The Biden administration is approaching a critical pivot point in its push to shore up the financial system against climate risks. The table is just about set with big proposals to implement over the coming year, and the churn of key personnel is starting to be felt, as it always does at the end of a president’s term. A few noteworthy moves happening just this week: — CFTC Chair Rostin Behnam announced Wednesday that the agency’s long-awaited guidelines for voluntary carbon offsets trading are expected to land as soon as this month. The offsets are seen as vital tools for companies to reach net-zero emissions goals. But the market has been beset by credibility and transparency problems, and officials want to make sure the offsets can be trusted. — Your MM host and Daniel Lippman scooped that one of the Treasury Department’s top climate finance hawks, Graham Steele, plans to step down in January. He had been overseeing efforts to scrutinize how property insurers are responding to extreme weather. Before joining the administration, he had been a thought leader on ways the government should regulate the finance industry in response to climate change. — House Financial Services Chair Patrick McHenry said he’ll ask the GAO to determine whether new climate guidance for big banks can be blocked by Congress, underscoring how Republicans are working to defang even relatively limited government attempts to focus Wall Street’s attention on the issue. Stepping back, Washington is about to reach the point where most if not all of the big climate risk safeguards of the Biden era have been vetted and proposed. They’ve been historic in some ways and contentious to be sure, but there’s no doubt they’ve also been quite restrained. It’s largely been the realm of guidelines and disclosure rather than direct pressure to retrench from fossil fuel investments and other activities that contribute to climate change. The biggie in the unfinished business category is the SEC’s corporate climate-risk disclosure rule. It’s been pending in the proposal stage for 20 months, amid concerns about whether it would be struck down in court. As Declan Harty and Jordan Wolman wrote earlier this week, the SEC is being outpaced by Brussels and even Sacramento when it comes to imposing climate transparency requirements on companies. Now, as they say, comes the hard part for Biden administration officials and regulators who have spent the last couple of years trying to redefine how Washington polices finance in the era of global warming and rising seas. “The proof is in the pudding,” Georgia State University assistant professor Todd Phillips, formerly of the Center for American Progress, the FDIC and the House, told MM. “They’ve proposed a lot of things. They have finalized some things. Next year, or next term, it really comes down to enforcing whatever is put out and making sure that the private sector complies with their legal obligations.” Happy Thursday — How would you grade the Biden administration’s approach to addressing climate risks in finance? Send thoughts: zwarmbrodt@politico.com.
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