US Congress is expected to begin considering climate change and energy legislation as early as next week, which will include details of a cap-and-trade system designed to reduce American greenhouse gas emissions 20% by 2020, and 83% by 2050.
The CFTC is expected to monitor and oversee the trading of derivative products associated with carbon dioxide allowances under any future federal scheme. The creation of EEMAC will allow the CFTC to anticipate and address regulatory issues pertaining to both energy and environmental trading markets, according to Bart Chilton, commissioner of the CFTC.
"Regulation of these important environmental markets is something we need to get right," Chilton added.
"The mission, mandate and membership of the EEMAC is being expanded to ensure that we are ready for what could be a $2 trillion market in the future," he continued. "We have a proven track record as a sure-footed regulator of environmental markets since 1995."
The CFTC currently regulates other environmental markets, such the sulfur dioxide derivatives market that came into existence after the passage of acid rain legislation in the 1990s.
Up until now EEMAC was focused on energy markets. It will now also include members with expertise in climate change and environmental markets. The first meeting will be held on May 13 at the CFTC's headquarters in Washington.