Earlier this year a bill known as the Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency Act (PROVE IT) was passed in the Senate Environment and Public Works Committee (EPW). Last week, the House introduced its own version of PROVE IT.
The act calls for a Department of Energy (DOE) study of the carbon intensity of nearly two dozen products made, mined, or refined in the United States and certain foreign countries including all major trading partners. But the data obtained could easily be used to implement a carbon tariff and eventually a domestic carbon tax. Such a maneuver has actually happened before.
When the Inflation Reduction Act of 2022 was partisanly passed with no Republican support, it contained a provision that created a Methane Emissions Reduction Program which imposed a first-ever climate tax on methane gas emissions from oil and gas companies. The move was made possible because the Environmental Protection Agency had already maintained the necessary database for this to occur. Said database was not originally intended to implement taxes; however, in the end, it created the pathway.
A DOE study provides the same slippery slope to enacting carbon taxes on various goods utilized by everyday Americans.
When deliberating PROVE IT in the EPW committee, Ranking Member Capito (R-WV) proposed an amendment that would prevent the use of the Act’s emissions data in future reconciliation bills to implement carbon tariffs or taxes. All nine committee Republicans voted for the amendment; all ten Democrats, against. EPW Chairman Carper (D-DE) explained that he could not support her amendment because it “prohibits any revenue measure based on the greenhouse gas emissions associated with commodities or products.” In essence, those against the amendment did not want to add something that would hinder the very tax they claim the Act does not facilitate.
Supporters argue that the bill would merely hold foreign nations accountable for their emissions. But how does data hold anyone accountable? Only if the data is used to enable a tax on greenhouse gas emissions. Senate Cosponsor Kevin Cramer (R-ND) once stated, “It’s easier to take a second step once you’ve taken a first step.” PROVE IT is step one.
Several in favor of PROVE IT are also supportive of a carbon border adjustment mechanism (CBAM), having introduced such proposals in the past. The European Union is the first to create a CBAM which includes a carbon tax on imports as well as domestic carbon pricing. Several officials in Congress are all too eager to embrace Europe’s failed environmental policies.
Once a carbon tariff is in place, a domestic carbon tax is sure to follow. And while currently only 22 products are covered under the Act, the gates are wide open for further additions.
So when the sponsors and promoters of this bill say it will not create a tax, don’t believe them. PROVE IT can and will lead to carbon taxes. And carbon taxes are not what Americans nor the economy need.
Any type of carbon tax would be passed along through increased prices. Tariffs are not a tax on foreign producers but a tax on domestic consumers; companies will only raise their prices on goods and services to help absorb the additional costs. Many folks are already struggling with record-high inflation.
More expensive goods are detrimental to any economy because it discourages buying products due to decreased purchasing power. Families and organizations will have to continue to tighten their wallets, choosing to forego various commodities that no longer fit within budgets. And the poor are disproportionally affected because they struggle the most to cover basic necessities.
This type of legislation only serves to punish the use of fossil fuels, which continue to make up more than 80 percent of the world’s energy. We rely on coal, natural gas, and petroleum to power our vehicles, regulate the temperature in our homes throughout the year, grow our food, ship countless goods, and basically keep people alive. That amount of fossil fuel usage is not changing any time soon.
It would be a terrible shame if the PROVE IT Act proved true the concerns expressed in last year’s Senate resolution calling for a rejection of any and all carbon taxes; the taxes “would be detrimental to the families and businesses of the United States while severely harming the economic and national security of the United States.” It would certainly make liars out of those who signed it.
Kristen Walker is a policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.theamericanconsumer.org or follow us on Twitter @ConsumerPal.