On The Trail: The Candidates’ Stance on Energy and the Environment
by Andrew Foss on October 29, 2008 in Features
In this year’s presidential race, energy and the environment are key issues for the candidates. While Senators John McCain and Barack Obama agree on the need for new policies, their proposals differ in significant respects.
Energy Independence. Citing national security concerns, both candidates are seeking to reduce U.S. dependence on foreign oil. McCain wants to reduce oil imports primarily by increasing domestic energy production. Although his proposal to expand offshore drilling would create jobs, it would have little impact on the amount of U.S. oil imports or the price of oil, according to the Energy Information Administration.
Obama, however, is seeking to reduce oil consumption. His plan would accelerate the deployment of advanced vehicle technologies, particularly plug-in hybrids. Championing specific technologies is risky, however. Given the rapidity with which technology changes, they may not be the best option going forward.
Climate Change. Both McCain and Obama support a cap-and-trade program to limit greenhouse gas emissions across all sectors of the economy. In a cap-and-trade program, the government caps total greenhouse gas emissions and allows participating companies to trade emission allowances.
McCain is seeking to reduce emissions by 60 percent (below 1990 levels) by the year 2050. Obama will strive for an 80 percent reduction over the same period. Under a McCain plan, companies covered by the cap-and-trade program would receive a certain number of emission allowances for free.
Obama’s plan, in contrast, would require companies to purchase all emission allowances from the government through auctions (generating more government revenue that the McCain plan). The cost of electricity and fossil fuel-intensive products under Obama’s plan, however, would likely be higher than under McCain’s.
Renewable Energy. Both candidates want to expand the use of wind, solar, geothermal, and other forms of renewable energy. The candidates are divided, however, on the Production Tax Credit (PTC) which gives a tax break to producers of certain types of clean energy.
McCain abstained this year from voting to extend the PTC. Instead, he is proposing a new system of permanent tax incentives that treat all renewable energy producers equally. McCain, however, has yet to explain what this new system would look like.
Obama voted to extend the PTC, and has proposed national renewable portfolio standards. These standards would require that by 2012, at least 10 percent of U.S. electricity come from renewable sources (rising to 25 percent by 2025).
Nuclear Energy. McCain strongly supports nuclear energy as a means for reducing greenhouse gas emissions, improving local air quality and promoting energy security. He proposes to build 45 nuclear power plants by the year 2030. His long-term goal is to build 100 plants in total. This would double the U.S. nuclear fleet, assuming no plant retirements. Since no new power plants have been built in America since the 1970s, however, it might be more prudent to construct a small number of nuclear plants (for example, as part of a pilot program) to test and evaluate the latest designs.
Obama is less enthusiastic than McCain about nuclear energy. And both candidates lack concrete, detailed plans for addressing nuclear waste (although McCain has proposed the development of an international waste repository).
R&D Incentives and Investment. As a result of the recent credit crisis, many R&D projects in the energy sector are suffering financial constraints. The candidates’ R&D proposals are therefore particularly important.
McCain has proposed a $300 million prize for the development of an advanced battery for plug-in hybrids and electric cars that delivers power at 30 percent of current costs. His proposal mimics private-sector competitions aimed at encouraging innovation, such as the Ansari X-Prize for developing spacecraft.
Using revenue from cap-and-trade allowance auctions, Obama plans to invest $15 billion annually, for ten years, in plug-in hybrids, clean coal, biofuels, and other projects. By comparison, the Department of Energy’s annual budget for energy-related R&D is currently less than $3 billion.
While it’s impossible to perfectly predict future presidential policy based on candidates’ campaign statements (recall President Bush’s 2000 campaign promise to regulate carbon dioxide emissions), McCain and Obama appear serious about energy and environmental issues. Voters can only hope they will deliver on their promises and bring American energy policy into the 21st century.
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