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Hilton joining us right now as we continue our conversation on energy CFTC commissioner joining us at a DC Bart welcome that if you don't.
Good to be with you guys are now in the big thing we were talking about cap and trade a little while it -- this is gonna create a secondary market's gonna create a market here.
If you're buying and trading.
The futures if you will.
How how this be regulated in -- there are concerns because -- understanding that there might be some concerns that this is gonna be very readily.
-- open to fraud.
Going forward are you concerned with that and how how do you see it regulated moving -- -- What what was a lot -- your question -- take them one at a time.
One it's going to be a large large market at the derivatives market could be a very large market I've estimated date could be.
Two trillion dollars now -- to give you a sense so of how large that is.
It would be not as large as Euro dollars which for the number one futures traded in the US.
But it would be larger than say crude oil which is the largest physical commodity so would be pretty large two trillion dollar dollars.
But I'm not worried about the fraud if if all of the transactions are done.
On regulated exchanges.
Right now we have over the counter transactions that happen that happen for.
Many commodities in the the energy India.
Metals complex in particular.
But I'd like to see all of this trading done on exchange so we can avoid that fraud abuse.
Or as you suggest the potential of even manipulation I want somebody looking at these things all the time it's too important.
For the environment but it's too important to the economic engine of our democracy that we actually get this right and have steadfast sure -- regulation.
-- but this a win for you are for you guys and just -- people understand.
Under cap and trade if it goes through -- every company will get a little permit on how much they can didn't CO2 they can in the into this.
Environment what they don't use they basically good trade off and -- you need more appeared.
If -- sloppy and admitting more into the universe you can somehow -- -- and bar.
You -- would be controlling this little bartering -- -- Yeah we'd -- -- it you know that it if the cap and trade part where the trade part of Brett you know congress would establish the captain and the allocations that you're talking about three -- they'd be.
Under the house bill by idea by idea.
The EPA -- protection agency and then the commodities futures trading commission -- my agency would be in charge of making sure there's no.
Fraud abuse or manipulation I don't look at added as it as a win ferocity what we'll do whatever congress tells us to to do.
But I do want to let people know that we can handle this.
We do all sorts of contracts who long as we have the staff to do it.
We can not only do we can -- a really good job of avoiding fraud abuse and manipulation these cap and -- -- It's is there any concern here about some.
All four manipulation if you will by the government all you know over regulation because he's been hearing that obviously -- into the banking industry here.
For so long -- they're -- concern about bad in this particular market that will do.
Yeah I mean there's there's that at least -- sort I think.
Two different issues one is you need to get the allocations right to begin with and that's -- said the EPA's perspective.
What happened in the European Union when they started this is they over allocated.
And therefore -- -- credits themselves weren't much weren't worth much people didn't need them.
So the first thing is to get the allocation right and by the way that's about the the only thing that's different from say.
A crude oil contractor.
Gold contract is that.
At the government doesn't doesn't control the allocation that -- -- -- different with with with these carbon credits.
But once we -- it get it.
As long as we have the people looking at it I'm not worried about broader or abuse it's it as long as we can see everything in the markets.
I don't want big large transactions going on.
In what people called dark markets and that essentially just means unregulated markets where there's not transparency there's not daily reporting.
But we got a whole plethora of oversight and surveillance.
And accountability measures that we use every day 1847365.
So we're ready if in fact congress decides to give -- authority look at these markets.
-- this seems to me like it had the potential to be an over active market I mean are you are you excited about this.
Cap and trade decide whether I believe in the policy at all just -- all this coming to you -- and I think this could be an exciting.
Trading place just to even watch this.
It is I mean you wouldn't.
Do something like this just for the trading venue a miracle that it has that.
That the bonus of saving the world maybe but for from my perspective it is very exciting because.
The the enormous potential of these markets what it cannot only do four.
Markets but what it can actually you do for consumers and for the economic engine of our democracy.
We can really fuel inject our economy it can be a stimulus if you will and so I am super excited about it I think it's a neat thing enough.
I'm hopeful that we get the chance to be a participant.
-- I think you hit it right on the head it's a stimulus for the economy you can make a lot of money and you can save the world I don't think there are three things that we could really you know who come up with they'll be better than that it's like Syria Iran well at the right -- right thanks -- we appreciate it -- thank you so -- -- That's Bart Chilton definitely not a -- Commissioner of the Commodity Futures Trading Commission think he's.
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