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CFTC explores role in voluntary carbon markets

Chairman seeks input on agency's role in voluntary carbon markets, announces RFI on climate-related risks

2 June 2022

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On 2 June, the US Commodity Futures Trading Commission held its first-ever "Voluntary Carbon Markets Convening", a meeting of high-level officials from public sector bodies and industry organizations involved in carbon markets. 

The purpose of the meeting was to discuss issues related to the supply and demand for high quality carbon offsets, including product standardization and the data necessary to support the integrity of greenhouse gas emissions avoidance and reduction claims. Panelists also discussed issues related to the market structure for trading carbon offsets and carbon derivatives, as well as perspectives on the challenges and opportunities in these markets.

In opening remarks, CFTC Chairman Rostin Behnam stated, "the CFTC is uniquely poised as the regulator at the forefront of climate-related risk management" and said the purpose of the convening is to gather input about what role the should CFTC play in voluntary carbon markets.

Behnam also announced the release of a formal Request for Information on climate-related market risk. "The RFI will seek responses on questions specific to data, scenario analysis and stress testing, risk management, disclosure, product innovation, voluntary carbon markets, digital assets, greenwashing, financially vulnerable communities, and public-private partnerships and engagement," Behnam said.

Sen. Debbie Stabenow (D-MI), chairwoman of the US Senate Committee on Agriculture, and Rep. David Scott (D-GA), chairman of the House Committee on Agriculture, provided keynote remarks welcoming the CFTC’s focus on climate change and the opportunities for carbon markets in the transition to a more sustainable economy.

The meeting included four panels, featuring experts and participants from a wide variety of stakeholder groups in the carbon markets. These panels focused on:

  • an introduction to the carbon offsets markets, carbon offsets standards, and a private sector supply-side initiative;
  • the role of carbon offsets in domestic compliance markets, an overview of recent regulatory initiatives that impact markets for carbon offsets, and perspectives on the role of carbon offsets within a whole-of-government approach to mitigating climate change;
  • an overview of carbon offset spot markets; exchange-listed derivatives, registry infrastructure, and OTC intermediation; and
  • recommendations from market participants regarding the role of the CFTC in these markets.

Official statements and documents

 

 

 

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