Hill Heat

• Dick Wittman, member of the Agricultural Carbon Market Working Group and former president of the Pacific Northwest Direct Seed Association
• Laurie Wayburn, president and co-founder, Pacific Forest Trust
• Ruben Lubowski, economist and the Forest Carbon Economics Fellow, Environmental Defense
• Steve Corneli, vice president market and climate policy, NRG Energy Inc.
• Derik Broekhoff, senior associate, World Resources Institute.

A Senate Agriculture subcommittee enters the brewing debate over allowing industry to use offsets as a low-cost compliance option for new U.S. greenhouse gas regulations with a hearing Wednesday.

With offsets, companies could meet their environmental requirements by funding activities that don’t reduce emissions at their smokestack or tailpipe. Instead, they could rely on soil sequestration, methane capture at a farm or forestry projects.

Senate Forestry and Conservation Subcommittee Chairwoman Debbie Stabenow (D-Mich.) supports the widespread use of offsets as Congress develops cap-and-trade legislation that would put a first-ever limit on U.S. heat-trapping emissions.

In an interview last week, Stabenow called on the sponsors of a pending cap-and-trade bill due on the Senate floor early next month to expand a provision that currently limits use of offsets from both domestic and international projects at 15 percent.

“This whole area of offsets is one they’re moving on,” Stabenow predicted. “I don’t think we should cap it.”

A new version of the bill from Sens. Joe Lieberman (I-Conn.), John Warner (R-Va.) and Barbara Boxer (D-Calif.) is expected to be public early this week. But it is unclear whether they will change the offset provisions.

Presumptive Republican presidential nominee Sen. John McCain of Arizona sees offsets playing a big role in his global warming platform. Last week, McCain said he would let companies meet their initial compliance requirements with an unlimited amount of offsets.

McCain’s campaign cited U.S. EPA and Energy Information Administration studies that show unlimited offsets could lower the climate program’s costs by as much as 71 percent. “Offsets are a very important bridge, especially in the early years, to the time when we have low-carbon technologies available on a commercial wide-scale,” the campaign said.

Addressing a common concern about offsets, the McCain campaign also insisted, “The offset credits will indeed be real, measurable and verifiable – or they won’t be certified and allowed into the market.”

But not everyone sees unlimited offsets in the same light.

“Don’t design a system, a boat, that’s going to leak,” said Rep. Jay Inslee (D-Wash.), a member of the House Energy and Commerce Committee. “If you have 100 percent offsets, as Senator McCain is suggesting, all you have is sending all your money around the world and no investment in the United States. That’s a nonstarter.”