Dear Chairman Carper, Ranking Member Capito, and Members of the Committee:

We would like to thank the Committee on Environment and Public Works for providing the opportunity to express our views regarding the PROVE IT Act. A study to increase transparency on greenhouse gas emissions intensity for specific products may seem innocuous but it presents problems. In particular, we are writing to discuss the major methodological problems with measuring greenhouse gas emissions intensity, the extension the PROVE IT Act provides for executive overreach, and the costs that would be associated with any subsequent carbon tariff or tax.

Measuring embodied emissions is not straightforward and there is no standard methodology. Even calculating “domestic carbon emissions” is different from “embodied carbon emissions consumed domestically.” The PROVE IT Act seeks to track emissions at the product-level. However, there are a multitude of standards and frameworks that use different scopes, origins, and stages of production to measure embodied emissions. Further, emissions are not readily observable, so there are major difficulties and differences in methodology for calculating embodied emissions at the industry level, which are even worse at the product-level. Methodologies for emissions calculations are still in their infancy, thus any policy response based on such calculations is imprudent.

Additionally, important questions must be raised about how such a study and database would be used. The PROVE IT Act covers products based on their Harmonized Tariff Schedule classification, laying the groundwork not only for a carbon tariff but a domestic carbon tax. The application of a carbon tariff requires a corresponding domestic carbon tax to be compliant with the World Trade Organization. Thus, arming lawmakers with an emissions database lays the groundwork for both a carbon tariff and domestic carbon tax.

The use of this study is dangerously vulnerable to political influence and ripe for favoritism. Giving unelected bureaucrats enormous power over Americans by providing executive agencies the authority to judge the data businesses submit will present opportunities for abuse, for example by making some imports look more carbon intensive than they are in reality. While some policymakers wish for such a database to provide evidence against trading partners conducting similar studies, since there is no standard methodology for measuring greenhouse gas emissions and no forum to settle disputes about intensity, the most likely outcome would be a tit-for-tat trade war, particularly if a carbon tariff and tax follow.

To read the full Statement for the Record, download the PDF below.