Friday, February 8, 2008

Climate Bill, Energy Costs & Farmers

A funny dynamic has started to occur on the climate change issue: agriculture is starting to wake up to their own interests on this bill -- and to the fact that their interests are not always the same as the larger fossil fuel industry. As this has started to happen, there have also emerged a big push to put agriculture "back in its box" using ag's political capital and friendly rural faces to go down with the ship in terms of fighting climate change legislation -- while the fossil fuel industry makes its own side-deals with lawmakers on what they now see as an inevitable law.

One of the key strategies that is being trotted out and used against those in the agriculture industry who have decided to engage in shaping a climate bill to be the best it can be in terms of creating a carbon offset market, is that the cost of any climate bill -- let alone Lieberman-Warner are SO high -- that farmers would be participating in their own demise by working on such a bill. This scare tactic is very effective if you have not been following the full climate issue and don't realize just how inevitable a climate bill is. To these cost scare tactics, I offer the following thoughts:
  1. The only way that the "do nothing" crowd on climate change should be believed or listened to at all is if they can guarantee that there will not be a mandatory climate bill in the next few years. I triple dog dare them to come up with thoughtful analysis that shows that Corporate America + a Democratic congress + a President from either party that supports climate legislation = no bill ??
  2. Higher energy costs ARE a concern -- AND THAT IS EXACTLY WHY ITS CRITICAL FOR FARMERS TO GET INVOLVED. Ag offsets are the only way to allow coal-fired utilities to keep burning coal and keep energy costs down while the reductions in GHG emissions move forward. If you are concerned about higher energy costs for farmers, then you'd better MAKE SURE that farmers have the option of selling their carbon on the market to reduce those costs for themselves and for the entire economy. We are not talking about getting involved in this bill because farmers want climate action now -- we are talking about farmers getting involved in a bill that WILL pass and making it better.
  3. The cost estimates that the "do nothing" climate crowd are using are HYPER inflated and assume all sorts of things that the Lieberman-Warner bill does not call for and will not create -- at least according to multiple universities and government agency economic modeling -- compared to a for-profit firm hired by the Edison Electric Institute to develop the worst case scenario.
  4. Keep in mind that those who tell you we must have a "safety valve" or price cap on carbon -- are only guaranteeing a price cap for industry -- they are NOT dealing with YOUR higher energy costs which the energy companies will still pass on to you (farmers), but which you will not be able to reduce for yourselves because there is no carbon offset market when you have a price cap on carbon -- which becomes essentially a carbon tax.

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