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This report was updated on Aug. 13.
Energy and the environment have emerged as A-list concerns in this year's presidential campaign. Both presumptive nominees say that addressing the rising cost of gasoline and the environmental impact of climate change are among their top priorities. But they offer significantly different plans of action--with Republican John McCain tending to embrace market-based approaches and Democrat Barack Obama generally opting for federal mandates.
To counter this summer's high pump prices, McCain proposes suspending federal taxes on gasoline and diesel fuel. Obama opposes such a tax holiday. He instead wants to impose a "windfall profits" tax on Big Oil.
Obama initially opposed all new oil drilling along American shores, but in early August, he changed his tune. Now the Illinois senator is backing some limited drilling as part of a broader energy package. He's thrown his support behind a bipartisan Senate proposal that would open drilling along the southeast and Florida coasts while cutting tax breaks for oil companies. In addition, Obama claims oil prices could be temporarily lowered by releasing oil from the national Strategic Petroleum Reserve, a proposal that's been pushed by congressional Democrats but opposed by the Bush administration. Obama also wants to increase fuel-efficiency standards on new cars and trucks.
McCain supports the bipartisan Senate bill on oil drilling, which has been dubbed the "gang of 10" proposal because it was crafted by five Democrats and five Republicans. But McCain would go even further, opening the east, west and Florida coasts to oil and natural gas development. In his 2000 presidential bid, McCain opposed drilling, but in 2006, he voted to allow the oil development. Both candidates promise to steer more tax dollars to emerging energy technologies.
On climate change, McCain and Obama support legislation to cut U.S. emissions of greenhouse gases by capping industrial pollutants and allowing companies to buy and sell emissions permits. But McCain places his faith in a cap-and-trade plan that would rely on the free market to determine how companies meet the low-carbon demands. Obama is pairing his climate plan with a wide range of federal mandates and tax incentives aimed at curbing the nation's appetite for fossil fuels.
McCain's decision to actively compete with Obama on environmental issues is a significant change from the approach of previous Republican presidential nominees, who largely ceded green issues to their Democratic rivals. McCain does have some green credentials. In 2003, he joined Sen. Joe Lieberman, ID-Conn., in launching Congress's first campaign to control U.S. emissions of greenhouse gases. President Bush and other conservative Republicans actively fought the McCain-Lieberman legislation.
McCain touts endorsements by two environmentally respected GOP governors, Charlie Crist of Florida and Arnold Schwarzenegger of California. McCain is hoping to use his environmental track record to woo independents and moderate Democrats in November. "Senator McCain is showing that you can go head-to-head in a debate on environment and let the people decide who has the better approach," said Jim DiPeso, policy director at Republicans for Environmental Protection, which supports McCain.
McCain, long a defender of the Grand Canyon, seeks to wrap himself in the land preservationist mantle of one of his heroes, Theodore Roosevelt. In early June, McCain toured Florida's Everglades National Park and vowed to help restore that "river of grass." His photo-op was diminished, however, when local reporters questioned why the senator from Arizona had voted against legislation authorizing $2 billion for Everglades projects. McCain answered that the Everglades money was part of a $23 billion water projects bill that included pork-barrel spending he opposed.
Arguably, on energy and environmental issues, McCain is trying to have it both ways. On the one hand, he cites his climate-change battles to paint himself green and to counter Democratic claims that he votes in lockstep with Bush. Yet McCain is joining with conservative Republicans in condemning Obama for voting for legislation that would have eliminated tax breaks for the oil and natural-gas industries. And McCain backs many of Bush's energy proposals. Both Republicans emphasize expanding the nation's fleet of nuclear power plants. Both favor increased offshore drilling, although McCain has voted against Bush's efforts to open Alaska's Arctic National Wildlife Refuge to oil drilling. McCain and Bush also oppose stricter car fuel-efficiency standards and oppose requiring power companies to produce some of their electricity from renewable resources, such as solar and wind.
Environmental lobbyists argue that McCain has sided with Bush and other conservative Republicans more than he has sided with the environmental community. During his 22 years in the Senate, McCain has voted with the greens on only one-quarter of their top legislative priorities, according to the League of Conservation Voters' congressional scorecards. In 2007, McCain didn't show up for any of the 15 votes that the league considered crucial.
By contrast, Obama has earned an 86 percent rating from the league during his four years in the Senate; he missed only four important environmental votes last year. Little wonder then that Obama has the endorsement of Friends of the Earth and is likely to get the backing of the LCV, Defenders of Wildlife, and the Sierra Club if they decide to endorse a presidential nominee.
During this Congress, McCain is walking a tightrope between GOP moderates who want to address climate change and GOP conservatives who oppose any new environmental mandates. He declined to support a global-warming bill introduced by Lieberman and Sen. John Warner, R-Va. McCain argued that the measure failed to provide enough incentives for new nuclear reactors. Ultimately, Senate Republicans blocked the legislation.
In a May speech on climate change, McCain made the case for his free-market approach to global warming. "The people of this country have a genius for adapting, solving problems, and inventing new and better ways to accomplish our goals," he said. "But the federal government can't just summon those talents by command. Only the free market can draw them out." In a 2007 speech, he advocated a go-slow policy on global warming. "Let's not let urgency breed rashness and irresponsibility," he said.
Cathy Duvall, the Sierra Club's national political director, says that the environmental community viewed McCain as a hero when he and Lieberman introduced the first climate-change bill but that he has failed to keep up with the times. "The problem with Senator McCain's approach is that he's not saying anything different today than he was saying in 2003," Duvall said. "And, frankly, the science has proven that the size and the scope of the problem are much worse than we knew five years ago. When you get into the details," she added, "his plan doesn't make fast-enough investments or deep-enough investments to move us off of using old technologies and into new technologies."
Obama's philosophy on energy and the environment is fundamentally different from McCain's market-based approach. "My plan isn't just about making dirty energy expensive. It's about making clean energy affordable," Obama said last year. He promises to "phase out a carbon-based economy that's causing our changing climate." In May, he detailed a massive 10-year, $150 billion plan to develop and commercialize a new generation of green products: "I'll be the president who finally keeps the promise that's made year after year after year, by providing domestic automakers with the funding they need to retool their factories and make fuel-efficient and alternative-fuel cars."
Obama's master plan includes more-aggressive programs to curb climate change. While McCain has proposed cutting greenhouse-gas emissions by 60 percent below 1990 levels by 2050, Obama would slash emissions by 80 percent in that timeframe. Both promise to take a leadership role in getting other nations--particularly China and India--to cut their global-warming pollution. Obama would require the federal government to auction off greenhouse-gas emissions credits to companies that want to continue to pollute. McCain favors distributing the credits free of charge to coal-burning power plants and other polluters, although he envisions eventually auctioning some credits.
Obama proposes doubling fuel-economy standards on new cars and trucks within 18 years and mandating that electric companies generate at least 25 percent of their power from solar or wind power by 2025. After years of supporting corn-based ethanol, the Illinois Democrat wants to spur production of ethanol from nonfood, cellulosic plants, such as switchgrass. He wants the first 2 billion gallons to be produced by 2013. The 2007 energy bill expanded the national ethanol/biofuels mandate to 36 billion gallons a year by 2022, including 15 billion gallons of corn-based ethanol. Obama proposes raising that to 60 billion gallons a year by 2030. Obama also vows to reduce American oil consumption by 35 percent by 2030.
Soon after becoming a senator, Obama raised eyebrows within the environmental community by supporting new technologies to convert coal into oil. Green groups oppose coal-based petroleum because current methods of making and using the fuel would produce twice as much global-warming pollution as conventional oil. Obama advocates a low-carbon standard for car and truck fuels that is similar to a program that California adopted. Suppliers would be required to cut the greenhouse gases produced by their fuels by 10 percent by 2020. "The low-carbon fuel standard is the only public policy approach that simultaneously addresses energy-security goals and environmental goals," says Jason Grumet, president of the Bipartisan Policy Center. He said that Obama "doesn't want to be picking technologies. He wants to be picking performance outcomes." In early 2007, McCain came out in favor of a federal low-carbon fuel standard. Since then, however, his top aides have backed away from the policy, arguing that a cap-and-trade program would do enough to cut pollution from automobiles.
Business lobbyists are, predictably, unenthu-siastic. "What you'd really see in an Obama presidency is that he would support government-driven programs," said William Kovacs, the U.S. Chamber of Commerce's vice president for environment, technology, and regulatory affairs. "McCain has made it clear that he's on the climate issue, but he would have more of a market-oriented approach." Kovacs acknowledged, however, that if McCain becomes president, he "may actually end up having mandates, too, to achieve certain targets."
Pro-market Heritage Foundation analyst David Kreutzer disparages Obama's wide-ranging environmental plan as a "political chum line: He's throwing out little bits of bait to 100 different groups. There are government subsidies, tax credits, mandates. That amounts to the government directing where investment should take place. And that kind of thing doesn't have a great track record."
At their core, the energy and environmental goals of McCain and Obama are similar--and in many ways quite a departure from Bush administration policy. Both candidates promise to dramatically cut U.S. greenhouse-gas emissions. Both would embrace a leadership role in negotiations to curb climate change worldwide. Both are focused on cutting U.S. dependence on foreign oil and on pushing development of new, clean technologies. Neither would open Alaska's wildlife refuge to oil development.
The critical difference between McCain and Obama lies in how they would try to reach those shared goals. "Whoever is elected president will make energy and climate issues a high priority," said DiPeso of Republicans for Environmental Protection. "That's the kind of progress our country needs to make."
This article appears in the June 21, 2008, edition of National Journal.