Carbon Finance

We at Curzon have developed a deep understanding of carbon markets, climate change investment, consulting, policy and regulation and are ideally placed to advise our clients on how to drive new investment in the low-carbon economy.

The carbon market is undergoing rapid change and the true environmental cost of carbon emissions is slowly being recognised and integrated into the world economy through a range of different policy approaches. Governments and business have woken up to the scale of the climate change challenge. Investment in clean technologies is booming, and carbon emissions are fast becoming one of the world's major commodity trades. Each year the market grows in scope and complexity and the next ten years will see a huge expansion in national and international compliance regimes based on carbon pricing, most notably in the US and China where the threat of climate change is being taken increasingly seriously. We can expect to see tougher greenhouse gas emissions policies with an emphasis on encouraging investment into renewable energy, energy efficiency, energy security and technology transfer and a drive towards policy harmonisation. The conflicting pressures of energy demand and a changing climate will encourage huge investment in clean energy infrastructure globally - the International Energy Agency estimates this could be as much as US$ 45 trillion over the next decade.

Until recently the majority of carbon finance transactions have been structured as typical "off-take" agreements, but there is an increasing recognition of the value of emission reduction streams and these are now being integrated into the financing of clean development projects. We are able to recognise and enhance the value of the underlying infrastructure assets that generate emission reductions or benefit from other policy initiatives that encourage low-carbon investment.

Our carbon finance advisory team provides project finance, corporate finance and strategic advice to clean technology companies, energy-intensive industries, financial institutions and governments.

Curzon raises and deploys capital for numerous low-carbon activities including:

• Financing reforestation projects in Developing Countries (as defined in the Kyoto Protocol).
• Investing in clean technology businesses in Europe, North America (Annex 1 & 2 Countries) and Developing Countries.
• Investing in renewable energy and waste-to-energy projects in Developing Countries.

We bring years of investment banking experience to bear on complex transactions so as to render them understandable, viable and ultimately successful.

In the past year policy makers at national and international level have made significant advances into the creation of regional cap-and-trade schemes as well as an international agreement on REDD. Furthermore, according to surveys of carbon asset buyers in early 2010, interest in forestry offsets has increased significantly due to the high potential for additional benefits for communities and biodiversity. The highest demand comes from voluntary markets and from buyers in pre-regulatory markets like the USA and Australia. Forestry offsets can be validated under a variety of standards for use both in voluntary and compliance markets. Among the most rigorous and desirable standards are the CDM, the Voluntary Carbon Standard (VCS), Climate Action Reserve (CAR) and the Climate, Community and Biodiversity Standard (CCBS). The CCBS is a supplementary standard that certifies benefits to community and biodiversity as well as CO² emissions reductions and when used in combination with another standard attracts a price premium.

Curzon's skills in the field of forestry-related carbon project development combine regulatory and voluntary market technical know-how, specialist forestry expertise, the management capacity required to achieve successful project registration on which depends the issuance of carbon credits, and access to a global network of carbon credit buyers and investors.