Better Markets urged Commodities Futures Trading Commission (CFTC) Acting Chair Rostin Benham and CFTC Commissioner Dan Berkovitz to continue their leadership in bringing attention to climate-related risks and using the public visibility of their positions to call for urgent action to accelerate the transition to a low-carbon economy.

Why it matters.  It can no longer be denied that human activities—particularly the emission of greenhouse gasses—cause well-documented global warming and climate change.  It is unlikely we can stop the emission of greenhouse gasses and may only be able to stop it if policymakers take bold, decisive, coordinated, and international regulatory and legislative action.  We agree with the report of the CFTC’s Climate-Related Market Risk Subcommittee of the Market Risk Advisory Committee (MRAC), Managing Climate Risk in the U.S. Financial System (“MRAC Report”), which says that “financial markets will only be able to channel resources efficiently to activities that reduce greenhouse gas emissions if an economy-wide price on carbon is in place at a level that reflects the true social cost of those emissions.”

What we said.  “Your initial actions have exemplified the way regulatory officials should be examining statutory mandates to find constructive solutions to the climate crisis and advance the Administration’s climate-change-related objectives.”

Bottom line.  The CFTC must continue to lead the policy discussion on carbon pricing by issuing a formal report with a series of market design and oversight recommendations that extend to primary, secondary, and offset market issues.

Read our June 24 letter to the CFTC regarding leadership in addressing climate risk here.