McCain vs Obama on energy

From the WSJ Morning Brief:

Energy policy has emerged as a key point of contrast between the proposals of John McCain and Barack Obama, and one likely to stay in the headlines until November

Obama:

... Mr. Obama appears to present a clearer case on the energy-technology plan that the journal describes as the heart of his spending program.

He would pay for that $15 billion-a-year plan with revenue collected from a separate proposal to limit the emissions of greenhouse gases through a system of trading pollution permits that are auctioned off to utilities and other producers of carbon dioxide. Mr. Obama, who compares his energy ambitions to the Kennedy-era space program, would invest that $150 billion over 10 years in solar, wind and possibly nuclear alternatives to fossil fuels. Mr. Obama sees a better chance now of pushing through the kind of major infrastructure programs that failed to make it in the Clinton years. ...

One comment: big government programs make me nervous.

McCain:

Mr. McCain, too, has appealed to voters who worry about global warming, and made high gas prices a prominent issue on the campaign trail. But he offers a more cautious policy path to dealing with both issues. An advocate for moderate government spending and a more forceful believer in tax cuts, Mr. McCain says incentives for alternative energy sources distort the markets, though he would support incentives for building new nuclear power plants. He, too, favors a cap-and-trade system for carbon emissions, but on a smaller scale. And like President Bush, Mr. McCain would like to tackle high gas prices by giving oil companies more latitude to drill where they would like.

To that end, yesterday he called for an end to federal bans on drilling off the American coasts ...

One comment: free markets that fail to allocate resources efficiently due to negative externalities are already distorted. Subsidies and taxes can be used to reduce the distortion.
 

Comments

[Matt]

You forgot to mention that the bulk of the emissions income that Obama get will be used to make energy cheaper for electricity users.

You also fail to mention that paying off the damaged parties in global warming exactly maximizes the efficiency trade off and ultimately pressures congress to get out of the energy subsidy business.

You are right about big government allocating energy use, and that realization will eventually cause you to question the alliance between progressives and environmentalists. The failure of environmentalists to fully grasp the contradiction will cause a 20 year delay in tackling the problem.

[Scott]

We cannot drill our way out of high gas prices in either the short or long term. Drilling will be ineffective no mater what. Nor can we "alternative energy" our way out of the problem in the short run (less than 10 years) because the infrastructure replacement is a longer term issue. In the longer term there should be no question that alternative energy/technology will be where we end up. In the short run all we can do is drive less/slower and shrink the economy. We will be doing both. It will not be much fun.

Obama's approach is feasible, even necessary, McCain's is wishfull thinking.

[Scott]

I should have mentioned that reason drilling will not work is that the untapped US supplies are minuscule compared to world demand. It is highly unlikely that drilling anywhere in the world will ever significantly reduce oil prices given that peak oil is upon us.

[joshua corning]

One comment: free markets that fail to allocate resources efficiently due to negative externalities are already distorted.

Ya cuz we all know how hard it is to get gas...that station right off the road to work is just to hard to pull into to.

It is tough for me but I imagine that the market distortions and inefficiencies of pulling over that curb must be apocalyptic for the collegiate class.

[tyler]

He's against ANWR, but for drilling off of Florida...I don't understand this man.

Still, he's the best republican we could hope for, environmentally.

Which is saying nothing.

[Jesse Jones]

Both Obama and McCain offer us cap-and-trade for controlling emissions, a system overly complicated and bound to be filled with loopholes for well-connected pollutors to dodge through. A direct tax on carbon would be simplest, most democratic, and most effective, but advocating any tax whatsoever, even one that makes sense, has come to be viewed as political suicide. If Obama advocated a direct tax on carbon he would come off better on the environmental debate.

But as it stands, McCain wins the skirmish on the environment, for four reasons. First, he supports nuclear power. While it would be wonderful to live in a utopian society powered by windmills and solar panels, such solutions are simply not cost-effective at this point. With our current nuclear plants aging, it is critical that we begin to break ground on new plants, or else grudgingly burn more coal (as we did after the "environmentalist" movements like Greenpeace killed nuclear power for a generation).

Second, McCain has resisted joining the bandwagon of providing subsidies for domestic, corn-based biofuels. Such subsidies are the result of the grossest combination of junk science combined with the powerful farm lobby. It takes more energy to grow, transport, and manufacture ethanol than it provides in fuel, resulting in even more carbon emissions. Sugarcane ethanol, grown in Brazil (hardly a hotbed of terrorism) is much greener, and new methods of extracting ethanol from other sources (such as algae) have not received much attention at all. Subsidies for corn-based ethanol, while very popular among Iowan voters, disincentivize these legitimate sources.

Third, McCain supports lifing the federal ban on offshore drilling. Though states such as California and Florida may continue to oppose drilling off their coastlines through statewide bans, under the current system even states whose residents support offshore drilling, like Alaska, are prevented from drilling. This is neither fair nor democratic. Such drilling, begun today, would take at least ten years to draw oil, but no effective energy policy decision realizes changes overnight. The effect on oil prices would be minimal, but the domestic production would leave us less dependent on foreign sources. It would not "drill our way out" of the problem, but it would be a boost to any comprehensive energy policy.

Also, McCain is a Republican, and thus would be better able to draw bipartisan support for his energy policy.

The notion that Democrats are more eco-friendly than Republicans may be true in most cases, but John McCain is not your average Republican. To me, his energy policy fuses the best elements of the right and the left. It's not exactly what I'd advocate, but it's the best we're gonna get in this election cycle.

[Kudzu Fire]

Since much of the world's future carbon emissions will come from China and India, the purpose of cap and trade in US is, in my opinion, to destroy capitalism and reduce the US to third world status. All hail the Marxist Messiah.