By DAVE BLOWER JR.
Farm World Editor

INDIANAPOLIS, Ind. — Gov. Mitch Daniels, during the Indiana Energy Conference last week, described the federal cap-and-trade proposal as “rock-headed” and “wrong for America.”

Daniels was the keynote speaker at the annual event which was at the University Place Conference Center on the campus of Indiana University-Purdue University at Indianapolis.

According to the U.S. Environmental Protection Agency (EPA), cap-and-trade is a market-based policy tool that puts a mandatory cap on air pollution emission levels while providing the sources of these emissions flexibility in how they comply.

The government sets the cap emission levels and monitors those companies that generate the pollution.

Companies that produce less than the allowed emission level may sell the balance of their emission credit to companies that will exceed the mandated cap levels.

Successful cap-and-trade programs, the EPA claims, reward innovation, efficiency and early action and provide strict environmental accountability without inhibiting economic growth. Corporations and national governments may trade or sell emission allowances to companies that will exceed emission-cap levels.
Daniels disagrees. He believes the policy will severely impact economic growth.

“We’re committed to environmental progress and steady progress,” he said.

To improve the environment, Daniels said, “It took a heck of a lot of money and heavy investment. It’s the only way this ever happens.”

Therefore, he reported, to improve the environment, America must first improve its economy. “To continue to make progress, we’re going to have to be able to pay the bills,” Daniels said.
This is why he is concerned with the proposed cap-and-trade legislation.

“I think carbon legislation is the most rock-headed policy to come down the pike in a long time,” Daniels stated. “I hope it’s defeated, and I think it will be.”

He added that the carbon credit plan isn’t good for any American, but it is certainly not good for Hoosiers who will likely see sharply increased energy prices. Daniels said the policy punishes Midwest states that rely heavily on coal-fired power plants for energy.
But the governor said his opposition to the bill is more than its negative impact on Hoosiers.

The cost of cap-and-trade is the key issue, stated Daniels.
“I think Hoosiers are as patriotic as any Americans,” he said. “I think I have enough intellectual integrity that if it’s good for America – even if its bad for us here in Indiana – we should be for it.

“The costs of this bill are certain, immediate and very high. On the other hand, the environmental benefits are not certain and long-range, at best.”

He added that the policy is estimated to only reduce the average global temperature by a fraction of a degree.
“The only other thing I know about this bill is that there are some middlemen who will get rich quick,” Daniels said of those who will buy and sell carbon credits.

Farm groups and farm-related service businesses remain split on the possible effects of the Waxman-Markey Climate Change bill (HB 2454) which was adopted by the U.S. House of Representatives by a 219-212 vote earlier this summer. Only eight Republicans voted for the bill while 44 Democrats voted against it.

The National Farmers Union supports the Waxman-Markey bill and its companion in the Senate.

The American Farm Bureau Federation, on the other hand, has campaigned that either bill will increase input costs for farmers.
Daniels said the cap-and-trade legislation adds costs to a struggling economy, and it is a threat to Indiana’s energy plan.
He described Indiana’s energy plan as all-inclusive. More renewable energies, nuclear power and any other new technology is welcome. More energy encourages business and reduces costs for Hoosiers, Daniels summarized.

“We’re committed to green energy,” he said. “We’ve shot to the head of the pack in biofuels. We’re No. 1 in the nation in wind energy growth last year.”

He added that more investment in these options is necessary, and he backs most subsidies that support this developing industry.
However, he said it is naive to believe that they will provide all of Indiana’s energy in the near future. Daniels said there is a need to use coal and other fossil fuels.

“This isn’t a policy; this is arithmetic,” Daniels explained. “I hope we grow tremendously in wind energy in the next 25 years, but it won’t meet our needs.”

He believes energy conservation should be a focus for governments, but growing the economy is essential to environmental improvements.

“Some people think we can be poor and green at the same time,” he said. “Poor countries are never green.”

Published on Oct. 7, 2009