ASSESSING RISK AND RETURN OF FOREIGN INVESTMENT IN UNITED STATES RENEWABLE ENERGY AND CARBON OFFSET PROJECTS: A CASE STUDY

Abstract

International policy and market changes have prompted many carbon offset project developers to reconsider their business models and search for new opportunities. International compliance offset project methodologies have become more complex with increased oversight and U.S. domestic and regional compliance markets are growing. The possibility of developing projects within these markets has become a risky but possibly financially rewarding proposition.

This client-based masters project investigates the market changes that have prompted many firms to reassess their business model, determines the possibility of a specific client developing new projects internationally or within the domestic United States, and compares the risks and returns from these possibilities. Carbon market policies are outlined and discussed within a comparison of regional renewable energy incentives, primarily focusing on the Southeast and Midwest regions of the United States.

The resulting analysis and proposal shows 3 domestic U.S. renewable energy and/or carbon offset projects, and compares them to a recently completed renewable energy project in operation in Lahore, Pakistan. Analysis of these projects show large possible returns dependent on the strategy taken by the client. Financial projections are shown with regards to pre-determined comparison metrics, and ultimately project type, location, and technology are suggested to the client. International policy and market changes have prompted many carbon offset project developers to reconsider their business models and search for new opportunities. International compliance offset project methodologies have become more complex with increased oversight and U.S. domestic and regional compliance markets are growing. The possibility of developing projects within these markets has become a risky but possibly financially rewarding proposition.

This client-based masters project investigates the market changes that have prompted many firms to reassess their business model, determines the possibility of a specific client developing new projects internationally or within the domestic United States, and compares the risks and returns from these possibilities. Carbon market policies are outlined and discussed within a comparison of regional renewable energy incentives, primarily focusing on the Southeast and Midwest regions of the United States.

The resulting analysis and proposal shows 3 domestic U.S. renewable energy and/or carbon offset projects, and compares them to a recently completed renewable energy project in operation in Lahore, Pakistan. Analysis of these projects show large possible returns dependent on the strategy taken by the client. Financial projections are shown with regards to pre-determined comparison metrics, and ultimately project type, location, and technology are suggested to the client.