Introduction

Good morning everyone, and thank you Commissioner Mersinger, Committee Secretary Lauren Fulks, Alternate Secretaries JonMarc Buffa and Lillian Cardona, and the members of EEMAC who are so gracious to be here today to build on the work from the EEMAC Meeting in February.

Future of Power Markets

The agenda today includes many critical topics, including the future of power markets and the path to attaining net zero carbon in the U.S.

Legislation implemented under the direction of President Biden, including the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA), has drastically improved the incentives to invest in energy markets. Under the IIJA, the federal government has awarded billions of dollars to promote grid reliability, resiliency, and energy efficiency.[1] As the Biden Administration has reported, in the year following the passage of the IRA, “[c]ompanies have announced more than $110 billion in new clean energy manufacturing investments, including more than $70 billion in the EV supply chain and more than $10 billion in solar manufacturing.”[2] Growing demand for electric vehicles, coupled with the growth of energy-intensive AI data centers, is leading to an increased need for electricity to power these new technologies. We must ensure that our infrastructure can grow along with new demand, while still allowing us to reach our sustainability goals, including net zero carbon emissions.

These developments also come as new environmental markets are forming, such as the market for carbon credits and their derivatives. Carbon credits are a novel way to incentivize parties to reduce their carbon emissions. Because the Commodity Exchange Act tasks the CFTC with enforcing against fraud and market manipulation, the CFTC must act to deter fraud and ensure market integrity. The Climate-Related Market Risk Subcommittee of the Market Risk Advisory Committee, which I sponsor, is tackling these issues.

Conclusion

Addressing climate-related market risk, and transitioning to carbon-neutral power sources, is going to take a whole-of-government, and whole-of-society approach, and I look forward to hearing today about how members of EEMAC can help advance this critical aim.

[2] The White House, FACT SHEET: One Year In, President Biden’s Inflation Reduction Act is Driving Historic Climate Action and Investing in America to Create Good Paying Jobs and Reduce Costs (Aug. 16, 2023), FACT SHEET: One Year In, President Biden’s Inflation Reduction Act is Driving Historic Climate Action and Investing in America to Create Good Paying Jobs and Reduce Costs | The White House.