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Climate Issues; Dairy Developments; Crop Insurance; and Biofuels

Climate Issues: Copenhagen Background- U.S. Tries to Jolt Talks Forward

An update posted yesterday at CQPolitics.com reported that, “Secretary of State Hillary Rodham Clinton said the United States would help to raise $100 billion annually through 2020 for a fund to help poor countries adapt to climate change — but only if all countries submit to outside verification of their carbon emissions. [A full transcript and video replay of Sec. Clinton’s presentation yesterday is available here.]

“Clinton’s offer is intended to end a stalemate with China at the Copenhagen talks. China has refused to allow outside inspectors to monitor its emissions reductions. Its response to Clinton’s speech was muted, and it was unclear whether the offer of a massive fund would jump-start talks.”

The CQ article noted that, “Until now, the United States had committed only $1.2 billion to such a global fund for 2010, and support for a $10 billion global fund through 2012. The European Union also made an offer of $3.6 billion annually through 2012. But developing nations and U.N. leaders have repeatedly urged rich countries to kick in more, and Japan upped the ante last night with a commitment of $15 billion annually for two years.”

However, Darren Goode reported yesterday at the National Journal’s Copenhagen Insider Blog that, “Top U.S. climate negotiator Todd Stern today told a 21-member bipartisan House delegation here that there is quite a lot of work left in bilateral talks with China and overall in the U.N. climate conference.

“‘A lot to be done,’ Rep. Sander Levin, D-Mich., said when asked what Stern’s message was in a briefing this afternoon.

“‘Publicly, they’re still optimistic,’ said Energy and Commerce ranking member Joe Barton, R-Texas. ‘But they really don’t think it’s very likely.’

“Barton, a global warming skeptic, is here to argue that the House’s climate strategy, which underpins the Obama administration’s position in Copenhagen, would kill jobs in the U.S. and abroad. He said Stern ‘kind of squirmed, hemmed and hawed’ when asked how things were going before saying, ‘Well, it’s possible, but there’s still a lot of work left to be done.’”

Jim Tankersley reported in today’s Los Angeles Times that, “Key concessions from the United States and China jolted climate negotiations Thursday in Copenhagen, providing optimism a day before President Obama joins other world leaders seeking a new international agreement on controlling greenhouse gases.

But success hinged on two issues that have vexed diplomats throughout the two-week summit: an agreement between America and China on how to ensure that fast-developing nations follow through with their pledges to limit emissions; and whether poor nations will accept smaller emission cuts than they would like from wealthy countries in exchange for hundreds of billions of dollars in financial assistance.”

Juliet Eilperin and Anthony Faiola reported in today’s Washington Post that, “With an offer of significant new aid to help poor nations cope with the effects of global warming, the Obama administration began a major diplomatic effort Thursday aimed at saving the troubled climate talks before the president’s expected arrival Friday morning.”

The Post article indicated that, “Concerned that the process had broken down so badly that world leaders would not have a document to consider Friday, Secretary of State Hillary Rodham Clinton pushed to establish a small, representative group of nations that could work through the night to produce a text that President Obama and others could use as a basis for final negotiations.”

Eilperin and Faiola explained that, “Clinton pledged that the country would help mobilize $100 billion a year in public and private financing by 2020 — an amount that is almost equal to the total value of all developmental aid and concessional loans granted to poor nations by the United States, Europe and other donors this year. She did not specify how much the U.S. government would commit to giving, but a senior administration official said it would be 20 to 30 percent. Administration officials said they envisioned most of the money coming from private sources, or from revenue generated by a cap-and-trade scheme, but other sources could include redirecting existing subsidies or a tax on bunker fuel.”

Today’s article added that, “Michael A. Levi, senior fellow for energy and the environment at the Council on Foreign Relations, said administration officials are ‘taking a big risk.’

“‘They appear to be betting a good deal that Copenhagen will do more to help legislation on the Hill than this finance offer will hurt,’ he said.”

Stephen Power, Guy Chazan, Elizabeth Williamson and Jeffrey Ball reported in today’s Wall Street Journal that, “President Obama played a big card Thursday, authorizing Mrs. Clinton to tentatively endorse European proposals that rich nations come up with $100 billion a year over the next decade to help poor nations fight climate change. The decision — which surprised European officials who said they hadn’t been flagged — was made after the conference hit an impasse Wednesday.”

“Previously, the U.S. had stuck to a $10 billion annual figure by 2012, and declined to specify what it thought would be a longer-term financial target. The U.K. had long advocated for $100 billion by 2020, while other European nations wanted more,” the Journal article said.

The Journal writers pointed out that, “Mrs. Clinton’s announcement is the latest move by U.S. officials to counter accusations from developing nations that the U.S. hasn’t done enough to break the climate-talk deadlock. President Obama was scheduled to arrive in Copenhagen Friday morning to meet with other world leaders and join a climate agreement — if there is one.”

With this background in mind, news analysis turned to some of the political implications for President Obama as he takes part in the talks today.

John M. Broder and Elisabeth Rosenthal reported in today’s New York Times that, “President Obama arrives here on Friday morning bent on applying a combination of muscle and personal charm to secure a climate change agreement involving nearly 200 countries.

He injects himself into a multilayered negotiation that has been far more chaotic and contentious than anticipated — frozen by longstanding divisions between rich and poor nations and a legacy of mistrust of the United States, which has long refused to accept any binding limits on its greenhouse gas emissions.

“The world is looking to Mr. Obama to wrest some credible success from this process. And on Thursday, with almost 120 heads of state and government in attendance, there were some signs that a meaningful political deal might be at hand, including a slight shift in China’s position and a pledge by the United States to help the poorest nations cope financially with global warming.”

Glenn Thrush and Louise Roug reported yesterday at Politico that, “As President Barack Obama jetted off to save the climate talks Thursday night, his allies at home and overseas were engaged in another rescue mission of sorts: guarding his prestige from taking a hit if the talks flop.”

The article added that, “At a time when he’s juggling several political chain saws — health care reform, a Wall Street overhaul, a jobless and joyless recovery — a humiliating setback in Denmark could hobble Obama.”

Ben Geman reported yesterday at The Hill Online that, “Progress in Denmark could dictate how far Obama will go toward enacting complex and controversial plans to reshape the way the country produces and uses energy. Battle lines already have been drawn over whether the legislation will spark the creation of thousands of new ‘green’ jobs or impose burdens on industry that will exacerbate economic hardships.”

Climate Issues: Lawmaker Perspectives- GOP Concerns

Dow Jones writer Ian Talley reported yesterday that, “The U.S. congressional Republican leadership said Thursday it’s prepared to block efforts by the Obama Administration to regulate greenhouse gases and fund international climate finance. [A video replay of a related news conference on this development yesterday with the GOP Senators is available here].

“The lawmakers say they plan to pass a ‘disapproval resolution’ that would prevent the Environmental Protection Agency from regulating gases such as carbon dioxide and will stop appropriations of any federal funding for administrative efforts to finance international climate agreements.

“The GOP vows come as Secretary of State Hillary Clinton earlier Thursday pledged the U.S. would help fund up to $100 billion a year in long-term financing to developing countries such as China and India as part of a last- chance effort to salvage a climate conference in Copenhagen.”

Mr. Talley added that, “The group of Senators–with support from House Republicans–said they already had enough votes to bring the resolution up for a vote on the Senate floor, and predicted Democrats would join the effort. Critics of the Obama administration’s EPA decision to declare greenhouse gases a public danger–a trigger for regulations of emitters across the economy–say developing command-and-control regulation under the Clean Air Act will release a cascade of litigations and could cripple the economy.”

Washington Post writer David A. Fahrenthold reported yesterday at the paper’s Carbon Blog that, “Having failed in a previous attempt to squash the Environmental Protection Agency’s ability to regulate greenhouse gases, Sen. Lisa Murkowski (R-Alaska) is trying another.

“In a press conference with other Republican Senators Thursday, Murkowski said she would introduce legislation under the Congressional Review Act, which allows Congress a kind of veto over decisions by the federal bureaucracy.”

Yesterday’s update indicated that, “Her current tactic was also endorsed Thursday by Sen. Lindsey O. Graham (R-S.C.), whose climate brainstorming with Sen. John F. Kerry (D-Mass.) and Sen. Joseph I. Lieberman (I-Conn.) has spawned hopes for a bipartisan climate bill.”

But Murkowski’s new tactic will still be hard to pull off.

It would have to be passed by a majority in both the House and Senate, and signed by President Obama–the same president who chose the EPA leadership that made the decision in the first place.”

Darren Goode reported yesterday at the National Journal’s Copenhagen Insiders Blog that, “Leading Senate climate skeptic James Inhofe, R-Okla., crashed the party here [in Copenhagen] for just a couple of hours this morning before heading back to Capitol Hill for health care votes later today. He used his time at the conference to hold court with reporters in the media center, where he blamed ‘Hollywood elites’ and the United Nations for perpetrating what he considers a climate change hoax.

The Environment and Public Works Committee ranking member said he had come to spread his message to the 192 other assembled nations and warn them, ‘Don’t go back home with the false impression as to what we’re going to do’ in the U.S.”

Ken Anderson reported yesterday at Brownfield that, “Kansas Representative Jerry Moran has introduced legislation to rescind the EPA’s endangerment rule on greenhouse gases.”

Mr. Anderson noted that, “Moran argues that the Clean Air Act was never intended to regulate greenhouse gases. He says proceeding with the rule would have devastating effects on the economy. Moran sponsored legislation earlier this year that would prohibit carbon dioxide and other greenhouse gases from being classified as air pollutants under the Clean Air Act.”

Climate Issues: Agricultural Interests

Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “Agriculture Secretary Tom Vilsack is catching flak from Republicans for appearing to disavow his department’s own estimates of the impact of reducing greenhouse gas emissions through a proposed cap-and-trade system. In testimony to a House committee earlier this month, the Agriculture Department’s chief economist predicted that 59 million acres of U.S. cropland could be turned into forests to earn carbon credits.

“Vilsack, who has been in Copenhagen at the climate summit, was quoted by Reuters as saying that ‘more current’ studies outside the government disagree with his department’s conclusions.

Republicans are now questioning why Vilsack won’t back his department’s own experts. ‘It was confusing … to read that you have called into question an analysis produced by your own department,’ Sen. Mike Johanns, a Nebraska Republican and former agriculture secretary, wrote in a letter to Vilsack. In a separate letter, the ranking Republicans of the House and Senate agriculture committees said Vilsack’s statements ‘imply a lack of confidence’ in the administration’s own analysis and ‘raise doubts regarding the administration’s position on cap and trade legislation and, more importantly, the impacts on the agricultural and forestry sectors.’ The two lawmakers, Rep. Frank Lucas, R-Okla., and Sen. Saxby Chambliss, R-Ga., want a report from Vilsack on the problems with the administration’s analysis.”

Chris Clayton also highlighted some of these developments yesterday at the DTN Ag Policy Blog, where he noted that, “Secretary of Agriculture Tom Vilsack will have a big stack of mail waiting on his desk when he returns from the United Nations climate talks in Copenhagen, Denmark. Republican lawmakers have seized on Vilsack’s comments earlier this week when he questioned USDA’s own analysis and testimony on the impacts climate legislation will have on agriculture.”

Climate Issues: Trade Developments Linger

Meanwhile, an article from today’s New York Times stated that, “Could a legacy of the Copenhagen climate conference turn out to be higher tariffs?

“With little prospect of an agreement at the talks this week bringing immediate and binding emissions limits on the developing world, pressures are mounting in Europe and the United States to impose restrictions, called border adjustments, on imports from low-cost producers like China and India that are resisting cutting greenhouse gases.”

The article noted that, “In Copenhagen, the simmering battle over trade warmed up late last week, with the United States pushing for the right to impose border adjustments in a version of a draft deal, while powerful emerging economies are seeking to outlaw the practice in a competing version of a deal.”

Dairy Developments

Reuters writer Christopher Doering reported yesterday that, “Struggling U.S. dairy farmers, who have seen milk prices plunge 30 percent since 2008, will receive a one-time subsidy payment, the U.S. Agriculture Department said on Thursday.

“Milk producers that qualify will receive about 32 cents per hundredweight (100 lbs), according to USDA, with a limit per dairy operation of 6 million lbs, or roughly 300 cows. A producer reaching the maximum output would get $19,200.”

Both House Agriculture Committee Chairman Collin Peterson (D-Minn.) and Senate Ag Committee Chairman Blanche Lincoln (D-Ark.) reacted favorably to the USDA’s announcement yesterday.

Crop Insurance

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “In what may be an example of budget battles to come next year, there are signals that the Obama administration may cut $4 billion over five years from USDA’s crop insurance subsidies and propose at least a $1 billion increase for USDA’s child nutrition programs in its fiscal year 2011 budget.

“While the administration has been silent on whether it will formally link a cut in crop insurance to an increase in child nutrition programs, the two proposals could look like a direct tradeoff between farm and nutrition programs. That would be unpopular on Capitol Hill, particularly among rural Democrats in an election year.

“The crop insurance cuts would make it easier for the White House Office of Management and Budget to find money for child nutrition because it could claim in the president’s fiscal year 2011 budget that it was spending less than expected on crop insurance and could use that budget authority without showing much of an increase in the deficit.”

Mr. Hagstrom noted that, “RMA has begun one of its periodic negotiations with crop insurance companies over the structure of the program and the levels of subsidies it pays. Administration officials have made a proposal to the companies that would result in a 25 percent cut in profits or underwriting gains and a 30 percent cut in payments to deliver the programs, according to Keith Collins, a former USDA chief economist and crop insurance board chairman, who is now consulting for the industry. Collins said in an interview that the cuts would lead ‘to a serious degradation of service over time.’

David Graves, a lobbyist for crop insurance companies, said the cuts USDA is proposing are far greater than crop insurance cuts proposed last year by Rep. Jim Cooper, D-Tenn., and Sen. Sherrod Brown, D-Ohio, but rejected by Congress as too tough.”

Concluding, Mr. Hagstrom reminded readers that, “Earlier this year, the administration proposed to cut direct payments for larger farmers as a way to spend more money on nutrition programs, but those arguments fell flat with Congress and created animosity that the Obama administration was trying to pit farmers against hunger advocates.”

Biofuels

Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “Soybean growers are losing hope that Congress will prevent the $1-a-gallon tax subsidy for biodiesel from lapsing at the end of the year, shutting down some biodiesel production. The credit is due to expire Dec. 31. The House passed legislation extending the credit through next year, but the Senate is bogged down in the debate over health care and is likely to do little else other than a defense funding bill.”

Dan Looker reported yesterday at AgricultureOnline that, “If the biodiesel industry wants to survive into 2010, it may have to convince one or two Republican senators to break ranks from GOP stalling tactic.”

Mr. Looker noted that, “‘We wanted to put it on the defense bill that is before us,’ [Tom Harkin (D-Iowa)] said Thursday. ‘We could not find one Republican that would support it.’

“The Senate needs at least one GOP vote, since it may not have the 60 votes needed to break a filibuster on the defense appropriations bill. Senator Russ Feingold, an opponent of sending more troops to Afghanistan, is expected to be the lone Democrat voting against the defense bill. When that bill finally comes up for a vote, it’s still likely to pass by 90 votes, Harkin said.”

Keith Good