Tumblr Icon RSS Icon

Holiday on Ice: What North Carolina and Indiana tell us about future oil and climate policy

Posted on

"Holiday on Ice: What North Carolina and Indiana tell us about future oil and climate policy"

Share:

google plus icon

holiday.jpgFor nearly 2 months now, Senator Clinton has been outperforming the closing polls in primary state after primary state. And no one can possibly say that Senator Obama had a good past three weeks, with the reemergence of Reverend Wright. Yet this time he outperformed the recent polls in both states.

This suggests that in the only other big issue to rise in the last week of the campaign — the gas tax holiday — Obama did not lose votes taking the principled position. As I (and many, many others) have blogged, a gas tax holiday would most likely benefit the oil companies more than the the average consumer. Also, it sends a terrible message about future climate policies (namely that some weak-kneed president might roll back carbon prices the first time the economy hit a rough patch after a cap-and-trade system was passed) — see “Gas tax holiday, Part 3: It is cynical and indefensible no matter who proposes it.”

Clinton proposed the gas tax holiday Monday April 28, eight days before the two primaries. So what happened among late-deciding voters? Here is the answer, based on CBS’s exit poll numbers (overview here, Indiana here, North Carolina here):

Twenty-five percent in Indiana and 20 percent in North Carolina decided in the last week.

In North Carolina, Obama took those voters 54% to 44% (a 31,000 vote margin). In Indiana, Clinton took those voters, 56% to 44% (a 38,000 vote margin), which is not quite as high as her percentage of late deciders in Pennsylvania. So late deciders were pretty much a wash.

Again, I conclude that the gas tax issue did not play very much, if it all, in Hillary’s favor, even though, on the surface, it appears to be a very attractive populist issue.

THE STORY OF THE LAST SEVEN DAYS

The Washington Post has a long narrative on the days leading up to the two primaries, “After One of Campaign’s Roughest Patches, Obama Tried to Change the Narrative.” The part on the gas tax is worth reprinting:

Even before Wright’s press club appearance, Obama had been hitting presumptive Republican nominee John McCain for his proposal to temporarily suspend the 18-cent federal gas tax. When Clinton embraced the “gas tax holiday,” Obama’s aides became convinced that a tailor-made issue had fallen into his lap, an issue that could change the subject.

Obama and Axelrod talked that Sunday and agreed that the gas tax holiday was the perfect vehicle to reintroduce Obama as the responsible reformer who refused to pander, even with a presidential election on the line.

By the time he took the stage at an 18,000-person rally in Chapel Hill on Monday night, he had sketched out his basic argument. “Gas tax holiday — sounds good. I’m sure it polls well.” But he added, “That’s just politics of the moment, politics to get you through the next election. We need better leadership than that.”

Obama’s opposition may have been high-minded, but it was risky for a candidate already struggling for working-class support. Campaign officials insist they did no polling on the issue before Obama staked out his stance, although it was tested heavily after the fact, in polls and focus groups. Campaign officials said the results from those surveys did not ring any alarms, although as Obama began adding references to his $1,000 middle-class tax cut proposal later in the week, to show voters he was offering a much better deal.

“The principle certainly preceded any polling, but the polling supported the principle,” said Butts, the domestic policy adviser. “Good policy is good politics in this situation.”

On Tuesday, Clinton aired her first ad that criticizes Obama for rejecting the gas tax holiday, and Obama advisers began debating an appropriate response. Jim Margolis, the campaign’s media strategist, was screening some generic footage he had shot of Obama on Monday — including the gas tax riff that he introduced in Wilmington, and polished throughout the day.

“As soon as we all heard it, we thought, ‘We can’t do better than that,’ ” Axelrod said. “Let him do the talking.”

The issue ignited quickly, and primary voters were not the only Democrats paying attention. Sen. Evan Bayh, Clinton’s most effective Hoosier weapon, had been leaning hard on his state’s four freshman House Democrats, urging them to stay out of the race until the voters had spoken — even though he was leading the Clinton charge. Obama aides were convinced that they would pick up the endorsement of Rep. Brad Ellsworth, a popular former sheriff from the expected Clinton stronghold around Evansville. But Ellsworth did not come through, nor did Rep. Joe Donnelly, whose Democrat-rich district stretches through the state’s heartland, south from South Bend.

But Rep. Baron P. Hill, a southern Indianan from Clinton country, had been listening to the gas tax debate closely. He spoke with each of his district’s 20 Democratic country chairs. He was impressed by the surge of support among students at Indiana University, a fixture of his district. Most important, he spoke repeatedly with former Indiana congressman Lee H. Hamilton, who co-chaired the Sept. 11 Commission and who is backing Obama.

Obama not only picked up Hill’s endorsement, but also won Hoosier and former Democratic Party chairman Joe Adrew from Clinton’s column, giving his Wright recovery a boost. Both superdelegates cited Obama’s opposition to the tax holiday as a factor. Congressional leaders endorsed his position, and editorial boards hailed the Obama stance as principled and farsighted. The issue was featured prominently in a two-minute closing ad that the Obama campaign aired in North Carolina and Indiana.

I tend to think that Clinton may have won the issue slightly on a direct, tactical level, but really lost it by much more on a strategic level in that it allowed Obama to get back on message (and it also seems to have hurt her with the superdelegates, which, since they are the party leaders and members of Congress, is good news for future energy/climate policy). Indeed, the Post reported:

Cornell Belcher, an Obama pollster who declined to give out his polling numbers, said: “The whole gas tax thing, it isn’t about whether it’s working in the polls.”

The bottom line is that Obama’s position was not a losing position. That bodes well, I think, for both of the fall campaign against Senator McCain, and an Obama presidency, should he win.

THE VIEW DOWN UNDER

Finally, I was struck by the words of John Quiggin, an Australian economist whose climate writings I admire, in a post from Saturday, “Holiday from Sanity“:

I was pretty much stunned into silence by the proposal for a gasoline tax holiday put forward by John McCain and Hillary Clinton. I won’t bother repeating all the reasons why this is a terrible idea (when Tom Friedman has your number, I’d say your number is up).

Just a couple of observations. First, I find it hard to see how anyone serious can support either McCain or Clinton after this.

Second, the fact that the proposal has lasted this long suggests to me that the chance of any serious US action on global warming after the election is not that great. Without the US, we won’t get anything from China and India either, so that means we’re setting course for disaster. Perhaps if Obama wins, he’ll be able to turn this around, but this episode has me very depressed.

So even seemingly small digressions in the U.S. presidential race do get noticed around the world. I hope Quiggin — and others who are working internationally to avoid catastrophic climate impacts — will take some heart from the Tuesday vote. I did.

« »

21 Responses to Holiday on Ice: What North Carolina and Indiana tell us about future oil and climate policy

  1. Excerpt from Obama’s North Carolina victory speech:

    “[Some man he met in Pennsylvania] needs us to take a permanent *holiday* from our oil addiction by making the automakers raise their fuel standards, corporations pay for their pollution, and oil companies invest their record profits in a clean energy future.”

    Love it.

  2. Make, make, make…

    Maybe the government will “make” me eat corn flakes in the morning instead of a bagel, and “make” me exercise each night instead of watch TV. Then they can “make” me drive a small car to work instead of an SUV, where I can work more of the year to pay the taxes they “make” me pay.

    Yes, the drift towards state-control always starts out with the best of intentions.

    How about this instead–let’s work on an energy solution cleaner AND cheaper than coal, so people WANT to use it instead of HAVE to use it.

  3. john says:

    I, too, was heartened to see Obama resist the obvious and stand on principle, if indeed that is what he did.

    But the opposite of poll-pandering is not resisting the urge to pander; it is leadership. And that will require someone who can not only resist governance by polls, but someone who has both the moral courage and the rhetorical skill to shape polls … to lead people from their baser selves to their better angels.

    I don’t know if Obama is that person. But I do know Hillary and McCain have shown us they are not.

  4. Joe says:

    Kirk — none of us will live to see carbon-free power cheaper than the price of EXISTING coal plants. So either a high price for CO2 or government mandates or both will be needed.

    The U.S. auto industry has been too shortsighted to build fuel-efficient cars Americans now want — nor are they prepared for the inevitable doubling of prices from the current level and the fantastic pain that will cause the country if they continue on the current path.

    Now, the good news, as I have blogged repeatedly, is once we have plug ins widely introduced, you’ll be able to take your one person occupancy, relatively unsafe for you and others, SUV to work — at least until it becomes so clear that we are in the midst of a climate catastrophe, and big SUVs become as fashionable as smoking.

    But the government needs to accelerate the transition to plug ins and the transition to zero carbon electricity, because the “so-called” free market (who paid for all the highways, anyway?) by itself will just continue to destroy the livability of the planet.

  5. Kirk — none of us will live to see carbon-free power cheaper than the price of EXISTING coal plants. So either a high price for CO2 or government mandates or both will be needed.

    I’m not at all convinced of that. I don’t talk much about it, but the numbers from LFTR technology may be extraordinary. Remember that even EXISTING coal plants have to get fuel, and as world prices for coal escalate (as they have been doing over the last few years) even these plants may not be able to economically operate–even without a carbon tax.

    We’re seeing the market work with cars. Gas prices have gone through the roof, and consumers are saying “hmmm, maybe the SUV isn’t nice enough to make up for $100 a tank. Hmmm, that little Yaris isn’t looking too bad anymore.” And the car companies are being caught flat-footed.

    Joe, watching your documentary “Who Killed the Electric Car?” is what got me so excited about real electric cars, not these halfway-there hybrids. I want to buy a real electric car, so I can quit paying Osama and start getting carbon-free, nuclear-powered transporation to work.

    For what it’s worth, I do support a carbon tax. I think those scummy coal plants should have to pay through the nose for fouling our air and poisoning our citizens.

  6. Jim Edelson says:

    It may be too soon to declare the demise of the gas tax reduction as an electoral sound-bite tool. The Grover Norquists of the world have an ability to misconstrue almost anything to electoral advantage.

    But I too have been very encouraged about the Gas Tax Holiday ploy this time around. It does seem that something has shifted, and maybe it is the leadership of Obama that put a voice to it. And I think this puts to rest the notion that Obama will not fight. To take McCain and Clinton head-on by opposing a tax reduction was not a flight from conflict – Obama picked his fight wisely, and I hope this is something he does against McCain – and as President to overcome the fossil fuel ownership of Congress.

    There is no technological bullet on the horizon that is going to save us from destroying the climate – its going to have to done by taking on the tough opposition directly, and making those changes in pricing AND mandates that get to the necessary GHG reductions. I hope Obama has the chance to take this on, like he did the gas tax.

  7. There is no technological bullet on the horizon that is going to save us from destroying the climate

    I have to disagree…thorium can do the job.

  8. Joe says:

    Kirik — Where is there a thorium reactor running now?

  9. Well “Joeie”, India.

  10. Joe says:

    You have a link with info on this?

  11. Brad Venner says:

    From American Scientist, Sept-Oct 2003

    http://www.americanscientist.org/template/AssetDetail/assetid/25710/page/2

    India’s attraction to thorium-based fuels stems, in part, from its large indigenous supply. (With estimated thorium reserves of some 290,000 tons, it ranks second only to Australia.) But that nation’s pursuit of thorium, which helps bring it independence from overseas uranium sources, came about for a reason that has nothing to do with its balance of trade: India uses some of its reactors to make plutonium for atomic bombs. Thus India refuses to be constrained by the provisions that commercial uranium suppliers in countries such as Canada require: They demand that purchasers of their ore allow enough oversight to ensure that the fuel (or the plutonium spawned from it) is not used for nuclear weapons.
    India’s attraction to thorium-based fuels stems, in part, from its large indigenous supply. (With estimated thorium reserves of some 290,000 tons, it ranks second only to Australia.) But that nation’s pursuit of thorium, which helps bring it independence from overseas uranium sources, came about for a reason that has nothing to do with its balance of trade: India uses some of its reactors to make plutonium for atomic bombs. Thus India refuses to be constrained by the provisions that commercial uranium suppliers in countries such as Canada require: They demand that purchasers of their ore allow enough oversight to ensure that the fuel (or the plutonium spawned from it) is not used for nuclear weapons.

  12. Brad, India is largely surrounded by two nuclear powers, and Pakistan is very aggressive. The Indians are caught between a rock and a hard place because their military interests are served by nuclear weapons, and the Uranium suppliers want them to forgo nuclear weapons.

    Kirk is right the the Indians are currently running reactors with different nuclear fuels, Including thorium cycle based fuel.

  13. Klaus A says:

    I am against a carbon TAX for a very simple reason. A tax is ultimately paid for by the rate payer. Basically everybody. It does not reduce CO2 if we continue to use coal and not replace coal plants. It just funnels money to the most inefficient entity known, the government, to dissapear there in political pork projects and “administration”. Therefore it does NOT increase available capital for alternate energy sources or lower their cost. Really the only function is to make everybody poorer.
    IF the carbon levy were to be paid instead into a fund that finances research, development and building of effective alternate energy sources like the LFTR, then I would be all for it. But it has to be assured that politicians do not get their hands on it. As an example for an industry levy where they did, look at what happend to the fund paid for nuclear waste disposal.

  14. Klaus raises good points. What the government has done with the Nuclear Waste Fund is really pitiful and inexcusable.

  15. Abgrund says:

    The gas tax is basically the same as a carbon tax would be. It does very little to reduce consumption, it just bleeds the consumer and the money doesn’t go into offsetting the pollution or developing or providing better substitutes. If you want to change people’s behavior, you have to tax those who actually have choices.

    Funny how the so-called “liberals” always support regressive, smash-the-working-man taxes. How about taxing the profits of the oil companies, instead?

  16. hapa says:

    never seen a serious carbon tax proposal that doesn’t offset other taxes on ordinary people — sales tax, payroll tax, etc — or kick back a flat “normal use” refund — so the price only hits professional polluters.

  17. I haven’t made up my mind on the carbon tax. I generally agree that *repressive* taxes should be opposed. On the otherhand, taxing the profits of the oil companies…that could be different since it’s after the balance is due, so to speak and doesn’t effect the consumer.

    I want to take up this issue of “no technilogical bullet” thing. Of course there is…

    In no particular order, assuming the US, specifcally (but applicable world wide) had an actual *plan*, then the already proven, developed-in-the-1950s, LFTR would in fact be such a bullet. Why would it not be?

    If the US had a real conservation plan; put the money it has now fighting for fossil fuels in Iraq into a Manhatten-style electrical storage system that can cheaply (relatively speaking) get over 200 miles to a single charge for an electric vehicle, then we cold go 100% atomic power.

    The LFTR is *cheaper* to build than a regular LWR nuclear plant, the fuel is 4 times as plentiful, it producing only 1% of the waste of the above, it’s exlosion proof. We wouldn’t even need the carbon tax. We could eventually get to the point here we stop building ICE land transportation powered by fossil fuel and even ban their production down the road.

    None of the candidates think this long term. None of them seem to have the imagination to raise this seriously. From atomic fission into your car in one swoop.

    David

  18. karmath says:

    Klaus points are nice and good. What the government has done with the Nuclear Waste Fund is really poor and unforgivable.

  19. karmath says:

    The governments action towards the Nuclear Waste Fund is really poor and unforgivable.

  20. loiz says:

    Actually the carbon tax a`la Hansen is payed at the mining pit or import hub, and gets 100% redistributed flat to taxpayers as a fixed number, so the costs of implementing are trivial. This “tax” translates to a flat dividend.