Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) plans to include language in the climate bill designed to ensure proper oversight over carbon markets, she said today.
The bill will include "a lot" of the carbon market oversight legislation drafted by Sens. Dianne Feinstein (D-Calif.) and Olympia Snowe (R-Maine), Boxer said.
"We are going to have a very transparent marketplace, and we are going to incorporate a lot of Senator Feinstein's and Senator Snowe's work on this, plus other colleagues who are working on the issue," said Boxer, who declined to provide specifics.
Feinstein and Snowe introduced carbon market oversight legislation this month, S. 1399, that differs in several respects from the sweeping House-passed climate and energy bill.
The Feinstein-Snowe plan would put the Commodity Futures Trading Commission in charge of all carbon trading markets, while the House plan divides oversight, handing the Federal Energy Regulatory Commission control of the cash allowance markets while CFTC would regulate the derivatives market. Their bill also has several other provisions aimed at tracking and monitoring of carbon trading, increasing regulation of bilateral swaps, and other areas.
The extent to which lawmakers impose tight curbs on what are predicted to be large carbon trading markets could prove pivotal to the bill's overall chances of passage in the Senate.
A host of senators have long alleged that speculation in freewheeling oil trading markets has contributed to price volatility in recent years and are vowing to ensure tough controls over carbon markets.
Indeed, some would go well beyond either Feinstein's effort or the House measure. Sen. Byron Dorgan (D-N.D.) last week said he did not support creation of a trading system for carbon at all.
"There are some of us -- and I speak only for myself -- who believe cap and trade in terms of speculative carbon futures markets makes no sense. We ought to explore a carbon cap with different approaches," Dorgan said on the Senate floor. "I wanted to raise these concerns at this point, so that those who are working on the climate change bill and attempting to replicate the House approach will understand that some of us will aggressively resist the carbon market trade side of cap and trade."