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.

With Control of Both Houses, GOP Introduces Group of Roll-Back Bills

With their control of both houses of Congress now re-established, Republicans wasted no time last week in introducing a number of bills dealing with energy and environmental subjects, several of which are aimed at either rolling back or weakening the regulatory authority of the Environmental Protection Agency. Many of the measures had been introduced in the House after Republicans took control of that chamber in 2011, but they stand a better chance of being considered in the Senate now that the GOP holds the majority there.

One bill introduced in the Senate would allow Congress to rescind up to 7% of the budget for the EPA administrator's office if the administrator fails to meet certain deadlines for regulatory review requirements. Another would prohibit the United States from regulating greenhouse gas emissions until India, China and Russia implement similar policies, while a third would amend the Endangered Species Act to require the publication of a draft economic analysis of economic effects of critical habitat designations. The draft economic analysis would have to examine the potential effects of a proposed endangered species listing on property values, employment and the collection of state and local taxes.

If last week's Capitol Hill activities are an indication of what may come, it appears the 114th Congress will be far more active than the previous two.

***

Inhofe Not Relying on China's Pledge on Climate Change

Senate Environment and Public Works Chairman Jim Inhofe, R-Okla., is seen by many as the chamber's chief climate change denier, especially after having written a book titled, "The Greatest Hoax: How the Global Warming Conspiracy Threatens Your Future."

Last week, Inhofe addressed the subject of last November's pledge by President Barack Obama and Chinese President Xi Jinping that the two countries would take steps to reduce their carbon emissions. In the past, some critics complained that unless other countries, most notably China and India, seriously addressed carbon emissions, the United States could accomplish relatively little by acting unilaterally. China's statement in November was seen as a way to get beyond that criticism and attract greater international support for steps to reduce greenhouse gas emissions. However, it did nothing to mollify Inhofe.

Speaking with reporters, Inhofe said if he was in the position of Chinese leaders, "I think I would fabricate all kinds of commitments and pilot programs and just not live up to them." He claimed to have spoken with some people in China who admitted the nation was "effectively lying" so they could benefit economically while the United States implemented costly environmental regulations.

As chairman of the Senate committee that oversees the nation's environmental policies, Inhofe now is in a powerful position to block any actions on climate change that he does not want. He can be expected to use that power frequently over the next two years of his chairmanship.

***

Washington Insider: Nutrient Trading to Clean Up Drinking Water

The objective of cleaner drinking water for residents of smaller cities coupled with reports of growing pollution threats are making the water quality issue increasingly controversial. Each of the three main sources of pollution -- agriculture, industry and municipal water treatment plants -- tend to resist actively and politically when controls are debated.

Dustin Miller, general counsel for the Iowa League of Cities, which advocates for state's municipalities, told the press recently that cities see trading pollution reduction credits as a possible cost-efficient alternative to spending millions to upgrade their wastewater treatment systems. Improvements to treatment plants are possible, he said, but often have diminishing returns. Reducing nutrient levels can be achieved, he said, but at substantial cost.

Setting up a framework in which cities can buy credits for nutrient reductions achieved through less expensive controls may be a better option and one being tried in other parts of the country, he notes. Such programs often include buying credits from farmers who have cut their nutrient pollution by installing buffer strips between their fields and a local waterway, taking some land out of production or improving their drainage management, all options that are less costly than increasing controls at a wastewater treatment plant.

Iowa's nutrient-reduction strategy requires numerous wastewater treatment facilities to cut the nitrogen and phosphorus they discharged into rivers and streams. Miller said the reductions from these sources are significant, and the costs substantial and some cities have been forced to continually increase their rates by double-digit percentages. He thinks these policies are not sustainable.

As a result, the league of cities is evaluating more than 40 different water quality trading programs, including those being implemented in states like Wisconsin and Virginia in hopes of finding or creating one that is the right fit for Iowa, he said.

The problem is that while the cities are responsible for part of the pollution entering the state's waterways, there are other sources as well, including agriculture. Since Iowa is a very agricultural state, Miller said, farmers will need to be involved if nutrient pollution controls are to be effective.

Several of the options being considered allow trading between cities as well as among industrial dischargers. In addition, the league also is examining the possibility of trading between nonpoint-sources, such as farms, and point-source dischargers as a means of addressing agricultural pollutants.

Any effective program must be easily understood by communities, end-users and farmers, and it must engage the environmental community. The league is working to insure it has a policy and framework acceptable to stakeholders which is verifiable and appealing to the environmental community, Miller said. In that regard, his group has been consulting with the Iowa Environmental Council, as well as both Iowa State University's Nutrient Research Center and the University of Iowa in evaluating trading programs.

Susan Heathcote, spokeswoman for the Iowa Environmental Council, said the environmental group has discussed the program with the municipal group and is interested in any plan that will help the state reduce the amount of nutrients flowing into its waters.

She thinks trading between cities with wastewater treatment plants would be helpful, but the council hasn't yet made trading a priority because programs tend to be limited to point-source dischargers and have only a minimal effect on nutrient levels in the state.

Heathcote noted farmers are looking for proposals that allow them to reduce their nonpoint-source pollution but also enable them to manage efficient farming operations. She also indicated that a key part of the council's interest is that land changes made would be permanent -- "a permanent step that could have significant effects on Iowa nutrient pollution."

At the same time, it is fair to note farmers in the Corn Belt have had significant experience in evaluating the economics of long-term land use shifts under the Conservation Reserve Program. That experience suggests relatively few producers in this region are likely to find permanent land retirement attractive at prices these markets are expected to offer.

Still, reductions in land use intensity may offer significant reductions in nutrient run-off with far smaller effects on farming operations -- suggesting the evaluation of alternative trading schemes should be done carefully and with open minds regarding both environmental and agricultural objectives, Washington Insider believes.

---

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN's Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the U.S. Ag Policy, U.S. Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@telventdtn.com

(GH/CZ)

Copyright 2015 DTN/The Progressive Farmer. All rights reserved.