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<p>Foreword ix</p> <p>Preface xiii</p> <p>Acknowledgments xxi</p> <p>Chapter 1 The Early Years 1</p> <p>Chapter 2 Trying to Change the World 23</p> <p>Chapter 3 The Berkeley Years 47</p> <p>Chapter 4 The Chicago Board of Trade Years: The</p> <p>Commodity Futures Contract 65</p> <p>Chapter 5 The Chicago Board of Trade Years: Financial</p> <p>Futures Contract 89</p> <p>Chapter 6 Educating Users and Building the Market 125</p> <p>Chapter 7 Treasury Bond and Note Futures 139</p> <p>Chapter 8 The Decade of the Eighties 167</p> <p>Chapter 9 Globalizing Chicago Exchanges 191</p> <p>Chapter 10 Environmental Finance 205</p> <p>Chapter 11 Blame It on Rio 223</p> <p>Chapter 12 The Beginning of the Entrepreneurial Years 239</p> <p>Chapter 13 You’re Gonna Trade What? 265</p> <p>Chapter 14 From the Pit to the Box 291</p> <p>Chapter 15 Conceiving a New Kind of Exchange 313</p> <p>Chapter 16 The Twenty-First Century Lighthouse 327</p> <p>Chapter 17 CCX Market Architecture 351</p> <p>Chapter 18 Chicago Climate Exchange 375</p> <p>Chapter 19 The Rise of the Chicago Climate Exchange 393</p> <p>Chapter 20 The Fall of the Chicago Climate Exchange 413</p> <p>Chapter 21 The Chicago Climate Futures Exchange 429</p> <p>Chapter 22 The European Climate Exchange 453</p> <p>Chapter 23 India 479</p> <p>Chapter 24 Opening New Markets in China 501</p> <p>Chapter 25 Good Derivatives 533</p> <p>Appendixes 559</p> <p>Acronyms 575</p> <p>Glossary 577</p> <p>Index 593</p>

<p><b>RICHARD L. SANDOR</b> is Chairman and Chief Executive Officer of Environmental Financial Products LLC, which specializes in inventing, designing, and developing new financial markets with a special emphasis on investment advisory services.??EFP was established in 1998 and was the predecessor company and incubator to the Chicago Climate Exchange (CCX), the European Climate Exchange (ECX), and the Chicago Climate Futures Exchange (CCFE). Dr. Sandor was honored by the City of Chicago for his contribution to the creation of financial futures and his universal recognition as the "father of financial futures." In October 2007, he was honored as one of <i>Time</i> magazine's "Heroes of the Environment" for his work as the "Father of Carbon Trading." Dr. Sandor is a Distinguished Professor of Environmental Finance at Guanghua School of Management at Peking University and a Lecturer in Law at The University of Chicago Law School.

<p><b>GOOD</b><b> DERIVATIVES</b> <p>Through the eyes of an inventor of new markets, Good Derivatives: A Story of Financial and Environmental Innovation tells the story of how financial innovation—a concept that is misunderstood and under attack—has been a positive force in the last four decades. If properly designed and regulated, "good derivatives" can open vast possibilities to address a variety of global problems. Filled with provocative ideas, fascinating stories, and valuable lessons, this timely book will provide both an insightful interpretation of the last forty years in capital and environmental markets and a vision of world finance for the next forty years. <p>As a young economist at the Chicago Board of Trade, Richard Sandor helped create interest rate futures, a development that revolutionized worldwide finance. Later, he pioneered the use of emissions trading to reduce acid rain, one of the most successful environmental programs ever. Throughout these pages, he will provide unique insights into the process of creating these new financial products. Covering successes and failures, the story describes the tireless process of inventing, educating, and creating support for these new inventions in places like Chicago, New York, London, and Paris and how it is unfolding today in Mumbai, Shanghai, and Beijing. <p>Along the way, this book tells the story of the creation of the Chicago Climate Exchange and its affiliated exchanges—the European Climate Exchange, the Chicago Climate Futures Exchange, and the Tianjin Climate Exchange, located in China. The lessons learned in these markets can play a critical role in effectively addressing global climate change and other pressing environmental issues. The author argues that market- based trading systems are a far more effective means of reducing pollutants than "command-and-control." Environmental markets may ultimately help to find solutions to issues such as rainforest destruction, water problems, and biodiversity threats. <p>Written in an engaging, narrative style, Good Derivatives will be of interest to both practitioners and general readers who want to better understand the creative process of financial innovation. In the middle of so much distrust of markets, it is also a recipe of how transparent, well-regulated markets can be a force for good in environmental, health, and social areas.

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