Chicago Climate Exchange to Cease Operations

The Chicago Climate Exchange (CCX), the U.S.’s only emissions credit exchange, will close shop by year’s end, citing a lack of legislative interest. While voluntary, the exchange was legally binding, and counted among its members Dupont, Motorola and IBM.

The exchange suffered a blow when it became clear no meaningful climate legislation would make it through the Senate, and this month’s elections sealed its fate. Participants have lost interest, says CCX parent IntercontinentalExchange CEO Jeffrey Sprecher.

“The bulk of the users have said to us that they really don’t want to continue to trade voluntarily in the absence of any credit for their work by the current administration,” Sprecher said. “The real value of that business is what’s going on in Europe.”

The exchange will lay off its employees gradually over the next few weeks, and in the new year Intercontinental will launch a new registry for carbon offsets, but for now, the company is focusing its emissions trades where it’s profitable: on the European market. Indeed, even as the price of carbon has plummeted in the US, prices in the European Trading Scheme have risen steadily in recent months, and are projected to reach €40 per tons of CO2e in 2011.

What’s next for US Carbon Trading?

In the meantime, Sprecher is keeping an eye on California, which will now become the country’s testing ground for cap-and-trade policy. Some estimates the Golden State’s carbon market will grow up to $58 billion over the eight-year course of its cap-and-trade experiment, which will begin in 2012.

California is also key to the Western Climate Initiative, the west’s answer to RGGI, which aims “to design a regional cap-and-trade program that can deliver GHG emission reductions within the region at costs lower than could be realized through a California-only program.”

Intercontinental is among three major exchanges that are angling to be California’s key emissions-trading hub, along with NYSE Blue and Green Exchange.

“Anybody who has a significant carbon footprint is going to be looking at the need to make reductions or acquire credits,” said Josh Margolis, CEO of CantorCO2e.

2 responses

  1. Having worked for a company in Chicago back in the sixties that designed and built coal processing plants, I feel a little responsible for carbon emissions, but now work on the other side and could be a replacement for the failure of this to go forward. Offsetting carbon footprints can still be a viable option even without significant “legislation”. We’ll even pay you to do it.

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