Environmental Markets

Goldman Sachs is active in the markets for carbon emissions and Renewable Energy Credits, among other climate related commodities. In Europe, we have been market-makers in the EU ETS since its inception in 2005 and in North America, we established a carbon team in 2007. Additionally, we have created new financial products to help our clients manage the risks posed by climate change.

During 2009, Goldman Sachs completed the largest North American carbon trade to date and became a founding member of a new exchange focused on building a global environmental marketplace.

On October 12, 2009, Goldman Sachs, Blue Source and CE2 Carbon Capital, Goldman Sachs announced a $12 million US carbon offset transaction, creating environmental and economic benefits as the US works to achieve emission reductions through state, regional and federal cap-and-trade programs. This is the largest publicly announced US offset transaction to date and signifies confidence in the role carbon offsets will play in a US regulated carbon market.

On March 31, 2009 Goldman Sachs announced that it had joined The Green Exchange venture as a founding member. The Exchange will offer a comprehensive range of environmental futures, options and swap contracts for markets focused on solutions to climate change, renewable energy and other environmental challenges. The first slate of environmental futures and options contracts were introduced on the New York Mercantile Exchange, Inc., the world's largest physical commodities exchange and a subsidiary of NYMEX Holdings (NYSE: NMX), on March 17.”

During 2008, we formed three separate alliances which will provide Goldman Sachs with greater access and liquidity to voluntary and pre-compliance carbon risk management products:

	In November 2008, we announced a multi-year alliance with E+Co to off-take the majority of their international offset portfolio. E+Co is in the business of providing financial backing and business support services to clean energy projects in 28 developing countries. The off-take includes verified emission reductions and certified emission reductions that meet standards including the Gold Standard and the Clean Development Mechanism.
	In October 2008, we announced a strategic alliance with Blue Source LLC in which we purchased a minority stake in the company and have a multi-year marketing agreement for their offsets. The North American based portfolio of offsets is diverse in project type and includes methane management, industrial gas destruction, carbon capture and storage, and others.
	In December 2007, Goldman Sachs signed an agreement to invest in APX, Inc., a leading infrastructure provider for environmental markets in renewable energy and greenhouse gases including carbon commodities. APX helps to track, manage, and retire renewable energy certificates (RECs), energy efficiency and conservation certificates, carbon offset credits such as verified emissions reductions (VERs), and greenhouse gas emission allowances.. The company, which is policy-neutral, is well positioned to be a leading provider of registry technology for the developing U.S. carbon market and can leverage this position for expansion into adjacent areas of the domestic and international carbon markets.