Carbon Markets Compromised by EU?

EU Frontloading Carbon Market to lower Energy Prices

Groups in the European Parliament announced a deal that would take over $20 billion from the EU Carbon Markets. The move decreases the price of Carbon by flooding the market with credits. It should reduce reliance on Russian Gas and lower consumer energy bills. Carbon markets are responsible for 10% of the increases in European energy prices.

REPowerEU, fulfills the short term goals of powering Europe. It will reduce the cost of heavy industries Carbon liability. The mechanism the EU is proposing, should keep climate agreements reachable by increasing standards in the future.

It’s effectiveness is questionable. It's unclear when this will be undone and it compromises the integrity of the Carbon markets. Maybe it helps avoid a recession, but it could sacrifice short term pain for long term agony.

The Production Board SPACs Lavoro

Lavoro is a distributer of Agricultural inputs in Colombia and Brazil. That means they sell all the stuff farmers need to make their operations work. Farmers speak to agronomists, sales people that help them optimise their inputs and output.

Brazil is the worlds third largest food producer. About 10% of the worlds calories come from Brazil. Lavoro expects to do about $2 billion in revenue and grow about 25% in 2023. Brazillian food exports are growing in an already growing crop market.

This type of deal is important, because agriculture relies on cheap inputs. In the context of climate change, agriculture is both a main contributor and a potential solution. Lavoro is being taken public by The Production Board, a climate focused holding company. TPB is a fantastic partner for companies in climate sensitive industries to grow rapidly, and help address climate change.

Data in Agriculture

This article introduces a newly funded study that reviews the use of data on dairy farms. It is a cooperation between Cornell, Stanford and UCSB. The study aims to understand Digital Agriculture, which optimises farms using a variety of tools.

Reading this article reminds of a book I’ve never read called the third wave of the internet. The idea is that internet native technologies are now affecting the real world. Instead of optimising ad click through rates, we’re going to begin optimising moos per minute.

Agriculture in Brazil

This week we’re looking at the agricultural outputs of Brazil (because of the Lavoro SPAC). Brazil produces the third most food in the world. That production comes at the expense of the Amazon rainforest. Since 1970 we've destroyed, over 700,000 square kilometres (270,000 sq mi) of the Amazon rainforest.

Much of that development has come to plant more Soya bean, of which Brazil produces the most, about 121 million tonnes / year with a revenue of over 46 billion every year. Agriculture accounts for about 6% of its GDP, and 30% of its workforce. Why the odd distribution? Most jobs in agriculture are lower paying, particularly in a developing Economy like Brazil's.

Brazil is by far the worlds largest producer of sugarcane, it produces about twice as much the world’s second largest producer. While sugarcane is the cheapest of the crops it produces, and the massive yields make it highly profitable for the nation.