# What This Bill Does: Blocking New Carbon Credit Trading Rules

Congress is trying to stop a new rule that would allow financial companies to trade carbon credit derivatives—basically financial products based on carbon credits. Think of it like this: carbon credits are permits that let companies emit a certain amount of greenhouse gases. The Commodity Futures Trading Commission (the agency that oversees futures and derivatives trading) recently created guidance allowing banks and investment firms to create and trade complex financial products based on these credits, similar to how they trade oil futures or other commodities.

This bill is a congressional "veto" of that rule. If it passes, it would prevent the CFTC's guidance from going into effect. Supporters of the bill argue that allowing Wall Street to trade carbon credit derivatives could create the same kind of financial speculation and manipulation that happened with other commodities, potentially destabilizing carbon markets and making it harder for these credits to actually reduce emissions. Critics counter that blocking this rule limits market flexibility and could reduce investment in carbon reduction efforts.

**Who this affects:** Primarily financial companies, investment firms, and large corporations that trade in carbon markets or want to. Indirectly, it could affect anyone concerned about climate policy, since it influences how carbon credits function as a climate tool. Regular consumers likely won't notice a direct impact on their daily lives, but it does shape how companies manage their emissions and whether financial markets can help drive climate action.

A joint resolution 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".

Kennedy, John

<p>This joint resolution nullifies the final guidance issued by the Commodity Futures Trading Commission (CFTC) titled <em>Commission Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts</em> and published on October 15, 2024. The guidance provides factors for designated contract markets (i.e., CFTC-regulated derivatives exchanges) to consider when listing voluntary carbon credit derivative contracts, including characteristics of transparency and permanence.&nbsp;</p>