WASHINGTON — Today, U.S. Senator Chris Coons (D-Del.), co-chair of the bipartisan Senate Climate Solutions Caucus and a member of the Senate Foreign Relations Committee, and U.S. Representative Scott Peters (D-Calif.), a member of the House Energy and Commerce Committee, unveiled new legislation to establish a border carbon adjustment (BCA) on polluting imports. Imposing a BCA will protect U.S. jobs, reduce global emissions, and drive resilience in frontline communities.

A BCA is a trade tool that levels the field for domestic manufacturers by imposing a fee on carbon-intensive products when they reach the border. This will incentivize investments in cleaner technologies and account for the cost of complying with U.S. laws and regulations on greenhouse gas emissions. The BCA will also provide a flexible framework for more ambitious climate policy to come.

“International cooperation will be critical to reaching net-zero emissions, and I applaud the Biden administration’s reengagement with our partners around the world to address climate change,” said Senator Coons. “We have an historic opportunity to demonstrate that climate policy goes hand in hand with providing economic opportunities as U.S. innovators develop and scale clean energy technologies. The FAIR Transition and Competition Act will complement our efforts to reduce emissions at home, ensure the United States is at the table for reframing trade around climate, and provide resources to support vulnerable communities and energy innovation as we build back better.”  

“I reject the idea that we should weaken our environmental standards to compete with other nations. The U.S. will remain a global economic leader by raising our ambition to meet the historic moment—to address climate change, to create millions of good-paying jobs, and to reduce economic inequality—not by lowering our standards and defying our responsibility to be a leader in providing safe, clean, and reliable energy,” said Representative Peters. “The FAIR Transition and Competition Act will facilitate a race to the top among U.S. companies to produce the next generation of clean energy and technology. The move would ensure we remain a key player in international cooperation on climate action and show the world that the U.S. is fully committed to addressing the climate crisis at home and abroad.”

“To ensure that our clean energy future is Made in America, we need a level playing field for American manufacturers who operate some of the least polluting facilities in the world,” said Collin O’Mara, President and CEO of the National Wildlife Federation. “Senator Coons and Representative Peters’ visionary legislation will recognize the climate leadership of American companies, while holding foreign polluters accountable, which is essential to creating good paying manufacturing jobs at home and tackling the 20% of emissions from the industrial sector around the globe.”

“Climate change is a global issue, and policies that create a level global playing field—and ensure that emissions reductions in one country aren’t erased by increases elsewhere—are critical.  On a level playing field an economy-wide price on carbon could seize an opportunity to harness market forces to unleash American innovation to reduce emissions, create clean energy jobs and usher in a new, prosperous economic era. We commend Sen. Coons and Rep. Peters for advancing the discussion on a key component of a carbon pricing framework, and look forward to evaluating this and other proposals as part of an effort to establish a comprehensive, market-based, economy-wide approach for emissions reductions,” said members of the CEO Climate Dialogue—a broad-based coalition of 27 leading businesses and institutions representing sectors across the U.S. economy — oil and gas, utilities, agriculture and food, automotive, chemicals, manufacturing, financial services, and environmental advocacy — united in their recognition of the economic, health, and environmental risks posed by climate change.

"The members of the American Sustainable Business Council are leaders when it comes to taking action on climate change.  As we move towards complete decarbonization of our economy, their efforts should be rewarded not penalized. The FAIR Transition and Competition Act guarantees that American businesses are not undercut by polluting industries beyond our borders,” said David Levine, Co-founder and President of ASBC. “By leveling the playing field, we will be able to invest back into communities that have historically carried the burden of environmental injustice with new workforce development programs and innovation breakthroughs. By working with the international community and our private sector, we will be able to rise to the moment and tackle the climate crisis.” 

“Global problems require global solutions. This is why Citizens’ Climate Lobby is excited to see the introduction of the Fair, Affordable, Innovative, and Resilient Transition and Competition Act introduced by Senator Coons and Representative Peters,” said Dr. Danny Richter, Vice President for Government Affairs at the Citizens' Climate Lobby. “The introduction of this bill speeds up the global discussion about accountability for polluters regardless of where they are located. Polluters should pay, but they should not have to pay twice for the same pollution. This bill is particularly well timed with the release of details to the EU’s carbon border adjustment mechanism. The prospect of the two largest economies in the world demanding accountability for carbon pollution at the same time should be a cause of celebration for climate advocates everywhere. Important details with respect to the WTO still need to be resolved, but there can be no doubt that this is a positive contribution to the climate discussion.”

"State and local governments need investments to increase community resilience to climate coastal hazards. In coastal communities, sea level rise and increased coastal storm intensity and related storm surge are causing coastal flooding and inundation and exacerbating erosion," said Derek Brockbank, Executive Director of the Coastal States Organization. "Additionally, underserved and disadvantaged communities are particularly hard hit by these increasing climate induced coastal hazards. The Resilient Communities Grant Program would provide coastal communities with critical resources necessary to prepare for, and adapt to, increasing climate induced hazards."

“As countries advance increasingly ambitious climate policies, they invariably hit a stumbling block: the risk that domestic manufacturing will relocate to countries with weaker or no climate policies,” said Dr. Michael Mehling, Deputy Director of the Center for Energy and Environmental Policy Research (CEEPR) at the Massachusetts Institute of Technology (MIT). “The FAIR Transition and Competition Act can help preempt such concerns by introducing a border carbon adjustment that ensures emissions will not simply be outsourced and occur elsewhere.”

The FAIR Transition and Competition Act of 2021 will protect U.S. jobs, reduce reliance on foreign energy sources, and drive climate innovation and community resilience domestically by:

  • Recognizing the costs incurred by U.S. companies in producing cleaner products due to emissions-related laws and regulations;
  • Accounting for those costs by levying a fee on imports in carbon-intensive, trade-exposed sectors;
  • Supporting international climate cooperation and the reframing of trade around climate;
  • Directing revenue to the development and commercialization of high-impact emissions reductions technologies; and
  • Creating a new Resilient Communities Grant Program for states to support climate adaptation, transition assistance, and the communities facing the most severe impacts of climate change and historic pollution.

Bill text is available here. A one-pager is available here.

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