Renewable energy systems depend on large financial incentives to compete with conventional generation methods. Market-based incentives, including state-level REC markets and international carbon markets have been proposed as solutions to increase renewable energy investment. In this paper we introduce and formulate a carbon revenue bond, a financing tool to complement environmental credit markets to encourage renewable energy investment. To illustrate its use, we value the bond by predicting future revenue using stochastic processes after analyzing historical price data. Three illustrative examples are presented for renewable energy development in three different markets: Europe, Australia and New Jersey. Our findings reveal that the sale of a carbon revenue bond with a ten year maturity can finance a significant portion of a project's initial cost. (C) 2012 Elsevier Ltd. All rights reserved.