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EPW clears PROVE IT Act

Jan 18, 2024
Illustration of a hand emerging from the capitol dome giving a thumbs up hand sign.

Illustration: Aïda Amer/Axios

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.
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