In our dedicated ESG and climate piece tomorrow we will focus on the progress and lack of progress at COP26 and discuss some of the likely consequences (intended and unintended) for the energy and materials industries. One of the subjects we touched on in the energy section of today's daily report, is how to craft a methane emission initiative that does not result in a decline in natural gas production before we see a needed recovery as the last thing the world needs now is more limited natural gas availability. Methane emission reduction looks like it is one subject on which there appears to be broad global agreement.
There has been a lot of press over the last couple of months around carbon offsets – not least because of Mark Carney’s efforts to legitimize the idea. Mr. Carney’s focus is to create a robust trading platform for the buying and selling of legitimate offsets so that a carbon market can operate efficiently. He believes that without accurate and realistic carbon values, and the ability to buy and sell them, the capital markets around emission reduction will be inefficient and that less money will be attracted into the area. On this, he is probably correct, but in our view, the carbon offset markets have a long way to go.