The issue of farm offsets could be a particularly contentious one as senators wrestle with the particulars of the climate bill. Agriculture interests want to make sure the bill has a robust offset program that can include broad participation of landowners across the country, but environmental groups want restrictions in place to make sure the bill leads to fewer emissions overall.
H.R. 2454, the bill the House passed last month, allows regulated industries that cannot meet greenhouse gas reductions at the smokestack to buy offset credits by investing in green energy or greenhouse gas reduction projects. The provision could significantly reduce compliance costs for some industries.
The offset market could be a boon to farmers and other landowners who plant extra trees to absorb carbon dioxide, install methane capture systems over animal waste lagoons or practice no-till farming to store carbon in the soil. The question for some environmental groups is whether these projects will measurably reduce carbon dioxide overall.
In the first of three EPW Committee hearings this week on the climate legislation, the panel is scheduled to hear tomorrow morning from the heads of the Agriculture Department's climate initiative, the Environmental Defense Fund, a forestry and mining business, and the American Farm Bureau Federation, which has been critical of the House bill. Witnesses are expected to promote some of the economic benefits of including a robust program for farmers and foresters to participate in carbon offsets.
The EPW Committee's bill is almost certain to have an offset program, but the particulars of how it is set up could be a sticking point.
Tomorrow's hearing comes as some groups question whether the House bill's offset program is too broad -- potentially rendering it meaningless in terms of actual emissions reductions. Of particular concern for some groups is a provision that would allow certain farm projects that date back as far as 2001 to qualify. Critics are concerned that instead of reducing carbon, the program may just pay farmers for what they are already doing.
A new analysis from the Environmental Working Group estimates that the House bill could allow the equivalent of more than 67 large coal-fired power plants to avoid any new controls on greenhouse gas emissions without requiring landowners to create any new carbon sequestration projects. "The effect of allowing polluters to take credit for what farmers and ranchers are already doing could significantly impede our progress in slowing climate change," states the report.
The Conservation Technology Information Center estimates that conservation tillage practices were already in use on 174 million acres in 2007, the equivalent of between 87-148 million metric tons of offset credits. Farmers could also potentially gain credit for millions of acres enrolled in farm bill conservation programs.
Farm groups fought to include the provision for "early actors" in the climate bill. They want to make sure that conscientious landowners who started conservation projects early on -- some of whom are already participating in voluntary carbon markets -- can still participate in a new carbon market.
They also warn that a requirement for new participants could potentially create incentives for farmers to plow up conservation lands and then reinitiate the carbon sequestration process.
The Environmental Working Group recommends the Senate bill only allow producers already participating in voluntary markets to transition to the new program. Otherwise, the group says that only conservation projects put in place from 2009 onward should qualify.
Tony Kreindler of Environmental Defense, who had not seen the EWG report, said the timing of the offsets is also of some concern to his group. Testimony from Environmental Defense President Fred Krupp will likely address the issue and recommend a scientific advisory board to oversee the program.
"We are very supportive of offsets as a means of immediate emissions reductions and cost savings for cap and trade," said Kreindler. "But there are ways to improve upon it -- we support very much ways they can make the offset program even better for both the environment and performers."
At a separate hearing last week, Agriculture Secretary Tom Vilsack told the committee it is "crucial" to engage farmers, ranchers and forest landowners in the climate program. He touted the carbon offsets program as beneficial for conservation and job promotion in rural areas.
Vilsack said USDA and other agencies could work to get offsets to scale and ensure the integrity of the program. "It is important that agriculture and forestry offsets have high standards of environmental integrity," Vilsack said. "Quantification and reporting systems need to be rigorous, verifiable and transparent -- and review and auditing systems will need to be in place.
"If these principles are followed, the resulting offsets should be real, additional, verifiable and lasting," he added.
10:00 AM EDT
EPW Hearing Room - 406 Dirksen
Witnesses: Jeffrey Hopkins, adviser for energy and climate policy at Rio Tinto; Bill Hohenstein, director of USDA's Global Climate Change Program; Fred Krupp, president of Environmental Defense Fund; and Bob Stallman, president of the American Farm Bureau Federation.