STRICTLY PRIVATE CONFIDENTIAL What Happens to CERs

STRICTLY PRIVATE & CONFIDENTIAL What Happens to CERs After Issuance? 1 February, 2011 C: Documents and Settingsrick. kwanDesktopWhat Happens to CERs After Issuance. ppt

Value Evolves through the Project Cycle C: Documents and Settingsrick. kwanDesktopWhat Happens to CERs After Issuance. ppt 2

How Do We Sell CERs? n Spot Sales } Cash sales n Forward/Future Sales } Firm (guaranteed) sales l OTC l Exchange } Non-firm (SERPA) sales n Options } Calls } Puts C: Documents and Settingsrick. kwanDesktopWhat Happens to CERs After Issuance. ppt 3

What Are the Risks on a Project Level? n Registration risk n Registration delays n Performance risk n Issuance delays n Natural disasters (Earthquake in Sichuan province) n Qualititative criteria (HFC/N 20) ban C: Documents and Settingsrick. kwanDesktopWhat Happens to CERs After Issuance. ppt 4

What are the Risks on a Macro Level? n Double dip recession } Egypt/Tunisia risk spreads further into Middle East and oil rockets well over $100/barrel } China overheats and has a hard landing } Euro zone crisis returns with Greece/Portugal/Spain in risk of default or requiring more funds n Climate policy } EU 20% or 30% } US/Canada/Australia etc. demand or not? } Kyoto extension, new pact? C: Documents and Settingsrick. kwanDesktopWhat Happens to CERs After Issuance. ppt 5

Sample Scenario C: Documents and Settingsrick. kwanDesktopWhat Happens to CERs After Issuance. ppt 6

How Do you Hedge Your Investments? n Price Risk } Buy low, sell high n Volumetric Risk } Oversell/undersell? C: Documents and Settingsrick. kwanDesktopWhat Happens to CERs After Issuance. ppt 7

Contact Climate Change Capital CCC Head Office Climate Change Capital 3 More London Riverside London SE 1 2 AQ United Kingdom Tel: +44 (0)20 7939 5000 Fax: +44 (0)20 7939 5030 www. climatechangecapital. com C: Documents and Settingsrick. kwanDesktopWhat Happens to CERs After Issuance. ppt 8