Carbon Market Watch welcomes the opportunity to provide feedback on the United States’ Commodity Futures Trading Commission’s (CFTC) proposed guidance on the voluntary carbon market (VCM).

Regulating financial transactions in the VCM, including but not limited to futures transactions, is important to plug some of the most gaping holes in the current VCM infrastructure. Financial transparency and integrity is currently direly lacking in the VCM, and rules to address this should focus both on the quality of the assets and financial products being traded, as well as the transparency of the trades.

The CFTC’s proposed guidance is a step in the right direction, but it does not go far enough. Some elements covered by the guidance lack specificity, and some issues that weigh on the VCM’s reputation are not addressed in the current proposal.