Recent Press Releases

Thune Asks USDA to Address Issues in Cap and Trade Analysis

Senate Ag Committee Members Question Projected Impact on Producers

July 24, 2009

Washington, D.C. —  Senator John Thune today joined his Republican colleagues on the Senate Agriculture Committee in sending a letter to the chief economist at the United States Department of Agriculture (USDA). The letter asks USDA to address concerns arising from the methodology of a study released concerning potential impact on our nation’s agriculture producers of the House-passed cap and trade bill. Much of the underlying research in the USDA study was conducted by the Environmental Protection Agency (EPA).

“Any form of cap and trade will have a significant impact on all sectors of our economy, but agriculture in particular would be affected due to high energy requirements,” said Thune. “USDA should reevaluate the effects of Waxman-Markey through the lens of independent analysis, not through the ideologically driven prism of studies conducted by the EPA.”

Specifically, Senator Thune and the Agriculture Committee members express concerns about the veracity of EPA estimates on energy cost increases and the long-term benefits of a carbon offset program. The letter also asks for a more detailed study of the individual benefits of afforestation and methane and nitrous oxide reductions.

Yesterday, Senator Thune joined Senators Mike Johanns (R-NE) and Pat Roberts (R-KS) at a press conference to further discuss issues relating to the USDA report. Senator Thune specifically discussed the EPA estimate’s unfeasible reliance on the assumption that carbon capture technology will be available and cost-effective by 2014, when most experts demonstrate that such technology would not be available until 2020 or 2025. He also cited concerns about the report’s failure to adequately address increased fertilizer costs as a result of cap and trade legislation.

The full text of the letter follows:

Dr. Joseph Glauber
Chief Economist
United States Department of Agriculture
Jamie L. Whitten Building, Room 112-A
Washington, D.C. 20250-3800

Dear Dr. Glauber:

With release of the Department’s “Preliminary Analysis of the Effects of H.R. 2454 on U.S. Agriculture” and Secretary Vilsack’s testimony in front of the Senate Committee on Agriculture, certain questions came to light that we believe require further attention.

We believe that the study is a first step in understanding the vast impacts of H.R. 2454 on production agriculture. As noted yesterday by Secretary Vilsack, a cap-and-trade and offset regime has many complex variables that require rigorous study. In the question and answer session, certain issues arose that we believe must be part of the continuing analysis of H.R. 2454.

First, rather than rely on energy estimates and other assumptions from the Environmental Protection Agency (EPA), we believe it is more appropriate for the Department to utilize a range of estimates. As you know, the results of an economic analysis are often shaped and largely dependent on the assumptions and independent variables used in the model.

In addition, during the hearing, there was some confusion regarding the long-term impacts and benefits of H.R. 2454. We believe it would be helpful for you to brief the Committee on the results of the EPA analysis with particular attention to price impacts on various crops and sectors, acreage adjustments, allowances to the fertilizer industry and the relative benefits that accrue between agriculture soils, afforestation and methane and nitrous oxide reductions. This briefing would facilitate our understanding of the costs and benefits of H.R. 2454.

We look forward working with you in the weeks and months ahead as the Senate begins its debate on climate change legislation.

Thank you for your prompt attention to this request.

Very truly yours,

U.S. Senator Saxby Chambliss (R-Ga.)
U.S. Senator Thad Cochran (R-Miss.)
U.S. Senator John Cornyn (R-Texas)
U.S. Senator Chuck Grassley (R-Iowa)
U.S. Senator Mike Johanns (R-Neb.)
U.S. Senator Richard Lugar (R-Ind.)
U.S. Senator Mitch McConnell (R-Ky.)
U.S. Senator Pat Roberts (R-Kan.)
U.S. Senator John Thune (R-S.D.)