Transcript Slide 1

The Chicago Climate
Exchange (CCX)
Instigating Change or Business-As-Usual?
Chelsea Acosta
Brittany Camp
Amar Kelkar
Grace Leonard
Christel Trutmann
Ellie Walsh
Roland Wang
Environmental Governance
30 April, 2008
Question and Outline
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Is the CCX effective in pushing environmental
change, or are companies manipulating the system
without reducing emissions?
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Overview of CCX
Review of members
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Universities, Chemical Industry (DuPont)
Offsets
FINRA
Criticisms
Key Terms
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Carbon offsets
Carbon Financial Instrument (CFI)
Baseline emissions
GHGs
“Business-as-usual”
Members
States, Counties and Cities
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Member States
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Illinois
New Mexico
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Member Cities
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Member Counties
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King County, WA
Miami-Dade, FL
Sacramento, CA
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Chicago
Portland
Oakland
Aspen
Berkley
Boulder
Fargo
Melbourne, Australia
Members
Emission Responsibilities
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Energy use in city buildings
City lighting
Contracted work
Motivations
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Public relations
Preemptive start before federal market
Clean air
Members
University members
of the CCX
Members
A university in the marketplace…
Q. “What are the university’s major actions as a member? (In terms of
buying/selling credits, and offsets)”
A. “…our extra credits have been accumulating in the registry. I believe it will be
a larger campus decision as to what we do with those credits… We could
sell them and reinvest in renewable energy projects… or even let it go into
the general fund (worst case). My concern is that we do something
meaningful. By default, if we don’t sell the credits we can retire them
and take that carbon off the market. That’s the purest thing to do.”
-P. Ferman Milster, P.E.
Associate Director – Utilities & Energy Management
University of Iowa
Members
CCX and the Chemical Industry
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For CCX:
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Large potential reductions
Fueling the trade with a huge base of carbon
credits
For DuPont
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Show investors that they are environmentally
friendly
Already reducing anyway
Motivation?
Members
Public and Investors angry about
Chlorofluorocarbons (CFCs)
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DuPont Products w/ CFC’s:
R-22
R-134a
Freon 12
25% market share in 1980’s
1987: Montreal Protocol,
agreeing a 50% decrease in
CFC consumption over a 10
year period
Members
DuPont and the CCX
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Reductions already being made
Largest reductions in CFC’s
Successful membership - used as a means to
publicize their reduction efforts
Already had monitoring system in place
Independent goals for sustainability by 2015
CCX: Approved Offset Projects
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Forest Sequestration
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Alternative Energy
Projects
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Agricultural Offsets
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Destruction of
Released CO2
Do offsets actually reduce CO2
emissions?
No-tilling
What does FINRA do for CCX?
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FINRA: Financial Industry Regulatory Authority
 FINRA acts as the third-party watchdog for the CCX
Involved in:
Registering new participating groups
Educating the participants on rules and regulations of the trading
system
Enforcing of rules and reporting if companies violate policies
 Policies include rules within the CCX and actual laws
Acting as the watchdog of the CFI Trading (Market Oversight)
Determining emissions baselines for new participants
Verifying yearly emissions from participating groups
Reporting and verifying offset programs
Criticisms
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Private enterprise with little public input
Trading system not transparent
Loopholes in the rules
CCX rules too business friendly
Low emission reduction goals
Elusive calculation of baseline emissions
Power of the CCX or good corporate
citizenship?
Conclusions
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The CCX has great potential to catalyze
environmental change
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But the CCX is not taking its position seriously
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Current trading system is not effective
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Members are manipulating the system for profit
Policy Recommendations
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Eliminate sale of credits from last year
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With Higher reduction goals (>1%)
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Emulate the 1980’s cap-and-trade system
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Stricter punishments
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Reduce commissions on CFI trades
Questions?