Chicago Climate Exchange

Chicago Climate Exchange (CCX) is North America’s only voluntary, legally binding greenhouse gas (GHG) reduction and trading system for emission sources and offset projects in North America and Brazil.

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A project that is beyond business as usual is commonly referred to as a carbon project. CCX employs independent verification, includes six greenhouse gases, and has been trading greenhouse gas emission allowances since 2003. The companies joining the exchange commit to reducing their aggregate emissions by 6% by 2010. To date the exchange has more than 350 members ranging from corporations like Ford, DuPont, and Motorola, to state and municipalities such as Oakland and Chicago, to educational institutions such as Tufts University and University of Minnesota, to farmers and their organizations, such as the National Farmers Union and the Iowa Farm Bureau. CCX has an aggregate baseline of 226 million metric tons of CO₂ equivalent, which is equal to the United Kingdom’s annual allocation under the EU ETS. This would make the CCX market comparable to one of the larger countries in the EU CO₂ market, or 4% of U.S. annual GHG emissions.

CCX is operated by the public company Climate Exchange PLC, which also owns the European Climate Exchange.^[1] Richard Sandor, creator of the Sustainable Performance Group, founded the exchange and has been a spokesman for it. The exchange trades in emissions of six gases: Carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, perfluorocarbons and hydrofluorocarbons. CCX started trading in October 2003, prior to the commencement of trading in the European Union through the ETS system.

The Carbon Sequestration Atlas of the United States and Canada details some of CCX's activity in various regions of North America. For instance, the Big Sky Carbon Sequestration Partnership reports that to date, the Chicago Climate Exchange (CCX) has accepted 5,388 CO2-eq metric tons (5,939 CO2-eq tons) of forestry-based carbon credits in the pilot tribal portfolio. The projects are now undergoing third-party verification in preparation for listing on the CCX. An additional 2,000 CO2-eq metric tons (2,200 CO2-eq tons) is now under development with the Navajo nation. For the private/state lands portfolio, NCOC has obtained listing agreements for 19 cropland sequestration projects in north-central Montana with a total of 7,587 CO2-eq metric tons (8,363 CO2-eq tons).

Components of the Trading System

The Trading System has the following three parts.

1. The Trading Platform is a marketplace for executing trades among Registry Account Holders. For instance, National Farmers Union’s Carbon Credit Program is a multi-state program that allows farmers and landowners to earn income by storing carbon in their soil through no-till crop production and longterm grass seeding practices. Farmers Union has earned approval from the Chicago Climate Exchange to aggregate carbon credits. Farmers Union is enrolling producer areas of carbon into blocks of credits that will be traded on the Exchange, much like other agricultural commodities are traded.
2. The Clearing and Settlement Platform processes all transaction information.
3. The Registry is the official database for Carbon Financial Instruments owned by Registry Account Holders.

References

See also

• European Climate Exchange
• International Petroleum Exchange
• List of futures exchanges
• The Climate Registry