The Commodity Futures Trading Commission can raise the bar on voluntary carbon credits

The Clean Air Task Force (CATF) advocates for the Commodity Futures Trading Commission (CFTC) to implement more rigorous standards for voluntary carbon credit derivatives. CATF suggests adding 'durability' and 'vintage' to the CFTC's proposed commodity characteristics and requiring dynamic baseline analysis, independent third-party verification, and explicit accounting for the risk of carbon reversal to prevent low-quality credits from distorting prices and undermining climate goals.

• The voluntary carbon credit market reached a peak value of $2 billion in 2021 and has the potential to grow by hundreds of billions of dollars if integrity is maintained. More than 40% of these credits are linked to forestry and land use projects.
• Low-quality carbon credits, resulting from inconsistent implementation and a lack of centralized governance, risk distorting prices and diverting investment away from high-quality projects, which may ultimately deter overall emissions reductions.
• CATF recommends that the CFTC expand its proposed 'commodity characteristics' for derivatives contracts to include 'durability' (the contracted duration of carbon storage, which currently ranges from 10 to 100 years) and 'vintage' (the year a credit was generated or issued).
• To ensure high credit quality, CATF urges the CFTC to require dynamic baseline analysis for determining additionality, particularly for ecosystem-based credits, and to mandate that the risk of carbon reversal—especially from wildfires, drought, and disease—is addressed using spatially explicit data.
• CATF proposes that the CFTC insist on the independence of third-party verification bodies and require that project data be made publicly available through regularly updated, machine-readable, or digitally searchable open-access databases.

APA

Sturges, F., & Sanders-DeMott, R. (2024). The Commodity Futures Trading Commission can raise the bar on voluntary carbon credits. Clean Air Task Force. https://www.catf.us/2024/02/commodity-futures-trading-commission-can-raise-bar-voluntary-carbon-credits/

Chicago

Sturges, Frank, and Rebecca Sanders-DeMott. The Commodity Futures Trading Commission can raise the bar on voluntary carbon credits. Clean Air Task Force, 2024. https://www.catf.us/2024/02/commodity-futures-trading-commission-can-raise-bar-voluntary-carbon-credits/.

Wikipedia

{{cite press release |last1=Sturges |first1=Frank |last2=Sanders-DeMott |first2=Rebecca |title=The Commodity Futures Trading Commission can raise the bar on voluntary carbon credits |publisher=Clean Air Task Force |date=28 February 2024 |url=https://www.catf.us/2024/02/commodity-futures-trading-commission-can-raise-bar-voluntary-carbon-credits/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{sturges2024commodity, author = {Sturges, Frank and Sanders-DeMott, Rebecca}, title = {{The Commodity Futures Trading Commission can raise the bar on voluntary carbon credits}}, publisher = {Clean Air Task Force}, year = {2024}, month = feb, url = {https://www.catf.us/2024/02/commodity-futures-trading-commission-can-raise-bar-voluntary-carbon-credits/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }