1. Back to the Future: State of the Voluntary Carbon Markets 2011 PREMIUM SPONSOR SPONSORS

2. 2 Simplified diagram of the paths voluntary carbon credits can take from reduction to final buyers PROJECT DEVELOPER BROKER RESELLER PRE-COMPLIANCE (surrender or trade) PURELY VOLUNTARY (retirement)

3. 3 Report informed by market-wide, comprehensive survey of the Over the Counter (OTC) voluntary carbon markets. OTC market is comprised of decentralized, B2B or bi-lateral trades not occurring on exchanges or through formal trading platforms or programs Database of 1,400 companies in marketplace. 284 responded, another 261 suppliers did not transact credits in 2010, were no longer selling voluntary carbon credits or were no longer in business Total % coverage: ~50% of companies, more than 50% of volume Use transaction volume to weight response significance. We consider a transactions to be the point at which you sign a contract – not when $ exchanged or credits delivered, which can happen in future. Means we also track forward sales and options. Best indicator of level of interest and investment in marketplace. This year, a record 284 respondents from 38 countries responded to our survey

4. 4 # of suppliers from South doubled (2009: 29; 2010: 58). Almost ½ from Latin America: 33, up from 13 in 2009 Survey Participant Location COUNTRY20092010 BRAZIL510 MEXICO27 GUATEMALA3 CHILE3 BOLIVIA12 PANAMA2 PERU22 URUGUAY12 ARGENTINA1 COLOMBIA1 COSTA RICA01

5. 5 Source: State of the Voluntary Carbon Markets 2011, Ecosystem Marketplace and Bloomberg New Energy Finance Historic Transacted and Retired Volumes MtCO2e OTC market and Latin America saw record transaction volumes, even excluding CCX LATIN AMERICA = 28% $

6. 6 Source: State of the Voluntary Carbon Markets 2011, Ecosystem Marketplace and Bloomberg New Energy Finance Transaction Volume by Location and Project Type Forest carbon changing the landscape for project location, once a toss up between US- and Asia-based projects LA supplanted top country locations: US: 34% PERU: 17% BRAZIL: 8% INDIA: 8% TURKEY: 8% CHINA: 4% 2009: 16% or 7 MtCO2e MtCO2e

7. 7 Source: State of the Voluntary Carbon Markets 2011, Ecosystem Marketplace and Bloomberg New Energy Finance Land-based projects sequester 46% of all OTC credits; 90% in Latin America; REDD stacked the odds in favor of VCS Market Share by Project Type, Latin America OTCMarket Share by Standard, Latin America OTC

8. 8 Source: State of the Voluntary Carbon Markets 2011, Ecosystem Marketplace and Bloomberg New Energy Finance As seen in previous years in US and AU, Latin American buyers in 2010 sought credits from their own backyard Latin America Buyers Market Share (tracked 12 MtCO2e) MOTIVATION (tracked 9 MtCO2e) % Business For-Profit: Purely Voluntary 50% Business For-Profit: Pre-Compliance 31% Unknown5% Business For-Profit: Resale to voluntary buyers 1%

9. 9 Source: State of the Voluntary Carbon Markets 2011, Ecosystem Marketplace and Bloomberg New Energy Finance SECTORVOLUNTARYPRE-COMPLIANCETOTAL FORESTRY25.9 MtCO2e15.4 MtCO2e41.3 MtCO2e RENEWABLES4.60 METHANE0.090 EFFICIENCY / FUEL SWITCH 6.70.47.1 INDUSTRIAL GAS0.40 TOTAL THROUGH 2015 53 MtCO2e Trends in Supply for Latin American Offsets Through 2015 Where will future supply come from? Reported supply through 2015 equates to 13 MtCO2e/year through 2015 INTERNATIONALDOMESTIC THE USUAL SUSPECTS: EU- and US-based companies absorbed ½ this volume (~7 MtCO2e) in 2010 EXCHANGES: Santiago Colombia Caribbean Basin CALIFORNIA: Up to 71 MtCO2e international REDD could pass through that program through 2020, but no details yet LARGE DOMESTIC FIRMS LOOKING @ FOOTPRINTS; SUPPLY CHAIN EXPORTERS Vale Energy, Banco do Brasil, Pemex, Banco Bradesco, Isagen, Endessa OTHER INTERNATIONAL PROJECT FINANCE: Bilateral/multilateral, fund-based POTENTIAL DOMESTIC MARKETS: WCI, Chile, Brazil (?) – some sub-national movement Trends in Demand for Latin American Offsets

10. Thanks to suppliers and sponsors! For more Information: PREMIUM SPONSOR SPONSORS Molly Peters-Stanley, Associate Ecosystem Marketplace mpeters-stanley@ecosystemmarketplace.com (202) 298-3005