SHANGHAI (6 September 2012). The Center for Energy Sustainability and Economics conducted a survey that highlights the concern of carbon funds regarding the post-2012 scenario, highlighting the need for more stable exit strategies, clearer project methodology approvals and more profitable investment ventures.

The respondents cite that the steep fall of the EU ETS carbon price from 18 Euros a metric tonne to 4 Euros a metric tonne will remain until mid-2013. About 36% of the respondents see that until the debt crisis is over, there will be tougher capital investment climate, fewer project starts, more close downs and layoffs and further decline in price. The respondents believe that renewal of the EU ETS is necessary and other carbon markets will take prominence.

Whilst 20% are unsure whether the price will increase or there will be major game changing projects in the carbon space, interestingly a significant percentage (12 percent) cite the possibility of investing in other profitable businesses, few of which believe that LNG will be the hot topic among financiers, as they see positive economics governing players to convert to natural gas as fuel of choice.

20% remain upbeat that carbon price will remain stable this year and will increase on the second half of 2013, but warn that without policy push, the industry will turn to currently the most economically attractive track: fossil fuels. The respondents believe that the retraction of the political structured agreement of the Kyoto Accord was not a failure, but needs to evolve. Energy efficiency keenly interests investors as it requires the cheapest investments and gives out high returns, but it can only go so far.

“You know that it takes at least 5-15 years for your carbon investments to mature, but the extension to the Kyoto Protocol is only by 2020 and major buy-side institutions such as the EU ETS are still adjusting policies and restricting the use of CERs to only those sourced from LDCs,” says Frank Mercado, Director at the Center for Energy Sustainability and Economics. “This is an insane scenario for carbon funds where once we are expecting 18 Euros a metric tonne or higher potentially doubling to 36 Euros. Now, the price has crashed to barely 4 Euros and several carbon funds have already closed down as a matter of strategy, fund houses are asking fundamental questions such as ‘How do you ensure that we are not the next one?’ and ‘Is our money even coming back?’”

“Apart from there’s no clear indication of what’s going to happen after 2020, the adoption of second commitment period of the Kyoto Protocol without a legally binding agreement for the period beyond 2012… is therefore not an international agreement as referred to in Article 11a (7) of the EU ETS Directive,” says Junji Hatano, Chairman and CEO, Carbon Asiatica (Japan).

“Attaining carbon credits involves going through a rigorous process that is governed by the United Nations, and other equally strict international bodies. The failure of the countries of the world to agree on the successor to the current Kyoto Protocol exacerbates the difficulties,” Hatano added. “Nonetheless, there are still opportunities.” Asiatica, with its professionals who collectively have vast experience, is in a unique position to help project owners explore these opportunities navigate that will be discussed specifically during the presentation.

Laurent Fessmann, Partner at Baker & McKenzie highlighted that “The future of carbon finance is filled with question marks - is the cap-and-trade model efficient enough to prevent long-term average global temperatures from rising more that 2ºC above pre-industrial levels? Will the clean development mechanism going be maintained and if so, under which form?”

Gajananna Hegde, United Nations Framework Convention on Climate Change’s Team Lead in the Methodologies Unit in the Sustainable Development Mechanisms programme will be available to answer these questions and unveil methodology updates towards shaping a registry, new market-based mechanisms and transparent accounting on 18 September 2012 at the World Energy Investment Summit 2012 at the Le Royal Meridien, Shanghai.


ABOUT WORLD ENERGY INVESTMENT SUMMIT 2012

As the value of our assets is derived almost exclusively from legislation, the WORLD ENERGY INVESTMENT SUMMIT 2012 (WEIS 2012) (18-19 September 2012, Le Royal Meridien, Shanghai) helps you find ways to generate returns from your existing investments whether within the CDM Framework or outside it. EITHER WAY, YOU GET SOME MONEY BACK!

You may be attending other Carbon Forums, but in these programs, you will be stuck with the CDM Frameworks that may longer be your most profitable option.

When you attend WORLD ENERGY INVESTMENT SUMMIT 2012, you are not just confined to earning from carbon finance but you can combine your carbon portfolio with direct investments into projects.

WEIS 2012 is the only event that combines carbon business with direct renewable energy and energy efficiency investments.

The programme consists of international veterans in the carbon and clean energy business to answer your Top 5 Questions:

1. IS CARBON TRADING STILL GOING TO MAKE MONEY?
Gajananna Hegde, United Nations Framework Convention on Climate Change’s Team Lead in the Methodologies Unit in the Sustainable Development Mechanisms programme will be available to answer these questions and unveil methodology updates towards shaping a registry, new market-based mechanisms and transparent accounting.

2. WHERE IS IT SAFE TO PUT YOUR MONEY IN ENERGY EFFICIENCY ANC CLEAN ENERGY?
International Finance Corporation is the bellwether of investments and its senior investment officer will be on hand to cite experiences in clear view.

3. WHERE CAN VALUE BE GENERATED AND WHERE FUNDS REDIRECTING THEIR INTERESTS?
Structured transaction and risk management enable you cost effective and efficient trade execution. Hear from Marco as he provides counsel to end user and producer clients whether in China or anywhere in the world on access to global commodity markets and implementing risk management strategies.

Get understanding on carbon risk management, renewable energy and energy efficiency project initiatives on carbon finance and traditional project finance from Marco Teruzzin.

4. WHAT’S NEXT FOR CHINA AND ITS NEW CLIMATE CHANGE LAW REGULATIONS?
Chinese Renewable Energy Industries Association’s Wang Weiquan as well the National Development Reform Commission detail China’s outlook.


5. WHAT ARE COUNTRY-SPECIFIC POLICIES IN LDCS AND GROWTH AREAS?
Meet DNAs and investors in Ghana, Sao Tome e Principe and Maldives among many others! The time is now to make money instead of asking for money so below are more technology providers and experts will provide you a 360-degree perspective in investing.


Rebalance your carbon portfolio clean energy investment at the
Le Royal Meridien, Shanghai, China on 18-19 September 2012

Register today in one of these 4 easy ways:
• Call us at +65 6844 2080,
• Visit www.arcmediaglobal.com/worldenergy
• Fax us at +65 6844 2060 or
• Email us at [email protected] for more info.

The Center for Energy Sustainability and Economics is an industry research centre (IRC) that works to bring top executives together in communities of learning and practice to act as a catalyst for generating high-value energy business insight and channel top expertise to where the world needs it most.
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