Climate Policy Hill Briefing on Carbon Market Design & Oversight in a U.S. Greenhouse Gas (GHG) Cap-and-Trade System

Briefing on Carbon Market Design & Oversight in a U.S. Greenhouse Gas (GHG) Cap-and-Trade System
May 1, 2009

The Pew Center and the Nicholas Institute for Environmental Policy Solutions at Duke University held a briefing on the design and oversight of a successful carbon market. As Congress debates climate change legislation, one of the most critical yet least discussed issues is the development and oversight of a well-functioning carbon commodity market.  This briefing frames and discusses many of the central issues in this process, including: overall market design, options for the choice of regulator, the role and importance of the derivatives market, and the types of rules and enforcement necessary to prevent market manipulation and abuses.  

Video  Watch the video and accompanying slides presented by each speaker listed below.

  • Janet Peace, Vice President for Markets and Business Strategy, Pew Center on Global Climate Change
    Presentation: Windows Media   Slides (pdf)
  • Jonas Monast, Co-Director, Duke University Climate Change Policy Partnership
    Presentation: Windows Media   Slides (pdf)   
  • James Newsome, Board member of the CME Group, former president of NYMEX and former chairman of the CFTC
    Presentation: Windows Media   Slides (pdf)
  • Andy Stevenson, Finance Advisor in NRDC’s Center for Market Innovation and a former hedge fund manager and investment banker
    Presentation: Windows Media   Slides (pdf)
  • Betsy Moler, Executive Vice President of Government and Environmental Affairs and Public Policy, Exelon Corporation, and former FERC Commissioner
    Presentation: Windows Media   
  • Question & Answer: Windows Media   

Briefing Highlights

  • The U.S. carbon market will be large.
  • A market for GHGs will be different than other commodity markets.
    - Created to deliver an environmental goal
    - Emitters will have to participate
    - There will be a limited supply of compliance units (allowances and offsets) that will likely decrease over time.
  • The effectiveness of the market will have implications for the broader economy.
  • Key fundamentals of a successful market
  • Role and importance of the derivatives market
  • Oversight considerations, such as the types of rules and enforcement necessary to prevent market manipulation and abuses

 

Related Materials

Climate Policy Briefs Series

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-This series was made possible through a generous grant from the Doris Duke Charitable Foundation, but the opinions expressed herein are solely those of the presenters.-