A Tale of Two Visions

In comparing the details of Barack Obama’s energy plan announced this week with John McCain’s Lexington Project it is apparent there is much the two agree on. They both address dependence on foreign oil in the context of global warming. They both want to reduce US carbon emissions and both would use “cap and trade” market mechanisms. Both would encourage research into alternative fuels and promote electric automobiles. Both would offer temporary emergency price relief from $4 gasoline. There are differences of course but there are a lot of similarities.

But the comparison masks a fundamental difference in outlook at the heart of a great national divide that is becoming starkly clear. It looks to be the overriding issue in this presidential campaign. It may very well be the determining factor in what sort of place America will be as we make our way deeper into the 21st century. Will we continue on the trajectory of increasing prosperity that inexpensive energy has made possible? Or will we accept drastic lifestyle changes and reductions in living standards to accommodate unavoidable scarcity? It is the most glaring contrast in vision that I ever remember seeing in a presidential campaign.

Obama believes “We must act quickly and we must act boldly to transform our entire economy – from our cars and our fuels to our factories and our buildings.” McCain thinks we can use domestic resources and technology to produce ”more power, pushing technology to help free our transportation sector from its use of foreign oil, cleaning up our air and addressing climate change, and ensuring that Americans have dependable energy sources.” Obama thinks we have to get by on less energy and is prepared to see prices continue increasing in order to discourage its use. We would certainly have to use less petroleum. His windfall profits tax on big oil will further depress domestic production, as we learned in the Carter administration. McCain thinks we can produce the energy we need, do it cleanly, and do it without bankrupting ourselves. Obama wants to free us from Venezuela and the Middle East. McCain wants us to stop importing any oil, a fundamental difference considering the fungible nature of global oil markets.

Both men want new zero carbon cars. Obama wants to be sure they are made in the US, presumably through protectionist legislation. We would need it. Cap and trade would impose significant new costs on American business and Obama would fund much of his program by auctioning the licenses, another immediate cost to continue operating and a huge new incentive to move production overseas. McCain is a free trader, wants to keep existing tax cuts in place, and generally opposes new ones.

Obama wants to do all this without relying on new nuclear power until the waste problem can be resolved. Since he also opposes the only feasible mechanisms for waste disposal, he effectively means no new nukes. McCain wants a crash construction program on the grounds no other currently available technology is as clean.

While the battle rages China and India continue to expand their economies with little regard for any sort of pollution controls, let alone the still controversial need to reduce carbon dioxide emissions. When we recently approached them with proposals for participation in a new CO2 protocol they both said no thanks. They have other priorities. The decision by both presidential candidates to couple the need for energy independence with climate change is an expensive one. If we take all options for increasing supply off the table and pile on new taxes to boot we could end up in the poorhouse.