Chicago climate mart to try CO2 link with EU
NEW YORK, Apr 5: A voluntary Chicago emissions market said on Tuesday it is trying to arrange a deal in which its members can use carbon dioxide emissions allowances from the European Union in ''demonstration transfers'' to meet commitments in its bourse.
If such transfers take place, they could be the first trading link between greenhouse gas emitters in the United States and the European Union's Emissions Trading Scheme, the world's first to trade heat-trapping gases that scientists believe are warming the earth.
Multinational companies and some governments have been eager to form links between developing emissions markets in Europe and the United States to increase liquidity and set clearer standards on capital-intensive facilities such as power plants and refineries.
In the European Union, industrial facilities have been buying and selling emissions of heat-trapping gases on the Emissions Trading Scheme since early last year. Member nations signed the Kyoto Protocol on global warming which calls for industrialized countries to cut emissions about 5 per cent under 1990 levels from 2008 to 2012.
The United States, the world's top emitter of global warming gases, pulled out of the international agreement.
But the Chicago Climate Exchange (CCX), which bills itself as the only reduction and trading system in North America, formed a voluntary trading market to help companies prepare for potential future US greenhouse gas caps.
CCX members enter legally binding agreements to cut their emissions by a set amount and time. If they beat those targets, they generate credit they can sell or bank. If they fall behind, they must purchase credits on the exchange.
In what the CCX calls ''demonstration transfers'' trade could be carried out from one market to another.
''Batches of 100 tons of EU allowances would be transferred by a CCX member from its EU allowance account into an account CCX has established in an EU registry,'' CCX said in a statement yesterday.
''The EU allowances would then be retired, and CCX would issue 100 metric tons of CO2 into that member's CCX registry account,'' the release said.