In The Big Short (2010), Michael Lewis wrote about the incredible story of systematically mispriced risk, the destabilization of the global economy, and a small number of smart investors who were able to identify and monetize the inevitable market correction. Today, we believe there is another threat caused by systematic mispricing across the entire global economy, which may dwarf the Great Financial Crisis. Analysts predict that the coming correction will require the largest reshuffling of capital in history,¹ and it is already in motion.

The global economy has over-produced and built an unstable position in carbon dioxide (CO2) for over 150 years, despite the known harmful effects, because there was no accounting for the cost. We are only now beginning to face the true cost of these emissions. In the same way that smart investors figured out how to invest in the unwinding of the 2008 financial system, we believe there is an even larger scale opportunity to invest in the unwind of global industrial carbon intensity. Read more to learn about how to capture this investment opportunity. 

Report Highlights:

• Theme Highlight: The Biggest Short
• Carbon Market Recap & Outlook
• KGHG Quarterly Commentary
• KMET Introduction
• Carbon Correlations, Market Modeling & Performance

1. McKinsey & Company, “The net-zero transition,” January 2022