John M. Broder reported in today’s New York Times that, “Todd Stern, the chief American climate change negotiator, said Thursday that the flawed and incomplete agreement reached last month in Copenhagen could provide significant benefits if countries followed through on its provisions.
“The three-page Copenhagen Accord is not legally binding, and the 192 nations that took part in the December talks did not formally accept it. But a sizable group of those countries said they would accept its terms and provide plans to reduce greenhouse gas emissions by Jan. 31.”
The Times article added that, “Mr. Stern also said that the Obama administration remained committed to securing passage of comprehensive energy and climate change legislation to meet its own promises to reduce global warming emissions by about 17 percent from 2005 levels by 2020.
“He said that the House had made a promising start by passing a bill last June but that the legislation had been sidetracked in the Senate by the health care debate. He said it was ‘tremendously important’ for the Senate to act on some form of climate change legislation.”
Reuters writer Timothy Gardner reported yesterday that, “The top U.S. climate envoy on Thursday urged other countries to set carbon emission targets to fight global warming by the end of this month as a crucial step toward a global legally binding agreement.”
Yesterday’s article noted that, “Stern said President Barack Obama was focused on getting a climate bill passed this year. ‘There will be a significant effort on the part of all in the administration to press forward on a strong broad energy and climate bill,’ he said.”
Bloomberg writer Jim Efstathiou Jr. reported yesterday that, “Stern said a bipartisan initiative to forge a compromise by Senators John Kerry, a Massachusetts Democrat, Lindsey Graham, a South Carolina Republican, and Joseph Lieberman, a Connecticut independent who usually votes with Democrats, is ‘very important.’
“The three senators released a framework last month for legislation that includes investments to support nuclear power and speed development of technology to capture carbon dioxide pollution from coal-fired power plants. It also supports expanded offshore oil and natural gas production. The proposal aims to bridge regional differences among members of Congress on crafting a climate-change bill and placate lawmakers from manufacturing states.”
In a broader look at the administration’s strategy on the climate change issue, Washington Post writer Juliet Eilperin reported yesterday at the Post Carbon Blog that, “Ted Nordhaus and Michael Shellenberger of the Breakthrough Institute, two environmental thinkers who infuriate many left-leaning greens, have written a provocative piece in Foreign Policy declaring Obama’s climate strategy a failure.”
Meanwhile, Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “Majority Leader Harry Reid (D-Nev.) on Thursday said that there is room on the busy Senate calendar to bring up a sweeping energy and climate change bill this spring.
“His comments – in a speech before a geothermal energy group in New York – come amid speculation that tackling controversial plans to impose limits on greenhouse gases may fall by the wayside.”
Dow Jones writer Mark Peters indicated yesterday that, “U.S. Senate Majority Leader Harry Reid said Thursday he expects climate change legislation this spring, but warned it would fail without bipartisan support.”
And in more specific perspectives on climate issues and agriculture, Ken Anderson reported yesterday at Brownfield that, “Is cap-and-trade dead?
“In an exclusive interview with Brownfield, the chair of the Senate Agriculture Committee—Senator Blanche Lincoln of Arkansas—didn’t respond directly to that question. But she made it clear it’s time to look at other options.
“‘I just have great skepticism that this is the way to go,’ Lincoln says. ‘I think we can do all of the things that we want to do—the priorities we have—on behalf of national security and the economy, lessening our dependence on foreign oil. I think we can lower our carbon output and I think we can create great green jobs, without having to use a cap and trade system. I don’t think that’s the only way to go.’
“And Lincoln says EPA’s announcement that it plans to regulate greenhouse gas emissions does not put additional pressure on Congress to pass cap and trade.”
An audio replay of the conversation between Sen. Lincoln and Ken Anderson is available here (MP3).
Wes Clement reported on Wednesday at the Pine Bluff Commercial Online (Arkansas) that, “U.S. Sen. Blanche Lincoln (D-Ark.) is optimistic help is on the way for farmers whose crops were heavily damaged from record 2009 rainfall.
“‘Many farmers had major damage to crops, and the need for help is immediate since banks will begin making crop loans in a couple of weeks,’ Lincoln said Wednesday.”
The article pointed out that, “Chad Pitillo of Simmons First National Bank said last week the bank had already begun making crop loans and that some farmers would not have enough equity to continue into next season if financial assistance is not provided very soon.
“Lincoln, who is chairman of the Senate Committee on Agriculture, Nutrition and Forestry, joined Sen. Thad Cochran (R-Miss.) to introduce legislation in mid-November that would provide quick damage assistance. In early December Rep. Marion Berry (D-Ark.) and Rep. Travis Childers (D-Miss.) introduced a companion bill in the House.
“‘It will be important that we find a bill that we can attach it to that can pass quickly,’ Lincoln said. ‘Since we are not in session, I don’t know what bill that will be yet, but it is a high priority and I am focused on getting assistance to farmers as quickly as possible.’”
A news release issued yesterday by Sen. Lincoln noted in part that, “U.S. Senator Blanche Lincoln, D-Ark., Chairman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, continued her call for disaster assistance today as 32 more Arkansas counties received federal disaster designations from the United States Department of Agriculture (USDA). The total number of Arkansas counties now designated as primary disaster areas is 72. Lincoln has introduced legislation that would provide timely disaster assistance to farmers affected by this fall’s heavy rains, floods and other weather-related disasters.
“‘Arkansas farmers have experienced costly damage to their crops and many are unsure if their operations will survive another year,’ said Chairman Lincoln. ‘These disaster declarations underscore the need to get help to our state’s hard-working farmers as soon as possible. I will continue to work to deliver assistance to our producers so that they can continue to meet our food and fiber needs while providing much-needed economic strength to our rural communities.’”
A news release issued yesterday by Chairman Lincoln and Senate Ag Committee Ranking Member Saxby Chambliss (R-Georgia), stated that, “[Sen. Lincoln and Sen. Chambliss] today noted comments by U.S. Trade Representative (USTR) Ron Kirk strongly defending the U.S. position at the World Trade Organization (WTO) ministerial meeting last December in Geneva. In a letter to Kirk, the Senators praised his call for an ambitious agricultural market access agreement within the Doha Development Round. They also highlighted the importance of maintaining the ‘single undertaking’ approach with respect to cotton, which ensures that no separate agreements affecting U.S. cotton programs would be signed outside of a comprehensive agreement of the Doha Round. They emphasized that such an insistence is specifically important to maintain the Senate’s support for and confidence in the multilateral negotiations.”
In other trade news, Reuters news reported yesterday that, “Russia warned the top poultry supplier, the United States, it will insist that Washington observe Moscow’s new safety rules, but will accept shipments cleared by the customs before January 19.
“Prime Minister Vladimir Putin said on Thursday Moscow will find alternative poultry import sources if Washington does not stick to the regulations.
“The comment adds to challenges that experts from the two countries would have to overcome at talks next week.”
And a news release issued yesterday by the National Farmers Union indicated that, “Today National Farmers Union (NFU) and the U.S. Cattlemen’s Association (USCA) submitted a joint letter to United States Trade Representative (USTR) Ron Kirk, urging a vigorous defense of the country of origin labeling (COOL) law at the World Trade Organization (WTO).
“On January 8, NFU and USCA filed joint comments in response to the Dec. 4, 2009, Federal Register Notice regarding the COOL challenge filed by Canada and Mexico with the WTO.”
Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “Crop insurers are going to battle with the Obama administration over its plans to slash the industry’s growing profits.
“Representatives of the companies that sell the heavily subsidized insurance policies are set to meet with U.S. Agriculture Department. The insurers’ message: The cuts could force companies to pull out of less-profitable regions.
“‘This government is running around looking for ways to crate jobs. Yet on the other hand they seem to be threatening rural America for working,’ said Robert Parkerson, president of National Crop Insurance Services Inc., an industry trade group.”
Mr. Brasher noted that, “A study done for the USDA last year said the companies had been earning a rate of return of as much as 28 percent in recent years and about twice what would be considered reasonable for the insurance business. Payments to the industry have doubled from $1.8 billion to $3.6 billion over the past three years as commodity prices have risen. Meanwhile, the number of policies has dropped from 1.3 million to 1.1 million, according to the USDA.”
Yesterday’s update added that, “Keith Collins, a former chief economist at the USDA who now serves as a consultant to the industry, challenged the study the department is using. It said it unfairly is based on a comparison with rates of return in the property and casualty industry rather than on the crop insurance companies’ actual equity, data that were not available.
“He says the proposed cuts are too large: ‘I would say that there is a pretty fine line between bold and imprudent and I think this probably goes over the line.’”
Justice Department – Monsanto
Bloomberg news reported today that, “The Monsanto Company, the world’s largest seed producer, said on Thursday that the Justice Department had formally requested information on its herbicide-tolerant soybean seed business as part of an investigation into anticompetitive practices.
“The company said in a statement that the Justice Department was seeking confirmation that competitors and farmers would have access to the seed, first-generation Roundup Ready, after the patent expired in 2014.
“The Justice Department’s antitrust division ‘is investigating the possibility of anticompetitive practices in the seed industry,’ a department spokeswoman, Gina Talamona, said.”
Zachary A. Goldfarb reported in today’s Washington Post that, “With the price of gas at the pump at its highest point in well over a year, federal regulators moved Thursday to prevent excessive speculation by financial traders from driving the cost of oil even higher. The effort to adopt new limits on the trading of oil and other energy commodities is a sharp reversal after years when regulators left those markets alone.
“The proposal from the Commodity Futures Trading Commission, which oversees oil and energy trading, would introduce new restrictions on what the largest traders can do. Concerned that some firms can amass such large holdings in energy commodities that their trades can have an outsize effect on the price of gasoline, heating oil or natural gas, officials said they would prevent traders ‘from establishing extraordinarily large positions.’”
The Post article noted that, “The proposed limits highlight a newfound skepticism among regulators toward the financial sector. Big banks and Wall Street firms have transformed the marketplace for energy commodities into a high-stakes casino for speculation, a departure from its original role as a place where airline and shipping agencies, for instance, could buy contracts to keep the price of their fuel steady. Regulators are concerned that this betting has created too much volatility, sending the price of oil and other energy commodities up and down violently.
“Oil prices hit a record high of $145 a barrel in 2008 before plunging to $33 a barrel in a matter of months. With the slow economic recovery, they have risen to about $80 a barrel. The instability in prices is caused by several factors, including overall economic conditions, the decisions of oil-rich nations and the weather — in addition to financial speculation. So it remains difficult to determine how much any regulatory proposal would affect these price swings.”
Today’s article added that, “The agency’s plan sets the new trading limits high enough that they would affect only 10 firms, agency officials said. They would not name the traders.
“‘While the proposed limits err on the high side, such levels would still ensure that the very largest traders’ positions, those with the greatest potential for causing market contortions, would be limited,’ CFTC commissioner Bart Chilton said. ‘If limits were set too low, there would be a possibility’ that traders would go overseas or to unregulated markets.”
In his statement regarding the Notice of Proposed Rulemaking from yesterday, Commissioner Chilton also indicated that, “The Commodity Exchange Act (CEA) has as its fundamental purpose the deterrence and prevention of fraud, market abuse and manipulation. To accomplish our mission requires vigilance and thoughtful consideration of the potential for market aberrations. It requires agile, balanced and prudent action in a timely manner—not usually the mark of government. Our role in striking the right balance with regard to the massive passives and other new dynamics in the futures industry requires that we not merely review and respond, but that we anticipate, deter and prevent.
“That is why I support moving forward on the energy proposal before the Commission. This proposal strikes a reasonable balance. Simply put, it seeks to impose mandatory hard cap position limits. Doing so is not the mark of wild-eyed overzealous regulators. In fact, the position limits called for in the proposal are similar to limits already in effect for agricultural commodities. This proposal simply seeks to expand such mandatory hard cap position limits to four heavily traded energy contracts.”
Kara Scannell added today at The Wall Street Journal Online that, “Democratic Commissioner Bart Chilton said the proposal ‘strikes the right balance. He said if there’s the possibility that noneconomic forces are affecting energy prices, ‘we need to figure out a way to deal with it.’”
Reuters writers Ayesha Rascoe and Tom Doggett reported yesterday that, “The proposal is the first major regulatory reform for the CFTC since Gary Gensler, a former Goldman Sachs Group Inc. executive, became chairman in May with promises to get tough on the volatile world of commodity trading.
“His actions parallel reforms pending in Congress and dovetails with the Obama administration’s proposals to bring over-the-counter derivatives under federal regulation.
“There has been intense debate among analysts whether excessive speculation and big money inflows were responsible for the wild swing in energy prices in 2008.”
Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “Sen. Maria Cantwell (D-Wash.), a leading Senate proponent of tighter energy market regulation, said through a spokesman Thursday that the Commodity Futures Trading Commission’s new proposal to rein in speculative trading is a step forward but too weak.
“The commission on Thursday floated a draft plan that would impose aggregate limits on the number of futures contracts that traders may hold, a response to concerns that large positions amassed by hedge funds and other parties have added to price volatility.
“‘Large Wall Street firms reaped huge profits at the expense of energy consumers by taking excessively large speculative positions in energy futures markets. Senator Cantwell has been calling for aggregate position limits since early 2008, and has introduced legislation to force the Commodity Futures Trading Commission to do this,’ Cantwell spokesman John Diamond said in a statement to The Hill.”