Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.
Senate Panel Approves Regan Nomination to Top EPA Post
The Senate Environment and Public Works Committee voted 14-to-six Tuesday to approve the nomination of Michael Regan to serve as EPA Administrator.
Four Republicans — Sens. Kevin Cramer of North Dakota, Roger Wicker of Mississippi, Lindsey Graham of South Carolina, and Dan Sullivan of Alaska — joining the panel's 10 Democrats in support.
The six Republicans voting no — Sens. Shelly Moore Capito of West Virginia, James Inhofe of Oklahoma, Cynthia Lummis of Wyoming, Richard Shelby of Alabama, John Boozman of Arkansas, and Joni Ernst of Iowa — indicated their vote was not so much against Regan as against the Biden administration's climate policies.
“As an individual he is exactly the sort of person that I would like to see leading a federal agency but unfortunately officials in place at the White House and at the EPA have already set the agenda before he even achieves the office,” ranking member Capito said. “It is unclear whether Secretary Regan, if confirmed, would have any authority to stop the regulatory march towards the Green New Deal. Without clear commitments to oppose some policies that would economically devastate my state, I cannot support him.”
It is not yet clear when his nomination will be taken up by the full Senate, but he is expected to be approved by the chamber to take the top EPA post.
Democratic Senators Unveil Pandemic Relief For Farmers Of Color
Four Democratic senators — Raphael Warnock of Georgia, Cory Booker of New Jersey, Ben Ray Lujan of New Mexico, and Senate Agriculture Committee Chairwoman Debbie Stabenow of Michigan — introduced a bill aimed at delivering direct relief to Black, Indigenous, and Hispanic farmers and other agricultural producers of color affected by the coronavirus pandemic.
Warnock said the effort also is aimed at addressing what he described as “longstanding inequity in agriculture.” The Emergency Relief for Farmers of Color Act would provide $5 billion to farmers of color as part of the $1.9 trillion pandemic relief package being pushed by Democrats and President Joe Biden.
The bill would provide $4 billion in direct relief payments to help farmers of color pay off outstanding USDA farm loan debts and related taxes, help them respond to the economic impacts of the pandemic.
Washington Insider: The Coming Climate Change Battle
Politico is reporting this week that corporate America is entering the Biden era with bold public pledges to fight climate change. But as Democrats seek to hold businesses to those promises, “they're facing a big battle.”
Democrats are vowing to go through the Securities and Exchange Commission to impose sweeping financial disclosure rules on climate risk that would force thousands of businesses including banks, manufacturers and energy producers to divulge information to investors. Lenders are set to get even more scrutiny from their own regulators like the Federal Reserve, including potential stress tests to measure their resiliency to rising sea levels and extreme weather.
Politico says the coming “backlash” is just beginning.
The report says that BlackRock CEO Larry Fink, who has been hailed by some as a corporate leader in fighting climate change, is putting his weight behind a call for companies to abide by a voluntary global standard and “is warning against the potential shortfalls of government intervention.” Also, Republican lawmakers are emerging as allies to businesses resistant to the looming transparency rules.
“This is about solving a societal problem that does not align simply with the SEC's mission,” said Rep. Patrick McHenry of North Carolina, the top Republican on the House Financial Services Committee. “I'd like the Securities and Exchange Commission (SEC) to stick to what they do and then for us in the elected class to make these large-scale societal decisions.”
At the heart of the clash is a broader argument about how much control the government should have over business, a debate that will get more heated as the Biden administration moves to impose stricter regulations on the economy after four years of rollbacks by former President Donald Trump.
The reluctance to embrace a large government role in climate policy is echoed by business groups in Washington, D.C., that are calling for flexible disclosure requirements. The campaign by Democrats is expected to trigger a lobbying blitz as companies try to shape regulations. An increasing number of corporations are responding to the pressure by releasing more climate data voluntarily, though industry representatives say companies are split on the issue.
The U.S. Chamber of Commerce and the American Petroleum Institute (API), two of the biggest business associations, are warning against rigid rules which could expose companies to legal trouble if they don't accurately report information. The API said it supports greater transparency but that rules "must be workable for different industries, support access to capital for all sectors and allow for companies' reporting to demonstrate the multiple pathways toward managing climate opportunities and risks."
The Chamber argues that the regulations should allow for companies and their investors to determine the most relevant information to release. "There are people who are going to be reluctant to have any disclosure obligations imposed on public companies sort of broadly," said former SEC Chair Mary Schapiro, who is now a key player in crafting international climate reporting standards and supports mandatory disclosure. Republican officials are signaling that they will fight the effort, giving companies a powerful set of friends.
Republican SEC Commissioner Hester Peirce told POLITICO she was skeptical that climate-related requirements could meet the standard of "material" information for investors.
Sen. Pat Toomey, R-Pa., who will be the top Republican on the Senate Banking Committee, said, "Imposing a costly and prescriptive reporting regime would discourage firms from going public, reduce access to capital and slow economic growth, which means fewer jobs and opportunities for retail investors."
BlackRock's Fink argues that many publicly traded companies are on track to manage their climate risk amid growing market pressure and that the government should focus on privately held firms that are taking on more carbon-intensive businesses. “We're going to see a vast change in the public company arena worldwide,” he said last week. We're not going to need really governmental change or regulatory change.”
"There is, without question, significant and systemic risk to the financial system that is created by climate change," said Rep. Sean Casten, D-Ill., who wrote legislation with Sen. Elizabeth Warren, D-Mass. that would require the SEC to develop climate disclosure rules. "Yet if you are an investor and you want to understand how much of that risk you're exposed to, you don't have any unambiguous metric that says this is what your exposure is that's done in a consistent way."
The official who's expected to lead the way for Democrats is Gary Gensler, Biden's nominee to chair the SEC. Gensler “took on the banks when he was the lead regulator writing financial trading rules after the 2008 Wall Street meltdown,” Shapiro said. “The U.S. needs to be participating with the rest of the world in dealing with these issues. That's something that Gary will be quite sensitive to."
While some companies will resist government intervention, others see benefits in having regulators accelerate standard reporting metrics. But industry representatives say the methods used to measure and report climate impacts are still developing and it may be a gamble to codify them into federal rules.
“You have this voluntary system out there," said Dorothy Donohue, deputy general counsel at the Investment Company Institute, which counts BlackRock among its members. Once you put it in a rule, it's a whole lot harder to change," she said. "That's not to say institutions won't get there, but I think at the moment when those numbers are being disclosed, I think people take them with a large pinch of salt.”
So, we will see. This is a debate that is likely to intensify sharply and which could be very important to producers — and so, one that should be watched closely as it emerges, Washington Insider believes.
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