Voluntary Carbon Markets (“VCMs”) are touted as a promising solution to rising global carbon emissions. They have the potential to strengthen climate technology and promote projects that reduce carbon dioxide emissions and remove Greenhouse Gases (“GHGs”) from the atmosphere. VCMs are estimated to be worth $2 billion, and the burgeoning sector is forecasted to grow to $250 billion by 2050. However, fraud and manipulation in the issuing of carbon credits threaten to undermine the environmental benefits of VCMs and the public’s confidence in the market.

The Commodity Futures Trading Commission (“CFTC”) recently announced the first enforcement action for fraud in VCMs. Two weeks prior to the unprecedented enforcement action, the CFTC finalized guidance regarding the listing for trading of Voluntary Carbon Credit Derivative Contracts. These steps, and the CFTC’s creation of the Environmental Fraud Task Force, align with the agency’s recent priorities of reducing fraud in the environmental space and building trust in Voluntary Carbon Markets. These efforts follow the Biden-Harris Administration’s broader priorities of improving environmental, social, and governance (“ESG”) efforts and advancing high-integrity VCMs.

The CFTC’s hugely successful whistleblower program will be critical to the agency’s efforts to combat fraud in VCMs, as it plays a key role of detection in all the agency’s enforcement efforts. The CFTC Whistleblower Office released the Whistleblower Alert on Fraud...

Read Full Story: https://news.google.com/rss/articles/CBMirwFBVV95cUxNVm1Wb1I3R2RCRnlJb1o5UXBQ...