H.R. NO.








requesting the department of business, economic development, and tourism to review the feasibility of the state becoming a member of the chicago climate exchange.


WHEREAS, there is evidence that the planet's climate is becoming warmer, with potentially catastrophic effects on coastal areas and global weather patterns; and

WHEREAS, many scientists suspect that a significant cause is a man-made increase in emissions of greenhouse gases, which trap heat inside the earth's atmosphere; and

WHEREAS, the United States has refused to support the United Nations' Kyoto Protocol, which calls for international emissions reductions, even though the United States produces more greenhouse gases than any other country; and

WHEREAS, the Chicago climate exchange, which is funded by grants from the Chicago-based Joyce Foundation and administered by Northwestern University’s Kellogg Graduate School of Management, is the first major attempt in the United States at establishing a market for reducing greenhouse gas emissions; and

WHEREAS, the Chicago climate exchange, also known as "CCX", is a voluntary attempt to create market incentives for participants to cut emissions by reducing and trading greenhouse gas emissions; and

WHEREAS, this reduction system, also known as "carbon trading," offers energy companies, manufacturers, and governments that reduce their emissions of carbon dioxide and other greenhouse gases the opportunity to make money while protecting the environment; and

WHEREAS, the goal of the CCX is to implement a voluntary pilot program for trading greenhouse gases in North America, to be later expanded to include international sources; and

WHEREAS, the CCX marks the first time major companies in multiple industries, including founding members such as American Electric Power, the City of Chicago, DuPont, the Ford Motor Company, International Paper, and Motorola, Inc., have made a voluntary binding commitment to use a rules-based market for reducing their greenhouse gas emissions; and

WHEREAS, the CCX, which began trading on December 12, 2003, with reduction commitments and trading to continue through 2006, will enable members to receive credit for reductions and to buy and sell credits to find the most cost-effective way of achieving reductions; and

WHEREAS, CCX participants agree to voluntary limits on their emissions of greenhouse gases, while participants that drastically reduced their emissions receive credits, which they can sell to others who missed their targets; and

WHEREAS, traders could also generate "offset" credits by planting trees, which sequester carbon dioxide, allowing the market to then create a tradable commodity that could be bought and sold quickly like shares on a stock exchange; and

WHEREAS, a number of companies have already participated in bilateral trades of greenhouse-gas emissions with carbon-trading transactions having already surpassed $100,000,000, while economists believe that annual trading volume could eventually run into the tens of billions of dollars; and

WHEREAS, the goal of the exchange is to develop standardized commodities and trustworthy market institutions for such trading, with the National Association of Securities Dealers, which regulates the Nasdaq, having agreed to provide regulatory services to the exchange; and

WHEREAS, the benefits of participation in the exchange include reducing the long-term costs of controlling greenhouse gases; receiving financial benefits from environmentally sustainable practices, including reduced energy costs and raised productivity; and enhancing environmental leadership reputation among stockholders, customers, and employees; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-Second Legislature of the State of Hawaii, Regular Session of 2004, that the Department of Business, Economic Development, and Tourism is requested to investigate the feasibility of Hawaii becoming a member of the Chicago climate exchange to generate needed revenue for the State while helping to improve the environment; and

BE IT FURTHER RESOLVED that the investigation should include:

(1) An evaluation of the advantages and disadvantages of participation in the CCX;

(2) The creation of an action plan that reflects the necessary steps involved in becoming a member of the CCX; and

(3) An examination of any available options for increased income for the farm economy through the utilization of agricultural lands as carbon cash crops over food production, when appropriate; and

BE IT FURTHER RESOLVED that the Director of Business, Economic Development, and Tourism is requested to submit a strategic plan and a report, including findings, recommendations, and proposed legislation, as appropriate, to the Legislature not later than twenty days prior to the convening of the Regular Session of 2005; and

BE IT FURTHER RESOLVED that a certified copy of this Resolution be transmitted to the Director of Business, Economic Development, and Tourism.






Report Title:

Chicago Climate Exchange; Carbon Sequestration