Carbon Trading Market Expands to Chicago, Mexico City
CHICAGO, 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.
"For 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."
"Mexico City is pleased to announce its participation in the Chicago Climate Exchange design phase," said Mexico City's Environment Secretary Claudia Sheinbaum.
"Our 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," Sheinbaum said.
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 similar commitment.
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 Protocol.
"We 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 Exchange.
"The 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.
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