Pricing Carbon: Integrating Promise, Practice and Lessons Learned from the Chicago Climate Exchange

Abstract

In 2003, the Chicago Climate Exchange (CCX) , a feisty start-up, appeared on the climate change scene in the USA, the world’s first and only integrated cap-and-trade system covering all six greenhouse gases. In the absence of a national emissions reduction mandate, CCX established a voluntary but legally binding self-regulated membership system under basic US contract law and operated from 2003 to 2010, pioneering the carbon pricing field worldwide. CCX recruited large and small companies, cities, counties and universities, and through CCX there were more emissions covered by a cap-and-trade system in the USA than in any other country in the world at the time, even though the USA had turned its back on the Kyoto Protocol. What accounts for this achievement and what can be learned from the grit, passion and ups and downs of CCX? This chapter provides answers and bold suggestions for regaining momentum and capacity building so that the world can move more rapidly from theory to practice on carbon pricing.