Press Release ­ for immediate use …

                        Press Release ­ for immediate use
                                       14 August 2008

   Ground-breaking emission model for Australia points to rising carbon
                     prices between 2010 and 2020

New Carbon Finance announces the launch of its new research and analysis services for
the Australian carbon market and publication of its first price pathway for the Australian
Carbon Pollution Reduction Scheme.
As the world leader in research and analytics for the European, North American and
Global carbon markets, New Carbon Finance has developed a proprietary price path
forecasting model for the prospective Australian Carbon Pollution Reduction Scheme
(CPRS) scheduled to commence in 2010.

                            A highly detailed, market specific model

Built with the input of some of Australia's leading authorities on emissions trading, including
investment banks and domestic energy companies, the New Carbon Finance Australian Carbon
Price Forecasting Model is specifically designed to forecast CPRS allowance prices.

The model covers all aspects of the market including emissions from industrials, transport, land-
use change, forestry, waste, fugitives, agriculture and the power sector, plus a full spectrum of
abatement options, import of CDM/JI credits and domestic offsets. In addition, the model
emulates the real-word behaviour of market participants whose actions can move prices as
significantly as market fundamentals.

The NCF Australian model has been constructed with the maximum level of flexibility to allow
key sensitivities to be tested while the scheme is in its design phase.

                      Analysis highlights key sensitivities in the market

The key conclusions to New Carbon Finance's research are:

Under all scheme designs currently being discussed carbon prices are expected to rise as the
targets become more demanding. The range of possible prices is large. The central scenario
however shows nominal prices around A$10/tCO2e in 2010, A$40/tCO2e in 2015 and
A$70/tCO2e by 2020.

 A lower cap, access to international offsets and more flexible fuel supply contracts will
                      act as downward drivers on the carbon price

The analysis show that varying the emissions cap clearly has a significant impact on the price in
the scheme. Changing the cap to a 20% reduction by 2050 (from the central projection of a 60%
reduction) trajectory would reduce prices in 2020 to A$50/tCO2e. Increasing the cap to a
reduction of 80% by 2020 would lift prices to over A$110/tCO2e.

Access to the international and domestic offset markets is a key means of managing
compliance risk for companies with obligations under the scheme. The analysis suggests that
doubling access to international credits such as CERs, generated through the Clean
Development Mechanism, and ERUs, generated through the Joint Implementation scheme,
could reduce the carbon price by around A$20/tCO2e in 2020.

The power sector's abatement opportunities are currently constrained by the prevalence of
inflexible fuel supply contracts. This means that it is difficult or costly for operators to switch out
of existing dirty fuels to cleaner alternatives.

              Banking and borrowing will improve the efficiency of the scheme

Allowing banking and borrowing unequivocally increases the scheme's efficiency and
effectiveness. Such a scheme would allow participants to carry over allowances purchased in
one period for use in a later period and also "borrow" allowances from future periods to meet
targets for immediate reductions. Being able to do this allows participants to manage
unpredictable variations in emissions, for example caused by changes in output, fuel prices or
weather. Allowing this flexibility would act to increase prices in the early years and hold them
down in later years.

                                       Global Coverage

As part of NCF's suite of global carbon market forecasting models, the Australian market model
is linked directly into other world carbon markets. With potentially wide-ranging access to the
CDM market, this is an essential aspect of analysing the Australian carbon price.

If you are interested in reading the full version of the inaugural New Carbon Finance Australian
CPRS report please email info@newcarbonfinance.com or call us on +44 (0)207 092 8800.



ABOUT NEW CARBON FINANCE:

New Carbon Finance is the leading provider of high quality fundamental analysis of the
European, North American, global and Australian carbon markets. Our team of analysts has
been providing professional advice on carbon markets since 1998, including assistance in the
design of various national and international schemes and company-level strategic advice.
During this time we have built up highly detailed fundamental market models that analyse
carbon market demand and supply and provide regular forecasts of carbon prices. New Carbon
Finance operates as a division of New Energy Finance.

ABOUT NEW ENERGY FINANCE:

New Energy Finance is the world's leading independent provider of research to investors in
renewable energy, biofuels, low-carbon technologies and the carbon markets. The company's
research staff of 120 (based in London, Washington, New York, Palo Alto, Beijing, New Delhi,
Tel Aviv, Cape Town, Sao Paulo and Perth) tracks deal flow in venture capital, private equity,
M&A, public markets, asset finance and carbon credits around the world.

The New Energy Finance Desktop is the world's most comprehensive subscription database of
investors and investments in clean energy. New Energy Finance's Insight Services provide
deep market analysis to investors in Wind, Solar, Biofuels, Biomass, China, VC/PE, Public
Markets and the US. New Energy Finance is co-publisher of the world's first global stock-market
index of quoted clean energy companies, the WilderHill New Energy Global Innovation Index
(ticker symbol NEX). The company also undertakes bespoke research and consultancy, and
runs senior-level networking events.

For further information please contact:

Jonathan Malsbury, Research Manager New Carbon Finance,
jonathan.malsbury@newcarbonfinance.com

Seb Henbest, Analyst, seb.henbest@newcarbonfinance.com

New Carbon Finance
New Penderel House
283 ­ 288 High Holborn
London WC1 7HP
United Kingdom
Tel: +44(0)207 092 8800



                                 www.newcarbonfinance.com

                                 www.newenergyfinance.com