CFTC takes a look at carbon markets
The Commodity Futures Trading Commission convened a one-day meeting on carbon markets last week to try to understand the field and determine what role the CFTC should play in regulating these emerging markets, and issued a request information on climate-related financial risks to obtain the opinion of stakeholders on the issue.
In an opening statement at the June 3 meeting, CFTC Chairman Rostin Behnam said, “There is now a common understanding that climate change presents an emerging and growing threat to financial stability, and may cause subsystemic shocks and far-reaching ripple effects on the U.S. financial system and the broader economy. However, climate change also presents opportunities as we strive to provide decisive and consistent leadership in the markets and institutions responsible for monitoring and managing risk, capital and asset allocation.
“The CFTC is uniquely positioned as a regulator at the forefront of climate-related risk management, as businesses and individuals will increasingly turn to derivatives markets to mitigate physical and financial risks. climate change-induced transitions and seek price discovery for new and evolving risk management products.”
Behnam said: “The RFI will seek comment on all aspects of climate-related financial risk, as it may relate to derivatives markets, underlying commodity markets, registered entities, registrants and other market participants. market.”
House Agriculture Committee Chairman David Scott, D-Ga., was the keynote speaker at the convening. “Our farmers, ranchers and foresters deserve a reliable and transparent accounting and auditing framework that ensures the integrity of these carbon offsets,” Scott said.
National Agricultural Cooperative Council President and CEO Chuck Conner said some aspects of carbon trading, such as the contracts farmers sign with companies, fall outside the CFTC’s jurisdiction. reported DTN/The Progressive Farmer.
“They have a high threshold to show that these contracts fall within the regulatory mandate of the Trade in Goods Act,” he said.