Chicago and Mexico City to begin carbon trading
Chicago will become the US’ first city to develop of a carbon emissions trading system, alongside the world’s biggest metropolis, Mexico City, which has announced similar plans.
Authorities from both cities, jointly home to some 25 million inhabitants, have announced that they are to join the Chicago Climate Exchange (CCX), which aims to reduce participants’ greenhouse gas emissions by 5% below 1999 levels over 5 years.
After years of discussion about the potential for trading carbon emissions, the CCX will first test the concept on a regional scale, and then promptly expand to cover the rest of the US, Mexico and Canada. The US Midwest is a promising location for starting the market because of its nearly one-fifth share of the economy and greenhouse gas emissions, its mix of manufacturing, transport, energy, agriculture and forestry sectors, and its extensive international linkages. Mexico City, with a population of almost 20 million is also one of the world’s most polluted, with frequent and even choking smog a common feature, although a recently-unveiled plan aims to cut air pollution significantly (see related story).
Funded through US$1.1 million in grants from the Chicago-based Joyce Foundation which supports efforts to protect the environment of the Great Lakes region, the CCX draws on the model of sulphur dioxide trading, which has been successful in cutting pollution that causes acid rain. Participants would set voluntary limits on their greenhouse gas emissions, and their either make the reductions themselves or buy credits from others that have “extra” reductions to sell. The Exchange, now in its design phase, would offer a market for such transactions, and thus help reveal the “price” of cutting carbon emissions.
Chicago’s participation was announced by the city’s mayor, Richard Daley, who will become honorary Chairman of the Exchange. “For years our financial exchanges have been a vital part of the local and national economy,” he said. “This is a good example of the kind of innovation that will help us solve our energy and environmental problems.”
At the same time Mexico City’s Environment Secretary Claudia Sheinbaum announced the city’s participation in the scheme. “Our participation supports the development of options to reduce greenhouse gas emissions that are both cost effective and supportive of sustainable development,” she said. “We are convinced that the CCX is a key opportunity to help the City of Mexico achieve sizeable greenhouse gas emission reductions.”
“We are delighted to welcome the sister cities of Chicago and Mexico City…into the CCX,” commented Dr. Richard Sandor, Chairman of the CCX. “The commitments of major North American cities and corporations to this initiative indicate that the concept of emissions trading is gaining greater acceptance as a cost-effective way of achieving environmental benefits.”