Friday, October 30, 2009

Just in from Washington

Jake Putnam photo
AFBF: Cap and Trade Senate Bill Fails Farmers and Consumers

Washington--Senate Bill 1733, the Clean Energy Jobs and American Power Act sponsored by Sens. John Kerry, D-Mass., and Barbara Boxer, D-Calif., would, like a parallel bill that passed in the House of Representatives in June, establish a cap-and-trade program to reduce greenhouse gases.

American Farm Bureau Federation President Bob Stallman testified Thursday before the Senate Environment and Public Works Committee saying the American Farm Bureau stands in opposition to the House and Senate versions of the bill.

“One of the major failings of H.R. 2454 was that the measure failed to provide a cost-effective blueprint to transition to a clean energy economy,” said Stallman. “S. 1733 exhibits the same shortcoming.”

Stallman stressed that cap and trade legislation would result in higher fuel, fertilizer and energy costs to farmers and ranchers. Cost increases incurred by utilities and other providers resulting from climate change legislation would ultimately be borne by consumers.

“The impacts of the legislation go far beyond just the farm and ranch community,” said Stallman. “Families will be hit hard with higher energy costs under any cap-and-trade program, an amount that could total up to $200 billion a year for American taxpayers. That will put enormous strain on family budgets.”

Stallman asserted that there should be two essential components to any policy that seeks to transition from one source of energy to new sources: a mechanism that removes the old source and a means to “plug the hole” that is left when that energy source is removed with a readily available, cost-effective new source of energy.

“The principal bills in the House and Senate would accomplish the first element by capping emissions of greenhouse gases (GHGs) by limiting the use of fossil fuels,” continued Stallman. “However, there is little in either bill that would provide an alternative source of energy to the fossil fuels that will be lost.”

Stallman also said that S. 1733 does not make economic sense for agriculture. According to the latest Environmental Protection Agency report “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2005,” updated in 2008, agriculture and forestry emit between 6 percent and 7 percent of the total GHG emitted in the U.S. The same EPA report also indicates that agriculture and forestry have the potential to sequester between 15 percent and 20 percent of total U.S. emissions. Currently these two sectors sequester about 11 percent of total emissions, so these sectors are responsible for reducing more GHG emissions than they emit.

“It stands to reason that any climate change policy should seek to maximize these contributions from agriculture, not punish them,” said Stallman.

Regarding offsets, Stallman told committee members that unlike the House bill, S. 1733 does not specifically provide a place for agriculture and forestry in its offsets program. While the bill provides a pool of 1.5 billion tons of domestic offsets, the bill does not specify who is eligible to provide those offsets. Instead, the president may choose which sector is eligible.

“This uncertainty creates a number of problems both for farmers and ranchers and the offsets program itself,” said Stallman. “S. 1733 places the entire offsets program at the complete discretion of the president, with no sector being assured that any of the offset opportunities they might provide will even be eligible to participate in the program. In this regard, S. 1733 takes a step backward from the House bill.”

“Agriculture and forestry can play a key role in any future national energy policy,” concluded Stallman. “But, S. 1733 fails to recognize this role and would in fact penalize the very sectors that have the best opportunity to reduce greenhouse emissions in the most cost-effective manner for all.”

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