406 Dirksen EPW Hearing Room

James M. Inhofe


Opening Statement of Senator James M. Inhofe
Environment and Public Works Committee
Hearing on “Opportunities for Agriculture, Forestry Communities, and Others in Reducing Global Warming Pollution.”
Tuesday, July 14, 2009
Let’s face it: as anyone familiar with agriculture knows, farming is an energy-intensive business with high-costs and low profit margins. So when the price of diesel, electricity, or natural gas goes up, farmers really feel the pinch. So it’s not surprising that a significant portion of the agricultural community opposes cap-and-trade, the purpose of which is to raise prices on the energy that farmers use. 
Now if cap-and-trade achieved its intended effect—that is, to prevent a global climate catastrophe—then farmers would be the first to sign up and help. Farmers are practical people; when they see a problem, they want to fix it, case closed. 
But if you’re asking them to assume an enormous economic burden for a meaningless exercise, one that subsidizes the coasts at the expense of the heartland; one that sends American jobs and taxpayer dollars to India and China; one that puts American farmers at a disadvantage in the global marketplace—all for no impact whatsoever on global warming, then you’ll get an earful.  And rightly so.
What do I mean here?  Well, as EPA Administrator Lisa Jackson admitted to me last week, if the U.S. chooses to enact cap-and-trade unilaterally, without China, India, and other developing nations, which emit a significant portion of the world’s greenhouse gases, then farmers would be forced to pay for a solution that doesn’t work. Farmers understand what this means: it’s all pain for no climate gain.
Now one thing I’ll note about farmers: they are great stewards of the land.  Farmers have partnered with the federal government to improve and protect thousands of acres of agricultural lands.  But they are rightly leery of cap-and-trade, because the supposed environmental benefits its supporters claim it will create are an illusion. 
They are also skeptical of cap-and-trade’s alleged economic benefits.  Over the last several months, cap-and-traders, in a desperate attempt to reverse the inexorable decline in public support for the Waxman-Markey bill, have claimed that cap-and-trade will create economic opportunities for farmers. 
They say that farmers can make a hefty profit by taking advantage of so-called “offsets”.  These projects allow farmers to undertake certain agricultural practices, such as no-till farming, to keep CO2 in the ground, and get paid for them.  But as farmers have discovered, these projects won’t fully defray the increased energy costs and the devastating macroeconomic impacts caused by cap-and-trade. 
According to the Heritage Foundation, farm income could drop by $8 billion under cap-and-trade—and offsets will make up less than 10 percent of this lost income.  And many farmers, like fruit, vegetable, rice and cotton farmers, will not be able to participate in an offset program because their crops are simply not suitable for no-till or other practices to sequester CO2 in soil. They will simply be stuck with significantly higher energy costs.
Also consider a report by the Congressional Research Service, which recently confirmed that new EPA estimates of the potential for agricultural soil sequestration (no till or other practices) are “significantly lower than EPA 2005 estimates.”  In plain English, this means that the most viable tool for producing offsets—soil sequestration—won’t be available for farmers in the amounts promised by cap-and-trade supporters. 
I learned a good deal of this from the letters sent by 120 agricultural groups opposing the Waxman-Markey bill. The opposition, I should note, runs the gamut of the agricultural sector, including: the Farm Bureau, the Pork Producers Council, the USA Rice Federation, the National Cattlemen’s Beef Association, the National Chicken Council, the Council of Farmer Cooperatives, American Meat Institute, and the North American Millers Association.  I could go on and on but reading the list could take up the entire hearing.  So I ask that these letters be added into the record.
What’s clear to farmers is that cap-and-trade is bad for business and meaningless for the environment.  It raises prices, destroys jobs, and hits farm economies in the heartland.  What farmers need, and what the nation needs, is an energy policy that makes energy clean, affordable, and reliable, and one that increases the energy we can produce right here at home.