FarmPolicy

August 21, 2019

Climate Bill; Food Safety; and CFTC Issues

Climate Bill- Senate Hearing- Background

Paul Kane reported yesterday at The Washington Post Online that, “A quartet of Obama administration officials launched a new effort to sell landmark climate change legislation on Capitol Hill, telling a Senate committee today that the goal was not limited to simply curbing greenhouse gases but also to creating a boom in alternative energy jobs.

“The administration’s top energy and resource officials sought to provide a push for the legislation because of the steep climb it faces in the Senate. The officials hailed the emerging legislation as something that would provide a boost to the national economy at a time when it is shedding 500,000 jobs per month.

“‘This is a jobs bill, it’s an energy bill,’ EPA Administrator Lisa P. Jackson told the Senate Environment and Public Works Committee.”

The Post article added that, “The main Republican argument against the climate change legislation is its cost. GOP senators suggested that many regions of the country will face higher utility bills. Either the utilities will pass on the costs of buying the permit allowances to continue exceeding their carbon caps, or they will pass on the costs of transferring to new alternative energy sources, they argued.

“Mississippi Gov. Haley Barbour, a Republican considering a run for the presidential nomination in 2012, testified that a recent gathering of southern business leaders produced bipartisan opposition to the plan under consideration on Capitol Hill.

“‘There was little dissent about who would bear the cost . . . the consumer,’ Barbour said, suggesting that the trading system would become too complicated. ‘Many Americans worry it will end up being an Enron-style manipulation scheme.’”

Keith Johnson, in an update posted yesterday at the Environmental Capital Blog (The Wall Street Journal), reported that, “California’s Barbara Boxer, chairwoman of the Environment and Public Works Committee, praised the House bill and urged her colleagues to rise to the challenge. Ranking Republican James Inhofe of Oklahoma started out decrying the costs of climate legislation and finished by challenging the notion of global warming altogether.

“In short: They stuck to the script. And the rank and file on both sides fell in line.”

Mr. Johnson pointed out that, “There is still a huge divide over whether—let alone how—to tackle climate change.

For instance, Republicans again raised the issue of political interference at the Environmental Protection Agency—going so far as to introduce a WSJ editorial into the record—while Democrats answered by quoting Tom Friedman and his calls to do something, anything, but quickly.”

Robert Schroeder reported yesterday at The Wall Street Journal Online that, “Cabinet officials pressed President Barack Obama’s case for climate-change and clean-energy legislation at a Senate hearing on Tuesday as lawmakers clashed over whether a ‘cap-and-trade’ system for cutting greenhouse gases would help the U.S. economy or hurt it.”

The Journal item added that, “Sen. James Inhofe of Oklahoma, the panel’s top Republican, said the cap-and-trade system would amount to the largest tax increase in American history, a statement echoed by many Republicans but shot down by Democrats including Sen. Barbara Boxer of California, who chairs the committee.

“‘There are no new taxes,’ Ms. Boxer said Tuesday morning.”

Bloomberg writer Daniel Whitten reported yesterday that, “Republican Senator James Inhofe of Oklahoma said climate legislation won’t be approved by the U.S. Senate even though it’s likely to get the endorsement of the Environment and Public Works Committee.

“Inhofe said Environmental Protection Agency Administrator Lisa Jackson’s testimony to the Senate panel today that U.S. action alone won’t reduce carbon dioxide levels will strengthen opposition to the measure when it reaches the Senate floor.

“Inhofe, who has called the theory that humans cause global warming a hoax, said today that China and India won’t limit emissions, and the U.S. ‘cannot put ourselves in a position where our manufacturing base,’ relocates to countries that don’t limit carbon dioxide emissions.”

Yesterday’s Bloomberg article noted that, “Agriculture Secretary Tom Vilsack identified a major unresolved issue when he urged committee members to let farm and timber interests earn credits for capturing carbon and other greenhouse gas emissions, an idea some environmental groups oppose.

“‘It is difficult to see how greenhouse-gas concentrations in the atmosphere can be stabilized’ without giving incentives to landowners including farmers, Vilsack told the committee.”

Kate Galbraith reported yesterday at the Green Inc. Blog (The New York Times) that, “As yet, there is no climate bill before the Senate that would be equivalent to the bill passed by the House last month. But Senator Boxer is expected to release a draft some time in the next few weeks. The Senate has also been working separately on an energy bill.”

Senate Hearing- Focus on Agriculture

To listen to an audio analysis focusing on some of the agricultural issues that were discussed at yesterday’s Senate climate bill hearing, go to this clip that was posted yesterday at the National Wheat Growers Association (NAWG) Online- the audio piece features the perspectives of NAWG’s Mark Gaede.

Also, Reuters writer Charles Abbott reported yesterday that, “The climate change bill being drafted in the U.S. Senate is unlikely to succeed unless it gives farmers and ranchers a role in locking carbon into the land, Agriculture Secretary Tom Vilsack said on Tuesday.

“Vilsack said a carbon-offset program that pays landowners for practices like tree-planting and reduced tillage that lock carbon into soils and vegetation could reduce greenhouse gases.

“‘I believe it is crucial that we engage the participation of farmers, ranchers and forest land owners,’ Vilsack told the Senate Environment Committee.”

Mr. Abbott indicated that, “A carbon-offset program will need the support of thousands of farmers to reduce greenhouse gases by meaningful amounts, said Vilsack. He said the Agriculture Department’s experience in running land stewardship programs nationwide proves it can handle the job of overseeing an offsets program.

“‘I see this as a partnership with all my partners at this table,’ said Vilsack, referring to the EPA and the Energy and Interior departments.”

In a related item, a news release issued yesterday by Sen. Mike Johanns (R-Neb.) stated that, “Senator Mike Johanns today called for a Senate Agriculture Committee hearing to discuss the cost of cap-and-trade legislation for American farmers and ranchers. Johanns’ request came after U.S. Agriculture Secretary Tom Vilsack testified before the Senate Environment and Public Works Committee on the subject and provided no information about or estimate of the bill’s impact on input costs for agricultural producers.

“”Nebraska farmers and ranchers, along with those across the country, are rightly concerned about how the House cap and trade bill will impact them,’ Johanns said. ‘Secretary Vilsack should provide the Senate and America’s farmers with an answer to one simple question: How much more does the Department of Agriculture estimate America’s agricultural producers will pay under the House bill? The Administration has wholeheartedly endorsed the House bill, while farm group after farm group has opposed the legislation. I’m mystified at how the Secretary can serve his primary mission of supporting U.S. agriculture if he does not know the impact of the bill he supports on the very producers he has taken an oath to serve.’

“Senator Johanns wrote a letter today to Senator Tom Harkin (D-IA), Chairman of the Senate Agriculture Committee, and Senator Saxby Chambliss, (R-GA), ranking Republican on the committee. The letter requests that the committee investigate and analyze the economic impact of cap-and-trade legislation on American farmers and ranchers.”

Also yesterday, the Commodity News for Tomorrow report, a CME Group newsletter produced in partnership with Dow Jones, stated that, “Carbon offsets – credits given for projects that reduce greenhouse gas emissions- are likely to play a crucial role in whether the U.S. Senate is able to pass a climate bill.”

The report added that, “The bill’s [House climate bill] authors were able to secure passage after winning cautious support from dozens of Farm Belt lawmakers worried about protecting their regions from higher energy costs. Fundamental to their negotiations were how offsets will be considered. As for many industries, the ability to sell offsets to emitters gives the agriculture industry a source of revenue that can help neutralize rising input costs that are expected to result from a climate bill.”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Farmers can benefit from carbon sequestration if they work in the right soil type, but those producers are going to have to work harder at embracing no-till practices as well.

That’s part of the challenge advocates for carbon sequestration in Ohio face as they seek to broaden acceptance of no-till and incorporate it into agriculture’s response to potential climate-change legislation.”

For more on the issue of carbon sequestration and agriculture, see this update; “Clean-Energy Legislation Is an Opportunity for Farmers and the Economy,” which was posted yesterday at the Center for American Progress Online.

Climate Bill- International Issues

Lisa Lerer reported yesterday at Politico.com that, “On Wednesday, the Senate Finance Committee will hold a hearing on the international trade issues raised by global warming legislation and the Senate Foreign Relations Committee will examine the impact of the European Union’s cap-and-trade system.”

In a related article, John M. Broder and James Kanter reported in today’s New York Times that, “The United States, long a laggard in international efforts to reduce global warming pollution, will arrive at the meeting of the world’s major powers in Italy this week carrying a newly assertive message on the dangers of climate change and the steps needed to address it.

“The European hosts of the Group of 8 summit meeting welcome the shift. But the new stance also worries them, in part because they fear that the United States is working toward an independent deal with China outside the global negotiating framework.”

Climate Bill- Senate Votes

Jennifer A. Dlouhy reported today at the San Francisco Chronicle Online that, “The House passed its own climate change bill in June by a close 219-212 vote. California Democratic Sen. Barbara Boxer, chair of the Senate panel, and other supporters face daunting odds reproducing that success in the Senate. A Senate bill is likely to be introduced later this month and is expected to mirror much of the House legislation.”

Ms. Dlouhy explained that, “More than a dozen Senate Democrats have expressed deep concerns about how the legislation will affect farmers, coal-reliant power utilities and manufacturers in their states.

“Sen. Arlen Specter, D-Pa., said he was concerned about the ramifications for coal. ‘As a senator from a coal-producing state, that is a factor that I must take into account,’ Specter said.

“Sen. Kirsten Gillibrand, D-N.Y., said she wanted to ensure that any new market for trading carbon offsets and allowances is subjected to ‘proper oversight.’

“For Sen. Jeff Merkley, D-Ore., a key issue is finding a way to encourage efforts to glean energy-rich woody material rotting on the floor of public forestland.”

Tom Steever reported yesterday at Brownfield that, “Senator Charles Grassley [R-Iowa] says he would vote against the House version of climate change legislation. And even though much of the policy to be included in a Senate climate change bill is under development, the Iowa Republican is skeptical. ‘It’s going to be very detrimental to the economy of the United States if we pass a bill and the other countries of the world don’t follow along,’ said Grassley Tuesday, in a conference call to farm reporters, ‘and I have my doubts if they will follow along.’”

Emily Pierce reported today at Roll Call Online that, “Senate Democratic leaders have stepped up the pressure on their rank and file to unify on procedural votes after finally gaining a filibuster-proof majority, but centrists who have long been headaches for the leadership are so far refusing to commit to the strategy.

“‘Most Senators vote their conscience and they do what they think is right. They didn’t come here to be told what to do by somebody else,’ moderate Sen. Evan Bayh (Ind.) said.”

The article pointed out that, “But many Senate Democratic centrists remain leery of voting for any Democratic agenda item that could put them in jeopardy in their conservative-leaning states.

“For example, Sen. Mary Landrieu (La.) said she would ‘be supportive of many Democratic priorities’ and is ‘absolutely committed to help the Democratic leadership and the president get health care reform that our people can depend on.’ However, she flatly refused to rule out filibustering any bill, including health care and climate change legislation.”

“Similarly, Sen. Ben Nelson (Neb.) said he has often been loath to block legislation or executive branch nominees, but reserves the right to filibuster if he determines it’s warranted,” the Roll Call article said.

And in a Q & A with reporters yesterday, Senate Majority Leader Harry Reid (D-Nev.) had this exchange: “QUESTION: And how confident are you for 60 votes [for a climate bill]?

“REID: Well, we have to see what the product is first, you know? But I feel that, with our still importing 70 percent of the oil we use, that it’s more important now than ever to do a good energy bill, which we already have one reported out of the Energy Committee, which is a good bill Boxer’s moving forward on. I met with her last night. So I think we’re doing quite well.

“QUESTION: How do you bridge some of those regional differences on the (OFF-MIKE)

“REID: We have a number of steps. First of all, we have to get a bill out of the committees and then join that in a bill. Then we have to get something off the floor. The House is going to move — and they’ve already moved quickly on this, so they have a bill, so we have something to confer with them. So it’s a — it’s at least at three step or more process.”

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Meanwhile, Glenn Thrush reported yesterday at Politico.com that, “Henry Waxman, who has had an eventful couple of weeks to say the least, is slamming the House GOP — saying their opposition to climate change legislation and the stimulus indicates they’re cheering against the good ‘ol U S of A.

“‘It appears that the Republican party leadership in the Congress has made a decision that they want to deny President Obama success — which means, in my mind, they are rooting against the country as well,’ the powerful House Energy and Commerce chairman told WAMU-NPR host Diane Rehm this morning in an hourlong appearance promoting his new book, ‘The Waxman Report.’”

The related audio clip from yesterday’s Diane Rehm Show can be heard here, (MP3- 1:11).

Food Safety

Adriel Bettelheim reported yesterday at CQPolitics that, “Responding to a series of food-related health scares that killed several people and cost producers hundreds of millions of dollars, the Obama administration on Tuesday outlined a series of regulatory steps aimed at preventing outbreaks of E.coli, salmonella and other pathogens.” (A related Bloomberg article on this development is available here, and a related USDA news release can be found here).

And, in other news regarding food safety, USDA’s Economic Research Service released a report yesterday entitled, “Imports From China and Food Safety Issues.”

CFTC Issues

Reuters writer Russell Blinch reported yesterday that, “The top regulator of U.S. futures markets is considering a clampdown on excessive speculation in energy and commodity trading by restricting holdings of big players, part of a broader move by the Obama administration to stabilize the financial markets.

“Commodity Futures Trading Commission Chairman Gary Gensler said in a statement on Tuesday that the agency will hold hearings in the next few weeks to seek comments from consumers and market players on whether to set position limits on all commodity futures contracts.”

Keith Good

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