What if EU carbon permits spike to 200 euros a tonne?
Trade the EU power curve: an ETS reform plus cold snap rocketing carbon to EUR200 lifts marginal-cost power and squeezes utility and heavy-industry margins, feeding euro-area inflation breakevens. Rhymes with the 2021-22 EUA run toward EUR100 alongside the gas crisis that hammered energy-intensive producers. The modeled US Treasury/Fed cascade overstates spillover; transmission is European power, gas-to-coal switching economics, and EUR/USD on the energy-import drag.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. A supply-tightening reform and cold snap rocket EU carbon permits, squeezing utilities and heavy industry margins. The trigger decomposes into signed root‑shocks — European energy ▲ · Inflation surprise ▲ — which propagate through our causal graph to the markets below.