Chicago bourse trades US cap and trade contracts

NEW YORK (Reuters) - The Chicago Climate Futures Exchange said on Wednesday it has launched the first contracts that potentially could be used for compliance in a future U.S. cap-and-trade market on greenhouse gas emissions.

Members of the exchange traded 42 contracts representing 42,000 tonnes of carbon dioxide allowances, the bourse said.

Prices ranged from $11.75 to $15.00 per tonne for contracts that expire in 2013, 2014 and 2015.

The U.S. government does not regulate greenhouse gases, a first step in creating a cape-and-trade market.

U.S. President-elect Barack Obama on Tuesday reiterated his plans via video into an emissions conference to start a cap-and-trade market that limits greenhouse gas output from big industries like oil refiners and cement makers.

Obama wants to reduce U.S. greenhouse gas emissions to 1990 levels by 2020 and cut them an additional 80 percent by 2050.

Richard Sandor, the exchange's chairman and chief executive, said in a statement, "Our customers requested a tool for hedging U.S. carbon policy and allowance prices."

The exchange did not immediately return calls about how it envisioned owners of the contracts could redeem them in any future U.S. market. A risk for early actors on climate has always been that their emissions reductions may not be recognized in a federal climate market.

Obama's plan would likely have to be formed in Congress where it could face opposition from emitters and consumer groups wary of raising energy prices during a recession.

The president-elect's campaign team said last month that Obama would also try to regulate emissions under current laws. A 2007 Supreme Court ruling found that U.S. environmental regulators have the power to regulate the emissions.

Peter Fusaro, an emissions market expert and founder of energy advisor firm Global Change Associates, said, "We will likely have a U.S. cap-and-trade program in 18 months or so and the Chicago Climate Exchange is trying to carve out some space of its own for this."

Backers of greenhouse gas markets say they push polluters to find innovative ways to cut output of gases blamed for warming the planet.

First, an emissions cap is set on all large polluters that gradually gets tougher. Then, companies that cut emissions under the level earn credits for the right to pollute that they can sell to companies that choose not to cut emissions.

Shell Energy North America was one of the parties in the deals, the exchange said.

(Reporting by Timothy Gardner; Editing by Christian Wiessner)