Private Market Solutions for Greenhouse Gas Emissions (GHG) Trading

Although the Chicago Climate Exchange (CCX) is emerging as the marketplace to trade for greenhouse gas (GHG) emissions credits and many state registries have been created, many industrial customers are not currently willing to join these organizations. However, many of these customers, through good business practices, are already creating GHG emissions reductions, which, through proper verification, can be quantified and traded through bilateral agreements. Many of these customers are seeking a private market to trade these emissions credits and a secondary market is developing. Word-of-mouth and relationships are driving the development of this market. When collaborations occur, both parties benefit, but often in different ways. Some of these benefits include energy use reductions or greater use of renewable sources, lower operating and environmental costs, and GHG reductions. Through this very low-tech process, like-minded businesses are striking bilateral arrangements to trade or purchase GHG emissions credits. This paper will discuss the reasons for the creation of this secondary market, discuss the ancillary benefits of these collaborations, and offer examples of this market at work.