1. www.socialcarbon.org info@socialcarbon.org SOCIALCARBON and the Voluntary Market ® IV SEMINARIO INTERNACIONAL: MERCADO DEL CARBONO LIMA 22 de Octubre 2009 Stefano Merlin

2. What is SOCIALCARBON? SOCIALCARBON is a standard developed to strengthen co-benefits (environmental & social) of carbon offset projects (www.socialcarbon.org).www.socialcarbon.org The SOCIALCARBON Methodology (SCM) is the key element of the Standard. It was developed by the Ecológica Institute (Brazil) in 2000.Methodology SOCIALCARBON is used for monitoring co-benefits of offset projects, it is normally combined with another standard, such as the VCS - Voluntary Carbon Standard(Greater part of issued projects) CDM, TUV Nord Standard, etc.

3. Research and Community Centers The Ecológica Institute is a Non for profit NGOs based in the Brazilian Amazon that owns and operates research centers in the North of Brazil, focusing on climate change, renewable energy, biodiversity and human dimensions that contribute to general knowledge for local communities and the scientific world. Ecotropical Research Center in Taquarussu Rural Technology Center in Pium Cangucu Research Center

4. 1 - Use of six basic resources: Social, Human, Financial, Natural, Biodiversity and Carbon. 2 - The indicators have a score beginning at the most precarious scenario (level 1) and ending at the ideal situation (sustainable use of resource – level 6). 123456 Absence of formal community associations Community organizations exist but they lack structure and are driven by internal conflicts Community organizations exist and those who are in charge are keen to strength the group Community organizations exist and are headed by people who are recognized as leaders by the community Leaders of community organizations are motivated and relatively experienced Organizations which internalize the sense of community exist and are headed by capable and experienced leaders 123456 The community is very vulnerable to external influences, especially from local politicians Moderate vulnerability to external influences Little vulnerability to external influences Minimal vulnerability to external influences 3 - All the data is collected through participative methods (interviews, questionnaires and meetings with stakeholders). 4 -The average score by the indicators is plotted in a hexagon. How does it work?

5. TUV NORD BVQI PAYMENT OF VCS LEVY SOCIAL CARBON GUIDELINES & INDICATORS UNFCCC & VCS METHODOLOGIES VCS ACCREDITED Social Carbon Project Cycle SOCIAL CARBON REPORT (ZERO MARK) D.O.E. VALIDATION ACTION PLAN IMPLEMENTATION D.O.E. VERFICATION (MARK ONE) VCS_PD D.O.E. VALIDATION MONITORING D.O.E. VERIFICATION Feasibility Study REGISTRATION INTO MARKIT REGISTRY DOCUMENTS AND STATESMENT ISSUANCE

6. SOCIALCARBON VERs are registered at Markit SOCIALCARBON Registry Access: http://www.socialcarbon.org/Registry/http://www.socialcarbon.org/Registry/

7. Why use SOCIALCARBON? Source: Ecosystem Marketplace, New Carbon Finance, 2008

8. Why use SOCIALCARBON?

9. Customer Motivations for Offsets

13. Transactions: 2007 X 2008

14. Project Locations

15. Standards in 2008

16. Standards in 2009

17. State of the Voluntary Market 2009

18. Impact of Financial Crisis on prices “VCS credits sold for an average of $3.7/t, 40% lower than their Nov/Dec level ($6.2/t) and 29% lower than the VCI average ($5.2/t)… project type differentiation continues to have some influence on prices despite standards being the primary price driver. Interestingly, Social Carbon also upheld its premium prices as the market continued to value its additional differentiation over and above VCS.”

19. Some SocialCarbon Buyers

20. Licensing Social Carbon Social Carbon Company: The Social Carbon Company licensed the use of Social Carbon Methodology from the Ecológica Institute and is responsible for managing the operations of the Registry and for the licensing process of the methodology and brand to other organizations in the carbon market. Social Carbon Company is based in Brazil and provides also carbon management services to project developers in the Voluntary Market www.socialcarbon.comwww.socialcarbon.com Social Carbon Company has today enormous expertise with Renewable Biomass projects and with emission reduction projects implemented in Tropical Regions of the world.

21. Fuel Switch at the Ceramic industry and agrobusiness activities: Switch from non renewable biomass to renewable biomass or Switch from fossil fuel to renewable biomass to generate thermal energy for the production processes Project Activity

22. Method Emission reductions and data monitoring: Category AMS-I.E.: Switch from Non – Renewable Biomass for Thermal Applications by the User –Versao 01 from February 2008 onwards Category AMS-I.C.: Thermal energy for the user with or without electricity – Version 13 from March 14th 2008. Sustainability Assessment:  SOCIALCARBON® Methodology and guidelines

23. Buriti Nut HusksPara Nut Husks Elephant Grass Açaí Pits Corn Husks Taperebá Coconut Husks Bagasse Babaçú Rice husk Eucalipto Use of Renewable Biomasses

24. Investment and Technological Enhancements Projects costs, among others:  Production line and equipment changed in order to allow renewable biomass to be used  Capacitating employees to be able to operate new machinery

25. The Social Carbon Methodology offers transparency and credibility through periodic monitoring that identifies and analyses the socioeconomic and environmental benefits hitched to the projects. Sustainability Aspects Point 01 Point Zero

26. Project Results  Reduction of CO2 emission  Discourage of deforestation and conservation of ecossystems  Improvement of Brazilian clean energy matrix  Environmental management tools and wastes management  Eficiency in the productive process  Improvements of working and sanitary conditions  Stakeholders and public awareness

27. Feasibility tool for REDD Projects

28. Thank you Contacts: Stefano merlin stefano@socialcarbon.com stefano@socialcarbon.com Rua Borges Lagoa 1065 Conjunto 146 14°Andar - Vila Clementino Cep 04026-000 São Paulo-SP, Brasil Tel. +55 11 5083.3252 Fax. +55 11 5083.8442