Corn growers, utilities, and environmentalists find a mutual interest in rain forests.
by Julie Kosterlitz
National Journal | Saturday, April 17, 2010
Just before Congress headed out for its spring recess, the Ohio Corn Growers Association teamed up with another nonprofit group to run a six-figure advertising campaign, online and in publications targeted at Capitol Hill. Their message: Protecting tropical rain forests is good for U.S. farmers.
If Midwestern corn farmers extolling the virtues of rain forest preservation seems a tad improbable, chalk it up to the strange-bedfellow politics of climate change. These farmers, it turns out, are among the newest additions to a rather crowded sleeping arrangement.
But their arrival comes at a critical moment. A coalition of coal-based utilities and major environmental groups is trying to persuade Senate members to include its hard-won agreement on tropical forest preservation in comprehensive climate and energy legislation.
The farmers could help cut through the tangle of competing interests clamoring for attention on the energy bill. "Every senator is a farm-state senator," says Glenn Hurowitz, Washington director of Avoided Deforestation Partners, the nonprofit that brokered the coalition agreement and co-sponsored the rain forest advertising campaign. Moreover, Sen. Sherrod Brown, D-Ohio, is a member of the Agriculture Committee, which will play a role in shaping any climate legislation.
At the heart of the deal is the idea that U.S. climate legislation should award tradable credits, known as offsets, to countries or groups that prevent tropical deforestation -- which is a major global contributor to rising carbon levels in the atmosphere.
The ability to trade such offsets, coalition members say, is a win for the environment, for developing countries, and for coal-burning utilities and their customers.
Offsets could make conservation of rain forests more profitable than other uses, such as logging and farming, and thus provide the means to save them that environmentalists have long sought. They could provide a major source of cash for developing nations, Brazil and Indonesia among them, that are home to the forests. And they could make climate-change legislation more palatable to coal-burning utilities -- including American Electric Power, Duke Energy, and PG&E, all coalition members -- by dramatically lowering the cost of meeting carbon-reduction targets in a new law. Buying carbon credits would be a lot cheaper than trying to rapidly shift to alternative-energy sources, or develop clean-coal technologies.
Still, for more than a decade after the idea of offsets was first broached at the 1997 international conference on climate change in Kyoto, Japan, deep and acrimonious splits over the notion prevented any progress. Companies wanted to be allowed to buy the credits from rain forest preservation projects abroad, while environmentalists favored using public funds -- including money paid by firms for the "right" to pollute -- to finance preservation. The environmentalists argued that individual projects could be easily gamed--one rain forest saved, while another nearby was destroyed. Some critics contended that cheap foreign credits would allow domestic polluters to continue business as usual with little financial impact, while others feared that preservation schemes would trample the rights of rain forest inhabitants.
"The issue was really quite divisive," said Fred Krupp, president of the Environmental Defense Fund, a coalition member.
By early 2009, however, with a Democratic Congress vowing to move climate-change legislation, the squabbling parties had further incentives to seek common ground. And there was a new, somewhat unlikely player on the scene offering to broker an agreement: California vintner Jeffrey Horowitz, a Harvard-trained former architect who had developed a passion for rain forest preservation. In 2007, Horowitz decided to put his VIP Rolodex and family foundation money into a quest for consensus between the contending parties.
Having once worked with a nephew to found a company to trade carbon credits, Horowitz said he learned that without a government-created regulatory system, "trying to do any trading ... seemed very risky." In 2007, Horowitz set up Avoided Deforestation Partners to see if he could break the gridlock. He built on relationships he had cultivated in foreign governments during his work as an architect; among financial, business, and environmental groups as a result of his carbon-trading venture; and in the political arena as a Democratic donor and fundraiser. (Horowitz and his wife, Lynn, have given more than $50,000 to federal Democratic candidates and party committees in the last three elections.)
Horowitz succeeded in attracting high-profile spokespeople to his cause: A September 2008 meeting in New York City, for example, drew Nobel laureates Al Gore and Wangari Maathai. By early 2009, he had persuaded many of the adversarial parties to give negotiations another chance. He has also drawn financial support from several foundations and individuals.
"Jeff is just incredibly dedicated to saving tropical forests," said Doug Boucher of the Union of Concerned Scientists, another early party to the talks. "His role was absolutely key. He brought everyone together and convinced them to be in the frame of mind to compromise" by emphasizing that "if we could agree, we could have a great deal of success, and that if we couldn't, legislators were not going to step into this hornet's nest."
The talks led to breakthroughs. The fight over whether preservation should be financed with public funds or offsets was resolved when the group agreed that "both are not only essential but complementary," Hurowitz said. The Environmental Defense Fund's Annie Petsonk came up with a compromise approach to preventing abuse of the system: Countries with major tropical deforestation problems would be required to measure preservation on a nationwide basis, while nations whose rain forests aren't as compromised would initially be able to sell offsets from individual preservation projects.
Advances in satellite technology over the past decade have also given environmental groups greater confidence that promised forest preservation can be verified.
After three months of working out the details, a wide array of companies and environmental groups signed on to a "unity agreement" last May. It called for the sale of offsets, subject to regulation, and setting aside 5 percent of revenues raised through the trading of pollution credits for public investment in rain forest preservation. Among the signers were major environmental groups, coal-burning utilities, and corporations, including Marriott International and the Walt Disney Co.
Key elements of the agreement were incorporated in the energy legislation that passed the House last year. Offsets estimated to be worth $14 billion combined with the $4 billion in public funds could mean $18 billion for tropical forest preservation annually, Horowitz says.
Not everyone is on board. Friends of the Earth and Greenpeace are among the environmental groups that consider the compromise too weak. Selling cheap offsets makes it "painless for U.S. industry" to meet carbon-reduction goals and "defeats the purpose of putting a price on carbon in the first place," contends Rolf Skar, the senior forest campaigner for Greenpeace in the United States.
But the coalition's bigger concern is that the provision calling for public funds for preservation -- which is vital to the compromise -- could be traded away in the Senate to secure votes for the broader bill.
The agreement's signatories have formed the Tropical Forest and Climate Coalition to lobby for the bill, led by Boucher, Marty McBroom of American Electric Power, and Jake Schmidt of the Natural Resources Defense Council. They continue to recruit new members to the cause -- such as the Ohio Corn Growers Association. Farmers had already been active in seeking to receive carbon offsets for using more climate-friendly farming practices. They got interested in rain forest preservation last year after critics complained that the increased use of corn for ethanol fuel was displacing U.S. food production, and in turn fostering the conversion of tropical forests to agriculture.
"We wanted to go there to see if it was true," said Dwayne Siekman, the corn growers association's executive director. On a trip to Brazil in mid-2009 that was arranged by the Environmental Defense Fund, Siekman and his colleagues saw the impact of deforestation firsthand. While talking with Brazilian farmers, the visitors became convinced that turning rain forests into cropland was also hurting U.S. farmers' economic interests. Brazil, Siekman says, is "a strong producer in cattle and soybeans, and more forest clearing makes them even stronger," which adds to the competitive pressure on U.S. farmers.
Earlier this year, Ohio-based American Electric Power introduced the corn growers association to Avoided Deforestation Partners, which recognized the political advantage of having allies in the farming sector. "Agriculture was the piece missing in [the coalition], and we hope to be a bridge to bring more [farm groups] in," Siekman said.
In late March, the association joined nearly three dozen corporations and environmental groups in sending a letter to Sens. John Kerry, D-Mass., Joe Lieberman, ID-Conn., and Lindsey Graham, R-S.C. -- the chief negotiators on the Senate's climate-change bill -- in which they supported carbon offsets and stressed the benefits that rain forest preservation holds for domestic agriculture and forestry.
Besides the joint advertising campaign, Avoided Deforestation Partners hopes to drive home the unity agreement's importance to agriculture with an upcoming economic report concluding that U.S. agriculture and logging interests stand to lose more than $100 billion by 2030 unless tropical deforestation is stopped.