WASHINGTON, D.C.— Cantrell Dumas, Director of Derivatives Policy, issued the following statement on the filing of Better Market’s Comment Letter to the Commodity Futures Trading Commission (CFTC) regarding its proposal on the listing for trading of voluntary carbon credit derivative contracts.
“The CFTC’s proposed guidance addresses the urgent climate crisis by enhancing transparency and integrity in the carbon credit markets. This move, aimed at launching initiatives to combat fraud and improve market efficiency, aligns with Better Markets’ long-standing advocacy, underscored in our 2021 letter to then Acting Chair Behnam. As we witness the escalating impacts of climate change through severe weather and disasters, the necessity for immediate and effective action has never been more apparent.
“The voluntary carbon markets are essential for reducing greenhouse gas emissions but are hindered by challenges like fraud, disorganization, and integrity concerns. The CFTC’s proposed guidelines aim to create a transparent and efficient framework for carbon credit derivatives, underscoring the critical role of Designated Contract Markets in ensuring these new and evolving products comply with the Commodity Exchange Act and CFTC regulations. We support the guidance’s emphasis on preventing market manipulation and disruptions through strict surveillance and enforcement. This approach is crucial for maintaining the markets’ trustworthiness and their contribution to combating climate change.
“Better Markets urges the CFTC to finalize this guidance quickly, resisting any pressures that seek to weaken its impact. By ensuring the effectiveness of the carbon credit markets, we protect our economy from climate risks and take big steps toward creating a healthier planet for future generations.”
The comment letter is available here.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.