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Climate trade talks heat up

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Apr 29, 2024
Sen. Bill Cassidy

Cassidy in February. Photo: Kevin Dietsch/Getty Images

President Biden's climate and trade task force adds new weight to the Hill conversation about carbon tariffs.

Why it matters: Lawmakers see the task force as a sign that the White House is finally getting serious about climate and trade policy — and about responding to the EU's impending carbon border adjustment mechanism.

  • "I think it is a breakthrough," Sen. Bill Cassidy told Axios.

Driving the news: Climate czar John Podesta announced the task force this month, saying it would be "open to proposals from our colleagues on Capitol Hill and policy thought leaders from inside and outside government."

Podesta didn't endorse carbon tariffs in his announcement but said the task force will "focus on ensuring that we have credible, robust and granular data to implement smart climate and trade policies."

  • That sounds like the PROVE IT Act — the Senate's bipartisan data bill that advanced out of the EPW Committee this year.

What they're saying: Cassidy said the Biden administration has previously "not formally acknowledged that most of the greenhouse gases spewing out around the globe are coming from Asian trading partners."

  • The task force, he said, is a sign of "a bipartisan convergence that we need to address this."
  • Senate Finance Chair Ron Wyden called the task force a "constructive idea" and told Axios he expects to be "very actively involved" in the climate and trade conversation.

Between the lines: U.S. trade representative Katherine Tai has been pursuing a deal on green steel and aluminum with the EU. But her efforts to form a "carbon club" have fallen flat with Europeans — and some U.S. climate hawks.

  • Sen. Sheldon Whitehouse told Axios the task force shows that the administration is starting to take the EU's CBAM "way more" seriously.
  • "For a while, they thought they could head it off with the steel and aluminum arrangement," he said. "And I think they realized that's a dead duck of an idea, and I couldn't be happier to have that duck be dead."

Our thought bubble: Congress is a long way from enacting a carbon tariff. Legislation often needs years to marinate on the Hill.

  • Cassidy sees his Republican carbon tariff bill as an attempt at "moving the Overton window." The task force might be part of that shift.
  • And regardless of the congressional timeline, said Xan Fishman of the Bipartisan Policy Center, "the rest of the world is acting, and oftentimes, we can influence what they do."
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