PROVE IT Act: A Good Idea Or A Carbon Tax In Sheep’s Clothing?

Written by Lynne Balzer on September 5, 2024. Posted in Current News

The PROVE IT (Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency).

Act of 2024 is a bipartisan bill in the US Congress to study and report on the greenhouse gas emissions intensity of many energy-related products produced in the United States and other countries.

The bill, introduced by Senators Chris Coons (D-DE) and Kevin Cramer (R-ND), is an attempt to obtain reliable data assessing the environmental impact of US manufacturing practices and to compare them with those of other nations, particularly major industrial nations such as China.

PROVE IT would direct the Department of Energy (DOE) to conduct a study of the emissions intensity of nearly two dozen products, including aluminum, steel, cement, and other energy-related goods that are imported by and produced in the United States.

The data collected would be published in an online database, and the study updated every five years.

Some conservatives fear that this data could lead to the imposition of carbon taxes or import tariffs, even though the bill states that it does not grant federal authority to impose such taxes or duties.

The products that would be affected by this legislation include plastic, biofuel, crude oil, petrochemicals, refined petroleum products, fertilizer, glass, hydrogen, lithium-ion batteries, natural gas, pulp and paper, solar cells and panels, uranium, and wind turbines.

John Curtis (R-UT), who sponsored the House version of the bill (HR 7198) promoted it by saying,

“We should embrace the fact that American industries produce cleaner and with better standards than anywhere else in the world… This bill is not just about proving our energy dominance; it’s about leveling the playing field in international competition.

Russia and China are on an unapologetic trajectory to energy dominance, using none of the innovative technologies or regulations that make our energy cleaner in the United States.

This legislation will help American businesses compete globally, strengthen our trade relationships, and provide our allies with a reliable energy partner.”

Another supporter, Rep. Peters (R-FL), adds,

“To address climate change, we must have a global race to the top so that all nations have more strong incentives to reduce their emissions.

Our PROVE IT Act will provide the data to show the benefits of America’s high environmental standards while holding nations like China accountable for their emissions-intensive practices.

I am excited to be leading this effort with Representative Curtis, which shows that even in an age of increasing partisanship, we can still work together to advance strong and common-sense environmental and energy policies.”

Supporters of this 17-page bill hail it as a meaningful step toward collecting product-level emissions data. They say that improving the process of measuring, reporting, and validating product-level emissions is important for implementing a “border adjustment” under a carbon tax.

But what would the emissions data obtained by such a study be used for? Would lawmakers use the study’s results to enact unilateral carbon tariffs on imports?

Supporters also say that without a domestic US carbon tax, there will be “significant challenges”. They conclude that if such emissions data is used to inform a well-designed border-adjusted carbon tax, then the US would be on the right track to reaching its net-zero goals.

This bill has garnered support from climate activist organizations, trade organizations, and legislators, who see it as a way to promote cleaner manufacturing practices and strengthen international trade relationships.

However, PROVE IT has rightly faced opposition from libertarian groups and others who suspect that it will lead to future regulations: tariffs and taxes on carbon.

Some who oppose this bill see parallels to the Inflation Reduction Act (IRA), from which the collected environmental data was used to establish a tax on methane. They fear that a similar outcome would undoubtedly arise from the PROVE IT Act.

The bill is presented as an attempt to work with the European Union – the Carbon Border Adjustment Mechanism (CBAM). One of its supporters, Sen. Kevin Cramer (R-ND), has repeatedly argued for working with the European Union on climate policy. He wrote:

“We have an opportunity to counter Putin’s playbook with a bold initiative consistent with European priorities… One aspect of that initiative could be a joint trade mechanism between the United States and the European Union that levels a common carbon fee on imported goods.”

The article, “Why the PROVE IT Act Would Result in Carbon Taxes” (CEI, April 29, 2024) states that this bill (S. 1863) would not just collect information on the carbon intensity of goods but would also provide the framework for implementing future taxes on carbon, something that US citizens, already overburdened by the inflationary pressures arising from out-of-control spending, don’t need.

The author, Daren Bakst, is certain that the bill would lead to the creation of both a carbon tax on imports (tariff) and a domestic carbon tax.

Even though the bill’s supporters have advanced the myth that PROVE IT was not designed to institute a carbon tax, they believe such taxes are needed.

The fact that supporters of the bill, men such as Kevin Cramer and Chris Coons, consider PROVE IT as a tool to hold other countries accountable for their emissions indicates that this is a precursor to imposing carbon taxes.

Even though the bill’s supporters have advanced the myth that PROVE IT was not designed to institute a carbon tax, they believe such taxes are needed.

About half of this bill’s sponsors have also sponsored bills imposing carbon taxes on imports and domestic products.

Imposing a tariff on imports would weaken industry opposition to a domestic carbon tax, driven by trade law obligations and pressure from environmental groups.

Likewise, if domestic manufacturers are required to pay a domestic carbon tax, they would also want to see a corresponding tax on imports to “level the playing field.”

Thus, it seems likely that the PROVE IT Act could be a wolf in sheep’s clothing, a strategic move to build support for carbon taxes. Therefore, it would be a good idea for any legislator who opposes such taxes to reject the bill to avoid making this scenario possible.

The Institute for Energy Research (IER) agrees, stating that the PROVE IT Act is a “thinly veiled attempt to foist a domestic carbon tax and ‘border adjustments’ (tariffs, quotas, or both) on the US economy.”

PROVE IT would amount to the US version of an “UN-led initiative to politicize global trade to penalize CO2 emissions and thus energy and economic progress.” Other countries subject to such tariffs would retaliate, imposing similar tariffs on US exports.

As an exporter of oil and liquified natural gas, the US would come out as the loser in this bargain. This bill would thus politicize global trade, penalizing CO2 emissions and hampering energy and economic progress.

In addition to the imposition of taxes, this legislation would create a tremendous additional administrative cost of doing business. It also implies that carbon dioxide is a pollutant, which anyone with any understanding of the science knows is not the case.

IER considers PROVE IT a “Trojan horse” that “would lead to new taxes on Americans, drive up prices, punish energy use, and legitimize extreme climate policies.”

Hundreds of fascinating facts about the climate change scam can be found in Lynne Balzer’s richly illustrated book, Exposing the Great Climate Change Lie, available on Amazon and other booksellers.

See more here Climate Dispatch

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