Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Monday 06/02/14

Farm Groups Need to Dig Deeper Into Climate Plan

Depending on who was offering their perspective, the White House's new Clean Power Plan is either draconian or woefully insufficient.

The initial reaction reflects one thing: Like the fight to rein in federal spending, the battle over climate change will be protracted for the next generation of young Americans.

The plan calls for reducing carbon emissions from coal-fired power plants by 30% of 2005 emission levels by 2030. That statement is confusing, isn't it? The proposed rule is 645 pages long. I have other summer reading possibilities I consider more worthwhile at this point.

Here is how it breaks down. Coal, the dirtiest fossil fuel, accounts for nearly 32% of carbon pollution nationally. This rule would put a burden of emission declines on the electrical-power industry and states. It would effectively limit and reduce the domestic use of coal. The rule lays out various scenarios for states to consider that would push the coal plants to meet their obligations.

Critics of the plan suggested the carbon-emissions cut, amounting to about 6-7% of total U.S. emissions, would hurt the economy and raise energy prices. Supporters of taking action on climate change praised the move, but some complained that the move doesn’t go far enough to curb the impacts of climate change.

The American Farm Bureau said of the plan, "The Environmental Protection Agency’s latest greenhouse gas proposal will harm the nation’s economy, rural communities and America’s farm and ranch families if implemented."

The EPA rule would lead to higher energy prices, AFBF stated. "Farmers would face not just higher prices for electricity, but any energy-related input such as fertilizer. Rural electric cooperatives that rely on old coal plants for cheap electricity would be especially hard hit," the group stated.

“U.S. agriculture will pay more for energy and fertilizer under this plan, but the harm won’t stop there,” American Farm Bureau Federation President Bob Stallman said. “Effects will especially hit home in rural America.”

Today’s announcement follows EPA’s April “Waters of the Unites States” proposal that would unlawfully increase the agency’s role in regulating America’s farms under the Clean Water Act. AFBF responded with a formal campaign to “Ditch the Rule.”

"The greenhouse gas proposal is yet another expensive and expansive overreach by EPA into the daily lives of America's farmers and ranchers,” Stallman said. “Our farmers and ranchers need a climate that fosters innovation, not unilateral regulations that cap our future."

Taking the opposite view, National Farmers Union President Roger Johnson said climate change "has already begun to affect agriculture, and it is clear that weather volatility will only continue to increase in the coming years unless our policymakers proactively address this challenge. I commend the administration for its leadership on climate change mitigation.

“Agriculture stands ready to be an important part of the solution to our climate challenges. I encourage Congress and the administration to engage the agricultural community in reducing carbon pollution by creating voluntary incentives for sequestering carbon and implementing conservation strategies that preserve our limited soil and water resources.

Johnson added that the EPA should use the announcement on Monday to also consider withdrawing the proposed rule to reduce biofuel volumes for 2014 under the Renewable Fuels Standard.

“I also urge EPA to recognize that rural electric cooperatives serve our nation’s farmers and ranchers and are a significant source of rural employment. Co-ops provide power to 42 million Americans and account for 12 percent of total U.S. electricity sales. Any regulatory action must consider the impact on rural electrics and the communities they serve.”

Neither response from Farm Bureau or Farmers Union is adequate. Such a proposal demands a thorough vetting to compare energy prices. That should include analyzing the cost of power plants upgrades, idling or conversion to natural gas and other energy sources. Such an analysis should look at what a state has done to retool its energy sources and the impacts of those changes on jobs and industry. For example, have Iowa or Minnesota seen slower economic growth because of their utility investments in wind power? That would be a good question to answer. Iowa Gov. Terry Branstad criticized the Obama administration's proposal for power plants on Monday, but Branstad and Iowa Republicans also support expanding Iowa's wind industry. Natural gas and wind industries are likely to be the biggest benefactors of the power rule.

Here I'd like to chime in as well that states at the forefront of changing their energy mix can gain unexpected industries. Facebook is investing $300 million for a new data center in central Iowa, an investment that could expand to up to $1.5 billion. A new wind project in Iowa also was part of the Facebook announcement. A year earlier, Google began building a $400 million data center just south of Council Bluffs, Iowa, just across the river from Nebraska. Both of those high-tech development decisions were tied to the internet companies wanting to locate places with high portfolios of renewable energy.

Of course, Kansas wants to build a $2.4 billion coal-fired power plant. That too has a lot of economic impact.

The effects of doing nothing -- status quo -- should be considered. Scientific reports are generally weak when it comes to analyzing financial costs a possible future outcome. But lower crop yields due to increasing weather volatility should be factored in, as well as the potential rising costs of crop insurance and disaster aid. Losses and preventative costs for the growing impacts of invasive species should be considered. What is the financial impact on farmers and rural communities if we fail to mitigate global warming?

The political rhetoric on this rule will carry on for years to come. Farm groups should use some of that time to take a broader look at all of the possible outcomes for rural America.

Chris Clayton can be reached at chris.clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

Posted at 11:06PM CDT 06/02/14 by Chris Clayton
Comments (2)
Renewable energy will be a boom for rural America and the Farm Bureau needs to go that route instead of their normal negative approach. Solar, wind, biofuels and methane generation from manure are already happening in many rural areas and the new regulations will only speed it up. Ever since the energy shortages of the 1970's we have been needing a real energy independence policy, not only from Mideast oil but from our dependence on a rapidly depleting resource. While this regulation isn't enough it is a start and hopefully in our time we will see real energy independence as well as a cleaner environment, its not an option, its a requirement for human/planet survival. As farmers we need to take advantage of the great position we are in and participate fully in this,,,, you can either growl about your rising energy bill or be selling energy and making money. Its like letting 1000 acres lay fallow and then buying corn instead of planting it. We all have wasted resources everywhere you look.
Posted by Jay Mcginnis at 5:41AM CDT 06/03/14
I am not ready to put the U.S. economy at a disadvantage to sooth the egos of Obama voters and other losers. You can go to China or India and tell them to cut their emissions. When and if you get back tell me how that works out.
Posted by GORDON KEYES at 5:50PM CDT 06/03/14
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