Never Fear Carbon Traders, Those Onerous Regulations in Waxman-Markey will be Repealed

There was some internet hubbub last week when North Dakota's Senator Dorgan penned an op-ed for the Bismark Tribune (words I never imagined typing):

Reduce our CO2, yes ... but cap-and-trade, no

Joe Romm at the Center for American Progress weighed in, first nicely on the 20th (Dorgan is a Democratic heavyweight and potential swing vote):

When Sen. Dorgan finds out what’s in the climate bill — hint, hint, White House — he might just support it:

...In fact, Dorgan’s concerns about speculators and market fraud — which Mississippi Governor (and global warming denier/delayer) Haley Barbour has been playing up, along with James Hansen and Robert Shapiro — are ones that the authors of Waxman-Markey were quite aware of when they wrote the bill.

That’s why the bill has many provisions (and realities) that would stop “a financial meltdown from speculators trading frantically in the permits and their derivatives,” as Hansen put it, or someone cornering the market, as Barbour put it....

...Fourth, the bill has a whole section devoted to “Carbon Market Assurance.” As the WRI summary describes it:

The Federal Energy Regulatory Commission is given regulatory authority over allowance and offset markets and allowance derivative markets (Sec. 761, pg. 449). The President is also delegated authority to instruct agencies to take on pieces of market regulation based on existing authority as long as regulations are consistent with this section. The draft makes it a federal crime to commit fraud or manipulate any carbon market. In addition, the regulations facilitate and maintain market oversight and transparency and require market monitoring to prevent fraud, manipulation and excessive speculation....

Then a bit less nicely on the 22nd:
Nobelist Krugman: Fear of carbon markets and speculation is “99% wrong and bad for the planet” :

The reason I say fear not fellow traders? One of the additions to the bill, at 3 a.m. the day of the vote:

SEC. 358. EFFECT OF DERIVATIVES REGULATORY REFORM
LEGISLATION.

(a) STATUTES.—Upon the passage of legislation that includes derivatives regulatory reform, sections 351, 352, 354, 355, 356, and 357 shall be repealed.

(b) REGULATIONS.—Upon the passage of legislation that includes derivatives regulatory reform, any regulations promulgated under section 351, 352, 354, 355, 356,
or 357 shall be considered null and void.

Here are the referenced sections:

Subtitle E--Additional Market Assurance

SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DERIVATIVES INVOLVING ENERGY COMMODITIES.

SEC. 352. NO EFFECT ON AUTHORITY OF THE FEDERAL ENERGY REGULATORY COMMISSION.

SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FUTURES TRADING COMMISSION.

SEC. 354. SETTLEMENT AND CLEARING THROUGH REGISTERED DERIVATIVES CLEARING ORGANIZATIONS.

SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A CREDIT DEFAULT SWAP.

SEC. 356. TRANSACTION FEES.

SEC. 357. NO EFFECT ON ANTITRUST LAW OR AUTHORITY OF THE FEDERAL TRADE COMMISSION.

SEC. 358. EFFECT OF DERIVATIVES REGULATORY REFORM LEGISLATION.

SEC. 359. CEASE-AND-DESIST AUTHORITY.

SEC. 360. PRESIDENTIAL REVIEW OF REGULATIONS

Here are some possibly related posts:

Who Will Be the U.S. Carbon Czar? FERC? CFTC? Me?
Carbon Trading: Senate Confirms Goldman Alum to Head CFTC
U.S. panel OKs CFTC to regulate carbon derivatives

Now get out there and lobby!