FarmPolicy

June 28, 2017

Climate Issues: EPA Finding, International Talks; Sens. Chambliss and Johanns; Crop Insurance; and Harvest Progress

Categories: Climate Change

Climate Issues: EPA Finding

Coral Davenport reported yesterday at CQPolitics.com that, “The EPA on Monday found that carbon dioxide and other greenhouse gases threaten public health, a strategically timed action that is likely to resonate internationally as the world begins talks on a climate change treaty at a U.N. summit in Copenhagen.

The so-called endangerment finding triggers a requirement that the federal government regulate fossil fuel emissions under the Clean Air Act (PL 101-549) and puts new pressure on Congress to enact climate change legislation.

“‘The message to Congress is crystal clear: Get moving,’ said Sen. John Kerry, D-Mass., the point-man in efforts to write a bipartisan Senate global warming bill.”

The CQ article indicated that, “EPA Administrator Lisa P. Jackson called the findings ‘long overdue’ and said they ‘cement 2009’s place in history as the year when the United States Government began addressing the challenge of greenhouse-gas pollution and seizing the opportunity of clean-energy reform.’”

[Note: A transcript of Administrator Jackson’s EPA announcement from yesterday can be found here, while a complete video reply of her press conference can be viewed here; also, a key audio excerpt from her remarks yesterday can be heard here (MP3-2:07). Ms. Jackson also explained the EPA action in an interview yesterday evening on the PBS NewsHour).

Yesterday’s CQ item added that, “Jackson stressed that congressional action remains the administration’s first choice. While Monday’s decision authorizes the EPA to set a timetable to begin curbing emissions, Jackson has not laid out a schedule and said she still hoped Congress would act first.

“In attacking the EPA action, Republicans cited the recent controversy over a series of hacked e-mails from the University of East Anglia’s Climate Research Unit, in which climate scientists refer to using a ‘trick’ to ‘hide the decline’ in preparing some climate change data.”

However, the article noted that, “‘There is nothing in the hacked e-mails that undermines the science on which the decision was made,’ Jackson said. ‘This issue has not raised new questions that are not already addressed in this finding.’” (Related audio on this topic from yesterday’s briefing is available here (MP3-1:31)).

Chris Clayton reported yesterday at DTN that, “With fewer Americans believing in manmade climate change and new revelations challenging scientific findings, Monday’s announcement was largely a validation by the Obama administration that officials support the overall science behind climate change and the United States is taking actions to respond to greenhouse-gas emissions.

“‘The findings I make today are firmly grounded in science,’ Jackson said in a news conference.”

Mr. Clayton added that, “When the EPA began its push in April, lawmakers were just beginning to craft legislation. The House passed a bill in June that would create a mandated cap-and-trade program, but would exempt agriculture from any emissions cap. Senate leaders have said there will likely not be a floor debate on climate legislation until at least next spring.

“Senate Environment and Public Works Chairman Barbara Boxer, D-Calif., who pushed a climate bill out of her committee in October with no Republican support, called the EPA finding a milestone in the efforts to address global warming.”

Lisa Lerer and Eamon Javers
reported today at Politico.com that, “Monday’s ruling forces the EPA to begin mandating greenhouse gas emissions reductions from industrial polluters like power plants, factories, and auto makers. The EPA, Jackson said, ‘is now authorized and obligated to make reasonable efforts to reduce greenhouse gas emissions under the Clean Energy Act.’”

John M. Broder reported in today’s New York Times that, “The administration has used the finding as a prod to Congress, saying that if lawmakers do not act to control greenhouse gas pollution it will use its rule-making power to do so. At the same time, the president and his top environmental aides have said that they prefer such a major step be taken through the legislative process.”

Mr. Broder also pointed out that, “In late September, the agency announced a proposed ‘tailoring rule’ that limits regulation of climate-altering gases to large stationary sources like coal-burning power plants and cement kilns that produce 25,000 tons or more a year of carbon emissions.”

Recall that back on October 1, Mr. Broder reported in more detail on the “tailoring rule,” which is particularly important to agricultural interests, and noted in a New York Times article at the time that, “Ms. Jackson described the proposal as a common-sense rule tailored to apply to only the largest facilities — those that emit at least 25,000 tons of carbon dioxide a year — which are responsible for nearly 70 percent of greenhouse gas emissions in the United States.

The rule would not, as critics contend, cover ‘every cow and Dunkin’ Donuts,’ Ms. Jackson said.”

Mr. Broder added in his October 1 Times article that, “Industry groups reacted quickly, challenging the E.P.A.’s authority to use the Clean Air Act to regulate greenhouse gases and questioning Ms. Jackson’s power to lower the threshold for regulation.”

An update posted yesterday at the Environmental Capital Blog (The Wall Street Journal) provided this summary regarding the important ramifications of the “tailoring rule,” “The legal folks at Mondaq summarize the logic behind the tailoring rule and its possible pitfalls quite nicely:

“‘According to EPA the cost of processing these permits [for the whole economy] would be about $15.9 billion, and the cost to the regulated community to obtain these permits would be about $39.6 billion […] Because the thresholds for the applicability of [Clean Air Act] requirements are in the statute, it is very unclear whether EPA has the legal authority to change those thresholds by regulation. EPA’s proposal simply asserts that the higher thresholds are an ‘administrative necessity’ to avoid the ‘absurd results’ associated with regulating GHG emissions under the CAA.’

In other words, in seeking to make executive regulation of greenhouse-gas emissions feasible, the EPA could open itself up to legal challenges. Those could come from environmentalists, who want to see wider regulation of emitters. They could also come, paradoxically, from the business community: Any legal challenge that upends EPA authority to regulate emissions as planned could throw a giant wrench in the works.”

Steven Mufson and David A. Fahrenthold reported in today’s Washington Post that, “The EPA’s ‘endangerment finding’ — a key bureaucratic step in the regulatory process — was seen as a message to Congress and Copenhagen, but it was also a belated response to an order from the U.S. Supreme Court, which ruled in April 2007 that carbon dioxide should be considered a pollutant under the Clean Air Act. As a result, the court said, the EPA had not only the power but the obligation to regulate the gas. (In that case, Massachusetts v. EPA, the Bush administration was fighting against regulating carbon dioxide from vehicle tailpipes.)”

The Post article added that, “Some senators who environmental groups hope might vote for a climate bill also said they were unhappy. Sen. Olympia J. Snowe (R-Maine) called the move ‘regrettable.’ And Sen. Blanche Lincoln (D-Ark.), chairman of the Senate Agriculture Committee, said in a statement that she is concerned that the move ‘will create burdens on American industry without providing any significant environmental benefits.’

‘I strongly urge EPA to wait for Congress to find a solution,’ Lincoln said.”

And on the “tailoring issue,” the Post writers explained that, “The Clean Air Act set a low threshold for regulation that opponents argue would require rules for everything from laundries to office buildings, from cow farms to coal plants. But the EPA said it would impose new rules only on large factories, refineries, power plants and other facilities emitting more than 25,000 tons a year of carbon dioxide.”

Christi Parsons and Jim Tankersley reported in today’s Los Angeles Times that, “Climate legislation would affect a broad swath of the American economy; it could raise consumer prices and manufacturing costs in at least some areas and faces formidable opposition from business groups, Republican lawmakers and some Democrats.

The challenge of passing a bill is all the greater at a time when Congress is preoccupied with the even more controversial healthcare overhaul and voters seem more concerned about jobs and the economy than about long-term climate change.

“As a result, President Obama, who promised action on global warming during his campaign, has moved forward on the alternative track: direct administrative action by the EPA.”

EPA Finding: Reaction

Sen. John Thune (R-SD)- 12.7- “This decision lays the groundwork for EPA to undercut large portions of our economy. The Clean Air Act was written a long time ago to curb pollution from smokestack industries, not to regulate emissions from ethanol plants, manufacturing facilities, or even our livestock industry. Instead of unilateral action through the EPA, the Obama Administration should work with Congress to pass bipartisan energy legislation that promotes clean energy, lowers energy costs, and reduces our dependence on foreign oil.”

National Corn Growers Association President Darrin Ihnen– 12.7- “The livestock industry is also particularly concerned with certain production facilities that will fall within regulatory parameters. The intended purpose of the Clean Air Act was never to regulate every farm in America as part of the overall effort to curb greenhouse gas emissions.”

American Farm Bureau Federation President Bob Stallman– 12.7- “We realize the EPA’s stated intention is to focus this finding narrowly on specific industries, using particular thresholds, but we believe there is no protection in the provisions that prevent them from being applied broadly across all sectors, including farm and ranch families who produce livestock.”

Los Angeles Times editorial board– 12.8- “More important, the EPA action sends a strong message to the Senate, where progress on a crucial climate bill has stalled. The cap-and-trade system created by the bill is a market-based method for cutting carbon that would be less expensive to industry and consumers than the direct regulatory approach taken by the EPA. In other words: If you don’t like cap-and-trade, you’ll like the alternative less. That’s something even science-denying obstructionists ought to be able to understand.”

The New York Times editorial board– 12.8- “There is one obvious way to keep the E.P.A. from having to use this authority on a broad scale. And that is for Congress to pass a credible and comprehensive bill requiring economywide cuts in emissions…No one would be cheering louder than Ms. Jackson, who has neither the resources nor the ambition to regulate what would amount to 70 percent of the American economy. If Congress fails to act, she will have no choice.”

EPA Finding: International Talks

Ben Geman and Jim Snyder reported yesterday at The Hill Online that, “It [yesterday’s EPA action] may also give U.S. negotiators more credibility at the international climate summit that began Monday in Copenhagen, Denmark. The EPA signaled that it is intended to do so. ‘We arrive at the climate talks in Copenhagen with a clear demonstration of our commitment to facing this global challenge,’ EPA Administrator Lisa Jackson said Monday afternoon.”

The Hill article noted that, “White House press secretary Robert Gibbs on Monday deflected questions about whether the finding was timed to coincide with the beginning of the Copenhagen talks, which Obama will attend Dec. 18 for their culmination.

“Asked how much the EPA finding would help the U.S. posture at the talks, Gibbs said the finding was set in motion by the high court ruling. ‘The timing is based on the fact that the first step of this process is being completed,’ he said.”

Bloomberg writers Jim Efstathiou Jr. and Daniel Whitten reported yesterday that, “The [EPA] move, on the opening day of an international climate summit in Copenhagen, arms President Barack Obama with new regulatory powers that could help forge consensus in efforts to curb global warming. Obama also gains standing when asking other nations to make commitments for a new global climate treaty, said Kevin Book, a Washington-based managing director for analysis firm ClearView Energy Partners LLC.

“‘It’s exactly what you would want to have in your bag on the way to Copenhagen,’ Book said in an interview today. ‘You can’t go and argue for other nations to make changes if you haven’t made any yourself.’”

In more general coverage of the Copenhagen talks, Tom Zeller Jr. reported in today’s New York Times that, “A much-anticipated global meeting of nearly 200 nations — all seeking what has so far been elusive common ground on the issue of climate change — began here on Monday with an impassioned airing of what leaders here called the political and moral imperatives at hand.

“‘The clock has ticked down to zero,’ said the United Nations’ climate chief, Yvo de Boer. ‘After two years of negotiation, the time has come to deliver.’

“From now until Dec. 18, delegates will try to hammer out some of the most vexing details involved in the pursuit of a global climate accord.”

Meanwhile, James Kanter reported yesterday at The Green Inc. Blog (The New York Times) that, “Pushing rich-world countries like the United States and the European Union to lay money on the table for poor countries may prove to be the most significant obstacle to reaching a global agreement on curbing global warming, Connie Hedegaard, the Danish minister for the United Nations climate conference in Copenhagen, warned at an opening ceremony for the conference on Monday.”

Sens. Chambliss and Johanns

In other climate related developments, a news release from yesterday stated that, “U.S. Senators Saxby Chambliss (R-Ga.) and Mike Johanns (R-Neb.) today raised issue with testimony delivered by U.S. Department of Agriculture (USDA) Chief Economist Dr. Joseph Glauber before a House Agriculture Committee hearing last week on the economic impacts of pending climate change legislation. The Senators have repeatedly said Waxman-Markey and Kerry-Boxer cap and trade bills will have profound and substantial impacts on the U.S. agriculture sector. The long-awaited USDA analysis confirmed initial concerns raised in July when U.S. Department of Agriculture Secretary Tom Vilsack first testified in front of the Senate Agriculture Committee on the same issue.

“As noted in Dr. Glauber’s testimony, cap and trade will increase the food consumer price index (Food CPI) by nearly 5 percent by 2050. The beef sector will see a 10 percent decline, while the hog and dairy sector will see reductions of 23 percent and 17 percent respectively. Additionally, cap and trade will take 59 million acres of cropland and pasture out of production. In short, according to USDA and other testimony at the hearing, cap and trade will increase food prices, reduce production and likely put farmers out of business.”

The news item indicated that, “‘This testimony confirms what we’ve known for some time: the cost of producing crops and livestock will increase, and energy prices will go up,’ said Sen. Johanns, member of the Senate Agriculture Committee. ‘American farmers will be asked to sacrifice 59 million acres of farmland while feeding a world population set to increase by 2 billion people. If this bill becomes law, producers will be driven out of farming; production will plummet as land shifts from food to trees; food prices will rise; and production overseas will increase. Perhaps most alarming, the testimony is from an Administration that wholeheartedly endorsed cap-and-trade legislation months ago. This is not a vision for American agriculture, it’s a death sentence.’”

Crop Insurance

Marcia Zarley Taylor reported yesterday at the DTN Minding Ag’s Business Blog that, “USDA is trying to eliminate what it considers excess profits in crop insurance industry, but industry sources counter that the Risk Management Agency’s proposed contract could thin the herd of crop insurers if it is ultimately implemented.”

Yesterday’s update added that, “In the industry’s view, tampering with rates could chase some big players out of the market. Only 15 companies currently handle crop insurance, but just three companies share about 70 percent of the sales. Of the big three, only Rain and Hail is an independent company without backing from a large corporate parent. A Wells Fargo subsidiary holds the top sales position.

“The risk is that pruning more profit out of the business will discourage corporate parents from offering these insurance lines, says Tyler Silveus, a vice president of Silveus Insurance Group in Warsaw, Ind. ‘Everyone wants to deliver a program without making people rich, but if USDA goes too far, it might encourage a couple of those insurers to drop off the map.’

“Tom Witthoft, vice president of administration and information for Rain and Hail, shares those concerns. Volatility in commodity prices has added to crop insurers’ exposure, and made it more difficult to assess reserve levels needed. For example, corn futures prices varied by more than 40 percent in 2008, more than twice the volatility the crop averaged during 1980-2006.”

Harvest Progress

DTN’s Susanne Stahl and Katie Micik reported yesterday (link requires subscription) that, “Corn harvest is still dragging on across the country, according to USDA’s latest Crop Progress report. Harvest is generally complete by this point in the season, but this year, it’s at 88 percent complete.

“‘Of the 18 reporting states, only Texas and North Carolina are 100 percent harvested,’ said DTN Analyst John Sanow. ‘Illinois, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin are all less than 90 percent complete.’

“A winter storm that’s expected to move across the Midwest early this week should bring harvest to a halt once again, Sanow said.”

Keith Good

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