FarmPolicy

November 17, 2019

EPA Acts on Climate Change; EPA Pesticide Case; Mexican Tariffs; Peanuts; and ACRE

EPA Move- Background

Juliet Eilperin reported in Saturday’s Washington Post that, “The Environmental Protection Agency yesterday officially adopted the position that carbon dioxide and other greenhouse gas emissions pose a danger to the public’s health and welfare, a move that could trigger a series of federal regulations affecting polluters from vehicles to coal-fired power plants.

The EPA’s action marks a major shift in the federal government’s approach to global warming. The Bush administration opposed putting mandatory limits on carbon dioxide and other greenhouse gases, on the grounds that they would hurt business, and the EPA had resisted identifying such emissions as pollutants under the Clean Air Act.

“What happens next is unclear. The agency’s proposed finding is likely to intensify pressure on Congress to pass legislation that would limit greenhouse gases, as President Obama, many lawmakers and some industry leaders prefer. But cap-and-trade legislation, which would limit emissions and allow emitters to trade pollution allowances, is fiercely opposed by a coalition of Republicans and Democrats from fossil-fuel-dependent Midwestern states who fear that such a system would raise energy prices and hurt the nation’s economy.”

If Congress doesn’t act, the Obama administration is likely to press ahead with at least some curbs on carbon dioxide and other pollutants blamed for global warming. While White House spokesman Ben LaBolt emphasized yesterday that ‘the president has made clear his strong preference that Congress act to pass comprehensive legislation,’ he indicated that the new scientific finding may leave regulators little choice.”

More specifically with respect to this issue, recall that EPA administrator Lisa Jackson appeared on C-SPAN’s Newsmakers program on Sunday, April 5, where Robin Bravender of Greenwire asked here the following question: “If Congress does not act quickly to pass cap and trade legislation is EPA prepared to regulate green house gasses on its own?

To listen to Ms. Jackson’s answer and general comments on this issue, just click here (MP3- 2:22). The entire C-SPAN interview with Lisa Jackson can be viewed by clicking here. (See also this related New York Times editorial from Saturday, which stated that, “The E.P.A.’s new administrator, Lisa Jackson, is to be applauded for moving so quickly, and she should move as aggressively as she can to develop whatever rules she thinks are necessary. But as Ms. Jackson is the first to say, legislation addressing climate change would be more effective and inclusive than top-down regulation. It would require broad consensus in Congress and command a wider political consensus going forward. It would also be less vulnerable to legal challenge.”)

Ms. Eilperin added in her Post article from Saturday that, “The EPA’s proposed finding — which is subject to a 60-day comment period — comes almost exactly two years after the Supreme Court ordered the agency to examine whether emissions linked to climate change should be curbed under the Clean Air Act. The finding makes clear that the agency views these pollutants as threats to public health, the environment and national security.”

Jonathan Weisman and Siobhan Hughes reported in Saturday’s Wall Street Journal that, “The finding could touch every corner of Americans’ lives, from the types of cars they drive to the homes they build. Along with carbon dioxide, the EPA named methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride as deleterious to the environment. Even if the agency doesn’t use its powers under the Clean Air Act to curb greenhouse gases, Friday’s action improves the chances that Congress will move to create a more flexible mechanism to do so.

“On a conference call Friday with environmentalists, EPA officials stressed they would take a go-slow approach, holding two public hearings next month before the findings are official. After that, any new regulations would go through a public comment period, more hearings and a long review.”

The Journal writers added that, “Rep. Edward J. Markey (D., Mass.), a co-author of sweeping climate change legislation, called the EPA’s decision ‘a game changer.’

“‘It’s now no longer a choice between doing a bill or doing nothing,’ said the lawmaker, who will hold four days of climate change hearings next week before the formal drafting of a bill begins the last week of April. ‘It is now a choice between regulation and legislation.’”

John M. Broder reported in Saturday’s New York Times that, “Although the finding had been expected, supporters and critics said its issuance was a significant moment in the debate on global warming. Many Republicans in Congress and industry spokesmen warned that regulation of carbon dioxide emissions would raise energy costs and kill jobs; Democrats and environmental advocates said the decision was long overdue and would bring long-term social and economic benefits.

“The E.P.A. administrator, Lisa P. Jackson, said: ‘This finding confirms that greenhouse gas pollution is a serious problem now and for future generations. Fortunately, it follows President Obama’s call for a low-carbon economy and strong leadership in Congress on clean energy and climate legislation.’”

Jim Tankersley and Margot Roosevelt noted in Saturday’s Los Angeles Times that, “Virtually all major areas of the economy could be affected, including oil, chemicals, cement, steel, forestry and large-scale farming.”

More specifically with respect to agriculture and the EPA decision, Philip Brasher reported on Friday at The Des Moines Register Online that, “In moving toward regulation of greenhouse gases, the Environmental Protection Agency argued that agricultural production could be harmed by a warmer climate but acknowledged that there could be some benefits to crops.

“Citing scientific reports, the agency allowed that some crops will initially benefit from rising temperatures and carbon dioxide levels. But the agency said yields of corn and other commodities could fall as the climate continues to warm and some areas experience more frequent droughts.”

EPA Move- Reaction

* Bob Stallman, President, American Farm Bureau Federation- 4.17- “If EPA were to regulate greenhouse gas emissions under the Clean Air Act, U.S. agriculture would be hard hit. Many agriculture facilities would be subject to permit requirements for structure construction or modification. Further, according to the Agriculture Department, any agricultural operation of more than 25 dairy cows, 50 beef cattle, 200 hogs or 500 acres of corn would be subject to emission fees…[T]his announcement is a slippery slope for agriculture.”

* Roger Johnson, President, National Farmers Union- 4.17- “Because agriculture and forestry lands have the potential to sequester nearly 25 percent of all annual greenhouse gas emissions in the United States, it is critical that a flexible offset program, that ensures maximum voluntary participation by the agricultural and forestry communities, is developed. Offset projects would be meaningful revenue streams for producers who will experience some increase in agricultural input costs as a result of climate legislation.”

* Former U.S. Agriculture Secretary, Senator Mike Johanns (R-Neb.), News Release- 4.17- “Senator Mike Johanns today announced that he is co-sponsoring legislation to protect livestock producers from onerous regulations proposed by the Environmental Protection Agency (EPA), which today moved one step closer to becoming reality. The EPA today issued a proposed rule to regulate greenhouse gas emissions as air pollutants under the Clean Air Act. This would have a devastating impact on livestock producers because cattle emit methane, one of the gases the EPA proposes to regulate. The steep tax that would result is commonly referred to as the ‘cow tax.”

* Senator John Thune (R-SD), News Release-4.17- “This is the first step in a slippery slope that could result in implementation of a tax on all CO2 emissions. The EPA has opened the door by starting with automobiles, but the reality is that this is the first step in a process that could result in sweeping regulations that could result in a tax on naturally occurring emissions from livestock. If the Administration wants to implement climate change legislation, it should work with Congress to pass bi-partisan legislation rather than finding a way around working through the legislative process. The Clean Air Act was written to curb pollution from the smokestack industries, not to regulate the livestock industry.”

* Ranking Member of the Senate Committee on Environment and Public Works James Inhofe (R-Oklahoma), News Release- 4.17- “Today’s action by the EPA is the beginning of a regulatory barrage that will destroy jobs, raise energy prices for consumers, and undermine America’s global competitiveness. It now appears EPA’s regulatory reach will find its way into schools, hospitals, assisted living facilities, and just about any activity that meets minimum thresholds in the Clean Air Act. Rep. John Dingell was right: the endangerment finding will produce a ‘glorious mess.’ It’s worth noting that the solution to this ‘glorious mess‘ is not for Congress to pass cap-and-trade legislation, which replaces one very bad approach with another. Congress should pass a simple, narrowly-targeted bill that stops EPA in its tracks.”

* Chairman of the Senate Committee on Environment and Public Works Barbara Boxer (D-California)-4.17- “EPA, through its scientists, has given us a warning that global warming pollution is a clear, present and future danger to America’s families. If Congress does not act to pass legislation, then I will call on EPA to take all steps authorized by law to protect our families.”

* House Agriculture Committee Ranking Member Frank Lucas (R-Oklahoma)- 4.17- “Time and again, the Obama administration makes it clear it is intent on putting greater burdens on our farmers and ranchers. This EPA decision is just another example of how much this administration is out of touch with the realities of our current fragile U.S. economy. Piling on huge regulatory costs for our producers will only wreck agriculture and further damage an already weak economy. I fear that this sets up the opportunity for a push to do sweeping cap and trade legislation as an alternative to the EPA regulatory action. Cap and trade is not a viable alternative and will only be destructive for American farmers and the general economy. The answer to a bad problem is not a bad solution. We must seek a workable solution to this problem.”

And DTN Ag Policy Editor Chris Clayton reported on Friday (link requires subscription) that, “Coupled with the EPA decision, the Commodity Futures Trading Commission also took a step Friday to push its role in regulating the carbon market. CFTC Commissioner Bart Chilton, a former lobbyist for the National Farmers Union, announced the CFTC is expanding its Energy and Environmental Markets Advisory Committee. Chilton stated the committee, or EEMAC, would ‘significantly enhance the CFTC’s ability to anticipate and address regulatory issues pertaining to both energy and environmental trading markets.’ The CFTC’s announcement comes as different committees in Congress debate just which federal agency should have oversight of any cap-and-trade scheme created by legislation.”

Climate Change- Canada

Ian Austen reported at The Green Inc. Blog (The New York Times) on Friday that, “The most immediate problem Canada faces from greenhouse gas emissions is economic rather than environmental. At least that was the message at a news conference on Thursday held to unveil a report from a government advisory body on carbon pricing.

“Bob Page, the chairman of the National Round Table on the Environment and the Economy, said that if Canada did not introduce an effective, national carbon emissions control program, it would face potentially ruinous trade retaliation from the United States once Congress and the Obama administration introduce their own emissions control programs.

“Canada’s economy relies disproportionately on exports to the United States.”

Climate Change- Brazil

The Economist Magazine Online indicated last week that, “When Carlos Minc, Brazil’s environment minister, recently called for developing countries such as his own to adopt targets to curb carbon-dioxide emissions, there were mumblings of disagreement from other bits of the federal government. The powerful foreign ministry, which thinks Brazil should hew to the line of China and India that only rich countries should slash their emissions, is particularly sore about Mr Minc’s attempts to bounce it into a new policy without prior approval. But away from Brasília, there are signs that Brazil is moving in his direction.”

EPA Pesticide Case

Friday’s Commodity News For Tomorrow Report, a free publication generated by the CME Group and Dow Jones, reported that, “While the Environmental Protection Agency parses the language of a recent court ruling on pesticide applications, farm groups are hoping the court reconsiders a decision they say would prompt a sea of change in agriculture production.

“The decision, by the U.S. Court of Appeals 6th Circuit, nullifies an EPA ruling that allowed the chemical applications to fall only under federal pesticide regulations. Instead, the pesticides will now be classified as pollutants under the Clean Water Act.” (For additional background and details, see this FarmPolicy.com update from April 13).

Friday’s article noted that, “Farm groups say the ruling has broadened the definition of ‘point-source’ pollutants. Many, if not most, farmers produce crops on lands that contain some wetlands or adjoin areas that arguably have a connection to navigable waters, and they could be subject to the permitting requirements, [Don Parrish, senior director of regulatory relations for the American Farm Bureau Federation] said.

“[Mike Shapiro, the EPA’s acting assistant administrator for water programs] said even with the ruling, farmers would retain two key exemptions: for stormwater runoff and water from irrigated fields. Both would still be exempt from the permitting requirements, even if they still contained pesticide residues by the time they reached a waterway.”

And the article indicated that, “[Rob Snyder, director of public policy for the National Corn Growers Association] said that while the issue over stormwater is considered up in the air, he is more concerned about ‘drift,’ or pesticide that travels through the air and ends up somewhere it is not intended.

“‘Even if a minute droplet ends up in stream bed through air to a water body, we think that under this ruling it creates a huge legal liability for the grower, if they don’t have a [Clean Water Act] permit,’ Snyder said.”

Mexican Tariffs

A Dow Jones article from Friday, which was posted at DTN (link requires subscription), reported that, “U.S. President Barack Obama said Thursday he’s hopeful the U.S. and Mexico can resolve a trade dispute that arose last month when the U.S. canceled a cross-border trucking program between the two countries.” (For additional background on this issue and the implications for U.S. agriculture, see this FarmPolicy.com update from March 23).

Friday’s article added that, “‘The last thing that we want to do at a time when the global economy is contracting and trade is shrinking is to resort to protectionist measures,’ Obama said.

“Regarding his campaign promise to renegotiate Nafta to include labor and environmental provisions, Obama said the economic situation on both sides of the border necessitates caution.”

Meanwhile, a news release issued on Friday by the National Corn Growers Assocation stated that, “The National Corn Growers Association (NCGA) and 140 other agricultural, manufacturing and services companies and associations have sent a letter to President Obama, urging him to work quickly to resolve the dispute over the U.S. Department of Transportation’s termination of the Cross Border Trucking Pilot Program with Mexico. Within days of the pilot programs termination, Mexican government officials placed retaliatory tariffs on $2.4 billion worth of U.S. manufactured and agricultural exports.”

Peanuts

Barry Shlachter reported on Friday at the Fort Worth Star-Telegram (Texas) Online that, “There’s good news and bad news for Texas peanut farmers.

“After two months of falling demand for peanuts after a salmonella outbreak that sickened 491 and killed 10, sales rebounded in March — thanks, perversely, to the recession that prompted families to turn to staples like peanut butter.

“Volume sales increased by 5.6 percent from March of 2008, according to Information Resources Inc. Consumption plummeted 19.4 percent in January and fell nearly 1 percent in February, IRI said.”

The article noted that, “‘Our entire industry really paid the price for what happened with Peanut Corporation of America, and we’ve been battling to regain consumer confidence in peanut-butter products ever since,’ said Shelly Nutt, executive director of the Texas Peanut Producers Board.

“‘Even though retail-brand peanut butter was never affected by the PCA recalls, consumers were apprehensive to purchase any peanut-butter products for a while.’”

Later however, Friday’s article explained that, “The downside is that most Texas farmers still haven’t gotten contracts from major processors known as ‘shellers.’ Ample supplies, compounded by what had been an uncertain market, had kept them on the fence, [Nutt] said.

“Because of a bumper crop last year, the shellers ‘have enough in storage through December.’

“It now seems that Texas might cultivate as few as 160,000 acres of peanuts, down from 275,000 last year, Nutt added. ‘Time is running out. Some growers have until May 1 to start preparing the soil and planting.’”

ACRE

Troy Dumler, an Extension Agricultural Economist at Kansas State University has written a report on the new Average Crop Revenue Election (ACRE) Program. The report, which was released last week, can be viewed by clicking here.

And University of Illinois Agricultural Economists Nick Paulson and Gary Schintkey have made a flash video presentation on ACRE available- which contains both slides and audio. To view this presentation, just click here.

Keith Good

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