Today's Inflation Trivia: Carbon Offsets

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by Tyler Durden
Thursday, Dec 02, 2021 - 06:40 PM

Submitted by Peter Tchir of Academy Securities

What "commodity" is up 350% since May and up 22% since November 1? The Global Emissions Offset Futures:

So the one inflation literally no one is talking about, is the cost of buying carbon offsets?

What we need to understand is how many of the offsets are new (someone created an offset) which would be good, or how much is people who already had offsets just selling them?

Clearly winners and losers in this market, but fascinating.

This topic came up because I'm told, at least in Europe, despite high gasoline prices, refiners are seeing less profitability, in part, because the rise in carbon offsets has outpaced all else.

Probably not a bad thing, if it is getting us to the goal of carbon neutral (which somehow I think depends on whether this is new offsets created, or shifting of existing offsets, that previously weren't monetized), but I suspect it is inflationary, especially since of all the inflation complaints I hear and read about, this one isn't mentioned.

Anyways, I found this one really curious and have to admit it had been off my radar screen until recently.