September 2008 marks a critical month in the fight against climate change. As the pressure builds on corporations and other major institutions to reduce their carbon emissions, a number of newsworthy events will bring these issues to the forefront this fall.
The (CCX) has been around for five years as the United States’ first legally binding cap-and-trade system for carbon emissions. It is comprised of over 400 members, including some of the most prominent names in corporate America: Ford Motor Companies, DuPont, IBM, Bank of America, and United Technologies, among others. CCX gives corporations and other entities a market-driven solution for reducing their emissions.
The month’s key events are noted below:
September 24 – CCX offers RGGI (Regional Greenhouse Gas Initiative) futures on its futures exchange, CCFE – the first regulated exchange in the US to do so. CCFE RGGI contracts have traded every day since the launch of the contract and are the price signal for the utilities and hedgers involved participating in this market.
September 22 - Global launch of the Carbon Disclosure Project (CDP) sixth report. The world’s premier source for corporate greenhouse gas emissions data, the CDP is an independent not-for-profit organization that, as of 2008, was working with 3,000 of the world’s largest companies and their shareholders to disclose the greenhouse gas emissions of major corporations. CDP launches in past years have featured such notable keynote speakers as Bill Clinton and Al Gore. (CCX will be in attendance at the CDP event.)
September 23-26 – Clinton Global Initiative (CGI). The fourth annual New York gathering of leaders from business, NGOs, foundations, and government, the meeting will focus on Energy & Climate Change, among other issues. CGI members commit to creating and implementing measurable solutions to the world’s problems. Among those who spoke on the intersection of climate change and business during CGI 2007 include Florida Governor Charlie Crist, Turner Enterprises Chairman Ted Turner, and Duke Energy CEO Jim Rogers.
Background on CCX:
CCX is the world’s first legally binding, integrated six gas greenhouse gas reduction and trading program for emission sources and offset projects worldwide, including members and participants in all 50 U.S. states. In operation since 2003, CCX has seen record trading volumes over the last few months, continues to offer new products like the recently announced RGGI futures instrument, and has recently forged a partnership with Dow Jones. Carbon Financial Instruments (CFIs), CCX’s main offering, are currently trading at roughly $2.50.
The mechanics of CCX’s cap-and-trade system function as follows:
- All entities that are part of a cap-and-trade system pledge to “cap” their carbon emissions over the course of a set timeframe to a pre-determined and measurable level.
- If an entity emits carbon at a level that falls below this cap, they may trade their surplus allowances to those entities in the system that have exceeded their caps.
- This proves to be an effective because it gives all entities within the system a financial incentive to emit at a level that meets or falls below the cap.
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