Saturday, December 13, 2008

Flatulent fees?

You have to admit that when you first heard about a possible tax on cow farts, you thought it was the subject of a Gary Larson "Far Side" comic strip, right? Well, the notion of a agricultural emissions tax that could assess methane emanating from dairy farms is no laughing matter to the nation's farm community. In fact, it has farmers angry and mobilizing for a fight.

Hopefully it's much ado about nothing. (GW)

'Cow Tax' Uproar Underscores Greenhouse-Gas Divide

By Stephen Power
Wall Street Journal
December 13, 2008

Is the Environmental Protection Agency preparing to slap a "cow tax" on bovines for their contribution to global warming?

The agency says no. But in recent weeks, farmers and livestock ranchers have flooded the EPA with letters warning of catastrophic consequences if such a tax was imposed.

"If President-elect [Barack] Obama tries to include farmers in some kind of livestock assessment based on greenhouse-gas emissions, I want my Iowans to know that I'm going to stand beside the producers and fight," Sen. Charles Grassley (R., Iowa) said this week.

Farmers and livestock ranchers have launched a vociferous campaign against a 'cow tax,' but the EPA says no such levy is in the works.

The idea of a so-called cow tax might seem far-fetched. But the uproar highlights a serious policy decision awaiting Mr. Obama's administration: whether to use the Clean Air Act to regulate greenhouse-gas emissions -- effectively branding as harmful pollutants carbon dioxide and other gases generated both by industry, as well as by the digestive processes of livestock.

Many environmental groups want the Clean Air Act used to control greenhouses gases. But business groups, led by the U.S. Chamber of Commerce, are resisting. They argue such use of the Clean Air Act would lead to a cascade of unintended regulatory consequences, with regulations covering schools, hospitals, breweries, bakeries and farms.

At the core of the battle is a Supreme Court ruling last year that the 1970 Clean Air Act authorizes the agency to regulate greenhouse-gas emissions if it concludes they endanger public health or welfare. In response, the EPA published a 570-page notice in July that drew no conclusion on that question, but instead solicited comment on options for controlling emissions of heat-trapping gases.

The EPA document only briefly suggested that livestock could be subject to regulation. But the document went too far for the Bush administration, which -- in an unusual step -- published comments from four federal agencies slamming the EPA's work. The Agriculture Department said regulating emissions from agriculture could subject "numerous farming operations" -- including "dairy facilities with over 25 cows" -- to the "costly and time-consuming process" of getting permits to operate. The American Farm Bureau Federation alerted its members that the EPA was on course to saddle them with "costly and burdensome permits," costing as much as $175 per cow per year for dairy cattle, enough "to force many producers to go out of business."

Local chambers of commerce, meanwhile, began disseminating estimates of what such fees would mean for farmers at the state level -- arriving at a figure of $24,995 a year for the average dairy farmer in North Dakota.

"This can be considered the most outrageous proposal in regards to the environment and animal agriculture that has been brought forth," Ron Sparks, commissioner of Alabama's Department of Agriculture and Industries, said in a letter to the EPA dated Nov. 26. "I An EPA spokeswoman says the agency "is not proposing a cow tax," and notes that the document published in July states that the Clean Air Act "does not include a broad grant of authority for EPA to impose taxes, fees or other monetary charges specifically for" greenhouse-gas emissions. David Bookbinder, an attorney for the Sierra Club, says the idea of a cow tax is "a fantasy designed to whip up opposition to regulation," and that the EPA has the discretion to choose not to regulate small emitters, such as dairy farmers.

But the idea that Mr. Obama's administration might try to use the Clean Air Act to regulate greenhouse-gas emissions isn't far-fetched. Environmental groups such as Mr. Bookbinder's group are pressing him to do so, on the grounds that the U.S. cannot credibly participate in climate talks with other nations aimed at forcing a successor to the Kyoto Protocol on climate change until it passes climate legislation or begins regulating such emissions.

Talks aimed at forging such an agreement are scheduled to begin in December 2009 in Copenhagen, and it isn't clear Congress will be able to pass climate legislation by then. Mr. Obama's administration could move to use the Clean Air Act to regulate greenhouse-gas emissions without waiting for comprehensive legislation. Many Democrats expect one of the new administration's first acts will be granting California's request for a waiver from the law, so it can regulate greenhouse-gas emissions from automobiles -- an authority it was denied under the Bush administration.

A spokesman for Mr. Obama's transition team said the president-elect "believes a comprehensive federal approach" to regulating greenhouse-gas emissions is "far preferable" to using the Clean Air Act to regulating, but that he "intends to follow the law."


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