Chicago Climate Exchange discontinues its GHG cap-and-trade

Posted on November 18, 2010 by

Chicago Climate Exchange (“CCX”) recently announced that they the CCX emission reduction program will be discontinued at the conclusion of its Phase I and Phase II program at the end of this year. CCX was launched in 2003 and it’s emission reduction program was the first voluntary greenhouse gas (“GHG”) cap-and-trade scheme in North America.

The premise of CCX operation was based on the fact that it’s members made voluntary but legally binding commitments to reduce their annual GHG emissions by 6 per cent below their emissions baselines by the end of 2010. The members who were able to reduce their emissions beyond these targets earned surplus allowances to sell, bank or trade with other members of CCX who could not meet their targets.

The trades were perforned through the Carbon Financial Instrument (“CFI”) contracts. From the all-time high of $7.40 in May 2008, the . Since February 2010, closing prices for a CFI contract fell to $0.05 in January 2010. The CCX has had zero monthly trading volume.

In the place of program being discontinued, the CCX will soon create a CCX Offsets Registry Program. This program will replace emission reduction targets with a general marketplace for emission offsets.

These events however do not affect other CCX affiliate programs such as the European Climate Exchange and the Chicago Climate Futures Exchange.