Democrats are by and large lamenting the incoming Republican governing trifecta and what it could mean for the four years of climate policy actions.
But some environmental advocates and congressional Democrats see a glimmer of hope for the prospects of advancing one very narrow but significant policy: carbon tariffs — or something like it.
Over the past two years, bipartisan interest has grown around tying climate action to trade policy, leading to the introduction of a flurry of bills that would take different approaches to this idea.
That momentum has largely been stalled by opposition from conservatives who fear these bills would be weaponized by a Democratic administration intent on imposing a carbon tax.
With Republicans now set to take over the White House, House and Senate next year, proponents say there is reason for optimism that this anxiety will no longer be relevant, as a carbon tax is widely opposed within the GOP.
“I do think that some who expressed concern about that as a potential pathway could have their concerns allayed,” said Sen. Chris Coons (D-Del.).
He and Sen. Kevin Cramer (R-N.D.) are pushing S. 1863, the “Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency (PROVE IT) Act,” which calls for a study of the carbon intensity of U.S products. The idea is to show how U.S.-made products are more climate-friendly than those of foreign competitors.
“There are strong supporters of the ‘PROVE IT Act,’ and I am hopeful there is a way Trump’s trade agenda can align with the concerns about emission intensity of industrial goods, but we’ll have to see,” said Coons.
President-elect Donald Trump set expectations during his successful reelection campaign that he would seek to implement a vast array of tariffs as a means of bolstering U.S. manufacturing.
Vice President-elect JD Vance, while debating his Democratic opponent in the fall, argued there should be incentives for producing certain products domestically — like solar panels — because the U.S. has a cleaner standard than countries like China.
The concept of a carbon tariff has also been specifically endorsed by Trump’s former U.S. Trade Representative Bob Lighthizer, who has remained in the president-elect’s orbit and may return to the administration.
“’PROVE IT’ is as America First as you can possibly get,” Cramer said last week. “I think we can make that case depending on who’s listening.”
Information from the study would be useful as the European Union and the United Kingdom plan to enact carbon tariffs in the coming years. The White House this fall announced a pilot project to study the carbon intensity of a much smaller subset of industrial products as the “PROVE IT Act,” but the future of that initiative is now uncertain. A spokesperson for the Department of Energy, which is leading the project, said Monday its planned webinar to tell “stakeholders” more about the initiative “has not yet been scheduled.”
Zach Friedman, senior director for federal policy at Ceres — a nonprofit which advocates for sustainability measures within the business sector — told POLITICO’s E&E News the group is already upping its ambitions beyond a simple study.
“We’ve moved beyond ‘PROVE IT,'” he said. “It’s great to have data but we need to protect and strengthen American manufacturing.”
Friedman said Republicans could also use carbon tariffs to raise revenue to pay for their planned tax bill, which may repeal some green energy incentives in the Democrats’ 2022 climate law.
Trump ‘needs to make the case’
George David Banks, a Trump adviser during his first term in office who has since been working with lawmakers and outside groups on developing climate trade policies, predicted the center of activity would in the next Congress will be around legislation from Sen. Bill Cassidy (R-La.), S. 3198, the “Foreign Pollution Fee Act.”
Cassidy’s bill would slap a fee on imported goods that are dirtier than their domestic counterparts and is widely seen as a framework designed to specifically confront China, a notorious polluter that isn’t penalized in trade relationships for being so.
It would not impose a fee on products made domestically. The bill also would not call for a domestic price on carbon. Both are policies many Democrats and greens embrace.
Still, the legislation would amount to a significant step in the fight against climate change, and Shuting Pomerleau, director of energy and environmental policy at the right-leaning American Action Forum, predicted Democrats would “probably be willing to take the win” if the “Foreign Pollution Fee Act” became the consensus climate and trade proposal.
Rep. John Curtis (R-Utah), who co-sponsored the House version of the “PROVE IT Act,” H.R. 8957, will be in the Senate next year and said carbon tariffs could be an area ripe for bipartisan agreement.
“Tariffs are a big deal to [Trump], and I would love to know if there’s an intersection between a border adjustment and what he is proposing,” said Curtis. “That could be a very interesting point at which Republicans and Democrats could come together … and I think a lot of good can come from that.”
Cassidy has been hard at work laying the groundwork for that outcome. In October, he convened former Trump administration officials, business leaders and researchers for a daylong energy summit in Baton Rouge, Louisiana, to discuss themes like “threats to global trade and energy security,” “supporting accountability and fair competition” and of course the “Foreign Pollution Fee Act.”
Back on Capitol Hill last week, Cassidy said he was continuing to work on getting his bill “in a good place,” which would likely have to require picking up more cosponsors.
So far, the only public supporters in the Senate are himself and Sen. Lindsey Graham (R-S.C.). A third original co-sponsor, Sen. Roger Wicker (R-Miss.), took his name off the bill following near-immediate conservative blowback.
Ultimately, Banks said, the ability to move any of these policies in the next Congress will be dependent on who Trump picks to lead the Treasury Department and serve as U.S. trade representative and how much attention the incoming administration gives to this issue. The “PROVE IT Act” could still emerge as an important tool.
“I still think if you were to have the White House argue, or make the case to congressional Republicans, that they need the data in order to push back on the EU [Carbon Border Adjustment Mechanism] and similar policies that pop up around the world, I think that will increase support for it,” said Banks. “The administration probably needs to make the case.”
This story also appears in Climatewire.
