Dolfio Series

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Dolfio Series 2 Part 1 Carbon markets
Its money time! ( WCI News) Webinar
Prepared by Dolfio July 30th,
2008
Disclaimer All information provided "as is" for
informational purposes only, and is not intended
for trading purposes or advice
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Table of Contents

• General background on the Carbon/Energy Challenge
• Western Climate Initiative News
• Its money time!
• Trading of assets (VERs, CERs, EUAs, RECs)
• Carbon/renewable energy projects
• Carbon funds
• Carbon sector stocks
• Carbon/energy intensive stocks
• Pair Trading
• Renewable energy model stocks
• Dolfio may help you
• Q/A

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The 45 Trillion Carbon Energy Challenge (1)
Energy Needs
Energy Production/Consumption
Today
Renewable
Coal
Nuclear
Gaz
Oil
Peak
Source European Energy Forum
CO2 Emissions
Coal Reserves
Katrina, Polar caps

Source BP Amoco
Max sustainable
(1) 45 T amount needed over the next 50 years
to avoid an energy shortage and mitigate climate
change. Source International Energy Agency, June
2008
Source revue de lEnergie n575, Jan/Feb 2007
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Carbon Market Size
Carbon Allowances Value and Volume in MtCO2e per
year (1)
6640
140B in 2015 (3)
3600
50B in 2007
2080
1882
15B in 2012, 30B in 2015
2B in 2009
875
546
188

• Sources WorldBank, PointCarbon, US EPA,
  Environment Canada, Dolfio analysis
• Based on the CWI analysis of the WCI Draft
  Design released on July 23rd, 2008. 546
  represents 42 of the GHG emissions over the WCI
  (including Quebec and Ontario) 875 includes
  another 25 of GHG emissions from transportation
  fuels (to be included at the beginning of the
  second period in 2015)
• Assumptions1882 represent 75 of the emissions
  from power generating stationary sources. The
  additional 1718 means than 45 of US and Canada
  emissions would be in the scope of the
  cap-and-trade system. The price range is based on
  the EPA analysis of the bill. The size of the
  market assume a 40/tCO2e price point.

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Table of Contents

• General background on the Carbon/Energy Challenge
• Western Climate Initiative News
• Its money time!
• Trading of assets (VERs, CERs, EUAs, RECs)
• Carbon/renewable energy projects
• Carbon funds
• Carbon sector stocks
• Carbon/energy intensive stocks
• Pair Trading
• Renewable energy model stocks
• Dolfio may help you
• Q/A

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Western Climate Initiative News

• Ontario and Quebec join the WCI
• Grows the potential market size from 1GtCO2 to
  1.3 GtCO2,
• Gives the WCI momentum as a blueprint for a North
  American carbon market
• Elements of the draft design
• Governance a regional body to be created
• Allocation partners to decide respective budgets
  and percentage of allowances auctioned by year
  end
• Scope 40-45 of the GHG emissions starting
  20121. Transportation to be included in 2015
  (phase 2). CO2 from biofuel/biomass out of scope
• Offsets not more than 10 for compliance
  purposes. Projects to be considered in
  agriculture, forestry and waste management

(1) Dolfio Estimate