	Background

In June 2009, the House passed H.R. 2454 , the American Clean Energy and Security Act of 2009. In November 2009, Chairwoman Boxer of the Senate Committee on Environment and Public Works completed markup of S. 1733 , the Clean Energy Jobs and American Power Act, by approving a "Manager's Amendment" as a substitute, and ordered S. 1733 reported. Both the House-passed ( H.R. 2454 ) and the Senate-reported ( S. 1733 ) bills would establish a cap-and-trade system to regulate greenhouse gas (GHG) emissions, as well as to address energy efficiency, renewable energy, and other energy topics. Among other provisions, both bills would require major reductions in GHG emissions from entities comprising roughly 85% of current U.S. GHG emissions. Covered sectors would include electricity production, natural gas distribution, petroleum refining, and industrial sectors. These and related bills and issues are currently being debated in Congress. However, if enacted, provisions in these bills could potentially raise farm input costs for fossil fuels, fertilizers, energy, and other production inputs. These higher costs could potentially be alleviated by possible farm revenue increases should farmers participate in carbon offset and renewable energy provisions that are part of these bills. This report also describes some of the carbon energy and biomass provisions pertaining to the domestic agricultural and forestry sectors in the energy titles of these bills. 2454 many in the Senate and in the agriculture community regarded that effort as a "good starting point" that still needed additional work to satisfy those in Congress with major agriculture constituencies. In September 2009, Senator Kerry introduced S. 1733 , which was referred to the Senate Committee on Environment and Public Works (EPW). For example, some in the agricultural community have continued to support the ongoing efforts of Senator Stabenow, who continued to work on a proposal (often referred to as the "Stabenow Amendment") that would expand on the agricultural and forestry carbon offset provisions in these climate bills and also allow for certain other provisions benefitting U.S. farmers and landowners. These provisions were included in a bill, the Clean Energy Partnerships Act of 2009 ( S. 2729 ), introduced by Senator Stabenow shortly after the Senate EPW Committee completed work on S. 1733 . Other in the agricultural community, however, including Chairwoman Lincoln of the Senate Agriculture Committee and the American Farm Bureau Federation, continue to voice concerns about climate legislation and how this legislation could affect national and local farming communities, and U.S. economic competitiveness. Although these bills would not require GHG emission reductions in the agriculture and forestry sectors, if enacted, provisions in these bills could potentially raise farm input costs for energy, fertilizers, and other production inputs. Appendix A compares the carbon offset programs that would be established by the House-passed bill, H.R. The House and Senate bills also differ in their allowable proportions of domestic and international offsets.
In June 2009, the House passed H.R. 2454, the American Clean Energy and Security Act of 2009. In September 2009, Senator Kerry introduced S. 1733, the Clean Energy Jobs and American Power Act, which was referred to the Senate Committee on Environment and Public Works. The committee completed markup of the bill on November 5, 2009, by approving Senator Boxer's "Manager's Amendment" as a substitute, and ordered S. 1733 reported. Both the House and Senate bills would establish a cap-and-trade system to regulate greenhouse gas (GHG) emissions, as well as address energy efficiency, renewable energy, and other energy topics. Among other provisions, both bills would require major reductions in GHG emissions from entities comprising roughly 85% of current U.S. GHG emissions. Covered sectors would include electricity production, natural gas distribution, petroleum refining, and industrial sectors. These and related bills and issues are currently being debated in Congress.
Although the leading House and Senate climate proposals would not require GHG emission reductions in the agriculture and forestry sectors, provisions in these bills could potentially raise farm input costs for energy, fertilizers, and other production inputs. However, higher production costs could potentially be alleviated by possible farm revenue increases from other provisions that are part of these bills. For example, the cap-and-trade proposals in these bills would distribute tradeable allowances at no cost to certain agricultural industries, such as fertilizer manufacturers. These "free" allowances could also dampen the impact of the cap-and-trade system that would otherwise occur. Higher costs might also be dampened by possible farm revenue increases should farmers participate in carbon offset programs for domestic farm- and land-based carbon storage activities. The renewable energy provisions contained in these bills could potentially expand the market for farm-based biofuels, biomass residues, and dedicated energy crops. Both bills also provide incentives for international forestry and related land-based activities. Other provisions in these bills might also affect the U.S. agriculture sectors. These include provisions that would establish a GHG registry for reporting emissions, which might affect certain larger livestock operations, and provisions to implement certain biomass and bioenergy requirements.
This report describes some of the agriculture and forestry provisions that are included in major energy and climate legislation in the 111th Congress, comparing provisions in the House-passed bill (H.R. 2454) and the Senate-reported bill (S. 1733). Initially, when the House passed H.R. 2454 many in the Senate and in the agriculture community regarded that effort as a "good starting point" that still needed additional work to satisfy those in Congress with major agriculture constituencies. In particular, other ongoing efforts in the Senate, such as a bill introduced by Senator Stabenow (Clean Energy Partnerships Act of 2009, S. 2729), would provide for expanded carbon offset provisions benefitting U.S. farmers and landowners, among other provisions. This Senate bill is supported by many in the agricultural community. However, others (including Chairwoman Lincoln of the Senate Agriculture Committee) continue to question this legislation and cite concerns about how this legislation could affect national and local farming communities.