With the most liquid of carbon pricing mechanisms finally starting to bottom out, we're left in a state of limbo.
How long will it take for carbon markets to turn around? How long until we see corporate interest pick up again?
I’m not a fortune teller, so this answer won’t necessarily comfort anyone…
But while the timeline is unknown, lets make it clear, the voluntary carbon market’s rise is inevitable.
In the same way that the commodity super cycle we're witnessing now was guaranteed.
The closer we get to 2030, the more interest we will see.
O&G might be the bane of an environmentalist’s existence… but it will not be replaced in the next few decades.
What does that mean? We need more carbon offsets.
That is unless everyone just drops their green commitments. Which I highly doubt.
If there’s one thing a vocal minority within the younger generation knows how to do… it's complaining.
They will annoy the hell out of any corporation or government official until they bend their knee.
Most influential entities don’t seem keen on dealing with the incessant theatrics of groups like “Just Stop Oil.”
Even worse, social media has given these organizations an endless level of power that they can wield to keep nearly anyone in line.
With that said, most companies and governments are taking a climate-friendly stance anyway.
Combine these forces with the already overwhelming MSM coverage of climate change and I don’t see our tailwinds dying down any time soon.
As they shouldn’t because climate change is a threat that needs to be addressed.
How “quickly” it needs to be addressed is an argument I don’t even care to have.
Whether we are destined for self-destruction in 10 or 50 years is ultimately irrelevant, when the answers we should focus on are the same, regardless of expiration date.
We know the planet is being affected negatively. So lets do something about it.
A nuclear power renaissance, the ultimate answer, is likely a distant dream… but it’s a nice thought.
Either way, trillions of dollars have been and will continue to flow into different sectors aimed at dealing with this issue.
So what should you and I be doing right now?
Perhaps we should consider investing in an asset class that will be necessary to deal with the leftover emissions that incumbent fossil fuel operations produce? One that is hated by virtually all sides of the climate change debate?
I don’t know, just a crazy thought.
As I have stated in several videos on my channel, it's the most obvious contrarian investment I've ever seen.
The long-term growth potential of the voluntary carbon markets dwarfs that of any traditional commodity. Which were the last great contrarian investments in the previous 5-10 years.
Yes, it's a relatively unproven investment class when you compare it to standard commodities, but we can see where this is headed.
That is the issue though, the opportunity cost we might experience while we await our destination…
This sector’s increasing popularity will be a slow burn, if you're looking for the next meme stock, this is not the place to find it (not yet anyway).
I would wager most people don’t even understand what a carbon offset is, but that's self-evident from the irrational hatred we see for the asset class.
Unprecedented growth contrasted with unwarranted vitriol from every angle? Sign me up.
I plan on slowly building up my positions over time. If you have the time to wait, I don’t think there will be a better place to be over the next few decades.