Washington Insider- Wednesday

Science and Climate Change

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

Sixth Circuit Will Hear WOTUS Challenges

Challenges to the Environmental Protection Agency’s (EPA) Waters of the U.S. (WOTUS) rule will be heard by the U.S. Sixth Circuit Court after a three-judge panel found district courts don’t have jurisdiction over the matter.

The government had favored a finding that circuit courts were the appropriate venue for hearing challenges over WOTUS rule, saying that it would help expedite a resolution to the case and conserve judicial resources. Opponents of the rule, including the American Farm Bureau Federation (AFBF) and other industry groups had asked that the case be heard at the district court level.

The AFBF has indicated that it is likely to petition the full Sixth Circuit to rehear the question of court venue, again making the case that the matter belongs at the district court level. The ruling does mean that an existing nationwide stay on implementation of the WOTUS rule will remain in effect, something favored by those opposed to the rule.

The Eleventh Circuit Court recently shelved plans to proceed with oral arguments over WOTUS, pending a decision by the Sixth Circuit. District courts in other U.S. circuits are not bound by the Sixth Circuit’s ruling on venue, so the matter is still far from settled on a nationwide basis.


Producer Use of USDA Marketing Assistance Loans Continues to Rise

Producers have taken out marketing assistance loans (MALs) an increasing amount of 2015-crop corn, soybeans, wheat and sorghum, according to USDA data.

The loan totals for the week ended Feb. 15 are the highest for corn since the 2010 crop year when producers took MALs on 801.129 million bushels of corn, and the highest levels since the 2009 crop year for soybeans (123.504 million bu.), wheat (102.503 million bu.) and sorghum (1.760 million cwt).

Price support loans disbursed in February carry a 1.625% interest rate, the same level as was the case for January, but up from 1.375% in November.

MALs are designed to provide producers interim financing at harvest time to meet cash flow needs without having to sell their commodities when market prices are typically at harvest-time lows.

Marketing assistance loans for covered commodities are non-recourse as the commodity is pledged as loan collateral and producers have the option of delivering the pledged collateral to the Commodity Credit Corporation (CCC) in satisfaction of the repayment of the outstanding loan for the loan at maturity -- forfeiture. A settlement value is determined and applied to the outstanding loan principal and interest.

Market loan repayment provisions allow repayment at less than principal plus interest under certain conditions. The difference between the repayment rate and the loan level plus interest is retained by the producer and is called a marketing loan gain.

MAL use now totals $5.778 billion as of Feb. 15, including $1.283 billion for corn, $1.171 billion for upland cotton, $3.9 million for sorghum, $551 million for soybeans and $183 million for wheat. Expectations as prices declined going into harvest were that use of the MAL program would increase and data shows that is the case, especially with some farmer lenders/bankers suggesting the loan program use for farmer borrowers.


Washington Insider: Science and Climate Change

Bloomberg recently reported a highly unusual sequence of developments in the climate science fight. It turns out that Robert Mercer, a heavy-duty supporter of climate skeptics has also backed science believers, leading observers to ponder what all this might mean.

For some time, Mercer (a prominent Ted Cruz supporter and the biggest single donor in the presidential race so far) has also been the biggest backer of a California scientist who went from climate skeptic to believer over the last few years.

Mercer is the co-chief executive officer of Renaissance Technologies, a Long Island hedge fund that uses computer studies to identify trading opportunities. Since around 2010, he’s emerged as one of the country’s biggest donors to conservative causes, Bloomberg notes.

These include tough questions about the science behind the assertion that humans are causing global warming raised by groups including the Heartland Institute, which got about $5 million from Mercer’s foundation between 2008 and 2014, and Doctors for Disaster Preparedness, a “fringe-science” forum that’s hosted prominent skeptics such as Dr. Willie Soon, Bloomberg says. Mercer has also supported three Congressional bids by Arthur Robinson, the Oregon chemist behind a petition by scientists who question climate science.

So, it was no surprise when Mercer’s family foundation donated heavily to a nonprofit group called Berkeley Earth, Bloomberg says--about one-third of the group’s funding in 2014, and recently its biggest single source.

That group was founded by Richard Muller, a physics professor at the University of California at Berkeley who has been an outspoken critic of climate science and who pledged an “independent review” of global warming data when the group was founded in 2010. His biggest initial funder was Charles Koch, the conservative industrialist who is a major supporter of several climate-skeptic organizations.

More recently, however, Muller has declared widely that his reviews found the earth is indeed warming. He followed his initial report with the conclusion that almost all of the warming was human-caused carbon emissions. He announced the latter findings in the New York Times in 2012, calling it a “total turnaround” and labeling himself a “converted skeptic.”

Muller’s “conversion” is a mystery to environmentalists who wonder if they have a new supporter. Perhaps even more mysterious is the observation that he is still supported by anti-science groups. “It doesn’t make any sense that a climate-change denier would invest in him,” Connor Gibson, a researcher at the environmentalist group Greenpeace who tracks the funding of climate science told Bloomberg. “I’m thoroughly confused.”

Muller told Bloomberg that Mercer has never criticized anything that he had published or done. “Never has he indicated any hope for any conclusions we could reach,” Muller said. My sense is he felt the data out there -- the big data – were not being analyzed properly and that we would do so.

At the same time, Muller has received criticism from some former friends. As recently as 2011, Heartland posted an essay on its website calling him an “eminent scientist” and citing approvingly his criticism of mainstream climate science. By the next year, however, its weekly newsletter dismissed him as a “longtime global warming alarmist” and said he relied on debunked data.

Cruz, with his large super-PAC contributions from Mercer, asserts that the earth is actually in a cooling phase, a contention Bloomberg questions, noting that 15 of the hottest 16 years have occurred since 2001, according to the National Aeronautics and Space Administration and the National Oceanic and Atmospheric Administration. Cruz persists with the observation, “Climate change is the perfect pseudoscientific theory for a big government politician who wants more power,” he told NPR in December.

As for Koch, while his foundation provided $150,000 in initial funding for Berkeley Earth, it didn’t support it in subsequent years. Muller said he doesn’t know if his “conversion” played a role in the loss of Koch’s financial support. “I’ve read him saying he accepts global warming as well. Maybe we had an impact on that, I don’t know,” Muller said.

At this time, there seems to be no way to appraise the apparent tensions among Muller, Mercer, Cruz and others, especially fights intensify among politicians, the administration and the congress regarding anti-emissions programs, and especially concerning reviews now underway in the courts. It is hard to see how an issue could be more tangled or more divisive—and, while a change in view by one scientist has attracted considerable attention, it likely will have little impact on the overall debate, Washington Insider believes.

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