Behnam: Growing Climate Solutions Act creates financial services market

Rostin Behnam, President Biden’s nominee for Commodity Futures Trading Commission, told Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., that through her Growing Climate Solutions Act, “You are creating a financial services market.”

At his confirmation hearing, Behnam added that the CFTC should be involved in that market’s regulation.

In response to a question from Senate Agriculture Committee ranking member John Boozman, R-Ark., Behnam assured him that the bill would result in the carbon credits being bought and sold in the private sector rather than the government buying and selling them.

Behnam also reassured Senate Agriculture Appropriations Subcommittee Chairman John Hoeven, R-N.D., that the market for the credits are going to be voluntary. But Behnam added that it is important that the market for the credits have “integrity” and that he would welcome participating in the development of that market.

The Growing Climate Solutions Act, which would establish a voluntary Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Certification Program to help reduce entry barriers into voluntary environmental credit markets for farmers, ranchers, and private forest landowners, has passed the Senate but has come under criticism from Rep. Glenn “GT” Thompson, R-Pa., the House Agriculture Committee ranking member, and other House Republicans.

Behnam, who already serves as a CFTC commissioner, assured Sen. Tommy Tuberville, R-Ala., that he would continue his habit of traveling to learn more about rural America. Behnam noted he grew up in northern New Jersey, but had spent six years working on the Senate Agriculture Committee under Stabenow and had taken several trips to the Midwest.

“I love to travel. My strategy is direct engagement,” Behnam said.

Tuberville told Behnam he had “tied up” agency resources studying climate risk, which the senator considers outside the CFTC’s purview. But Behnam responded that the CFTC is a risk management agency and that it needs to understand issues such as the impact of flooding on harvests and how fires in the western states affect the economy and the fruit bowl in California.

Behnam said he does not anticipate adding climate scientists to the CFTC staff, noting its employees are accountants, lawyers and investigators.

When Sen. Mike Braun, R-Ind., asked him how he would handle “out of bounds” players in the commodities markets, Behnam said he wants to maintain the U.S. position as the “gold standard” in commodity markets.

Behnam also said he wants to work on reauthorization of the Commodity Exchange Act, which governs the agency but has not been reauthorized since 2013.

Asked by Hoeven about what role the CFTC could play in supply chain issues, Behnam said its role is limited to addressing fraud and manipulation.

Behnam expressed an interest in addressing the concerns of ranchers in the commodity markets, particularly on transparency.

Futures prices are a reflection of cash market activity, Behnam said, and if there isn’t transparency, there won’t be “the price discovery we want.”


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