Representative Curtis and Representative Peters introduced the House version of the PROVE IT Act

Today, Representatives John Curtis (R-UT) and Scott Peters (D-CA) introduced the bipartisan PROVE IT Act in the House. This House version of the bill is a companion of the Senate version introduced by Senators Chris Coons (D-DE) and Kevin Cramer (R-ND) last year. 

The House bill has gained bipartisan support, with a total of 19 additional co-sponsors, 9 Republican co-sponsors, including Climate Solutions Caucus (CSC) Co-Chair Andrew Garbarino (R-NY), Conservative Climate Caucus Co-chair Lori Chavez-DeRemer (R-OR), and Representatives Maria Salazar (R-FL), Juan Ciscomani (R-AZ), and David Valadao (R-CA), and 10 Democratic lawmakers such as CSC Co-Chair Chrissy Houlahan (D-PA), Ranking Member of the Energy Subcommittee Diana DeGette (D-CO) and New Democrat Coalition Chair Annie Kuster (D-NH).

Representatives Curtis and Peters’ introduction of the House bill marks an important milestone in the U.S. Congress as the PROVE IT Act is now a bipartisan and bicameral bill seeking to provide information about carbon emissions in international trade.

The PROVE IT Act is essential to studying product-level carbon emissions across major industries. It will enable the U.S. to be better at measuring emissions data, calculating, reporting, and verifying emissions, which is crucial for designing and enacting climate policies. 

What does the bill propose?

The Niskanen Center published a detailed legislative analysis of the Senate proposal, which also gives an overview of what’s in the House version of the bill. 

The legislation would request the Department of Energy to conduct a carbon intensity study on products across various industries such as fossil fuels and manufacturing. The study would cover the United States and other major economies such as member countries of the G7. 

The bill seeks to examine the carbon emissions associated with producing a certain product and compare the U.S.’s product-level carbon intensity performance against other countries.

What is the implication of the legislation?

The bill includes no carbon tariffs, tax, or border adjustments. It focuses on commencing a carbon emissions study. The House version of the PROVE IT Act includes explicit language prohibiting the bill from providing authority to any federal agency to enact a domestic carbon tax or fee or new reporting requirement for domestically manufactured covered products.The House bill language mirrors an amendment adopted during the Senate Committee on Environment and Public Works markup of the Senate bill earlier this year. 

It is unclear how the carbon intensity study results will be used if the bill becomes law. Since the bill explicitly prohibits enactment of a domestic carbon tax, it’s unlikely that the PROVE IT Act would lead to any sort of U.S. domestic carbon price. It’s more likely that the carbon study results will be used to levy tariffs on carbon-intensive goods imported from other countries. 

There has been strong momentum in Washington recently toward stand-alone carbon tariffs. In April, the Biden Administration launched a climate and trade task force, which is looking to enact carbon tariffs on imported goods to encourage decarbonization in internationally traded goods. Democratic and Republican lawmakers have also introduced carbon tariff bills to achieve the same goal. 

The premise of the carbon tariffs approach is the belief that the U.S. is leading in industrial decarbonization globally. The Niskanen Center released a study last year showing that while the U.S. is much less carbon intensive than major economies such as China and India, it has significant room to improve compared to other peers such as the EU. The Niskanen study indicates the importance of the PROVE IT Act and that much more work needs to be done in product-level carbon emissions study. 

Conclusion

The PROVE IT Act is an important bill enabling the U.S. to improve its understanding and develop its data on product-level carbon emissions. This would significantly contribute to developing the standards and methodologies for measuring carbon emissions. It will also be critical to enact a border-adjusted carbon tax when there is political momentum to incentivize domestic decarbonization effectively.