January 19, 2020

Climate Legislation; Trade; CFTC Issues; and Crop Insurance

Climate Legislation- Executive Branch Perspectives

An update posted yesterday afternoon at CQPolitics reported that, “Despite the obituaries being written for Senate passage of a cap-and-trade bill this year, President Obama is expected to reiterate his call for comprehensive clean energy and climate change legislation and to rebrand it as part of his job-creation agenda.

“White House officials and senators leading efforts to write a bipartisan climate bill signaled Wednesday that they will keep pushing hard for legislation that would curb emissions of greenhouse gases and boost development of alternative energy.”

Yesterday’s update noted that, “Stressing the need for legislation to eliminate dependence on foreign oil, put a price signal on carbon emissions and mandate an increase in electricity from renewable sources, [White House energy and climate adviser Carole Browner] stuck to the ‘jobs’ script and never used the phrase ‘cap and trade.’

“‘This is about creating a new generation of clean energy jobs that will position us in a global market, and we need the legislation to do that,’ she said.

“Experts expect the president also to avoid the cap-and-trade label —which many lawmakers see as a confusing turn-off to voters — in his remarks to the nation, instead framing the plan with the rhetoric of jobs creation.”

Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “The White House isn’t giving up yet on getting Congress to enact a cap-and-trade system to regulate greenhouse gas emissions. At least, they’re not giving up publicly.

“‘We’re encouraged by what we’re seeing and we’re going to continue to work at’ getting Congress to pass the legislation, the White House climate czar, Carol Browner, said during a speaking appearance on Capitol Hill today.”

Mr. Brasher added that, “[Browner] said nothing about an issue percolating on the Hill and that’s whether Congress should act on a separate energy bill that would mandate the use of renewable electricity and give federal regulators more authority to speed the construction of long-distance transmission lines, such as from states like Iowa to eastern urban centers.

The administration, backed by environmental groups, has wanted Congress to keep those provisions together with the more controversial cap-and-trade provisions that would be in a broader climate bill. Opponents of cap-and-trade want the renewable energy provisions considered separately. Many senators say cap-and-trade is essentially dead for this Congress.

Cap-and-trade advocates, meanwhile, are expressing some frustration with the opposition to the plan by the agricultural lobby. One of the key arguments against the legislation is that it would raise farm production costs substantially. Todd Wooten of Duke University’s Nicholas Institute for Environmental Policy Solutions, said farmers and their suppliers will figure out ways to handle those costs: ‘People tend to react to higher gas prices, higher fertilizer prices by changing their practices. It’s basic economics.’ He didn’t address another objection to the bill – that it’s going to decrease the amount of cropland and drive up commodity prices, increasing livestock production costs and food inflation.”

Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “White House climate czar Carol Browner on Wednesday declined to predict whether climate and energy legislation will reach the Senate floor in 2010, but also said she sees important progress on the measure.

“‘I’ve been in this town, in and out of this town, for a very, very long time. Predictions about when something is going to happen in the legislative process are very, very hard to make,’ said Browner, who was EPA administrator under President Clinton, at a Capitol Hill briefing.”

Also prior to the President’s State of the Union speech last night, some members of the Senate sought to influence the direction of the presentation with respect to the climate issue.

Jim Snyder reported yesterday at The Hill’s Energy and Environment Blog that, “Sixteen Democrats and Independent Bernie Sanders of Vermont sent the president a letter making the case for clean energy and climate legislation.

“‘Legislation that invests in clean energy and puts a meaningful limit on carbon pollution will be a major job creator,’ the senators wrote. Here’s the letter.”

As to what President Obama actually said in his address to the nation last night, Anne E. Kornblut and Michael D. Shear provided this broad overview in today’s Washington Post: “Obama did not use the occasion to build momentum for far-reaching new policies, instead calling for Congress to complete the tasks already at hand, including ‘another look’ at health-care reform, funding more education programs, imposing stiffer regulations on Wall Street and pursuing a more ambitious energy policy. He reiterated his demand for a three-year freeze on discretionary government spending, threatening to use his veto to achieve it, and walked through a series of steps his administration hopes to take to aid middle-class families.”

Kara Rowland and Stephen Dinan reported in today’s Washington Times that, “Saying he’s heard the fears of an anxious nation, President Obama on Wednesday night told Americans he won’t scrap the agenda that won him the White House, but he repackaged his push for health care reform and much of the rest of his priorities as means to boost the economy.”

More narrowly, the article added that, “As for energy policy, Mr. Obama likewise reiterated his support for a cap-and-trade plan to combat global warming, urging the Senate to work through a deadlock on the issue as moderate Democrats from Rust Belt states are resisting the proposal approved by the House last summer. He also cited the need for new nuclear power plants and ‘making tough decisions about opening new offshore areas for oil and gas development.’”

Specifically, Pres. Obama stated that, “But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean coal technologies. And, yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.

“I am grateful to the House for passing such a bill last year. And this year I’m eager to help advance the bipartisan effort in the Senate.

“I know there have been questions about whether we can afford such changes in a tough economy. I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here’s the thing — even if you doubt the evidence, providing incentives for energy-efficiency and clean energy are the right thing to do for our future -– because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation.”

In other developments on climate issues from the executive branch, John M. Broder reported in today’s New York Times that, “The Securities and Exchange Commission said on Wednesday for the first time that public companies should warn investors of any serious risks that global warming might pose to their businesses.

“Although the agency has long required companies to reveal possible financial or legal impacts from a variety of environmental challenges, it has never specifically cited climate change as bringing potentially significant business risks or rewards.

“The S.E.C., on a party-line 3-2 vote, issued ‘interpretive guidance’ to help companies decide when and whether to disclose matters related to climate change. The commission said that companies could be helped or hurt by climate-related lawsuits, business opportunities or legislation and should promptly disclose such potential impacts. Banks or insurance companies that invest in coastal property that could be affected by storms or rising seas, for example, should disclose such risks, the agency said.”

Climate Legislation- Congressional Perspective

Ben Geman reported yesterday at The Hill’s Energy and Environment Blog yesterday that, “Senate Majority Leader Harry Reid (D-Nev.) is facing new pressure to include limits on greenhouse gases in an energy bill.

“Climate change advocates worried the Senate will move an energy bill this year without the limits want Reid to reject an energy-only approach.”

Mr. Geman explained that, “The missive to Reid shows concerns among the groups are growing that an energy only approach is gaining traction with lawmakers worried that climate change measures could hurt their reelection chances.”

Centrist Democrats such as Blanche Lincoln (D-Ark.) and Byron Dorgan (D-N.D.) say the Senate should vote on energy legislation approved by the Senate Energy and Natural Resources Committee in June.

“That broad bill includes new renewable energy requirements, expanded federal financing for low-carbon energy technologies, new Gulf of Mexico oil-and-gas drilling and energy efficiency programs, but no limits on carbon emissions.”

Amy Harder reported yesterday at the National Journal’s Energy and Environment Blog that, “Sen. Lindsey Graham, R-S.C., said today that skeptical Republicans and Democrats should throw their support behind climate change legislation not only because it’s good for the economy and the environment, but because Congress desperately needs a win under its belt.”

“Graham reiterated the calls by Sen. John Kerry, D-Mass., and White House energy czar Carol Browner earlier today that any climate and energy bill must include a price on greenhouse gas emissions. He also told reporters later that there are Republicans willing to vote for a bill that has some type of emissions control if there are robust provisions for nuclear energy and offshore oil drilling.”

Yesterday’s update noted that, “What type of emissions control system could garner the most support still needs to be worked out, Graham said. He expressed support for the cap-and-dividend bill sponsored by Sens. Maria Cantwell, D-Wash., and Susan Collins, R-Maine. This bill would cap emissions at the sources, such as power plants, and send rebates directly back to consumers to offset higher energy prices.

“Calling his recent meeting with the two senators ‘eye-opening,’ Graham said their proposal ‘had simplicity to it that I didn’t quite understand. It had many attractive components.’”

Darren Samuelsohn of Greenwire reported yesterday at The New York Times Online that, “Sen. John Kerry (D-Mass.) urged climate bill supporters today to strike a populist note in lobbying for a sweeping new environmental law that will reduce traditional air pollutants while also tackling global warming.

“‘I want you to go out there and start knocking on doors and telling people this has to happen,’ Kerry said during a conference hosted by labor, farming, military veteran and environmental groups. ‘You know if the Tea Party folks can go out there and get angry because they think their taxes are too high, for God’s sake, a lot of citizens ought to get angry about the fact that they’re being killed and our planet is being injured by what’s happening on a daily basis by the way we provide our power and our fuel and the old practices we have. That’s something worth getting angry about.’”

Yesterday’s update pointed out that, “Kerry blasted The New York Times for a story published [on Wednesday] that said the trio would end up drafting a bill that is more modest than their original expectations.

“‘Nothing could be further from the truth,’ Kerry said. ‘We’re not scaling back our effort. We haven’t changed our goals one bit. We’re simply trying to figure out what the magic formula is to be able to get 60 votes. Our goal remains exactly what it was before, to price carbon and to create a target for the reduction of emissions that’s real. That’s the goal.’

“‘There are any number of ways of skinning this cat, and we’re not stuck on one idea, so that’s what they’re misinterpreting,’ he added. ‘We’re looking around for a way to come at this that can get the job done.’”

Mr. Samuelsohn added that, “Several Senate moderates, including Byron Dorgan (D-N.D.), Blanche Lincoln (D-Ark.), George Voinovich (R-Ohio) and Lisa Murkowski (R-Alaska), have suggested that Congress move first on a pared-down approach that just addresses energy policy, with climate limits perhaps coming later. But there remain questions about what will actually gain momentum on Capitol Hill.

“‘The economy is the reason we have to focus on clean energy manufacturing, because that’s the jobs,’ said Sen. Debbie Stabenow (D-Mich.). ‘I think we’ll see an energy bill; whether it be the bill coming out of committee or a more comprehensive bill, I’m not sure.’

But Stabenow also said a limit on greenhouse gas emissions could benefit agriculture interests by allowing them to participate in a market that pays them for environmentally friendly offset practices. ‘I think that it’s important in some form to have a price on carbon,’ she said.”

Bloomberg writers Daniel Whitten and Kim Chipman reported yesterday that, “A so-called cap-and-trade bill that passed the House of Representatives last year with support from Obama has stalled in the Senate. A poll released today by Yale and George Mason University found U.S. concern about global warming has ‘dropped sharply.’ Of those polled, 50 percent are somewhat or very worried about global warming, down from 63 percent in the fall of 2008.”

The Bloomberg article stated that, “Senator Barbara Boxer, a California Democrat and sponsor of the cap-and-trade bill in the Senate, said ‘incremental’ steps may be needed. Lawmakers have proposed adopting certain energy provisions as part of jobs legislation.

“‘When we have the 60 votes for cap-and-trade that’s when we would go, but until we have that, we can’t just do nothing,’ Boxer said in an interview. ‘We have to keep working.’”

Meanwhile, Juliet Eilperin and David A. Fahrenthold reported in today’s Washington Post that, “This winter’s extreme weather — with heavy snowfall in some places and unusually low temperatures — is in fact a sign of how climate change disrupts long-standing patterns, according to a new report by the National Wildlife Federation.”

Climate Issues- International Perspectives

David McKenzie reported today at The Weekly Times Online (Australia) that, “Prime farming land will be protected from wholesale tree planting and soil carbon sink under the federal coalition’s new climate change policy.

Climate change spokesman Greg Hunt told The Weekly Times there would be no incentives for tree planting on prime land in the policy and pledged a review of existing incentives, including tax breaks for carbon-sink forests.

“‘We will not be adding incentives for the wholesale re-afforestation of 100 per cent prime cropping land,’ Mr Hunt said.”

The article added that, “National Farmers’ Federation economics manager Charlie McElhone welcomed the recognition of the importance of prime farming land, but said details of the coalition’s approach were still sketchy.”


DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “USDA Undersecretary for Farm and Foreign Agricultural Services Jim Miller, who spent several days last week in Russia in meetings on trade conflicts, said Monday that U.S. and Russian officials are working on a new export certificate that would limit the amount of tetracycline used in U.S. hogs. However, he said that the limit is not related to any domestic campaigns or congressional efforts to curb the non-therapeutic use of antibiotics in farm animals.

“Miller told reporters that he had ‘several days of very productive meetings’ in Russia on issues involving U.S. exports of chicken, beef, pork, dairy, processed meat and pet food. Miller said he and Russian officials would be exchanging letters over the next few weeks to try to clarify issues.

“Russia, which has been a key export market for U.S. chicken, has effectively banned U.S. chicken, and Russian officials have said they intend to be self-sufficient in chicken production within three years.”

Meanwhile, Bloomberg writer Lucian Kim reported yesterday that, “The U.S. has failed to respond to an offer to jumpstart stalled negotiations on Russia’s membership in the World Trade Organization, First Deputy Prime Minister Igor Shuvalov said.

“Shuvalov told Prime Minister Vladimir Putin today that he had proposed raising talks to the ministerial level during a September visit to Washington, according to a statement on the Russian government’s Web site.”

And Reuters writer Doug Palmer reported yesterday that, “President Barack Obama on Wednesday launched a drive to double U.S. exports over the next five years in a move that reaches out to business groups and Republicans who have criticized his inaction on trade.”

CFTC Issues

Reuters writers Christopher Doering and Tom Doggett reported yesterday that, “Congress should require banks and other big players to trade derivatives on regulated exchanges as an ‘absolutely essential’ part of regulatory reform to prevent another market crisis, the chief U.S. futures regulator said on Wednesday.

“Exchange trading of ‘standardized’ swaps is an important element in the Obama administration proposal to bring over-the-counter derivatives under federal control. The plan also calls for reporting trades and processing through clearinghouses to reduce risk.”

The article added that, “‘Make no mistake: This is an absolutely essential component of reform,’ said Gary Gensler, chairman of the Commodity Futures Trading Commission, referring to trading of swaps on regulated exchanges and electronic platforms.

“In prepared remarks, he said requiring banks and other Wall Street dealers to bring their standardized transactions to transparent trading venues would ‘shift the information advantage from a small group of derivative dealers on Wall Street to the broader market.’

“While the House of Representatives approved its financial market overhaul bill in December, the Senate is in the early stages of assembling its own regulatory reform plan and there is no timetable for when it might move forward.”

Crop Insurance

A news release issued yesterday by the National Farmers Union indicated that, “Today National Farmers Union (NFU) President Roger Johnson submitted a letter to United States Department of Agriculture (USDA) Secretary Tom Vilsack expressing concern regarding potential cuts to the Federal Crop Insurance Program in the Fiscal Year 2011 Budget.

“‘The crop insurance program under the U.S. Department of Agriculture’s Risk Management Agency provides a critical component of the farm safety net,’ said Johnson. ‘In making annual planting decisions, producers rely upon crop insurance products to maintain stability and assurances in the event of reduced yield from natural disasters.’

While Congress provided significant funding to the federal crop insurance program through the 2008 farm bill, Administrative and Operating reimbursement was reduced by 2.3 percent and program outlays were reduced by $3.9 billion over five years. As the current administration considers programs for budgetary savings, NFU emphasizes that cuts should not be made to programs that are critical to the operation of agricultural producers.”

Keith Good

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