Chicago Climate Exchange (CCX)
The Chicago Climate Exchange (CCX) was a pioneering emissions allowance trading system based in Chicago, Illinois, established in 2000 and operational from 2003 until its acquisition by Intercontinental Exchange in 2010. It was notable for being the only cap-and-trade system in North America to cover all six greenhouse gases, which include carbon dioxide, methane, and nitrous oxide, among others. The CCX facilitated a marketplace where organizations, regardless of size, could voluntarily commit to reducing their greenhouse gas emissions according to a legally binding agreement. Members, which numbered around four hundred by 2010, included both large and small emitters, as well as owners of projects aimed at reducing emissions.
To meet their reduction commitments, members implemented various operational changes and had the option to trade emissions allowances and offset credits. The system also incorporated annual audits by third-party experts to ensure compliance with emissions baselines and reduction schedules. Additionally, CCX had affiliations with various exchanges globally, including those in Europe and Canada, promoting a broader engagement in environmental markets. As a significant initiative in addressing climate change, the CCX model aimed to incentivize reductions in greenhouse gas emissions through market mechanisms and collaborative efforts.
Subject Terms
Chicago Climate Exchange (CCX)
Identification: Financial institution that operates an emissions allowance trading system in Chicago, Illinois
Date: Established in 2000
The Chicago Climate Exchange operates the only cap-and-trade system covering all six greenhouse gases (carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, perfluorocarbons, and hydrofluorocarbons) and offset projects in North America and Brazil.
The Chicago Climate Exchange (CCX) was founded in 2000 and began operating its emissions allowance trading system, or cap-and-trade system, in 2003; by 2010 CCX had four hundred members. CCX membership comprises organizations that produce greenhouse gas emissions (both big emitters and negligible emitters such as office-based businesses and small institutions) as well as owners of title to qualifying emissions-offset projects that sequester, destroy, or reduce such emissions. Each registered emitter makes a voluntary but legally binding commitment to an emissions reduction schedule that includes a commitment to reduce aggregate emissions by a certain percentage below a set baseline level.
Emission baselines, annual reduction commitments, and offset projects are subject to annual audit by third-party experts. In order to reach their emissions targets, members can reduce emissions through their operational practices (such as by changing the fuels they use, making efficiency improvements, or instituting managerial changes), purchase additional emission allowances from other members who have reduced their own emissions by more than the annual reduction requirement, or purchase offset credits from registered emission reduction projects. Entities and individuals can also trade emissions allowances for the purposes of financial investment.
Exchanges affiliated with CCX include the European Climate Exchange (ECX), an exchange operator in the European Union Emissions Trading Scheme); the Insurance Futures Exchange (IFEX), an exchange platform that trades insurance-based derivatives; the Montreal Climate Exchange (MCeX), a joint venture with the Montreal Bourse to host Canadian emissions allowance trading; Tianjin Climate Exchange (TCX), a joint venture with the China National Petroleum Assets Management Company and the Tianjin Property Rights Exchange facilitating emissions trading in China; and Envex, a joint venture of Climate Exchange PLC and Macquarie Capital Group specializing in environmental markets in Australia and the Asia Pacific region.