A Business Case for the Gold Standard

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A Business Case for the Gold Standard Heidi
Forbes Gold Standard and the Clean Development
Mechanism Capacity Building Workshop 7th
December 2006
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About Tradition Environmental Products Desk

• TFS have been active in the emissions markets in
  Europe since 2001, first in the UK ETS and then
  in the European Union ETS. We also are active in
  the renewable certificate market
• TFS has closed CDM transactions throughout the
  developing world and in its capacity as brokers
  finds Buyers for CERs and also investors in CDM
  projects.
• In 2005 TFS awards including
• Best Broker in Environmental Finance Magazine of
  EU-ETS, UK allowances and UK renewable
  certificate
• Best Energy Broker in the Energy Business Awards
• Silver award for Excellence in Emissions
  Markets in the Energy Business Awards

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The CDM Gold Standard what does it mean to the
market?

• The Gold Standard sets out a code of best
  practice on many issues in the PDD to deliver
  real contributions to sustainable development in
  host countries plus long term benefits to the
  climate.
• Standardises a minimum level of contribution to
  sustainability across projects worldwide
• Eliminates risk from fraudulent business
  practices in the market conservative
  calculations minimise delivery risk. Issues have
  already arisen in India in relation
• Increases transparency across the whole CDM
  process, negating need for further questions
  during the final stages
• These best practices give the Gold Standard a
  distinct advantage in quality and value in the
  market. Value that results in better prices

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The CDM Gold Standard a win-win-win solution
SELLERS BUYERS
Benefits from public opinion and lessened risk

• Commands higher value

• THE ENVIRONMENT
• Accelerates shift to greener technologies
• Balances local vs. global sustainability
• Well-managed growth of the carbon market to
  preserve environmental integrity and asset values

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Reducing reputation risk

• Buyers do not want to purchase credits from
  projects where their reputation is at risk TFS
  example Malaysian Palm Oil Project and large
  European Utility and avoidance of project types
  in the market generally.
• Reducing reputation risk increases value to
  Buyers and thus increases value to Sellers
  through the price. The project value is increased
  throughout the development chain.
• Price signals are therefore more economically
  efficient as the available capital for CDM
  development is channelled to the most
  environmentally beneficial projects.

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A CDM Gold Standard Example Chinese Wind Power
Project

• The project will produce CERs through the
  generation of renewable energy by a 45MW wind
  project in East China.
• Electricity generated will be supplied to the
  East China grid, substituting electricity which
  is primarily generated by coal-fired plant, thus
  displacing emissions.
• The first CERs will be generated from 1 July 2007
• The PDD is currently being developed
• It is currently working with the Gold Standard in
  the early stages of development to ensure
  approval. A stakeholder consultation is being
  completed in December 06.
• This project is expected to be the first CDM Gold
  Standard project to be approved in China, and is
  expected to be widely publicized in China and
  globally.

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• Contact Heidi Forbes
• Office 44 20 7726 4988
• Mobile [phone]
• Heidi.forbes_at_tfsbrokers.com
• www.tfsbrokers.com