{"id":234422,"date":"2025-11-17T10:30:00","date_gmt":"2025-11-17T15:30:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=234422"},"modified":"2025-11-18T04:24:00","modified_gmt":"2025-11-18T09:24:00","slug":"what-do-prediction-markets-indicate-about-the-rhetoric-at-this-years-international-climate-conference","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/what-do-prediction-markets-indicate-about-the-rhetoric-at-this-years-international-climate-conference\/","title":{"rendered":"What do prediction markets indicate about the rhetoric at this year\u2019s international climate conference?"},"content":{"rendered":"\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"1005\" height=\"628\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-16.png\" alt=\"\" class=\"wp-image-234426 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-16.png 1005w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-16-700x437.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-16-300x187.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-16-768x480.png 768w\" data-sizes=\"(max-width: 1005px) 100vw, 1005px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1005px; aspect-ratio: 1005\/628;\" \/><\/figure>\n\n\n\n<p>From Sergio Moraes via <a href=\"https:\/\/climatechampions.net\">climatechampions.net<\/a><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>The <a href=\"https:\/\/unfccc.int\/cop30\">30th United Nations Climate Conference of the Parties<\/a> (COP) is underway this week in Bel\u00e9m, Brazil, where nearly 60,000 attendees, including governments, NGOs, and activists, are gathering to discuss and negotiate greenhouse gas emissions-reduction efforts under the United Nations Framework Convention on Climate Change.<\/p>\n\n\n\n<p>This year\u2019s COP 30 marks the 10-year anniversary of the COP that produced the <a href=\"https:\/\/en.wikipedia.org\/wiki\/Paris_Agreement\">Paris Agreement<\/a> (negotiated at the <a href=\"https:\/\/en.wikipedia.org\/wiki\/2015_United_Nations_Climate_Change_Conference\">2015 COP held in Paris<\/a>).<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>The Paris Agreement sought to limit the long-term rise in global surface temperature to \u201cwell below\u201d 2\u00b0C (3.6\u00b0F) above pre-industrial levels, with a preference for limiting it to 1.5\u00b0C (2.7\u00b0F) above pre-industrial levels.&nbsp;<\/p>\n\n\n\n<p>Over the past decade, greenhouse gas emissions from high-income countries have declined slightly, but economic development in middle-income countries and the associated increase in their emissions have pushed global greenhouse gas emissions up (illustrating why emissions reductions have been such a tough sell).&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"1116\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-18-1100x1116.png\" alt=\"\" class=\"wp-image-234428 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-18-1100x1116.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-18-700x710.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-18-300x304.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-18-768x779.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-18-1514x1536.png 1514w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-18.png 1577w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/1116;\" \/><\/figure>\n\n\n\n<p>From <a href=\"https:\/\/ourworldindata.org\/greenhouse-gas-emissions\">Our World in Data<\/a>.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>Despite these recent trends, projections indicate that global greenhouse gas emissions are in the process of <a href=\"https:\/\/www.iea.org\/reports\/world-energy-outlook-2025\/executive-summary\">plateauing<\/a>, though they are not declining at a rate anywhere near what would be required to limit long-term global warming to 1.5\u00b0C.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"549\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-15-1100x549.png\" alt=\"\" class=\"wp-image-234425 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-15-1100x549.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-15-700x350.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-15-300x150.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-15-768x384.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-15-1536x767.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-15.png 1600w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/549;\" \/><\/figure>\n\n\n\n<p>From <a href=\"https:\/\/climateactiontracker.org\">climateactiontracker.org<\/a>.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>This year\u2019s COP has seen this reality become more mainstream. The stage for this was set a couple of weeks before the meeting when Secretary General of the UN Ant\u00f3nio Guterres said <a href=\"https:\/\/www.theguardian.com\/environment\/2025\/oct\/28\/change-course-now-humanity-has-missed-15c-climate-target-says-un-head\">in an interview<\/a>, \u201cLet\u2019s recognise our failure\u2026The truth is that we have failed to avoid an overshooting above 1.5\u00b0C in the next few years.\u201d<\/p>\n\n\n\n<p>This reality is reflected in ForecastEx\u2019s prediction market on when global temperature limits might be breached for the first time at the annual timescale. The market currently shows better than even odds that global temperatures will breach 1.75\u00b0C in the next decade.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"375\" height=\"143\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-13.png\" alt=\"\" class=\"wp-image-234423 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-13.png 375w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-13-300x114.png 300w\" data-sizes=\"(max-width: 375px) 100vw, 375px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 375px; aspect-ratio: 375\/143;\" \/><\/figure>\n\n\n\n<p>From <a href=\"https:\/\/forecasttrader.interactivebrokers.com\/eventtrader\/#\/market-details?id=776339242%7C20360110%7C1.75%7C2035&amp;detail=contract_details\">IBKRForecastTrader<\/a>.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>The primary temperature limit in the Paris Agreement was 2.0\u00b0C. While markets indicate that this limit is very unlikely to be breached in the next decade, it becomes much more likely over the subsequent decade. The market currently stands at 61% on whether a year will be above the 2.0\u00b0C threshold by 2045.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" width=\"1100\" height=\"569\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-14-1100x569.png\" alt=\"\" class=\"wp-image-234424 lazyload\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/569;width:379px;height:auto\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-14-1100x569.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-14-700x362.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-14-300x155.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-14-768x397.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-14.png 1446w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" \/><\/figure>\n\n\n\n<p>From <a href=\"https:\/\/forecasttrader.interactivebrokers.com\/eventtrader\/#\/market-details?id=776339242%7C20360110%7C1.75%7C2035&amp;detail=contract_details\">IBKRForecastTrader<\/a>.&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>These numbers are roughly in line with the odds that I <a href=\"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/esg\/how-quickly-will-the-globe-warm-paris-agreement-forecast-contracts\/\">initially calculated for these markets<\/a>, and thus they reflect an expectation that emissions will roughly follow a SSP2-4.5 \u201cmiddle-of-the-road\u201d world with moderate economic growth, uneven development, and only moderate top-down climate policy.&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>That analysis suggested that the odds of breaching 2.0\u00b0C by 2045 were 72% on the SSP2-4.5 emissions trajectory, 26% on the SSP1-2.6 emissions trajectory, and 100% on the SSP5-8.5 emissions trajectory.&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"607\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-17-1100x607.png\" alt=\"\" class=\"wp-image-234427 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-17-1100x607.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-17-700x386.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-17-300x166.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-17-768x424.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-17-1536x848.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/11\/image-17.png 1600w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/607;\" \/><\/figure>\n\n\n\n<p>Produced in MATLAB (annual version of the 5th figure from \u201c<a href=\"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/esg\/how-quickly-will-the-globe-warm-paris-agreement-forecast-contracts\/\">How Quickly Will The Globe Warm? Paris Agreement Forecast Contracts<\/a>\u201d).<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>So, most market participants believe we will surpass the Paris Agreement\u2019s 2.0\u00b0C limit within the next 20 years, which raises the uncomfortable question of whether these COP climate talks will continue to perpetually center global temperature limits in their framing.\u00a0<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>Global temperature is a downstream outcome of atmospheric greenhouse gas concentrations, which in turn are a downstream outcome of global greenhouse gas emissions, which in turn are a downstream outcome of (among other things) energy generation and technology. ForecastEx also has markets for these upstream elements, such as <a href=\"https:\/\/forecasttrader.interactivebrokers.com\/eventtrader\/#\/market-details?id=712856705%7C20360105%7C460%7C2035\">atmospheric CO\u2082 concentrations<\/a>, <a href=\"https:\/\/forecasttrader.interactivebrokers.com\/eventtrader\/#\/market-details?id=732764729%7C20260630%7C39000%7C\">global CO\u2082 emissions<\/a>, and, more specific, but still relevant, <a href=\"https:\/\/forecasttrader.interactivebrokers.com\/eventtrader\/#\/market-details?id=791099810%7C20251125%7C62000%7C\">US renewable energy generation<\/a>.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>If the past is predictive, during COP30, governments will announce new pledges, financing mechanisms, and emissions targets. But how will we know whether these proclamations meaningfully change the expectations for future trajectories of energy, greenhouse gas emissions, greenhouse gas concentrations, and global temperature?\u00a0<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>Prediction markets can cut through the noise and uncertainty by aggregating the beliefs of participants who have financial incentives to assess likely outcomes objectively. If, following a major COP agreement, the market-implied probability of breaching 2 \u00b0C by 2045 drops, that would signal confidence that the new policies will make a real difference. If it stays flat, that would indicate that, despite the headlines and declarations, the collective judgment is that the world\u2019s temperature path remains largely unchanged.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>I\u2019m not holding my breath, but I\u2019ll be watching with interest.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Prediction markets can tell us whether pledges coming out of the climate negotiations are likely to make a substantive difference.<\/p>\n","protected":false},"author":1601,"featured_media":234426,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[18931,3],"tags":[],"contributors-categories":[13576],"class_list":{"0":"post-234422","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ibkr-climate-energy","8":"category-traders-insight","9":"contributors-categories-interactive-brokers"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What do prediction markets indicate about the rhetoric at this year\u2019s international climate conference?<\/title>\n<meta name=\"description\" content=\"Prediction markets can tell us 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