By Jim Efstathiou Jr. and Daniel Whitten


Aug. 13 (Bloomberg) -- Goldman Sachs Group Inc. and JPMorgan Chase & Co. would be barred from a planned U.S. carbon- emissions market or face trading restrictions under proposals by Democratic senators crafting climate change legislation.
At least nine members of the majority party say speculation by Wall Street banks may cause excessive price swings in the cap-and-trade system of pollution allowances at the center of President Barack Obama’s plan to curb global warming.
The senators say they may limit participation to polluters needing permits, ban derivatives or impose stricter regulations than exist in today’s energy markets.
“The volatility that has existed in the oil market is exactly what we don’t want to happen in carbon markets,” said Senator Maria Cantwell, a Democrat from Washington state who wants to exclude financial companies from the carbon market. “The banks contributed to that, and the banks continue to contribute to it.”
Debate over the banks’ role may thwart Obama’s efforts to get the 60 votes needed in the 100-member Senate to approve climate legislation. There are 60 Democrats in the Senate, and Republicans largely oppose a similar House bill passed in June.
Most senators favor letting financial companies trade carbon-dioxide permits, said Kevin Book, a Washington-based managing director for ClearView Energy Partners LLC, which does energy analysis.
House Bill
“If you take away the financial market component, you’ve stolen somewhere between four and six votes,” Book said in an interview.



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