Chapter 5 - Initial Observations from the First Year of the Chicago Climate Exchange

Abstract

This chapter presents the initial observations from the first year of the Chicago Climate Exchange (CCX). The overarching goal of CCX is to turn the theory of greenhouse gas (GHG) emissions reduction and trading into a reality—to prove that the concept can work in practice. The members of CCX undertook significant efforts to assemble internal records of energy and materials use. For members in the electric generation sector, GHG emission reports are based on the data from the continuous emission monitors (CEMs) installed on most electricity generating units. When CEM data are not available for most members in the industrial and manufacturing sectors, the GHG emissions are determined by applying emission factors to fuel inputs. CCX rules prescribe the use of World Resources Institute/World Business Council for Sustainable Development (WRI/WBCSD) calculation tools and other methods to determine GHG emissions from fuel use. CCX and National Association of Securities Dealers (NASD) developed the auditing process after thoroughly researching into existing emissions trading programs and calculations developed by WRI and the Intergovernmental Panel on Climate Change (IPCC). CCX intends to extend the central exchange model not only to non-GHG air pollutants but also to other environmental commodities.