4 ms·
This is only a partially formed idea: Some kind of derivatives market that allows investors to make money speculating on fossil fuel reserves while simultaneous
by yummypaint 6y ago
This is only a partially formed idea: Some kind of derivatives market that allows investors to make money speculating on fossil fuel reserves while simultaneously discouraging extraction. The core idea is that fossil fuels are a finite resource nearly irreplaceable at scale whose value will increase with time, but the specifics of what lies where is poorly known, which creates an opportunity for a market to exist. Participating in the market would have to be more profitable than extraction, however. Maybe if the price of securing mineral rights could be guaranteed to be greater than the market value of the resource? It isn't clear how this incentive structure would work. I welcome ideas.
- eunoia 6y agoI like this. It seems like this could also be within the scope of a single fund? The fund would own mineral rights, investors could buy in expecting those rights to appreciate in value over a very long term. I suppose you’d want a few funds with different speculation strategies and then basically end up back at a market though. Also I don’t see how anyone invests without the end goal _eventually_ being extraction.
- charliepark 6y agoYou might like reading some thoughts in this direction from Matt Frost: https://mwfrost.com/coal_retirement_plan/ https://mwfrost.com/coal_retirement_plan/ Or a slightly more conversational article on his idea: https://www.theatlantic.com/technology/archive/2015/10/every-climate-concerned-billionaire-should-do-this-to-save-the-world/413020/ https://www.theatlantic.com/technology/archive/2015/10/every...