CFTC Commissioner Goldsmith Romero Seeks Input on Voluntary Carbon Markets

CFTC Commissioner Christy Goldsmith Romero urged responsible innovation in ESG and described the opportunities and challenges of scaling up the number of carbon products that are listed on voluntary carbon exchanges.

The Commissioner noted the CFTC's recent request for public input on climate risk, current market activities and the appropriate role for the CFTC. She highlighted current market challenges in reaching net-zero goals and the need for promoting trust and transparency in the market given a lack of consistent and comparable data. On the demand side (those seeking to invest in carbon credits), she listed several challenges including "a lack of standards and taxonomy, a lack of transparency with pricing, a lack of transparency into projects that form the basis of carbon credits, and integrity-related issues like double counting and the need for independent verification." She warned that this can lead to concerns about greenwashing.

On the supply side, she underscored that the agricultural community is facing "significantly increased fuel costs as well as fertilizer costs given geopolitical events surrounding Russia's invasion of Ukraine." She noted that the agricultural community "may not have the resources to make certain sustainable investments that could become carbon credits."