EFP was responsible for the feasibility and design studies for the first North American greenhouse gas emissions trading program: the Chicago Climate Exchange. Since then, our principals have served as authors, consultants, or contract committee members for a variety of commodity and financial instruments.
Futures and Options Exchanges
Environmental Financial’s principals have consulted to the following futures and options exchanges:
- Chicago Board of Trade
- Korea Exchange
- Hong Kong Exchanges and Clearing Limited
- Stock Exchange of Singapore
- Winnipeg Commodity Exchange
- Montreal Exchange
- New York Mercantile Exchange
Commodity and Financial Instruments
Our principals have also served as authors, consultants, or contract committee members for the following commodity and financial instruments:
- CCX Carbon Financial Instrument Futures and Options
- ICE ECX EUA Futures and Options
- ICE ECX CER Futures and Options
- United Nations Study of Greenhouse Gas Emissions Trading
- CCFE Futures and Options
- CBOT Catastrophe Futures and Options
- CBOT Clean Air Futures
- CBOT GNMA Futures and Options
- CBOT Soybean Futures
- CBOT Soybean Meal Futures
- CBOT U.S. Treasury Bond Futures and Options
- CBOT U.S. Treasury Note Contracts
- CBOT Wheat Futures
Chicago Climate Exchange
Launched in 2003 by Environmental Financial Products (EFP), Chicago Climate Exchange (CCX) was North America’s first voluntary and legally binding emissions reduction and trading scheme. It traded all six greenhouse gases: carbons dioxide, methane, nitrous oxide, sulfur hexafluoride, perfluorocarbons, and hydrofluorocarbons. Its design and initial development were funded by two grants from the Chicago-based Joyce Foundation and endorsed by Kellogg School of Management at Northwestern University. CCX was originally conceived of as a pilot program in the Midwest that could be scaled nationally and, eventually, globally.
Since the United States was not party to the Kyoto Protocol when CCX was launched, there was no legal mandate, and therefore no institutional framework, through which carbon emissions could be reduced and traded. Environmental Financial Products faced the enormous challenge of having to build both an environmental and financial regulatory structure, create a registry, monitor and verify emissions and regulate the market.
By the end of 2008, CCX recruited 328 members-including large corporates such as Ford, Motorola and Baxter International- with an emissions baseline larger than the emissions of Germany under the European Union Emissions Trading Scheme (EU ETS). The CCX membership covered all 50 states, all major sectors of the U.S. economy, and had an international presence in the EU, China, Canada, India and Latin America. Furthermore, it represented 17 percent of the companies in the Dow Jones Industrial Average, 20 percent of the largest CO2 emitting electrical utilities in the U.S., and 11 percent of Fortune 100 companies. Volume traded grew from 2,251,400 metric tons at the end of 2004 to 69,236,800 metric tons by the end of 2008.
To realize its vision of a global emissions market, CCX paved the way for a family of exchanges including the European Climate Exchange (ECX), the leading exchange in the EU ETS; the Chicago Climate Futures Exchange (CCFE), which offered futures and options contracts on mandatory environmental programs; and the Tianjin Climate Exchange (TCX) in China. Additional global affiliates included the Montreal Climate Exchange in Canada and Envex in Australia.
In 2010, IntercontinentalExchange (ICE), a leading operator of regulated global futures exchanges, clearing houses and over-the-counter markets, acquired the Climate Exchange plc, the holding company which operated the Chicago Climate Exchange and its family of exchanges.