From ClimateWire via the New York Times:
The Commodity Futures Trading Commission has the "best experience" and the regulatory authority to oversee any carbon futures market, President Obama's nominee to head the agency told the Senate Agriculture Committee yesterday.The loophole was originally an informal decision by the CFTC not to regulate electronic trading of energy derivatives by CFTC, Wendy Graham, Chair, under Bush I.
"CFTC does have that authority," Gary Gensler said at his confirmation hearing. "But I will work with Congress to put that into statute" if it needs to be stronger, he said.Sens. Saxby Chambliss (R-Ga.), Richard Lugar (R-Ind.) and Debbie Stabenow (D-Mich.) all voiced concerns during the hearing about oversight of the future carbon market that could be worth billions of dollars if Congress passes cap-and-trade legislation for greenhouse gas emissions....MORE
It was later codified in one of the last bills signed into law by the the Clinton administration.
Between the two Bush's and Bill Clinton the Enron saga forshadowed what is to come in the carbon markets.
Here's the Congressional Research Service's six page history of the Enron loophole.