Energy & Environment

Carbon Copy: A Boost for the Business of Buying Pollution Credits

King County, Washington, has become the first county to join the Chicago Climate Exchange, a commodities market where members buy and sell pollution credits. "We're looking at this as a good decision from a business perspective," says County Executive Ron Sims.
by | September 2006

King County, Washington, has become the first county to join the Chicago Climate Exchange, a commodities market where members buy and sell pollution credits. "We're looking at this as a good decision from a business perspective," says County Executive Ron Sims.

In order to join the exchange, an entity has to voluntarily commit to reducing its carbon emissions to 6 percent below 2000 levels by 2010. For King County, which has an active reduction plan in place, this means only a 2 percent decline in current emissions levels. The county will then be in a position to profit by selling excess carbon credits to other members of the exchange.

By getting involved in the exchange early, county officials say they will also be in a position to help draft the rules that govern exchange policies. For example, exchange members currently can increase their credits by reducing the carbon emissions from a given bus. Sims says the county could try to convince the exchange that the credit should be based on how effective a transit system is. The calculation, he suggests, should be on how many cars are taken off the road and not just the existence of lower-emissions buses.

Critics of the county's decision to join the exchange say it is a symbolic gesture that won't alter what the county is already doing and that the exchange is too small to bring in much in the way of profits. Since accepting greenhouse emissions caps is still voluntary in the United States, they point out, the market for carbon commodities is nowhere near as active as in Europe, where countries have adopted caps established by the Kyoto treaty.

Zach Patton  |  Executive Editor
zpatton@governing.com  | 

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