An entirely new agency to regulate the carbon allowance trading program, assuming there is one, would be far better than having existing US agencies deal with it, according to Suedeen Kelly, a member of the Federal Energy Regulatory Commission. The task of regulating the market would be so daunting that it would dwarf an existing agency's mission, she said today at an ICF International energy breakfast in Washington. She also said she hasn't found a taker for her suggestion.
The Waxman-Markey climate and energy bill would charge FERC with overseeing cash carbon allowance and offset markets, while a White House plan would delegate responsibility for carbon derivatives markets to an agency that stakeholders expect to be the Commodity Futures Trading Commission. But "if I were master of the universe," Kelly said, "I'd create a new entity that that would be their sole job, because I believe that is going to be a huge undertaking."
Neither FERC, the CFTC, nor the Environmental Protection Agency "has done what's going to be needed to do," Kelly said. "The regulation of carbon and carbon emissions is going to be a big challenge ... and no similar challenge has been presented to us,"
Our colleague Esther Whieldon reports that Kelly said she had mentioned this idea to members of Congress, but "no one has really signed on."
"Personally, do I want FERC's mission dwarfed? Not really," Kelly said. But "whatever Congress decides is right, we'll support." FERC Chairman Jon Wellinghoff in the past has also expressed concern that the job of regulating carbon markets, particularly derivatives, would require a major increase in the agency's staffing and resources.
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