President Obama's next great policy initiative after health care reform is climate change legislation, commonly known as the "cap and trade" bill. Yesterday, one day after his joint session address on health care reform, the cap and trade bill tripped itself up twice on Capitol Hill over two of the most contentious issues it addresses. To begin with, 26 Democrats sent President Obama a letter insisting that provisions in the House version of the bill authorizing imposition of tariffs on trading partner nations who do not enact equivalent carbon emission controls be strengthened, or these legislators will not support the final measure. Of the 26 letter signatories, 24 voted for the bill in the House earlier this session.
Also yesterday, with most of the nation still focused on fallout from the presidential health care reform address, Commodity Futures Trading Commission Chairman Gary Gensler to Senator Tom Harkin's Agriculture Committee that CFTC will need more staff, greater technological support, and increased interagency cooperating to effectively regulate any public market for trading carbon allowances and offsets, as proposed in the House bill. "We should not put too much faith in the markets alone to deliver results," Chairman Harkin remarked. "Do we want to repeat the adverse impacts of excessive speculation in the crude oil markets last year for carbon?"
Gensler testified that all carbon market futures should be traded only on exchanges, but that businesses and farmers could use over the counter markets to trade carbon derivative products tailored to specific needs. Any such derivatives, he stated, should be regulated according to proposals already included in the Obama administration's financial services market reform proposals under Congressional consideration.
Also yesterday, with most of the nation still focused on fallout from the presidential health care reform address, Commodity Futures Trading Commission Chairman Gary Gensler to Senator Tom Harkin's Agriculture Committee that CFTC will need more staff, greater technological support, and increased interagency cooperating to effectively regulate any public market for trading carbon allowances and offsets, as proposed in the House bill. "We should not put too much faith in the markets alone to deliver results," Chairman Harkin remarked. "Do we want to repeat the adverse impacts of excessive speculation in the crude oil markets last year for carbon?"
Gensler testified that all carbon market futures should be traded only on exchanges, but that businesses and farmers could use over the counter markets to trade carbon derivative products tailored to specific needs. Any such derivatives, he stated, should be regulated according to proposals already included in the Obama administration's financial services market reform proposals under Congressional consideration.
