By Timothy Gardner
NEW YORK (Reuters) - CME Group Inc CME.N, parent of the world's largest derivatives exchange, has fallen behind in offering contracts for the growing global greenhouse gas market, but there's no reason why it can't catch up, Executive Chairman Terry Duffy said on Monday.
"Green is something we're new to," Duffy told the Reuters Exchanges and Trading Summit in New York.
Competition to dominate the fledgling U.S.-based carbon trade is heating up as membership grows in the Chicago Climate Exchange (CCX) (CLIE.L: Quote, Profile, Research, Stock Buzz), the first U.S. climate bourse, led by Chief Executive Richard Sandor.
"The world is thinking that Richard has an upper hand in green trading," said Duffy, who is also based in Chicago. "He's been a little ahead of us. It doesn't mean we can't catch up."
Members of CCX sign legally binding agreements to cut emissions by a certain amount. If they can't, they have to buy credits representing emissions reductions from members that have cut output of the plant-warming gases.
Global trade in greenhouse gas emission reductions hit about $60 billion last year. Its growth is expected to rocket after the United States, the world's largest energy consumer, regulates greenhouse gases, something all major candidates in November's presidential election have promised to do.
CME Group may be positioned to enter the global greenhouse gas market through its planned purchase, announced in January, of the New York Mercantile Exchange, the world's largest energy bourse.
This spring NYMEX and New York-based energy brokerage Evolution Markets launched the Green Exchange. It offers futures and options on carbon credits on emissions reductions by countries in the European Union and derivatives for ones representing reductions in developing countries through clean energy projects, known as certified emissions reductions. Continued...
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