EPW clears PROVE IT Act
The Senate Environment and Public Works Committee advanced the PROVE IT Act — but the markup exposed inter-party tensions that could derail the bill.
Why it matters: The legislation is an important first step in the Hill discussion about carbon tariffs.
Driving the news: EPW moved the bill Thursday in a 14-5 vote. Four Republicans — John Boozman, Lindsey Graham, Cynthia Lummis and Kevin Cramer (the lead sponsor) — joined all Democrats in voting "yes."
- PROVE IT, you may recall, would direct the Energy Department to study industrial greenhouse gas emissions from producers in the U.S. and around the world.
- Cramer also added an amendment during the markup that specifies that nothing in the bill "provides any new authority to any federal agency to impose, collect or enforce a greenhouse gas emissions tax, fee, duty, price or charge."
- Expect the coming House companion to have a similar provision, which is a nod to Republican concerns that the bill would lead to a carbon tax.
What they're saying: "Today was really monumental," Cramer told reporters afterward. "It was a big enough margin that I think we have an impetus for making a case for bringing it to the floor, either on its own or probably in the package of some sort."
- Proponents see PROVE IT as a precursor to an eventual U.S. carbon tariff regime.
- But they argued during the markup that it's necessary in the immediate term to respond to the EU's carbon border adjustment mechanism.
Yes, but: Republican opposition — including from ranking member Shelley Moore Capito — remains strong, and will probably be amplified in the House.
- Capito said a new data program could provide a statutory base for Democrats to impose a tax or tariff with the 50-vote threshold via reconciliation.
- She pointed to the IRA, in which Congress directed EPA to revise existing reporting requirements to facilitate a new fee on methane emissions.
- She tried to add an amendment that would have set a 60-vote threshold for carbon tariffs in a future reconciliation bill, but was rebuffed in a partisan vote.
Of note: Centrist and conservative climate groups wrote Congress this week urging support for the bill in a letter signed by high-profile trade groups like the American Petroleum Institute and U.S. Chamber of Commerce.
- Meanwhile, more than 40 conservative groups penned their own letter, calling PROVE IT "a gateway for a carbon tax on imported goods and a domestic carbon tax."
- "The United States should push back against the EU's extreme green policies and not, under any circumstances, accept their disastrous environmental and energy policies," they wrote.
Our thought bubble: The war of words shows how contentious the carbon tariff fight could become.
- PROVE IT might be a stepping stone, but we don't see Congress getting real on carbon tariffs in 2024.