The document provides an overview of California's carbon market regulations, trading activity, and market participants. It discusses the cap-and-trade program's goals of reducing emissions to 1990 levels by 2020. Covered entities must have annual emissions over 25,000 metric tons of CO2 and begin compliance obligations in 2013. The market includes California carbon allowances and various offset credits. Transaction structures include fixed-price contracts for allowances and offsets as well as floating price options.

1. California Carbon Markets update: An overview of the regulations, market and trading activity Presented by: David Nussbaum July 2011

3. Evolution Markets Overview Evolution has offices on three continents and has completed environmental transactions in more than 30 countries New York San Francisco London Beijing

10. The “Four Buckets” of CA Carbon Products Early Action Credits Early action credits subject to re-verification to meet AB 32 compliance requirements Indicative Pricing: 7/21/11 $16.75 bid / $17.25 offer $10.75 bid / $11.75 offer ODS $8.50 bid / $9.50 offer Forestry $6.00 bid / $8.00 offer Livestock (dairy) $7.75 bid / $9.75 offer $2 bid / $4 offer Guaranteed ARB-compliant Offsets Firm delivery of offsets guaranteed to meet AB 32 compliance requirements California Carbon Allowances (CCAs) Forward delivery of California Carbon Allowances Potential Early Action Credits ARB is expected to approve additional methodologies from Offset Standard Bodies such as the Climate Action Reserve, American Carbon Registry and potentially others

15. Historical Pricing 3/1/11 – 7/1 /11

16. Contact Information David Nussbaum Director Evolution Markets Inc. 10 Bank Street 4 th Floor White Plains, New York 10606 tel. +1.914.323.0265 mob. +1.917.816.2255 email dnussbaum@evomarkets.com website www.evomarkets.com