June 22, 2022

Time to Wake Up #284 – A Carbon Border Adjustment

Mr. President, I rise now for the 284th time with my increasingly tattered and battered ‘‘Time to Wake up’’ poster to urge this Chamber to wake up on the issue of climate change.

Human beings dumped 36.3 billion tons of greenhouse gases into the atmosphere last year—last year. After all our big talk, after all the plans and the COPS and the commitments, 36.3 billion tons. That is the highest total ever recorded. We are not doing any better. We continue to do worse, and here in Congress, we continue to do nothing. We have seen this coming for many years. And even with all that warning, nothing. NOAA reports there is currently more carbon dioxide in the atmosphere now than at any time during the last 4 million years.

Humankind has never experienced what we are putting ourselves through. Here is a look at it. Over centuries, wobbling, wobbling, back and forth quite steadily. And now—whoops—and all the way up to where we are, out of the historic range of this planet back into geological time.

All that carbon pollution has us hurtling toward climate catastrophe. With every ton of carbon dioxide we add, comes a higher risk of destructive changes to our world: ever-stronger hurricanes, rising seas, severe droughts, flooding, heat waves, disease, hunger, and more. We have a simple choice: We act swiftly to address the carbon pollution scorching our planet or we tip our climate over the edge into a cycle of destruction mankind cannot halt.

As we disrupt essential planetary operating systems, we face another problem: American deindustrialization and the offshoring of jobs in much of our manufacturing base.

After China joined the World Trade Organization back here in 2001, the United States lost almost 6 million manufacturing jobs. It was a complete bloodbath. Communities across America were hollowed out as factories closed and workers were laid off losing union jobs that helped workers support their families and enjoy a good wage and a decent standard of living.

Our trade deficit blew up, especially for manufactured goods. In 2001, our trade deficit in manufactured goods topped $250 billion. By 2020, it had more than tripled to almost $900 billion.

Then came the COVID–19 pandemic and exposed the fact that we no longer make so much upon which modern life depends. First it was the masks and the protective gear for medical professionals on the frontlines; then shortages came to everything from patio furniture to auto computer chips, bicycles, garage doors, and much more.

Well, what if—what if—it turned out there was a solution to both problems, a policy that would simultaneously drive down carbon pollution worldwide and help reshore American manufacturing? Well, it turns out there is such a solution, and it is called a carbon border adjustment. With Senators Coons, Schatz, and Heinrich, I have introduced one here in the Senate.

The fact is that American manufacturers are way less carbon-intensive than other competitors. On average, we are nearly 50-percent less carbon-intensive than our trading partners. Here is a list of some of our majors: China, 3.2 times more efficient; Mexico, 1.4 times more efficient; India, 3.8 times more efficient. So if we level the playing field about carbon emissions economy to economy, we win against carbon-intensive nations like China and India. And that is fair. A steel plant in Shanghai shouldn’t be able to pollute for free and undercut plants in Pittsburgh that make better steel with less pollution.

My border adjustment fixes that problem. Carbon-polluting goods from abroad, fossil fuels, refined petroleum products, petrochemicals, fertilizer, cement, steel would be tariffed on the carbon intensity of their industries. This means that if you are a carbon-intensive cement factory in Mexico, you pay or you invest in technologies to lower your carbon intensity to match that cleaner plant across the border in Texas. That is a powerful incentive to reduce global emissions and a big boost to U.S. companies competing against foreign climate cheaters.

The tariff revenues fund a competitive grant program for carbon-emitting U.S. industries to help them invest in the new technologies necessary to reduce their own carbon intensities.

Developing countries didn’t get us into this mess, and they are getting clobbered by climate change, so we also direct some revenue to the State Department to support decarbonization projects in those countries.

To make this work, we need to hold American companies to the same standard as we do overseas, so we the standard at our U.S. average emissions for the industry. So all you have to do to pay nothing is be better than average. And if you are below average, all you have to do to pay nothing is to clean up your act to where half your industry already is. We also give clear targets to industries for future baseline carbon intensity because that is what industry wants—clarity, certainty to know where the goalposts are.

Look at an example. Under my bill, the average or better American steel mill would pay no charge at all because it is better than average. The below average steel mill might pay $5 to $10 per ton of steel produced, a $5 to $10 per ton incentive to clean up its mill. But here is the really good part: Imports from a Chinese steel mill, more like $110 per ton. The below average U.S. steel mill, $5 to $10; the Chinese, $110. That will make Americans feel more competitive compared to polluting Chinese imports, and then buyers will beat a path to our door.

We might as well get ready with a U.S. carbon border adjustment because the European Union Parliament is passing a carbon border adjustment of its own. Member states will vote on that proposal later this year. When it takes effect, American companies will pay a carbon tariff to European governments—unless we have one of our own.

Now, where we want to be is for the EU, the UK, Canada, Mexico, Japan, perhaps South Korea, all with common carbon border adjustments, creating a common carbon pricing platform across all those major economies so that we move toward decarbonization, and more importantly, the rest of the world that wants to trade with the United States, with the UK, with the EU, has to clean up its act. They would need to decarbonize and fast to have any hope of competing.

Trying to convince Chinese manufacturers to clean up their act out of the goodness of their hearts, perhaps, is a bit of a fool’s errand. Putting a tariff on their goods so that they have to pay if they don’t clean up their act? Now, that is how you get things going.

Unfortunately, this is on us now—on Democrats. There are too many Republicans who are just in tow to the fossil fuel industry to help. And, of course, you can’t talk about anything having to do with climate change without the dark money scoundrels, propped up by the fossil fuel industry, to come and cause mischief.

They are even advertising against my bill. Here is an advertisement against it paid for by AG Conservatives—AG Conservatives. Well, assume that this is a real organization, which it isn’t. It is a front group paid for by dark money that hides who the real donors are— just a mouthpiece for somebody who doesn’t want to identify themselves.

But why would an agriculture group want to hurt manufacturing? It doesn’t make any sense. Why would they not want American manufacturing to have that advantage against their Chinese competition? Why would they be asking people to vote no on a carbon border adjustment?

And by the way, there are a lot of products where agricultural products form the feedstock for a later manufacturing product. And if we are bringing manufacturing to the United States because we are favored versus dirty polluting foreign manufacturers, why would they not want that to happen? And where is agriculture in this fight anyway when this is mostly about manufacturing? Where, for American agriculture, is the downside?

If you think it through, it actually doesn’t exist, which helps confirm to me that behind this phony front group is probably the fossil fuel industry pretending that it is some agriculture group. If that were agriculture, that was agriculture from millions of years ago before it all went down to the bottom and got compressed and rotted and turned, after millions of years, into oil. That is the agriculture. So that is what we are up against.

That is why Democrats are going to have to do this. The fossil fuel money that is driving the other party makes it impossible for bipartisanship to work.

We have a shot in reconciliation to pass a serious climate bill—a real one— and we should make a carbon border adjustment a central component of that bill. It is a win-win-win. We compete on a playing field with a huge built-in advantage for American manufacturing; we spare ourselves carbon tariffs from the EU; and we relentlessly, with economic pressure and power, drive down carbon pollution across the biggest polluters around the globe—a win-win-win.

The choice is clear. Let’s win.

I yield the floor