Climate

Campaign stunner: McCain “might take [new CAFE standards] off the books”

doubletalk.jpg We’ve heard climate double talk from McCain on “mandates” and “dependence on foreign energy sources.” Now, in a stunning interview with E&E News (subs. req’d), the McCain campaign seriously undermines its claim that the Arizona Senator could successfully take on the global warming threat.

As the reporter put it, “the Arizona senator’s presidential campaign is trying to differentiate itself from its Democratic rivals by rejecting calls for additional climate-themed restrictions.” This, however, is a potentially fatal difference.

I don’t know which of three statements by “Douglas Holtz-Eakin, a McCain campaign policy adviser” is more wrong-headed.

1. “The basic idea is if you go with a cap and trade and do it right with appropriate implementation, you don’t need technology-specific and sectoral policies that are on the books and that others are proposing simultaneously.”

This statement could not be more inaccurate and naive. A cap & trade system without on aggressive technology development/deployment effort, especially in the transportation sector, will inevitably fail because it causes too much economic pain, as I explained at length in “No climate for old men.” And now we get the explicit statement that McCain opposes “technology-specific and sectoral policies that are on the booksif we have a cap & trade.

Does anybody who cares about climate change really think we are pushing clean technologies and clean transportation too hard? Other than Sen. McCain’s campaign, that is — we’ve already seen that McCain does not support renewable technology tax credits that have been “on the book” for years even before we have a cap & trade. This is an especially jaw-dropping statement given that even the delayers themselves have been saying we need a bigger clean tech push for years.

2. Holtz-Eakin … questioned the candidates’ [Obama’s and Clinton’s] calls for a new federal low carbon fuel limit, stronger fuel economy standards and policies to reduce U.S. oil consumption. Cap and trade, Holtz-Eakin said, is the ideal solution by itself…. Asked if this position meant McCain would block implementation of new corporate average fuel economy requirements that President Bush signed into law last December, Holtz-Eakin replied, “He’s not proposing to eliminate those. He simply wants to check as time goes on if they become completely irrelevant. You might want to take them off the books [!!!], but we’re not there yet.”

He cannot be serious. We might “want to take [fuel economy standards] off the books” because a cap & trade system might render them irrelevant? Uhh, no. Let’s go through this again.

In the Energy Information Administration’s own analysis of using a cap & trade system to reduce U.S. emissions — a very flawed study, but one that is a good economic model of McCain’s strategy, since it doesn’t capture technology deployment strategies or fuel economy standards — the price of carbon hits politically impossible levels, $348 per metric ton, which, in the EIA analysis, doubles the price for electricity. But that price for carbon would raise gasoline prices by under a dollar a gallon and thus would not have much impact on average US fuel economy or the success of alternative fuels (much as the recent price jump from $2 a gallon to $3 didn’t). Long before the carbon price hit that level, businesses and consumers would demand the price be capped, or the program shut down entirely ending the U.S. effort to stop catastrophic global warming.

3. “You don’t need redundant policies that interfere with the flexibility that is the key to meeting these desirable goals at low costs….” Pressed to explain what beyond a cap-and-trade program would be needed, Holtz-Eakin replied, “He wants to see the use of nukes. The ultimate policy proposal will be designed to make sure that’s true.”

The hypocrisy is staggering. “Redundant policies” that push renewables or efficiency would interfere with flexibility that supposedly keeps costs low. Indeed, we can even take existing clean tech policies off the books once we have a cap & trade. But ramming expensive nuclear power plants down the public’s throat — that’s fine.

Note, the nonpartisan Keystone report “Nuclear Power Joint Fact-Finding,” from June 2007, found nuclear “power isn’t cheap: 8.3 to 11.1 cents per kilo-watt hour.” And as a study by Cambridge Energy Research Associates (CERA) found, nuclear power plant costs have soared in the last couple of years. And, of course, nuclear power has a major supply bottleneck, that will inevitably drive up costs for any country that wants to rapidly accelerate the construction of nuclear power plants.

The fact that this guy is a former director of the Congressional Budget Office means, of course, he is an economist, which is perhaps all you need to know about him. The fact he is acting as a senior advisor and surrogate for McCain is a very bad sign. Holtz-Eakin could easily end up as the head of McCain’s Council Economic Advisers, National Economic Council, or, scariest of all, the Office of Management and Budget — where he could (further) cripple clean tech programs for years to come (beyond the damage the Bush administration has already done).
This was one of the central points from my long analysis, No climate for old men: McCain would appoint all the wrong people to key positions, and they would undermine or block the key policies needed to tackle warming cost effectively. This stunning interview confirms my worst fears.

Here is the whole article:

McCain adviser questions Democrats’ push for more than cap and trade

John McCain bucks the traditional Repandublican establishment with his support for cap-and-trade legislation, but the Arizona senator’s presidential campaign is trying to differentiate itself from its Democratic rivals by rejecting calls for additional climate-themed restrictions.

“The basic idea is if you go with a cap and trade and do it right with appropriate implementation, you don’t need technology-specific and sectoral policies that are on the books and that others are proposing simultaneously,” Douglas Holtz-Eakin, a McCain campaign policy adviser, said in an interview yesterday.

Holtz-Eakin, a former director of the Congressional Budget Office, dismissed the presidential campaign platforms of McCain’s two remaining Democratic rivals, Sens. Barack Obama of Illinois and Hillary Rodham Clinton of New York. Specifically, he questioned the candidates’ calls for a new federal low carbon fuel limit, stronger fuel economy standards and policies to reduce U.S. oil consumption.

Cap and trade, Holtz-Eakin said, is the ideal solution by itself. “You don’t need redundant policies that interfere with the flexibility that is the key to meeting these desirable goals at low costs,” he said.

Asked if this position meant McCain would block implementation of new corporate average fuel economy requirements that President Bush signed into law last December, Holtz-Eakin replied, “He’s not proposing to eliminate those. He simply wants to check as time goes on if they become completely irrelevant. You might want to take them off the books, but we’re not there yet.”

Both Clinton and Obama support setting up a mandatory cap-and-trade program to reduce U.S. heat-trapping greenhouse gas emissions 80 percent by midcentury. They are also identical in backing a 100 percent auction of the emission credits.

Unlike McCain, the two Democratic candidates would push their climate regulations beyond cap and trade.

Clinton, for example, would increase fuel efficiency standards to 55 miles per gallon by 2030 and cut foreign oil imports by two-thirds from 2030 projected levels. Obama says he would double fuel economy standards within 18 years and supports a federal low carbon fuel standard requiring suppliers to reduce the carbon their fuel emits by 10 percent by 2020.

Campaign aides for both Clinton and Obama did not return calls or e-mails requesting comment about the McCain adviser’s efforts to contrast the candidates.

But their surrogates did defend the push for even broader climate policies beyond cap and trade during a panel discussion last week in Santa Barbara, Calif., hosted by the Wall Street Journal.

“He appreciates the problem of climate change is unlike anything we’ve ever faced before,” Obama climate adviser Jason Grumet said. “It’s going to require a kind of social commitment along the lines we’ve not seen in this country since World War II.”

Added Gene Sperling, a Clinton adviser, “It can’t be an all-or-nothing proposition. Senator Clinton has a lot of proposals about what you can do as the executive from day one going forward.”
No position on Lieberman-Warner

McCain also is not wedded to the cap-and-trade bill he introduced in January 2007 with Sen. Joe Lieberman (I-Conn.) that seeks to cut U.S. emissions 60 percent below 1990 levels by 2050. “When he introduced that bill, the floor statement was pretty clear that this was an ongoing process,” Holtz-Eakin said. “He wasn’t so much committed to the bill as to an issue.”

Several climate proposals have been introduced in Congress since Lieberman and McCain teamed up, including a more stringent Lieberman proposal that includes Sen. John Warner (R-Va.) as the lead co-sponsor. “The Lieberman-Warner is a good bill,” Holtz-Eakin said of the legislation due on the Senate floor this June. “It’s not his intention to suggest anything different.”

But Holtz-Eakin said that does not mean McCain will be a guaranteed “yes” vote.

“We don’t take positions on Senate legislation given it will change,” he said. “He’s going to realistically need to have time to study the bill. It’s premature.”

Turning to some cap-and-trade specifics, McCain does have concerns about the idea of using a complete 100 percent auction for emission credits. While McCain’s views remain static on the topic, Holtz-Eakin said the Arizona Republican wants to make sure allowance distribution takes into account international competition for U.S. businesses and also how to distribute costs across the economy.

McCain also continues to support growth in nuclear power. Pressed to explain what beyond a cap-and-trade program would be needed, Holtz-Eakin replied, “He wants to see the use of nukes. The ultimate policy proposal will be designed to make sure that’s true.”
Post-Kyoto deadlines

McCain is planning several environmentally themed speeches later this year as the general election campaign picks up steam — though no firm dates have been set.

The four-term senator also is trying to brandish his foreign policy credentials this week with visits to Iraq, Israel and Europe.

McCain, Lieberman and Sen. Lindsey Graham (R-S.C.) visited British Prime Minister Gordon Brown in London yesterday to talk about a number of issues, including international climate negotiations aimed at getting a new treaty that can succeed the Kyoto Protocol.

“I am convinced that if we work at it, we will be able to convince India and China that it is in their interest to be part of a global agreement to reduce greenhouse gas emissions,” McCain told reporters outside Brown’s 10 Downing Street office. “I believe that we can achieve a global agreement.”

Keeping the focus on climate negotiations, McCain also visited with Stavros Dimas, the top European Commission climate official. And echoing aides to Obama and Clinton, Holtz-Eakin acknowledged that McCain is considering sending staff to the annual U.N. climate conference this December in Poznan, Poland, if he wins the election.

“We have certainly contemplated it,” Holtz-Eakin said.

Climate negotiators have given themselves a 2009 deadline for completing a new post-Kyoto agreement — a schedule some see as difficult to meet given the time it will take for a new U.S. president to get his or her staff and policies in place.

Asked to comment on the post-Kyoto deadline, Holtz-Eakin replied, “Saying anything very definitive about meeting a target that is 11 months into the first term when you don’t have any control in between is really hard. We’ll certainly be interested in moving this process forward as quick as possible.”

17 Responses to Campaign stunner: McCain “might take [new CAFE standards] off the books”

  1. Red Craig says:

    I 100% agree with your position that nuclear energy can’t be the sole solution to the global-warming predicament. Still, it’s not helpful to dismiss nuclear energy as though it’s not an important part of the solution.

    The Keystone report is deficient in that it doesn’t calculate the cost of alternatives to nuclear energy. Cost estimates depend a lot on assumptions and on methodologies. If the same assumptions and methodologies are used to compare alternatives they can be useful; a single cost figure by itself has neither validity nor significance.

    It’s not a good idea to use companies that work for oil companies as information sources on nuclear energy. CERA’s own writeup says they didn’t use actual costs in their study, just what they thought construction would cost now. That’s slightly disconcerting since there is plenty of cost data from Japan and France. Anyway, CERA’s study, such as it is, shows that all energy construction costs have gone up sharply; they simply claim that nukes have gone up more. They don’t provide a basis for that belief, but claim that it’s because of the increasing awareness that nuclear energy is essential to minimizing the worst aspects of global warming, which is driving up demand for critical materiel.

    We need to get past this home-team rivalry between nuclear and renewables. Any simple analysis with even rudimentary arithmetic shows too things: renewables don’t work without backup, which would have to be either nuclear or fossil-fuel; and nukes can’t be built fast enough to carry the whole load. What it will take to beat this is all the renewable energy we can manage, all the nuclear plants we can build, and more conservation than anyone wants.

    This one reservation aside, you’ve done a great job of bring us up to date on Sen. McCain.

  2. Joe says:

    Thanks.

    I agree with your statement: “What it will take to beat this is all the renewable energy we can manage, all the nuclear plants we can build, and more conservation than anyone wants.” Not because I’m the biggest fan of nuclear — obviously I’m not — but because I really, really don’t want to hit 1000 ppm, and because nukes are what progressives will have to accept to get the policies they want. Right now, I’m mainly trying to tamp down overenthusiasm for nukes. I will blog on this in April, I think.

  3. Tom says:

    Has there been any specific mention of geothermal power generation?
    I know it’s dependent on water supply, but it seems more viable than a crash nuclear program.

  4. Red Craig says:

    Tom, that’s a very good question. Our esteemed host probably has better information, but MIT did a study you can find at http://geothermal.inel.gov/publications/future_of_geothermal_energy.pdf. As I understand the situation, there are two kinds of geothermal: wet and dry. The wet type has its own environmental problems and is available only in limited amounts, most of which are being exploited already. Dry is different: there is very much available and it could be a major energy source—MIT estimates it could produce as much as 100 GW of electricity, slightly more than nukes produce now. The study doesn’t mention water supply, so I dunno if it’s a problem or not. Dry geothermal hasn’t been pursued because of high cost. With $100/bbl oil and impending carbon taxes, that could change.

  5. Jay Alt says:

    I find this disappointing and very disturbing. Wouldn’t the EU cheer to see a new set of US climate officials, equipped with the Holtz-Eakin mindset? Yikes!
    He’s a former CBO chief who ‘speaks with unmatched authority on the economy.’ He and McCain are again in the news and this doesn’t sound any better –

    McCain on global warming: Strong warnings, few details
    http://www.mcclatchydc.com/227/story/31052.html

  6. Shannon says:

    This post is excellent. Thanks.

  7. Jason says:

    Another post to tear down McCain.

    McCain is for signing Kyoto.

    McCain against drilling in ANWR.

    McCain against drilling off the coast of florida.

    McCain in michigan took a lot of heat for being for cafe standards. Romney pounded him on it.

    Who cares what his economic adviser said. He isn’t his enviornmental adviser. He said he would leave the current cafe standards.

    McCain has even said he wants to increase them.

    McCain has hundreds of advisers. Enough already with the smearing of McCain.

  8. Ken Levenson says:

    thanks Joe. and just to underline:

    Hansen is not just the most credible person out there, he’s the U.S. Government’s official authority on the subject.

    Bush may choose to undermine the deadly serious statements of the professionals working for him – but why do others?

  9. Ken Levenson says:

    sorry, my post above was meant for another post! (look before you leap) :)

  10. Joe says:

    Jason:
    Hmm. I wonder who you’ll be voting for.

    Yes, McCain is the best of the GOP candidates, by far, on this one issue. But 1) this isn’t the first time McCain has been wishy washy on climate issues recently and 2) McCain chose this very senior economist to speak for him on energy/climate matters.

  11. Paul K says:

    I wonder about the propriety of a subsidiary of a non partisan think tank engaging in negative political attacks on individual candidates.

  12. Paul K says:

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    Who said anything about Rush Limbaugh?

  13. Joe says:

    Paul: You shouldn’t “wonder” about things that are easily fact-checked. This blog is well within its rights to criticize anyone in any party — even one up for election — on the issues it focuses on. I try to make clear my analysis isn’t Democrat vs Republican — there are lots of good GOP’ers I blog on (like Arnold). It is conservative vs. progressive.

    And I’m sorry this friggin’ spam slips through. I try to be vigilant and delete it as fast as I see it. I’ll see about a filter.

  14. Lou Grinzo says:

    One nano-nit, Joe, about your comment:

    “The fact that this guy is a former director of the Congressional Budget Office means, of course, he is an economist, which is perhaps all you need to know about him.”

    Speaking as a card-carrying economist who works full time (for less income than I’d care to admit) writing and speaking about energy and environmental issues, might I please ask you to lighten up on economists? Honestly, we do know a few things about that whole allocation of scarce resources thing, we’re not all morons, and most of us don’t dress like Darth Vader when we’re online. (Note to self: Check to make sure web cam is off.)

    Seriously, I find it amazing how economists have become everyone’s punching bag in the e+e arena when we have scores of non-economists online opinion endlessly on economic matters and all too often getting things hysterically wrong.

  15. Joe says:

    Sorry, in my field, you guys are the equivalent of … well, economists!
    Sorry again. I actually did the MIT equivalent of a minor in economics, so I know just enough to be dangerous to myself.
    You are certainly correct that being a non-economist is no guarantee of wisdom on this matter (but it helps — sorry, again, couldn’t resist).
    Actually, Some of my favorite people in this area are economists, like Skip Laitner, and Bob Repetto, and, of course, Herman Daly. But, of course, “real economists” don’t like them, so there you go!

  16. David B. Benson says:

    Lou Grinzo & Joe — Thanks for the laughs, giggles and chortles. :-)

  17. Rick C says:

    Jason Says:

    March 24th, 2008 at 4:00 pm
    Another post to tear down McCain.

    McCain is for signing Kyoto.

    McCain against drilling in ANWR.

    McCain against drilling off the coast of florida.

    McCain in michigan took a lot of heat for being for cafe standards. Romney pounded him on it.

    Who cares what his economic adviser said. He isn’t his enviornmental adviser. He said he would leave the current cafe standards.

    McCain has even said he wants to increase them.

    McCain has hundreds of advisers. Enough already with the smearing of McCain.

    Shouldn’t McCain be sued regarding his stated support for renewable energy in those political ads under truth in labeling laws?

    [JR: Where are the links? McCain can make stuff up, but commenters on this blog need facts.]