Borrow it
Coverart for item
The Resource Regulating a carbon market : issues raised by the European carbon and U.S. sulfur dioxide allowance markets, Mark Jickling, Larry Parker

Regulating a carbon market : issues raised by the European carbon and U.S. sulfur dioxide allowance markets, Mark Jickling, Larry Parker

Creator
Contributor
Summary
Both the European Union's Emissions Trading Scheme (EU-ETS) and the U.S. Title IV sulfur dioxide (SO2) program provide insights into regulatory issues that may face any future U.S. carbon market. From the initial operations of the EU-ETS, the 2006 price crash raised questions about the adequacy of market regulation. In particular, some suspect that information about allocations leaked before official publication, and that certain traders profited from this knowledge. Title IV's longer trading history reveals two important trends: (1) an increasing trend toward diverse and non-traditional participants that is likely to continue under a carbon market; (2), an increasing use of financial instruments to manage allowance price risk that is likely to expand under a carbon market as a hedge against price uncertainty. Indeed, a carbon market may look more like other energy markets, such as natural gas and oil, than the somewhat sedate SO2 allowance market. Regulation of emissions trading would have to consider two kinds of fraud and manipulation: fraud by traders or intermediaries against other investors, and sustained price manipulation. Four agencies could have roles in the regulation of an emissions market, each with its own attributes that may contribute to effective regulation. The Commodities Futures Trading Commission (CFTC) currently oversees the Title IV program and its current mission most closely resembles what a regulator of a future carbon market would do, including experience in market surveillance to prevent or detect fraud and manipulation. The major failing of the CFTC, according to some, is that it lacks the resources and the statutory mandate to do its job. The Securities and Exchange Commission (SEC) is much larger than the CFTC, and its enforcement programs are considered more effective than the CFTC's. While the CO2 market will resemble commodities markets more closely than securities, SEC has some appropriate regulatory tools applicable to an emissions market. The Environmental Protection Agency (EPA) would likely be responsible for the primary market in allowances. However, EPA lacks experience comparable to that of the CFTC and SEC in regulating trading markets, although the data it gathered in the primary market could be critical to oversight of the secondary market. Federal Energy Regulatory Commission (FERC) was granted oversight authority over bulk electricity and interstate natural gas markets in 2005. Its experience with market surveillance and enforcement is thus limited in comparison to the SEC and CFTC, and it does not play an active role in overseeing the Title IV market. It is possible that no single regulator would have clear jurisdiction, as is the case in the Title IV program. This kind of regulatory fragmentation has not always worked well. An umbrella group to monitor markets and provide a forum for regulatory coordination might help to prevent regulatory gaps or conflicts in the market
Language
eng
Work
Publication
Extent
1 online resource (32 pages)
Note
  • "April 30, 2008."
  • Title from title screen (viewed Sept. 18, 2008)
Instance
Label
Regulating a carbon market : issues raised by the European carbon and U.S. sulfur dioxide allowance markets
Title
Regulating a carbon market
Title remainder
issues raised by the European carbon and U.S. sulfur dioxide allowance markets
Statement of responsibility
Mark Jickling, Larry Parker
Creator
Contributor
Subject
Genre
Language
eng
Summary
Both the European Union's Emissions Trading Scheme (EU-ETS) and the U.S. Title IV sulfur dioxide (SO2) program provide insights into regulatory issues that may face any future U.S. carbon market. From the initial operations of the EU-ETS, the 2006 price crash raised questions about the adequacy of market regulation. In particular, some suspect that information about allocations leaked before official publication, and that certain traders profited from this knowledge. Title IV's longer trading history reveals two important trends: (1) an increasing trend toward diverse and non-traditional participants that is likely to continue under a carbon market; (2), an increasing use of financial instruments to manage allowance price risk that is likely to expand under a carbon market as a hedge against price uncertainty. Indeed, a carbon market may look more like other energy markets, such as natural gas and oil, than the somewhat sedate SO2 allowance market. Regulation of emissions trading would have to consider two kinds of fraud and manipulation: fraud by traders or intermediaries against other investors, and sustained price manipulation. Four agencies could have roles in the regulation of an emissions market, each with its own attributes that may contribute to effective regulation. The Commodities Futures Trading Commission (CFTC) currently oversees the Title IV program and its current mission most closely resembles what a regulator of a future carbon market would do, including experience in market surveillance to prevent or detect fraud and manipulation. The major failing of the CFTC, according to some, is that it lacks the resources and the statutory mandate to do its job. The Securities and Exchange Commission (SEC) is much larger than the CFTC, and its enforcement programs are considered more effective than the CFTC's. While the CO2 market will resemble commodities markets more closely than securities, SEC has some appropriate regulatory tools applicable to an emissions market. The Environmental Protection Agency (EPA) would likely be responsible for the primary market in allowances. However, EPA lacks experience comparable to that of the CFTC and SEC in regulating trading markets, although the data it gathered in the primary market could be critical to oversight of the secondary market. Federal Energy Regulatory Commission (FERC) was granted oversight authority over bulk electricity and interstate natural gas markets in 2005. Its experience with market surveillance and enforcement is thus limited in comparison to the SEC and CFTC, and it does not play an active role in overseeing the Title IV market. It is possible that no single regulator would have clear jurisdiction, as is the case in the Title IV program. This kind of regulatory fragmentation has not always worked well. An umbrella group to monitor markets and provide a forum for regulatory coordination might help to prevent regulatory gaps or conflicts in the market
Member of
Cataloging source
EJB
http://bibfra.me/vocab/lite/collectionName
HeinOnline U.S. Congressional Documents Library
http://library.link/vocab/creatorName
Jickling, Mark
Government publication
federal national government publication
Illustrations
  • illustrations
  • charts
Index
no index present
Literary form
non fiction
Nature of contents
  • dictionaries
  • bibliography
http://library.link/vocab/relatedWorkOrContributorDate
1954-2013
http://library.link/vocab/relatedWorkOrContributorName
  • Parker, Larry
  • Library of Congress
Series statement
CRS report for Congress
Series volume
RL34488
http://library.link/vocab/subjectName
  • Emissions trading
  • Greenhouse gas mitigation
  • Carbon dioxide mitigation
  • Sulfur dioxide mitigation
  • Environmental protection
  • Environmental economics
  • Carbon dioxide mitigation
  • Emissions trading
  • Environmental economics
  • Environmental protection
Label
Regulating a carbon market : issues raised by the European carbon and U.S. sulfur dioxide allowance markets, Mark Jickling, Larry Parker
Instantiates
Publication
Note
  • "April 30, 2008."
  • Title from title screen (viewed Sept. 18, 2008)
Bibliography note
Includes bibliographical references
Carrier category
online resource
Carrier category code
  • cr
Carrier MARC source
rdacarrier
Color
mixed
Content category
text
Content type code
  • txt
Content type MARC source
rdacontent
Control code
252781964
Dimensions
unknown
Extent
1 online resource (32 pages)
Form of item
online
Media category
computer
Media MARC source
rdamedia
Media type code
  • c
Other physical details
illustrations, charts
Specific material designation
remote
System control number
(OCoLC)252781964
System details
  • Mode of access: World Wide Web
  • System requirements: Adobe Acrobat Reader
Label
Regulating a carbon market : issues raised by the European carbon and U.S. sulfur dioxide allowance markets, Mark Jickling, Larry Parker
Publication
Note
  • "April 30, 2008."
  • Title from title screen (viewed Sept. 18, 2008)
Bibliography note
Includes bibliographical references
Carrier category
online resource
Carrier category code
  • cr
Carrier MARC source
rdacarrier
Color
mixed
Content category
text
Content type code
  • txt
Content type MARC source
rdacontent
Control code
252781964
Dimensions
unknown
Extent
1 online resource (32 pages)
Form of item
online
Media category
computer
Media MARC source
rdamedia
Media type code
  • c
Other physical details
illustrations, charts
Specific material designation
remote
System control number
(OCoLC)252781964
System details
  • Mode of access: World Wide Web
  • System requirements: Adobe Acrobat Reader

Subject

Genre

Member of

Library Locations

    • Pardee Legal Research CenterBorrow it
      5998 Alcalá Park, San Diego, CA, 92110-2492, US
      32.771471 -117.187496

Library Links

Structured data from the Bibframe namespace is licensed under the Creative Commons Attribution 4.0 International License by University of San Diego Libraries. Additional terms may apply to data associated with third party namespaces.
Processing Feedback ...