Washington Insider-- Thursday

Biomass Carbon Debate

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

India Asks US for Additional Time to Comply with WTO Solar Program Ruling

An additional 15 months to comply with a World Trade Organization (WTO) ruling has been requested by India relative to a ruling against domestic content requirements included in its national solar program, a senior Indian trade official told Bloomberg BNA.

"This is the least we can ask the U.S. to do. We have been patient with them on implementing the WTO verdict on the steel import dispute. It is time they reciprocate," a senior official from the Ministry of Commerce and Industry told Bloomberg BNA on condition of anonymity.

India is already in the second phase of its three-part program designed to boost solar power and reduce its cost, according to an official in the Ministry of New and Renewable Energy. Changing the provisions midway might have an "adverse impact" the official said. India would be better positioned to implement the changes required by the ruling in the third phase of program, the official added.

Resolution of the matter could open the Indian market to U.S. renewable energy companies who provide solar photovoltaic panels for use in solar power plants. Under WTO rules, a country has 12 months to implement a verdict. However, 15 months may be given in cases that are deemed "exceptional" by WTO authorities and the winning party.

The request from India to the U.S. was already made "informally," and the U.S. has indicated it is “ready” to discuss the matter, U.S. diplomatic sources told Bloomberg BNA.

India's Commerce and Industry Minister Nirmala Sitharaman is expected to make the formal request to U.S. Trade Representative Michael Froman when they meet October 30 during the next round of the U.S.-India Trade Policy Forum, officials said.

EPA Rebuffs Request to Delay Farmworker Pesticide Rule

A bargain offered by agriculture industry groups to the Environmental Protection Agency (EPA) to resolve a dispute over new pesticide safety regulations for farmworkers was rebuffed by the agency.

The dispute centers on a provision of the regulations requiring farmers to turn over information on the pesticides they have used at the request of a third party representing one of their farm workers. The rules are part of EPA's wider overhaul of its farmworker safety regulations, which the agency completed late last year and will enforce starting January 1, 2017.

The agriculture industry is firmly opposed to the third-party measure and is backing legislation attached to a House spending bill that would prevent EPA from implementing it.

Discussions on the issue were held between agriculture industry trade groups and EPA on Aug. 31. Two trade group representatives who attended the meeting told Bloomberg BNA that they offered the agency a quid pro quo: the industry would agree to drop its support for the legislation if EPA delays implementing the third-party provision for a year.

Paul Schlegel, director of environment and energy policy with the American Farm Bureau Federation (AFBF), attended the meeting. He said he told EPA regulators that "if you'd be willing to do this, I'll give you a commitment that we can sit down and do something that accomplishes what you want to do and is still protective of farmworkers."

EPA staffers from the pesticides office also attended the meeting, according to the two industry representatives. Aside from AFBF, the National Cotton Council, USA Rice and United Fresh were among the groups that sent representatives.

The proposal did not seem to sway the EPA staffers, according to both industry sources who spoke to Bloomberg BNA. “I did not come away with a feeling they'd actively consider it,” Schlegel said. EPA spokesman Nick Conger later told Bloomberg BNA in an e-mail that the agency "is committed to working with our state co-regulators and the regulated community to ensure that the January 1, 2017, implementation deadline ... is met and that workers are provided with the protections they deserve."

Key now will be whether the measure makes it into a broader spending plan that lawmakers are expected to work on in a post-election lame-duck session of Congress. The current continuing resolution (CR) that is keeping the government funded as Fiscal 2017 is underway will end December 9.

Washington Insider: Biomass Carbon Debate

The New York Times Business page reported yesterday that an “unlikely bipartisan collection of senators that includes staunch Republican climate change deniers as well as Democrats who support much of the administration’s strategy” want to force the government to assume that burning forests to generate electricity does not add carbon dioxide to the air but is instead “carbon neutral.”

The idea is that wood from forests used for biofuels that are replanted with trees rather than turned into other non-forest uses, the EPA and USDA should recognize that wood and other organic matter as a renewable energy source that is carbon neutral.

The Times thinks this legislation has the potential to “undo” the president’s plan to reduce emissions of heat-trapping carbon dioxide from the nation’s power sector. In fact, it could mean a major hole in the plan that is supposed to cut annual emissions from the power sector by some 250 million tons between now and 2030.

The proposal is mainly the work of Maine’s senators, Susan Collins, a Republican, and Angus King, an independent, who introduced it into the Senate version of the energy bill passed earlier this year. It has broad support, and passed out of the Senate Energy Committee by a unanimous voice vote, according to those speaking for the chairman and ranking member.

“The Senate has strongly supported the benefits that biomass utilization can have, including instances in which it is a carbon-neutral source of energy,” they wrote in a statement. “Conversations about the amendment are expected to continue among the bill conferees, the amendment sponsors and other congressional colleagues as the energy bill moves through the conference process.”

The Times says it can’t handicap the bill’s chances, but thinks the proposal could become law. Members of Congress are now working to reconcile the Senate’s bill with the one that passed in the House, which does not include this provision. Even if it fails to make it through, similar language has been attached to appropriations bills for the Interior Department, passed by both chambers and now undergoing reconciliation.

Forest and climate scientists, environmental groups and even doctors are scared, the Times says. “The cost of getting biomass policy wrong is high,” Sami Yassa of the Natural Resources Defense Council said in a statement. “Burning biomass as a ‘zero-carbon’ fuel to comply with climate goals could seriously erode the climate gains projected under the Clean Power Plan.”

The strongest proponents of “biomass neutrality” are, unsurprisingly, in heavily forested states where biomass industry groups have substantial sway. But those lawmakers believe they have a legitimate environmental argument: It makes sense not to count carbon dioxide from burning trees when the trees will grow back and recapture all the carbon released when they were burned.

On the other hand, wood is not a very efficient energy source, according to the Times, and using it to generate electricity generates more carbon per unit of power than using coal. Power companies would produce fewer emissions if they burned coal and left the forest alone to keep sucking carbon out of the air. Also, it notes the gap in time between the time the trees are cut and when new growth can recapture all the carbon emitted.

“It means that you remove an active carbon sink that was pulling carbon out of the air,” said Mary Booth, director of the Partnership for Policy Integrity, which opposes the assumption that biomass is carbon neutral. “Under the most conservative assumptions you are worse off for 40 to 50 years.”

The Times thinks that a rule change on environmental impacts of wood burning would mean more biomass generators and between now and 2030 could require clear-cutting six million to eight million acres of forest, according to the partnership’s analysis.

Biomass proponents say more forests would be planted if timber were considered carbon neutral, but that is perhaps too speculative a proposition on which to base such a critical decision, the Times says. It notes that it is not surprising that members of Congress from states with big forestry industries would try to boost the role of wood into the nation’s efforts to combat climate change but thinks that the assumption that burning forests won’t contribute to climate change “would defeat the purpose of climate policy.”

The White House also is worried about the prospect of turning forests into sources of electricity. Earlier this year it objected to legislation that would stop the Environmental Protection Agency from making its own call on biomass based on its understanding of the science. Still, the current Times article argues that it will take more active intervention from the White House to stop this threat – which the Times reports might mean that the United States falls far short of the promise it made in Paris last year to cut greenhouse gas emissions in 2025 by 26% to 28% compared with 2005.

While it still seems unlikely that changes in environmental policies would be tacked onto the already contentious CR that will be considered in December, this bill seems to have the potential to require significant shifts if it goes forward. It should be watched closely as the discussion proceeds, Washington Insider believes.

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