Bad Deal Cut on Domestic Offsets

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In order to secure votes for the climate and energy bill from representatives of agricultural states, Congressman Waxman cut a deal with Congressman Peterson, chair of the House Agricultural Committee. Waxman compromised on two major issues. On the first, Waxman agreed to a five year moratorium before the indirect land-use effects of ethanol are assessed. On the second, the United States Department of Agriculture (USDA) will adminster domestic ag offsets, instead of the EPA. The EPA will be also given a role, although in what capacity is still unclear.

This essentially means that the USDA will most likely be deciding what constitutes a carbon offset from agriculture. Given that the mandate of the USDA is to promote US agricultural interests and not protect the environment, it is in the agency's interest to make it easy for US agriculture to produce carbon offsets, rather than ensuring high quality (if it is even possible) offset credits. This could very well mean that the number of domestic offsets produced annually will be higher than the EPA predicts in its analysis of the bill.

As the bill has wound its way toward the floor of the House (a vote is expected on Friday), various aspects of the bill have been considerably weakened. This considerably increases the likelihood of rip-offsets.