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Action heats up on US Climate Bill.

- Friday, June 26, 2009

Legislation to implement a US greenhouse emissions trading scheme will encounter its first real test when it faces a vote in the US House of Representatives on Friday 26th. A series of amendments negotiated by House Agriculture Committee Chairman Collin Peterson appears to have gathered the support of farm state Democrats, but it is understood the Bill will face stiff opposition from Republicans.

In a statement about
the amendments secured for agriculture, Peterson said;

We have reached an agreement that works for agriculture and contributes to the reduction of greenhouse gas emissions in the United States. The climate change bill will include a strong agriculture offset program run by the U.S. Department of Agriculture that will allow farmers, ranchers, and forestland owners to participate fully in a market-based carbon offset program. This agreement also addresses concerns about international indirect land use provisions that unfairly restricted U.S. biofuels producers and exempts agriculture and forestry from the definition of a capped sector.


Following is an explanation of the agricultural amendments negotiated. Noteworthy is the fact that agriculture will be an exempt sector, and not required to pay for permits for farm emissions.


Agriculture and Forestry Provisions in the Climate Bill

How the Program works:

USDA will be exclusively in charge of implementing and operating the agriculture and forestry offset program. USDA will be able to capitalize on its nationwide network of field offices, research capabilities, scientific experts and conservation partners to establish and operate the agriculture and forestry offset program.

Any producer or forestland owner who is interested in participating in the offset program will be required to have an approved plan of practices that will sequester carbon or avoid or reduce greenhouse gas emissions. Once that plan is approved, implemented, and verified the producer will be able receive an offset credit from USDA to sell in the market place to utilities, refiners, or other firms subject to limitations on greenhouse gas emissions.

Who is eligible?

Participating producers will carry out practices that sequester or avoid greenhouse gas emissions.

Producers who have previously participated in voluntary offset programs will be eligible to participate and earn offset credits for activities with continuing benefits.

Practices, such as no-till farming and avoided deforestation, will be available to earn offset credits under the new program, as long as they were started after 2001 and result in additional greenhouse gas reduction.

Producers who have chosen to participate in USDA conservation programs will not be penalized or barred from the offset program.

Producers living in regions with strict regulatory controls will not be automatically disqualified from the offset program and will be granted flexibility to carry out further practices that address water, soil, and air quality.


The trading of derivatives for emission allowances, offset credits, or renewable electricity credits is required to occur on CFTC-regulated markets. Trading these derivatives in unregulated "dark markets" is prohibited (to be included in the Manager’s Amendment).


The agriculture and forestry sectors will be exempt from the bill’s greenhouse gas emission reduction requirements.


Despite these amendments, the US Farm Bureau has urged politicians to vote against the legislation.

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