Commodities agency plows ahead with carbon market study

To be sure, a few domestic markets exist, including the Regional Greenhouse Gas Initiative among northeast and mid-Atlantic states, and trading is poised to take off under California’s climate law.

But the big national market envisioned under climate legislation remains a distant horizon, given the near impossibility that carbon limits will move in the next Congress.

Nonetheless, the upcoming request for comment gamely notes, “Recently a number of legislative proposals have been introduced in Congress setting out various approaches to reducing carbon emissions. Some of the proposals contain a market-based policy instrument.”

The CFTC notice seeks comment on a range of questions aimed at informing the study. For instance, they’re looking for input on the “basic economic features” that might be incorporated into a carbon market, such as the characteristics of emissions allowances and cost containment.

Other questions include “To what extent, if any, and how should a U.S. regulatory program interact with the regulatory programs of carbon markets in foreign jurisdictions?” and “What has been the experience of state regulators in overseeing trading in the regional carbon markets and how would that instruct the design of a federal oversight program?”

Other members of the interagency group include the secretaries of Agriculture and the Treasury, the heads of the Environmental Protection Agency and the Securities and Exchange Commission, and others.