Carbon Credit Investment

Emissions trading, which is also called cap and trade, has evolved as a means of reducing the amount of greenhouse gases released into the Earth's atmosphere utilizing a market based approach. Since many countries now have their own emission reduction targets to achieve, caps have been placed on industries on the amount of pollution they are allowed to release. This is issued in the form of permits. If they produce more than permitted they will either have to reduce their emissions themselves, which may involve considerable expense investing in technology and machinery to achieve this or they would have to source carbon credits to offset their emissions from a verified source.

Why Purchase Carbon Credits

According to the New York Times, "carbon trading is one of the fastest growing specialties in financial services" Currently, the market is at 160 billion USD and it could expand to 3 trillion USD during the next 10 years.

Responses from over 2,000 carbon market professionals & their expectations for carbon prices by 2020 show that during the last 3 years, they consistently project prices of 30-50 USD per tCO2e.We believe most that high quality VER's have the potential to produce a very handsome return

With our carefully researched & verified projects, our prices are very competitive so the potential is huge, especially with more cap and trade markets that is anticipated to kick off in the US during the next few years and the new Australian compliance market that is already in place. Often referred to as a "pre-compliance buy" before regulation is introduced, investors are keen to buy at the earliest opportunity, especially when quality carbon credits are available in limited amounts.

"Carbon will be the world's biggest commodity market, and it could become the world's biggest market overall."
Louis Redshaw (BARCLAYS)

"Carbon Trading is the fastest growing Specialties in the Financial market"
The New York Times

Carbon Credits Cap and Trade. How it works

Under the protocol, countries commit to limiting their greenhouse gas outputs. The given targets are based on their yearly outputs, averaged over a number of years. The system is then implemented by issuing each country set amounts of permits, called carbon credits, on the amount of GHGs that they are allowed to release into the atmosphere each year

They are measured in tonnes of CO2e (carbon dioxide equivalent). For example, one tonne of CO2e is equal to one carbon credit. By gradually decreasing the amount of CO2e each country is allowed to release into the atmosphere each year, the mechanism motivates participants to discourage industries that pollute the atmosphere and encourages those which support clean energy technologies.

Countries that exceed their emissions limits may buy credits from countries that have beaten their targets, and therefore have surplus credits. This gives each carbon credit a monetary value. A carbon credit, therefore, is the financial instrument that represents one tonne of pollution that has been removed, stored or avoided. This system of trading creates a double edged financial incentive for entities to comply with the mechanism. Today, these credits are traded on global exchanges, much like commodities and other securities.

Typically, governments distribute these permits amongst a number of companies by way of allowances (usually heavy industry and energy companies).

These companies are left with three options which enable them to meet their obligations:

• To reduce the greenhouse gases they produce through investing in greener technologies
• To invest in projects which create energy from clean sources, (such as a wind farm).
• To purchase carbon credits from entities that have surplus credits.

The ultimate objective of the system is to maximise environmental and economic benefits, whilst achieving cost effective reductions in emissions of global warming gases