1. Overview: The detrimental affects of anthropogenic global warming are
becoming more and more apparent as the century drags on: from melting ice caps,
to extreme weather cycles, and acidifying oceans, our generation is faced with the
most daunting challenge that humanity has ever been confronted with. While
recently there have been tremendous improvements in the fight against climate
change from international emission mitigation commitments, to rapid
improvements in the efficiency of renewable energy technology, to a growing
awareness and acceptance of the problem at hand: humanity is beginning to actively
fight against climate change –but there is still vast work to be done and very little
time to capitalize on our window of opportunity. One of the growing theories that
climate change combatants rely on is the belief that the fight against climate change
will not be won by a single technological improvement in geo-engineering, but
rather: by a collective effort that will lead to a plethora of innovations across a range
of academic disciplines and economic industries. This is where Planetary Emissions
Management’s value can be found, as its highly innovative carbon investment
vehicle has the potential to play a crucial role in mitigating carbon emissions, and in
sequestering carbon from the atmosphere by natural means.
Joshua Wexler-Waite
1/20/2015
PEM Carbon Inc.

2. PEM Carbon’s investment vehicle –while extraordinarily innovative– is
relatively simple in its economic model; The Company’s vehicle will yield carbon-
backed assets that are measured, verified, and accounted (MVA), and therefore
much more appealing to retail or institutional investors than credit-backed assets
where the derivative value can be harder to trace or verify. The source of PEM’s
carbon-backed products will involve a hefty real-estate investment in a densely
forested region of the world that will naturally sequester carbon through
photosynthesis, some proposals include: Democratic Republic of Congo, Brazil,
Canada, and Indonesia. Once real-estate purchase have been made, PEM Carbon will
employ –ideally local– scientists and crews to maintain and protect the forested
real-estate while simultaneously using laser measurement technology to track the
levels of carbon within the trees and grasslands of the land plot. These carbon
measurements can then be accounted and recorded for up to date measurements of
carbon levels. With PEM’s investment model, landowners can accurately value their
carbon investments within the land, allowing for land conservation to become a
tangible monetary investment rather than an abstract nonrevenue environmental
success.
The next step in PEM’s investment vehicle would be the securitization of the
carbon within PEM-owned land, and a public offering of carbon-backed securities
through the Regulation A, or Regulation A+ provisions of the Securities Act.
Regulation A allows for $5 M in securities to be offered in a 12-month period, and
Regulation A+ allows for $50 M to be offered in the same period; each of these

3. provisions would provide PEM Carbon to adequately test market demand for MVA
Carbon-backed products.
Since PEM does not have a brokerage service, they would likely need to enlist
the help of a large financial institution such as an investment bank to garner the
necessary sales force to distribute carbon securities to retail and institutional
investors. Once distributed, PEM’s carbon securities will appreciate in a similar
manner to owning a gold-backed security, however with PEM’s carbon securities:
investors will be able to regularly check the prices and levels of carbon that are in
their security based on the carbon sequestration that occurs within PEM-owned
real-estate. PEM’s securities could create an entirely new asset-class that could be
defined as a safe-haven asset because their value is derived from a measured level of
tangible carbon atoms, and therefore provides investors with a transparent
measurement of value of their carbon securities. Since PEM’s carbon products are
voluntary and not compliance-based (as the current carbon credit market is), PEM’s
carbon assets will likely fetch a higher price than credit-backed assets, further
boosting their appeal to both institutional and retail investors.
The biggest appeal of PEM’s carbon securities would be threefold: their
ability to mitigate deforestation in PEM’s purchased real-estate, their ability to
appreciate as carbon is sequestered, measured, and verified; finally these assets will
be heavily demanded by people who are seeking to make a difference in the fight
against climate change but who may not have the resources to take part in large-
scale mitigation projects. PEM’s securities will be beneficial to both the climate by

4. reducing atmospheric carbon levels, and to the investors that buy and trade them
after an initial offering.
Potential Barriers: While PEM’s carbon investment model is hugely innovative and
has enormous upside potential both for investors, and in the fight against climate
change: there are a few potential barriers to execution that are worth exploring.
Firstly, PEM’s initial real-estate investment will require regulatory approval
from the national government in which the land is being purchased, and this will
likely occur in an emerging market where governments can be skeptical of foreign
investors. Aside from the initial task of raising capital to finance a real-estate
purchase, PEM Carbon will also have to find an adequately forested plot of land, and
they will need to seek regulatory approval from the government in which that land
presides. PEM’s CEO, Bruno Marino, has demonstrated an aptitude for helping local
populations, and for potentially partnering up with larger telecommunications and
infrastructure companies that would allow emerging nations to improve their
quality of life drastically, while simultaneously fueling PEM’s carbon investment
vehicle. Dr. Marino has also demonstrated an eagerness to hire local populations to
work in PEM’s facilities, which would require a full-time team of scientists,
botanists, and potentially security personnel to maintain the forested land. Dr.
Marino’s hugely positive intentions will likely play an important role in gaining
regulatory approval from such nations, and furthermore: the current economic rout
among emerging market nations will likely make government’s more eager to

5. attract foreign investment as a means to bolster economic growth and improvement
of quality of life.
The second, and arguably most prominent barrier to PEM’s carbon security
model is the SEC regulatory approval that is necessary for a firm to execute a
Regulation A or Regulation A+ offering. While PEM’s model is aimed at combating
climate change and aiding investors, the SEC can sometimes be unpredictable in its
decisions so it will be important for PEM to remain vigilant in their Regulation A
application even though they are likely to meet compliance standards. SEC approval
currently stands as the most significant impediment to PEM’s carbon investment
model, as once PEM gains SEC approval for an offering, it will be much easier for The
Firm to raise capital for both the initial real-estate investment, and for the public
offering that will likely require assistance from a large financial institution.
Another barrier to PEM’s success in its Carbon security offering will be the
marketing of the sale of the securities. While investors have demonstrated a demand
for social impact bonds, and similar products that aim at curbing detrimental social
problems: PEM’s products are an entirely new asset class and therefore will likely
be viewed with skepticism from investors. PEM’s marketing efforts will need to
work in tandem with the underwriter of the offering whether it is a large investment
bank or prime broker service. The initial public response to the offering will play an
important role in establishing the new asset class and forming a mainstream
market. PEM could maximize its marketing efforts if it teams up with a reputable
financial services firm that has a proven history in commitment to combating
climate change, as well as in exceptional client and security investment services

6. such as Morgan Stanley or Goldman Sachs. Additionally, investor sentiment during
the first year of the carbon security market will be crucial in their sustainability, as if
investors are spooked or unsure of their assets: they will undoubtedly sell-off and
eliminate the market for PEM’s securities –possibly for good. On the other hand, if
markets are stable after the offering and investors see the carbon assets appreciate
–even moderately– that would feed investor confidence and would allow PEM to
pursue additional offerings that would further establish the market for Carbon-
backed securities.
The final barrier to PEM’s carbon securities is the rate by which carbon
atoms can be measured, verified, accounted, and priced as products that are sold on
exchanges: and furthermore, how the speed at which the products are measured,
verified, and accounted will affect the liquidity of the products. In other words, if
there is an inconsistent system of updating the levels of carbon contained in the
securities it could affect the price of the products in such a way that could spook
investors and lead to a sell-off or liquidity event. Although this may seem unlikely
and far off in the future (as a Reg A offering will first have to occur to establish a
market for Carbon-backed products), it will be important for PEM to develop a
consistent system of measuring, accounting, updating the price of these securities so
as to avoid such an event. One such solution could be a once-a-day update in the
price of the securities, or perhaps–if the securities are to be updated consistently
throughout the day– specific times each day in which the price of the securities will
updated.

7. Conclusion: PEM Carbon’s potential to optimize carbon capture, measurement, and
securitization methods must be pursued to their utmost as the discovery of value in
quantified carbon markets could open new doors in the future of both carbon
security markets, as well as emission mitigating investment opportunities. PEM’s
carbon products have large potential for innovative disruption in carbon markets, as
current credit-backed carbon markets have continually failed across the globe from
Europe to California due to the uncertainty that comes with credit-backed securities.
Since PEM’s securities will be measured, verified, and accounted they will be
accurate portrayals of the carbon that is underlying their value, making them more
appealing to investors who are skeptical of credit-securities. While commodity
prices are currently at unusual lows, gold has proven to be a resilient commodity
and PEM’s carbon securities will operate and trade in a similar manner, although –if
proven successful– their value should appreciate at a more steady rate than gold
and should not experience the same levels of beta volatility in correlation with
equity and bond markets. PEM Carbon’s intent to assist emerging nations in their
development through infrastructure projects and job creation is yet another reason
that PEM should continue to pursue a Regulation A offering of carbon securities;
emerging markets are currently experiencing widespread capital flight which will
increase their appetite for foreign investment, especially for well-intentioned
foreign firms that will not degrade and exploit their lands and local populations. As
mentioned in the introduction, climate change will not be thwarted by a single geo-
engineering innovation (as much as the GOP is praying for such a solution), and PEM

8. Carbon’s security products are a perfect example of a firm doing as much as they can
to contribute to humanity’s fight against global climate change.
In conclusion PEM Carbon is an extremely innovative firm with tremendous
integrity and even more potential for the future of both carbon securities, as well as
further emissions reduction investments: and that is why they should rigorously
and aggressively pursue their goal of creating quantified carbon-backed securities in
hopes of creating both value for retail and institutional investors, as well as to play
an important role in our generation’s fight against global warming.