Voluntary carbon markets are widely considered to have an important role to play in achieving greenhouse gas emissions goals. Market demand from entities and individuals purchasing carbon credits that are created through investments in nature-based or technology-based projects have fueled growth of the sector, with demand projected to increase by a factor of 15 or more by 2030 and a factor of 100 by 2050.
ISDA is focused on developing strong legal standards to encourage consistency in the definition of voluntary carbon credits (VCCs), as well as provide clarity on the bankruptcy and regulatory treatment in key jurisdictions for both primary and secondary markets.
Consistent with this objective, this whitepaper has been published to: (i) discuss some legal and regulatory questions relating to voluntary carbon markets; (ii) describe the oversight of primary and derivatives markets under Commodity Futures Trading Commission (CFTC) rules; and (iii) explain why VCC derivatives are considered commodity derivatives by the CFTC. The paper also recommends the CFTC could use its experience in regulating commodity derivatives markets as a blueprint for enhancing its oversight of voluntary carbon derivatives markets by employing a combination of private-sector and regulatory tools.
Documents (1) for Voluntary Carbon Markets: Analysis of Regulatory Oversight in the US
Latest
Response on Scope of BMR
On July 28, ISDA and the Global Foreign Exchange Division of the Global Financial Markets Association responded to the European Commission’s (EC) consultation on the need to exempt spot foreign exchange (FX) benchmarks under Article 18a of the EU Benchmarks...
Strengthening DC Governance
The Credit Derivatives Determinations Committees (DCs) play a vital role. Without a single, industry-wide determination on whether a credit event has occurred, it simply wouldn’t be possible to clear credit default swaps (CDS), making the market less safe and less...
ISDA CSA Significant Errors Notification SOP
The ISDA CSA Notification of Significant Error or Omissions Suggested Operational Practices (SOP) considers current institutional processes and outlines suggested operational practices related to the new requirement under §26.3(2) of the Canadian Trade Repositories and Derivatives Data Reporting rules rewrite...
ISDA Paper on UPI Identifiers
On July 16, ISDA submitted a paper (UPI as the Foundation for OTC Derivatives Reporting: The Case for UPI) to the UK Financial Conduct Authority (FCA). The paper was developed to complement ISDA’s response to the FCA’s discussion paper DP24/2:...