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Rice and climate legislation

The effects of climate legislation, and the potential for unintended consequences, were keyed on by members of the House Agriculture Subcommittee on Conservation, Credit, Energy, and Research during a Dec. 3 hearing.

Among the topics when Louisiana Rep. Bill Cassidy had his turn to ask questions: how rice would fare and the potential for increased U.S. food imports.

For more on Cassidy’s climate views, see Rep. Cassidy: rethink conservation efforts.

Rep. Cassidy: “Is there any estimate of how many (carbon) credits will be purchased internationally versus domestically?”

Joseph Kile, the Congressional Budget Office’s (CBO) assistant director for microeconomic studies, replied, “In CBO’s analysis … it varies over time between roughly 30 and 50 percent of offset allowances.”

Cassidy: “Thirty to 50 percent internationally?”

Kile: “Domestic. So 50 to 70 percent would come from international sources.”

Cassidy: “I’ve also gathered from this testimony there will be a net increase in the amount of food we’ll import. That’s implied because of decreased (cropland) acreage … increased costs and an expanded population. Is that a fair statement?”

Joseph Glauber, USDA chief economist: “Imports don’t increase under this. What do decrease are exports. Any sort of exportable surplus falls considerably. That’s the flip-side.”

Cassidy: “Is there any estimate of the net decrease in U.S. wealth that will be created by this? We’ll be buying 50 to 70 percent of our credits overseas, exporting less, (and) perhaps importing more. … This will be like OPEC with credit and food.”

Kile: “That’s not something we’ve looked at directly. But it’s important to remember offsets are designed as a cost-control mechanism in a climate bill. It’s the cost of the climate action versus the benefits one might (gain) from that.”

Cassidy: “But intuitively, if we’re spending a lot of money overseas to buy credits and we’re exporting less and we have increased acreage under production, there will be a net decrease in U.S. wealth.”

Kile: “The policy itself would impose costs on the United States. That’s correct.”

Cassidy: “Do we have any estimate of how many jobs it will cost the agricultural sector because of (the legislation)? In the case of rice, according to your testimony, Mr. Glauber, by 2050 there will be a 25 percent decrease in the amount of production and a corresponding decrease in acreage. How many jobs will be lost from this?”

Glauber: “I don’t have job estimates.”

Cassidy: “Intuitively, you know there will be some, correct?”

Glauber: “It depends on how the activity flows. There is more money in the sector itself. With an income increase you get jobs, as well. But trying to sort out what shifts in acreage and production would entail, we haven’t done that.”

Cassidy: “I’m also concerned because there seems to be an aggregation of the benefits of offsets versus an aggregation of the cost of compliance.

“If you look at Louisiana particularly, which I represent — and this bill, frankly, seems to (draw) a huge bull’s-eye on my state — in your (earlier) testimony, Mr. Glauber, it looks like rice has the (highest) increase in input costs because it’s the most energy-intensive, the most carbon-intensive.

“Yet, in your testimony today, you speak on how there will be a 25 percent decrease in rice production. It seems most of the benefit of the offsets go the corn-growing states and relatively little goes to rice-producing states. It seems we have an incredibly tilted table against rice farmers and folks in the Mississippi Delta region.”

Glauber: “The only thing I’d caution with drawing too many conclusions from that is the fact that, going back to the model used, it’s a very elaborate model that includes a lot of various greenhouse gas practices.

“But there are others and a number could potentially affect rice cultivation. Things like mid-season drainage, shallow flooding … upland cultivation and improved irrigation water management. There’s a lot of research out there that suggest there are greenhouse gas emission reductions connected with these practices.”

Cassidy: “Presumably that has been included in these complex models, at least to some extent. It appears that if you’re a rice-growing state — in the Mississippi Delta region, for example — this is a bull’s-eye on economic development.”


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