June 26, 2009 by Victor Flatt

Offsets in the USDA – The Bad, the OK, and the Unknown

Wednesday, I explored the various ways that the USDA takeover of bio-sequestration offsets could affect how well the offsets provision of the Waxman-Markey Climate Security Act would work. Today, we have legislative language in the form of an amendment offered by Rep. Collin Peterson (D-MN), which fills in some of the details.  While some of the changes may be helpful, others are cause for worry.

The amendment gives all offset authority over bio-sequestration and agricultural activities to the USDA – the authority to initially approve offset rules; to create rules for “additionality,” leakage, and permanence; to approve offsets themselves; and to account for reversals. The language does remain specific about what must guide the rulemaking, and is also specific about accounting for reversals and holding offset credits in reserve for reversals. The offset reversal part of the law does expand the list of offsets eligible for requirements of insurance or reserve, but it also gives the USDA unilateral power to not require that reserves be replenished for unintentional failure of offsets if it was because of a “natural disaster.” (Sec. 504(c)(3)(B)(iii)).

Besides these changes, the effect of the change from the EPA to the USDA over the …

June 24, 2009 by Victor Flatt

Last night, House Energy and Commerce Chair Henry Waxman announced that he had agreed with Agriculture Committee Chair Collin Peterson that the USDA could have jurisdiction over agricultural offsets in the massive American Clean Energy and Security Act, which the House may vote on this Friday.

In agreeing to what had been one of the major sticking points to bringing farm Democrats on board, Waxman appears to believe that any concerns over USDA’s role are outweighed by the other good things in the bill. There are a lot of potential concerns with the USDA having the lead role on agricultural offsets. Most environmentalists have asserted that the EPA would be more likely to properly enforce the requirements that offsets be additional, verifiable, and not have leakage.

It is hard to make predictions about the effect of this change without specific legislative language, which is expected later …

June 23, 2009 by Victor Flatt

Yesterday the Supreme Court ruled in Coeur Alaska, Inc. v. Southeast Alaska Conservation Council that the United States EPA and the Army Corps of Engineers could interpret the Clean Water Act to exempt water pollution sources from pollution control requirements if the pollution was accompanied by fill material.

This legal feat was accomplished because the Clean Water Act divides jurisdiction between the Corps for “fill” material and the EPA for pollutants. This division ostensibly gives each agency control of its own area of expertise, the Corps dredging and filling and the EPA pollutants that could harm human health or the environment generally. The problem comes when, as in this case, “fill” material contains significant amounts of pollution. Who then should regulate? I believe a straightforward reading of the intent of the legislation indicates that generally the Corps should only regulate fill that might contain de minimis amounts …

May 19, 2009 by Victor Flatt

On Friday, the House Energy and Commerce Committee released its anticipated Beta version of its comprehensive GHG and energy bill. Among other goals, the new discussion draft attempts to address concerns from moderate and conservative Democrats concerning the proposed cap and trade system and how it would work. The most notable change involves the free allocation of allowances to certain economic sectors to assist in the transition to the new system, and this is the part that seems to most directly respond to actual political pressures regarding the cost of controlling greenhouse gases.

With respect to offsets, the most problematic change is allowing the offsets, which are more uncertain than emission reductions, to be treated as equal in value to emissions allowances. The original Waxman-Markey discussion draft discounted all offsets by 20% with respect to equivalent greenhouse gas allowances, so that it took 1.25 offsets to …

April 27, 2009 by Victor Flatt

Two weeks ago, Representatives Waxman and Markey put forth a 648-page legislative draft for dealing with climate change. That draft had proposals for the use of offsets, some good and some not so good (see my earlier post). Moderate and conservative Democrats on the Energy and Commerce Committee have now put forward suggested changes (as reported by ClimateWire) that they say are necessary to make the proposed bill less onerous. In general, these provisions would more or less weaken the targets and enforcement mechanism in the proposed bill, and that is not a positive thing. We already know that climate change is serious and that the U.S. is going to have to take a leading role in addressing it, or we will never reach the international consensus necessary to address the problem. Yes, it will be hard, but instead of shirking our responsibility to ourselves and …

April 2, 2009 by Victor Flatt

On Tuesday, March 31, House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and Rep. Edward Markey (D-MA) released a “discussion draft” of the American Clean Energy and Security Act of 2009 – a climate change bill that will serve as the starting point for long-delayed congressional action on the world’s most pressing environmental program. CPRBlog asked several Center for Progressive Reform Member Scholars to examine different aspects of the 648-page Waxman-Markey bill. This entry, by Victor Flatt, looks at the offsets for carbon emissions that would be permitted under the measure.

The Waxman-Markey draft bill treads some familiar ground with respect to the use of offsets to meet greenhouse gas reduction requirements, but also introduces some new innovations. In departing from other drafts and bills, the offsets provision may be most controversial in its limited examination of the environmental effects of offsets, and its use of …

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