FarmPolicy

July 30, 2014

Climate Legislation; Food Security; Ag Committee Regulatory Issues; and Biofuels

Climate Legislation

Juliet Eilperin reported in today’s Washington Post that, “A House-passed bill that targets climate change through a cap-and-trade system of pollution credits would slow the nation’s economic growth slightly over the next few decades and would create ‘significant’ job losses from fossil fuel industries as the country shifts to renewable energy, the head of the Congressional Budget Office told a Senate energy panel Wednesday.

“CBO Director Douglas W. Elmendorf [testimony] emphasized that his estimates contained significant uncertainties and ‘do not include any benefits from averting climate change,’ but his message nevertheless contrasted sharply with those of President Obama and congressional Democratic leaders, who have suggested that a cap on carbon emissions would help revive the U.S. economy.”

Ms. Eilperin explained that, “Elmendorf testified before the Senate Energy and Natural Resources Committee that the cap-and-trade provisions of the House bill — in which emitters of greenhouse gases would be able to buy and sell pollution credits — would cut the nation’s gross domestic product by 0.25 to 0.75 percent in 2020 compared with ‘what it would otherwise have been,’ and by 1 to 3.5 percent in 2050.

“Elmendorf also pointed to disruptions that would occur as Americans sought employment with industries that would benefit under a carbon cap, such as solar and wind power.

“‘The shifts will be significant,’ the CBO director said. ‘We want to leave no misunderstanding that aggregate performance — the fact that jobs turn up somewhere else for some people — does not mean that there are not substantial costs borne by people, communities, firms in affected industries and affected areas. You saw that in manufacturing, and we would see that in response to changes that this legislation would produce.’”

Today’s Post article added that, “Opponents of climate-change legislation seized on Elmendorf’s comments, suggesting they meant the United States would be better off not curbing greenhouse gas emissions linked to climate change. Sen. Sam Brownback (R-Kan.), who described himself as ‘a skeptic’ on the issue, detailed how Kansans would likely face higher energy prices under a cap-and-trade system.

“‘Because while we’re projecting these things, people are having to deal with their basic lives on it, and this is going to be very expensive,’ Brownback said.

But Elmendorf, who called the economic downside to the House climate bill ‘comparatively modest,’ noted that climate change could impose costs on Brownback’s home state in other ways, by harming agriculture” [related audio, MP3-0:10 ; to see the entire exchange with Sen. Brownback, just click here].

Jim Snyder, writing yesterday at The Hill Online, added that, “Elmendorf noted that farmers in Kansas could be hurt by change in climate due to greenhouse gases in the atmosphere and noted that supporters of the legislation equate it with an insurance policy against the worst-case scenarios.”

Meanwhile, a news release issued yesterday by Sen. Lisa Murkowski (R-Alaska) stated that, “[Sen. Murkowski] today underscored the importance of ensuring that climate change legislation doesn’t hamper the international competitiveness of the United States or limit its economic growth.

“‘We must ensure that climate change does not endanger our recovery, and we must seek to reduce energy prices, not drive them up,’ Murkowski said at a Senate Energy and Natural Resources hearing on the cost of climate change legislation. ‘Americans are hoping that when the economy turns around, it will stay strong. In the meantime, they’re hoping that, at a minimum, Congress won’t make life harder for them than it already is.’

Economic assessments of climate change bills vary greatly. However, every analyses projects two things in common: higher energy prices and lower economic growth.”

Alex Kaplun of ClimateWire reported yesterday at The New York Times Online on the importance of one Senator’s perspective on climate issues: Ohio’s Sherrod Brown.

Yesterday’s article stated that, “In the quest to secure 60 votes for cap-and-trade legislation, bill sponsors can point to almost any member of the Democratic Senate majority as a ‘must have’ vote.

But, at least in the early days of the debate over the Kerry-Boxer climate change package, perhaps no single Democrat has received as much attention as Ohio’s Sherrod Brown, who has become an absolute ‘make or break’ vote for the majority.

“The first-term senator is one of several Midwestern Democrats currently on the fence over the bill, and there are others on that list who have more seniority and, perhaps, more power to shape major legislation. The only committee on which Brown sits that figures to get a crack at the bill is Agriculture.”

Mr. Kaplun indicated that, “Indeed, he has bluntly stated that unless the authors agree to a variety of manufacturing and trade provisions, there is little possibility that the legislation will get anywhere near enough support to clear the Senate. ‘There probably won’t be 50 votes,’ Brown said last week. ‘There sure won’t be 60 without taking care of manufacturing.’”

More specifically with respect to agriculture, Kate Galbraith reported yesterday at the Green Inc. Blog (The New York Times) that, “The politically influential American Farm Bureau, the self-described ‘national voice of agriculture,’ has outlined a new campaign effort to derail Congressional bills to combat climate change.

“In a memo obtained Wednesday by Green Inc. and addressed to state farm bureau directors, the group’s public-relations director, Don Lipton, wrote:

“‘Climate change bills in both the Senate and House will impact our farmers and ranchers, hit America’s consumers and impair the economy of our nation. For farmers and ranchers, it will mean higher fuel and fertilizer costs, which puts us at a competitive disadvantage in international markets with other countries that do not have similar carbon emission restrictions. For the future prosperity of the U.S. economy and American agriculture, climate change legislation must be defeated by Congress.’”

Yesterday’s update added that, “The campaign’s slogan will be ‘Don’t CAP Our Future’ — a play on the baseball-style caps often worn by farmers. According to the memo, state farm bureaus will get a campaign ‘starter kit’ — including themed stickers — by early next month.”

Later, Ms. Galbraith stated that, “The American Farm Bureau’s position puts it at odds with the Secretary of Agriculture, Tom Vilsack, who has argued that the costs of cap-and-trade to farmers will be outweighed by the benefits — from carbon offset revenues, for example.”

On the issue of the USDA analysis regarding the Waxman-Markey bill, the “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “USDA economists are working to remove the ‘preliminary’ label from their analysis of the effects the House-passed climate-change legislation would have on agricultural producers and production. Washington Insider sources say the updated analysis is nearly complete, and that the department likely will issue it later this month, depending on how quickly the study can move through the interagency clearance process.

“The updated USDA analysis is said to focus on the regional effects the climate change bill might have. Some have called for USDA to break that regional approach down to a state-wide basis, thus giving members of Congress additional ammunition either for or against the legislation. There is no evidence USDA wants to undertake such a micro study.

“The upcoming analysis also is said to focus more on livestock and specialty crops, as well as on the effects the legislation could have on consumer food prices, than did the preliminary study that was criticized by so many on Capitol Hill when it first was released.”

In other aspects of the climate debate, Lisa Lerer reported yesterday at Politico.com that, “Climate-legislation supporters are increasingly turning to national security to bolster their pitch for a bill this year.

“So far, the climate debate has largely focused on reducing greenhouse gas emissions that cause global warming, drafting an international climate change treaty and fostering new, cleaner sources of energy and so-called green jobs.

But for nearly two years, military and intelligence experts have been issuing studies warning that climate change could put American military personnel and national security at risk. Increasingly violent storms, pandemics, drought and large-scale refugee problems, they say, will destabilize regions and encourage terrorism. And American dependence on foreign energy sources will only exacerbate the threats and increase the likelihood of military action.”

Recall that the Senate Foreign Relations Committee will be holding a hearing today on climate change issues entitled, “Drought, Flooding and Refugees: Addressing the Impacts of Climate Change in the World’s Most Vulnerable Nations.”

In other news regarding climate related issues, Andrew C. Revkin and Clifford Kraus reported in today’s New York Times on inexpensive ways to blunt the negative impacts of climate change in an article entitled, “Curbing Climate Change by Sealing Gas Leaks.”

And from an international perspective, Elisabeth Rosenthal reported in today’s New York Times that, “As world leaders struggle to hash out a new global climate deal by December, they face a hurdle perhaps more formidable than getting big polluters like the United States and China to reduce greenhouse gas emissions: how to pay for the new accord.”

Food Security

Reuters writer Roberta Rampton reported yesterday that, “The world has made little progress in reducing hunger since 1990, a new report said on Wednesday, pointing to 29 countries with alarming levels of malnutrition, mainly in Africa and South Asia.

Those countries also are most vulnerable to the impact of historically high food and energy prices, as well as economic recession — factors that the International Food Policy Research Institute said are not yet captured in the data used to compile its annual hunger index.”

The article pointed to this map “showing where hunger is most acute.”

Bloomberg writer Alan Bjerga reported yesterday that, “Expanding aid and education for women is essential to reducing hunger in the world’s most impoverished regions, according to the International Food Policy Research Institute.

Countries that scored worst on the group’s Global Hunger Index tend to have the greatest gender inequality, the institute said today as it released this year’s rankings. With women responsible for up to 80 percent of African food production, gender equality equals food security, the institute said.”

The AP reported yesterday that, “Parents in some of Africa’s poorest countries are cutting back on school, clothes and basic medical care just to give their children a meal once a day, experts say. Still, it is not enough.

A record 1 billion people worldwide are hungry and a new report says the number will increase if governments do not spend more on agriculture. According to the U.N. food agency, which issued the report, 30 countries now require emergency aid, including 20 in Africa.”

In a related article, Bloomberg writer Luzi Ann Javier reported yesterday that, “Rice and cotton prices are likely to soar in the coming decade as prices of agricultural commodities boom because of declining inventories and production disruptions, said investor Jim Rogers, chairman of Rogers Holdings.

“‘If we start having problems, weather problems, production problems, the price of rice is going to skyrocket over the next decade,’ Rogers, 66, who predicted the start of the commodities rally in 1999, said in an interview. ‘When it happens I don’t know. But I know that the fundamentals are ripe.’

“Rice, wheat, corn and soybeans climbed to records last year on concern production was lagging behind demand, sparking riots from Haiti to Ivory Coast. Prices dropped as farmers planted more, helping to replenish stockpiles. Agriculture production needs to expand by 70 percent through 2050, as the global population rises to 9.1 billion from 6.7 billion, Jacques Diouf, director-general at the United Nations Food and Agriculture Organization, said Oct. 12.”

The AP reported today that, “Greater investment, innovation and improved public-private partnerships are needed to meet the world’s growing demand for food, business and government leaders said at the World Food Prize symposium in the United States.

“The chief executives of DuPont and Archer Daniels Midland Co., two major players in international agriculture, and the agriculture secretary for the Netherlands spoke Wednesday, the first day of the conference in Des Moines.

All three said demand for food worldwide would double by 2050, and agriculture must meet that demand by increasing production on land already in use.”

Ag Committee Regulatory Issues

House Agriculture Committee Chairman Collin Peterson (D-Minn.) appeared yesterday on the AgriTalk Radio program with Mike Adams. In part, the discussion between Chairman Peterson and Mike Adams focused on financial regulation under the jurisdiction of the Agriculture Committee.

To listen to this portion of the discussion from yesterday’s AgriTalk program, just click here (MP3-5:41).

Biofuels

Recall that Jim Snyder reported last week at The Hill Online that, “A ‘family feud’ between rival ethanol lobbies represents a ‘clear and present danger to the corn industry,’ according to an internal memo written by the president of a third trade association that represents corn farmers.”

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “After a nasty exchange of messages among corn and ethanol groups, the National Corn Growers Association said late Tuesday that it will work closely with the Renewable Fuels Association and the American Coalition for Ethanol, but did not mention Growth Energy, the ethanol lobbying group headed by ethanol plant builder Jeff Broin and former U.S. Army General Wesley Clark.

“The messages have revealed that ethanol plant builder Jeff Broin and a handful of other ethanol leaders established Growth Energy in 2008 because they did not believe the NCGA and the RFA were lobbying hard enough for ethanol. Broin, Clark and Tom Buis, Growth Energy’s Washington lobbyist, are also making the case that they have defended the industry and are pursuing its goals more vigorously than the other groups in the last two years.

NCGA, which lobbies for corn growers on a wide range of issues; RFA, which was founded in 1981 to make the case for ethanol; and Growth Energy have been at odds since Growth Energy was founded last year.”

Mr. Hagstrom indicated that, “Their battles became public on Oct. 2 when NCGA President Darrin Ihnen, a South Dakota farmer, sent Renewable Fuels and Growth Energy a memorandum stating that he was tired of the ‘friction and divergence in the ethanol industry’ and that the two groups needed to ‘reconcile immediately.’ Ihnen suggested that the two groups agree to binding arbitration, with NCGA as the facilitator.

Last Friday, RFA and Growth Energy each sent NCGA a letter saying that all corn and ethanol groups should work together, but rejecting the binding arbitration proposal as impractical and legally impossible. RFA Chairman Chris Standlee emphasized that his group has a long history of working with NCGA and wants to continue it.

“Growth Energy’s Clark and Broin, in their reply to NCGA, said the founders of Growth Energy had spent ‘countless hours and significant dollars’ trying to unify the ethanol industry before deciding they needed their own group.”

Keith Good

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