The Peterson Compromises and the Question of

The House Agriculture Committee yesterday released the language of an amendment by Agriculture Committee Chairman Collin Peterson (D-MN), which Rep. Waxman has agreed to accept as part of the final House climate change bill in order to secure support from Peterson and other farm-state representatives. Peterson represents a large, heavily ag-dependent district in central and western Minnesota, and makes no apologies for his desire to protect the interests of farmers in his district and elsewhere. From that perspective, the Peterson-Waxman deal represents one of Peterson’s most significant legislative accomplishments to date as Ag Committee chairman. From the point of view of environmentalists, however, the deal involves some major concessions to the ag and forestry sectors, and a serious weakening of the bill.

Peterson's amendment notably exempts the ag and forestry sectors from , and moves authority to draw up and administer rules for offset credits generated by those industries to the U.S. Department of Agriculture (USDA). The bill still requires that offset credits be awarded only to activities generating GHG emission reductions that are “additional to” any reductions that would have occurred anyway in the absence of the credit -- the so-called “additionality” requirement. But the Peterson amendment defines “additionality” broadly to allow offset credits for farmers who previously participated in voluntary offset programs, or who adopted GHG-reducing practices like no-till farming after 2001, or who elect to participate in USDA conservation programs (including programs that pay them to take acreage out of production), or who undertake conservation measures required by other laws and regulations -- all categories that might have been ineligible under the original Waxman-Markey bill.

Exemption of the ag and forestry sectors from emissions caps can only be characterized as a naked exercise in political favoritism. But there are some real substantive concerns behind some of the other changes. Ag organizations argue that EPA is not well informed about ag practices, and lacks the technical expertise and administrative capacity to design and implement an effective offset program. USDA, they contend, not only has technical expertise in ag practices, but has personnel and working relationships with farmers in every agricultural county in the nation, while EPA doesn't even have offices in every state. At the level of implementing the offsets program, it might make some sense to have USDA involved. But the Peterson amendment goes beyond that, putting USDA in charge of writing the rules for ag- and forestry-related categories of offsets -- a move that is certain to set off alarm bells among environmentalist who see USDA as captive to ag interests and not particularly attuned to environmental protection goals.

It would be a mistake simply to assume that administration of the program in a way that is responsive to farmers necessarily involves fraud or boondoggles, however. There are some very sticky issues in defining what counts as "additionality," for example. Many environmentalists take the position that if a farmer receives any other benefits from making a land use change, it should be ineligible for treatment as an offset. Ag groups say with some justification that it's a bit more complicated than that in the real world, because in most land use decisions multiple considerations come into play. For example, if a farmer is eligible to take highly erodible cropland out of production in exchange for payments under USDA’s Conservation Reserve Program (CRP), and that land use change would also produce significant carbon sequestration, many environmentalists would say the farmer shouldn't be eligible for an offset credit, reasoning that the farmer already has other reasons for making the land use change. The ag groups point out, however, that for many farmers the existing incentives under CRP may be inadequate to secure the land use change (as has been the case lately with high commodity prices causing many farmers to opt out of CRP). But CRP payments plus the GHG offset credit might tip the balance in favor of conservation, producing multiple environmental benefits and more carbon sequestration than would have occurred if CRP lands are ineligible for offsets.

The challenge, as always, is to strike the appropriate balance, to develop the program in a way that is both responsive to farmers and environmentally sound. Although Waxman has apparently ceded offset rule-making authority to USDA under the Peterson compromise, environmentalists will continue to insist there needs to be a mechanism for continued EPA oversight and involvement in the offset program, up to and including an EPA veto over USDA rules. So far, Waxman’s staff has only said that the chairman intends to seek the counsel of the Obama administration as to how that might be done.