Washington Insider-- Monday

Climate Change Summit in Morocco

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

US Ag Exports Hit $129.7 Billion for FY 2016

U.S. agricultural exports in Fiscal 2016 totaled $129.7 billion against imports of $113.11 billion for a trade surplus of $16.62 billion, according to USDA's U.S. Agricultural Trade Data update.

September U.S. agricultural exports were valued at $11.1 billion with imports of $8.879 billion for a trade surplus of $2.2 billion. That marked the largest trade surplus since November 2015 when it was $3.5 billion. The export total was down slightly from August while imports slumped $539 million from August.

Compared to Fiscal 2015, the value of U.S. agricultural exports in Fiscal 2016 declined by $10.02 billion while imports fell $1.13 billion resulting in a trade surplus that was down $8.89 billion.

Based on USDA's latest forecast for Fiscal 2016, the import outlook was spot on at $113.1 billion while the export forecast was $2.7 billion too low.

WOTUS Concerns Raised by Environmental Groups

Endangered, threatened species could be put at risk

Endangered and threatened species may be at risk because the Environmental Protection Agency's (EPA) waters of the US (WOTUS) rule excludes large swaths of wetlands, ponds and ephemeral streams critical to their survival, environmental advocacy groups said in briefs filed in a case before the US Sixth Circuit Court of Appeals.

The allegation was raised by a coalition of environmental groups led by Waterkeeper Alliance. They contend the two agencies responsible for the rule, EPA and the U.S. Army Corps of Engineers, failed to consult with the U.S. Fish and Wildlife Service and National Marine Fisheries Service regarding the potential impact on species.

Federal agencies are required to consult under Section 7(a)(2) of the Endangered Species Act (ESA) if a proposed action "may affect" listed species or their critical habitat, the groups argued. The "may affect" threshold, they said, is low enough to apply to the WOTUS rule because it refers to "Any possible effect, whether beneficial, benign, adverse, or of an undetermined character" that triggers the formal consultation requirement.

"The breadth of the Rule, which establishes the framework for determining the jurisdictional status of every waterbody in the nation, strongly suggests that ESA consultation was required here," the groups added.

One provision cited by the groups is the rule's 4,000-foot limit for determining whether a significant nexus exists between navigable waters and isolated ponds and wetlands, which they said is "arbitrary and capricious." They noted an April 2015 memo by Jennifer Moyer, regulatory programs chief for the corps, who said the application of the significant nexus test could remove as much as 10 percent of waters, mostly wetlands, that are currently jurisdictional under the statute.

Washington Insider: Climate Change Summit in Morocco

Amid the white-hot frenzy of U.S. politics, many global observers are watching the climate talks now getting underway in Marrakech, Morocco. Bloomberg is reporting this week that negotiators from nearly 200 nations will convene a new United Nations climate change summit "for the first time without the specter of years, or even decades, of failed climate deals hanging over their heads."

The summit comes less than a year after the nations of the world clinched the first truly global climate pact in Paris. Then, Bloomberg says, almost everyone assumed would take years to ratify and implement. Instead, more than 90 parties, including the United States, but also rapidly developing China, India and Brazil, have already formally joined the accord. That was more than enough countries to push it into effect last Friday.

Still, the negotiators are approaching climate issues somewhat tentatively perhaps to tamp down expectations. "Veteran negotiators and environmental groups that track the negotiations are quick to note what won't be done at Morocco summit and that is that negotiators won't be considering further strengthening pledges nations made to cut greenhouse gases. That won't happen until the 2018 "facilitative dialogue" where countries will assess whether they need to be more ambitious to address the global climate threat, Bloomberg says.

This is true in spite of "broad agreement" that the actions developed and developing nations pledged won't be enough. A recent UN report warned that the world still needs to shave another 25% off its projected greenhouse gas emissions through 2030 to avoid surpassing the global temperature goal.

Under the Paris pact, countries vowed to keep the global temperature rise "well below" 2 degrees Celsius this century, compared to pre-industrial levels, and "pursue efforts" to hold the line at a 1.5 degree C increase. In addition, the UN report notes that the world remains "on track" to see temperatures rise between 2.9 and 3.4 degrees C later this century.

The agenda in Morocco will include questions of how to ensure nations are transparent in monitoring, reporting and verification of their climate actions, although final procedures and guidelines for implementing the Paris Agreement aren't due until 2018. Thus, negotiators say, expect only modest progress in Marrakech.

Jonathan Pershing, the U.S. special envoy for climate change, said the Paris pact's speedy entry into force means negotiators are now under pressure to produce results, even if they are largely in the form of a work plan for the multiyear implementation. "So the work plan happens here" at the Morocco summit, "and the work itself will take place between now and probably 2018," Pershing told Bloomberg.

The nearly 200 nations almost certainly will resume a still-simmering debate over how much help richer nations provide vulnerable developed nations; and how to address the loss and damage suffered by nations already being hit by climate impacts.

Morocco climate envoy Hakima El Haite told Bloomberg the summit will include a focus on the needs of developing countries, which account for the bulk of emissions over the coming decades but that activities in Marrakech will include "brainstorming" about new solutions from cities, regional governments, the private sector and other institutions and include daily themes to highlight climate challenges and solutions for agriculture as well as oceans.

The Paris pact included a compromise, providing developing nations an explicit reference to the loss and damage issue in the text. But in a concession to developed nations, the text of the deal cautions that nothing in the agreement should be interpreted as a "basis for any liability or compensation."

The Morocco summit also could be an opportunity for negotiators and climate advocates to pressure some top greenhouse gas emitters that have yet to ratify the deal, a group that includes Russia, the world's fourth largest emitter, as well as Japan (5th) and Australia (14th). Some of the countries yet-to-ratify are likely to use the spotlight of the Marrakech negotiations to announce they have formally joined the pact.

A major aspect of these talks is their ponderous nature, as well as the enormously important decisions that they may, or may not, consider. Changes of the magnitude likely to be addressed in these and subsequent talks will affect all economic sectors, and should be watched closely by producers as they proceed, Washington Insider believes.

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