Definitions (Second half of term)

Capital Markets

An interaction between economic and financial mechanisms that form markets where prices are determined, information is communicated, and transactions/distribution occur.

Stocks (Equities)

Assets partitioned to shareholders that confer direct ownership of a corporation.

Bonds (Debt)

Assets partitioned to creditors that confer direct debt obligations to those creditors from a corporation or government entity.

Currencies

The single largest asset market by volume (more than $5.3 trillion traded daily), which is traded in pairs and is driven by governments, corporations, and individuals needing to exchange money.

Derivatives (Including Commodities Futures)

Financial contracts between two parties where the value is derived from the performance of an underlying market product.

Commodity Futures Contracts

A specific derivative contract to buy an underlying commodity at a point in the future for a price determined today.

Supply and Demand

The forces that dictate market operations, where prices are meant to reflect the balance between buyers and sellers.

Speculation

A component of markets that creates liquidity and helps determine what is right or wrong with a product's price.

Market Sizes

The notes list global equities roughly at $80 trillion, the global bond market at $244-$250 trillion, currency at over $5.3 trillion daily, and derivatives at roughly $1.2 quadrillion in notional value.

Size of Global Economy

In 2018, the gross world product (GWP) equaled $87.51 trillion, or $134.98 trillion when accounting for purchasing power parity (PPP).

Debtor

An entity (individual, corporation, or government) that takes on debt, pays interest over a set time, and must repay the principal, essentially becoming "bonded" to the creditor.

Creditor

Bondholders who are owed a debt obligation; they hold tremendous power because they are entitled to an entity's assets (ahead of stockholders) in the event of a bankruptcy.

Debt Issuers

The corporate or government entities that issue debt (bonds) to creditors.

Interest Rates and Currency Movements

Interest rates are monetary policy levers used to control money supply, inflation, and currency value. When interest rates rise, floating debt becomes more expensive.

Currency Correlations to Domestic Resources (Dutch Disease)

A phenomenon where a massive influx of foreign currency from resource extraction drives up the local currency value, making other export sectors (like manufacturing) uncompetitive and causing their decline.

Dollar Hegemony

Established post-WWII, this system relies on the US dollar as the primary unit for international markets, giving the US an economic "nuclear" option (sanctions) and removing balance-of-payments constraints.

The Carry Trade

A strategy based on borrowing money in a currency with a low interest rate and investing it in a currency with a higher rate of return.

Hedge Funds

Large pools of capital invested on behalf of sophisticated/accredited investors using complex, "market neutral" (long/short) strategies to make money whether the market goes up or down.

Shorting

Borrowing an asset to sell it today, with the hope that the price goes down so it can be bought back cheaper later; essentially betting against an asset.

High Frequency Trading

An almost purely speculative, relatively new AI/algorithmic trading model that can make up large percentages of entire markets.

Market Volatility

Fluctuations in price that are often exacerbated by the structure of derivatives or high-frequency speculation.

Market Cycles

Economic booms and busts fueled by mechanisms like the carry trade, cheap borrowing, and inflation.

Markets as Artificial Ecosystems

Powerful human-created systems that can potentially be directed to positively impact issues like climate change if properly mandated and regulated.

Cap and Trade

A flexibility mechanism for emissions trading (like the EU ETS) where carbon units are bought and sold.

Carbon Tax

A direct, set price on carbon emissions (such as the Canadian Carbon Tax), representing an alternative to carbon trading.

Environmental Social and Governance (ESG) Investing

An investment approach that involves rating companies based on criteria evaluating their environmental, social, and governance strategies and performance.

Externalities

Sometimes called spillovers, these are costs or benefits occurring when an economic exchange impacts a third party who is not part of the transaction.

Resource Curse

Also known as the paradox of plenty, this refers to the failure of resource-rich countries to benefit from their wealth, often experiencing higher rates of conflict, authoritarianism, and lower economic stability.

Resource Conflict & Conflict Minerals

Conflicts funded by the extraction and taxation of resources (like diamonds or coltan) by militias, leading to human rights abuses and civil wars.

Canadian Bitumen Oil

A low-grade, heavy sour crude from the oil sands that is more costly to refine, resulting in a price discount and often requiring the burning of natural gas to extract.

Debt and the Canadian Oil Sector

The Canadian oil industry relies heavily on bank debt, forcing companies to maintain extraction to create the profits necessary to pay down those debts.

3Ts +G

Key conflict minerals from the DRC

Coltan

The ore that yields tantalum, highly sought after because it is heat resistant and stores electricity for use in 65-80% of global electronics; the DRC holds 80% of the world's reserves.

Commodity Chains & Pinch Points

The supply chain from artisanal mines to middle men, which eventually hits a regulatory "pinch point" at the smelters before reaching distributors.

Corporate Social Responsibility

Ethical practices driven by legal regulations (e.g., Dodd-Frank Section 1502) and reputation defense to remove conflict minerals from supply chains.

Junior and Senior Mining Partners

Mentioned as distinct corporate players ("Seniors vs juniors") in the varied mining industries.

Bag and Tag

A certification scheme system used to track minerals and ensure they are sourced from conflict-free artisanal mines.

Environmental Security

The protection of ecosystems during extraction, dealing with externalities like habitat destruction and poaching of endangered species (e.g., Grauer's Gorillas in the DRC).

Human Security

Relates to security costs that threaten or cause violence and human rights abuses on third parties outside the direct production process.

Boom Bust Cycles

Cycles of investment and withdrawal in resource-rich continents (like Africa), driven entirely by the fluctuating demand for commodities.

Environmental Effects of Resource Extraction

Refers to the massive ecological footprint of extraction, such as unfunded cleanup liabilities for tailing ponds.

What constitutes a Black Swan Event

An event that comes as a surprise to the observer, has a massive systemic effect, and is often rationalized after the fact.

Illusion of Understanding

A human ailment where we falsely believe the complex and random world is highly explainable and predictable.

Retrospective Distortion

Assessing events after the fact to organize history, making it appear far more logical in the rearview mirror than it was.

Overvaluation of Factual Information

Also called the "Curse of Learning," this is when we place unwarranted trust in "authoritative" experts who rely on past data, blinding us to new outliers.

The Systemic Change of Black Swans

Black Swans bring powerful feedback loops and systemic reach; they are often the events that decide the winner in dialectical shifts.

Probability Curves (Bell Curves)

Experts typically predict for "Mediocristan" (the middle of the bell curve), totally missing Black Swans which exist in "Extremistan" as extreme outliers.

Flat vs. Fat Tail of the Curve

Multipliers (like environmental changes) can create a "fat tail" to the probability curve, making statistically rare events much more likely to occur.

Relationship to Climate Change

Climate change is technically a "White Swan" because it is a systemic threat we can see coming. However, it is also referred to as a pending "Green Swan"—a profound, planned market shift that delivers exponential economic, social, and environmental wealth.

Identity Politics

A tendency for people of a specific religion, race, or background to form exclusive political alliances instead of broad-based politics; often intertwines with populism in immigration debates.

Refugees

Legally defined by the 1951 UN Convention as someone outside their country with a "well-founded fear of being persecuted". Currently, there are legal hurdles for "climate refugees" because they don't easily fit this definition, though the UN Human Rights committee has recognized asylum seekers from sinking islands. Estimates project up to 200-250 million climate-displaced people globally by 2050.

Feminism in the Global System

Explores gender dynamics in crises; during the 2015 migration, 76% of Syrian refugees in camps were women or children, whereas 58% of those who made it to Europe were adult men, creating a gender imbalance that correlates with increased crime against women.

Ecological Modernization

The theory and policy discourse that economic growth and environmental protection can be combined in a mutually beneficial, positive-sum game through technological adjustment.

EM in Developing States

Relates to the Brundtland Commission's emphasis on global social equity and distribution alongside environmental improvements.

“Greening” the Liberal State

Shifting state environmental policy from hierarchical, end-of-pipe solutions (like pollution ceilings) toward decentralized policies, market mechanisms, and self-regulation.

Role of populism in supporting/opposing EM

The loss of traditional manufacturing jobs to globalization and efficiency can fuel populism and a backlash against systemic, elite-driven global and environmental transitions.

Jevon’s Paradox

The phenomenon where technological improvements that increase resource efficiency paradoxically lead to an overall increase in the consumption of that resource.

Porter Hypothesis

The idea that properly designed environmental regulations actually enhance competitiveness and trigger green innovation, rather than harming profits.

ESG Investing

Rating companies based on their Environmental, Social, and Governance performance to direct capital away from heavy polluters and toward sustainable models.

Carbon Capture

(CCS) Technology meant to capture CO2 emissions. Many fossil fuel companies push this as ESG-friendly, though they argue they need state subsidies to make it commercially viable.

Collective Action Projects

Collaborative global efforts organized through UN bodies and conferences (like the COP) to address transboundary pollution and climate interference.

Kyoto Accords vs. the Current Paris COP

Kyoto used "Top-down individual targets" strictly for developed nations with rigid architecture. Paris uses a flexible, "Bottom up" approach with self-determined targets for all nations.

Developing vs. Developed

Kyoto maintained a strict firewall between the two (Annex 1 vs. Non-Annex 1). Paris removed the strict annexes for a nuanced, self-differentiated approach requiring action from both.

Nationally Determined Commitments (NDCs)

The self-determined, bottom-up emission reduction targets submitted by individual countries under the Paris Agreement.

Legal Enforcement

Kyoto had a "strong enforcement" system for Annex 1 states. Paris relies on a "Facilitative compliance system" focused on engagement and transparency rather than punitive measures.

Technology Transfers

Mechanisms designated within the accords (such as the technology mechanism established in Copenhagen) to assist developing nations in acquiring green infrastructure.

Financial Mechanisms

Commitments requiring developed nations to supply $100 billion a year (from 2020-2025) to assist developing nations with mitigation and adaptation.

Adaptation

Strategies to handle the existing impacts of climate change, given a higher profile and global goal under the Paris Agreement.

Mitigation

Efforts to reduce overall GHG emissions, with Paris aiming for global GHG neutrality by the second half of the century.

Climate Finance Fund

Programs like the Green Climate Fund established to support adaptation, mitigation, capacity building, and technology.

Loss & Damage

Financial compensation for inevitable climate harms; Paris enhanced this into a standalone mechanism rather than keeping it grouped under adaptation.

Sustainable Development Goals

Successors to the Millennium Development Goals that acknowledge Green Theory approaches on a global scale.

Junior Employment Squeeze

As AI automates white-collar cognition and grunt work, it eliminates entry-level jobs, threatening the future pipeline of senior human experts.

Surveillance & Bias

Agentic AI requires massive data streams, fueling surveillance capitalism; algorithmic bias scales historical prejudices based on the data it is fed.

Data Center Water Consumption

AI runs on massive servers that require millions of liters of fresh water daily for cooling; a single large-scale AI data center can consume 1 to 5 million gallons of freshwater per day.

Grid & Agriculture Optimization

AI can serve as a climate weapon by optimizing power grids with renewable energy and utilizing precision agriculture to reduce chemical and water runoff by 80%.

Material Discovery Advantage

AI can rapidly accelerate green tech innovation by simulating chemical compounds to invent materials for carbon capture or fusion power in a matter of weeks.