Case | HBS Case Collection | June 2008 (Revised October 2008)

International Carbon Finance and EcoSecurities

by Andre F. Perold, Forest L. Reinhardt and Mikell Hyman

Abstract

In late 2007, EcoSecurities had to decide whether to undertake a new Clean Development Mechanism (CDM) project in China. EcoSecurities was an aggregator of carbon credits and also invested directly in projects that produced carbon credits. Governments and firms required to cut their greenhouse gas emissions under the Kyoto Protocol could use carbon credits to fulfill part of their compliance obligations. As demand for UN-issued carbon credits rose, the UN approval process had become increasingly burdensome. The Ventilation Air Methane Project was an opportunity to break into a new sector with large potential, and the economics and risks of the project needed to be assessed.

Keywords: Non-Renewable Energy; Cost Management; Investment Return; Business and Government Relations; Risk and Uncertainty; Investment; Cash Flow; Valuation; Pollution and Pollutants; Environmental Sustainability; Financial Services Industry; China;

Citation:

Perold, Andre F., Forest L. Reinhardt, and Mikell Hyman. "International Carbon Finance and EcoSecurities." Harvard Business School Case 208-151, June 2008. (Revised October 2008.)