OLS : Record


Main Title Regulating a carbon market issues raised by the European carbon and U.S. sulfur dioxide allowance markets / {electronic resource} :
Author Jickling, Mark.
Publisher Congressional Research Service, Library of Congress,
Place Published {Washington, D.C.} :
Year Published 2008
OCLC Number 252781964
Subject Added Ent Emissions trading; Greenhouse gas mitigation--Economic aspects; Carbon dioxide mitigation--Economic aspects; Sulfur dioxide mitigation--Economic aspects; Environmental protection--Economic aspects; Environmental economics
Internet Access
Description Access URL
Library   Call Number Additional Info Location Date Modified
EJBM POD Internet only Headquarters Library/Washington,DC 09/19/2008
Collation 32 p. : ill., charts ; 28 cm.
Notes "April 30, 2008." Title from title screen (viewed on Sept. 18, 2008). Includes bibliographical references.
Contents Notes Both the European Union's Emissions Trading Scheme (EU-ETS) and the U.S. Title IV sulfur dioxide (SO2) program provide insights into regulatory issues that may face any future U.S. carbon market. From the initial operations of the EU-ETS, the 2006 price crash raised questions about the adequacy of market regulation. In particular, some suspect that information about allocations leaked before official publication, and that certain traders profited from this knowledge. Title IV's longer trading history reveals two important trends: (1) an increasing trend toward diverse and non-traditional participants that is likely to continue under a carbon market; (2), an increasing use of financial instruments to manage allowance price risk that is likely to expand under a carbon market as a hedge against price uncertainty. Indeed, a carbon market may look more like other energy markets, such as natural gas and oil, than the somewhat sedate SO2 allowance market. Regulation of emissions trading would have to consider two kinds of fraud and manipulation: fraud by traders or intermediaries against other investors, and sustained price manipulation. Four agencies could have roles in the regulation of an emissions market, each with its own attributes that may contribute to effective regulation. The Commodities Futures Trading Commission (CFTC) currently oversees the Title IV program and its current mission most closely resembles what a regulator of a future carbon market would do, including experience in market surveillance to prevent or detect fraud and manipulation. The major failing of the CFTC, according to some, is that it lacks the resources and the statutory mandate to do its job. The Securities and Exchange Commission (SEC) is much larger than the CFTC, and its enforcement programs are considered more effective than the CFTC's. While the CO2 market will resemble commodities markets more closely than securities, SEC has some appropriate regulatory tools applicable to an emissions market. The Environmental Protection Agency (EPA) would likely be responsible for the primary market in allowances. However, EPA lacks experience comparable to that of the CFTC and SEC in regulating trading markets, although the data it gathered in the primary market could be critical to oversight of the secondary market. Federal Energy Regulatory Commission (FERC) was granted oversight authority over bulk electricity and interstate natural gas markets in 2005. Its experience with market surveillance and enforcement is thus limited in comparison to the SEC and CFTC, and it does not play an active role in overseeing the Title IV market. It is possible that no single regulator would have clear jurisdiction, as is the case in the Title IV program. This kind of regulatory fragmentation has not always worked well. An umbrella group to monitor markets and provide a forum for regulatory coordination might help to prevent regulatory gaps or conflicts in the market.
Access Notes Mode of access: World Wide Web. System requirements: Adobe Acrobat Reader.
Author Added Ent
Parker, Larry
Corporate Au Added Ent Library of Congress. Congressional Research Service.
PUB Date Free Form 2008.
Series Title Traced CRS report for Congress ; RL34488
BIB Level m
Medium electronic resource
OCLC Time Stamp 20080918104641
Cataloging Source OCLC/T
Language eng
Origin OCLC
Type CAT
OCLC Rec Leader 04503nam 2200409Ia 45020