FarmPolicy

November 23, 2014

Deal Reached On Waxman-Markey Climate Bill

Categories: Climate Change

John M. Broder reported in today’s New York Times that, “The House is moving toward a vote Friday on energy and climate change legislation, with several significant issues still unresolved but with Democratic leaders expressing confidence that they will muster the votes to pass it.

President Obama endorsed the measure on Tuesday at a White House news conference, calling it ‘extraordinarily important.’ He has sent aides to Capitol Hill to lobby for the bill almost daily and dispatched cabinet officers and senior advisers to a half-dozen states this week to try to drum up public support.”

The Times article stated that, “At the heart of the 1,201-page measure is a cap-and-trade program to limit emissions of carbon dioxide and other heat-trapping gases that scientists blame for global warming.

“[Rep. Henry A. Waxman (D-California)] and [Rep. Edward J. Markey (D-Massachusetts)] are still negotiating elements of the complex legislation, and there is no certainty that they will assemble enough votes to pass it on Friday over near-unanimous Republican opposition.

“They have been in talks with farm-state lawmakers over a number of agriculture-related provisions. Mr. Waxman and Representative Collin C. Peterson, the Minnesota Democrat who heads the House Agriculture Committee, said Tuesday that they had resolved the most contentious of these issues: the Agriculture Department, not the Environmental Protection Agency, would regulate the use of farm and forestry projects intended to offset carbon dioxide emissions from industrial sources.”

And on a separate point of concern regarding biofuels and indirect land use analysis, Reuters writer Richard Cowan reported yesterday that, “Waxman announced another break for agriculture as part of the deal: The climate change bill would halt an EPA proposal that farmers feared could hold U.S. ethanol makers responsible for greenhouse gases from crops overseas.

“Waxman said a ‘five-year moratorium’ on a proposed EPA rule would be included in the legislation and USDA and Congress would have additional powers to stop the plan after the five years.

“Corn-based ethanol has become a major boost to U.S. corn prices and farmers feared the EPA proposal could hurt sales.”

More specifically, in a statement released yesterday, Chairman Peterson indicated that, “We have reached an agreement that works for agriculture and contributes to the reduction of greenhouse gas emissions in the United States. The climate change bill will include a strong agriculture offset program run by the U.S. Department of Agriculture that will allow farmers, ranchers, and forestland owners to participate fully in a market-based carbon offset program. This agreement also addresses concerns about international indirect land use provisions that unfairly restricted U.S. biofuels producers and exempts agriculture and forestry from the definition of a capped sector.”

With respect to these two changes in the bill that relate to the agricultural sector, Avery Palmer reported yesterday at Congressional Quarterly Online that, “Both changes are likely to anger environmental groups, who say that EPA has superior expertise in these areas. But, Waxman said, ‘I think we will hold the environmentalists.’

Peterson said he would vote for the bill, but other members are waiting to see final language. House leadership wants to bring the bill to the floor on June 26.
Majority Leader Steny H. Hoyer, D-Md., said a Saturday vote was also possible. ‘I will advise members they may be here this weekend,’ he said.”

On the issue of rural vs. urban electricity allowances, DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “One roadblock in the legislation was cleared when the National Rural Electric Cooperatives Association sent a letter to Waxman saying the group was satisfied with changes made regarding the fairness of emission allowances and the way they will be distributed. The change in the bill would prevent companies from getting more than 100 percent of their needs, effectively reducing the allowances that other companies could buy at cheaper rate. Changes in the language of the bill allowed the electric cooperatives to state ‘its members will not stand in the way of passage of this legislation.’”

Steven Mufson reported in today’s Washington Post that, “Democratic leaders in the House have scheduled a Friday vote on a climate change bill that would establish a complex cap-and-trade system to limit the nation’s greenhouse gas emissions, a priority for President Obama.

The House Rules Committee unveiled the latest version of the bill, which weighs in at 1,201 pages. It features new items such as $7.5 billion in ‘green bonds’ for a new federal financing agency called the Clean Energy Deployment Administration, extra emission allowances for politically powerful rural electric cooperatives, greater flexibility for states that want to use free allowances for mass transit, and tweaks benefiting a range of companies, including algae-based biofuel producers and major petroleum refiners.” (Note: with respect to the length of the bill, Darren Samuelsohn reported yesterday at the New York Times Online (ClimateWire) that, “The House bill posted on the Rules Committee Web site has grown from the 946-page version adopted last month in the Energy and Commerce Committee. Sources on and off Capitol Hill said the bulk of the changes largely reflect requests from the eight other committees that also had jurisdiction over the bill, including the Ways and Means Committee and Science and Technology Committee.”)

Mr. Mufson explained in today’s Post that, “House Democratic leaders were still struggling to cement support for the legislation, and yesterday made two new concessions to farm state lawmakers. The party’s caucus met yesterday evening.

“One dissenter has been House Agriculture Committee Chairman Collin C. Peterson (D-Minn.), who wanted to alter the rules for agricultural offsets, which are credits farmers could receive for tilling and conservation practices that keep carbon dioxide stored in the soil. Peterson wanted authority for evaluating offset proposals moved from the EPA to the Agriculture Department. Environmentalists and the bill’s main sponsors feared that the Agriculture Department might use lax standards, which would blow a hole through the nationwide cap on carbon dioxide emissions.

“Peterson and House Energy and Commerce Committee Chairman Henry A. Waxman said late yesterday that they had reached a deal putting the Agriculture Department in charge of running the offset program. The lawmakers said they would seek advice from the Obama administration about an advisory role for the EPA.”

Today’s Post article added that, “Peterson had also wanted the climate bill to change the EPA’s method of calculating the emissions of corn-based ethanol. The EPA counts indirect costs, including the increased use of land in places such as Brazil to grow soybean crops displaced in the United States by corn grown for ethanol use. Waxman (D-Calif.) said he would ask the EPA to commission a study of indirect costs and that any method of counting those costs should be agreed to by the Agriculture Department as well as the EPA.

“Peterson had threatened to oppose the bill but said yesterday that he would support it.”

In a related item regarding EPA and carbon sequestration stemming from agriculture, Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “The EPA has taken a new look at the House climate bill and still doesn’t see much much in the way of payments to farmers for storing carbon.

The EPA’s analysis of the bill also forecasts that crop yields will fall if the legislation is enacted and that the amount of cropland will fall as acreage is put into trees to qualify for carbon payments.

Those conclusions run counter to one of the Obama administration’s selling points for the bill – that farmers stand to make money from addressing greenhouse gas emissions by getting paid for storing carbon in the soil. Theoretically, those payments could help offset higher costs of fertilizer and energy.”

Mr. Brasher pointed out that, “The EPA’s analysis of the bill’s impact is thin on details and supporting documentation, but Farm Bureau economist Allison Specht says it doesn’t appear to be changed much from one done earlier when the bill was still in draft form. ‘We’re making policy where we’re just not sure where the revenue side could be for agriculture,’ she said.

“The bill would allow for a billion tons of domestic carbon offsets, but the agency predicts that there won’t be more than 400 million tons of such credits until after 2040. There’s one particular interesting change from the last analysis to this one. In the last one, a bar chart showing the projected carbon credits was color coded so that you could tell how little was projected to come from changes in farming practices [see chart here]. This time, the bar chart (page 34) is in black and white, obscuring the ag portion” [see chart here].

Meanwhile, Ian Talley and Siobhan Hughes reported in today’s Wall Street Journal, “Opponents and supporters of landmark climate legislation are ramping up their public-relations campaigns ahead of the planned vote. The Obama administration is pushing the measure as a job-creator, while critics, including many Republicans, are portraying the bill as an energy tax that could slow the economy.”

With respect to the proposition that the Waxman-Markey climate bill is a “job creator,” note that an update posted yesterday at Speaker Pelosi’s Blog, The Gavel, stated that, “The American Clean Energy and Security Act of 2009 (HR 2454) was filed with the Rules Committee last night and expected to be considered by the House on Friday. The legislation will revitalize our economy by creating millions of new jobs, increase our national security by reducing our dependence on foreign oil, and preserve our planet by reducing the pollution that causes global warming.

“Moving to a clean energy economy and transitioning off foreign oil will create whole new industries and as many as 3 to 5 million clean energy jobs.”

In addition, yesterday’s Gavel update included this sequential pictorial explanation of just how the bill will create new jobs.

The Gavel update did not address the cost side of the equation.

House Vote Analysis

Patrick O’Connor reported yesterday at Politico.com that, “Both chairmen [Waxman and Peterson] were planning to walk their colleagues through the details of their agreement during a Tuesday night caucus meeting and both promised to reach out to fellow Democrats until they have sufficient support for the overarching bill.”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Environment & Energy Daily came out with an analysis of the potential voting on the bill — which needs 218 votes to pass — showing right now there are 170 definite yes votes for the bill and 157 definite no votes. There are 108 congressmen labeled as ‘fence sitters’ who will determine the outcome. The analysis puts 25 of 27 Democrats on the House Agriculture Committee in the fence-sitter category. Mixed with those Ag Committee members were 32 members of the conservative Blue-Dog-Democrat coalition as well.”

And Darren Samuelsohn indicated yesterday at The New York Times Online (ClimateWire) that, “Rep. Stephanie Herseth Sandlin (D-S.D.), a co-chair of the fiscally conservative House Blue Dog Coalition, said last week that a number of the group’s members would be reluctant to support a climate bill if they were given less than a week to review it.

“‘The coalition is just not going to be ready to vote on this next week, particularly if we don’t get language until Monday,’ she told E&E last week. ‘Because many will insist that we have a number of days to review the language ourselves, to have back and forth with our constituencies and stakeholder groups, to understand how the system with a significant manager’s amendment will work. Yes, absolutely, we need to chew on this awhile.’”

Jared Allen and Molly K. Hooper reported yesterday at The Hill Online that, “Pelosi’s gamble to schedule a Friday vote is one of the riskiest moves she has made as Speaker. There are at least eight Democrats who are firm ‘no’ votes, while many others are on the fence.

“In an indication that Democrats lack the necessary votes to pass it on their side of the aisle, Pelosi and other party leaders have met with centrist Republicans seeking their support.”

Steven T. Dennis and Tory Newmyer reported today at Roll Call Online that, “Indeed, Pelosi is pushing the climate change measure full tilt, and enormous pressure is already building for rank-and-file Democrats to fall into line.

“‘People may not like it, but it’s very tough to bet against the Speaker,’ said one Democratic strategist.

“A whipping operation has been under way since the bill passed the Energy and Commerce Committee in May. Since then, panel Democrats have held a series of meetings with various intraparty caucuses to build support, and administration officials including climate change czar Carol Browner met with senior Democratic whips to reassure them on the bill.

That lobbying effort has now kicked into higher gear, according to Democratic aides and lobbyists, with the White House and Democratic leadership launching a full-court press to bring one of President Barack Obama’s top two legislative initiatives across the finish line.”

Senate Analysis

Alexander Bolton reported yesterday at The Hill Online that, “Senate Majority Leader Harry Reid (D-Nev.) has intervened in Senate talks over climate change legislation to avoid the kind of blowup with farm-state lawmakers that has slowed action in the House.

“Reid has asked that Sen. Tom Harkin (D-Iowa), the chairman of the Senate Agriculture Committee, receive invitations to climate change meetings hosted by Sen. Barbara Boxer (D-Calif.), chairwoman of the Environment and Public Works Committee.”

The Hill article noted that, “‘He said, ‘I want you in these meetings,’ because of the impact on agriculture,’ Harkin said of his conversation with Reid. ‘I wasn’t invited; now I am. Reid talked to me and then Boxer asked me to be there.’

“‘Agriculture is going to have a seat at the table. We’re going to be a part of it.’”

Yesterday’s article stated that, “’Every farm-state senator is aware of what the cap-and-trade proposals could do to their agriculture base,’ said Sen. Ben Nelson (D), who represents Nebraska and sits on the Agriculture Committee.

“‘Agriculture is a big user of electricity,’ he said. ‘There’s a recognition that when electricity costs go up it can add, in some cases, tens of thousands of dollars in costs at a time when commodity prices are not what they were. So we have to be very concerned.’

“Reid had said he would take up climate change after the Senate passed healthcare reform, setting a tentative date for debate this fall.”

Farm-state opposition could prove a bigger hurdle in the Senate, where rural lawmakers hold greater sway than in the House, a chamber dominated by lawmakers from populous coastal states,” the Hill article said.

EPA Climate Regulation

Recall that back in April the Environmental Protection Agency took the position that some greenhouse gases posed a threat to public health. This position potentially opened the door for executive branch regulation of greenhouse gases if Congress fails to reach a legislative agreement on the issue. Some have noted that this EPA finding has added pressure for Congress to act on the climate change issue.

A Dow Jones article from yesterday, which was posted at DTN (link requires subscription) reported that, “The U.S. Chamber of Commerce will Tuesday challenge the legal and scientific basis for the Obama Administration’s proposal that greenhouse gases represent a danger to public health and welfare.

“Should the Environmental Protection Agency reject the Chamber’s petition for an on-the-record hearing protesting the endangerment proposal, the group says it will file an appeal with the federal appeals court.

If successful, such as case could ultimately undermine the Administration’s pursuit of regulation of greenhouse gases, both through the Environmental Protection Agency and Congressional action.”

Yesterday’s Dow Jones article explained that, “The attack is aimed at the fundamental basis upon which lawmakers and EPA officials are seeking to regulate emissions, questioning the scientific basis of the EPA’s proposed finding that greenhouse gas emissions could damage human health.

The EPA’s endangerment proposal is the precursor to regulation of greenhouse gases, and landmark climate legislation under debate in the House is based on a lawmaker-determined finding that emissions such as carbon dioxide will harm humans. Emission regulation is expected to impact nearly every sector of the economy, fundamentally changing the way the nation uses energy.”

Meanwhile, a news release issued yesterday by the House and Energy Commerce Committee Republicans stated that, “Fourteen Republicans on the House Energy and Commerce Committee, led by U.S. Rep. Joe Barton, R-Texas, today sent their comments to the Environmental Protection Agency on the proposed endangerment finding.”

Keith Good

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