Trading Market Expands to Chicago, Mexico City
Article courtesy of Lycos Environmental News Service
Illinois, November 13, 2001 (ENS) - The city of Chicago
will become the first American municipality to commit
to participate in the development of a carbon emissions
trading system, Mayor Richard Daley announced today. At
the same time, Mexico City officials also announced their
intention to join in the carbon trading initiative.
The city of Chicago and Mexico City are joining the Chicago
Climate Exchange (CCX), a voluntary market for trading
emissions of greenhouse gases which are linked to global
warming. Mayor Daley will become honorary chairman of
the exchange, now in its design phase.
Mayor Daley announced the city's commitment to CCX in outlining
a 13-point energy plan for Chicago. The Mayor spoke at a
meeting of corporate leaders, under the auspices of The
CEO Coalition, discussing the future of energy and clean
air in middle America.
years our financial exchanges have been a vital part of
the local and national economy," said Daley. "This is
a good example of the kind of innovation that will help
us solve our energy and environmental problems."
City is pleased to announce its participation in the Chicago
Climate Exchange design phase," said Mexico City's Environment
Secretary Claudia Sheinbaum.
participation supports the development of options to reduce
greenhouse gas emissions that are both cost effective
and supportive of sustainable development. We are convinced
that the CCX is a key opportunity to help the City of
Mexico achieve sizable greenhouse gas emission reductions,"
Grupo IMSA of Mexico, an aluminum products manufacturer,
announced its intent to participate in the design phase
of the CCX, joining 40 other entities that have made a
The CCX is developing a market based mechanism for limiting
emissions through a voluntary cap. The CCX would enable
companies to get credit for such voluntary reductions
and to buy and sell credits in order to find the most
cost effective way of achieving reductions.
The goal is to reduce participants' greenhouse gas emissions
by five percent below 1999 levels over five years, a limit
roughly in line with the limits adopted under the Kyoto
are delighted to welcome the sister cities of Chicago
and Mexico City, as well as Grupo IMSA into the CCX,"
said Dr. Richard Sandor, chairman of the Chicago Climate
commitments of major North American cities and corporations
to this initiative indicate that the concept of emissions
trading is gaining greater acceptance as a cost effective
way of achieving environmental benefits," Sandor said.
Funded through $1.1 million in grants from the Chicago
based Joyce Foundation, the Chicago Climate Exchange draws
on the model of sulfur dioxide trading, which has been
successful in cutting pollution that causes acid rain.
To address climate change, companies or cities would set
voluntary limits on their greenhouse gas emissions, and
either make the reductions themselves or buy credits from
others that have reductions to sell. The exchange, now
in its design phase, would offer a market for such transactions,
and thus help reveal what Sandor calls the "price" of
cutting carbon emissions.
After years of discussion about the potential for trading
carbon emissions, the Chicago Climate Exchange will first
test the concept on a regional scale, and then expand to
cover the rest of the U.S., Mexico and Canada.
The Midwest is a promising location for starting the market,
according to Sandor, because of its nearly one-fifth share
of the U.S. economy and greenhouse gas emissions, its
mix of manufacturing, transport, energy, agriculture and
forestry sectors, and its extensive international linkages.
Entities participating in the design phase of the Chicago
Climate Exchange include: Agriliance, a partnership of
agricultural producer-owners, local cooperatives and regional
cooperatives; BP, the holding company of one of the world's
largest petroleum and petrochemicals groups; Cinergy,
an energy company that serves more than 1.5 million electric
customers and 500,000 gas customers in the Midwest; Ducks
Unlimited; DuPont; the energy company Exelon; International
Paper; the Iowa Farm Bureau Federation; Manitoba Hydro;
National Council of Farmer Cooperatives; PG&E; National
Energy Group; Suncor Energy; Swiss Re, the reinsurance
firm; The Nature Conservancy; Waste Energy; and ZAPCO.