S.jres9 - Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Commodity Futures Trading Commission relating to Commission Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts. (119th Congress)
Summary
This document is a joint resolution (S.J. Res. 9) introduced in the Senate during the 119th Congress. It aims to disapprove a rule submitted by the Commodity Futures Trading Commission (CFTC) concerning guidance on listing voluntary carbon credit derivative contracts. The resolution invokes Chapter 8 of Title 5 of the United States Code, which provides a mechanism for congressional review of agency rulemaking.
The resolution specifically targets the CFTC's guidance published in the Federal Register on October 15, 2024 (89 Fed. Reg. 83378). If passed, the resolution would nullify the CFTC's guidance, preventing it from having any force or effect.
The resolution was introduced by Mr. Kennedy and Mr. Sheehy and referred to the Committee on Agriculture, Nutrition, and Forestry for consideration.
Expected Effects
If enacted, this resolution would prevent the CFTC's guidance on voluntary carbon credit derivative contracts from taking effect. This would likely create uncertainty in the carbon credit market, as the CFTC guidance was intended to provide clarity and standardization.
The absence of this guidance could lead to inconsistent practices and potentially hinder the development of a robust and reliable carbon credit trading system.
Potential Benefits
- Could prevent potential overreach by the CFTC in regulating carbon markets, allowing for more market-driven innovation.
- May address concerns about the potential for fraud or manipulation in the voluntary carbon credit market if the CFTC guidance is deemed inadequate.
- Could allow Congress to have more direct oversight of the development of regulations related to carbon markets.
- Might encourage the development of alternative regulatory frameworks or industry standards for voluntary carbon credits.
- Could protect certain industries or businesses from potentially burdensome regulations imposed by the CFTC guidance.
Potential Disadvantages
- Creates uncertainty in the voluntary carbon credit market, potentially discouraging investment and participation.
- May hinder the development of standardized and transparent practices for listing and trading carbon credit derivatives.
- Could lead to a lack of regulatory oversight, increasing the risk of fraud and manipulation in the carbon credit market.
- May undermine efforts to promote environmental sustainability and combat climate change through market-based mechanisms.
- Could damage the credibility of the U.S. in international efforts to regulate carbon markets.
Constitutional Alignment
The resolution is an exercise of Congress's legislative power under Article I, Section 1 of the Constitution, which vests all legislative powers in Congress. Chapter 8 of Title 5, United States Code, provides a specific mechanism for congressional review of agency rulemaking, which this resolution utilizes.
By disapproving the CFTC's guidance, Congress is asserting its authority to oversee and potentially nullify actions taken by executive branch agencies. This aligns with the principle of checks and balances, ensuring that no single branch of government becomes too powerful.
However, the resolution's impact on environmental policy and potential implications for interstate commerce could raise questions about the scope of federal power under the Commerce Clause (Article I, Section 8, Clause 3) if the underlying CFTC guidance is seen as necessary to regulate carbon emissions that affect multiple states.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).