European Affairs

So I was surprised recently by the answer of a senior Brussels policy-maker when I asked him about the role agriculture was playing in the European debate over climate change. After a momentary blank stare, the European Commission official replied that the farm lobby had not been a major factor.

It could not be more different in the United States in the Obama administration’s quest to craft a landmark law shifting the economy away from carbon-emitting energy. With the debate in Congress at a critical point, agriculture is a key actor in the legislative process. Those who thought the farm bloc’s influence ended sometime around the Eisenhower administration have had to adjust their thinking – including a number of law-makers on the energy committees. They have had to confront the power of their fellow legislators representing agricultural interests.

Comprehensive climate legislation passed the House of Representatives in July as the Waxman-Markey bill, but only after substantial concessions to agricultural producers, including the burgeoning bio-fuels industry centered on ethanol made with U.S.-grown corn. In the Senate, agriculture is even more powerful: every State has farming interests, and sparsely populated rural States wield outsized influence. In this wing of Congress, the legislation is in deep trouble. The largest U.S. farm organization, the American Farm Bureau Federation, has vowed to kill it. The powerful chair of the Senate Agriculture Committee – Blanche Lincoln, a centrist Democrat from Arkansas – has called the chances of passage a “heavy lift” despite the fact that she belongs to the same party as President Obama. The White House has repeatedly urged action on climate change to reverse the Bush administration’s inaction on global warming. But Ms. Lincoln represents rice, cotton and poultry interests and other food producers in sprawling rural areas, and many of her voters fear being penalized by charges on carbon. So Ms. Lincoln and other “farm bloc” lawmakers will want big sweeteners for their rural constituencies before any bill is allowed to start toward the President’s desk. It is a legislative obstacle course because Ms. Lincoln and her allies occupy strategic positions in the Senate’s complex system of powerful committees, which are now controlled by Democrats.

In one Senate committee, Environment and Public Works, a draft climate bill narrowly passed on November 5. But the vote was boycotted by all committee Republicans, and an ominous “no” vote was cast by a key Democrat, Max Baucus, a Democrat from Montana, another rural state. He cited concerns over the agricultural provisions in the environment committee’s bill. Now the powerful Finance Committee, which Baucus chairs and which is laced with farm-state Senators, will take up the legislation and start writing its own version of a climate-change bill.

Agriculture interests on both sides of the Atlantic are famously wary of change, and there is no denying that climate legislation will bring economic change on an unprecedented scale. But in the European Union, agriculture has so far been exempted from the Emissions Trading Scheme, a mandatory cap-and-trade system that started in 2005. The farm sector produces a much smaller share of greenhouse gases than industry or transport (just under 10 percent in the EU, about six percent in the U.S.), and agriculture-based carbon emissions have declined in recent years thanks to improved farm productivity (which allowed farmers to grow more crops with less soil disruption and other emission-causing practices). But that relatively easy progress based on productivity gains has gone as far as it can go, the European Commission says. For the EU is to meet its 2020 target of lower carbon ceilings, agriculture-related emissions must be cut further – a difficult challenge.

So far, however, there is little movement in Europe to find ways in which the agricultural sector can participate more broadly in climate mitigation -- for example, through reforestation and other carbon-cutting moves that can become “offsets” for industrial emissions. As yet there is no mechanism for European farmers and ranchers to sell offsets. For the moment, however, there is quiescence among EU farm organizations – perhaps because European climate legislation with real teeth for the agricultural sector appears to be some time away,

The situation in the U.S. offers a striking contrast because of the high political visibility in Washington of the farmers and ranchers and their communities, all of which fear that carbon constraints will penalize them. Farmers see these carbon caps as a change that will increase the costs of their main “inputs”: fertilizer, fuel for tractors and combines, and power to heat barns and farm houses during brutal Midwest winters. Rural electric utilities, many of which depend on coal, are seen as big losers liable to suffer penalties for carbon emissions. In fact, they do in legislation drafted so far. A recent study from Texas A&M University, a center for agricultural research, concluded that the House-passed bill would be costly for almost all rice and cotton farms across the South of the country. In this situation, it is not surprising that the “farm vote” in Congress is finding it tough to support President Obama and some of the Congressional leaders in the Democratic majority in their push to shift the “energy economy” to resist global warming.

It is a tricky political calendar to manage. So far, the White House appeals have enjoyed some initial extra urgency due to the imminence of the Copenhagen conference in December to chart a “post-Kyoto regime.” The Democratic party was anxious to avoid seeing their newly-elected President meet the conference “empty-handed.” The European allies have chided Washington for the lack of U.S. leadership on the issue ever since the 1997 Kyoto conference, when the United States was the only major nation that refused to sign the protocol on carbon cuts.

But Washington is now resigned to the prospect of seeing no major new accord emerging from the Copenhagen meeting. As a result, the Senate, whose agenda is already overloaded with health care and financial reform issues, has postponed action on climate legislation until the spring of 2010. That delay could permit useful political bargaining in Washington, especially if the Obama administration gets some international momentum for a “post-Copenhagen push” and some national political running room from the passage of a significant health-care reform. But the new calendar – focused on next spring – also sharpens Congressional apprehensions about the legislative elections in November 2010. Many of Obama’s key Democrats in Congress have to worry about rural voters in order to keep their seats and preserve the Democratic majority.

Climate-change legislation is partly hostage to Congress’ “farm bloc” because this group has maneuvered strategically to position its members on influential committees and subcommittees, and they now control several key choke points in the legislative process. As a result, they can often shape the agenda even on many matters – such as climate change – that are not traditionally associated with agrarian interests. This group might be dubbed the Congressional “Agri-crats:” they are moderate-to-conservative Democrats from farm states who often put the needs of agriculture ahead of party loyalty. This group finds it politically painful to follow the lead of President Obama at the risk of weakening their own political base at home. In the Senate, the Midwestern corn belt and Great Plains is a Democratic bastion, but on the powerful House Agriculture Committee, half of the 28 Democrats on the committee are people who managed to get themselves elected (or re-elected) in 2008 from districts carried by Obama’s rival, Republican Senator John McCain in the presidential election that year. So these Agricrats know that there are no Obama “coat-tails” for them to ride in their districts: instead, they need to court their constituents, not simply follow the President. Thus, 13 of the 28 Democratic members of the House Agricultural Committee voted against the climate-change legislation. The bill carried there, but the outcome was foreboding about the difficulties to come in the Senate.

These stiff political odds against President Obama on the climate issue in his own party offer a bleak picture for the White House initiative. But meaningful legislation may still be possible as Congressional advocates seek to craft a bill that will win at least the grudging support of the Agricrats while also advancing the cause of reducing greenhouse gases.

Agriculture has already won major concessions from Congress and the Environmental Protection Agency. These include, most notably, a guarantee of nearly total exemption from any requirement to limit emissions of greenhouse gases. These come from such things as carbon dioxide (released when ground is plowed); nitrous oxide (a side effect of nitrogen-based fertilizers); and methane (from the stomachs of animals confined in feed-lots for herds of stationary animals, from dairies and from hog-feeding buildings).

The “cap and trade” system under consideration has been framed to soften the impact on agriculture: for example, the fertilizer industry would receive special allowances to help it meet its targets. This would, in theory, insulate farmers against higher costs associated with the transition.

But Congress will have to do much more to bring rural lawmakers on board, notably by building in opportunities for farmers and ranchers to make money from the new cap and trade system. This will come largely in the form of “offsets” – earned by sequestering carbon in soil and in new trees, capturing methane and perhaps even limiting their use of chemical fertilizers. As credits, these offsets could then be traded in an international marketplace where they would be purchased by utility companies, refineries, manufacturers and others who need the credits in order to meet greenhouse gas reduction targets that they cannot reach themselves by directly reducing their own emissions.

The rural-backed movement to give farmers and ranchers a stake in the cap and trade system has been decried by some environmental organizations as simply a crude device to buy off the farm bloc. They are skeptical that agricultural offsets will result in actual reductions of greenhouse gases: there is a question of “additionality,” i.e. whether farmers would be paid for doing things (such as adopting better tilling methods) that they would be doing anyway for their own reasons of productivity. Critics from Green groups fear that farm offsets will be a cheap way for polluters to postpone cutting actual emissions. (According to a recent environmental study, the House-passed legislation would not result in any actual decline in fossil-fuel emissions until 2030, in part because of the availability of agricultural and other offsets.)

Questions about the quantifiable impact of some environmentally-friendly practices were raised in a recent study sponsored by the U.S. Department of Agriculture. It examined the carbon savings from a relatively new farming practice known as “continuous no till.” By avoiding deep ploughing, this technique leaves residue in the fields, preserves moisture and nutrients and keeps oxygen in the air from combining with soil carbon that then can escape as carbon dioxide. “No till” has been touted both as good land husbandry and as a climate mitigator. But the scientists at the department’s research service reviewed test plots using traditional aggressive tillage and heavy applications of fertilizer to grow corn and soybeans and compared their results with those of other plots using minimum tillage and a four-year rotation of corn, wheat, soybeans and alfalfa. Over one full year, they found, “carbon dioxide emissions were no different.”

There are also concerns about “carbon versus food.” This debate centers on the long-term impact on food prices of reforestation as a way of reducing carbon emissions from the land. Some recent initial surveys by the Environmental Protection Agency estimated the impact of offsets in shifting land from crops and pasture to forests. To achieve current targets for carbon cuts, these estimates said, the role of agricultural offsets would have to be so large that they could shrink U.S. cropland by 23 percent by 2050. This change might not be wholly unwelcome to farmers who were being paid for the switch, but they would reduce food supplies (and drive up prices) at a time when both these unfavorable trends are already on people’s minds in the United States.

For the moment, this question is riddled with contradictory predictions among experts about different outcomes. Predictions that vast amounts of cropland will switch to reforestation have been challenged in a study released in mid-November by the “Bio-based Energy Analysis Group” at the University of Tennessee: this group forecast that, even without such a switch, farms of virtually all kinds stand to boost their incomes in the form of payments earned through other kinds of carbon-saving measures they can adopt. This would decrease the incentive for farmers to switch their land use away from crops.

Underscoring the debate’s complexity, other recent studies have noted that rising oil prices (which also raise the value and price of ethanol from corn) could make it worthwhile for farmers to grow more corn rather than plant more trees. The point about these debates is not simply the difficulty of making assumptions about how to meet carbon targets: it is also to underscore the important role that the American agricultural sector, the world’s largest, must play in any national plan (and eventually in any global negotiations with U.S. involvement) designed to curb greenhouse gases and climate change.

None of these estimates can change another nagging uncertainty about the role of agriculture in plans for global carbon emission curbs. Agriculture, even in the best-case scenarios of climate-conscious practices, can never deliver the savings in greenhouse gases on the same scale that must be demanded from industry and utilities, which remain the major emitters. As a result, there is concern that planners may be counting too heavily on offsets in the farm sector to help hit long-range targets for lower overall emissions ceilings in 2020, 2030 and 2050. This risk may be particularly high in Washington, where the agricultural dimension has such political strength that politicians may be tempted to emphasize the capacity for offsets. That might help get the farm sector on board with expectations of credits that can be remunerated in an emissions-trading market. But it may be projecting the existence of offsets that can not be delivered on the expected scale.

This issue contains potential complications for Europe. While agriculture is exempted from the ETS (along with other sectors such as small business and transport), agriculture is sharply limited to current EU rules about how it can participate. The ETS, for example, does not give credits to "carbon sinks" (such as forests) because of scientific uncertainty over their permanence and questions about their long-term contribution to reducing greenhouse gases.

So the U.S. creation of a far-reaching offset scheme for agriculture would create a major imbalance with the EU, especially if European industries seek to use U.S. offsets to meet their greenhouse gas targets stipulated in the ETS. Such factors are liable to complicate convergence on a transatlantic carbon-trading market and on global climate-change action – if and when the U.S. adopts legislation on this issue.

Many voices in Washington assure that a bill will be passed and enacted. Despite the skepticism about climate legislation across rural America, the opposition is not universal. The National Farmers Union, a Democratic-leaning lobby that is the country’s second-largest farm organization, supports cap and trade. This differing position is personified in Congress by Representatives such as Betsy Markey, a freshman House member from a rural, agricultural district that covers most of eastern Colorado. Her political situation exemplifies the tensions in an emerging climate-debate on agriculture known as “Old Ag versus New Ag.” Her constituency is dominated economically by wheat, corn and cattle, as it has been for generations. But the economic future of her district may rest more with a “new economy” buoyed by alternative-energy development: Colorado is a center of pioneering activity on renewable fuels, and her district is home to wind farms, companies making solar panels and turbine blades, and biofuel-research facilities. All of these activities would benefit from tax credits and other incentives in the climate bill.

In her part of the country, the West, carbon is emerging as a commodity in the business calculations of farmers. Even those who oppose the legislation are eyeing the prospect of profits with interest. “If it paid enough I’d have to look at it,” a Colorado wheat and corn grower confided to me when I traveled there recently.

In the Senate, momentum appears to be growing for a robust “agricultural offsets” program that could lure rural support for the climate bill. Influential Senators (such as Majority Leader Harry Reid from Nevada) are supporting a sweeping proposal put forward by several Democrats on the Agriculture Committee that, among other things, would enable farmers to earn credits for a variety of practices that store carbon.

That won’t ensure enactment by any means. (Senator Lincoln, significantly, has not signed on.) But it suggests that, like it or not, U.S. agriculture is going to have a seat at the table.

Dan Morgan, a former reporter and editor with the Washington Post, recently completed a fellowship with the German Marshall Fund of the United States.