Illustration: Sarah Grillo/Axios
Senators in Dubai told Axios that there's been real progress in the bipartisan conversation about carbon tariffs.
Why it matters: It's a sign that lawmakers could take baby steps toward a carbon border adjustment mechanism in this Congress.
Driving the news: In an exclusive interview with Axios on the sidelines of COP28, members of the U.S. delegation said carbon tariffs are the next frontier in U.S. climate policy.
- Sen. Lisa Murkowski said the first step is passing the PROVE IT Act, a bipartisan bill that would direct federal agencies to study emissions intensity of industrial goods produced in the U.S. and elsewhere.
- "If you're talking about what could actually pass now … I think that could materialize and then perhaps could be the underpinnings for what to do next," she said.
- Republicans, Murkowski said, are considering ideas on climate policy that would have been "heresy" just a few years ago.
- Sen. Sheldon Whitehouse added that the EU's CBAM could become "a forcing event that leads to more bipartisanship, that creates something very real in terms of economic pressure to knock off the pollution."
Zoom in: The Biden administration is currently negotiating a deal with the EU on "sustainable" steel and aluminum, widely seen in the U.S. as a test case for a bigger climate trade regime.
- Those talks have stalled in recent months. But big-name environmental groups recently wrote Biden urging him to "seize this historic opportunity to use trade tools to incentivize climate action."
- In the Senate, meanwhile, Whitehouse and Sen. Bill Cassidy have both floated competing carbon tariff legislation.
Our thought bubble: PROVE IT is the kind of low-hanging fruit that often moves in a larger legislative package. But we don't expect to see an actual carbon tariff regime move through Congress before the end of next year.
- It's still a tough sell in the House with continued Republican anathema to any kind of domestic carbon tax.
- Reps. John Curtis and Scott Peters plan to introduce a House companion to the PROVE IT Act. They're likely to deviate from the Senate version to make Republicans more comfortable with the idea.
- Even if Congress can't ever enact a CBAM, PROVE IT could give the executive branch the tools it needs to pursue the kind of "carbon club" framework the Biden administration is proposing in steel talks with the EU.
Of note: Lawmakers also spent a lot of time in Dubai this weekend talking about environmental permitting.
- Most of it was posturing they'd do back here: "Climate action advocates should be leading this, not getting in the way of it, but unfortunately we're ass backwards right now," Peters at an event on permitting.
- But there was some substance: At an Atlantic Council event, E&C energy subcommittee chair Jeff Duncan laid out his plans for getting a bipartisan nuclear permitting package: a floor vote and then conferencing with the Senate.
- Duncan said he's looking to hold a hearing on nuclear waste to give lawmakers a chance to weigh in on that controversial topic.
