POLITICO: DEMOCRATS PRESS CFTC ON CARBON TRADING

Nine Democratic lawmakers are urging the CFTC to finalize “rigorous” guidance for carbon credit trading and are weighing legislation to bolster the agency's authority.

In a letter led by Rep. Doris Matsui (D-Calif.) and Sens. Cory Booker (D-N.J.) and Sheldon Whitehouse (D-R.I.), the lawmakers warn CFTC Chair Rostin Behnam that the voluntary carbon market is riddled with fraud and lacks transparency.

The credits at issue are a tool that proponents say could be used to help companies manage their carbon footprints and direct funding to projects that reduce pollution. The market has been bruised by a series of scandals tied to falsified or exaggerated benefits.

“If the credit does not represent the emissions reductions or removals claimed, carbon credits are at best an opportunity cost and at worst increasing net greenhouse gases in the atmosphere while enabling corporate greenwashing,” the lawmakers said in the letter shared first with POLITICO.

The Democrats want the CFTC to finalize carbon trading guidance and implement it "vigorously." The CFTC proposed guidance late last year for derivatives tied to carbon offsets.

As part of implementation, the lawmakers are calling on Behnam to publicly identify credits and market actors vulnerable to fraud. They want a briefing from the agency in 90 days to help inform potential legislation.

The CFTC did not immediately respond to a request for comment.