USDA seeks to cut risk in environment markets
NEW YORK (Reuters) - U.S. agriculture regulators are pressing Congress to form a board aiming to cut risks in developing environmental markets, such as ones in which greenhouse gas emitters pay for the right to pollute, an official said on Thursday.
The inter-government agency board would aim to protect market players from fraud and manipulation by setting standards for environmental trades, Mark Rey, Under Secretary for Natural Resources and the Environment at the Department of Agriculture, told reporters at a meeting in New York.
"A fundamental first step in the development of these markets is to have broadly agreed upon standards that both buyers and sellers ... agree will govern credit for an ecosystem service," Rey said.
The USDA is seeking formation of the board in the 2007 Farm Bill, which it hopes Congress will pass later this year.
Environment markets can be as large as the European Union's Emissions Trading Scheme, on which tens of billions of dollars worth of carbon emissions credits have traded since 2005, or as simple as single party-to-party deals in voluntary markets.
The EU set up its market to help member countries meet their obligations under the Kyoto Protocol.
President George W. Bush withdrew from the Kyoto pact and opposes mandatory regulations on greenhouse gases.
Small voluntary carbon markets have begun in the United States, the world's top greenhouse gas emitter. But the markets lack regulatory bodies.
Environmental markets can mitigate ecosystem problems like air and water pollution by creating incentives for players such as farmers to switch to cleaner practices.
The Department of Agriculture has worked with the Energy Department on voluntary carbon credits, with the Environmental Protection Agency on water credits, and hopes to work with the Department of Interior on creating credits for saving endangered species, Rey said.
