Power Pole (File)

Energy Organizations Oppose Bill Dubbed ‘PROVE IT Act’ Seen As Precursor To Carbon Taxes

Power Pole (File)
Power Pole (File)

A coalition of dozens of prominent energy and free-market organizations have come together to vehemently oppose a piece of legislation they believe would pave the way for the imposition of carbon taxes on both imported and domestic goods.

The PROVE IT Act, currently advancing through Congress, has drawn the ire of this diverse group, which argues that the bill’s provisions would effectively remove roadblocks to the implementation of such economically damaging tax schemes.

The PROVE IT Act, or the Promoting Reliable Oversight of Vital Energy Infrastructure Transparency Act, requires the Department of Energy to collect, analyze, and regularly update data on the carbon intensity of both domestic and foreign goods. Supporters of the bill argue that this information would help inform policy decisions related to emissions reduction.

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However, the coalition of energy organizations sees this as a thinly veiled attempt to lay the groundwork for carbon taxes.

The coalition’s primary concern is that the data collected under the PROVE IT Act would be used to impose new “climate” taxes, similar to the recently enacted federal methane tax included in the Inflation Reduction Act. They argue that this would lead to a two-pronged assault on American consumers and businesses—a carbon tax on imported goods and a corresponding domestic carbon tax.

The coalition warns that these taxes would disproportionately impact low-income households, as the increased costs of goods and energy would eat into their already-strained budgets. Additionally, they argue that a carbon tax on domestic industries would undermine their competitiveness, potentially leading to job losses and further economic hardship.

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The coalition also expresses concern that the PROVE IT Act embraces the European Union’s approach to climate policy, which includes a carbon border adjustment mechanism and a domestic carbon pricing scheme. They view this as a concerning development, as they believe the EU’s climate policies have been disastrous for both energy affordability and economic prosperity.

Excerpt from CEI House PROVE IT Act Coalition Letter
Excerpt from CEI House PROVE IT Act Coalition Letter

Ultimately, the coalition argues that the PROVE IT Act would lead to a significant increase in the cost of energy and other essential goods, thereby undermining the affordability and reliability of modern life. They assert that this would be one of the most significant threats to energy and economic prosperity in recent memory, and urge legislators to reject the bill.

The coalition’s opposition to the PROVE IT Act is not solely based on partisan lines. They note that the U.S. House of Representatives has recently passed a bipartisan resolution expressing opposition to domestic carbon taxes and explaining their harmful effects.

The coalition’s position is clear: Americans deserve access to affordable and reliable energy, not federal tax schemes that treat energy use as a sin. They argue that the PROVE IT Act would lead to precisely the kind of burdensome taxation that the public has repeatedly rejected.

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Given the coalition’s strong opposition to the PROVE IT Act, they are urging legislators to reject the bill in its entirety and ensure that it is not included, in any form, within other legislation. They view this as a critical step in protecting American consumers, businesses, and the broader economy from the damaging effects of carbon taxes.

The coalition also argues that the imposition of a carbon tax on imported goods would inevitably lead to the implementation of a corresponding domestic carbon tax. This, they contend, is due to both trade law obligations and the likelihood of environmental groups and others advocating for similar greenhouse gas reduction commitments from domestic industries.

Moreover, the coalition expresses concern that the PROVE IT Act could be a step towards the creation of a “carbon club” of countries that join together to impose carbon taxes in some fashion. They view this as an undesirable outcome, as it would further entrench the EU’s approach to climate policy, which they believe has been harmful to both energy affordability and economic prosperity.

Ultimately, the coalition’s position is rooted in the belief that Americans deserve access to energy that is both affordable and reliable. They argue that the PROVE IT Act, with its potential to lead to carbon taxes, represents a significant threat to this fundamental need, and they are calling on legislators to reject the bill and protect the interests of American consumers and businesses.

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