The playbook for growing government generally begins with a study—which is advertised as disinterested, fair, and not far-reaching. But then the preordained finding emerges: Market failure exists and requires government intervention, guided by experts. The result, if followed, is a new government program that is complex, manipulated, and disliked by both friend and foe. But rather than respond with a timely repeal, and lessons learned, a tyranny of the status quo takes hold.
Welcome to the PROVE IT Act of 2024, a thinly veiled attempt to foist a domestic carbon tax and “border adjustments” (tariffs, quotas, or both) on the U.S. economy.
The formal title is the Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency Act of 2024 (S.1863). As reported to the Senate in January:
This bill directs the Department of Energy (DOE) to conduct and report on the results of a study regarding the greenhouse gas emissions intensity of certain products produced in the United States compared to the greenhouse gas emissions intensity of products produced in certain other countries. In addition, DOE must establish a public online database that contains such comparisons and product emissions intensity data.
The Act seeks to block “dirtier” imports. Senate Sponsor Chris Coons (D-DE) and Kevin Cramer (R-ND) state:
American manufacturing and production are among the cleanest in the world. The PROVE IT Act would put high-quality, verifiable data behind these practices and bolster transparency around global emissions intensity data to hold countries with dirtier production accountable.
The probable outcome of the proposed legislation—and the very reason to defeat it—can be inferred from this meant-to-be-reassuring language:
Nothing in this Act provides any new authority to any Federal agency—
- to impose, collect, or enforce a greenhouse gas emissions tax, fee, duty, price, or charge; or
- to establish a new mandatory reporting requirement (including by regulation) with respect to the domestic production of any category of covered products.
That is what they always say when taking the first step on the road to serfdom.
Mandatory Oil Import Program
An obvious precedent for PROVE IT can be found in the history of government intervention in energy. This experience cautions against tariffs or quotas on imported energy, either explicitly or implicitly via energy-intensive products.
Consider the Mandatory Oil Import Program of 1959 (MOIP), which followed a five-year “voluntary” program, both of which eschewed a free markets resolution of the alleged problem.
MOIP began with special-interest pleas and, yes, a government study. Then came federal “jawboning” to reduce oil imports, no new coercive authority for anyone. But what do you know: “voluntary” measures proved inadequate, so a presidential executive order launched the 14-year mandatory program. In the end, very few would be pleased with the results.
Here is the chronology leading to MOIP:
- President Eisenhower appoints a Cabinet Committee on Energy Supplies and Resources Policy to study petroleum supply and demand.
- The Committee recommends that oil imports be kept at 1954 (current) levels and hints at mandatory measures.
- The Reciprocal Trade Agreements Extension Act of 1955 authorizes standby authority to curtail oil imports.
- The Office of Defense Mobilization (ODM) requests import data from the major importing companies, followed by “voluntary” import recommendations.
- A second ODM study in 1957 finds a national security threat from (still rising) oil imports.
- A formalized “voluntary” program under the newly formed Oil Import Administration (OIA) covers all oil imports in the five oil planning districts (formulated for World War II planning).
- The Trade Agreements Extension Act of 1958 requires the President to ensure compliance with ODM recommendations.
- The same year, the Buy American Act is applied to oil purchased by the government via a certificate of compliance from the OIA.
- ODM and the Special Committee to Investigate Crude Oil Imports declare a national security emergency and recommend mandatory controls.
Presidential Proclamation 3279, “Adjusting Imports of Petroleum and Petroleum Products into the United States,” implements Eisenhower’s mandatory oil import controls. Licensing procedures are formulated, and an Oil Imports Appeals Board is established to join the OIA.
The history of MOIP has been the subject of many books and articles. Its beginning, evolution, and termination (in 1973) is a case study into the perils of government intervention into complex economic interactions.
Conclusion
Consider the parallel roads of MOIP and PROVE IT. Substitute “climate emergency” for “national security.” Replace the Office of Oil Imports with a to-be Office of Carbon Imports—and the Oil Import Administration with a Carbon Import Administration.
The road to serfdom can begin with a study and assurances of “no new authority.” PROVE IT should be understood as the first step on that road–and never see the light of day.
