EMERGING OPPORTUNITIES IN GLOBALCARBON EMISSIONS TRADING:CREATING VALUE, MANAGING RISKThursday, January 18, 2007

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LETTER FROM MAYOR BILL WHITE, CITY OF HOUSTON 4

LETTER FROM CONSUL GENERAL JUDITH SLATER, 5BRITISH CONSULATE- GENERAL, HOUSTON

ORGANISERS 6

AGENDA 7-8

EXECUTIVE SUMMARY 9-10

REPORT 11-16

SPONSORS 17

SUPPORTING ORGANISATIONS 18-21

SPEAKERS 22-28

CONTENTS

WELCOME FROM MAYOR BILL WHITE

Greetings,

As mayor of Houston, I welcome everyone to the first conference on Carbon Emissions Trading hosted bythe British Consulate-General and the Greater Houston Partnership.

Houston is America's great city of opportunity and, as the world's energy capital, an integral part of the global economy. Our cityhas a diverse economic base and is a key center of many industries, such as transportation, healthcare and research &development. Houston's long history of innovation in the oil and gas industry uniquely positions the city nationally andinternationally as a location for such a dialogue about carbon emissions trading.

Educating our business leaders and citizens on air quality and environmental issues is important to maintain standards that helpmake Houston a great place to live and work. For example, air quality improvements can create new business opportunities andkeep Houston a vibrant city for decades to come. This event will focus on these issues, and hopefully lead to many successfulpartnerships in carbon markets between the UK and Houston.

I hope those visiting our city for the first time will have an opportunity to share in the Houston experience, taking with youlasting impressions of the spirit, vitality and tradition that characterize our city. I hope all visitors will have an enjoyable andrewarding stay, and look forward to having you return again soon.

Sincerely,

Bill WhiteMayor

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WELCOME FROM CONSUL-GENERAL JUDITH SLATER

A big welcome to all of you, and thank you for attending the British Consulate- General’s first event onCarbon Emissions Trading in Houston.

The British Government is committed to addressing the challenges posed by climate change. British Prime Minister TonyBlair has played a leading role in recent years in the drive to combat global warming, in particular by reducing carbonemissions. As a nation, the UK is committed to a 60% reduction on its 1990 levels of carbon emissions by 2050. Wemaintain that a high-level, public-private framework for low-carbon investments and discussion of the economics of climatesecurity will help us to respond to these new challenges.

Whilst the federal government here has yet to follow suit, we have already seen commitments by several states in the U.S. toreduce their emissions. The independent Stern Review on the economics of climate change, published this past October,concluded that the establishment of a carbon price, through tax, trading or regulation, was an essential foundation ofclimate change policy. The EU Emissions Trading Scheme is now the centrepiece of European efforts to cut emissions.Carbon emissions markets are developing quickly and carbon market structures have become a near term necessity in theUnited States.

Given London’s strength in financial services, and its reputation as a centre of innovation for trading practices, London hasbecome the emissions trading ‘hub’ of Europe, with much of the trading infrastructure based there.

Houston, the international energy capital, also has a long history of innovation in energy markets that uniquely positionsthe city to leverage the next wave of opportunities in carbon emissions trading. New businesses springing up from evolvingcarbon markets aligns with Houston’s entrepreneurial spirit. I hope that this will lead to the forging of strong collaborativeframeworks between the UK and Houston, lasting well into the future.

Finally, I would like to thank the Greater Houston Partnership, our very generous corporate sponsors and our partners fortheir support of this Conference.

Consul-General Judith SlaterBritish Consulate- General, Houston

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WHO WE AREUK Trade & Investment is the lead Government organisation that supports companies in the UKdoing business internationally and overseas enterprises seeking to set up or expand in the UK.We work in close partnership with the English regional development agencies and the nationaldevelopment agencies in Scotland, Wales, and Northern Ireland. UK Trade & Investment willprovide you with the support and strategic partners you need to succeed in the UK.

WHERE TO FIND USUK Trade & Investment has an extensive network world-wide. With commercial teams based inoffices around the world, and a network of specialists throughout the UK, we are uniquelypositioned to help your business across national boundaries. For more information visit us atwww.uktradeinvest.gov.uk

UK TRADE & INVESTMENT CONTACTS IN HOUSTON:Rob TokerConsul, Head of UK Trade & InvestmentBritish Consulate-General1000 Louisiana, Suite 1900Houston, Texas 77002Rob.Toker@fco.gov.uk713-659-6270 x 2140

Lindsey BartlettVice Consul, EnergyLindsey.Bartlett@fco.gov.uk713-659-6270 x2137

Joanne HowardBusiness Development AssociateJoanne.Howard@fco.gov.uk713-659-6270 x2130

The Greater Houston Partnership is the primary advocate for the Houston region. It is comprisedof a strong network of public, private, government, and nonprofit partners working together toachieve economic prosperity and enhance Houston area’s quality of life. More than 2,000Member companies collaborate on more than committees, three councils, and 10 advisory boardsdedicated to enhancing the business and living climate in the Houston region. These Membersrecognize that in working together, companies large and small, individuals and civic organisaionscan make this region a business magnet and a shining example for cities around the world.

www.houston.org

ORGANISERS

UK TRADE & INVESTMENT

THE GREATER HOUSTON PARTNERSHIP

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AGENDA

7:00 – 8:00 AM REGISTRATION, CONTINENTAL BREAKFAST & NETWORKING

8:00 – 8:10 AM OPENING REMARKS AND INTRODUCTION TO MAYOR BILL WHITEJeff Moseley, President, Greater Houston Partnership

8:10 – 8:15 AM WELCOME FROM CITY OF HOUSTONMayor Bill White, City of Houston

8:15 – 8:20 AM WELCOME FROM THE BRITISH CONSULATE-GENERALHM Consul-General Judith Slater

8:20 – 9:00 AM INVESTING IN THE RESPONSE TO CLIMATE CHANGEJames Cameron, Vice-Chairman, Carbon Disclosure Project

9:00 – 9:30 AM CARBON EMISSION ALLOCATIONS & TRADING Leonhard Birnbaum, Director, McKinsey & Co.

9:30 – 11:00 AM MARKET STRUCTURES: GLOBAL CARBON MARKETSThis panel will examine the EU emissions trading scheme and other regulatory frameworks, carbon price drivers,supply and demand issues and future market dynamics.

CHAIR AND OPENING ADDRESSMark Proegler, Director, Emissions Markets Group, BP

PANEL MEMBERS:n Ian Carter, North America Policy Coordinator , International Emissions Trading Associationn Mason Henderson, Manager, Cantor Fitzgerald EBS n Guy Turner, Director, New Carbon Finance n Toby Campbell- Colquhoun, Trader, Environmental Products, Shell Trading, London

11:20 – 12:20 PM VERIFICATION, TRADING, & REPORTING: AN INTEGRATED APPROACHThis panel will assess the impact of multi-scheme CO2 governance on business processes and information systems.

SPONSORED BY VAN NESS FELDMAN

Emerging Opportunities in Global Carbon Emissions Trading:Creating Value, Managing Risk

Thursday, January 18, 2007The Federal Reserve Bank of Dallas - Houston Branch

1801 Allen Parkway

Moderated by: Dr. Jeff Chapman, Chief Executive, The Carbon Capture & Storage Association

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11:00 – 11:20 am Networking Coffee Break

AGENDA

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CHAIR AND OPENING ADDRESSMark Earthey, Vice President, Product Management- Europe, SunGard Energy Solutions

PANEL MEMBERS:n Wilhelm Wang, Certified EMS Lead Auditor, Marketing Manager, Sustainability, BSI Management Systemsn Francois Dauphin, Environmental Offering Director, Logica CMGn Craig Windram, Director & Founder, E3 Europe

12:20 – 1:30 PM KEYNOTE LUNCHEON: THE CONTINUING EVOLUTION OF SUSTAINABLE FACILITIES AT WAL-MARTCharles Zimmerman, Vice-President, Prototype & New Format Development, Wal-mart Stores Inc.

1:40 – 2:40 PM INTERNATIONAL PROJECTS: CLEAN DEVELOPMENT MECHANISM, JOINT IMPLEMENTATION AND BEYONDFrom new certified forestry projects in China and projects in India to the transition countries of Central andEastern Europe, enhanced capacity is providing firms with the ability to more accurately match carbonexposures. This session will examine the investment climate in the most active Clean Development and JointImplementation markets.

CHAIR AND OPENING ADDRESSChandra Shekhar Sinha, Senior Finance Specialist, Carbon Finance, World Bank

PANEL MEMBERS:n Ricardo Nogueira, Counsel/Investment Advisor to Trading Emissions PLC,

EEA Fund Managementn Andy Dvoracek, Senior Project Manager, EcoSecurities Group PLC.

3:00 – 4:00 PM RAPIDLY EVOLVING US MARKETS AND BUSINESS CLIMATEThis panel will include an update on the Regional Greenhouse Gas Initiative, developments and plans for actionin California, and an overview of legislative proposals in the United States.

CHAIR AND OPENING ADDRESS Kyle Danish, Attorney, Van Ness Feldman

PANEL MEMBERS:n Victor Flatt, A.L. O’Quinn Chair in Environmental Law, University of Houston Law Centern J. Greg Spencer, President, Blue Source LLC

4:00 – 4:30 PM HOUSTON’S ROLE IN ENERGY MARKETS Vince Kaminski, Professor, Jones Graduate School of Management, Rice University

4:30 – 5:00 PM NATURAL GAS IN A CARBON CONSTRAINED ENVIRONMENTJim Yardley, President, El Paso Pipeline Group, El Paso Corporation

5:00 – 6:30 PM CLOSE AND NETWORKING RECEPTION

SPONSORED BY BP

2:40 – 3:00 pm Networking Break

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EXECUTIVE SUMMARY

UK Trade & Investment at the British Consulate-General Houston, incollaboration with the Greater Houston Partnership, hosted aconference on Carbon Emissions Trading in Houston. The conference,Emerging Opportunities in Global Carbon Emissions Trading: CreatingValue, Managing Risk, addressed how current emissions tradingsystems are creating business opportunities, fostering innovation andtechnology development, and influencing global financial systems.The international market for carbon emissions trading is currentlyworth approximately $30 billion, and experts predict that the carbonmarket will reach $150 billion by 2012.

London’s position as the epicentre for carbon emissions trading,coupled with Houston’s international energy expertise, highlighted theconference’s objectives of encouraging the continued innovation ofenergy markets and developments in carbon emissions trading.Houston has the potential to become a key global partner to Londonand an industry leader for carbon trading in the United States asdomestic markets develop.

Recognizing the harmful effects of climate change upon the globalcommunity, the UK plans to reduce CO2 emissions sixty percent by2050 – a reduction driven largely by market based mechanismsincluding emissions trading. After the implementation of theEuropean Union Emissions Trading Scheme (EU ETS), the firstworldwide greenhouse gas emissions (GHG) trading scheme,governments, industry and their institutional investors, as well ascitizens, recognize the economic value and the environmentalnecessity of addressing climate change and the markets that canencourage emissions reductions.

The United States emits more greenhouse gasses than any country inthe world and the US, along with Australia, India, Japan, China, SouthKorea, commonly referred to as the Asia-Pacific Partnership or AP6,account for nearly 50% of global GHG emissions output. Following theexample of the UK, the public and private sectors have started to reducegreenhouse gas emissions; especially the most difficult to mitigate CO2.US-based multinationals are already participating in GHG emissionstrading as required by their international operations, and an increasingnumber of domestic companies trade on the United States’ burgeoningvoluntary market. While mandatory federal regulation concerningcarbon emissions does not currently exist in the United States, manycompanies predict that future regulation is imminent and recognize thenecessity of increasing energy efficiency and reducing carbon emissions.In addition, California passed the Global Warming Solutions Act of 2006to reduce the state’s GHG emissions by twenty-five percent by 2020.Further, the Regional Greenhouse Gas Initiative (RGGI) allows for a capand trade program for CO2 emissions in power plants in the Northeastand Mid-Atlantic regions.

The conference was supported by the leadership of both American andBritish officials. Mayor Bill White and HM Consul-General Judith Slaterwelcomed the conference participants and stressed the importance ofdeveloping an international relationship that promoted environmentalresponsibility and economic sustainability. Mayor White made anappropriate analogy to other waste stream sequestration problems andgave a brief history lesson of fresh water resources management inNineteenth century Houston and the varying and evolving attitudestoward the intrinsic and economic value of finite resources.

In the presentation entitled “Investing in the Response to ClimateChange,” James Cameron, Vice Chairman of London-based ClimateChange Capital emphasized that “climate change is an energy problemand energy is an infrastructure problem.” To satisfy global energyneeds, an infrastructure must be developed that promotes economicprofitability and environmental sustainability in the face of finiteresources. It is imperative that world governments address climatechange immediately. Climate change poses immediate threats thatgovernments cannot address through proxy and delegation. Rather, arobust market must continue to develop that allows investors to makelong-term decisions based on the price of carbon.

In addition, the conference highlighted the business opportunitiesprovided by carbon emissions trading in Kyoto and non-Kyotomarkets. The presentation entitled “Emissions Trading from aBusiness Perspective” presented by Dusseldorf-based McKinseyDirector, Dr. Leonhard Birnbaum focused on the short-term forcesdriving the carbon emissions market and the potential hazardsemerging markets must avoid. Climate change can be addressedcompletely absent philanthropic intentions. Emissions trading isimportant from a business perspective because companies will beforced to act on climate change in and outside of Europe. Increasedpolitical will, increased economic necessity, and increasing legalexposure for failure to act will encourage investors to develop strongermarkets for carbon trading. Lessons learned from the EU ETSdemonstrate the need for a uniform regulatory system that avoids anad-hoc, patchwork system of regulations. Uniform regulation willavoid the re-distribution of market signals and provide a consistent,stable market for carbon emissions trading. The net results will be thatbusiness will adjust behaviours and markets will work – what emergesis a clear expression of a belief in well structured, properly orientedmarkets to allocate resources most efficiently.

The panel on Market Structures: Global Carbon Markets made upprimarily of UK based traders and finance experts analyzed the ETSand other regulatory frameworks, carbon price drivers, supply anddemand issues and future market dynamics including who is buyingand selling emissions credits and allocations and why. The panelbegan by discussing fundamentals of emissions trading and provided aworld overview of the carbon emissions market. The panel noted thatthe Kyoto framework expires in 2012 and new frameworks must arise.New markets must be broad, promote consistency between currencies,and avoid creating complex system designs that increase transactioncosts. While the current ETS has a forward investment curve, there isno economic certainty following the expiration of Kyoto in 2012 thatallows countries to make investment decisions. The emerging marketin the United States should consist of a simple, multi-sectoral programthat recognizes the danger posed by climate change and provides asolution. As markets continue to emerge and develop, investors mustunderstand the flow of information between different markets and theinterdependency of energy markets i.e. natural gas, coal, etc. which inprevious eras were largely discrete and independent of one another.

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The next panel entitled Verification, Trading & Reporting: AnIntegrated Approach comprised primarily of UK enterprise IT expertswho analyzed the impact of multi-scheme CO2 governance onbusiness processes and information technology (IT) systems. The panelconcluded overwhelmingly that relying solely on use of homegrownspreadsheets constituted an ineffective method of managingcompliance in a mission critical business information process likecarbon accounting. Instead, they stressed the importance ofdeveloping efficient independent assessment procedures for GHGemissions reporting and the adoption of fit for purpose, robust ITsystems well integrated with each firms enterprise resource planning(ERP) suite and management information systems (MIS). The presenterfrom London based LogicaCMG provided evidence that 34% ofinternal financial worksheets used for strategic decision making werecorrupted or contained serious flaws. Accurate information isparamount from the trader and corporate manager perspective. GHGemissions could become the largest traded commodity market andeffective trading requires an integrated, accurate and robust IT system.The panel concluded with an impassioned appeal for internationalcooperation to address GHG emissions, which will require effective ITsystems rather than vulnerable, one-dimensional spreadsheets.

The following speaker, Charles Zimmerman, Vice President, Prototypeand New Format Development, Wal-Mart Stores Inc, discussedsustainability in a speech entitled “The Evolution of SustainableFacilities.” Taking the every day low price guarantee they provide tocustomers, Wal-Mart has adopted the business practice of providingthe company with an every day low cost. Leading the country inbusiness sustainability, Wal-Mart was fifty percent below the EnergyPolicy Act (2005) requirements through their use of processes such asdaylight harvesting, heat reclamation and advanced LED lighting. Thefull spectrum of deployable technologies and waste/energy reductionpractices was impressive. Wal-mart was emphatic that these practicesconstituted good business practices and each implementation paid foritself within a 6-24 month timeframe.

The panel entitled International Projects: Clean DevelopmentMechanism, Joint Implementation and Beyond consisted of UKexperts in structured finance and project finance who addressed theimpact of multi-scheme CO2 governance on business processes andinformation systems. The panel members explained how the carbonemission trading market has stabilized due to increasing prices andconsistent volumes. Managing risk requires the buyer’s due diligence,portfolio management, and cross-commodity trades. The marketremains active and is predominated by buyers from private firms in theEU and sellers from China’s CDM market. While the activity of thecarbon trading market is no longer questioned, the market presentsnew considerations. No longer presenting an uneven bargainingposition, the carbon trading market offers flexible terms, solid pricing,and contract profit sharing between the buyer and seller. Theinternational market, with China, India, and Brazil at the forefront,requires a portfolio approach and expertise of the country’s specifictechnology and market allowances. For offset project developers, theKyoto protocol and CDM have provided an important framework andbase of knowledge supporting improved project technology anddiversification. Despite the success of CDM, however, challengespersist relating to the speed of market based mechanisms.

After determining the impact of the Kyoto Accords on theinternational community, the next panel, Rapidly Evolving US Marketsand Business Climate, provided an update on the Regional GreenhouseGas Initiative (RGGI), developments and plans for action in California,and an overview of federal legislative proposals in the United States.The future regulation on climate change in the United States is beingshaped by public perception, environmental and cost predictions, andpolitical influence, a federal cap and trade regulatory program ispredicted. Current congressional bills discussing climate changelegislation address concerns for regulation differently, in respect tostringency and market-based provisions. Recognizing the regulatoryuncertainty, analysts question whether offset purchases in the UnitedStates are premature. However, considering the value of marketparticipants and the steep forward price curve, investors can offset amaterial portion of their physical risk with strategic investments.

With insight into international markets, Vince Kaminski of RiceUniversity, (formerly of Citigroup and Enron Energy Trading) discussed“Houston’s Role in the Energy Market.” The modern energy marketlargely involves financial institutions and hedge funds, which hold agrowing interest in commodity markets and commodity investments.The new emphasis on commodities as an asset class, creates demandfor risk management, energy trading, and contract structuring skills.Recognizing this new emphasis and increasing inter-market linkages,Houston provides access to diverse markets, research and educationalopportunities, and the foundation for a competitive merchant energybusiness.

Providing an alternate perspective, the final speaker, Jim Yardley,President of Houston based El Paso Pipeline Group discussed “NaturalGas in a Carbon Constrained Environment.” Mr Yardley explainedhow natural gas provides a bridge between current and future carbonmitigation policies because natural gas is the lowest carbon emittingfossil fuel with the highest efficiency and lowest capital infrastructureor risk. Moreover, the joint use of a gasification and methanationprocess on coal produces pipeline quality gas, which optimizes energysecurity prices and environmental considerations.

CONCLUSIONNot only has global carbon emissions trading emerged as a profitableendeavour for companies, investors, and industries, but it is also anecessary step for national and state governments and the widerinternational community to turn climate change risks into newopportunities. As a financial commodity, carbon emissions represent arapidly growing international market worth over $30 billion. Houston,the world’s energy capital, has a long history of innovation in energymarkets that uniquely positions the City to leverage the next wave ofopportunities in rapidly developing carbon markets.

EXECUTIVE SUMMARY

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EMERGING OPPORTUNITIES IN GLOBAL CARBONEMISSIONS TRADING:CREATING VALUE, MANAGING RISK

BackgroundUK Trade & Investment at the British Consulate-General Houston andthe Greater Houston Partnership hosted a conference on CarbonEmissions Trading in Houston, Texas. The conference, “EmergingOpportunities in Global Carbon Emissions Trading: Creating Value,Managing Risk,” addressed how current emissions trading systems arecreating business opportunities, fostering innovation and technologydevelopment, and influencing global financial systems. Theinternational market for carbon emissions trading is currently worthapproximately $30 billion, and experts predict that the carbon marketwill reach $150 billion by 2012.

London’s position as the epicentre for carbon emissions trading,coupled with Houston’s international energy expertise, highlightedthe conference’s objectives of encouraging the continued innovationof energy markets and developments in carbon finance. Houston hasthe potential to become a key global partner to London and anindustry leader for carbon trading in the United States as domesticmarkets develop.

Recognizing the harmful effects of climate change upon the globalcommunity, the U.K. plans to reduce CO2 emissions sixty percent by2050—a reduction driven largely by market based mechanismsincluding emissions trading. After the implementation of theEuropean Union Emissions Trading Scheme (EU ETS), the firstworldwide greenhouse gas (GHG) emissions trading scheme,governments, industry and their institutional investors, as well ascitizens, recognize the economic value and the environmentalnecessity of both emissions reductions and trading.

The United States emits more greenhouse gasses than any country inthe world and the US along with Australia, India, Japan, China,South Korea, commonly referred to as the Asia-Pacific Partnership orAP6, account for nearly 50% of global GHG emissions output.Following the example of the UK, the public and private sectors havestarted to reduce greenhouse gas emissions; especially the mostdifficult to mitigate CO2. US-based multinationals are alreadyparticipating in GHG emissions trading as required by theirinternational operations, and an increasing number of domesticcompanies trade on the United States’ burgeoning voluntary market.While mandatory federal regulation concerning carbon emissionsdoes not currently exist in the United States, many companies predictthat future regulation is imminent and recognize the necessity ofincreasing energy efficiency and reducing carbon emissions. Inaddition, California passed the Global Warming Solutions Act of 2006to reduce the state’s GHG emissions by twenty-five percent by 2020.Further, the Regional Greenhouse Gas Initiative (RGGI) allows for acap and trade program for CO2 emissions in power plants in theNortheast and Mid-Atlantic regions.

The conference was supported by the leadership of both Americanand British officials. Mayor Bill White and HM Consul-General JudithSlater welcomed the conference participants and stressed theimportance of developing an international relationship that promotedenvironmental responsibility and economic sustainability.

Mayor Bill White made an appropriate analogy to waste streamsequestration problems and gave a brief history lesson of fresh waterresources management in nineteenth-century Houston and thevarying and evolving attitudes toward the intrinsic and economicvalue of finite resources.

In his presentation entitled “Investing in the Response to ClimateChange,” James Cameron, Vice Chairman of London-based ClimateChange Capital, highlighted one of the conference’s major themes—market forces provide the most efficient response to climatechange. Mr. Cameron emphasized that “climate change is anenergy problem and energy is an infrastructure problem.” To satisfyglobal energy needs, an infrastructure must be developed thatpromotes economic profitability and environmental sustainability inthe face of finite resources.

Citing the Stern Review on the Economics of Climate Change1 and theCarbon Disclosure Project (CDP)2, Mr. Cameron analyzed how thedebate over climate change has transitioned from science, to policyand now to investment. The Stern Review, a report conducted byeconomist Sir Nicholas Stern for the British government, concludedthat GHGs could be reduced cost-effectively and the cost of inactionwas too high to contemplate further delay. Further, the CDP, a non-profit venture with international support, has created a remarkablecoalition of investors that requests corporations to report GHGemissions. Both the Stern Review and the CDP reflect the belief thatrobust markets must continue to develop and allow investors to makelong-term decisions based on the price of carbon. Investors areinterested in making long-term commitments in the emerging carbonmarket, and as awareness of the value of carbon increases, the marketwill grow and diversify.

Mr. Cameron also acknowledged the relationship between carbonmarkets and coal production. Coal production and consumptionrepresents a powerful force in the energy world. The energydemand will continue to be met with coal, leading to an increasedrisk from the effects of global warming. While coal provides anabundant and relatively cheap energy source, coal consumptionproduces high hidden costs. In response, investors shouldrecognize this opportunity and invest in carbon capture andsequestration. Mr. Cameron’s discussion on coal production andemerging markets emphasized that carbon markets must not begovernment controlled. Rather, carbon pricing and managementof carbon must become an essential component of economicmanagement in all countries. Carbon markets provide thenecessary market based system to support environmentalprotection and economic growth.

The next presenter highlighted the business opportunities provided bycarbon emissions trading in Kyoto and non-Kyoto markets. Dr. Leonhard Birnbaum, a Düsseldorf-based McKinsey Director,presented “Emissions Trading from a Business Perspective” andconcluded that carbon trading was a business necessity.

REPORT

1HM TREASURY, STERN REVIEW ON THE ECONOMICS OF CLIMATE CHANGE (2007),available at http:// http://www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/sternreview_index.cfm.

2 Carbon Disclosure Project, http://www.cdproject.net (last visited Feb. 5, 2007).

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Dr. Birnbaum focused on the short-term driving forces of theinternational carbon market and potential hazards emerging marketsmust avoid.

Climate change can and should be addressed completely absentphilanthropic intentions. Emissions trading is important from abusiness perspective because companies will be forced to act onclimate change in and outside of Europe. Increased political will,increased economic necessity, and increased legal exposure for failureto act will encourage investors to develop stronger markets forcarbon trading and low carbon technologies. According to Dr.Birnbaum, there is money to be made whether or not a country is aKyoto signatory.

Dr. Birnbaum recognized several challenges facing emissions tradingschemes and suggested ways to increase the effectiveness ofburgeoning markets in the United States. A successful emissionstrading program must achieve emission reductions for the lowest costwithout distributional issues. To achieve reductions, the tradingprogram must recognize total emissions in a trading sector. Tominimize the cost of a carbon market, the trading program shouldcreate investment certainty, exclude very small assets, and create aproper scope of investment. In addition, the trading system shouldrecognize competitiveness issues by encouraging cross bordertaxation, production based allocations with benchmarking, and globalagreements. A uniform regulatory system will avoid an ad-hoc,patchwork system of regulations. Uniform regulation will also avoidthe re-distribution of market signals and provide a consistent, stablemarket for carbon emissions trading. What emerges is a belief inwell-structured and properly oriented markets to allocate resourcesmost efficiently.

The panel on Market Structures: Global Carbon Markets, made upprimarily of UK-based traders and finance experts, analyzed theEuropean Union Emissions Trading Scheme (EU ETS) and otherregulatory frameworks. They also examined carbon price drivers,supply and demand issues, and future market dynamics, includingwho is buying and selling emissions credits and allocations and why.The panel was chaired by Mark Proegler, Director of BP’s EmissionsMarkets Group. He discussed the fundamentals of emissions tradingand provided a world overview of the carbon emissions market. Mr.Proegler noted that emerging markets must adopt a global approachand create a product-based mechanism that will in turn createemissions credits through emissions reductions. According to a WorldBank study, the current value of the carbon market doubled from2005 and currently totals $22 billion. Although a global market isemerging, Mr. Proegler noted that markets require regulatory and pricecertainty to encourage additional investment. Furthermore, he calledfor a comprehensive examination to correct the existence of windfallprofits. Mr. Proegler concluded his presentation with a call for aglobal solution to GHG emissions by harmonizing markets as theygrow with other technological changes.

Ian Carter, the North American Policy Coordinator for the InternationalEmissions Trading Association (IETA), addressed key challenges facingthe creation of a global carbon market. Mr. Carter’s presentation,“Emerging Opportunities in Global Carbon Emissions Trading,” brieflyanalyzed the ETS and provided guidance to the emerging carbonmarket in the United States.

Like other conference presenters, Mr. Carter recognized the value ofthe European carbon market, but required increased transparency,increased transactional efficiency, and more predictable investmentoutcomes. As the carbon market in the United States develops, Mr.Carter called for the adoption of an efficient market with federalcontrols. Any GHG legislation in the Untied States should rely onmarket efficiencies to minimize social and economic costs whilemaximizing effectiveness of the trading program. Further, lawmakersshould look to state initiatives regarding GHG emissions trading, suchas the RGGI and the California Clear Air Initiative, but only to create afederal system. Mr. Carter supported Dr. Birnbaum’s position that afederal system is superior to a state system. Uniformity fosterscertainty and will increase investor confidence in new carbon markets.

Mr. Carter also provided several warnings to proponents of carbontrading in the United States. First, the market must be simple—lawmakers must resist the temptation to over-engineer the market.Next, safety valves must be in place to provide access to a liquidmarket with an abundant supply of offsets. In addition, the marketshould be built and assessed with realistic expectations, and otherpolicy measures may be required to achieve results in the necessarytime frame.

The next panelist, London-based Toby Campbell-Colquhoun, anEnvironmental Products Trader for Shell Trading, analyzed the currenttrading scheme from a trader’s perspective in a presentation entitled“EU ETS – Lessons Learned”. The ETS received high marks for itsrelatively high volume of trades, depth and liquidity, low transactioncosts, and the expanding number of products available to trade onthe market. Mr. Campbell-Colquhoun stated that up to four millionallowances were traded daily on the market and numerous institutionswere engaged in the trading. The market contains a significantnumber of liquidity providers including investment banks and hedgefunds. In addition, transaction costs were reasonable and did notoffer a significant impediment to trade. Numerous products tradedfrequently on the market and interacted well with other tradedproducts such as power, gas, and coal. Also, the market provided anadequate mechanism for verification, monitoring, and validation.

Mr. Campbell-Colquhoun highlighted areas where the ETS couldimprove, including the need for increased transparency, better realtime price information and the prompt release of complianceinformation, thereby allowing traders to take advantage of themarket’s volatility. Further, the ETS must link with the flexiblemechanisms encouraged by the Kyoto Protocol, such as the CleanDevelopment Mechanism (CDM) and Joint Implementation (JI), andfully integrate with a global market. Finally, Mr. Campbell-Colquhouncautioned that Kyoto’s expiration in 2012 limited the certainty of themarket’s forward price curve. Although a forward price curve currentlyexists and traders can trade on a forward basis for two or three yearspast Kyoto’s expiration, investors must obtain greater certainty tocontinue the forward curve further.

In conclusion, Mr. Campbell-Colquhoun explained that a deep, liquid,and efficient market allows companies to formulate and executeeconomically rational investment decisions. After all, creating a stableregulatory regime provides companies with the confidence to committo long-term investments to reduce and moderate GHG emissions.

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Mason Henderson, Manager for Cantor Fitzgerald Brokerage, offeredinsight derived from the SO2 and NO2 market in the United Statesthat should be applied to burgeoning carbon markets. Hispresentation, “Lessons Learned: U.S. Offset and Cap & TradeExperiences,” began with a simple, yet resounding call for thegovernment to assume leadership, recognize the problem posed byGHG emissions, and commit to solve it. A successful market must besimple in purpose—reduce GHG emissions—and simple in method—submit carbon allowances or cut emissions output. Further, thetrading program must be based on an accurate, reliable emissionsinventory that works effectively from its inception. The tradingscheme should be mass-based rather than rate- or heat-based, andsources of GHG emissions must be incorporated into the scheme tocreate a viable solution. The trading scheme must establish clear rulesand regulations at the outset to encourage compliance. And as longas companies satisfy the scheme’s goals, the regulations should not beadjusted. Companies must be held to annual or bi-annual complianceobligations and penalties must be imposed for noncompliance: theremust be a fate worse than noncompliance. Mr. Hendersonencouraged emerging carbon markets to adopt existing infrastructureembedded in local air pollution control districts. Local regulatorsshould be vested with the authority to run, operate, monitor, andinspect those facilities subject to GHG regulations.

Noting some of the inefficiencies in the NO2 and SO2 trading scheme,Mr. Henderson explained that end users, rather than marketspeculators, must receive the allowances. Otherwise, companies will beless inclined to participate in the program. Further, new carbontrading schemes need to be uniform to avoid leakage and preventcompanies from relocating to jurisdictions with less stringent orcheaper compliance costs.

Guy Turner, a London-based Director of New Carbon Finance,concluded the first panel’s discussion with his presentation, “Pricesand Investment Opportunities in Carbon Markets”. Mr. Turnerunderscored his presentation by acknowledging the complex nature ofthe carbon market. The carbon market is difficult to forecastaccurately because it is affected by many factors including politics,weather patterns, and fuel prices. Therefore, it is imperative tounderstand the linkage between markets. The primary driver ofcarbon price is the balance of supply and demand. The supply side isdriven by abatement opportunities, such as cement and glassproduction. In certain situations, it will become cheaper to shut downoperations and sell carbon emissions credits rather than continueproduction.

On the demand side, the main driver is the degree to which globalcredits can be incorporated into the global trading scheme. Thecarbon market, like all markets, is not completely efficient. Buyersbuy at various times, but sellers will only sell when they are absolutelycertain that they will have credits to sell. Seller risk aversion will likelycontinue to throw the supply and demand curve off balance andaffect carbon prices. Although the carbon market does haveinefficiencies and externalities, fifty-one funds are dedicated toinvesting in carbon assets. In 2006, money invested in carbonvehicles totalled $5.8 billion. To reach reductions set forth in theKyoto Protocol, however, approximately $25 billion would have to beinvested. Mr. Turner concluded that while London was the currentepicentre of carbon trading and wealth management, the marketcenter could shift to the United States.

The next panel entitled Verification, Trading & Reporting: AnIntegrated Approach comprised of primarily UK enterprise ITexperts. The panel analyzed the impact of multi-scheme CO2governance on business processes and IT systems. The panelconcluded overwhelmingly that relying solely on the use of home-grown spreadsheets constituted an ineffective method ofmanaging compliance in a critical business information process likecarbon accounting.

Mark Earthey, Vice President of Product Management-Europe forSunGard Energy Solutions, briefly introduced the panel by calling forrobust IT systems that calculate emissions properly. The first presenter,Wilhem Wang, Certified EMS Lead Auditor and a BSI ManagementSystem Marketing Manager in the Sustainability group, began hispresentation, “Why Another Pair of Eyes? The Need and Value ofIndependent Assessment,” by asking a rhetorical question: “Why doAmericans care about GHG emissions—particularly without aregulatory system?” Mr. Wang believed increased public awareness ofthe effect of GHG emissions in the United States during the pasttwelve months and increased awareness of potential risk of publicliability from the business sector has caused Americans to care.Indeed, many experts believe that companies that choose to ignorethe risk of global warming may incur the same fate as thosecompanies that chose to ignore the consequences posed by the healthrisks of asbestos.

Industries producing the most significant GHG emissions—energygenerators, oil and gas, manufacturing and transportation—mustrecognize the need for independent assessment. Mr. Wang definedthe unique considerations inherent in independent, third-partyvalidation mechanisms. Emissions validation serves to assess theproject design’s baseline, monitoring plan, and the project’scompliance with the United Nations Framework Convention onClimate Change (UNFCCC) and host party criteria. In addition,validation provides assurances to the project stakeholders that theproject will generate certified emission reductions (CERs). Further, CERverification serves to verify that the project is implemented accordingto plan, confirms the existence of a functional monitoring plan, andassures that the project will generate verifiable emissions reductions.

Mr. Wang then analyzed the value provided by independentassessment. Not only will independent assessment enhance theproject’s credibility, transparency, and stakeholder communication, butit will also provide accurate reporting of GHG inventory and emissionsreduction realization. In addition, independent assessment willidentify opportunities for system management improvement.Currently, voluntary GHG emissions reporting and managementmechanisms are active, but limited, in the United States. However, theSupreme Court of the United States granted certiorari to review theD.C. Circuit’s decision in Massachusetts v. EPA and heard arguments inOctober 2006. The Court’s decision could accelerate the imposition ofa mandatory framework regulating GHG emissions. With thepossibility of United States regulatory frameworks on the rise, it isimportant to create a systematic approach to GHG management—emissions reductions, inventory reporting, and credit generation—toprovide a holistic framework that will unlock the value ofenvironmental improvement.

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Next, Craig Windram, Director and Founder of E3 Europe, presented“Emissions Compliance, Trading & Reporting: An IntegratedApproach.” Mr. Windram exposed the errors and inefficienciesproduced by relying solely on Excel spreadsheets to track emissionscompliance. In short, the use of the spreadsheet is incomplete, out ofdate, inaccurate, difficult to maintain, expensive to audit, inaccessible,and insecure. Indeed, thirty percent of company spreadsheets containerrors that go unreported, even after internal audits. Mr. Windramnoted that the majority of spreadsheet supported emissionscompliance systems evolved in piecemeal fashion and are susceptibleto data duplication and error. Further, spreadsheets create adisconnect between operations and corporate decisions causingmanagers to lose their oversight ability to monitor emissions liabilities,assets and compliance positions. Accurate reporting and monitoringaffects mark-to-market valuation of allowances which, in turn, directlyaffects a company’s balance sheet and profit and loss statement.Lastly, regulators and investors are demanding that managers providegreater transparency and accountability—a request the spreadsheetcannot provide. In conclusion, Mr. Windram encouraged managers toreview current reporting systems and assess their fitness.

Mr. Earthey then addressed the effects reporting errors posed totraders in his presentation entitled, “Reporting & VerificationInformation Systems—A Trader’s Perspective of the Requirements.”Accurate information is paramount from a trader and corporatemanager perspective,. GHG emissions could become the largest tradedcommodity market, and effective trading requires an integrated,accurate and robust IT system. Inaccurate information affects thetrader in numerous ways. The poor dissemination of informationresulting from faulty reporting can cause traders to act on inaccurateinformation and suffer significant losses. Traders can face fines fornoncompliance and suffer from bad publicity that will encourageothers not to trade. Despite these problems, trading can be highlyprofitable and emissions trading should not be an exception. Todevelop a robust carbon market, verification and reporting must beimproved upon.

Mr. Earthey outlined several general requirements for effectiveemissions trading. First, the system must be dynamic, flexible, andable to calculate emissions liabilities under applicable scheme rules.Emissions trading must also capture actual emissions and meetreporting obligations. Mr. Earthey concluded by explaining thatemissions trading involves many interlinked business processes. Inorder to capture opportunities to combine profit and compliance,effective trading demands an integrated IT system.

Lastly, Francois Dauphin, Environmental Offering Director for LogicaCMG, concluded the second panel with an impassioned appeal forinternational cooperation to address GHG emissions with effective ITsystems rather than through vulnerable, one-dimensional spreadsheets.Mr. Dauphin stated plainly that CO2 should be viewed as money. Assuch, regulations for GHG emissions will continue to develop andsystems need to develop a clear strategy to combat global warmingeffectively and economically.

After discussing existing international carbon trading markets and therole of governance and information systems on business processes,there was also resounding support for investing in the carbon marketirrespective of mandatory regulatory requirements. While concernsremain, the carbon market has proven to be environmentallyimportant and profitable for businesses.

Prioritizing business profitability through environmental maneuvershas undoubtedly been successful for an international retailer—Wal-Mart. Keynote speaker, Charles Zimmerman, Vice-President ofPrototype & New Format Development at Wal-Mart Stores Inc.,discussed “The Continuing Evolution of Sustainable Facilities at Wal-Mart.” Taking the every day low price guarantee they provide tocustomers, Wal-Mart has expanded the credo and adopted thebusiness practice of providing the company with an every day lowcost. Wal-Mart stores in the United States lead the internationalcommunity in energy efficiency and surpass energy use requirementsof the Energy Policy Act (2005) by fifty percent.

The company remains committed to business sustainability with theircontinued goal to reduce energy consumption. Indeed, the companyset, and will likely achieve, a goal to reduce energy consumption bytwenty percent in seven years. Using techniques like daylightharvesting, white roofs, and sunroofs, Wal-Mart stores are able toemploy natural sunlight to illuminate their stores. Heat reclamation isalso utilized to reuse the heat emitted from refrigeration units forother purposes such as heating water. The energy usage of therefrigeration units is further enhanced by adding doors to the displaycases, installing LED lights, and motion sensors to turn onrefrigeration unit lights.

Wal-Mart continues to improve the sustainability of their stores byresearching the feasibility of rainwater harvesting, domestic waterconsumption, construction debris recycling, and increasing the use ofrecycled products. Wal-Mart continues to have ongoing discussionswith competitors to reduce energy costs nationwide.

Following Mr. Zimmerman’s thought provoking discussion, the nextpanel addressed International Projects: Clean DevelopmentMechanism, Joint Implementation and Beyond. The panel offeredinsight into ways to enhance the capacity and ability of firms toaccurately match carbon exposures through investment in the mostactive clean development and joint implementation markets.

A representative from the Sustainable Development Department atthe World Bank, Chandra Shekhar Sinha, spoke on “InternationalProjects: Clean Development Mechanism, Joint Implementation andBeyond.” Mr. Sinha identified the structure of the market in 2006as predominated by the carbon allowance market, particularly, theETS. The market indicates a trend of market value doubling in2006. As carbon develops as a financial trading market, the growthof the project-based market will stabilize. From 1998 untilNovember 2006, the volumes have stabilized and the price of carbonhas continued to increase.

When entering the market, the fixed forward primary CER transactionsdominate and secondary markets emerge as more CERs are issued.For buyers, reliance on their due diligence rather than sellers’guarantees for delivery is necessary because upfront payments are rareand payments are made at agreed target points. To manage risk,buyers should ensure portfolio management and cross-commoditytrades, and utilize emerging insurance projects. Currently, buyers ofmarket shares are predominately private firms from the EU, whilesellers in the CDM market share are mostly from China. The World Bank has been involved in carbon finance since the late1990s. In 1997, the prototypical carbon fund was initiated with a$100 million investment that capitalized at $180 million.

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The second phase of their initiative was consolidation followed by thecurrent phase of identifying the value-added in the carbon market.

After surveying the multi-phased efforts of the World Bank, RicardoNogueira from Trading Emissions, PLC, discussed “Clean DevelopmentMechanism – Where are we now?” Mr. Nogueira explained that thecarbon market was no longer an absolute buyer’s market. Instead,the carbon market represented a deal structure with variety, flexibility,and equity. The market has matured with increased informationflow, transparency, and increasing success rates. With China, India,and Brazil at the forefront, the international market requires aportfolio approach and expertise of the country’s technology andmarket allowances.

Yet, an international market poses international problems. Projectrisks include project maturity, technology limitations, underlyingbusiness concerns, size and risk of controversy. With unreliableguarantees, buyers can assess risk by spreading out their portfoliothrough diverse technologies, project types, and geographies.

The market’s success, maturity, and problems were further discussedby Andy Dvoracek, from EcoSecurities. Mr. Dvoracek discussed theCDM as a robust market supporting large scale emissions reductions.The Kyoto Protocol and CDM provided a foundation for thedevelopment of an important framework and base of knowledge foroffset project developers. In the United States, recent initiatives, suchas RGGI, California's AB 32, and the voluntary Chicago ClimateExchange (CCX), have developed.

Despite the success of CDM, challenges persist due to the speed ofmarket based mechanisms. Without a long-term policy, there will notbe a long-term drive to act. Greater responsiveness and transparencyare important to support the market. Currently, there is no directinteraction between project developers and regulators, nor a balancebetween environmental integrity and red tape. Despite thesechallenges, Mr. Dvoracek recognized that the absence of policy, policyblunders and our imaginations are the only limitations to climatechange solutions.

After understanding the impact of the Kyoto Accords on theinternational community, the next panel entitled Rapidly Evolving USMarkets and Business Climate, discussed the RGGI, developments andplans for action in California, and an overview of legislative proposalsin the United States.

Professor Victor Flatt, the A.L. O’Quinn Chair in Environmental Law atthe University of Houston Law Center, addressed “Climate Change andFederal Regulation.” Regulations on the horizon will be shaped byperceptions of climate change induced environmental degradation,predictions as to temperature changes and their effects, predictions tothe cost of action and political influence. The current regulatoryresponse involves an E.U. cap and trade program, funding forrenewable energy, state and city programs, and a voluntary industryresponse. Public opinion is changing greatly and regulation willoccur—possibly as early as 2008.

A future federal regulatory system will be shaped by existing GHGregulations and the current political process. From the power plantcap and trade program in the Northeast to mandatory power plantCO2 controls, models will be evaluated to establish the federalregulatory system.

Politically, there are many different proposals, notably the Liberman-McCain, Bingaman and Boxer bills. It is possible that the newregulatory system will involve diverse sectors including electric powergeneration, petrochemical plants, refineries, and transportation. Thenational system will likely include a federal cap and trade program.Although the likelihood of immediate industry response is unknown,an industry might lose out on an opportunity or bragging rights bynot responding.

Professor Flatt’s views on the current status and future possibilities ofcarbon regulation provided an appropriate segway into Kyle Danish’sanalysis of current legislation in his presentation entitled “US Policyand the US Carbon Markets.”

Mr. Danish, an attorney with Van Ness Feldman, addressed theincreasing probability of GHG regulation in the United States due toDemocratic control of Congress, bipartisan interest, state activity,and the discussion shift “from if, to how, to regulate.” In these nextsteps of determining how to regulate, the policy design willdetermine the market.

The stringency of the regulation and whether the regulation willbe market based will need to be determined for future regulation.If the regulation will be market-based, it will be shaped by suchinitiatives as California’s experience with market-based approachesand Governor Schwarzenegger’s Market Advisory Committee.However, the stringency determination for emissions will beshaped by competing legislator’s proposals.

Mr. Danish recognized that the question of how much of theeconomy will be regulated would need to be determined.Different legislators and current state programs in California andthe Northeast, will provide a landscape to determine if coveragewill involve only the electric power sector or economy-widecoverage. However, Mr. Danish recognized that less thaneconomy-wide coverage will lead to smaller allowance marketsand larger offset markets.

Additionally, the current proposals of McCain-Lieberman andBingaman address a wide range of industries including coalmining, petroleum refineries and other facilities. The proposalsalso address cost control measures such as borrowing andsafety valves.

After surveying the future and direction of possible legislation,Greg Spencer of Blue Source discussed “Carbon Offset Purchases:Prudent or Premature.” Regulatory uncertainty in the UnitedStates is causing many analysts to question whether offsetpurchases are premature, but with pending legislation on thehorizon, they may in fact be prudent.

Offset purchases can be viewed as premature considering the loss ofinvestment for early action, offset criteria, counterparty delivery risks,and regulatory uncertainty. Yet, offset purchases actualize withmarket participants receiving value and the steep forward price curve.The annual price appreciation has been more than 100% in the lastthree years, and the price curve has forecasted 40% annualappreciation for the next eight years.

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Regardless of the prudency or prematureness debate, Mr. Spencerrecommends managing the risk. Buyers can offset a materialportion of the physical risk with multiple projects, verified offsets,and firm option structures. Moreover, strategic investments areimportant to hedge financial risks through equity, project ortechnology investments.

With insights in current U.S. activity in the carbon market, ProfessorVincent Kaminski, from Rice University, localized the discussion toHouston in his presentation, “Houston’s Role in Energy Markets.”With his experiences in the energy market and academia, ProfessorKaminski provided an overview of modern energy markets. Energymarkets are rapidly evolving following the deregulation of the naturalgas and electricity markets in the United States. Increasingglobalization and the integration of energy markets is causing anincreased demand for trading, risk management, and financialengineering professionals.

The modern energy market largely involves financial institutions andhedge funds. Since the crisis in the merchant energy business in2002, financial institutions and hedge funds emerged as a new classof players using diverse business models. More than ever, financialinstitutions look to commodities as an asset class likely due toshrinking profit margins in traditional business lines, a constant questfor diversification, and growing imbalances and distortions in theworld economy. Volatile energy prices are creating a market demandfor risk management and contract structuring skills. The inter-marketlinkages, between commodities such as electricity, natural gas, andcoal, are becoming more integrated geographically.

As such, Houston’s educational emphasis on energy markets researchshould be capitalized. Programs at Rice University's Jesse H. JonesGraduates School of Management and the University of Houston,Bauer College of Business, and the Center for Energy Economics atthe University of Texas at Austin establish a large pool of talent inHouston. As for the future of energy trading in Houston, in the lastfive years Houston has made significant progress in recovering its rolein the energy trading and merchant energy business.

Texas companies have been involved in initiatives to reduce carbonemissions. Jim Yardley, President of the Pipeline Group with El PasoCorporation, gave a presentation entitled “Natural Gas Industry in aCarbon Restrained Environment.” Mr. Yardley explained how naturalgas is a carbon restrained industry. Natural gas is the lowest carbonintensity emitting fossil fuel and offers the highest efficiency andlowest capital infrastructure or risk. These factors lead to a“breakeven fuel price premium,” compared with energy prices, carbontaxes, and high construction prices. The joint use of a gasificationand methanation process on coal produces pipeline quality gas andenergy security prices are optimized along with environmentalconsiderations. Natural gas presents a "bridge" in the face oftechnology and regulatory uncertainty. Mr. Yardley identifiedadditional greenhouse gas and air quality commitments El PasoCorporation has begun as avenues to reduce carbon emissions.

Not only has global carbon emissions trading emerged as aprofitable endeavor for companies, investors, and industries, but itis also a necessary step for national and state governments and thewider international community to turn climate chance risks intonew opportunities.

As a financial commodity, carbon emissions represent a rapidlygrowing international market worth over $30 billion. Houston, theworld’s energy capital, has a long history of innovation in energymarkets that uniquely positions the City to leverage the next wave ofopportunities in rapidly developing carbon markets.

Throughout the Conference, the presenters expressed their confidencein market forces. The conference demonstrated that theinfrastructure, knowledge, and capital are available for proponents ofa carbon trading market. As a global carbon market continues todevelop, the dialogue initiated at the Greater Houston Partnership andUK Trade & Investment conference on Carbon Emissions Trading willhelp to encourage the market to strengthen and mature.

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BP is one of the world’s largest energy companies, providing its customers with fuel fortransportation and energy for heat and light. BP employs more than 100,000 people worldwideand more than 35,000 in the United States. BP’s family of brands includes Amoco, Aral, ARCO,BP and Castrol.

BP is also among the world’s most progressive large enterprises. The first major energycompany to acknowledge the need for precautionary action to reduce greenhouse gasemissions, today BP continues to lead the effort to meet the world’s growing demand forsustainable, environmentally responsible energy.

www.bp.com

In the energy sector, SunGard provides integrated solutions that enable energy companies tomore efficiently and profitably trade and market energy, process transactions, manage risk, andoptimize operational and financial decisions. SunGard serves over 200 major energy marketparticipants across North America and Europe, including utilities, power generating companies,energy traders and marketers, gas producers, pipelines, distribution companies, and publicagencies. SunGard possesses leading energy solutions and industry expertise that companiesneed to address the current and future challenges of today's energy markets.

www.sungard.com

Van Ness Feldman is a law and policy firm concentrating in energy, environment, and naturalresources matters. Founded in 1977, the firm now has more than 80 attorneys and public policyprofessionals, many of whom served as chief legal counsel to key congressional committees andMembers of Congress and as high-level officials in key agencies of the United Statesgovernment. Van Ness Feldman was among the first law firms to recognize the emerging issueof climate change and establish a substantial, dedicated practice in the area. The firm providesstrategic advice to clients that are climate change leaders in a range of sectors, including: naturalgas pipelines, electric power, automobile manufacturing, and minerals and metals. Van NessFeldman also has a very active practice in emissions trading, providing legal counsel on CleanDevelopment Mechanism and Joint Implementation transactions under the Kyoto Protocol, aswell as for transactions in the US voluntary markets. The firm’s emissions trading clients rangefrom the “carbon fund” for the country of Switzerland to an entity that invests in offset projectsfor a group of over twenty US utility companies.

www.vnf.com

McKinsey & Company is a privately owned management consulting firm that focuses on solvingissues of concern to senior management in large corporations and organizations. TodayMcKinsey has over 7,500 consultants in 84 offices across 45 countries. They help solve strategic,organizational, operational and technological problems, for some of the world's largestorganizations. Clients include three of the world's five largest companies, two-thirds of theFortune 1000, governments and other non-profit institutions. McKinsey also performs pro bonoengagements for a number of charitable organizations and government agencies worldwide.

www.mckinsey.com

SPONSORS

BP

SUNGARD ENERGY SOLUTIONS

VAN NESS FELDMAN

MCKINSEY & COMPANY

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SUPPORTING ORGANISATIONS

The Carbon Capture & Storage Association (CCSA) exists to represent the interests of itsmembers in the business of capture and geological storage of carbon dioxide (known asCarbon Capture and Storage, or CCS) as a means of abating atmospheric emissions ofcarbon dioxide and, potentially, as a means of enhancing the production of fossilhydrocarbons. From its base in London the Carbon Capture & Storage Association bringstogether specialist companies in manufacturing & processing, power generation,engineering & contracting, oil, gas & minerals as well as a wide range of supportservices to the energy sector such as law, banking, consultancy and projectmanagement. The Association is a model for sectoral cooperation in businessdevelopment and its existence is welcomed by government.

www.ccsassociation.org

Center for Energy Economics, Bureau of Economic Geology, The University of Texas atAustin educates stakeholders on energy economics and commercial frameworks usingcomparitive research to facilitate energy development. We work to help prepare energyindustry managers and their legal advisors and government policy makers and regulatorsfor more competitive global energy markets. Our research focus is on frameworks forcommercially viable energy projects and the business-government interface.

www.beg.utexas.edu/energyecon

The City of London provides local government services for the financial and commercialheart of Britain, the 'Square Mile'. It is committed to maintaining and enhancing thestatus of the business City as the world's leading international financial and businesscentre through the policies it pursues and the high standard of services it provides. Itsresponsibilities extend far beyond the City boundaries in that it also provides a host ofadditional facilities for the benefit of the nation. These range from open spaces such asEpping Forest and Hampstead Heath to the famous Barbican Arts Centre.

The City of London combines its ancient traditions and ceremonial functions with therole of a modern and efficient local authority, looking after the needs of its residents,businesses and over 320,000 people who come to work in the 'Square Mile' every day.Among local authorities the City of London is unique; not only is it the oldest in thecountry but it operates on a non-party political basis through its Lord Mayor, Aldermenand members of the Court of Common Council. The Lord Mayor in particular plays animportant diplomatic role with his overseas visits and functions at the historic Guildhalland Mansion House for visiting heads of State.

The City of London is committed to an extensive programme of activities designed toassist its neighbours to combat social deprivation so that they can benefit from thewealth the 'Square Mile' generates. Staff and members of the City of London have,through centuries of careful stewardship, ensured that the 'Square Mile' has continuedto thrive. Today's City of London, through its philosophy of sustainable development,aims to share these benefits with future generations of residents, businesses and workers.

www.cityoflondon.gov.uk

CENTER FOR ENERGY ECONOMICS, BUREAU OFECONOMIC GEOLOGY, THEUNIVERSITY OF TEXAS AT AUSTIN

THE CARBON CAPTURE &STORAGE ASSOCIATION (CCSA)

THE CITY OF LONDON

19

SUPPORTING ORGANISATIONS

HARC

Climate Wedge Ltd Oy has partnered with Cheyne Capital Management Ltd, one of theworld’s leading hedge fund management companies, to offer a large source of high-quality voluntary emissions reductions to companies wishing to offer carbon offsetproducts and services to their customers or offset their direct emissions. Climate Wedgeaims to drive and support novel ways in which robust offsets can be used andrecognized as a meaningful response option to mitigating corporate GHG emissionsacross all sectors and regions.

www.climatewedge.com

Element Markets utilizes the foremost market intelligence on emission and renewableenergy credits to facilitate strategic financial transactions and develop uniquecapitalization for clean energy technologies.Element Markets LLC was founded in 2004 by a collection of senior managers withbackgrounds ranging from power and gas to emissions/renewable brokerage and graintrading. Our goal is to ensure that environmental assets, liabilities, and trading strategiesare managed at their optimum commercial level over a long-term basis. Our clientsrange from municipalities to Fortune 100 companies. We pride ourselves on our integrityand service, and we provide companies with customized solutions to meet theiremissions, renewable, or technology needs.

www.elementmarkets.com

HARC is a not-for-profit organization based in The Woodlands, Texas dedicated toimproving human and ecosystem well-being through the application of sustainabilityscience and principles of sustainable development. HARC's mission is to moveknowledge to action to improve human well-being and the environment.

HARC is a mission-focused sponsored research organization In a non-partisan andcollaborative manner, HARC is a conduit from basic research to action that fosters theimplementation of policies and technologies based on rigorous principles of socialscience, natural science, and engineering. HARC's research themes support sustainabilitysolutions in ecosystems, water, air & climate, clean energy, the built environment, andenvironmental health.

www.harc.edu

Houston Technology Center (HTC), A non-profit 501(c)(3) corporation, is Houston’sbusiness accelerator and the largest technology business incubator in Texas. HTCaccelerates the commercialization of emerging technology companies in Houston byproviding in-depth business guidance, access to capital and service providers, andentrepreneurial education. Additionally, HTC promotes Houston’s technology successesto enhance its position as a leading technology city and educates entrepreneurs and theunderserved communities of Houston. Supported by more than 300 corporations andorganizations, Houston's leading academic institutions, the Greater Houston Partnership,the Texas Medical Center, NASA-Johnson Space Center, and the City of Houston, HTChas become the center of technology entrepreneurship by assisting more than 200companies within several key sectors: Energy, Information Technology, Life Sciences,Nanotechnology, and NASA-originated technologies.

www.houstontech.org

HOUSTON TECHNOLOGY CENTER(HTC)

ELEMENT MARKETS

CLIMATE WEDGE

20

SUPPORTING ORGANISATIONS

The International Emissions Trading Association (IETA) is a non-profit organizationcreated in June 1999 to establish a functional international framework for tradinggreenhouse gas emission reductions. Their membership includes leading internationalcompanies from across the carbon trading cycle. IETA members seek to develop anemissions trading regime that results in real and verifiable greenhouse gas emissionreductions, balancing economic efficiency with environmental integrity and social equity.As of November 2005 the IETA comprises more than 110 international companies fromOECD and non-OECD countries. IETA has formed several partnerships such as with theWorld Bank and Eurelectric.

www.ieta.org

The Jesse H. Jones Graduate School of Management is one of the world's leadingbusiness schools. Founded in 1974, it is already among the top five percent of businessschools. Its MBA and MBA for Executives programs were ranked the best in Texas andthe Southwest by the Financial Times in 2004 and 2005. The school offers the RiceMBA, MBA for Executives, MBA for Professionals degrees as well as the following jointdegrees: Joint MBA/ME with the George R. Brown School of Engineering and MD/MBAwith Baylor College of Medicine.

The Jesse H. Jones Graduate School of Management is one of seven academic units ofRice University. Named in honor of the late Jesse Holman Jones, a prominent Houstonbusiness and civic leader, the school received its initial funding in 1974 through a majorgift from the Houston Endowment Inc., a philanthropic foundation established by Jonesand his wife, Mary Gibbs Jones.

www.jonesgsm.rice.edu

PKF Texas, located in Houston’s Galleria area at 5847 San Felipe, PKF Texas is a CPAfirm that focuses on solutions for every stage of your business. With leaders who areforward-thinking entrepreneurs and business advisors with Big 4 backgrounds, PKFTexas provides auditing, accounting, domestic/international tax compliance andplanning, profit enhancement, litigation services, information technology and businesssystems consulting to emerging and middle market companies across many industries.PKF Texas is a member of PKF International and The Leading Edge Alliance.

www.pkftexas.com

PKF TEXAS

THE JESSE H. JONES GRADUATESCHOOL OF MANAGEMENT

THE INTERNATIONAL EMISSIONSTRADING ASSOCIATION (IETA)

21

SUPPORTING ORGANISATIONS

The Rice Alliance supports entrepreneurs and early-stage technology ventures inHouston and Texas through education, collaboration, and research. Since inception inlate 1999, the Rice Alliance has assisted in the launch of over 170 technologycompanies that have raised more than $300 million in funding.

www.alliance.rice.edu

Wood Mackenzie has been providing its unique range of consulting services andresearch products to the Energy and Life Sciences industries for over 30 years. With ourfoundation in quality analysis, our detailed industry understanding and our wealth ofexperience, Wood Mackenzie is able to offer clients a unique skill combination that setsus apart from other solution providers. Our market proposition is based on our ability toprovide forward-looking commercial insight that enables our clients to make betterbusiness decisions.

www.woodmacresearch.com

WOOD MACKENZIE

THE RICE ALLIANCE

22

SPEAKERS

Dr. Leonhard Birnbaum is a Director at McKinsey & Company, Inc. and is located in theDüsseldorf office in Germany. He is a member of the global energy and materials practice servingclients across process industries. His main emphasis within McKinsey is on fundamental strategicand operational transformation work. He has been serving clients extensively on CO2 topics. Heholds a master degree as well as a PhD in chemical engineering at the University of Karlsruhe.

James Cameron is Vice Chairman of Climate Change Capital (CCC) and is responsible for strategicand sector development, is Chairman of the Advisory Board and represents the firm at the highestlevels of business and government. James is one of the world’s pre-eminent experts in developingmarket based policy responses to climate change. Prior to CCC he was Counsel to Baker &McKenzie and was the founder and the head of their Climate Change Practice. James has spentmuch of his legal career working on climate change matters, including negotiating the UNFCCCand Kyoto Protocol as an adviser to the Alliance of Small Island States. He has held academicpositions at Cambridge, London, Bruges and Sydney and is currently affiliated with the YaleCentre for Environmental Law and Policy. As a barrister he appeared in several of the leading casesin environmental law. He is the Chairman of the Carbon Disclosure Project and a treasurer ofREEEP and a trustee of The Climate Group. He is a member of the board of GE Ecomagination.

Toby Campbell-Colquhoun joined Shell Trading in 2001 to help set up the Shell GlobalEnvironmental Products Trading Business (EPTB). During this time, he has advised national andinternational institutions on emissions trading policy while helping develop commercial expertisein the market. He now manages European Business Development for Environmental Products,including the management of Shell compliance positions under the EU Emissions Trading Scheme,the development and maintenance of customer relationships, and the execution of transactions onbehalf of customers.

EPTB has been a pioneer in ETS globally, executing several groundbreaking deals, including thefirst trade in the EU Emissions Trading Scheme and the first trade of issued Certified EmissionsReductions. EPTB has desks in Houston and London and has links to other Shell businessesaround the world.

Ian Carter is the North America Policy Coordinator for the International Emissions TradingAssociation. Mr. Carter worked for ten years in the renewable energy sector as a financial officerfor a solar technology company, targeting transfer of photovoltaic manufacturing technology.Mr. Carter joined IETA from Canada's Department of Foreign Affairs in late 2005.

TOBY CAMPBELL- COLQUHOUNTrader, Environmental Products, Shell Trading

IAN CARTERNorth America Policy Coordinator,International EmissionsTrading Association

JAMES CAMERONVice Chairman of Climate Change Capital

DR. LEONHARD BIRNBAUM Director at McKinsey & Company, Inc.

23

SPEAKERS

Jeff Chapman has over thirty years of management experience in industry, consultancy and morelatterly in government circles. He has specialised in the energy sector with a focus on the businessopportunities that arise from climate change mitigation. Jeff has been a significant contributor tothe establishment of London as the World centre of emissions trading.

Recognising the enormous potential of emissions trading as a means of mitigating climate changeand as a business opportunity in the service sector Jeff created a London business cluster ofcompanies engaged in financial and technical services who were keen to develop business in thisarea. This ad hoc business cluster eventually became legally established under the name LondonClimate Change Services.

Supported by UK Trade & Investment Jeff organised events in London to help the emissionstrading business coalesce, inward visits of overseas businesses and overseas events aimed atdeveloping trading relationships in the context of climate related financial instruments. Theleading role that UK government has taken to develop emissions trading combined with theresponse from services has placed London firmly at the centre of World emissions trading

Jeff has also established the Carbon Capture & Storage Association in March 2006 which isfocused on supporting UK businesses to establish a position in greenhouse carbon capture &storage and has 36 large corporate members. He has assumed the role of Chief Executive and isactively promoting this technology in the UK and elsewhere.

Kyle Danish advises a range of clients on environmental matters, with a special focus on corporateclimate strategy and emissions trading-related transactions. His current clients include electricgeneration, oil and gas, and mineral exploration companies, as well as manufacturers and thinktanks. He is a frequent speaker and has published numerous articles on global warming andemissions trading issues. Mr. Danish also has authored several commissioned research papers onclimate change and energy policy for think tanks.

Mr. Danish is a Professional Lecturer at American University School of Law. From 2001 to 2003,he served as Co-Chair of the American Bar Association Committee on Climate Change andSustainable Development from 2001 to 2003. He is admitted to practice in the District ofColumbia and the State of New Jersey.

François is centrally involved in the development and promotion of LogicaCMG environmentalofferings and is representative for the Mediterranean countries. This includes the support ofvarious country sales teams and the setting up of associated sales campaigns.

François has been at LogicaCMG for nine years. He has held senior roles as a technical managerfor a unit of 250 people and was previously the manager of the French energy and utilities line ofbusiness. He joined the International Line of Business seven years ago and as a global businessdeveloper has a deep understanding of liberalizing gas and electricity markets, with a particularfocus on southern Europe. For example, François was heavily involved in the design of the rulesfor the French electricity balancing market, on behalf of the regulator. He has helped LogicaCMGunits around the world to build their energy and utilities businesses and has supported them inwinning new projects.

François is a graduate of Supélec (the leading electrical engineering school in France) and of LyonBusiness School (15th European business school in the 2004 Financial Times ranking list)

FRANÇOIS DAUPHINEnvironmental Offering Director,LogicaCMG

KYLE DANISHAttorney, Van Ness Feldman

DR. JEFF CHAPMANChief Executive, The Carbon Capture &Storage Association

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SPEAKERS

Andy Dvoracek is a Senior Client Manager for EcoSecurities' New York office, where hecoordinates origination of CDM projects globally. He specializes in the origination of anaerobicdigestion projects in both animal waste management and industrial wastewater facilities, as wellas a variety of other CDM project activities. He has experience in project development, duediligence, and emissions trading market analysis.

Prior to joining EcoSecurities, Mr. Dvoracek worked in environmental consulting and indoor airquality management. He has also worked within Swiss Re’s greenhouse gas/ renewable marketsdivision, and completed projects in domestic greenhouse gas mitigation and analyzing CDMtransaction costs for the United Nations. Mr. Dvoracek was a Peace Corps volunteer in El Salvador,working on sustainable agriculture, erosion control, and disaster mitigation. He speaks Spanishfluently and has travelled extensively throughout Latin America, Asia, and Southern Africa.

Mr. Dvoracek holds a Bachelor’s degree in Biology and Environmental Science from Saint John’sUniversity (MN), and a Masters of Public Administration in Environmental Policy and Managementfrom Columbia University’s School for International and Public Affairs (SIPA)

Mark Earthey is currently Vice President of Product Management for Europe at SunGard EnergySolutions, and is responsible for guiding the evolution of its pan-European energy trading and riskmanagement offering – ZaiNet.

Mark’s wealth of experience in the energy industry spans over 15 years. Previously, Mark wasGlobal Manager of LogicaCMG's greenhouse gas emissions management solutions business, wherehe was responsible for the development and direction of global strategy within the GHG emissionsarea of the energy and utilities market. During his tenure at LogicaCMG, he also worked as seniorpractitioner in retail energy trading and risk management, and held a number of principalconsultancy roles as vision-holder, business process analyst, and system architect. Prior toLogicaCMG, Mark was a Middle Office Manager at SEEBOARD, now part of EdF Energy.

Mark is a graduate of the Aston Business School, Birmingham, UK, gaining MSc and D.Phil.degrees.

Victor B. Flatt is the inaugural holder of the A.L. O’Quinn Chair in Environmental Law at theUniversity of Houston Law Center. Prior to accepting the chair, Professor Flatt was head of theEnvironmental Law Program at the Georgia State University College of Law, and he began histeaching career as an Assistant Professor of Law and Public Policy at the University ofWashington’s Graduate School of Public Affairs. Professor Flatt graduated with a B.A. inChemistry and Mathematics, Magna Cum Laude, from Vanderbilt University, and received his JD,Cum Laude, From Northwestern University School of Law, where he was a John Henry WigmoreScholar. Professor Flatt’s research focuses on the administration of environmental law, and fourof his articles have been selected or were a finalist for the best environmental law review articlesof the year. He consults with government, non-profits and businesses on environmental lawregulation. He is co-director of the University of Houston Law Center’s Environment, Energy, andNatural Resources Program, and is Faculty Editor in Chief of the Environment & Energy Law &Policy Journal.

VICTOR B. FLATTA.L. O’Quinn Chair in Environmental Law,University of Houston Law Center

DR. MARK EARTHEYVice-President of Product Management,SunGard Energy Solutions

ANDY DVORACEKSenior Client Manager, EcoSecurities

25

SPEAKERS

Prior to joining CF Environmental in July of 2006, Mason Henderson traded real-time power andconsulting in emissions for Calpine. Prior to his Calpine experience, he brokered a variety ofemissions products from 2001-2005, specializing in the SO2 and NOx markets. In addition to hisemissions experience, Mr. Henderson has an extensive background in trading commodity andfinancial markets. After graduating from the University of Pennsylvania in 1988, he took aposition at a boutique brokerage shop in Philadelphia dealing in bonds. In 1990, Mason headedto the trading floors in NY with Cooper, Neff & Associates. In 1992 he began trading commodityoptions in coffee and sugar, then traded as a local-market maker in a variety of options pits,including gold and copper in New York, and the German Bund and British Short Sterling inLondon

Mr. Vincent Kaminski has spent the last 14 years working in different positions related toquantitative analysis and risk management in the merchant energy industry. The companies heworked for include Citigroup, Sempra Energy Trading, Reliant Energy, Citadel Investment Group,and Enron (from 1992 to 2002) where he was the head of the quantitative modeling group. Priorto starting a career in the energy industry, Mr. Kaminski was a Vice-President in the ResearchDepartment, Bond Portfolio Analysis Group, of Salomon Brothers in New York (from 1986 to1992).

As of September 15, 2006, Mr. Kaminski has accepted a full time academic position with RiceUniversity in Houston (Jesse H. Jones Graduate School of Management) where he was teaching acourse in energy finance and energy derivatives for the last six years. He serves on the ExecutiveCommittee of the Global Energy Management Institute at Bauer College of Business, University ofHouston.

Mr. Kaminski holds an M.S. degree in international economics, a Ph.D. degree in theoreticaleconomics from the Main School of Planning and Statistics in Warsaw, Poland, and an MBA fromFordham University in New York. He is a recipient of the 1999 James H. McGraw award forEnergy Risk Management (Energy Risk Manager of the Year). Mr. Kaminski published a number ofpapers, and contributed to several books, on energy markets. His recent publications in the riskmanagement and commodity options pricing areas include: Managing Energy Price Risk, RiskBooks, London 1999, all three subsequent editions, editor and co-author; The Challenge ofPricing and Risk Managing Electricity Derivatives, in: The US Power Market, Risk Publications,London 1997, author; Energy Derivatives: Pricing and Risk Management, Lacima Publications,London 2000, contributor; and Energy Modeling. Advances in the Management of Uncertainty,London 2005, editor and co-author.

VINCE KAMINSKIProfessor, Jones Graduate School ofManagement, Rice University

MASON HENDERSONManager, NOx and SO2 Emissions, Cantor Fitzgerald EBS

R

26

SPEAKERS

Ricardo Nogueira is an attorney by training and has extensive transaction expertise in emissionstrading. In his role as an attorney, Ricardo has represented both Annex I buyers as well as projectdevelopers in negotiating emissions reduction purchase agreements and advising on the CDMprocess and other Kyoto Protocol related issues generally.

Prior to joining Trading Emissions plc, Ricardo was a senior attorney with the Washington, DCbased law firm of Van Ness Feldman where his practice focused on energy and environmentalissues, with an emphasis on energy infrastructure transactions, international energy projects andglobal climate change. While at Van Ness Feldman Ricardo participated in the development ofcorporate wide climate policies for large multinationals clients as well as on capacity buildingprojects in the developing world. Additionally, he has acted as transaction counsel on a range ofCDM projects located in Latin America, Asia and Africa.

Prior to Van Ness Feldman, Ricardo lived and worked in Brazil for three years with the firm ofFelsberg and Associates. Ricardo’s practice in Brazil focused on a cross-border transactions, foreigninvestment and climate change matters. Ricardo was involved in some of the initial CDM projectsin Brazil and was a principal protagonist for an early effort to develop a Brazil specific CDMinvestment fund. He also acted as the privatization team leader responsible for the internationaldue diligence review on behalf of the Brazilian Central Bank of two state-owned banksundergoing privatization (BANESPA and BANESTADO).

Ricardo is fluent in both Portuguese and Spanish. He is frequently invited to provide trainingseminars on emissions trading and the CDM for a variety of organizations and has recentlypublished an article on Managing Dispute Risks in CDM Transactions with the American BarAssociation International Environmental Law Committee. Ricardo holds a Juris Doctor degree fromSeton Hall University School of Law

Mark Proegler is Director of BP’s Emissions Markets Group, which has global responsibility for BP’sinvolvement in existing and developing emissions markets. Prior to this, he held a number ofmanagerial, operational, marketing, and business development positions in a wide array ofbusinesses in BP and the former Amoco Corporation, including Gas & Power, Chemicals, andMarketing & Refining. Mark has an undergraduate degree in Chemical Engineering and a Mastersin Business Administration. He resides with his wife and two sons in Houston, where he alsoserves on the Board of Habitat for Humanity, NWHC.

Untill March 2006, Mr. Sinha was the Team Leader for Operations for the Carbon FinanceBusiness at the World Bank. He has been at the World Bank since 1997 and was part of thedesign team for the Prototype Carbon Fund through which carbon finance was established at theWorld Bank. At the Bank, he has also worked on the Global Environment Facility and theActivities Implemented Jointly (AIJ) program.

Prior to joining the World Bank, Mr. Sinha worked at the Tata Energy Research Institute (TERI),New Delhi, India (1987-96), has been a Fellow at the John F. Kennedy School of Government,Harvard University (1993-94), worked for the United Nations Development Programme/ GlobalEnvironment Facility (1994-95) and the Indian Institute of Technology, New Delhi (1985-89).

Mr. Sinha is an Indian national. He has a Ph.D. and M.Tech. in Energy Studies from the IndianInstitute of Technology, New Delhi, India and a Masters degree in Physics from the IndianInstitute of Technology, Kanpur, India.

CHANDRA SHEKHAR SINHA Carbon Finance Coordinator for theSustainable Development Department inthe Latin America and the Caribbeanregion of the World Bank.

MARK A. PROEGLERDirector, Emissions Markets Group, BP

RICARDO NOGUEIRACounsel/Investment Advisor to TradingEmissions PLC, EEA Fund Management

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SPEAKERS

Greg Spencer is the President and co-founder of Blue Source, the largest supplier of Greenhousegas offsets in North America. Formed in early 2001, Blue Source has a portfolio of offset projectscurrently producing more than 20 million tonnes of Ghg reductions per year in 45 states andexpected to produce a total of more than 300 million tonnes by 2012. In addition to expandingits Ghg portfolio, Blue Source is actively seeking to build multiple Ghg reduction projects in theUS up to $500 million in size utilizing project capital committed by First Reserve Corporation.

Prior to his role at Blue Source, Greg had 20 years of transactional experience focused in corporateM&A, law, capital markets, and environmental and operational risk management. He has a BS inEnvironmental Planning and a JD from the University of Utah.

Guy is Director of New Carbon Finance, New Energy Finance’s specialist group focused on theanalysis of carbon markets. Guy joined New Energy Finance to set up New Carbon Finance inMay 2006.

New Carbon Finance is the leading provider of fundamental-driven analysis of European andglobal carbon markets. Supported by a highly capable and dedicated team of researchers andanalysts, New Carbon Finance offers clients all the information needed to understand the driversof future prices in the EU ETS and global Kyoto markets. New Carbon Finance also carries outleading edge research on investment and trading activities in the carbon sector. New CarbonFinance is supported by a global network of researchers providing detailed analysis of carbonmarket activities in countries such as China and India.

Guy is responsible for developing and delivering New Carbon Finance’s growing range of servicesfrom regular monthly analysis of the carbon markets through to model licensing and tailoredconsulting assignments. Guy has been providing advice on emissions markets to governments andcompanies for over eight years, prior to which he worked for seven years as a policy and strategyconsultant in the energy and environmental field. Over the last three years he has led thedevelopment of sophisticated models of the European and global markets, such as the EuropeanCarbon Balances Model. Guy was previously Director of Climate Change Policy and Strategy atEnviros Consulting in the UK. Guy is a regular commentator, trainer and speaker on emissionsmarkets and holds degrees in Economics and Engineering, an MSc in Environmental Technologyand is a graduate of the Corporate Finance Programme at London Business School.

Mr. Wang has over 20 years of experience in environmental, health, safety and product regulatorycompliance administration and management system implementation and verification. Mr. Wang isalso a certified Lead Auditor for ISO 14001, ISO 9001, Responsible Care® Management System andOHSAS 18001 Specification. Since joining BSI Management System, Mr. Wang has beenresponsible for management system assessment delivery and is now the product marketingmanager for business sustainability for the Americas. Prior to joining BSI, Mr. Wang the productregulatory and compliance manager with Ciba Specialty Chemicals responsible for all productrelated regulatory and compliance issues. Mr. Wang holds a bachelor degree in chemistry fromUniversity of California at Berkeley and a master degree in international business from St. Mary’sCollege of Moraga, California.

WILHELM WANG Certified EMS Lead Auditor, MarketingManager, SustainabilityBSI Management Systems

GUY TURNERDirector, New Carbon Finance

J. GREG SPENCERPresident, Blue Source LLC

28

SPEAKERS

Craig Windram is the Director and founder of E3. Craig is currently based in France and helpsmajor energy and energy intensive manufacturing sector companies in North America, Europe andAustralasia to develop their strategic responses to environmental and climate change policy.

Craig has developed corporate strategies to respond to the risks and opportunities arising fromnational and international climate change policy; undertaken work on the compilation andverification of greenhouse gas emissions inventories; compared full life cycle greenhouse gasemissions for alternative fuels and generating technologies; led feasibility studies into thecommercialisation of alternative renewable energy technologies; developed corporate strategies torespond to the risks and opportunities arising from national and international climate changepolicy, including detailed cost benefit analysis of alternative abatement strategies; directed thedesign of alternative greenhouse gas emissions trading regimes; and compiled detailed costbenefit analyses of alternative environmental and renewable energy technologies.

Craig is the author of several papers and publications on climate change policy and emissionstrading and its implications for the energy sector. His most recent book – which he co-authoredwith Duncan Brack and Michael Grubb of the Royal Institute of International Affairs - addressesthe linkages between climate change policy and international trade and was published byEarthscan in January 2000. Craig is a former Associate Fellow at the Royal Institute ofInternational Affairs in London.

Jim Yardley assumed his current role in August 2006. Prior to this appointment, Yardley waspresident of Southern Natural Gas Company (SNG) and SNG’s subsidiary, Southern LNG Inc.,which owns the Elba Island LNG facility.

Mr. Yardley has been with Sonat and El Paso since 1978 and has held various roles in thecompany’s pipeline business, offshore drilling business, and corporate staff. He has been based inBirmingham, Houston, and London.

Jim earned a Bachelor of Arts degree in economics from Duke University and Master of BusinessAdministration degree from Harvard Business School. Yardley is on the boards of JuniorAchievement of Greater Birmingham, Inc.; United Way of Central Alabama, Inc.; and the GreaterAlabama Council, Boy Scouts of America.

Charles R. Zimmerman is currently the vice-president of Prototype and New Format Developmentfor Wal-Mart Stores, Inc. Mr. Zimmerman is also leading the "Sustainable Buildings Network" atWal-Mart. This network, among other things, is charged with increasing the overall energyefficiency of new and existing buildings by 20-30 percent. Prior to his current role, Mr.Zimmerman worked in the International Division for Wal-Mart Stores as Director of Design andConstruction. Mr. Zimmerman has worked for Wal-Mart since 1997. Previously, he worked in boththe consulting industry as well as for the Texas State Department of Highways. Mr. Zimmerman isa graduate of the University of Arkansas, a registered professional engineer, and member of theArkansas Academy of Civil Engineers.

CHARLES ZIMMERMANVice President of Prototype & NewFormat Development, Wal-Mart Stores, Inc.

JAMES C. YARDLEYPresident, Pipeline Group for El Paso CorporationExecutive Vice President, El Paso Corporation

CRAIG WINDRAMDirector and Founder, E3 International

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