1. Harry Klodowski, Esq. Betts, Hull & Klodowski LLC HKlodowski@BHKlawPGH.com 724-940-4000 Betts, Hull & Klodowski LLC

2. Legal Basis for Regulation of GHGs Kyoto Treaty, CDM & JI Federal Legislation State & Regional Programs Betts, Hull & Klodowski LLC

3. Massachusetts v. EPA  127 S. Ct. 1438 (2007)  Not Regulating GHG from vehicles is arbitrary and capricious  GHGs are Pollutants Under CAA and Can be Regulated  Regulate or Tell Us Why Not Betts, Hull & Klodowski LLC

4. 2007 U.S. Bills on GHG Regulation Major Proposals Regulate 6 Kyoto GHGs All Sectors Betts, Hull & Klodowski LLC

5. Regional Programs Registration (Baseline, Offsets, Verification, Registration) Regulation (Covered Sources, Gasses, Cap, Allocation) Betts, Hull & Klodowski LLC

6.  RGGI  Midwest Regional Accord  Other Regions, States  Chicago Climate Exchange  Other Emission Brokers Betts, Hull & Klodowski LLC

8.  RGGI 7+1 States (CT, DE, MN, NH, NJ, NY, VT & MD)  Cap & Trade for EU’s, 25 MW, CO2 Only Betts, Hull & Klodowski LLC

9. RGGI Offsets Outside RGGI Region Covers 6 GHGs Betts, Hull & Klodowski LLC

10. RGGI Offset Projects  Methane Capture – Farms  Methane Capture – Natural Gas  Gas/Oil Energy Efficiency  Afforestation  SF6 from Utility, Industrial Betts, Hull & Klodowski LLC

11. RGGI Offset Requirements Real Additional Verifiable Enforceable Permanent Betts, Hull & Klodowski LLC

12. RGGI Status Betts, Hull & Klodowski LLC 2003 Formation Model Rules & MOU 2009 – 14 cap 2015 – 18 cap 2008 Allowances – June (???)

13. Midwest Regional GHG Reduction Accord Announced November 2007 Draft Rules August 2008 Regulatory Program April 2010 Betts, Hull & Klodowski LLC

14.  Multi Sector  Multi Gas Betts, Hull & Klodowski LLC

15. Chicago Climate Exchange Inc.  Formed 2003  Voluntary Registration & Trading  2003-2006 Reductions (3%)  2006-2010 (3%) Betts, Hull & Klodowski LLC

16.  For Profit  Fees for Membership, Trades  Too Industry Friendly? Baseline Annual Reports Bogus Offsets Verification Betts, Hull & Klodowski LLC

17.  300 Members  200 Page Agreement  6 GHG  Offsets – some questionable  Created a U.S. Market Betts, Hull & Klodowski LLC

18.  Federal Program  State & Regional Programs  DOE/EIA 1605(b)  USEPA Climate Leaders  The Climate Registry Betts, Hull & Klodowski LLC

20. USEPA Multi Sector GHG Inventory One Page of December 2007 U.S. Budget Draft June 2008 Operating 2009 Betts, Hull & Klodowski LLC

21. USEPA Climate Leaders  Voluntary  158 “Leaders”  6 GHGs  Multi Sector  Good Emission Inventory Tools Betts, Hull & Klodowski LLC

22. The Company We Keep

23.  GHG Inventory, Offset Quantification  2007 Forms Reporting Software SEIT  Good Tool for Energy Efficiency Reductions  Verification “recommended” Betts, Hull & Klodowski LLC

24.  39 States, 2 Provinces  80% Population  Voluntary Registration Betts, Hull & Klodowski LLC

25.  Common Accounting Standard  Credible & Consistent Emission Reporting  North American Industry Sectors Betts, Hull & Klodowski LLC

26. Climate Registry Benefits Cost Effective Document Early Action Prepare for Regulation Employee Education Save Energy Software & Support Recognition Betts, Hull & Klodowski LLC

27.  6 Gases  Direct & Indirect  Facility Level Reporting Betts, Hull & Klodowski LLC

28. Climate Registry  General Reporting Protocol (April 2008?)  Verification Protocol (June 2008?)  Reporting Software Betts, Hull & Klodowski LLC

29. GHG Preservation Under PA ERC Rules  “Emission Reductions”  Reciprocity NY, MD  May 2008 Amnesty to 2002  Two Years to File  Lower Cost? Betts, Hull & Klodowski LLC

30. Legal Standard ERC  Surplus  Quantified  Enforceable  Permanent RGGI  Real  Additional  Verifiable  Enforceable  Permanent Betts, Hull & Klodowski LLC

31. What Are They Worth? CO2 – CCX - $4.50 CH3 – CCX - $94.50 NOX – CCX- $1395.00 NOX – Pa ERC - $1250.00 NOX – NOX SIP Call - $3330.00 Betts, Hull & Klodowski LLC