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Eye on Carbon Credits. Where Profits & Ethics Unite. Why invest in carbon credits?.

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eye on carbon credits
Eye on Carbon Credits

Where Profits & Ethics Unite

why invest in carbon credits
Why invest in carbon credits?

The principal objective is to make capital returns from investment in renewable / clean energy verified emission reduction credits. To this end, together with our partner provider, we have made available to retail investors the opportunity of purchasing high quality, verified carbon credits, which give investors direct exposure both to global climate change policy and the price of carbon credits.

Investments in carbon credits resonate with three global themes which are reducing poverty, fighting climate change and promoting corporate social responsibility. They provide opportunities for investors to pursue those three objectives simultaneously, making the purchase of carbon credits attractive to investors at all levels who are looking for sustainable investments that generate capital gain.

investment rationale
Investment Rationale

The market for carbon assets continues to be attractive. Our UK partner provider has the team, experience, distribution and infrastructure to enable investors to access the global carbon markets and to build a valuable portfolio of carbon assets.

Over the longer term the carbon market will benefit from greater price transparency, decreasing transaction costs and increasing liquidity, all of which will lead to increased efficiency in pricing and improvements in carbon reduction development. Whilst carbon prices are currently volatile, we believe that over the medium to long term carbon credits provide a number of attractive investment opportunities.

secure fsa custody environment
Secure FSA Custody Environment

It is important that all clients’ carbon assets are held in a secure environment. Therefore, an international FSA regulated firm is in place to provide you with a secure custodianship service for the carbon credits that you purchase through us from the UK provider. Your credits will be held for you under the FSA main account with the APX Carbon Credit Registry - www.vcsregistry.com.

Once your purchase has been completed, your credits will be transferred into your own sub account for which you will be provided access via the web. You will instantly be able to see your credits with your unique serial numbers held in an account in your name on the APX Registry.

You are completely in control of your credits and can issue an instruction to move them to another account if you decide to sell or retire your credits. No-one else can do anything with your credits without your permission.

exit strategies
Exit Strategies

The carbon credits that you purchase will be in your name on the APX registry. You are completely in control of these credits, and can transfer them to any purchaser as you wish. Our partner can manage this for you if you would like.

You can also ask them to act as your Agent to sell your carbon credits on your behalf. There is a one-off fee of £99 + VAT to list your credits for sale and 5% commission on the value of all carbon credits sold on your behalf for this service.

They have a number of relationships with carbon credit brokers and bulk buyers and are members of the Carbon Trade Exchange, the APX and Markit Registries, with ongoing relationships with companies globally who purchase carbon credits to offset their corporate carbon footprints. Together, our aim is to aggregate your credits with other clients’ holdings and offer these purchasers access to substantial blocks via the provider.

In addition, there is a unique Carbon Partner Program in place – a network of over 2,000 carbon credit ecommerce websites which the provider hosts, enabling individuals and businesses around the world to buy and sell carbon credits.

large growing market
Large & Growing Market........
  • Carbon will be the world’s biggest commodity market, and it could become the world’s biggest market over all”
  • Barclays Capital
  • The global carbon market is forecast to grow to $1 trillion by 2013
  • (source: New Carbon Finance)
voluntary carbon market volume forecasts are positive
Voluntary Carbon Market volume forecasts are positive
  • New York Times:

“Carbon Trading is one of the fastest growing specialities in Financial Services.”

  • Louis Redshaw, Barclays Capital:

“Carbon will be the world’s biggest commodity market & it could become the world’s biggest market overall”

  • CFCT Commissioner:

“Carbon trading may dwarf that of crude oil within 5 years, worth 2 trillion”

  • Fortune:

“JPMorgan isn't alone. All the big global investment banks including Barclay‘s, Citigroup, Goldman Sachs and Merrill Lynch are hurrying into carbon finance”

  • Chris Leeds, Head of Emissions Trading, Merrill Lynch, London

“Carbon could become one of the fastest growing markets ever, with volumes comparable to credit derivatives inside of a decade“

  • Barclays PLC

“United Nations Carbon Credit prices may rise as much as 42% by 2012”

what type of credits will you be buying
What type of credits will you be buying?
  • We provide you with access to purchase carbon credits which have the Verified Carbon Standard accreditation. This ensures that carbon credits bought by businesses and consumers can be trusted and have real environmental benefits.
  • The Verified Carbon Standard is among the most widely used GHG accounting programs by projects quantifying emission reductions and issuing GHG credits in the voluntary markets. More than 600 projects have used the VCS Program to date to reduce or remove more than 56 million metric tonnes of CO2-equivalent from the atmosphere.
  • VCS has been used by projects on six continents to ensure that every GHG credit they generate is verified, permanent, unique and traceable. This provides important quality assurance for those working to curb GHG emissions on the ground even as top-down climate regulations take shape.
  • Read more about How VCS Works
carbon credits overview
Carbon Credits Overview
  • Carbon emissions are a lead cause of climate change and global pollution. You may have heard a lot in the media these days about carbon emissions trading, carbon taxes, and carbon credits. Lobby groups and corporations spend millions trying to sway consumers either way, so let’s break it

down......A cap-and-trade system is already underway in the European Union - where a cap has been set on how many emissions can be produced. Allowances are given to different companies via permits, though they can sell them if they don’t reach their pollution quota.

Carbon credits are bought voluntarily by companies and individuals to offset the environmental cost of their actions – which are typically measured by a verified third party and go towards funding projects in alternative energy, developing renewable resources, and other areas. Climate Action sells these kinds of credits to individuals, businesses, and organizations.

  • Climate change poses a threat to the planet in our lifetime. Consider the impact of drought and flood on global food prices (especially in developing countries), the quality of air in cities like Beijing and Tokyo, or melting ice in the Arctic.  Investing in  carbon credits won’t magically stop climate change, but it will direct financial resources towards projects that are making incremental  changes for the better.
the voluntary carbon market
The Voluntary Carbon Market

The voluntary carbon markets are inherently future-facing. Reducing greenhouse gases (GHGs) is an act designed with tomorrow’s planet in mind. Projects that reduce GHG emissions can be years in the making, and some will even outlive their stakeholders. Carbon offset buyers commit millions of dollars every year to support the evolution of new technologies. Suppliers generate pre-compliance credits before regulations set the rules. Behind the scenes, the voluntary carbon market infrastructure sets the market trajectory with tools for transparency, accountability, and expansion.

Transactions in the voluntary carbon markets are not required by regulation, but are instead driven by companies and individuals that take responsibility for offsetting their own emissions as well as entities that purchase “pre-compliance” offsets. What the voluntary carbon markets lack in size, they make up for in flexibility – spinning off innovations in project finance, monitoring, and methodologies that also inform regulatory market mechanisms.

Carbon credits can be voluntarily purchased in one of two ways – through a formal exchange or on the decentralized “over-the-counter” (OTC) market where buyers and sellers engage directly, through a broker or retail storefront.

Extract from “State of the Voluntary Carbon Markets 2011 report”, EcoSystems Marketplace

the voluntary carbon market cont
The Voluntary Carbon Market (cont)

Because the voluntary carbon markets are not part of any mandatory cap-and-trade system, almost all carbon credits purchased voluntarily originate from emissions reduction projects. These credits, sourced specifically for the OTC market, are generically referred to as Verified (or Voluntary) Emission Reductions (VERs) – or simply as carbon offsets.

OTC buyers may also voluntarily purchase and (in most cases) retire allowances from compliance markets like the Kyoto Protocol’s Clean Development Mechanism (CDM) or the US Regional Greenhouse Gas Initiative (RGGI).

The OTC market is driven by both “purely voluntary” and “pre-compliance” buyers. Purely voluntary buyers purchase credits to offset their individual or organization’s emissions and are driven by ethical or corporate social responsibility (CSR) motivations. Hence, the demand curve for these purely voluntary VERs has similarities with other “citizen consumer” ethical purchases such as Fair Trade or organic products.

Pre-compliance buyers purchase VERs for one of two purposes: to purchase credits that they might be able to use for future compliance at a comparatively low price or to sell them at a higher price to entities regulated under a future mandatory cap-and-trade scheme

Extract from “State of the Voluntary Carbon Markets 2011 report”, EcoSystems Marketplace

slide15

The Business Case for Sustainability – Avivahttp://www.aviva.com/reports/cr10/climate-change-environment/controlling-impacts/carbon-offsetting.html/

market growth will also come from the implementation of new international cap and trade schemes
Market growth will also come from the implementation of new international cap and trade schemes.........

Australia sets carbon price at £15 per tonne.....

The Australian government has unveiled plans to impose a tax on carbon emissions for the worst polluters.

Prime Minister Julia Gillard said carbon dioxide emissions would be taxed at A$23 ($25; £15) per tonne from 2012.

The country's biggest economic reform in a generation will cover some 500 companies.

In 2015, a market-based trading scheme will be introduced

china to launch cap and trade scheme
China to Launch Cap and Trade Scheme......
  • As a developing country, China does not shoulder legally binding responsibilities to reduce carbon emissions, according to the basic principle set by the United Nations Framework Convention on Climate Change.
  • Putting a price on carbon is a crucial step for the country to employ the market to reduce its rapidly growing carbon emissions and genuinely shift to a low-carbon economy whilst remaining competitive in the global marketplace.
  • The country's first voluntary carbon trade was sealed in August 2010, with a Shanghai-based auto insurance company buying more than 8,000 tons of carbon credits generated through a green commuting campaign during the Beijing Olympics.
  • The trade was carried out through the China Beijing Environment Exchange

http://www.bloomberg.com/news/2010-12-06/china-s-cap-and-trade-to-come-within-five-years-professor-stern-predicts.html

australia s national carbon offset standard
Australia’s National Carbon Offset Standard
  • “A business may choose to go carbon neutral for the following benefits:
  • Reducing impact on global warming
  • Reputational or corporate positioning
  • Product positioning
  • Differentiation from market competitors (or keeping up with market leaders)
  • Attracting and retaining staff
  • Saving money through reducing resource use and subsequent emissions reduction
  • Forming a greater understanding of the carbon risk associated with business operations and/or product manufacture”
slide23
Carbon Disclosure Project Leadership Indexhttps://www.cdproject.net/en-US/Results/pages/leadership-index.aspx
conclusion
Conclusion

With the team, experience, distribution and infrastructure in place with our partner provider, we believe this creates a unique opportunity to enable investors to access the global carbon markets and to build a valuable portfolio of carbon assets.

Over the longer term the carbon market will benefit from greater price transparency, decreasing transaction costs and increasing liquidity, all of which will lead to increased efficiency in pricing and improvements in carbon reduction development.

We believe over the medium to long term carbon credits provide a number of attractive investment opportunities

risk warning
Risk Warning
  • 1. All investments are speculative and can fluctuate in value. It should not be assumed that the value of investments will always rise. Past performance is not a reliable indicator of future results. You may get back less than the amount originally invested or even lose the full amount.
  • 2. You should carefully consider in the light of your financial resources whether investing in Carbon Credits is suitable for you.
  • 3. Changes in currency exchange rates may adversely affect the value of any overseas investments or investments denominated in a foreign currency.
  • 4. There may be a big difference between the buying price and the selling price of Carbon Credits. If you have to sell them immediately, you may get back much less than you paid for them. You may have difficulty in selling Carbon Credits at the price you wish to achieve and, in some circumstances; it may be difficult to sell them at any price. It can be difficult to assess what would be a proper market price for these investments. You should not invest in Carbon Credits unless you have thought carefully about whether you can afford to do so and have taken appropriate independent advice if you feel the need.
  • 5. Representations made by our sale consultants, agents or sales literature either orally, in paper or electronic form do not form part of these Terms. We give no warranty as to the future value of Carbon Credits.
  • 6. Forwards, options and other derivative contracts in relation to Carbon Credits are regulated investments in the United Kingdom. However, Carbon Credits sold by Baron Traders Ltd, aka Validated Carbon Credits are not derivatives and, as such, are not regulated investments. Accordingly, Baron Traders Ltd is not required to be regulated by the Financial Services Commission (FSC) or the Financial Services Authority (FSA) or any other regulator in the United Kingdom or Gibraltar. This means, among other things, that a person buying Carbon Credits from Baron Traders Ltd will not benefit from any protections afforded by the FSC or FSA and would not have access to the Financial Services Ombudsman or the Financial Services Compensation Scheme.
slide26

Where Profits & Ethics UniteTel: +44 (0) 203 137 4400

Email: info@validatedcarboncredits.com

Web: www.validatedcarboncredits.comValidated Carbon Credits is a trading name for Baron Traders Ltd registered in Gibraltar no. 105368