1. A Business Case for the Gold Standard Heidi Forbes Gold Standard and the Clean Development Mechanism Capacity Building Workshop 7 th December 2006

2. 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 it’s 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

3. 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

4. The CDM Gold Standard – a win-win-win solution Commands higher value SELLERS BUYERS Benefits from public opinion and lessened risk 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

5. 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.

6. 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.

7. Contact Heidi Forbes Office: +44 20 7726 4988 Mobile: +44 7834 600 499 Heidi.forbes@tfsbrokers.com www.tfsbrokers.com