The Chicago Climate Exchange (CCX)
by Sean Chamberlin - Sunday, 15 October 2006, 02:28 PM

About CCX


The Chicago Climate Exchange (CCX) is North America’s only, and the world’s first, greenhouse gas (GHG) emission registry, reduction and trading system for all six greenhouse gases (GHGs). CCX is a self-regulatory, rules based exchange designed and governed by CCX Members. Members make a voluntary but legally binding commitment to reduce GHG emissions. By the end of Phase I (December, 2006) all Members will have reduced direct emissions 4% below a baseline period of 1998-2001.Phase II, which extends the CCX reduction program through 2010, will require all Members to reduce GHG emissions 6% below baseline.

The goals of CCX are:
    To facilitate the transaction of greenhouse gas emissions allowance trading with price
       transparency, design excellence and environmental integrity
    To build the skills and institutions needed to cost-effectively manage greenhouse gas emissions
    To facilitate capacity-building in both public and private sector to facilitate greenhouse gas
    To strengthen the intellectual framework required for cost effective and valid greenhouse gas
    To help inform the public debate on managing the risk of global climate change

CCX Derived from Feasibility and Design Research Supported by Millennium Grants from the Joyce Foundation

The development of CCX was initiated through a feasibility study that was funded by the Chicago-based Joyce Foundation in 2000, a leading public policy philanthropy. The grant was administered by Northwestern University’s Kellogg Graduate School of Management and conducted by Environmental Financial Products (EFP). The predecessor to CCX, EFP specialized in developing and trading new environmental, financial and commodity markets. It also designed risk management and hybrid financial instruments that enhance the interrelationships between the capital, commodity and environmental markets. EFP’s principals acted both as agents and advisors in a variety of environmental trades and capital markets transactions. They also authored numerous articles in academic and general interest publications.

The study concluded that a North American private sector pilot greenhouse gas trading market was feasible. A subsequent grant in August, 2001 funded the initiation of research on market implementation. The research included:
    Preparation of an initial market architecture
    Formation of a high-level advisory board
    Recruitment of industry to contribute to development of market rules