Before they are generated, emission reductions (“ER’s”) produced by CDM and JI projects are bought and sold at a discount to their true value because of wide range of risk that may lead to non-delivery of the ER’s.
These risks can be grouped as follows:
price risk between the purchase date and when the ER’s are scheduled to be
generated physical risks during both construction and operating phases regulatory and political risks covering Kyoto process risks (including baseline,
verification and certification risks), Kyoto withdrawal, confiscation, expropriation
nationalisation etc. technology risks associated with the failure to meet specified performance criteria
contract frustration and credit risks such as revocation of Letter of Approval or
project execution risk
ERPA Master policy summary
We work with a range of operators in the carbon finance sector to develop, structure, and implement risk management, insurance and risk finance solutions for a variety of clients.
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