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Insights

We publish our arguments rather than hold them.

Environmental finance does not suffer from a shortage of proprietary method. It suffers from a shortage of structures that survive scrutiny. AeonLoop publishes the reasoning behind its work so that clients, counsel, and counterparties can test it before they rely on it.

Featured

Exploiting polymorphism in carbon to manufacture its investability

Graphite and diamond are one element arranged differently. Carbon credits are polymorphic too, and the rules that set their form can make them investable.

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Earlier

02Managing the macro effects of transition riskInstitutional investors have spent a decade lowering the carbon intensity of their portfolios. This is a start, but it still leaves them exposed to macro transition risk that portfolio decarbonization cannot mitigate.01The problem is the packaging, not the tonne.Roughly thirty years after Kyoto, capital has not moved into environmental assets at anything approaching the scale the transition requires. The usual explanations point at integrity, methodology, and price. The binding constraint is somewhere less interesting and far more fixable.

Series

No New Parts

A sixteen-part series on how environmental assets can be packaged in terms the capital markets already understand, written for readers who are not carbon specialists.

01Framing Is EverythingCarbon credits are an idea. What they are worth, and who will hold them, is decided by the commercial, legal, and regulatory frames you interpret them through.02The Commodity Dead EndEveryone treats carbon credits as commodities. Almost nobody remembers deciding to. What that inherited choice costs, and how oil escaped it.03Carbon Does Not Have Three CenturiesPurpose-built carbon infrastructure fails on time, not feasibility. Equities took three centuries to go global. Carbon does not have that luxury.04Manufacturing InvestabilityInvestment grade is the allocator's standard: economic value that can be stored and transacted. Investability is manufactured, not discovered.05The Wrapper: Finance's Oldest Answer to Novel AssetsA wrapper is a container built from settled law that holds a novel asset. Finance used them to solve the cross-border problem a century ago.06A Century of PrecedentTwo traits appear to keep carbon out of institutional portfolios. Securities markets solved both decades ago, for assets that looked stranger.07Custody, Clearing, and SettlementThree questions gate every institutional purchase. Securities markets answer each with a dedicated & regulated institution. Carbon answers all three with a registry that disclaims all liability.08What a Carbon Registry Is Actually ForA carbon registry has two jobs: creating the climate record and controlling of what enters it. Claiming the right to influence custody, clearing and settlement destroys orderly market formation.09One Genus, Two SpeciesCarbon allowances and carbon credits are two different species of the same genus. Regulators and standards bodies already deal with carbon at the genus level - leaving the field open and ready for innovation.10The Corresponding Adjustment Is a Sovereign CovenantA corresponding adjustment is a sovereign covenant, not a formality. It prevents double counting and makes a carbon credit exclusively ownable.11The Sovereign AuthorizationThe covenant lives in a document: the Letter of Authorization. It states what the units may be used for, and that use travels with the unit.12The Accounting EarthquakeAn asset whose carrying value can only fall is not an investment. Only the securities form lets an institution hold carbon and report appreciation in value.13Who Makes the Market?Ask a carbon roundtable how to get more liquidity and the answer is more buyers. Ask a capital markets trader and the answer is different: more market makers.14What About Permanence Risk?Reversal risk is measurable, allocable, ratable and insurable. Inside a security, permanence stops being an objection and becomes a term of the transaction.15Where is the Curve?Ask McKinsey what carbon will be worth in 2031 and you get a projection. Ask a copper trader the same about copper and you get a screen. An opinion versus a market.16Putting it all TogetherThe whole argument in one piece: carbon in investable form is a novel assembly of non-novel parts, and the instruments that assembly requires.

Working papers

Owning the Risk Factor You Are Priced Against

Institutional allocators model climate risk through a carbon price signal and then hold no position in it. The paper makes the case for direct exposure to utility-grade carbon units as a hedge against the transition risk already embedded in those portfolios, and sets out what any implementation has to satisfy.

Readable in full on this site, without a request or a registration.

An Origination Program for Carbon-Linked Securities

AeonLoop's working paper specifies the legal and financial architecture in full: dual-registry custody, corresponding adjustment treated as a sovereign covenant rather than as paperwork, permanence and reversal risk allocated by contract, and a book-entry wrapper that carries the unit into institutional portfolios without changing what is inside it.

The paper is provided to governments, institutions, and their advisers on request.

Request the working paper