Chicago Climate Exchange

Chicago Climate Exchange

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The now defunct Chicago Climate Exchange (CCX) was North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...

’s only voluntary, legally binding greenhouse gas
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...

 (GHG) reduction and trading system
Emissions trading
Emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants....

 for emission sources and offset projects in North America and Brazil.

CCX employed independent verification, included six greenhouse gases, and traded greenhouse gas emission allowances from 2003 to 2010. The companies joining the exchange committed to reducing their aggregate emissions by 6% by 2010. CCX had an aggregate baseline of 680 million metric tons of CO2 equivalent.

Climate Exchange PLC


Until July 2010, CCX was operated by the public company Climate Exchange PLC, which also owned the European Climate Exchange
European Climate Exchange
The European Climate Exchange manages the product development and marketing for ECX Carbon Financial Instruments , listed and admitted for trading on the ICE Futures Europe electronic platform. It is no longer a subsidiary of the Chicago Climate Exchange but rather a sister company...

. 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
Carbon dioxide
Carbon dioxide is a naturally occurring chemical compound composed of two oxygen atoms covalently bonded to a single carbon atom...

, methane
Methane
Methane is a chemical compound with the chemical formula . It is the simplest alkane, the principal component of natural gas, and probably the most abundant organic compound on earth. The relative abundance of methane makes it an attractive fuel...

, nitrous oxide
Nitrous oxide
Nitrous oxide, commonly known as laughing gas or sweet air, is a chemical compound with the formula . It is an oxide of nitrogen. At room temperature, it is a colorless non-flammable gas, with a slightly sweet odor and taste. It is used in surgery and dentistry for its anesthetic and analgesic...

, sulfur hexafluoride
Sulfur hexafluoride
Sulfur hexafluoride is an inorganic, colorless, odorless, and non-flammable greenhouse gas. has an octahedral geometry, consisting of six fluorine atoms attached to a central sulfur atom. It is a hypervalent molecule. Typical for a nonpolar gas, it is poorly soluble in water but soluble in...

, perfluorocarbons and hydrofluorocarbons. CCX started trading in October 2003, prior to the commencement of trading in the European Union through the ETS system
European Union Emission Trading Scheme
The European Union Emissions Trading Scheme also known as the European Union Emissions Trading System, was the first large emissions trading scheme in the world. It was launched in 2005 to combat climate change and is a major pillar of EU climate policy...

.

IntercontinentalExchange
IntercontinentalExchange
IntercontinentalExchange, Inc., known as ICE, is an American financial company that operates Internet-based marketplaces which trade futures and over-the-counter energy and commodity contracts as well as derivative financial products...

 (NYSE: ICE), a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, announced in April 2010 that it had agreed on terms to acquire Climate Exchange plc. That acquisition was completed in July 2010 and was followed by an announcement that half of the company's Chicago-based workforce would be laid off due to inactivity in the U.S. carbon markets. In November 2010, the Climate Exchange stated that it would cease trading carbon credits at the end of 2010, although carbon exchanges will still be facilitated.

Final Trading Position


The effective final CFI position was reached in November 2010 when the carbon credit price per metric ton of CO2 was between 10 and 5 US Cents, down from its highest value of 750 US Cents in May 2008. Trading reached zero monthly volume in February 2010 and remained at zero for the next 9 months when the decision to close the exchange was announced.


Carbon Sequestration Atlas of the United States and Canada


The Carbon Sequestration Atlas of the United States and Canada detailed some of CCX's activity in various regions of North America.

The Valley Wood Carbon Sequestration Project, the first such project to be verified through the Chicago Climate Exchange, was the recipient of offset funding generated through a unique partnership, developed in 2008 by Verus Carbon Neutral, that brought together 17 merchants of Atlanta's Virginia-Highland shopping and dining neighborhood retail district to establish the first Carbon Neutral Zone in the united States.

Components of the Trading System


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

Participants


The exchange had more than 400 members ranging from corporations like Ford, DuPont
DuPont
E. I. du Pont de Nemours and Company , commonly referred to as DuPont, is an American chemical company that was founded in July 1802 as a gunpowder mill by Eleuthère Irénée du Pont. DuPont was the world's third largest chemical company based on market capitalization and ninth based on revenue in 2009...

, and Motorola
Motorola
Motorola, Inc. was an American multinational telecommunications company based in Schaumburg, Illinois, which was eventually divided into two independent public companies, Motorola Mobility and Motorola Solutions on January 4, 2011, after losing $4.3 billion from 2007 to 2009...

, to state and municipalities such as Oakland and Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...

, to educational institutions such as University of California, San Diego, Tufts University
Tufts University
Tufts University is a private research university located in Medford/Somerville, near Boston, Massachusetts. It is organized into ten schools, including two undergraduate programs and eight graduate divisions, on four campuses in Massachusetts and on the eastern border of France...

, Michigan State University
Michigan State University
Michigan State University is a public research university in East Lansing, Michigan, USA. Founded in 1855, it was the pioneer land-grant institution and served as a model for future land-grant colleges in the United States under the 1862 Morrill Act.MSU pioneered the studies of packaging,...

 and University of Minnesota
University of Minnesota
The University of Minnesota, Twin Cities is a public research university located in Minneapolis and St. Paul, Minnesota, United States. It is the oldest and largest part of the University of Minnesota system and has the fourth-largest main campus student body in the United States, with 52,557...

, to farmers and their organizations, such as the National Farmers Union
National Farmers Union
National Farmers Union may refer to:*National Farmers Union *National Farmers Union *National Farmers Union *National Farmers Union of Scotland*National Farmers Union -See also:...

 and the Iowa Farm Bureau.

The government run passenger rail corporation, Amtrak
Amtrak
The National Railroad Passenger Corporation, doing business as Amtrak , is a government-owned corporation that was organized on May 1, 1971, to provide intercity passenger train service in the United States. "Amtrak" is a portmanteau of the words "America" and "track". It is headquartered at Union...

, was also a member of the exchange and was trying to reduce its emissions even though the railroad planned to dramatically increase its annual ridership totals.

See also


  • European Climate Exchange
    European Climate Exchange
    The European Climate Exchange manages the product development and marketing for ECX Carbon Financial Instruments , listed and admitted for trading on the ICE Futures Europe electronic platform. It is no longer a subsidiary of the Chicago Climate Exchange but rather a sister company...

  • International Petroleum Exchange
    International Petroleum Exchange
    The International Petroleum Exchange, based in London, was one of the world's largest energy futures and options exchanges. Its flagship commodity, Brent Crude was a world benchmark for oil prices, but the exchange also handled futures contracts and options on fuel oil, natural gas, electricity ,...

  • List of futures exchanges
  • The Climate Registry
    The Climate Registry
    The Climate Registry is a nonprofit collaboration between North American states, provinces, territories, and Native Sovereign Nations to record and track the greenhouse gas emissions of businesses, municipalities and other organisations...

  • Dow Jones Indexes
    Dow Jones Indexes
    Dow Jones Indexes was formed in 1997 as an entity within Dow Jones & Co. It is now owned by the CME Group. It serves as the marketing name of CME Group Indexes, LLC. It produces, maintains, licenses and markets indexes as benchmarks and as the basis of investible products such as exchange traded...


External links