January 27, 2003—In January, leading US and international companies and the City of Chicago announced the creation of Chicago Climate Exchange (CCX), a voluntary cap-and-trade program for reducing and trading greenhouse gas emissions. Through CCX, these entities have made a legally binding commitment to reduce their emissions of greenhouse gases by 4 percent below the average of their 1998 – 2001 baseline by 2006, the last year of the pilot program.
The founding members of CCX include American Electric Power, Baxter International Inc., the City of Chicago, DuPont, Equity Office Properties Trust, Ford Motor Co., International Paper, Manitoba Hydro, MeadWestvaco Corp., Motorola, Inc., STMicroelectronics, Stora Enso North America, Temple-Inland Inc., and Waste Management, Inc.
The announcement marks the first time major companies in multiple industries have made a voluntary binding commitment to use a rules-based market for reducing their greenhouse gas emissions. Trading is targeted to begin in the spring of 2003.
CCX will administer this pilot program for emission sources, farm and forest carbon sinks, offset projects, and liquidity providers in North America. To foster international emissions trading, offset providers in Brazil can also participate. The development of CCX resulted from feasibility and design studies that were funded by grants from the Chicago-based Joyce Foundation and administered by Northwestern University’s Kellogg Graduate School of Management.
