It starts with the present.
The Bruntland Commission
In 1983, the United Nations asked former Norwegian prime minister Gro Harlem Brundtland to lead the new World Commission on Environment and Development. After decades of effort to raise
living standards through industrialization, many countries were still dealing with extreme poverty.
It seemed that economic development at the cost of ecological health and social equity
did not lead to long-lasting prosperity. It was clear that the world needed to find a way to harmonize ecology with prosperity.
After four years, the “Brundtland Commission” released its final report, Our Common Future. It famously defines sustainable development as:
Development which meets the needs of the present without compromising the ability of future generations to meet their own needs.
In the sustainable world, the environmental, economic, and social needs remain in balance.
That's the goal. It is a difficult goal to accomplish. But we have to start somewhere.
End-of-the-rails view: sustainability through the eye's of current generation
Every generation can answer similar questions by applying current as well as emerging knowledge. This end-of-the-rails view incorporates emerging knowledge - or what could very well happen based on recent scientific advances.
Genetically-modified super plant is grown in climate controlled, vertical farms and reaches desired size in 24 hours.
The plant is harvested and processed into a new commodity, packaged and sold in standardized quantities. Let's call it Hemp for now.
There is a liquid futures market actively trading Hemp futures.
Hemp is used to make bio-fuels, bio-plastics, and also fibers for a variety of materials.
The daily driver now fills up the tank with bio-fuel.
The electric vehicle owned by a neighbor contains a greater percentage of plastic made from Hemp.
Frequent flyer reaches the destination on an aircraft powered by bio-fuel.
The current generation is in the middle of transitioning to a new and sustainable material.
Transition will lead to greater volatility
As the current generation transitions to other sustainable materials and energy sources, increased volatility is inevitable.
What if an oil refinery is converted to make bio-fuels instead from Hemp? During the conversion (neither trivial nor rapid), neither gasoline nor bio-fuels are produced.
It's inevitable that during the transition the supply and demand will not be matched causing greater volatility in physical trading and futures markets.
Greater volatility is inevitable in the future
For investors, the volatility in commodity markets has always been the reason for above-average returns or eye-opening losses.
The transition to sustainable energy sources and materials will only increase volatility.
But to manage and take full advantage of the volatility, there are three elements to consider:
- Deep understanding of current commodity markets: this is the present
- Building awareness of emerging commodity markets and begin trading when the both the markets and standardized futures contracts are ready
- Applying machine learning to identify and learn patterns that humans have difficulty detecting
Sustainability starts with the present
Crude oil is the biggest commodity market in the world. Because it is the biggest market, the transition to sustainable materials and energy sources will cause the biggest impact and resulting increase in volatility.
That's why TerraManta chose crude oil as the fist commodity to build the machine learning platform for forecasting commodity prices.
It is the present. And a gateway to the end-of-the-rails where sustainability is measurably present for all the right reasons.
TerraManta machine learning platform processed over 10 years of commodity market data forming an enviable foundation for forecasting commodity prices. The learning continues.
TerraManta will be ready to actively trade commodity futures contracts which will run the world in the future.