FBDS is the representative in Brazil of Chicago Climate Exchange.

The CCX - Chicago Climate Exchange is a self-regulatory exchange constituted under North American law and based in Chicago, USA. It is accompanied and audited by the same organizations and authorities that do the same  in the American financial market, including the New York Stock Exchange and Chicago Board of Trade (CBOT).

The CCX president is Dr. Richard Sandor, chief architect of the tradable permits of sulfur and the cap-and -trade scheme, which succeeded in solving the problem of acid rain in the United States using market mechanisms.

FBDS is the CCX representative in Brazil, and the only institution accredited to present Brazilian projects. Dr. Israel Klabin, FBDS president, is the only South American councilor on the CCX Board.

Considering that the American government chose not to be party to the Kyoto Protocol, some American companies (for example, Ford Motors, Du Pont, Motorola, etc.) decided to create a voluntary greenhouse gas reduction mechanism, which was consolidated in the CCX. By adopting this mechanism, member companies agree to reduce their emissions by 1% in 2003, 2% in 2004, 3% in 2005, and 4% in 2006.  From 2007 on new reduction goals will be negotiated for the second period of commitment (2007-2010). The companies that have already joined the CCX represent around 4% of all emissions in the United States, and the prospect is of a continuous increase in new members.

Emissions can be reduced in three ways:

• by investing in your own productive processes;
• by buying carbon credits from other CCX member companies;
• by buying carbon credits from projects in Brazil.

To date, only projects in the NAFTA region (USA, Canada and Mexico) and Brazil are accepted by CCX. The prospect is that, in the near future, projects in Australia, New Zealand and Chile, among others, will also be eligible.

Some funds in Europe and the Far East invest in carbon projects. The World Bank also operates in this market through the Prototype Carbon Fund (PCF). However, all those funds are regulated by rules based on the Kyoto Protocol, involving a lot of red tape, and the compliance with the following prerequisites, among others:  

• to obtain government approval;
• to respect any systematics and project presentation methodology established by the Protocol that, in practical terms, means some years of work before final approval (see the example of the Plantar Group in relation to PCF);
• the resources are to be allocated solely to new projects, and that all projects already implemented or underway are considered ineligible, since they are already included in the baseline.

However, the CCX has the following characteristics:

• since it is a voluntary mechanism among private North American and Brazilian businesses, it does not depend on any kind of government approval;
• the presentation methodology for forest-based projects was fixed by FBDS, and the CCX bureaucracy is much simpler, which means a very speedy process (around 90 days, between the date of contracting FBDS and the final approval of the project by CCX);
• CCX accepts the inclusion of projects already implemented, provided that the forest areas have been planted after 1990 (in areas not previously forested) and are still growing, that is, absorbing carbon from the atmosphere.

This is an outstanding opportunity for forest-based businesses in Brazil, since non-repayable loan funds may be attracted from projects already implemented, with a minimum of red tape and no government involvement.

The method for presenting projects until the trading of carbon credits plans the following steps:

• contracting FBDS to prepare the project;
• submit the preliminary report to CCX within 60 days from the contracting date;
• submit the final report to CCX within 30 days from submitting the preliminary report. On this occasion, the company becomes a participant in CCX.
• accreditation of the verifier with CCX. This verifier will be the auditor of the project and every year will confirm that the carbon absorption estimates made by FBDS are actually being met;
• sale of carbon credits, at the sole discretion of the bidding company, as long as they are sold by December 31, 2006.