Carbon Pricing
Overview
Carbon Credits exist in various shapes, under various national or international arrangements. They are often sold on a forward basis before they are generated, or even at very early stages of conception or implementation.
By their very nature, forward carbon credits cannot be priced by direct reference to an established market spot price or market forward price unless the transaction volume is guaranteed and other conditions are met.
The forward price is dictated by a combination of delivery risk and other exogenous investment related risks. Delivery risk is mainly composed of registration risk (until registration takes place) and of other technical, commercial or financial risks (prior to and after registration). Crucially, the impact of predictability, volatility and stability of a project’s CER yield prospects needs also to be carefully analyzed. Other exogenous risks include the local investment climate, counterparty strength, legal and contractual risk, as well as post Kyoto eligibility and project specific regulatory risk.
What we offer
Our Pricing Reports contain a detailed overview of a project, with deep analysis of the risks that the project could encounter. They are written from an investor’s perspective and provide CIS’ opinion on the fair value primary ERPA price that should be paid for a project, given its risk profile. This can serve as an invaluable benchmark for investors prior to entering negotiations with PPs.
The Pricing Reports contain a full delivery risk analysis and rating outline in addition to a more detailed price and transactional specific risk outline.
Due to the time sensitive nature of pricing quotes, pricing reports can only be ordered on an individual mandated basis and will be not be available publicly.
