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S. HRG. 111–1204 

ECONOMIC OPPORTUNITIES FOR AGRICULTURE, 

FORESTRY COMMUNITIES, AND OTHERS IN REDUCING GLOBAL WARMING POLLUTION 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JULY 14, 2009 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

AMY KLOBUCHAR, Minnesota 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

ARLEN SPECTER, Pennsylvania 

JAMES M. INHOFE, Oklahoma 

GEORGE V. VOINOVICH, Ohio 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

MIKE CRAPO, Idaho 

CHRISTOPHER S. BOND, Missouri 

LAMAR ALEXANDER, Tennessee 

BETTINA POIRIER, Staff Director 

RUTH VAN MARK, Minority Staff Director 
(III) 

C O N T E N T S 

Page 

JULY 14, 2009 

OPENING STATEMENTS 

Boxer, Hon. Barbara, U.S. Senator from the State of California ........................ 1 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 6 

Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee ................... 71 

Bond, Hon. Christopher S., U.S. Senator from the State of Missouri ................. 72 

Barrasso, Hon. John, U.S. Senator from the State of Wyoming .......................... 74 

Crapo, Hon. Mike, U.S. Senator from the State of Idaho ..................................... 75 

Sanders, Hon. Bernard, U.S. Senator from the State of Vermont ....................... 94 

Merkley, Hon. Jeff, U.S. Senator from the State of Oregon ................................ 95 

Gillibrand, Hon. Kirsten, U.S. Senator from the State of New York .................. 118 

Udall, Hon. Tom, U.S. Senator from the State of New Mexico ............................ 172 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland, prepared 

statement .............................................................................................................. 184 

Vitter, Hon. David, U.S. Senator from the State of Louisiana, prepared statement ...................................................................................................................... 185 

WITNESSES 

Hopkins, Jeffrey W., Principal Adviser, Energy and Climate Policy, Rio Tinto . 85 

Prepared statement .......................................................................................... 87 

Response to an additional question from Senator Crapo .............................. 93 

Hohenstein, Bill, Director, Global Climate Change Program, U.S. Department 

of Agriculture ........................................................................................................ 96 

Prepared statement .......................................................................................... 98 

Responses to additional questions from: 

Senator Baucus .......................................................................................... 103 

Senator Cardin .......................................................................................... 106 

Response to an additional question from Senator Klobuchar ....................... 107 

Responses to additional questions from: 

Senator Inhofe ........................................................................................... 108 

Senator Crapo ............................................................................................ 114 

Krupp, Fred, President, Environmental Defense Fund ........................................ 119 

Prepared statement .......................................................................................... 121 

Response to an additional question from: 

Senator Cardin .......................................................................................... 134 

Senator Klobuchar ..................................................................................... 136 

Responses to additional questions from Senator Inhofe ............................... 137 

Response to an additional question from Senator Crapo .............................. 144 

Stallman, Bob, President, American Farm Bureau Federation ........................... 145 

Prepared statement .......................................................................................... 147 

Response to an additional question from Senator Klobuchar ....................... 160 

Responses to additional questions from: 

Senator Inhofe ........................................................................................... 162 

Senator Crapo ............................................................................................ 164 

ADDITIONAL MATERIAL 

‘‘Fool Me Twice, Shame on Me,’’ article from the Center for American 

Progress ................................................................................................................ 187 

(1) 

ECONOMIC OPPORTUNITIES FOR AGRICULTURE, FORESTRY COMMUNITIES, AND 

OTHERS IN REDUCING GLOBAL WARMING 

POLLUTION 

TUESDAY, JULY 14, 2009 

U.S. SENATE, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, Washington, DC. 

The full committee met, pursuant to notice, at 10 a.m. in room 

406, Dirksen Senate Office Building, Hon. Barbara Boxer (chairman of the full committee) presiding. 

Present: Senators Boxer, Inhofe, Alexander, Barrasso, Bond, 

Cardin, Crapo, Gillibrand, Merkley, Sanders, and Udall. 

OPENING STATEMENT OF HON. BARBARA BOXER, 

U.S. SENATOR FROM THE STATE OF CALIFORNIA 

Senator BOXER. Our hearing will come to order. I want to welcome everyone on the panel. We will be addressing opportunities 

for businesses and sectors like ag and forestry in the fight against 

global warming. Each member can have 4 minutes to open. 

This is the first of three hearings scheduled for this week to address vital aspects of our plan for legislation that will avoid the 

ravages of unchecked global warming, create clean energy jobs here 

in America, and reduce our dependence on foreign oil. 

Agricultural and forestry businesses have opportunities to play 

an important role in efforts to reduce global warming. Changes in 

land use, reforestation and other activities can make significant reductions in global warming pollution. As an example, a farmer can 

capture the methane that is emitted by waste ponds or change to 

no-till or low-till land management or take other steps to increase 

the amount of carbon absorbed in soils and forests. Then that farmer can sell those documented reductions in emissions as an offset 

on an open market where it can be purchased. 

The farmer is paid, and the regulated entity receives credit toward cutting its global warming pollution. By providing regulated 

industries with a low-cost way to meet some of their pollution reduction requirements, offsets can be an important part of cutting 

our global warming emissions, and lowered costs for industry mean 

lower costs for family as we transition to a clean energy economy. 

Groups working in the farm sector have voiced their support for 

Waxman-Markey legislation, including the National Association of 

Wheat Growers, the American Farmland Trust, and the National 
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Farmers Union, and I ask unanimous consent that their letters be 

placed in the record. 

[The referenced documents follow.] 
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Senator BOXER. At the same time, it is essential that offsets in 

fact reduce emissions and that they can be monitored and verified. 

Making sure that offsets have integrity so that our clean energy 

jobs bill reduces pollution as it is designed to do is an important 

part of the work of this committee. 

I want to thank all of our witnesses for being here today to address this important subject. I think this is a very exciting opportunity out there posed in the form of a challenge. And I look ahead 

and I see if we do this right, I see new jobs. I see new opportunities 

for agriculture and forestry. And I believe if we do the right thing, 

we will not only meet the challenge of global warming and avoid 

the ravages of global warming, which have been laid out by the 

Bush administration and now the Obama administration, but will 

create millions and millions of jobs. 

The last point on that, in my home State of California, where we 

are taking the lead on this, the only real growth sector in the last 

10 years has been alternative energy, 125,000 new jobs and 1,000 

new solar companies. So we can prove the fact that even in this 

very tough recession, that is the bright spot in my home State. So 

I look forward to hearing the testimony today. 

At this time, I call on Senator Inhofe. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you, Madam Chairman. 

Let’s face it, as anyone familiar with agriculture knows, farming 

is energy-intensive business, so when the price of diesel, electricity 

or natural gas goes up, farmers know about it, and they don’t like 

it, and they tell us about it. 

Farming is a business of high costs and low profit margins, so 

it is not surprising that a significant portion of the agriculture 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 the global climate catastrophe, then farmers would be the first 

to sign up to help. In my view, the farmers are practical people. 

When they see a problem, they want to fix it, and case closed. 

But if you are asking them to assume an enormous economic 

burden for a meaningless exercise, one that subsidizes big cities at 

the expense of the heartland; one that sends American jobs and 

taxpayers to India and China; one that puts American farmers at 

the disadvantage in the global marketplace, all for no impact whatsoever on global warming, then you will get an earful. 

What do I mean here? Well, the EPA Administrator, Lisa Jackson, stated to this committee just 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 will be forced to pay for a solution 

that doesn’t work. Farmers understand what this means. It is all 

pain and no climate gain. 

Now, one thing I will 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 

land. But they are rightly leery of cap-and-trade because they sup-
7 

pose the environmental benefits its supporters claim it will create 

are illusory. 

Farmers 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 cap-and-trade will create economic opportunities for farmers. They say that farmers can 

make hefty profits 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 to get paid 

for it. But as farmers have discovered, these projects won’t defray 

the increased energy costs and the devastating impacts caused by 

cap-and-trade. 

According to the Heritage Foundation, farm income would drop $8 billion under cap-and-trade, and offsets would make up less 

than 10 percent of the lost income. And many of the farmers, like 

fruit, vegetable, rice and cotton farmers, won’t 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 the 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 and no-till and other practices 

are significantly lower than the EPA 2005 estimates. In plain 

English, this means that the most viable tool for producing offsets 

with soil sequestration won’t be available for farmers in the 

amounts promised. 

This is not just a small adjustment. This was a major change by 

about 10-fold. I learned a good deal of this in letters sent by 120 

agriculture groups opposing the House Waxman-Markey bill. This 

opposition, I should note, runs the gamut of agricultural sector, including the Farm Bureau, the American Farm Bureau, the Pork 

Producers Council, the U.S. Rice Federation, the National Cattlemen’s and Beef Association, the National Chicken Council, the 

Council for Farmer Cooperatives, the American Meat Institute, and 

the North American Millers Association. And I ask that all these 

be made a part of the record. 

Senator BOXER. Without objection. 

[The referenced letters follow:] 
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[The prepared statement of Senator Inhofe follows:] 

STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA

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-andtrade, 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-andtrade 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-andtrade 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. 

Senator BOXER. Thank you, Senator. 

Let me see, my list here, by order of arrival, next would be Senator Alexander. 
71 

OPENING STATEMENT OF HON. LAMAR ALEXANDER, 

U.S. SENATOR FROM THE STATE OF TENNESSEE 

Senator ALEXANDER. Thank you, Madam Chairman. 

Welcome to our witnesses. 

A lot of the prosperity of the United States of America has depended on two things: cheap energy and cheap food. That has 

helped us have a high standard of living, create jobs, and have the 

most productive agriculture operations in the world. 

We are here over the next several days to have hearings, and I 

appreciate the Chairman having these on the effects of climate 

change and global warming. I am one Senator who believes climate 

change is a problem and that humans are causing it, and that we 

need to deal with it. 

I think the House-passed bill, though is exactly wrong. It is a 

$100 billion job killing national energy tax that will add another 

utility bill to every American family, and no American families 

need, I mean, farmers are the first people who don’t need another 

utility bill because, as Senator Inhofe said, farming is one of the 

most energy-intensive operations we have. And every time you add 

utility bills or costs to existing utility bills, prices go up. 

I mean, when the price of gasoline goes up, so does the price of 

seed and feed, and operating all the machines on the farm. And the 

cap-and-trade program deliberately raises the price of gasoline. Its 

purpose is to raise the price of energy. 

If the price of electricity goes up, a lot of the machines that go 

on the farm cost more to operate. If the price of natural gas goes 

up, and we saw it just about 4 years ago go up, farmers all over 

America felt the pain of the high fertilizer costs, and that increased 

the costs of their operations. 

And of course, all that increases the cost of food to all of Americans. Setting aside land makes land more scarce, which is a part 

of this plan. And that raises the cost of food. When gasoline goes 

up, it costs more to haul the food to the wholesaler, and then to 

the retailer. Sara Lee, a big food processing operation in Tennessee 

that employs 2,000 people said if this House-passed bill passes, 

that they will delay their expansions because the cost of food is up. 

So I think we need to stop and think about whether it is really 

the wisest price and policy to try to attack climate change by deliberately raising the price of energy, especially this cap-and-trade 

that came from the House is like if you have a fly swatter right 

in front of you, and there is a fly and you use a noodle to try to 

get it. The cap-and-trade effect on fuel is about the most inefficient 

way you could deal with fuel because it deliberately raises the price 

of gasoline, for example, without reducing the carbon. 

We have had that testimony before this committee. A better way 

to deal with carbon from fuel would be a low carbon fuel standard 

as people switch to electric cars or to biofuels or other things, not 

deliberately raise the price of gasoline. 

So there is a better way to do all this. Yesterday, I offered a blueprint for 100 new nuclear power plants in the next 20 years. Republican Senators have proposed 100 new nuclear power plants in 

the next 20 years. That is the cheap energy solution. I mean, high 

cost energy such as that from Waxman-Markey would send jobs 
72 

and food producers overseas in looking for cheap energy to create 

products and to create food. 

So 100 new nuclear power plants, support for electric cars, offshore exploration, and doubling energy R&D for renewable energy, 

that is the low cost plan to deal with climate change instead of a 

new utility bill for every American family. 

Thank you, Madam Chairman. 

Senator BOXER. Thank you very much, Senator. 

Our next speaker is Senator Bond. 

OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, 

U.S. SENATOR FROM THE STATE OF MISSOURI 

Senator BOND. Thank you very much, Madam Chair, and thanks 

to the witnesses for coming today. It is a timely hearing because 

just yesterday I received a disturbing report that the proposed capand-trade legislation will cost the average Missouri farmer up to 

$30,000 per year. 

Now, we have long suspected that higher energy prices from capand-trade will hurt farmers with higher production costs. In President Obama’s own words, electricity prices will necessarily skyrocket under cap-and-trade. 

As has been said, farmers use energy in just about everything 

they do. Diesel fuel powers tractors and combines. Natural gas is 

the key ingredient to making fertilizer and drying grain. Farm 

equipment uses energy also for irrigation pumps, as well as transportation. 

A new report by the Food and Agricultural Policy Research Institute at the University of Missouri—Columbia, along with the Iowa 

State University details how there would be tens of thousands of 

dollars of cost, and I ask, Madam Chair, that this be included as 

a part of the record. 

Senator BOXER. Sure. Will do. 

[The referenced report was not received at time of print.] 

Senator BOND. After examining farm production costs at representative farms across the State, we found that Waxman-Markey 

would drastically increase farmer costs. A representative farm in 

Missouri, a 1,900-acre feed grain, soybean farm in Lafayette County east of Kansas City, would face $11,649 in higher energy costs 

in 2020, rising to $30,152 in 2050. There would be higher costs for 

seed, fertilizer, chemicals, custom hire and rental, machinery, fuel, 

drying and irrigation energy, machinery repairs and operating interests. 

I can only tell my colleagues here on the committee, many of 

whom come from the coast and may not be familiar with farm 

costs, that $11,000 rising to $30,000 per farm is a jaw dropping 

number for farmers. Forcing farmers to pay this amount for capand-trade would be a bit more than the postage stamp we were 

told earlier. It would be unconscionable. 

Some say that cap-and-trade is an opportunity that will benefit 

farmers, but those claims are popping as quickly as they are made. 

The Des Moines Register said plans to cut greenhouse gas emissions have been sold to farmer groups as a potential cash cow for 

growers, but new government estimates suggest farmers would 

make a lot less money than previously believed. 
73 

And as the Ranking Member pointed out, the CRS said a particular concern to many in U.S. agriculture is EPA’s current estimates of the mitigation potential from agricultural soil activities 

such as conservation and no-till are shockingly low, only about 10 

percent of EPA’s estimates. 

Some suggest that big carbon gains are to be had from planting 

trees. Now, I am a big fan of planting trees. I have planted over 

10,000 trees by hand on some land in Mexico, Missouri, including 

about 200 Asian-American chestnuts. And as a side note, if anybody wants to fight global warming, I will give you some information on where you can acquire my trademark seedlings and make 

a little cash on the side. 

But I can tell you, as a commercial proposition, a Missouri nursery quoted us a price of $1,200 per acre to plant eastern cottonwood trees, ideal for the Lafayette County farm we talked about. 

But planting the trees would cost over $2 million. Farmers would 

then earn, assuming a 2.6 ton per acre sequestration rate, at $28 

a ton of carbon, only $75 in sequestration revenues for the $1,200 

per acre cost. 

Now, otherwise a farm would make $750 per acre. So no farmer 

will figure that that pencils out to lose $675 for what they could 

get. 

So I will, Madam Chair, I will submit the rest of my statement 

for the record, but I can tell you that this cash cow is really a pig 

in a poke. 

More details later. 

[The prepared statement of Senator Bond was not received at 

time of print.] 

Senator BOXER. Senator, I look forward to those details because 

you were so unclear on where you stand. 

[Laughter.] 

Senator BOXER. I just want to place in the record at this time 

a document that shows the top four agriculture States. They are 

California, Texas, Iowa and Nebraska. I just want to place that in 

the record to clear up something that was said about the coast. 

[The referenced document was not received at time of print.] 

Senator BOXER. All right. 

Senator BOND. You can plant trees, you can plant chestnuts 

in—— 

Senator BOXER. Well, actually, Senator, if you want to go over 

the details of this, California sells 11.4 percent of all the agricultural production. That is well over Texas, which is second at 7.1 

percent. So if you want to come to California, come with me and 

visit my farmland and visit. We have everything from dairy farmers to, you know, 200, 300 different specialty crops. 

I think it is important that the facts be clear that the No. 1 agricultural production State is California, a State I know well and 

love very much. 

Senator Barrasso. 

Senator BOND. I agree with you. I am just sorry. I don’t want to 

see your agriculture crippled. 

Senator BOXER. Well, I think our agricultural people will speak 

for themselves through Senator Feinstein and myself, and the 52 
74 

or 53 other Representatives they have. But thank you for offering 

to speak for them. 

Senator Barrasso. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM THE STATE OF WYOMING 

Senator BARRASSO. Thank you very much, Madam Chairman. 

The Waxman-Markey bill may create green jobs. It may even create green jobs in the agriculture sector. If it does, great. We need 

green jobs in my State. Wyoming welcomes the possibility of them. 

But this Waxman-Markey bill also costs jobs, and Americans 

want all jobs, not just some. They don’t want to lose the jobs they 

have with the promise that they may get a green job in exchange 

in the future. 

The Administration says the Waxman-Markey bill will create 

millions of new jobs. This Administration also promised that after 

we passed the economic stimulus package, we would create or save 

3.5 million jobs. Well, since the passage of that bill, unemployment 

has reached 9.5 percent. Last month, 467,000 people lost their jobs. 

The Administration’s economic expert said that the unemployment would not exceed 8 percent. It has by a lot. Were they wrong? 

You bet. Vice President Biden acknowledged Administration officials were too optimistic earlier this year when they predicted the 

unemployment rate would peak at 8 percent. Vice President Biden 

said the Administration ‘‘misread the economy.’’ 

Well, is it possible that the Administration is also misreading the 

economic predictions of millions of new jobs being created in this 

bill? The Administration failed to make the grade on the $787 billion stimulus package. It is a fact that this legislation will cost jobs 

in our economy. That is why there is language in the bill to retrain 

workers who lose their jobs. Where will those job losses come from? 

Well, according to Robert Murray, who is Chairman, President 

and CEO of Cleveland-based Murray Energy Corporation, all 

Americans in the Midwest, South and Rocky Mountain regions will 

be the most dramatically affected because the climate change legislation will destroy the Nation’s coal industry, and low-cost electricity is what provided for these regions for generations. He goes 

on to say wealth will be transferred away from almost every State 

to the West Coast and New England. 

I believe that Waxman-Markey will create some jobs and will destroy many others. There won’t be a net job creation in my State 

and many rural States with economies tied to the mineral industry 

and dependent on fossil fuels such as coal and natural gas. Jobs 

will be lost under this legislation, jobs in my State, jobs in other 

rural States dependent on fossil fuels. 

And we need more jobs in all 50 States. We need to keep the 

ones we have. Americans want all of these jobs and more. We need 

them all. 

Thank you, Madam Chairman. 

Senator BOXER. Thank you very much. 

Senator Crapo. 
75 

OPENING STATEMENT OF HON. MIKE CRAPO, 

U.S. SENATOR FROM THE STATE OF IDAHO 

Senator CRAPO. Thank you very much, Madam Chairman. And 

I appreciate the opportunity to be here today to discuss these critical issues. 

I share the concerns of my colleagues about the impact of the 

cap-and-trade legislation on agriculture and forestry. Although it is 

very clear that there are offsets that can be achieved and utilized— 

and I want to talk about those in just a moment—but I think it 

is important that we not let this legislation and its implementation 

turn into a mechanism to force certain planting or operating decisions that may not be beneficial to particular agricultural or forestry operations. 

As I indicated, as we study this bill, I have become increasingly 

concerned that the costs of cap-and-trade will outweigh the benefits 

to foresters and farmers. Agriculture is an extensive energy industry, and for some crops energy inputs account for as much as 70 

percent of the cost of production. And my concerns are that these 

input costs under the cap-and-trade such as gasoline, diesel and 

electricity will increase and surpass the uncertain monetary benefits from the offsets. 

Additionally, increases in the cost of natural gas will result in 

higher fertilizer prices. And to put it in perspective, in 2008 farmers and ranchers spent $60 billion on fuel, electricity, fertilizer and 

chemicals. 

I look forward to the testimony that is going to be provided 

today. I am very focused this morning on issues relating to the forestry piece of this issue, as well as the agriculture side of it. Responsibly managed domestic forests have a golden opportunity in 

this legislation to participate in reduction of greenhouse gases. And 

although I indicated I have very big problems with the legislation, 

I think we have to look at the issues of projects like afforestation 

and reforestation and avoid the deforestation of forests across 

America. 

And additionally, wood products that harness carbon should be 

eligible for participation in the offsets market. 

Madam Chairman, because domestic forests are ideal participants in reducing global warming pollution, I am a little disappointed that today don’t have a witness from the forestry industry to explain the benefits and the challenges of domestic participation in this emerging market. 

I do have some comments that have been provided by the Alliance of Forest Owners, the National Alliance of Forest Owners, and 

would ask if the Chairman would allow me to submit their comments for the record so the committee can have the benefit of their 

input on this issue. 

Senator BOXER. Absolutely. Without objection. 

Senator CRAPO. Thank you very much. 

[The referenced document follows:] 
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Senator CRAPO. Madam Chairman, again I look forward to the 

witnesses’ testimony and to the information we will be provided 

today. I do have the strong concerns that I indicated about whether 

this legislation will, in the end, result in a higher cost, rather than 

a benefit to the agriculture and forestry industries, but I am willing to listen to the witnesses and see if we can find a way to create 

a win-win situation for everyone. 

Thank you, Madam Chairman. 

[The prepared statement of Senator Crapo follows:] 

STATEMENT OF HON. MIKE CRAPO, U.S. SENATOR FROM THE STATE OF IDAHO

Madam Chairwoman, thank you for the opportunity to share a few words. I would 

also like to thank the witnesses for being here with us today to share your testimony on including agriculture and forestry in reducing emissions. 

For many in agriculture and forestry, carbon offsets represent opportunities to obtain more value out of the land and new land management technologies in addition 

to the possibilities of reducing the costs of a cap-and-trade program. Agriculture and 

forestry offsets are already contributing financially to some farms and private forestry operations through no-till, anaerobic digesters and other carbon sequestration 

techniques. Estimates from EPA indicate that 20 percent of all greenhouse gas 

emissions in the U.S. can be sequestered in agriculture and forest lands. 

In the 2008 Farm Bill, Congress recognized the potential for farms and forests 

to participate in providing ecological services to society through the creation of the 

Office of Ecosystem Services and Markets at USDA. OESM is working to establish 

technical guidelines for the measuring, reporting and registration of the environmental services provided through various land management practices. I understand 

USDA’s testimony today will touch upon these issues, and I look forward to hearing 

this testimony. 

Responsibly managed domestic forests have a golden opportunity to participate in 

the reduction of greenhouse gases. Through projects like afforestation, reforestation, 

and avoided deforestation, forests across America can participate in offsets markets. 

States like Idaho, with unnaturally large fuel loads, are ideal locations for carbon 

sequestration through forest health projects that result in net carbon sequestration. 

Additionally, wood products that harness carbon should be eligible for participation 

in the offsets market. 

Because domestic forests are ideal participants in reducing global warming pollution, I must express my disappointment in not having a witness today from the forest industry to explain the benefits and challenges of domestic participation in this 

emerging market. This hearing would have provided a perfect opportunity for this 

committee to learn more about the opportunities that we have here in the U.S. to 

care for our forests and to improve our air quality. In lieu of a witness, I would like 

to ask unanimous consent to include the National Alliance of Forest Owners’ 

(NAFO’s) testimony in the record so that the committee has the opportunity to more 

thoroughly review this issue from the perspective of domestic forestry. 

While offsets can potentially benefit our farmers and foresters, I have some major 

concerns with the overall effect of cap-and-trade legislation on these industries. For 

example, it is important that legislation and implementation do not turn into a 

mechanism to force certain planting or operating decisions that may not be beneficial to a particular agriculture or forestry operation. 

Lately, I have become increasingly concerned that the costs of cap-and-trade will 

outweigh the benefits to farmers and foresters. For example, I have heard that some 

crops like potatoes and certain specialty crops are not suitable for no-till or other 

farming practices that sequester carbon in the soil. I also worry that livestock producers will be unable to feasibly purchase and utilize anaerobic digesters, which 

carry a price tag of $2 million–$3 million. 

Agriculture is an energy intensive industry. For some crops, energy inputs account for 70 percent of production costs. I have major concerns that input costs 

under cap-and-trade such as gasoline, diesel, and electricity will increase and surpass uncertain monetary benefits from offsets. Additionally, increases in the cost of 

natural gas will result in higher fertilizer prices. To put it in perspective, in 2008, 

farmers and ranchers spent $60 billion on fuel, electricity, fertilizer and chemicals. 

I look forward to the testimony outlining the benefits to farmers and foresters of 

cap-and-trade, but I also would like to ensure this committee engages in a well 

rounded discussion of the costs associated with cap-and-trade as well. We all know 
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that for farmers and foresters to be able to assist with reducing emissions, they 

must be able to remain on the land. 

Senator BOXER. Yes. We are going to start hearing from the witnesses, and if any colleagues on either side of the aisle come to this 

hearing, we will give them 3 minutes to make a statement. 

We are going to first hear from Jeffrey Hopkins, Principal Adviser, Energy and Climate Policy, Rio Tinto. And for those people 

who don’t know, Rio Tinto is one of the world’s largest mining companies, and it has operations in the following States: Colorado, Wyoming, Montana, Utah, Michigan, Arizona, California, Vermont, 

Kentucky. 

And from what we understand, they have had a corporate climate policy since 1998. So all these predictions of gloom and doom, 

we are glad you are here, and we would love to know how you are 

doing these past years as you have implemented such a policy. 

And welcome, sir. 

STATEMENT OF JEFFREY W. HOPKINS, PRINCIPAL ADVISER, 

ENERGY AND CLIMATE POLICY, RIO TINTO 

Mr. HOPKINS. Thank you. 

Madam Chair and members of the committee, Rio Tinto greatly 

appreciates the opportunity to testify today. My name is Jeff Hopkins, and I am Principal Adviser on Climate and Energy Policy for 

Rio Tinto, the largest diversified mining company in the U.S. and 

one of the largest diversified mining companies in the world. 

Our U.S. assets include coal holdings in Colorado, Wyoming and 

Montana; copper in Utah; copper projects in Michigan and Arizona; 

borates in California; and talc in Montana and in Vermont; as well 

as an aluminum smelter in Kentucky; with over 15,000 U.S. employees, all told. 

Our objective is to be the resource developer of choice from the 

mineral exploration phase to mine closure and beyond. Rio Tinto’s 

climate position recognizes and accepts the conclusions of the Intergovernmental Panel on Climate Change. Emissions of greenhouse 

gases resulting from human activities are contributing to climate 

change, and reducing these emissions is an important international 

goal. 

At all levels of our company, we carry out a three-part strategy 

for achieving this goal. First, we encourage all governments to take 

action to reduce emissions. In the U.S., this is exemplified by our 

participation in the U.S. Climate Action Partnership, or USCAP, a 

group of 25 businesses and five NGOs that released its Blueprint 

for Legislative Action last January. 

Second, we take a proactive stance at our own operations to reduce greenhouse gas emissions. 

Third, we develop low-emission pathways for our products, which 

include many commodities with positive greenhouse gas reduction 

benefits in use, but which are energy and greenhouse gas intensive 

in production. 

Offsets, the subject of today’s hearing, play an important role in 

this strategy. I will be happy to tell you how. But first, what is an 

offset? An offset is a reduction in greenhouse gas emissions from 

an unregulated—that is to say an uncapped—entity, which can be 

marketed to a regulated entity. That is what an offset is. 
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Offsets are potentially sold by regulated entities such as entities 

with farm or forest land use emissions to regulated entities, such 

as Rio Tinto, that have an obligation to purchase and submit an 

allowance for each ton of greenhouse gas emissions. 

For some perspective, the recently passed House bill proposed to 

regulate about 85 percent of U.S. emissions, leaving 15 percent of 

emissions unregulated and potentially available to supply offsets, 

including reductions from agriculture and forestry land use emissions. 

Because climate change is mitigated equally by reductions from 

regulated or unregulated sectors, the contribution of offsets from 

unregulated sectors is in all senses equivalent to reductions in 

greenhouse gas emissions from regulated sectors. 

Offsets bring several additional economic advantages as well. 

First, reductions in unregulated sectors could come at a much lowered cost in the immediate term than reductions from regulated 

sectors, resulting in some very narrow direct benefits and some 

very broad indirect benefits. Entities using cost-efficient offsets will 

directly benefit by reducing their own emissions and their overall 

compliance costs. And the entities selling the offset, including agriculture and forest communities, will directly benefit as they harvest the market value of that reduction. 

Those who are on the sidelines to this transaction will indirectly 

benefit as well because entities choosing to substitute offsets for allowances bring down the price of allowances for everybody. As a result, allowing entities in the CAP sector to pursue lower cost reductions wherever they exist will enable us to progress farther and 

faster toward stabilizing global GHG concentrations. 

The recently passed House bill would allow up to 2 billion tons 

of domestic and international offsets to enter into the system each 

year, with up to 1 billion tons of offsets from domestic sources and 

up to 1 billion tons from international sources. 

U.S. EPA analysis of this bill showed that the impact of the 1 

billion tons of international allowances alone works to reduce the 

prevailing cost of allowances by 89 percent. This demonstrates why 

Rio Tinto and USCAP call for ample offsets to contain the costs of 

climate regulation. 

Additional benefits include that international offsets create a 

funding mechanism for emission reductions in countries without 

carbon regulation. 

Senator BOXER. I am going to ask you to summarize. 

Mr. HOPKINS. OK. 

We do not plan to meet our emission reductions solely through 

the use of offsets, and we will first look toward our own abatement 

opportunities. We will never be a carbon neutral business due to 

our energy-intensive nature, supplying essential minerals and metals that meet societal needs and which contribute to improvement 

in living standards globally. We are determined to deliver shareholder value. Offsets and the cost containment they bring are a 

crucial part of this overall strategy. 

Thank you. 

[The prepared statement of Mr. Hopkins follows:] 
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Senator BOXER. Thank you. That summed it up well, I think. 

We are going to hear from Senator Sanders, followed by Senator 

Merkley. Both these Senators are running back and forth to the 

Health Committee, so we really appreciate their taking the time. 

Three minutes each, gentlemen, if you can. 

OPENING STATEMENT OF HON. BERNARD SANDERS, 

U.S. SENATOR FROM THE STATE OF VERMONT 

Senator SANDERS. Madam Chairman, thank you very much. 

And that is exactly right. We are doing the markup on health 

care right now, so I am preoccupied there. 

Let me just read a brief statement and thank all of our panelists 

for being here. 

Vermont is a unique State in many ways and benefits from being 

75 percent forested, with more than 4.6 million acres of forests. 

Vermont also benefits from having a strong agricultural sector representing more than 1 in 10 jobs in our rural economy. Perhaps, 

then, it is no surprise that whether you measure per capita or on 

total carbon output, Vermont is also the State with the lowest carbon footprint in the United States. 

We need to ensure that the lessons learned from States like 

Vermont that have been leaders in early action on energy efficiency 

and environmental preservation are applied to global warming legislation. One way to achieve greenhouse gas emissions reductions 

is through our lands and our farms, and that is especially true 

when so many family farmers around this country are facing very 

serious economic problems. We can and should provide flexible incentive programs to landowners and farmers to achieve tangible 

greenhouse gas emissions reductions through recognized practices. 

We know that preserving forests or reforesting can sequester carbon dioxide emissions. We also know that there are ways to capture farm emissions. In Vermont, our farmers are working to capture methane emissions from cows by using farm waste to generate 

electricity. That is just a very, very exciting technology. I was at 

a farm last year in Addison County, and seeing the methane gas 

being produced from manure providing electricity for hundreds of 

homes, just a very exciting technology. 

While offsets will offer an opportunity to engage the forestry and 

agricultural sectors in emissions reductions, we should provide 

funding for targeted incentive programs that help small farmers 

and landowners who may not be engaged in carbon trading but can 

play a valuable role in helping our Nation meet and exceed our 

greenhouse gas emissions reduction targets. 

I look forward to working with my colleagues to make this happen. The bottom line is: let’s not forget about family based agriculture in America. They can and should play a major role as we 

combat global warming. 

Thank you very much, Madam Chair. 

[The prepared statement of Senator Sanders follows:] 

STATEMENT OF HON. BERNARD SANDERS, 

U.S. SENATOR FROM THE STATE OF VERMONT

Vermont is a unique State in many ways and benefits from being 75 percent forested with more than 4.6 million acres of forests. Vermont also benefits from having 

a strong agricultural sector representing more than 1 in 10 jobs in our economy. 
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Perhaps then it is no surprise that whether you measure per capita or on total carbon output, Vermont is also the State with the lowest carbon footprint in the Nation. 

We need to ensure that the lessons learned from States like Vermont—that have 

been leaders in early action on energy efficiency and environmental preservation— 

are applied to global warming legislation. One way to achieve greenhouse gas emissions reductions is through our lands and farms. We can and should provide flexible 

incentive programs to landowners and farmers who achieve tangible greenhouse gas 

emissions reductions through recognized practices. 

We know that preserving forests, or reforesting, can sequester carbon dioxide 

emissions. We also know there are ways to capture farm emissions. In Vermont, our 

farmers are working to capture methane emissions from cows by using farm waste 

to generate electricity. 

While offsets will offer an opportunity to engage the forestry and agricultural sectors in emission reductions, we should provide funding for targeted incentive programs that help small farmers and landowners who may not be engaged in carbon 

trading but can play a valuable role in helping our Nation meet and exceed our 

greenhouse gas emission reduction targets. I look forward to working with my colleagues to make this happen. 

Senator BOXER. Senator, thank you so much for coming over. 

Senator Merkley. 

OPENING STATEMENT OF HON. JEFF MERKLEY, 

U.S. SENATOR FROM THE STATE OF OREGON 

Senator MERKLEY. Thank you very much, Madam Chair. 

I think the title for today’s hearing is very appropriate, Opportunities for Agriculture and Forest Communities, because there are 

substantial opportunities here as they relate to offsets and the 

practices employed in both sectors. 

Certainly, I wanted to focus a little bit on the forestry sector. At 

a recent event, our Majority Leader, Senator Harry Reid, called Nevada ‘‘the Saudi Arabia of solar power,’’ and then Senator Dorgan 

stood up and said, well, North Dakota is the Saudi Arabia of wind 

power. And if I was to continue that analogy, Oregon would be the 

Saudi Arabia of forest biomass. 

And indeed, we have a tremendous amount of carbon sequestering potential, and the management of our forest lands currently 

may be one of the worst possible practices in which we have millions of acres of second growth overgrown in a fashion which results in a lower level of carbon being captured in terms of the 

growth rate, but also a very high propensity to burn down, which 

puts all that carbon back in the atmosphere. 

So I want to make sure that we have through this bill the opportunity to recognize that those practices can be modified in ways 

that could be very, very helpful. But to have it work in the long 

term, and this applies to the agricultural world as well, we have 

to have a high level of integrity in the models that we are using 

for calculating the impact on carbon dioxide with a long-term view. 

And we have to have some type of insurance structure that maintains that if, in fact, we modify these practices and then this unit 

of forest, if you will, burns in a forest fire, that we capture those 

effects in the course of it. 

So I really want to emphasize this, because if we are really looking at a world where industrialization has been fueled by geological 

carbon being converted into atmospheric carbon dioxide, one way of 

interrupting that is to capture that atmospheric carbon dioxide 

through forests and reutilize it in a renewable energy system. And 
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certainly, forest biomass both has a potential role in producing heat 

and electrical energy through co-generation and certainly has a potential role as research proceeds on cellulosic ethanol, biodiesel, 

biobutanol, and so forth. 

So if we get this right, we have quite a potential. If we get it 

wrong, we’ll simply have a loophole that will make this whole bill 

irrelevant and ineffective. So I certainly appreciate your expertise 

being brought to bear on this issue, and I thank very much the 

Chair for the opportunity to come and speak. 

Senator BOXER. Senator, thank you. I know how busy everybody 

is. We appreciate it. 

Our next witness is Bill Hohenstein, Director, Global Climate 

Change Program, USDA. 

STATEMENT OF BILL HOHENSTEIN, DIRECTOR, GLOBAL CLIMATE CHANGE PROGRAM, U.S. DEPARTMENT OF AGRICULTURE 

Mr. HOHENSTEIN. Thank you, Madam Chair. 

Madam Chair, Ranking Member Inhofe and members of the committee, thank you for the opportunity to discuss the economic opportunities for agriculture, forestry communities and others in reducing global warming, focusing specifically on offsets. 

We recognize that the development of an offset market will require full partnership of relevant Federal agencies, including EPA, 

the Department of Interior, the Department of Energy, and others. 

Indeed, we are already working with other agencies on a variety 

of issues related to climate change. 

Climate change legislation presents both opportunities and costs 

for agriculture and forestry. USDA believes that the opportunities 

from climate legislation will likely outweigh the costs. The climate 

change legislation recently passed by the House of Representatives 

caps over 80 percent of U.S. greenhouse gas emissions. While direct 

agricultural emissions are not under the required cap in the House 

bill, the agriculture sector will face higher energy and input costs 

due to a reliance on the products that are included under the cap. 

A well designed cap-and-trade system that includes a robust carbon offset program and that promotes renewable energy could provide significant economic opportunities for landowners and rural 

communities. To be effective in addressing climate change, the offset actions need to be real, verifiable, additional, long lasting, and 

implemented on a broad scale. 

To give some sense of context on scale, H.R. 2454 sets a 1 billion 

ton cap, a limit on the use of domestic offsets. USDA estimates suggest that this is roughly equivalent to 170 million acres of trees or 

switching to no-till farming on 1.5 billion acres of cropland. 

Now, farmers and landowners have many other options to reduce 

emissions and increase sequestration and do not need to rely solely 

on tree planting or changes in tillage. These options include nutrient management, installing anaerobic digesters, composting manure, improving ruminant feeds to reduce the generation of methane, and reducing fire risks and lengthening forest rotations to 

store greater amounts of carbon. 

Taken together, these practices and others have the potential to 

transform agriculture and land management within the United 
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States and can provide additional environmental benefits as well. 

A number of important issues need to be addressed in the context 

of the greenhouse gas offsets program to ensure environmental integrity. The main considerations include permanence, leakage, 

additionality, and verifiability. 

The issue of permanence refers to the potential reversibility of 

carbon sequestration. To be effective, the carbon that is removed 

from the atmosphere and stored in plants and trees needs to remain out of the atmosphere, or there must be mechanisms in place 

to track and replace carbon offsets when reversals occur. There are 

a number of mechanisms for addressing permanence that ensure 

that responsibility for sequestered carbon is maintained over time. 

Leakage refers to shifting emissions from one place to another. 

There are several types of leakage, and leakage can occur within 

an entity. It can also occur at broad regional, national and international scales as well as markets respond to changes in production driven by the implementation of conservation practices. The 

extent to which market leakage is an issue will depend largely on 

whether the mitigation activity has an impact on production. There 

are a number of offset activities that will very likely have low leakage. For others, efforts can be made to measure or quantify the extent of leakage and account for it in awarding offset credits. 

To ensure the offsets are real and provide real atmospheric benefits, they must be additional. That is, offset credits must not be 

awarded for actions that would have happened in the absence of 

the offset policy. Given the difficulty in projecting a business as 

usual scenario for offset activities, measurements against a base 

year reference may be more practical to implement and less subjecting to gaming, fraud or interpretation. 

However, relying on a base year does not account for trends that 

would independently lead to increases or decreases in rates of 

emissions or sequestration. Projected baselines are uncertain but 

allow the reference to reflect such trends. 

H.R. 2454 as passed by the House provides approaches to address each of these considerations and in some cases provides more 

than one option. These approaches provide a useful starting point 

for the Senate’s deliberation on the role of offsets. 

USDA has a number of assets which could be helpful in carrying 

out an offsets program. A summary of them is included in my written testimony. Whatever role USDA is asked to play as part of an 

offset program, we would look to partner with EPA, DOI, DOE and 

other agencies to ensure that the program has environmental integrity and provides landowners with opportunities to contribute to 

addressing climate change. 

Thank you for the opportunity to discuss these issues here this 

morning, and this concludes my prepared remarks. 

[The prepared statement of Mr. Hohenstein follows:] 
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Senator BOXER. Thank you very much. 

I see we have been joined by Senator Gillibrand of New York. We 

welcome her, and you have 3 minutes to make an opening statement. 

OPENING STATEMENT OF HON. KIRSTEN GILLIBRAND, 

U.S. SENATOR FROM THE STATE OF NEW YORK 

Senator GILLIBRAND. Thank you, Madam Chairwoman. 

I just want to thank you for calling this hearing. I am very appreciative. 

I want to thank our witnesses. 

I serve on the Environment and Public Works Committee, but I 

also serve on the Agriculture Committee. And so I thought this 

hearing was particularly of importance to see how our farmers, our 

original green economy, can be part of the energy solutions that we 

are talking about. 

We have so many opportunities in New York in the agricultural 

sector and in the energy market sector, and there is a large area 

of confluence that I hope that we can take advantage of. I think 

some of your testimony on the cap-and-trade policy and how we can 

play a role in offsets is going to be very important. I also am very 

excited about opportunities for secondary revenue streams for our 

farmers through cellulosic ethanol, other biofuels, methane digesters. There are a lot of opportunities for growth in that sector because of alternative energy. 

I also am interested in the role of forestry. I think that New 

York, one doesn’t typically think of forests, but actually more than 

62 percent of the State is forested. We have the Adirondacks and 

the Catskill Mountains. We have forestry all through western New 

York as well. The State’s forest industry employs more than 60,000 

New Yorkers and contributes nearly $4.6 billion to our economy 

every year. 

So as we move toward climate change legislation, I hope that we 

will also look at the roles that forests also provide. I know that 

there are technologies that are very interesting, particularly in cellulosic ethanol production using wood pulp not used in paper-making. So I want to make sure that we look at those when we define 

what alternative crops can be, not to exclude inadvertently forests, 

which don’t have necessarily the same characteristics of a crop. 

So I look forward to this testimony. I am very grateful for your 

time and attention. And I am very grateful to the Chairman and 

the Ranking Member for their interest. 

Senator BOXER. Senator, thank you very much for coming over. 

And I know we will continue to work one on one on some of your 

concerns about New York’s agriculture and how they can benefit 

from our climate change efforts. 

And so now we are going to turn to our next witness, Fred 

Krupp, President of the Environmental Defense Fund. And I think 

it is important to know that the organization has been participating in on the ground carbon offsets projects since the mid-1990s. 

So we really welcome you here. 
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STATEMENT OF FRED KRUPP, PRESIDENT, ENVIRONMENTAL 

DEFENSE FUND 

Mr. KRUPP. Thank you, Chairman Boxer and members of the 

committee. Thank you for inviting me to speak to you today. 

I am honored to appear before you as you begin your work on 

this historic piece of legislation. 

I would like to begin my remarks by making one point. Environmental Defense Fund believes that an effective climate solution 

must include agricultural offsets. American farmers, foresters and 

landowners can provide creditable emissions reductions while earning a new income stream, and we must give them that opportunity. 

Smart policies in this area, together with policies designed to reduce emissions from international deforestation and forest degradation, will provide substantial environmental benefits and tremendous cost savings for U.S. companies operating under an emissions 

cap. 

Now, my written testimony is quite detailed and the time for 

your right now is short. So I would like to impress this upon you: 

I know the topic of carbon offsets can be controversial, and advocates all around have strong feelings about various aspects of the 

program. But as we move forward, we cannot lose sight of the fact 

that we all have an enormous stake in achieving a strong and successful offsets program. 

The environmental reasons for this are obvious. But it should be 

equally obvious that the core elements of the offset program are 

critical benchmarks for the market that will ultimately put a price, 

a monetary value, on these tons, and a strong offset program 

means better returns for the landowners that participate in it. 

EDF has long advocated the use of offsets in a carbon cap-andtrade system as a cost-effective means for regulated companies to 

meet their compliance obligations. Cost-effective compliance options 

like high-quality offsets will help get us where we need to go with 

respect to the atmosphere. 

Now, turning to the House bill, ACES, it embraces this point of 

view, relying on offsets as a key cost containment strategy. It allows banking of offsets credits, which increase opportunities for 

companies to build up reserves of low-cost compliance options that 

can buffer against higher or volatile allowance prices in the future. 

The bill also has very generous offset limits, which can be increased overall or shifted between international and domestic supplies depending on need. Separately from the offsets program, the 

ACES bill allows unlimited compliance use of allowances from comparably capped trading systems in other countries. 

These aren’t just important cost management devices. These are 

vital. EPA’s analysis of the ACES bill concluded that allowing domestic offsets to trade one for one, rather than five to four, as was 

the case in the original draft of the bill, lowers allowance prices by 

about 7 percent each year. International offsets are also crucial. 

EPA analysis shows that by eliminating international offsets, the 

cost would increase by about 89 percent. 

Additionally, EDF’s own modeling shows that the introduction of 

offset credits for reduced deforestation lowers allowance prices by 

an estimated 22 percent based on the cost estimates used in the 

EPA analysis. The potential price reductions grow to more than 40 
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percent of the program and include all sources of international forest carbon and are not limited to deforestation reductions. 

Now, I am not going to tell you the ACES bill is perfect. In fact, 

I don’t think anyone at this table would say so. In my written testimony, I have outlined some important areas for the committee to 

consider to improve, with respect to the role of science in the program, credit for past activities, accountability at the oversight 

agency, and the use of reductions in tropical deforestation. I hope 

we can cover some of this ground during the Q and A. 

In conclusion, I just want to restate that all of us—farmers, 

ranchers, landowners, emitting companies and the average citizen—have a stake in establishing a good, science-based offsets program. Carbon offsets must represent real, measurable, verifiable 

benefits to the atmosphere, and the program itself must stand up 

to public scrutiny. If the program isn’t considered credible, all of 

our efforts in this process will be for naught, and we very well may 

push the atmosphere past the point of recovery. We cannot afford 

to fail in this area. 

Thank you for this opportunity to speak today. 

[The prepared statement of Mr. Krupp follows:] 
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Senator BOXER. Thank you very much. 

And our last witness is the minority witness, the American Farm 

Bureau Federation. 

Sir, we welcome you. Mr. Stallman, Bob Stallman. 

STATEMENT OF BOB STALLMAN, PRESIDENT, AMERICAN 

FARM BUREAU FEDERATION 

Mr. STALLMAN. Thank you, Madam Chair, members of the committee. I am here today representing the American Farm Bureau 

Federation. 

How you deal with the issue before you is critical to farmers and 

ranchers. There is no question it will affect our bottom line. Under 

our best estimates of the legislation passed by the House using 

EPA assumptions, it will take $5 billion out of farmers’ pockets. 

Using the same rosy EPA scenario, but imposing the 2050 costs as 

if they occurred in 2012 gives a reduction in farm income of $13 

billion. Most likely, the reality would be worse. 

So we care a great deal about what legislation you approve and 

what the agricultural offsets will be. With that in mind, I would 

like to respectfully challenge all members of the committee to ask 

a few questions. Your answers will tell you a lot about what kind 

of bill that you produce. 

No. 1, what do we want to accomplish? If we really want to 

change what the world’s climate will be in 40 or 100 years, then 

the House-passed bill is not the answer. I believe Administrator 

Jackson said as much last week when she testified before this committee. 

Two, do we want to keep U.S. products competitive internationally while living up to our WTO obligations? If so, then the House 

bill is not the answer. It could spur trade retaliation and promote 

leakage of carbon emissions. And with that leakage, you will see 

economic activity and jobs leaving our country. 

Three, is this about energy independence for America? Again, the 

House-passed bill doesn’t measure up. It spells out what we can’t 

do. It doesn’t really say how we will make up for lost energy 

sources. The best way to have an honest productive debate is for 

everyone to lay their cards on the table. If we do, one thing becomes pretty clear: this debate isn’t about the climate. It is about 

fossil fuels. Everyone knows it, so let’s deal with that reality. 

If the proponents honestly want to revamp our energy so the use 

of fossil fuels is minimized, then they have an obligation to tell us 

their alternative. Arbitrary percentages about efficiencies, mandates for emissions limitations, promotion of international offsets 

are simply roundabout ways of saying that they don’t have an energy plan. While emission caps will be written into law, the market 

and power generation structures implied in EPA’s current analysis 

are just a set of assumptions. 

From an agricultural perspective, there are several changes we 

believe must be incorporated in the bill. One, the legislation must, 

at a minimum, include the provisions negotiated by Chairman Peterson of the House Ag Committee. We are encouraged by statements of Senator Harkin that say he wants to do that and will seek 

to strengthen them. Even with such changes, you need to remem-
146 

ber not all agricultural producers will be able to avail themselves 

of offsets. 

Two, other nations must be a part of the solution, or U.S. competitiveness will be sacrificed and climate reduction goals will fail 

to be achieved. Absent global commitments, we will be engaging in 

the economic equivalent of unilateral disarmament. 

And three, Congress must not create a hole in America’s energy 

supply. If fossil fuels are taken out, something else must be substituted. We must plug the hole created by the bill or run the risk 

of congressionally mandated shortages that will create spikes in energy prices. The agricultural sector, in particular, is poorly 

equipped to absorb or pass on such costs. 

It is very reasonable to estimate that costs that we currently 

project to occur in 2030 or 2040 might well shift forward to 2015 

or 2020. Acreage shifts might be more drastic than envisioned, and 

they could well involve greater shifts from crop acres to forestry as 

well as acreage currently dedicated to forage production shifting 

into forestry. 

And once again, some agricultural producers will never benefit 

from the legislation under any scenario, yet these same producers 

will incur the increased fuel, fertilizer and energy costs that their 

counterparts do. 

We are very open to the idea of including an off ramp in the legislation. Such an approach could kick in due to job loss, a lack of 

an international agreement, an inability to sufficiently commercialize renewable technologies, or a lack of alternative energy 

sources. Without some mechanism to protect agriculture, we are 

greatly concerned about the potential adverse impacts on farmers 

and ranchers. 

Some say agriculture will benefit. If EPA has their way, we will 

only be allowed to plant trees. Any other benefits will depend to 

a large degree on where the producer is located, what he or she 

grows, and how his or her business model can take advantage of 

any provisions in the legislation. 

Not every dairy farmer can afford to capture methane. It is a 

capital-intensive endeavor. Not every farmer lives in a region 

where wind turbines are an option. Not every farmer can take advantage of no-till. Not every farmer has the land to set aside to 

plant trees. Yet every farmer has production costs to meet. 

Nearly all of us rely on fertilizer and we all drive tractors. We 

all use energy in our production. We know our costs will rise, and 

frankly we are very concerned about the impact of this legislation 

on our livelihood. And I urge the committee to consider these factors as you take up legislation. 

Thank you again for the invitation to testify, and I look forward 

to questions. 

[The prepared statement of Mr. Stallman follows:] 
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Senator BOXER. Thank you, sir. 

Let me just say that the members of the National Association of 

Wheat Growers have a very different view than you, Mr. Stallman. 

And they say they have worked for a number of years to ensure 

that agriculture has a place in any climate change legislation and 

that producers are able to reap benefits, rather than except costs. 

And I think that is our job is to work with you, to show you that 

this change could well prove to be a boon for agriculture. A lot of 

people do believe it. 

As I said, the Farmland Trust and others, the National Farmers 

Union, and I understand we have work to do. 

I also want to point out and place in the record, and this is important, I think, for those who are naysayers to understand that 

the idea of cap-and-trade was created right here in this room years 

ago when we were fighting the problem with acid rain and what 

was happening. And we set up this cap-and-trade system, our predecessors did, and there was a prediction of the projected costs. And 

there was a prediction of emissions reductions. And it turned out 

that there were far more emissions reductions than were predicted 

and the costs, the actual costs, were five times lower than they 

were projected to be. 

The opportunity of this mechanism allowing a price to be set— 

in this case on sulfur dioxide—in the private market really worked 

as a boon and surpassed our dreams for the program. 

So you will be hearing more about that because people will make 

up stuff when it has to do with cap-and-trade, when we already 

have had the experience of cap-and-trade. 

I want to talk about this nuclear plant issue, and Mr. Krupp, I 

think you more than anyone else there have worked with this bill 

in a broader sense because Senator Alexander has put out his plan, 

which he hopes the Republicans will adopt, on their solution to this 

problem. And it is 100 nuclear power plants by 2030, built by and 

paid for by the rate payers with no tax credits going to them at 

all. 

He also has another part of his plan that deals with using future 

revenues from offshore oil drilling for battery research, and he 

would take that funding away from our parks and away from deficit reduction for use there. And he has a third piece which is $8 

billion for research from the taxpayers. 

I want to hone in on the nuclear power plant issue. My understanding of the modeling by the EPA of the Waxman-Markey bill 

is that instead of 100 power plants being built by 2030, they 

show—the models—261 plants being built by 2050, with tax credits 

going to the rate payers. 

So isn’t it true to say that the Waxman-Markey bill, which will 

be the base of our bill, we are going to have some tweaks to it, 

would result in the building of more nuclear power plants and help 

to the rate payers? 

Mr. KRUPP. Chairman Boxer, thank you for the question. 

There is no question that nuclear energy now being produced is 

one of the zero-carbon alternatives. And as the head of General 

Electric’s Nuclear Division said a few years ago, the best thing you 

could do for nuclear energy is put a cap on carbon. 
167 

My understanding is the EPA did not specify a particular number of plants, but I think you are right. The number that would be 

built would be in the range of what Senator Alexander has called 

for, certainly by 2050. The way I read the EPA modeling, it would 

be perhaps as many as 95 plants, new nuclear plants by 2050, and 

35 extra plants by 2030. 

Senator BOXER. OK. Well, just for the record, we called the modeler over at EPA, and they told us 261 new nuclear plants under 

the Waxman-Markey bill by 2050. 

Mr. KRUPP. I think is depends on what size. They clearly specified how many kilowatts and I think the discrepancy—— 

Senator BOXER. This is 1,000 megawatts. 

Mr. KRUPP. Yes. 

Senator BOXER. One thousand megawatts. 

In any event, I think it is very important that we understand 

that in the approach we are taking, we don’t pick any winners or 

losers. We just say when there is a price on carbon, nuclear power 

plants will compete, solar, wind, geothermal, any other way that is 

clean in terms of carbon. And the beauty of that is it winds up you 

have more nuclear power plants, if this is your goal. And there are 

a lot of people in the Senate who support that goal. 

I have a more reserved attitude about it, but the fact is I am not 

going to pick the winners and losers. The marketplace is going to 

do it. What I am going to work for is the ultimate safety of these 

plants and all those other things, but that is the fact. 

So I want to ask Mr. Hopkins and Mr. Stallman a question. We 

will start with you, Mr. Stallman. 

Will farmers benefit from a climate policy that increases efficiency in renewable energy and reduces fossil fuel consumption? 

And will those types of policies help protect you as farmers from 

higher prices, given the volatility in the fossil fuel market? 

Mr. STALLMAN. Well, the answer to that, Madam Chair, is, it depends. I mean, what are the alternative sources going to cost? And 

in terms of volatility, producers are pretty good at dealing with volatility whether it is weather, whether it is prices, whether it is 

spikes in costs. But it really boils down to economics. 

The energy we use on average in this country, 20.4 percent of our 

input costs are related to electricity. As an example, for the agricultural sector in California, has $5 billion worth of energy-related 

cost. If the energy costs go up, if they go up 20 percent, that is an 

extra $1 billion of expenses put on producers. If the energy costs 

go down, then obviously that reduces those input costs. So it depends on what the cost structure is. 

Senator BOXER. Surely. But the one thing I hope, Mr. Stallman, 

you will think about is the fact that we import so much foreign oil, 

and we are at the mercy of a lot of people that don’t like us. And 

there is proof positive that many of those countries turn around 

and use that income from our tax dollars, yours and your industry, 

to fight us, to fight us, not economically, but to physically fight us. 

There has been proof of that. 

So I would just like you to think about in the long term what 

a better situation it would be if you could choose from other options. 

I would ask Mr. Hopkins. 
168 

Mr. HOPKINS. Well, Rio Tinto is very interested in the future of 

coal. We are the second largest coal miner in the U.S. We are a 

foundation member of the FutureGen Alliance. Carbon capture and 

storage with coal is, I think, going to be the technology that brings 

us our long-term abatement goals. In the near term, the immediate 

term, that technology isn’t going to be ready and we are going to 

have to take advantage of offsets. But in the meantime, we are 

going to become more efficient. 

We are going to use renewable energy. In addition to supplying 

the coal that generates 6 percent of the electricity in the U.S., we 

supply the uranium that generates an additional 3 percent of the 

electricity in the U.S. So we are very interested in maintaining 

baseload power in the future. We think offsets are going to be a 

key component in keeping allowance prices down. 

Senator BOXER. Thank you. 

Senator Inhofe. 

Senator INHOFE. Thank you, Madam Chairman. 

Let me first of all, Mr. Hohenstein, I read portions of your statement, and then you repeated that just a few minutes ago, the suggestion that the 1 billion ton limit on domestic greenhouse gas offsets that are in the Waxman bill is roughly equivalent to sequestration potential of planting 170 million acres of trees. And according to the USDA Economic Research Service, in 2007 there were 

310 million acres of harvested cropland in the United States. Now, 

if you do your math, that would be 55 percent would be taken out 

of production. 

Now, I would like to ask if the USDA has done an analysis of 

how many acres of food production we would lose on that potential 

shift, and also how that would affect livestock prices. Have they already done it, an analysis? 

[The referenced information follows:] 
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Mr. HOHENSTEIN. Yes. Thank you for the question. 

And that number in my testimony was an attempt to provide 

some sense of the scale at which activities—— 

Senator INHOFE. OK. We are going to run out of time. 

Mr. HOHENSTEIN. With regard to analysis, USDA is in the process of evaluating the implications of higher energy prices on the agricultural sector due to H.R. 2454. 

Senator INHOFE. OK. 

Mr. HOHENSTEIN. We are also looking at the implications of offsets as well. 

Senator INHOFE. OK. Very good. 

Mr. Stallman, I talked to some of the Oklahoma Farm Bureau 

people this last week, and they are very emotional about this whole 

thing. You heard what Senator Bond said, he was using the 2,000- 

acre farm. We don’t have that many 2,000-acre farms, but I am 

sure you can scale it down a little bit. Do you agree with his figures 

in Missouri, and that was taken from the Ag Policy Research Institute, of up to $30,000 per farm? 

Mr. STALLMAN. That report just came out. We see no reason to 

dispute that. Obviously, they used probably slightly different assumptions than we did in calculating our aggregate net loss numbers for agriculture, but those seem very reasonable in terms of 

what you could expect at the producer level. 

Senator INHOFE. I went over and met with the Farmers Coop regional group on Friday. They were meeting over in Arkansas. And 

one of the things that concerns him the most is, we haven’t talked 

about the specifics, but how intensive it is in terms of agriculture 

in fuel, electricity, fertilizer, chemicals. In corn, it is 71 percent of 

the operating costs are fuel, electricity or fertilizer; soybeans, 50 

percent; wheat, 72 percent; barley, 69 percent. 

I assume that we have communicated this to your membership. 

They recognize the magnitude of this thing. 

Mr. STALLMAN. Oh, absolutely. And that is what generates the 

basic concern we have about the whole bill with respect to what it 

does to energy costs because, on average across the country, 20 percent of our input costs have some relationship to energy, and we 

are concerned. Even though we are a strong renewable energy supplier in this country, which is positive, we still have to deal with 

the impacts of any future increase in energy costs. 

Senator INHOFE. Yes. Well, let me ask you this question. The 

Chairman talked about the National Wheat Growers Association, 

and I don’t understand how they could be supporting this when all 

of the large wheat States, or many of them, are on the other side 

of this issue, the North Dakota Wheat Commission, the Oklahoma 

Wheat Growers Association, the Texas Wheat Producers Association. 

I wonder why they don’t get together with their national association. Any ideas? 

Mr. STALLMAN. Well, I hesitate to speak for other groups, Senator. I know the National Association’s position. I also know the 

concern that has been expressed to me personally by our members 

who are large wheat growers. So I do not know where the disconnect lies. I do know that from an economic perspective, we can 
172 

show no analysis that indicates that even with the liberal offsets 

policy, that the income from that would offset the increased cost. 

Senator INHOFE. I see. And has it ever occurred to you to ask the 

question, what are we doing here, after last week when the Director of the EPA in response to my question as to what effect would 

it have if we unilaterally here in the United States have a cap-andtrade, pass the bill such as we used as an example the MarkeyWaxman bill. What effect would that have on the overall worldwide 

reduction in CO2, and her response was it wouldn’t have. 

Now, if that is the case, and I agree with her, I don’t agree with 

everything that she says; I certainly agree with that. And if we 

have statements such as we do have from the leaders in China and 

India and other countries saying under no circumstances are they 

going to accept any kind of mandatory reduction, what are we 

doing here? 

Mr. STALLMAN. Well, that is a question we also raised. When we 

were over on the House side working on the bill and the legislative 

process, the rationale that was given, well, the U.S. has to show 

leadership by passing national legislation before we go into the Copenhagen talks. Well, I have been involved in international trade 

negotiations. Leadership usually means that the U.S. is supposed 

to give up something in favor of other countries. But there is no 

reason to have to have a bill passed by this Congress to go over 

to negotiate. You can do that without having legislation passed, as 

most countries are doing. 

Senator INHOFE. Yes, there are a lot of people who believe the 

concept, and we heard this of course from Senator Alexander. I 

don’t agree with him in this case, but that anthropogenic gases 

cause global warming. But there are a lot of them who actually believe that and still think that this is a disaster. And I am using 

the words of James Hansen, Dr. Hansen, he is Mr. Greenhouse 

Gas, I guess you could call him. He said, ‘‘The fact that the climate 

course set by Waxman-Markey is a disaster course. Their bill is an 

astoundingly inefficient way to get a tiny reduction of emissions. It 

is less than worthless because it would delay by at least a decade 

starting on a path that is fundamentally sound from the standpoint 

of both economics and climate preservation.’’ Now, here is the guy 

who is on the other side, the leader on the other side, and he was 

here I guess it was yesterday, in Washington. 

So I don’t know. You look at these things, and I look at them 

from an Oklahoma perspective and wonder if it is not going to 

make any change and if the countries are, in spite of what they say 

about leadership, if the leaders are saying under no circumstances 

are we going to do it, period. Anyway. 

Thank you, Madam Chairman. 

Senator BOXER. Thank you. 

I am going to ask Senator Udall if he would like to make a 3- 

minute statement and ask a question to the panel. 

OPENING STATEMENT OF HON. TOM UDALL, 

U.S. SENATOR FROM THE STATE OF NEW MEXICO 

Senator UDALL. Thank you, thank you very much, Madam Chair. 

And I will give just a brief opening statement. 
173 

Farmers and ranchers and foresters face, I think, dire threats 

from global warming. For example, in my State of New Mexico, one 

of our agricultural centers in seven of our counties have been 

struck with persistent drought. And we know that part of the overlay there has to do with global warming. 

Our New Mexico delegation has written a letter to the USDA on 

a disaster declaration for these counties, and I am afraid that this 

disaster could turn into a catastrophe while we wait for that response. 

The U.S. Climate Impact Report also found that drought frequency and severity are projected to increase in the future over 

much of the United States, particularly under higher emissions scenarios. Increased drought will be occurring at a time when crop 

water requirements will be increasing due to rising temperatures. 

As we debate the impacts of a cap-and-trade on agriculture and 

forestry, do not forget why we are having this debate. We must 

protect American farms, ranches and forests from global warming 

before the time runs out. 

Now, Mr. Hohenstein, will you urge the USDA to respond quickly 

and effectively to New Mexico’s drought disaster declaration request? 

Mr. HOHENSTEIN. Yes, I certainly will take that back to the department. 

Senator UDALL. Thank you. Thank you. 

Your testimony finds that the opportunities from climate legislation will likely outweigh the costs for agriculture and forestry. Your 

testimony did not directly address costs to farms and forests from 

climate change itself, however. You did serve on the USDA’s or 

were the USDA’s representative for the recent multi-agency U.S. 

Climate Change Impacts Report, and that report found just what 

I talked about earlier. 

Could you comment on that report and where you see things 

headed? Should farmers and ranchers also consider the avoided 

costs from warming that the legislation is designed to prevent, in 

concert with a global agreement? 

Mr. HOHENSTEIN. Sure. No, thank you for the opportunity to talk 

about that report. 

That report was coordinated by our office and produced last May, 

and looked at the effects of climate change on agriculture, land and 

water resources, and biodiversity. The effects of climate change on 

agriculture can be profound, but they are complex. They involve 

the effects of longer growing season and enhanced CO2 fertilization, 

combined with the effects of higher temperature and water stress. 

The effects are not uniform across the United States and are regional. In fact, some areas, in particular the intermountain region, 

will be affected by water stress and water availability. 

Areas in the south will increasingly be affected by higher temperatures that can affect grain set and pollination. So the effects 

are complex, and they are going to be felt increasingly throughout 

the United States over the next century. 

Senator UDALL. And specifically when you talk about the west, 

most of the models talk about temperatures being twice as high as 

other parts of the country. And so, you are well aware, I think, 

being a part of the USDA, that if you have much higher tempera-
174 

tures, you impact snowpack, which has the ability and capacity to 

grow the groundwater and recharge the groundwater. If that disappears, you realign the whole water situation. 

So it is something that is very worrisome to a lot of us, and we 

hope that your department will be out front in terms of speaking 

of what the consequences are going to be. We know there are going 

to be winners and losers in certain cases, but the losers are the 

ones that I am really worried about, and the intermountain west 

I think is one of those regions where it is going to be pretty severe. 

Thank you, Madam Chair. Thank you very much. Sorry for running over. 

Senator BOXER. I totally understand. No problem. 

Senator Alexander. 

Senator ALEXANDER. Thanks, Madam Chair, for holding the 

hearing and for bringing such talented witnesses. 

Mr. Krupp, we have had testimony before this committee by scientists that a low carbon fuel standard is a more efficient way to 

reduce carbon in fuel than an economy-wide cap-and-trade. Do you 

agree with that? 

Mr. KRUPP. Senator Alexander, I am glad that you have asked 

because it is absolutely essential that we figure out ways to—— 

Senator ALEXANDER. Well, I mean, I don’t have a lot of time. Is 

it true or not true? 

Mr. KRUPP. No, I don’t believe that is true. 

Senator ALEXANDER. You disagree with that? 

Mr. KRUPP. Yes. 

Senator ALEXANDER. Now, the testimony was that—how much do 

you think the economy-wide cap-and-trade will raise the price of a 

gallon of gasoline, the Waxman-Markey bill? 

Mr. KRUPP. About 2 cents a year. 

Senator ALEXANDER. 2 cents a year? 

Mr. KRUPP. Yes. 

Senator ALEXANDER. You think that will change behavior in 

terms of lowering the amount that people will drive their cars? 

Mr. KRUPP. I think the carbon cap will. You see, Senator Alexander—— 

Senator ALEXANDER. No, no. Just a moment. It is economy-wide, 

how much of the carbon in this country comes from fuel, what percent? 

Mr. KRUPP. It is roughly about a third. 

Senator ALEXANDER. It is about a third. And you have said that 

the Waxman-Markey bill would only add 2 cents per gallon of gas. 

So do you think anybody is going to change their driving habits 

based on that? 

Mr. KRUPP. Senator Alexander, you had it wrong in your opening 

statement because—— 

Senator ALEXANDER. No. I am asking you the questions. Do you 

think anyone will change their driving habits based on a 2 cent increase in the gallon of gasoline? 

Mr. KRUPP. I think they will buy more fuel-efficient cars. 

Senator ALEXANDER. On a 2 cent increase? 

Mr. KRUPP. Carbon content of fuel will be lower. 

Senator ALEXANDER. A 2 cent increase? You are one of the most 

experienced environmental persons in the city, and you’re actually 
175 

telling me that a 2 cent increase in a gallon of gasoline will change 

driving habits. 

Mr. KRUPP. It is 2 cents per year, Senator. 

Senator ALEXANDER. Well, how about per gallon? 

Mr. KRUPP. Well, 2 cents per gallon per year. 

Senator ALEXANDER. So that will change driving? You are saying 

that if it goes from $2.25 to $2.27 that I am going to change my 

driving habits, or you are? 

Mr. KRUPP. We should talk about it the way a cap-and-trade system works, Senator, because the cap is a mandatory system that 

will reduce the amount of carbon that can go into the atmosphere. 

So either it will reduce driving or people will get more fuel-efficient 

automobiles, or industries producing gasoline will have the option 

of paying your farmers in Tennessee to sequester carbon. I don’t 

care whether it happens from reduced driving. I care that the carbon goes down. 

Senator ALEXANDER. Well, then, if you care if the carbon goes 

down, you must—— 

[Applause.] 

Senator ALEXANDER. Are we at a pep rally or a hearing, Madam 

Chair? 

Senator BOXER. Well, just a minute. Please, can you just halt for 

a minute and freeze the clock? 

In this committee and in all the committees, we really do not 

have expressions of support or opposition. I understand that there 

is a lot of feelings on both sides, but I am asking everyone to please 

withhold, and if you don’t, then we have to escort you out of the 

room, and I don’t want to start with that, because I am glad you 

are here. 

So let’s continue and show respect to our Senator and all of our 

panelists. 

Go ahead, Senator. 

Senator ALEXANDER. Thanks, Madam Chair. I appreciate that 

very much. 

Mr. Krupp, you understand that I believe climate change is a 

problem, that I have introduced legislation to cap carbon from coal 

plants; that I authored a low carbon fuel standard here. And I 

think we ought to do something about it. 

But I think the idea that you would apply an economy-wide fuel 

standard to try to reduce fuel from gasoline simply doesn’t work. 

All it would do is raise the price of gasoline to farmers such as 

those we are talking about but not do the job of lowering carbon. 

Why wouldn’t we instead build 100 new nuclear power plants 

over the next 20 years? Nuclear produces 70 percent of our carbonfree electricity today. Double our number of electric cars and 

trucks. Explore offshore for natural gas, which is low carbon. And 

double energy research and development to make renewable energies cost-effective. 

By my calculations, that would get us to within the Kyoto Protocol limits by 2030 with a low cost, instead of a high cost. And 

why are we deliberately raising the cost of energy when energy is 

so important to keeping jobs here, to growing food, and to helping 

poor people heat and cool themselves? 
176 

Mr. KRUPP. Senator, first of all, I appreciate your leadership on 

this issue and the bills that you have sponsored in the past, including the 4P issue. And I appreciate your desire to have a low-cost 

solution. As you yourself recognize, 2 cents a gallon is a pretty low 

cost, and that is the beauty of the cap-and-trade system. It delivers 

the goods that you and I want, reducing carbon from fuel use as 

well as the rest of the economy, at a low cost. It opens up the option—— 

Senator ALEXANDER. But do you support building 100 nuclear 

power plants in the next 20 years? 

Mr. KRUPP. Actually, when you were out of the room, I predicted 

that is what will happen under the Waxman-Markey bill if you 

pass it. 

Senator ALEXANDER. So you do support it? Well, why would it be 

necessary to raise the price of energy if we could build nuclear 

power plants, electrify the cars, and do R&D for renewable energy? 

Why do we also have to increase our costs? 

Mr. KRUPP. Senator, I would love to partner with you to figure 

out how to make sure that this legislation keeps prices at an absolute minimum while doing the job. I would welcome that challenge. 

Senator ALEXANDER. Thank you very much, Madam Chair. 

Senator BOXER. Yes, Senator, when you were gone, I talked 

about your plan, and we called the EPA and they have said that 

under Waxman you would have 261 nuclear power plants by 2050. 

These are 1,000 megawatts. And the difference between your plan 

and this on the surface is you have stated that rate payers would 

pay the full cost of those, which means they are going to have to 

pay higher electricity bills. 

So I don’t understand how you can—and I would like to ask you 

this question—you don’t seem to mind them paying higher bills to 

build nuclear plants, but you, without any tax credit, which we 

have in the Waxman-Markey bill. We would have tax credits. You 

have no tax credits to help folks. You would make them carry the 

whole burden, which is $700 billion, and then keep saying it is 

cheap energy. I am confused on that point. 

Senator ALEXANDER. Thank you. 

Senator BOXER. Could you respond? 

Senator ALEXANDER. I would be delighted. 

Senator BOXER. Yes, yes. 

Senator ALEXANDER. Thank you. I would be delighted to do that. 

Let me use an example, if I may. California has no nuclear, very 

little nuclear power. 

Senator BOXER. Oh, no. We do have some. Oh, yes, we do. 

Senator ALEXANDER. But I read a report just this past week that 

your renewable energy mandates, which are even higher than 

those in the Waxman-Markey bill, are concerning your State officials and they are afraid that you may even, and this is the quote, 

‘‘be tight on electric power as soon as 2011’’ because you are not 

producing enough clean electricity from renewable energy. 

Tennessee has among the lowest electric rates. We are about 33 

percent nuclear. We are going to 40 percent. TVA is the only utility 

that is now opening new nuclear plants. They have just restarted 

Browns Ferry at a cost of $1.8 billion, and they thought it would 

take 10 years to pay off the construction loan and it only took 3. 
177 

So now all of those profits from that Browns Ferry plant are going 

to keep rates low. 

So my argument would be that over time, nuclear power paid by 

rate payers is cheap electricity and that renewable mandates such 

as requiring us in the Southeast to build huge wind turbines, defacing our landscape where the wind doesn’t blow, is expensive 

electricity. 

So that is my answer. I would compare California and Tennessee 

electric rates. 

Senator BOXER. Well, it did not answer the question that I posed 

to you, so I will just leave it—— 

Senator ALEXANDER. No, I tried to. I mean, well, but I would like 

to answer your question out of respect. 

Senator BOXER. I know. You did, from your perspective. You 

didn’t from my perspective, so I want to just restate my disagreement with your answer, bringing up California into this when we 

are doing fine, and we are a State that does believe, as you do, that 

the ravages of global warming is going to affect us—— 

Senator ALEXANDER. But your rates are high—— 

Senator BOXER. I didn’t interrupt you, sir. 

Senator ALEXANDER. All right. 

Senator BOXER. So here is the point. In your plan, you are recommending instead of doing a cap-and-trade system in a climate 

change bill, which as part of it allows offsets so the folks in agriculture can participate, which will give many free allowances, 

which will create many jobs, you are suggesting a command and 

control—we order you to build 100 nuclear power plants, a $700 

billion cost to the rate payers, no tax credits for them whatsoever. 

And you come up with other ideas, some of which I support, but 

costly to taxpayers. 

All I am saying is it is our belief that if we do this right, we are 

going to have those plants built, more plants than you want, and 

believe me, I am not the biggest fan of nuclear energy. I believe 

it has to be part of the solution. You are going to have more nuclear plants built, and you are going to have tax credits going to 

consumers, including if I might, farmers who purchase electricity. 

So I just feel the difference between us is you are coming forward 

with a command and control system. You are picking a winner and 

attacking other forms of renewable clean energy such as wind, 

which you have always attacked. And I am saying I think the marketplace should work through a cap-and-trade system, and the private sector putting a price on carbon will result in more nuclear 

power than you would plan. 

The other thing I went through when you were gone is to show 

you, is to show everybody that the same predictions about power 

rates were stated in the acid rain debate. And if I can have those 

papers again, because I only have the second one. And it is just exactly the same rhetoric. And I will hold that until I get another 

turn. 

Senator ALEXANDER. Madam Chairman. 

Senator BOXER. Yes. 

Senator ALEXANDER. May I give a short comment on what you 

just said? 

Senator BOXER. Yes. 
178 

Senator ALEXANDER. I mean, the difference is—— 

Senator BOXER. Go ahead. 

Senator ALEXANDER [continuing]. In 1990 and 1991 when we put 

a, not I, but a cap-and-trade was put on acid rain, there was a 

clear technological feasible way to deal with that called the scrubber. If you put on a low carbon fuel standard today, on fuel, you 

deal with 30 percent of carbon without this whole contraption of 

taxes and mandates, and you gradually lower it, and you shift people to what is probably a lower fuel cost, which is electric cars or 

maybe biofuels. 

The problem with coal is that we haven’t built a new nuclear 

plant in 30 years because the Government has resisted it, and we 

don’t have a commercially viable way to recapture the carbon. All 

we are suggesting is Presidential leadership of the kind, the President said in his inaugural address, let’s make energy from the sun, 

the wind and the earth. That is great. That is a lot more expensive, 

a lot less reliable and it is maybe 7 or 8 or 9 or 10 percent. 

What are we going to use to run the country? I would like for 

the President to be half as interested in 100 nuclear power plants 

as he is in windmills, and then he could say to his Administration, 

please bring me a plan that will help us make sure we have at 

least 100 nuclear power plants. 

I believe if he does that, the private sector will build them. The 

plants are very profitable. The Connecticut Attorney General was 

going to put a windfall profits on them last year during the oil crisis, and that, plus electric cars, plus energy R&D, which that we 

agree on, electric cars we agree on, would get us where we want 

to go without this big contraption that Mr. Hansen has described 

accurately. 

Thank you for the time. 

Senator BOXER. Thank you very much. 

I am just going to put something in the record here and quote 

from it, and then we will go—then I am going to call on—I forget 

who’s next. We go to Senator Barrasso, and then Senator Udall. 

But this is important, and I am very happy that you are here, 

Senator, because President Obama says that the Waxman-Markey 

bill is a great start for us, and it will result in more nuclear power 

plants being built than you want. So therefore, it is very clear that 

he doesn’t have to support your proposal. His proposal results in 

more nuclear power plants being built, plus the rate payers will get 

relief, whereas under your plan they don’t. 

Now, I also want to place in the record this very important fact 

and myth situation here. I think this is important for colleagues. 

There are always people who say no, no, no. And the history has 

them on the record. Thank God we keep a congressional record— 

no, no, no. We can’t—we cannot do this. 

And let’s go back to the cap-and-trade system that was designed 

by our predecessors sitting in this room for sulfur dioxide. Here is 

the thing, rhetoric, this is one of the electric utilities: ‘‘We estimate 

that the acid rain provisions alone could cost electric utility rate 

payers $5.5 billion annually between enactment in the year 2000 

and increasing to $7.1 billion from 2000 to 2010. Therefore, the 

total cost to consumers from enactment of this cap-and-trade system to 2010 could reach $120 billion.’’ 
179 

Well, guess what? History has proven these people wrong, wrong, 

wrong. This is what happened. The exact opposite happened. Instead of rising, consumer electricity rates declined by an average 

of 19 percent from 1990 to 2006. Adjusting for inflation, they were 

still 5 percent lower than when the Clean Air Act amendments 

were passed. And coal State residents saw rate decreases averaging 

35 percent over that period. 

Then it goes on. The 1990 Clean Air Act amendments will cost 

America’s business upwards of $50 billion. The truth is the benefits 

of the program exceeded the cost by 40 to 1, resulting in more than 

$70 billion in human health benefits annually. That is what happens when you take pollution out of the air. 

And then the other rhetoric. This is by Chemical Week: Clean 

Air Act amendments may cost America 4 million jobs. Reality? 

America created more than 20 million jobs in that period. The 

economy grew by 64 percent. 

I have lived my adult life, I have been privileged to see that 

when you address environmental issues, the economy gets stronger 

and stronger and stronger. The basic premise there is if you can’t 

breathe, you can’t work. And if you want to know this, if you look 

at what is going to happen if we have unchecked global warming— 

by the way, I know Senator Alexander doesn’t want that to happen, 

and I respect him so much. He is very clear on that. 

But if we do nothing and we argue over this to the point of stalling everything, the fact is I would predict that the farmers in my 

State will be so desperate as they see more droughts, more floods, 

more infestations, the kinds of things that the Bush administration 

predicted in the work that led to this Administration’s 

endangerment finding. 

So there are so many facts out there that get obscured. But I 

would say this, since Senator Alexander is urging President Obama 

to abandon a more comprehensive approach to this and pick one 

winner, nuclear power, and turn his back on all the other potentials, I would urge him not to do it because it is a huge mistake. 

Let the free market determine—once we put a price on carbon that 

will be set by the free market—what makes the most sense for us. 

And at the end of the day we will create the jobs. We will fight 

global warming. And as Thomas Friedman says, we will lead the 

world in all of these new technologies. It is a rare time when you 

have the confluence of two great challenges that we face: this recession that is deep and global, and this issue of climate change, 

which we need to address, and to find a solution that really lifts 

this economy up and makes sure that our grandkids don’t have to 

face the ravages of global warming. 

It is an exceptional opportunity here that I hope we will get over 

our fear-mongering and go back to history, take a look at what was 

said by the naysayers. 

And you have another one today that the press has asked me to 

respond to, and that is Sarah Palin wrote this naysaying op-ed 

piece on why we shouldn’t move forward with Waxman-Markey, 

which I am going to be rebutting later. 

So I would just tell the American people to take a look at history. 

Every single time we have moved forward to go after pollution, the 
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naysayers have been wrong about their predictions, wrong about 

their gloom and doom, and we have in fact led the world. 

This is our turn, and I know it is not easy to step forward and 

work for change, but I hope, colleagues, that we can do it. I won’t 

get everything I want. Senator Udall is not going to get everything 

that he wants. He will get some things that he likes. We are not 

going to get everything, because I could write a bill that would get 

far fewer votes than I need to be able to produce. I am going to 

have to walk away from some things that I believe should be in the 

bill, and so will Senator Udall. We all have to do that. 

And at the end of the day, we will have taken a step forward. 

And we will reap the benefits of that step. 

So now, for another side of the coin, Senator Barrasso. 

Senator BARRASSO. Thank you very much, Madam Chairman. 

Mr. Stallman, if I could—in your testimony you said that any climate change legislation will also impose additional costs on all sectors of the economy, will result in higher fuel, higher fertilizer, 

higher energy costs to farmers and ranchers across the country. 

And you also quote EPA Administrator Lisa Jackson saying that 

U.S. action alone will not impact CO2 levels. 

What are farmers and ranchers across the country supposed to 

think of this logic? I mean, if passing a bill doesn’t solve climate 

change yet dramatically increases their cost of doing business, does 

the ag community think Washington is out of touch with what is 

happening? When I go back home and talk to ranchers, talk to 

farmers in Wyoming, they are very concerned. 

What are you hearing from the farmers and ranchers across the 

country? 

Mr. STALLMAN. Well, I am hearing that concern specifically about 

the Waxman-Markey bill, about the potential for costs without any 

return. Do a cost benefit analysis, the costs are clearly there, with 

mandated restrictions on the use of carbon in a carbon economy, 

and the benefits, nothing will happen with regard to climate 

change. Administrator Jackson has indicated that. 

We actually do have a solution in our policy, and it is a voluntary 

cap-and-trade. It is a true market solution. It is not a market 

where Government mandates restrictions and then lets the marketplace work. A voluntary cap-and-trade would allow companies to do 

what they would with carbon reductions, and then the consumers 

and our citizens would pay with their dollars. If that is what they 

desire to have happen, our consumers and citizens would pay with 

their dollars to support those companies who reduce carbon emissions. 

That would be an indication of the will of the people, and it 

would also be a true market solution, and our policy supports that. 

Senator BARRASSO. Senator Udall mentioned the concept of the 

winners and losers in the ag community in the Rocky Mountain 

West and then people across the country under this Waxman-Markey bill. I mean, I worry about western ranchers whose operations 

are heavily dependent on the use of Federal lands for livestock, as 

well as very limited opportunity for offsets, as you talk about. 

These ranchers are constrained in the types of grazing practices 

they can employ on Federal lands. The Federal lands themselves 

don’t qualify for offset opportunities. The majority of the West is 
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Federal land. I can’t see how the agriculture community in the 

intermountain west States could possibly survive under this bill, 

given your testimony today. 

Are these the intended consequences or the unintended consequences, do you think, of this bill in terms of the impact on our 

ranchers and Federal land? 

Mr. STALLMAN. Well, I don’t believe anyone set out to have those 

consequences, so they are unintended consequences, but they are 

very real. And the few agricultural organizations that support the 

Waxman-Markey bill, they gloss over the fact that the benefits of 

the agricultural offsets program included in there is varied across 

the country. And your example of what happens to ranchers who 

are on Federal lands, they have no opportunities for real offsets, 

and yet they have to eat up the additional or absorb the additional 

energy costs that will be created. 

And so that is what we are facing. We are facing with only a few 

instances of agricultural producers being able to participate in offsets, which according to our analysis will not offset their increased 

energy costs anyway. It just makes it better than it would have 

been. But then some producers, as those you have indicated, fruit 

and vegetable producers and others, aren’t going to have any real 

opportunity to participate in the offset markets, and that makes it 

even worse for them. 

Senator BARRASSO. Do you think this bill can be perfected to the 

point where energy and input costs would be beneficial to farmers 

and ranchers? Or do you think that there is no way to do that? 

Mr. STALLMAN. Under the current structure and what it portends 

for cost increases in the energy sector, I think it will be very difficult. I think we will continue to work to find provisions, and 

working with Senator Harkin over here on the Senate side to improve the bill on behalf of agriculture. And there are things that 

can be done overall, as I talked about earlier, about having more 

specific ways of plugging that energy hole. 

The number of nuclear reactors that are proposed, that will occur 

under the Waxman-Markey bill are basically on the assumption 

that carbon costs get high enough to cause those to be cost-effective 

and that they will be built. We could maybe have a different model 

where we support a different regulatory structure for siting and approving nuclear reactors that would perhaps make the process 

quicker so we could plug that energy gap. 

So there are some things that can be done that are missing, we 

think, in the Waxman-Markey bill. We still have to worry about 

this international competitiveness issue for farmers and ranchers. 

Those ranchers that you are talking about are competing in the 

international marketplace, and if their costs are higher and those 

costs are solely imposed in the United States, and our competitors 

overseas don’t have those same restrictions because those governments refuse to accept mandates, which many have said that they 

will, then that just puts us in an international competitiveness 

nightmare in us being able to sell our products overseas. So that 

is another clear concern that we hope we can address in the Senate 

version. 

Senator BARRASSO. Thank you, Mr. Stallman. 

Thank you, Madam Chairman. 
182 

Senator BOXER. Thank you. And I hope you know we will look 

forward to working with you on those issues. 

Senator Udall. 

Senator UDALL. Thank you, Madam Chair. 

When we talk about this issue and the discussion has been that 

you are putting a price on carbon, you are increasing the cost on 

fuel. We forget where we were last summer when we have $4 gasoline. And I was out, Madam Chair, and I am sure you were, in the 

agricultural community and the farming community, and people 

were telling us they were going to go broke; that they were really 

hurting in terms of the cost of oil and the impact on them. And the only reason economists tell us we aren’t at $4 gasoline 

right now is we have a worldwide recession, which we haven’t seen 

since World War II, and we have a deep recession here in the 

United States. 

And so to somehow assume that we are just going to sit here and 

that the cost of gasoline today is going to stay stable for the next 

10 or 15 years is I think an absolute fantasy. So we should be focusing on how we get out of that box. And the reason we are in 

the box is because we are overly dependent on foreign oil to the 

tune of we are headed toward 70 percent dependence on foreign oil. 

And the oil that is left in the world we are talking about over twothirds of it, over 66 percent, is in six Middle Eastern countries, 

Russia and Iran, and we have 3 percent. 

So we are in a very, very difficult situation in terms of how we 

move forward with developing our oil resources. And many of us 

are for developing our oil resources, but we only have 3 percent. 

So the vision, I believe, and Mr. Krupp, I would like you to comment on this, the vision I think most of us have is that through 

putting a price on carbon, we move ourselves in a new direction 

with our over-dependence on foreign oil. We try to do something 

about that. We move ourselves in a direction of a renewable economy. 

And by the way, when we talk about a low carbon fuel standard, 

we actually have a low carbon fuel standard in place. We put it in 

place in 2005 and 2007 in the energy legislation. It is called a renewable fuels standard, which we are expanding on and improving 

upon. So let’s not pretend we don’t have a low carbon fuel standard 

in place and that we are trying to generate those kinds of renewable fuels. 

But Mr. Krupp, I wish you could comment a little bit on where 

this contrast of dependence on foreign oil, we are headed down this 

road of becoming more dependent, and where you see putting a 

price on carbon taking us, and what opportunities it opens up for 

us in some job potential and all of those kinds of things. Please. 

Mr. KRUPP. Thank you, Senator. 

I think the biggest new economy, the biggest new source of jobs 

in the world is going to be these alternative energy sources and 

cleaning up our fuels and cleaning up our energy sources. I see if 

we do nothing a future where a bunch of tyrants who don’t like us 

have their foot on our throat. And I don’t know how we get the foot 

off of our throat unless we act. 

And this bill, according to MIT and others who have modeled it, 

would reduce our dependency of oil by billions, tens of billions of 
183 

dollars every year. So I do think that the choice is between allowing us to continue to be whipsawed by the whims of some of these 

Mideast nations, or by doing something to diversify our sources of 

energy and fuel. 

And the beauty of the bill is it opens up a market for a lot of 

different things. Some farmers will be able to participate with bioenergy, others with methane. Some will be able to put wind turbines on, not everyone will be. I agree with what you have said, 

Bob. Others will be able to put solar panels on their land. There 

will be a variety of ways that farmers and landowners can participate. 

We cannot go with business as usual, America is losing jobs. We 

are dependent on foreign countries for the bulk of our oil supply, 

many of whom are very hostile to our interests. Taking action like 

the ACES legislation provides, allows us to get off that dependency 

and an explosion of new wealth for America. 

Senator, those who oppose this legislation may find in a few 

years that they regret it very much because instead of importing 

oil at that point, we may be importing solar panels and wind turbines because we failed today to take that step. 

I am not willing to sit by and watch us fail. We have to do something different. 

Senator UDALL. Thank you very much. And we, I know that the 

Chairman feels this very strongly, we are trying to move on a clean 

energy economy, trying to capture, as you said, the industrial potential of the future. 

Thank you very much, and thank you, Madam Chair. 

Senator BOXER. Thank you, Senator, very much. 

And I thought, Mr. Krupp, your comments were beautifully put 

because at the end of the day, no farmer that I know wants to be 

dependent on oil from people who don’t like us and who are using 

the proceeds to hurt us. No farmer wants that. No farmer that I 

know wants to sit back and allow climate change to ravage this 

country, this Nation. 

And I am going to ask Senator Udall if you could once again 

share with us what you told us, that if we do nothing and the climate changes the way the vast majority of peer-reviewed scientists 

tell us, what happens to your State, the big picture. 

Senator UDALL. Well, the thing that happens in New Mexico, and 

this is something that all of us can look at the models. And I have 

been told about the models for New Mexico. And basically, imagine 

that you all know how we move a mouse around on a screen and 

grab something and slide it. Well, basically what I have been told 

is that if you look at the intermountain west model and looking at 

double the temperatures of everyplace else in the country, you are 

going to have a dramatic impact. And the impact would be the 

equivalent of taking New Mexico and dragging it 300 miles to the 

south. I don’t know how many of you have been 300 miles south 

of New Mexico, but you are in the middle of Chihuahua, Mexico. 

OK? 

The mountains that they have down there are not forested. We 

have fantastic forested mountains, up to 10,000 feet. We have ski 

areas. The snowpack that is on top of those mountains recharges 

the water. Just for example in the city of Santa Fe, 40 percent of 
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our water comes from our snowpack. So you would be changing 

that whole equation, changing the water situation in New Mexico. 

Second what you would do is be drying out those forests. The forests might well by mid-century just disappear and you would have 

flora that would obviously adapt, but the forests would be gone. 

You would have increasing forest fires in that period because of 

what is happening. 

So the impacts are going to be dramatic. It was brought up about 

being worried about farmers and ranchers. Well, the ranchers, 

what the U.S. Climate Impact Report found that Federal grazing 

land will be less productive because it is going to be hotter. So 

there will be less forage for the cattle, so the ranchers are going 

to be hurting. 

These are the kinds of things that I think we are trying to prevent. And I think we need to look at where we are headed in the 

future, and it is not a pretty future for the intermountain west, and 

the way I would just describe it is more forest fires, less water, 

more thirst, and a real change or wiping out of a way of life. 

Senator BOXER. Well, I wanted to end on that note because we 

have a responsibility to protect our kids and our grandkids, not 

just ourselves. We have lived through the years that we weren’t affected by what was on the horizon. And now it is our job to ensure 

that future generations can live in a hospitable environment. 

And every time we have done this as a Senate, it has been a winner. I have gone through that. Every landmark environmental law 

was attacked harshly, predictions made that it would be just the 

end of the world. And this is certainly no exception. 

And I would like to close by saying the American Farmland 

Trust really gets it. In their letter of support, they say, ‘‘Keep in 

mind the potential cost of not supporting climate change legislation. Climate change is a real environmental challenge affecting 

our global ability to produce food and fiber in the years ahead.’’ 

So we need to look at that, and factor in the costs of doing nothing, being naysayers; no, we can’t; no, we shouldn’t; no, we mustn’t. 

And I think if we can get over that mind set of no, we will do the 

right thing. 

I just want to say to the panel, I so appreciate each and every 

one of you being here, and we will work with all of you. As we take 

the Waxman-Markey bill and we put our stamp on it, we are going 

to need all of you to work with us. 

Thank you. 

We stand adjourned. 

[Whereupon, at 11:50 a.m. the committee was adjourned.] 

[Additional statements submitted for the record follow:] 

STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND

Madam Chairman, thank you for holding this hearing on how the roles of America’s farm, forests and the hardworking people tied to the land cultivation are impacted by climate change yet stand to profit from the offsets that will be included 

in the climate and energy legislation we construct. 

Agriculture both affects and is affected by climate change. Australian farmers are 

contending with an unprecedented—and completely unforecasted—7-year drought 

that has crippled the entire continent’s agriculture industry. Our changing climate 

creates immeasurable challenges for farmers. Historical weather and climate cycles 
185 

1Professor Alan Buckwell, director of the Land and Business Association of the United Kingdom. 

are no longer reliable for planning crop selection, sowing and harvesting seasons, 

or precipitation patterns. 

As I mentioned in my statement at last week’s Climate Change hearing, a 2 percent increase in global temperature can create significant heat stress for plants and 

animals and also aids in the spread of both plant and animal diseases. 1 Much of 

Maryland’s agricultural growers and poultry producers are located on Maryland’s 

Eastern Shore, and rising sea levels and increased salt water infiltration into 

groundwater sources are serious concerns of mine for the future prosperity of Maryland’s farmers. 

The measures we are considering may present new challenges for farmers and foresters. However, a system of carbon offset credits will provide agricultural growers 

a new commodity to effectively sell, in addition to their products, in the marketplace 

and would create new revenue streams for the agricultural industry. 

However, in order to achieve actual reductions in greenhouse gases from agriculture, farmers must reduce: 

• methane, 

• nitrous oxide, and 

• their overall greenhouse gas production. 

Congress’s climate and energy legislation must help them do so. Beyond offering 

offsets for the carbon sequestration of agricultural and forestry biomass, climate 

change legislation should also help farmers by: 

• incentivizing the conversion of unproductive cropland back to its natural state, 

• providing for research and development into feed and digesters to reduce and 

capture livestock methane, 

• accounting for the carbon sequestration of agricultural biomass, and 

• increasing the water efficiency of irrigation systems. 

These are ways we can help our farmers and help solve the climate crisis at the 

same time. 

It is important for farmers to understand what they stand to gain from this legislation. Agriculture Secretary Tom Vilsack is engaging in field visits to rural communities across the country to share information about the challenges and opportunities a carbon constrained economy present for farmers and ranchers. I think it is 

unfortunate that so much negative—and often misleading—information is conjuring 

fears among America’s agricultural sector, and it is imperative that more outreach 

needs to be done to explain the impacts of climate change on growers, the need for 

action, and the key role agriculture plays in fixing the problem. 

With EPA’s scientific expertise we can develop an agricultural offsets program 

that is verifiable, effective and robust. With USDA’s on-the-farm expertise, we can 

create a carbon offset program that is tailored to individual farms. With farmers at 

the center, we can build an effective domestic offset program that combats global 

warming, generates significant revenue for our farmers, and keeps our key resource 

lands in production for America and the world. 

I look forward to working with my colleagues to make a strong climate bill that 

benefits farmers, and I look forward to our witnesses’ testimony. 

STATEMENT OF HON. DAVID VITTER, 

U.S. SENATOR FROM THE STATE OF LOUISIANA

Thank you, Chairman Boxer and Ranking Member Inhofe, for holding this hearing to discuss what I believe is a very important issue. 

This is a significant moment in history, as the societies that choose to expand and 

improve their use of energy will advance beyond those that don’t. The primary objective of any country’s energy policy should be to promote abundant supplies of affordable energy and to ensure that it is distributed to consumers. For examples of that 

philosophy look no further than China and India, where the two nations are attempting to bring great numbers of their populations out of poverty and into competition in a global economy. Cap-and-trade is the opposite of that effort. 

While proponents have argued that the United States needs to lead other nations 

to adopt their own cap on carbon emissions, three of the world’s top five emitting 

sources have categorically stated their intent to reject meaningful emissions limits. 

China, the world’s No. 1 emitter, stated that ‘‘it is not possible for China to accept 

a binding or compulsory target.’’ Russia, the No. 4 emitter, has called the emissions 

target ‘‘unacceptable, and probably unattainable.’’ India, the No. 5 emitter, has said, 

‘‘India will not accept any emission-reduction target—period.’’ 
186 

There are not many in the agriculture industry that trust cap-and-trade legislation will make their industry more competitive or that Government is likely to get 

this right. Perhaps the Missouri Farm Bureau said it best when they stated: 

‘‘ ‘Skeptical’ and ‘apprehensive’ may understate our members’ feelings toward proposed legislation and regulations to reduce man’s supposed impact on the Earth’s 

climate. Whether it is called global warming or global climate change, we have serious reservations about lawmakers and regulatory officials imposing sweeping new 

regulatory requirements and costs on the U.S. economy while it is business as usual 

in China, India, and other countries emitting large quantities of greenhouse gases 

(GHGs).’’ 

There exists a great misunderstanding in a good portion of our society about what 

exactly energy is and means to people and our economy, but the ones that are paying attention to cap-and-trade are starting to get it. Some people believe that advances in efficiency will limit the need for future energy sources. Others believe that 

increasing the cost of energy won’t have an adverse effect on middle income families 

or the working poor. And still some believe that forcing heavily subsidized noncompetitive energy into an energy portfolio will have a net positive impact on small 

businesses, manufacturers and farmers. In fact, these beliefs are quite wrong. 

As a society advances and technologies improve we know that energy begets the 

need for more energy. We now produce energy in many forms much more efficient 

than the carbohydrate energy farms once required to power the oxen that pulled 

farm implements. As that efficiency has increased so has our need for energy. Energy consumption per unit of GDP has been falling for thousands of years. We have 

consistently become more efficient. However, energy consumption as a whole has 

been steadily increasing—along with our quality of life. 

Our ability to grow and advance as a society is wholly dependent on affordable 

energy. Low cost energy has proven to be the greatest equalizer in the history of 

mankind. Thanks to affordable energy the poor can stay cool in Louisiana’s hot summers, and the elderly can stay warm in Wisconsin’s cold winters. And thanks to energy’s role in agriculture we are able to feed more people than at any time in the 

history of the world. That will only improve with more abundant and affordable energy. 

For the agriculture industry, implements once pulled by horses and oxen are now 

pulled by massive Caterpillars and John Deere tractors. These machines are much 

more efficient than oxen, but they require more energy. There exists a quite recognizable correlation between rising employment and rising consumption of conventional fuels. In the ag industry conventional fuels provide the energy that processes 

material and powers the increasingly advanced machines that provide internationally competitive farm products. 

When the debate over efficiency was lost in the quest for affordable and reliable 

energy, proponents of reducing energy consumption realized that the only way to 

actually reduce consumption is by driving up the cost of energy. This cannot be done 

without reducing the standard of living on America’s middle class and low income 

earners. To achieve this goal you need something bigger and scarier than simply a 

desire to reduce our use of energy. 

From Energy Secretary Chu to the environmental groups that support a unilateral reduction in carbon emissions, a consistent effort has gone to convincing proponents that the only way to decrease fossil fuel consumption is to increase the cost 

of energy. The effort has been made by filing one lawsuit after another to prevent 

domestic production and has included challenging onshore and offshore production 

in Alaska, convincing the Administration to cancel or slow offshore leasing programs 

in the Gulf of Mexico, and making every effort to increase taxes on domestic production. Yet cap-and-trade remains the best option for rapidly increasing the cost of energy and thus reducing energy consumption. 

The agriculture industry is quite right to be skeptical of the Waxman-Markey legislation or any other legislation capping carbon emissions. As they say, the devil is 

in the details. Unfortunately, this devil has the potential to devastate our economy, 

reduce the standard of living for most or all Americans, and could make us more 

reliant on not only foreign energy, but also foreign agriculture. 

As this committee works on legislation once touted by Enron and now by former 

Vice President Al Gore as an opportunity for ‘‘global governance,’’ I look forward to 

working through and discussing the many challenges ahead. Thank you. 

[Additional material submitted for the record follows: 
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