What if high EU carbon costs accelerate industrial hollowing-out and carbon leakage?
High EU carbon and energy costs accelerate carbon leakage and de-industrialisation in steel, chemicals and autos, denting euro-area growth and exposed regional credit.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
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 (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 3–10 years 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. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. High EU carbon and energy costs accelerate carbon leakage and de-industrialisation in steel, chemicals and autos, denting euro-area growth and exposed regional credit. The trigger decomposes into signed root‑shocks — Climate/crop supply ▲ · Credit spreads ▲ · European energy ▲ · Recession signal ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | High-yield credit HYG 📈 chart | Rate | ▼ -0.6% hist -0.38–-0.19% · other way -0.26% (n=11) |
| 2 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -0.64–-0.1% · other way +20.98% (n=11) |
| 3 | Financials XLF 📈 chart | Equity | ▼ -0.6% hist -1.53–+0.25% · other way +0.62% (n=11) |
| 4 | Wheat WHEATon Hyperliquid 📈 chart | Commodity | ▲ +0.6% hist -0.07–+0.95% · other way -1.78% (n=11) |
| 5 | Corn CORNon Hyperliquid 📈 chart | Commodity | ▲ +0.6% hist -0.37–+1.8% · other way -0.59% (n=11) |
| 6 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.4% hist -1.95–+6.33% · other way -11.42% (n=11) |
| 7 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.4% hist -0.96–+0.23% · other way -1.07% (n=9) |
| 8 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -0.41–+0.3% · other way +6.97% (n=9) |
| 9 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.4% hist -0.41–+0.44% · other way +0.24% (n=11) |
| 10 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.3% hist -0.85–+0.23% · other way -1.7% (n=12) |
| 11 | JPMorgan JPM 📈 chart | Equity | ▼ -0.3% hist -1.87–+0.4% · other way +1.64% (n=11) |
| 12 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.3% model prior · unmeasured |
| 13 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -3.65–+4.28% · other way +24.41% (n=9) |
| 14 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -0.5–+1.08% · other way +0.66% (n=11) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| JPM JPM | SHORT | -1.5% · 5d -1.5% | 65% | 38 | 0.25 | ✓ matches cascade |
| NG NG | SHORT | -3.4% · 5d -3.3% | 63% | 37 | 0.22 | ⚠ differs |
| Volatility VIX | LONG | +5.6% · 5d +2.7% | 61% | 37 | 0.19 | ✓ matches cascade |
| XLF XLF | SHORT | -1.1% · 5d -1.1% | 61% | 37 | 0.18 | ✓ matches cascade |
| CORN CORN | LONG | +1.4% · 5d -0.2% ↺ fades | 59% | 37 | 0.18 | ✓ matches cascade |
| SOL SOL | SHORT | -0.7% · 5d -7.8% | 61% | 15 | 0.16 | ✓ matches cascade |
| SMH SMH | LONG | +1.1% · 5d -0.4% ↺ fades | 59% | 37 | 0.16 | ⚠ differs |
| Gold XAU | LONG | +0.9% · 5d +0.1% | 58% | 37 | 0.15 | · |
| US dollar DXY | LONG | +0.5% · 5d +0.0% | 56% | 40 | 0.12 | · |
| COIN COIN | LONG | +4.8% · 5d +1.8% | 55% | 11 | 0.08 | ⚠ differs |
| NVDA NVDA | LONG | +1.5% · 5d -2.6% ↺ fades | 55% | 37 | 0.08 | ⚠ differs |
| NDX NDX | LONG | +0.6% · 5d -0.8% ↺ fades | 54% | 38 | 0.07 | ⚠ differs |
| XLK XLK | LONG | +0.8% · 5d -0.5% ↺ fades | 54% | 37 | 0.07 | ⚠ differs |
| ETH ETH | LONG | +1.6% · 5d -3.1% ↺ fades | 54% | 17 | 0.06 | ⚠ differs |