WASHINGTON, D.C.— Cantrell Dumas, Director of Derivatives Policy, issued the following statement in connection with the Commodity Futures Trading Commission (CFTC) approving final guidance regarding the listing for trading of voluntary carbon credit (VCC) derivative contracts:
“The CFTC’s approval of its guidance for the listing and trading of VCC derivative contracts is a significant milestone. This guidance doesn’t regulate the credits themselves but the derivative contracts tied to them, ensuring the development of transparent and well-regulated markets for carbon derivatives. By establishing a framework that enhances trust and oversight in these markets, the CFTC is helping ensure that voluntary carbon credits play a meaningful role in combating climate change.
“As carbon derivatives markets grow and evolve, it is vital that their underlying credits represent real, verifiable emissions reductions as stated in our comment letter. This guidance strengthens the market’s foundation, enhancing transparency and addressing critical issues like fraud, double-counting, and misrepresentation.
“To track the progress of this guidance, the CFTC must now create a series of clear, specific, concrete, and measurable benchmarks and goals—what should be referred to as ‘green milestones.’ To ensure accountability, these milestones must be publicly disclosed. These milestones will help determine if carbon markets are working as intended and are genuinely helping the fight against climate change. By closely monitoring these milestones, the CFTC can ensure that voluntary carbon derivatives markets become powerful tools for real environmental progress, not just empty promises
You can also see our recent fact sheet on the CFTC and carbon markets here.
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