A Rare Regulatory Voice Speaks Out for Climate Action

To put it mildly, federal regulatory agencies have not, during this administration, been in the forefront of those calling for bold action on climate change. That makes last week’s report on Managing Climate Risk in the U.S. Financial System especially welcome. The report comes from a subcommittee of the Commodity Futures Trading Commission (CFTC) an independent U.S. regulatory agency responsible for regulating commodity futures, options, and swaps.

The report is not an official policy statement from the executive branch, but the five CFTC commissioners, three Republicans and two Democrats, all appointed by President Trump, voted unanimously to create the subcommittee and subcommittee members voted unanimously to issue the report.

Why is the CFTC putting out a report on climate policy? Isn’t that the job of the Environmental Protection Agency? Well, yes, but the EPA is busy fighting a war against the previous administration’s war on coal, easing regulations on methane leaks, and other urgent business. Besides, there is a direct tie-in to the CFTC’s business: Wildfires, heat waves, sea level rise, and other climate-related phenomena represent a real and present danger for insurance markets, mortgage markets, agricultural commodity markets, and related futures, options and swaps.