Senate Republicans look for cover in carbon tariff push

By Emma Dumain, Kelsey Brugger | 10/27/2023 06:22 AM EDT

Backers say they’re laying the groundwork for a tariff by coming out strongly against a domestic carbon tax.

Sens. Kevin Cramer (R-N.D.) and Bill Cassidy (R-La.).

Sens. Kevin Cramer (R-N.D.) and Bill Cassidy (R-La.) during a conversation at the Capitol. Francis Chung/POLITICO

Ahead of new legislation that would impose a tariff on carbon-intensive imported goods, Sen. Bill Cassidy wants to send a message: It’s not a carbon tax.

That’s why the Louisiana Republican is sponsoring a resolution expressing disapproval for a carbon tax, specifically.

“People confuse the two, and we have to make sure there is no confusion,” Cassidy told E&E News on Thursday afternoon. “What we’re proposing is not a domestic carbon tax, and it is not intended to lead to a domestic carbon tax. [The resolution] makes that clear.”


This clarification underscores the political minefield ahead for Republicans on the concept of imposing fees on the heaviest polluters as a form of climate action, even as more Republicans are intrigued by the idea of boosting U.S. competitiveness against foreign adversaries like China. The European Union began implementing such a tariff this month in the form of the Carbon Border Adjustment Mechanism, or CBAM.

It also highlights anxieties that persist among conservatives. The chief worry is that bipartisan collaboration on bills linking carbon emissions to trade policy is the first step to introducing new taxes that could prompt companies to move overseas. There, energy production is typically dirtier, which would drive up greenhouse gas emissions.

Backers of the effort further acknowledge the need to educate and convince other Republicans on the concept of tying trade policy to emissions reduction goals.

Cassidy said Thursday he would be introducing the “Foreign Pollution Fee,” which he has outlined in concept as recently as last month in Foreign Affairs magazine, “very soon.” It would impose tariffs on carbon-heavy imports, much like a CBAM.

He explained he was using the new resolution, which “express[es] the sense of Congress that a carbon tax would be detrimental to the economy of the United States,” to “set the stage” for introduction of that larger bill.

Fourteen other Republicans so far have signed on to the anti-carbon tax resolution, including Sen. Kevin Cramer (R-N.D.), who has also said in the past he is working on CBAM legislation.

Cramer has also been working with Sen. Chris Coons (D-Del.) on S. 1863, the “Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency (PROVE IT) Act,” which would direct the Energy Department to study the carbon emissions of U.S. industrial products compared with the same products produced abroad.

Co-sponsors include Cassidy alongside other Republican Sens. John Boozman of Arkansas, Lisa Murkowski of Alaska and Lindsey Graham of South Carolina.

In the House, Reps. John Curtis (R-Utah) and Scott Peters (D-Calif.) are preparing companion legislation.

Cramer agreed that the resolution disapproving of a carbon tax was important political positioning — for Cassidy and for himself — and suggested that it would function as the GOP’s stake in the ground on a nuanced, and often misunderstood, topic.

“Putting out this release, and commenting on the domestic carbon tax and differentiating it, is an important step to clear the way for what the polluter’s tax would be,” Cramer said of Cassidy’s framework.

“I just think it would be counterproductive to have a domestic carbon tax, and I want to make sure people understand — particularly my constituents understand — I do not support a domestic carbon tax.”

‘They gotta do what they gotta do’

The “PROVE IT Act” is being embraced as a concept that could lay the groundwork for a carbon border fee without actually implementing one, making it palatable for those conservatives who are still wary about getting involved on climate issues.

It’s a bill around which members on both sides of the aisle have found common ground: Republicans and Democrats both say they want to ensure U.S. manufacturers are on a level playing field with countries like China.

From there, Republicans tend to play up the argument that U.S. production is far cleaner than its top competitors overseas, while Democrats stress the mechanism would help tackle greenhouse gas emission worldwide.

Senate Budget Chair Sheldon Whitehouse (D-R.I.), a climate hawk and a carbon tax advocate who has been working with Cassidy, Cramer and Coons on various carbon tariff proposals, said it was obvious to him what his Republican colleagues are up to now with the anti-carbon tax measure.

“They are trying to protect their flank as they work toward a carbon border tariff,” he said. “I think it’s a sort of marker for them.”

At the same time, Whitehouse expressed little concern that the new resolution would derail the ongoing bipartisan talks about how to tackle rising emissions around the world.

“They gotta do what they gotta do,” he said of the Republicans. “As long as we’re talking and as long as we’re moving forward, that’s what matters.”

Carbon tax backers push back

Greg Bertelsen, CEO of the Climate Leadership Council who has been working with lawmakers on carbon tariff legislation, likewise said he was unbothered by the development.

“From our perspective, this is nothing new,” he said. “Sens. Cassidy and Cramer have said, I believe, all along that they are not supportive of a domestic carbon tax. We don’t see eye to eye on every policy with every member of Congress, so what we’re focused on is where we do agree, and … we very much agree that there’s an enormous opportunity at the intersection of climate and trade to lower global emissions, enhance U.S. competitiveness [and] improve our geopolitical interests abroad.”

Alex Flint, president of the Alliance for Market Solutions — which advocates for a carbon tax — said in a statement that such a tax continued to be the best path forward regardless of suggestions otherwise.

“There are only three policy options to reduce carbon pollution: regulations, subsidies or a price on emissions,” he said. “Regulations are horribly inefficient, and we’re $34 trillion in debt and can’t afford subsidies. This is why economists and people thinking long term … recommend a carbon tax.

“It’s the only way to align climate and fiscal realities,” Flint continued. “We must stop nibbling around the edge, and a carbon tax can help us do that.”

This story also appears in Climatewire.