Indirect Land-Use Change and the Waxmen-Markey Bill

Leave it to The Economist to fill in the details on how this bill got passed. Basically house members from agriculture districts were promised favors in exchange for support.

To mollify the farmers, Mr Waxman had to agree that “indirect land-use changes” would not affect how American farmers producing crops to make ethanol would be considered under the bill. Farmers had howled that, by the original proposals, planting more crops to produce ethanol would mean less land devoted to food crops. This would clearly cause food prices to rise. Farmers in (say) Brazil might then cut down Amazon rainforest to make up the shortfall in America. That chopped-down Amazon would have counted against the Iowan corn farmer when carbon credits were doled out. Mr Waxman agreed to suspend the provision for five years, so the National Academy of Sciences could further study the subject.(How many inane aspects such as this made it through? Question mine)

The next big trade-off also came late in the day at the insistence of the farmers. The Department of Agriculture, rather than the Environmental Protection Agency, will determine what counts as a carbon “offset”. This means that farmers who prevent carbon emissions by, for example, planting trees or reducing tillage, would get carbon credits. The EPA is reckoned to be a tough regulator that would make sure farmers did not get credits for doing things that they would do anyway. The Department of Agriculture is expected to be more friendly to farmers.

Offsets that could be sold as to energy companies as a revenue stream. Of course I am assuming the biggest winner will be the agri-buisness folks, you know the same people who have made a killing off of ethanol.

Many of the mainstream environmental groups-the Natural Resources Defence Council, the Environmental Defence Fund, the Sierra Club and others-have said that the bill is flawed but far better than nothing. More than that, they claim that once in place it can be tightened over time.

Of course if the GOP gets its act together they could be watered down or even repealed.

But the bill must pass the Senate where farm states have even more clout than in the House (since each state, no matter how sparsely populated, gets two senators). It must go through another clutch of committees, each of which is susceptible to lobbying by special interests with long experience of getting their way. The energy committee, for example, has already passed a bill on renewables that has disappointed greens. The Senate’s majority leader, Harry Reid, wants a vote on the package by mid-September.

Between health care and this I am skeptical that both will get through this year, more likely the Senate will pass a bill the house finds unpalatable, but Obama will end up pushing for just so he could sign something into law.