Reported by Joseph Winters

Across the United States, more and more companies are pledging to zero out their greenhouse gas emissions using “voluntary carbon offsets” — credits that represent some amount of climate pollution that’s either prevented or removed from the atmosphere.

These credits, bought and sold on unregulated markets that are expected to be worth up to $100 billion by 2030, have long drawn criticism for failing to deliver on their promised emission reductions. Some credits come from projects that claim to protect forests that were never in danger of being cut down. Others pull carbon out of the air, but only temporarily, or are susceptible to “double-counting,” in which the same credits are claimed by two separate organizations. Experts have described offsets as a “climate scam” and the voluntary market for them a “Wild West.”

Now, federal regulatory agencies are beginning to take note. One of these is the Commodity Futures Trading Commission, or CFTC, an independent government body charged with ensuring the stability of the country’s derivatives markets. This week, the commission held its second roundtable discussion on promoting “integrity for high quality carbon credit derivatives,” and other recent actions suggest that it’s gearing up for a more proactive regulatory role in this space. 

Last month, for example, the CFTC released a whistleblower alert asking the public for tips about fraud and manipulation in voluntary carbon markets — a “precursor” to bringing enforcement actions against market manipulators, according to Todd Phillips, a fellow at the think tank the Roosevelt Institute. Just a few days later, the CFTC announced a new Environmental Fraud Task Forcewithin its enforcement division, to help investigate cases of “fraud and misconduct” in offset-related markets.

“The CFTC is uniquely situated to address this issue,” Phillips said. “There really is no one else.”

Read full report: https://grist.org/regulation/this-little-known-federal-regulator-could-crack-down-on-fraudulent-carbon-offsets/