Washington Insider-- Monday

The Bitterest Controversy, Climate

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

Lawmakers Call for GAO to Examine Deals Involving Foreign Companies

Lawmakers are calling on the Government Accountability Office (GAO) to examine a multi-agency board that reviews national security implications of deals involving foreign companies, as congressional reactions to Bayer AG's proposed acquisition of Monsanto Co. continue.

Sixteen bipartisan lawmakers requested the GAO determine whether the Committee on Foreign Investment in the United States (CFIUS) has kept pace with what they say is the growing size and scope of merger and acquisition deals in strategically important sectors of the U.S. economy.

“As we prepare for the upcoming presidential transition, now is an opportune time for GAO to review what has worked well, and where CFIUS authorities may need to be expanded, especially given the rise in state-owned enterprises and state-controlled enterprises from China and Russia, among other designated countries,” the letter said. Other high-profile deals in the agribusiness sector are also in the works, including a merger between DuPont Co. and Dow Chemical Co. and the proposed takeover of Syngenta AG by China National Chemical Corp.

“There have not been substantial structural updates to CFIUS composition or authority since its inception, despite a rapidly changing foreign investment climate, the rise of technology and information warfare, and new state-owned or controlled companies that are structured as independent entities but are largely directed by foreign governments,” Rep. Robert Pittenger, R-N.C., said in a statement announcing the letter.

Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, who was not a signatory to the letter, has also pressed CFIUS to expand its scope. In July, Grassley introduced legislation that would permanently add USDA to the CFIUS review panel, which is headed by the Treasury Department. The USDA participated in the panel's review of the Syngenta deal with China National Chemical Corp., but is not typically included. Grassley has scheduled a September 20 hearing in which top executives from Syngenta, Monsanto, Dow and other major agribusiness companies will testify on consolidation in the sector.

House Panel Clears Bill Expanding Livestock Sale Protections

Processors and producers who buy and sell livestock through online, video or other electronic means would fall under transaction regulations in the Packers and Stockyards Act as part of legislation approved by the House Agriculture Committee September 14.

HR 5883 would amend the 1921 law to expand the definition of “market agency” to include those who buy and sell livestock electronically, not just at a physical facility. The bill also specifies that funds used to purchase livestock can be transferred to the seller electronically or in any other manner that USDA finds appropriate.

The Packers and Stockyards Act offers financial protections for livestock producers engaged in transactions with packers, such as a requirement that meat packers with annual purchases over $500,000 be bonded, as well as trust protections for producers in case of nonpayment by a buyer. The bill would clarify that those protections include more modern avenues for livestock sales, such as the internet.

Washington Insider: The Bitterest Controversy, Climate

Inside Climate News (ICN) is reporting this week that partisan polarization on climate change is growing and tracks closely “another trend: the rising campaign contributions from fossil fuel interests to Republican candidates.” In 2000, 60% of industry giving went to Republicans and 40% to Democrats.

No more. Now the gulf between Republicans and Democrats is much wider and is generating big bucks for Republican politicians who get overwhelming 91% of fossil fuel industry campaign donations. Democrats get about 9%.

ICN says this “deepening divide underscores how much of U.S. climate policy is riding on the November election.” Donald Trump has promised to pull the country out of the Paris accord and Republican majorities in Congress are working to block environmental regulations. Hillary Clinton has vowed to support the global agreement to reduce carbon emissions and build on President Obama's climate initiatives.

In dollar terms, ICN says that “from the beginning of this election cycle in 2015 through the first six months of this year, fossil fuel industry political action committees and employees donated $37.2 million to Republicans running for federal office. In contrast, industry giving to Democrats totaled just $3.8 million.”

There is a chicken and egg argument about what caused the polarization. Are the contributions rewarding the voting, or are the political votes driving the Republican contributions? Robert Brulle, a sociologist at Philadelphia's Drexel University, who studies the fossil fuel money's influence on communication about climate change says "it probably works both ways.” The belief that “this guy's always voting with us, he's one of our friends, let's give him more money sometimes makes him a better friend. It's kind of a reciprocal relationship."

Republicans became much better friends to those who oppose environmental action in Congress since 1970, Dunlap says, and on the League of Conservation Voters' annual scorecards, where 100 signifies a "perfect" environmental voting record, the GOP average in the 1970s hovered between 30% and 40%, while the Democrats stayed mostly between 50% and 60%. Today, the GOP average has dropped to the single digits, while the Democrats' average is about 90%.

Dunlap also looked at The Gallup Organization's regular opinion polling on global warming to track the shift in political polarization over time. The gap between Republicans and Democrats on the question of whether changes in the Earth's temperature are due to human activities grew from 17 percentage points in 2001 to 41 points in polling this year. Eighty-two percent of Democrats believe in human-caused climate change versus 47% of Republicans.

Dunlap now thinks the increasing gap between the parties reflects that opposition to action on climate change has become a "core identity issue" for Republicans, on a par with opposition to abortion or taxes. Anti-regulatory ideology may have made the party "fertile ground" for hardened opposition to climate action, he said.

But Dunlap said the GOP leadership helped encourage the divide, especially since 2008. For example, he said when Senate Majority Leader Mitch McConnell, R-Ky., urged states last year to defy the Obama administration's Clean Power Plan, it sent a signal that the party was aligned with opponents of the regulations, including the fossil fuel industry. Dunlap also said it sent an important cue to rank-and-file Republicans to put pressure on Republicans in Congress who might be inclined to favor action.

Dunlap thinks it will be difficult to reverse the trend, since the partisan divide on climate does not reflect education, he says. He thinks that only a fundamental shake-up in the GOP is likely to dislodge their deep-seated views.

It's just one reason, he says, that this election—and what happens to the Republican party following it—may be crucial for the future of action on climate change.

There’s another factor that Dunlap doesn’t seem to consider, and that is the occurrence of climate events that severely affect property owners—floods, rising sea levels, storms and others. Even skeptics like Trump have been seen requesting aids for property facing new sea water floods. It has long been considered likely that climate deniers would change their views only in the wake of a clear and important climate disaster.

These are occurring with some regularity climate scientists say, but the divide remains. Still, the Inside Climate News main indicator can be expected to become less accurate in the future since the big, national energy companies have strong interests and enormous amounts of resources — and batterings by large climate events affects important areas.

At the same time, there is evidence that a majority of the public now believes that climate change threats are real, and they will have to spend some money to protect against these realities. So, we will see what happens with regard to the climate issues in the future—if nothing else, the issue seems to be climbing the scale of things voters pay attention to. Clearly, the heavy spending by energy companies will continue to influence their political base. But maybe that will turn out to be less than Dunlap thinks. This debate clearly deserves close attention by producers, Washington Insider believes.

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