What’s the Chicago Climate Exchange?

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The Chicago Climate Exchange (CCX) is a cap and trade system that helps reduce greenhouse gas emissions in North America. Members sign a legally binding agreement to reduce emissions and can trade emissions credits. CCX enables companies to use the “green business” label and remain competitive in the open market. While some argue that CCX proves companies can respond to global warming on their own, others believe government regulation is still necessary.

The Chicago Climate Exchange (CCX) is a corporation formed to facilitate the reduction of greenhouse gas emissions. It works under a cap and trade system, with CCX members agreeing to reduce overall emissions by a set amount, and can also trade emissions credits with each other. As the United States has repeatedly refused to sign the Kyoto Protocol, the Chicago Climate Exchange is designed to help fill the regulatory vacuum left by the lack of Kyoto controls in North America.

This organization was founded in 2003 by Richard Sandor, who saw the need for climate exchange in North America. Members of the Chicago Climate Exchange sign a legally binding agreement to reduce their emissions, and in exchange for this agreement, companies are issued credits, which they can use or sell. Companies that do not use all of their credits can sell them to other companies that have failed to achieve the necessary efficiency status, thus reducing overall emissions while maintaining a “cap” on total emissions.

Cap and trade systems are already in widespread use in other parts of the world and, in some ways, the Chicago Climate Exchange is simply a market response to the problem. By exchanging credits in various greenhouse gases, member companies can make a positive contribution to the environment, enabling them to use the coveted “green business” label in their marketing. These companies may also be more competitive with companies in other parts of the world that already have cap and trade systems.

The rise of institutions like the Chicago Climate Exchange illustrates the growing global concern over issues related to global warming and climate change. Cap and trade systems for various pollutants have been in use since the 1990s, but these systems have become much more widely used and accepted by members of the business world as they realize that being environmentally friendly is profitable. Some very high-profile companies are members of the Chicago Climate Exchange, including Motorola and Ford, demonstrating a widespread interest in trading pollution credits and a desire to remain competitive in the open market.

Some people have pointed to the proactive establishment of the Chicago Climate Exchange as an argument against government regulation of greenhouse gases, suggesting that companies will respond to global warming on their own. However, others are quick to point out that the Chicago Climate Exchange was born in response to similar systems around the world, helping North American companies compete globally and prepare for potential government crackdowns on greenhouse gas emissions. While the Chicago Climate Exchange is certainly a valuable step in the right direction, these critics believe government regulation is still needed, making cap and trade systems mandatory, rather than optional.




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