Chicago climate mart to try CO2 link with EU

NEW YORK (Reuters) – 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 percent 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 U.S. 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.

“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.