Washington Insider -- Monday

By DTN's Washington Insider

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

Congress Closer to Finding New Money for Highway Trust Fund

With the U.S. Highway Trust Fund estimated to run short of cash as early as August, there is increasing pressure on Congress to find a new source of money or risk having transportation infrastructure projects across the country shut down during the height of the summer work season.

It now appears that the prospect of delayed highway construction and repair is driving together lawmakers from both parties and both chambers of Congress, who are uniting behind a plan to provide $11 billion for the HTF through May 2015. Longer term, however, the situation is less certain, as members debate whether to raise taxes to provide infrastructure financing.

House Speaker John Boehner last week told reporters he sees little prospect that Congress would pass a long-term plan any time soon and said he remains opposed to raising the nation's 18.4 cents-per-gallon gas tax that funds highway projects.

When the House returns from its August break, it will have only 12 legislative days before the November elections. Any long-term fix to highway funding almost certainly will become a problem for the incoming 114th Congress in January.

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House Appropriations Subcommittee Cuts EPA Spending

The House Appropriations Interior, Environment and Related Agencies Subcommittee last week approved the fiscal 2015 spending bill to fund the Interior Department and the Environmental Protection Agency which. As expected the bill included sharp cuts for the EPA. Democrats reportedly will offer amendments to the measure when it comes before the full committee.

Rep. Jim Moran, D-Va., the ranking member on the subcommittee said the bill contained "23 problem legislative riders and funding limitations" that would undermine environmental laws, threaten public health and safety and deny the effects and consequences of greenhouse gases.

It is widely known that Republicans have a low opinion of the EPA and its regulations. Appropriations Committee Chairman Hal Rogers, R-Ky., also pointed out that Republicans are unhappy with the agency for failing to respond to congressional inquiries with accurate and full information. As punishment, the bill cuts funding by 50 percent for EPA's congressional affairs office, its budget office and its administrative office.

Just how much more efficient communications between EPA and Congress will become once the funding at those three EPA offices is cut by half has not been indicated. The question may be asked when the full committee takes up the measure, likely later this week.

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Washington Insider: Working With China on Greenhouse Gas Emissions

In a process well below the radar of most policy observers, top officials from the United States and China are working to define a workable future climate change deal, with a heavy reliance on technology. At a mid-July strategic and economic forum in Beijing, observers suggested that there were more examples of cooperation than confrontation.

Yet another top Chinese official called on his fast-developing nation to develop a "war on pollution" to tackle worsening air quality — a move that observers suggest implied high level commitment to both greenhouse gas controls and anti-pollution efforts. The Beijing talks were the sixth round of the U.S.-China dialogue and are credited with signs of increasing collaboration between the two powers.

This U.S.-China Strategic and Economic Dialogue drew a number of top Chinese and U.S officials, including Secretary of State John Kerry. It included a session highlighting possible areas of cooperation from both countries on both climate change and air pollution.

China Vice Premier Wang Yang spoke to U.S. counterparts about "needing a war on pollution" to make a dent in worsening air quality. In March, China's Premier Li Keqiang had made a similar pledge, vowing that the country would "declare war" on pollution with stronger measures over the coming year.

Todd Stern, the top U.S. climate negotiator, told reporters that the United States welcomed the Chinese official's comments on links between climate change and air pollution, and that he and his Chinese counterparts also discussed efforts by both nations to develop emissions reduction pledges to be tabled next year in the run-up to the late 2015 negotiations in Paris on a potential global climate agreement.

The United States has pledged to cut its emissions 17 percent by 2020 from 2005 levels. It is not publicly discussing whether it will offer even more ambitious reductions under the post-2020 deal expected to be discussed next year — a point Stern emphasized to reporters. His position is that the United States is "certainly not at a point" where it is discussing "concrete" post-2020 reductions, but he also appeared eager to suggest that these are in the works.

Stern also emphasized that Obama administration actions and policies already under way to strengthen vehicle efficiency rules and limit power plant carbon pollution are the "foundation stone for whatever targets we do post-2020."

China is already pledging to cut carbon emissions "per unit of economic output" by as much as 45 percent from 2005 levels before 2020, a move that increases pressure on the United States. In addition, China says it plans to release in the first half of 2015 a plan including actions it will take to address climate change in the years after 2020.

More than 190 nations now expect to meet in Paris in late 2015 to craft a new global climate accord that includes commitments by both developed and developing nations beginning in 2020. China and the United States are essential to any such agreement. Together they account for about 45 percent of global carbon dioxide emissions, observers note.

At the recent session, the United States and China announced the launch of eight demonstration emissions control projects — four on the capture, utilization and storage of carbon dioxide emissions and four on smart grids. These implement pledges made by the countries at their 2013 meeting. China's Huaneng Clean Energy Research Institute and Seattle-based Summit Power Group LLC announced that they will release details of collaborative "clean coal power" efforts in the next few days. Last April, the two launched the Climate Change Working Group to promote "forceful" large-scale cooperative action on technology, research, conservation and alternative and renewable energy sources.

A major reason the United States was unable to ratify the 1997 Kyoto Protocol was its lack of hard emissions control targets for developing countries, including China to match those pledged by developed nations. While there are still significant gaps to close between developing and developed countries, the growing willingness of previous holdouts like China to discuss greenhouse gas control projects –– and share technology –– is widely seen as a positive sign for possible tougher future agreements, Washington Insider believes.

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