America gets a cart before a horse on border carbon pricing (2)

June 8, 2023. Report, opinion by Mathew Carr

The Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency (PROVE IT) Act would direct the US Department of Energy to conduct a comprehensive study comparing the emissions intensity of certain goods produced in the United States to the emissions of those same goods produced in the other countries.

The EU is already putting together its Carbon Border Adjustment Mechanism, where importers effectively need to pay a carbon price that matches the price of EU carbon allowances — with payments linked to embedded carbon.

This prevents manufacturers outside Europe from unfairly gaining a market advantage by producing goods in a reckless way that harms the climate and nature. (See link below for more) The US is among nations reacting to Europe’s initiative.

How can a country like the US put a carbon price on imports when it does not price its own emissions?

That’s a little difficult to understand.

Perhaps this is the only way a federal carbon price can be sold by politicians in the US to their voters? Sell it as a continuation of the ‘we need protection from China’ mantra?

(Some states already have carbon prices, including California. Canada and Mexico are almost completely on board.)

Northam’s Big Carbon-Pricing Gap in Light Gray

Source: World Bank State & Trends of Carbon Pricing 2023

If selling the carbon-border measure as a protectionist measure is the political price to pay, I’m willing to pay it. Saving the climate is more important than nice geopolitics, I guess. We could have both, if there were more adults in the room.

The bipartisan nature of this below is impressive, still. There ARE at least some adults, pushing ahead.

Unedited pitch from here:

Senators Coons, Cramer introduce legislation to study global emissions intensity and hold countries with dirty production accountable

An essential step to countering global emissions from polluting countries, the PROVE IT Act would gather the necessary data to quantify the advantage of the United States’ cleaner manufacturing practices against countries with little to no environmental standards

JUNE 07, 2023

WASHINGTON – U.S. Senators Chris Coons (D-Del.)and Kevin Cramer (R-N.D.) today introduced the bipartisan Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency (PROVE IT) Act that would direct the Department of Energy to conduct a comprehensive study comparing the emissions intensity of certain goods produced in the United States to the emissions of those same goods produced in the other countries.

U.S. Senators Angus King (I-Maine), Lisa Murkowski (R-Alaska), Martin Heinrich (D-N.M.), Lindsey Graham (R-S.C.), Sheldon Whitehouse (D-R.I.), Bill Cassidy (R-La.), and John Hickenlooper (D-Colo.) are also co-sponsors. 

“The bipartisan PROVE IT Act will provide reliable data that’s needed to quantify the climate benefits of the United States’ investments in cleaner, more efficient manufacturing practices and to hold nations like China accountable for their emissions-heavy production of goods like steel,” said Senator Coons. 

“It will level the playing field and ensure our workers and producers are not unjustly penalized for their high environmental standards. Demonstrating our comparative advantage in emissions intensity, working with our allies and partners on data sharing, and building on that with future legislation will be a win for the climate, a win for American workers and manufacturers, and a win for global cooperation.”

“The United States lives up to the highest environmental standards in the world, and the PROVE IT Act is an opportunity to bolster our advantage by backing it up with verifiable data,” said Senator Cramer.

“Americans know and appreciate the stewardship that goes into the energy we produce and the goods we manufacture. Quantifying global data will prove our emissions-intensive goods are cleaner here at home while highlighting the countries who monetize their lax or nonexistent standards.”

“Climate change is one of the most pressing, existential threats facing our country. As we race against time to find and implement solutions, we must be guided by the facts from a global perspective – and that means accounting for the carbon footprint of nations around the world,” said Senator King.

 “The PROVE IT Act is a bipartisan, commonsense effort to quantify emissions and then develop strategies to support the United States’ continued environmental leadership in manufacturing. America has taken historic steps to address climate change with clean energy investments, but we aren’t operating in a vacuum and there is still more work to be done. Along with much needed permitting reform, this bill would be a significant boost in our mission to find a clean, sustainable energy path forward that protects the planet for generations to come.”

“When it comes to the production of materials like critical minerals, natural gas, crude oil, and more—Alaska sets the bar in terms of clean production standards. The United States manufactures and produces domestic goods and resources with some of the highest environmental standards in the world—far cleaner than many of our global competitors,” said Senator Lisa Murkowski. “I’m glad to join this commonsense legislation that will demonstrate to the world our environmental standards and promote the continuation of clean production.” 

“I’m all-in on improving the infrastructure our communities rely on. At the same time, we need to make sure we don’t solve our infrastructure challenges at the expense of our climate,” said Senator Heinrich. “This bipartisan legislation will give us the data we need to effectively reduce greenhouse gas emissions from industrial products internationally and at home.”

“This legislation will help give us an apples-to-apples comparison of manufacturing practices among industrialized nations,” said Senator Graham. “It will also provide important data to show the true costs of China dumping dirty products into our economy in an effort to undercut American manufacturers.” 

“As the European Union forges ahead with a strong carbon border adjustment, Congress should help support analysis of how competitive American manufacturers are in the global marketplace when the costs of carbon pollution are taken into account,” said Senator Whitehouse. “This bipartisan step should help private groups quantify the emissions intensity of goods produced here in America, and help us construct a carbon border adjustment of our own.”

“Goods produced in the U.S. are the cleanest in the world,” said Senator Cassidy, M.D. “This study will help us better understand that advantage as we explore policies that reward cleaner U.S. production at the expense of countries that exploit the environment.”

American manufacturers abide by some of the cleanest production standards in the world, and U.S. production is widely regarded as cleaner and more responsible than our competitors. The PROVE IT Act would obtain high-quality data to back up this claim up by determining the emissions intensity of domestically produced goods like steel, cement, glass, and aluminum, compared to those around the globe.

Specifically, the PROVE IT Act would direct the Secretary of Energy to conduct a study, alongside the Department of Commerce, Environmental Protection Agency, U.S. Trade Representative, Department of Homeland Security, and Department of State, to:

  • Determine the average emissions intensity of covered products produced in the United States and identify any gaps in that data;
  • Determine the average emissions intensity of covered products produced by G7 countries, free trade agreement partners, foreign countries of concern, and countries that hold a substantial global market share for a covered product;
  • Identify any issues with verifying the average product emissions intensity data from other countries;
  • Determine the emissions intensity of products produced in the United States compared to products produced in covered countries; and
  • Facilitate collaboration among entities with expertise in data collection and analysis, support international coordination on emissions intensity data, and establish a process for receiving data from private industry on a voluntary basis.

Comprehensive data on product emissions intensity is an important step inaddressing climate through trade policy, leveling the playing field for domestic producers and manufacturers who are forced to compete against rivals with little to no standards.

Senator Coons introduced the FAIR Transition and Competition Act, Congress’ first comprehensive border carbon adjustment bill, in 2021, and prior to Russia’s invasion of Ukraine, Senator Cramer penned an op-ed with former National Security Advisor H.R. McMaster advocating for a “climate and trade initiative that would cut global greenhouse gas emissions, increase energy security, and reduce Russia’s power to coerce Europe.” Merging climate and trade policy would reduce global emissions and support American workers by leveling the playing field for domestic manufacturers who have already made expensive investments to reduce emissions in their manufacturing processes.

The PROVE IT Act is endorsed by the Bipartisan Policy Center Action, American Iron and Steel Institute, Climate Leadership Council, Citizens for Responsible Energy Solutions, Information Technology and Innovation Foundation, Third Way, Progressive Policy Institute, Independent Petroleum Association of America, and Center for Climate and Energy Solutions.

The one-page summary of the bill is available here. The text of the bill is available here. A full list of endorsement quotes is available here.

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