AFIA shares view on climate change rules

“As you develop climate legislation, we urge you to consider the direct and indirect impacts on the cost of food, feed, and household products,” the letter to senators states. AFIA and 14 other industry trade associations signed the letter to Sen. Barbara Boxer (D-Calif.), chair of the Senate Environment and Public Works Committee, and Sen. James Inhofe (R-Okla.), the senior Republican on the committee. The American Meat Institute, the Grocery Manufacturers Association, the National Chicken Council, the National Council of Farmer Cooperatives, the National Meat Association and the National Turkey Federation are among the organizations that signed the letter, along with AFIA.

“Our facilities emit roughly two percent of the nation’s greenhouse gases, but we are disproportionately vulnerable to indirect costs,” the associations wrote. “As a result, poorly designed climate legislation could significantly increase the price of food and other household products. In particular, poorly designed climate legislation could significantly increase energy, transportation, regulatory and commodity costs. These are paramount considerations Congress must consider and prioritize among the issues it addresses.”

The associations wrote that Congress “must take extreme care to avoid adverse impacts on food security, prices, safety and accessibility to necessary consumer products.” Allowances, thresholds, offsets, pre-emption issues and trade are the five areas of most concern to the groups if legislation related to climate change and cap-and-trade issues is pursued in the Senate this fall.      

The distribution of allowances “should be based upon an industry’s historic emissions and additional allowances should be distributed to reflect early-action reductions in emissions between 2000 and 2012,” the letter states. “Although we are an energy-intensive industry, H.R. 2454 fails to provide allowances to the manufacturers, distributors or retailers of food, feed or household products and fails to provide transition assistance to low-income households struggling with rising food prices. Thus, our industry will be at a significant economic disadvantage to other industries unless the legislation fairly distributes allowances pro rata across all industrial sectors.”

The associations believe if a cap-and-trade system is adopted, the Environmental Protection Agency should not be authorized to lower the threshold for the cap in the future or use the Clean Air Act to regulate greenhouse-gas emissions from sources beneath that threshold. In the area of offsets, food processors, farmers and others should be allowed to generate offsets to reduce the cost of allowances, according to the organizations. “A well-designed offset system should strike a balance between the need for affordable offsets and the need for productive farmland,” the letter states.

Regarding pre-emption issues, comprehensive climate-change legislation should pre-empt or harmonize state and regional climate programs. Legislation also should explicitly pre-empt EPA regulation under the Clean Air Act, including EPA’s authority to issue New Source Performance Standards for sources that emit between 10,000 and 25,000 tons of equivalent carbon dioxide a year. The letter also expresses the belief that commitments to international trade should not be over-looked. “Climate legislation should be contingent on Senate ratification of an international commitment to reduce greenhouse-gas emissions that includes all major sources of emissions and should not authorize” the administration to place limits on imports from countries that do not strictly limit such emissions.

“We believe that H.R. 2454 will increase food and feed prices and reduce the international competitiveness of our businesses, and look forward to working with you to craft climate legislation that reduces greenhouse-gas emissions but which also ensures a safe and affordable supply of food,” the letter concludes.