ARB Research Seminar

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Progress Report on North America's First and Only Legally Binding Greenhouse Gas Emissions Reduction and Trading System

Michael J. Walsh, Ph.D., Executive Vice-President and Paula DiPerna, Executive Vice-President, Chicago Climate Exchange, Inc.

February 27, 2008
Cal EPA Headquarters, 1001 "I" Street, Sacramento, CA

Presentation

Overview

Dr. Walsh will review progress of the Chicago Climate Exchange® (CCX), a voluntary, legally binding pilot greenhouse gas reduction and trading system for emission sources and offset projects in North America and beyond. CCX has nearly four hundred members, including major corporations such as American Electric Power, Manitoba Hydro, Safeway, Intel, IBM, Rolls Royce, Ford, DuPont, Temple-Inland, Amtrak and International Paper. CCX members also include trading firms and public sector participants, such as the City of Oakland, Sacramento County, UC San Diego and other leading universities, as well as individual projects that provide GHG mitigation in the methane, agriculture, renewables and forestry sectors.

CCX has also activated a CFTC-regulated futures exchange that has become the pricing and hedging focal point for markets involving USEPA SO₂ and NOₓ allowances. CCX established in 2005 the European Climate Exchange, which is the predominant exchange for the European Union Emissions Trading Scheme for carbon dioxide. New CCX environmental markets are now in development in around the world.

Live trading of verified greenhouse gas reductions on CCX's electronic trading platform began in 2003 and has included credits based on industrial emission reductions under the cap as well as independently verified projects. By participating in an international rules-based market, CCX Members have built a comprehensive set of environmental and trading protocols, have advanced emissions management and trading skills, and have positioned their organizations to succeed in a carbon-constrained world. By making and meeting emission reduction commitments, CCX Members' focus on energy and process improvements has generated efficiencies that yield both environmental progress and bottom-line benefits to shareholders and taxpayers. (As submitted by CCX.)

Speaker Biography

Michael J. Walsh, Ph.D., is an Executive Vice President of Chicago Climate Exchange, Inc., a self-regulatory exchange that administers a voluntary, legally binding greenhouse gas reduction and trading program for North America. CCX's affiliated companies European Climate Exchange and Chicago Climate Futures Exchange host markets for futures products based on European Union carbon dioxide emission allowances and U.S. sulfur dioxide emission allowances. Dr. Walsh also serves on the Board of Directors of the Montreal Climate Exchange.

In his prior position with Environmental Financial Products (the predecessor company to CCX), Dr. Walsh arranged several international carbon credit transactions and served as liaison and lead writer for a series of five technical papers on international emissions trading prepared for the Government of Canada. As a consultant to the U.S. Agency for International Development, Dr. Walsh provided instructional seminars on emissions trading for industry and government officials from several eastern European countries. He has been a speaker at United Nations climate conferences at Geneva, Kyoto, Buenos Aires, Bonn and The Hague, and has been a keynote speaker at industry conferences and educational workshops around the world, including events in Budapest, Moscow, Rio de Janeiro and Sydney.

Dr. Walsh also previously served as a Senior Economist with the Chicago Board of Trade where he directed the Chicago Board of Trade's efforts to develop exchange-based environmental markets. Walsh designed and managed annual auctions of sulfur dioxide emission allowances conducted as part of the U.S. Environmental Protection Agency acid rain reduction program. Dr. Walsh has delivered Congressional testimony and provided dozens of presentations to state public utility commissions, national regulatory conferences and industry seminars. As the lead CBOT energy market analyst, he covered electricity market deregulation and evaluated the feasibility of electricity futures contracts. Dr. Walsh also directed, in conjunction with a team of industry and public sector leaders, establishment of the CBOT Recyclable Materials Exchange, an electronic marketplace backed by product standards, grading procedures and dispute resolution services. Walsh represented the CBOT in matters involving several U.S. government agencies including the Commodity Futures Trading Commission, the Internal Revenue Service and the Environmental Protection Agency.

Prior to his position with the Chicago Board of Trade, Dr. Walsh was a Financial Economist in the Office of Tax Policy in the U.S. Department of the Treasury. In that position he conducted industry studies of economic depreciation rates and co-authored a comprehensive review of the history of tax depreciation policy. Walsh has also served as a consultant to the Michigan Treasury Department and the West Virginia Tax Study Commission. Dr. Walsh served as a gubernatorial appointee to the Florida Air Emissions Trading Commission, and served on the Executive Board of the Southern Research Institute's Environmental Technology Verification initiative. He has written extensively on the economics of energy efficiency and the implementation of efficiency programs, and has published articles in the National Tax Journal, Energy Economics, The Journal of Futures Markets, Derivatives Quarterly, Analyse' Financier, and Environmental Quality Management. He has been an occasional referee for several scholarly journals including the Journal of Public Economics.

Dr. Walsh has been on the faculties of the University of Notre Dame and the Illinois Institute of Technology, and has lectured at Princeton, Northwestern, Colorado, Illinois and Johns Hopkins (Bologna). Dr. Walsh holds Bachelor of Science degrees in Economics and Political Science from Illinois State University, and M.S. and Ph.D. degrees in Economics from Michigan State University.

Paula DiPerna is Executive Vice President for Corporate Recruitment and Public Policy of the Chicago Climate Exchange (CCX). She is a noted public policy analyst and widely published author.

Ms. DiPerna served formerly as President of the Joyce Foundation in Chicago, a major public policy philanthropy based in Chicago, Illinois, known for its innovative grant making. She also served as Vice-President for International Affairs of the Cousteau Society, whose President was pioneer and ocean explorer, Jacques-Yves Cousteau. In that capacity she was responsible for all aspects of national and international environmental policy, and interacted extensively with the U.S. Congress, Heads of State, and the United Nations. While at the Cousteau Society, from 1979 to 1997, Ms. DiPerna was also a writer and co producer of many documentary films and traveled extensively globally, including one year in the Amazon regions of Brazil, Colombia and Peru.

Ms. DiPerna also has served as a consultant on environmental matters to the World Bank, the Global Environment Facility and LEAD-International, among other organizations. Ms. DiPerna also founded the Jobs and Environment Initiative, which quantifies jobs creation benefits of environmental activities national and in various U.S. states.

Ms. DiPerna has written numerous newspaper and magazine articles on a variety of subjects, a novel and several non-fiction books. "Cluster Mystery: Epidemic and the Children of Woburn, Mass.," published in 1985, has become a touchstone of environmental epidemiology.

Ms. DiPerna was named an Eisenhower Fellow in 1998, an international program for emerging leaders, and spent time in Hungary, Slovakia and the Czech Republic studying emerging environmental policy in Central Europe. She is a member of the Council on Foreign Relations and is based in the New York City office of CCX. Ms. DiPerna holds a Masters of Arts degree from New York University in New York City.


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