- Cap-and-Trade Program
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Well-functioning markets are fundamental to the implementation of the Cap-and-Trade Program. As one component of CARB’s approach to ensure that the markets are free of abuse and disruptive activity so they can appropriately reflect the supply and demand for compliance instruments, CARB is conducting market surveillance and analysis. CARB’s trained surveillance staff works closely with an independent market monitor, Monitoring Analytics, to monitor CARB’s auctions and all holding and trading of compliance instruments for the Cap-and-Trade Program. Activities in related markets are also tracked and analyzed.
CARB is working with several California state and federal agencies to ensure robust oversight of the markets for compliance instruments and related markets. CARB worked closely with the California Attorney General’s office in developing the program regulation and continues to use their expertise to help with potential future enforcement activities. CARB staff is engaged in active discussions with the California Independent System Operator (CAISO), the Commodity Futures Trading Commission (CFTC), and the Federal Energy Regulatory Commission (FERC).
The Public's Role in Market Monitoring
Members of the public, whether or not they are program participants, are an important additional set of eyes on the market. If you believe you have information concerning suspected unlawful activity or attempts to commit unlawful activity directed toward the Cap-and-Trade Program, the markets for compliance instruments, or related markets, CARB encourages you to contact the Cap-and-Trade Program and be directed to the program monitoring group.
CARB also encourages you to report any information regarding unlawful activity or attempted unlawful activity related to the markets for compliance instruments or related markets to one or more of the following, as applicable: the California Independent System Operator (CAISO), the Commodity Futures Trading Commission (CFTC), and the Federal Energy Regulatory Commission (FERC). For your convenience, CARB provides links to those entities complaint sites immediately below.
In addition, the Dodd-Frank Act created a CFTC Whistleblower Program that allows for the payment of monetary awards to eligible whistleblowers, and provides anti-retaliation protections for whistleblowers who share information with or assist the CFTC.
Market Oversight and Enforcement
When CARB determines that a market participant has violated provisions of the Cap-and-Trade Regulation, it may pursue legal action against that market participant. Violations can include failures to comply with registration and account representative requirements, prohibited information disclosures, market behavior that does not comport with regulatory requirements, and other non-conformances with the Regulation. Below is a listing of settled Cap-and-Trade Program enforcement cases, which are also publicly posted on the CARB Enforcement Case Settlement website along with all CARB settlements. This page only includes settlements associated with Cap-and-Trade Program enforcement actions that are fully settled; any pending cases are not shown. Related enforcement case settlements for violations of the Mandatory Reporting Regulation, which provides the annual, third-party verified greenhouse gas emissions data that constitutes covered entities' compliance obligations with the Cap-and-Trade Program, are published on the Mandatory Reporting Regulation website.
|April 2, 2021||ACT Commodities, Inc. (ACT)||ACT Commodities, Inc. (ACT) Settlement|
|March 6, 2017||Lake Shore Mojave||Lake Shore Mojave Settlement|
|April 13, 2016||Carlton Forge Works||Carlton Forge Works Settlement|
|February 3, 2014||Southern California Edison||Southern California Edison Settlement|
|December 18, 2013||City of Riverside||City of Riverside Settlement|
|October 31, 2013||Luminus Energy Partners QP, L.P.||Luminus Energy Partners QP, L.P. Settlement|
|June 11, 2013||CP Energy Marketing (US) Inc.||CP Energy Marketing (US) Inc. Settlement|