Today, Sen. John McCain (R-AZ) delivered a major speech on global warming at the North American headquarters of the Danish wind-power company Vestas, despite having prevented the passage of critical renewable energy tax credits for the wind industry in December and February. His campaign also unveiled an advertisement that includes this voiceover:

One extreme thinks high taxes and crippling regulation is the solution. The other side denies the problem even exists. There’s a better way.

Watch it:

One half of the ad is true: A significant constituency of the right wing denies that global warming exists or requires action. Sen. James Inhofe (R-OK), the ranking member of the Senate Environment and Public Works Committee, promotes the Skeptic’s Guide to Debunking Global Warming Alarmism. Right-wing media promote false headlines about climate change science. And the U.S. Chamber of Commerce and Bush administration’s response to global warming is to embrace an energy policy of increased fossil fuel dependence.

But what “extreme thinks high taxes and crippling regulation is the solution”? Those calling for a carbon tax instead of a cap-and-trade system to set a price on emissions are primarily conservative economists like Glenn Hubbard and Gregory Mankiw, the chairmen of Bush’s Council of Economic Advisers from 2001 to 2005. Is McCain calling Wall Street conservatives “extreme”?

And what “crippling regulation”? The only thing McCain describes as a “regulation” is an energy efficiency standard for building codes. The global investment firm McKinsey & Company has found that mandatory energy efficiency standards, far from being crippling, overcome present market failures and policy distortions and can drive massive return on investment. Is McCain calling McKinsey “extreme”?

McCain’s just trying to have it both ways — his campaign is trying to promote the complex system of government regulation necessary to establish a fair and national carbon market and still pay homage to a right-wing ideology that considers any governmental solutions anathema. Read more

The Bush administration has signed off on a stunning new report, “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply.”

I am working on a big wind article for mid-week, but here are the key conclusions of what is easily the most comprehensive and credible report released on windpower in a decade:

• Annual installations need to increase by only a factor of three from current levels by 2018.
• Costs of integrating intermittent wind power into the grid are modest. 20 percent wind can be reliably integrated into the grid for less than 0.5 cents per kWh.
• No material constraints currently exist. Although demand for copper, fiberglass and other raw materials will increase, achieving 20 percent wind is not limited by the availability of raw materials.
• This would require 300,000 MW of wind, delivering electricity for about 6 to 8.5 cents per kilowatt hour, unsubsidized (i.e. no federal tax credit) and including the cost of transmission to access existing power lines within 500 miles of wind resource [new nuclear is currently about 15 cents/kwh (see here)].
• The 20% Wind Scenario could require an incremental investment of as little as $43 billion NPV [net present value] more than the base-case no new Wind Scenario. This would represent less than 0.06 cent (6 one-hundredths of 1 cent) per kilowatt-hour of total generation by 2030, or roughly 50 cents per month per household.

The benefits the country gets for this small incremental investment are staggering:

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McCain’s cost-containment strategy for his climate policy is a fraud. It substitutes a huge amount of low cost, phony emissions reductions both here and abroad — called offsets — for actual domestic emissions reductions. Offsets are “credits for reductions made from sectors of the economy outside the trading system.”

Such an offset strategy is little more than rearranging deck chairs on the Titanic, and would “involve substantial issuance of credits that do not represent real emissions reductions,” according to a recent analysis by Stanford. Ironically, one of the carbon offsets that McCain explicitly cites, no till farming, does not actually offset carbon emissions, according to the latest science.

KEEPING CARBON COSTS LOW

Every major cap & trade bill needs a strategy to keep the cost of the emissions permits as low as possible to minimize economic pain and to stop politicians from trying to undo the entire system, by, say … oh, just hypothetically now … demanding a carbon price holiday whenever prices get too high or the economy starts to slow (see “McCain reveals cynicism, hypocrisy with call for summer gas-tax holiday, energy budget freeze.”)

Progressives like Sen. Obama typically embrace aggressive clean energy deployment strategies as well as smarter regulations that promote efficiency (see “Could a President Obama or Clinton stop global warming?“). Sen. McCain, like most conservatives, does not support such strategies and indeed has routinely oppose them (see Part 1). Unfortunately, without such policies, the price for carbon could easily reach hundreds of dollars per metric ton (as I explain in “No Climate for Old Men“), causing economic harm and a political backlash.

Another strategy for cost containment is a safety valve, a ceiling on the permit price. A safety valid is a terrible idea that undermines the whole point of a cap & trade (see here and here). Fortunately, McCain opposes a safety valve, as he explains in the newly released “Q&A: John McCain’s Climate Platform.” You can also read his new talking points and fact sheet and the speech itself. But the “Q&A” is the most important of all those.

This leaves McCain very few options if he wants a bill that keeps costs low. Sadly, he takes absolutely the worst possible option — unlimited offsets.

A TITANIC EMBRACE OF OFFSETS

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Sen. John McCain (R-AZ) is poised to make a major speech on global warming today at the North American headquarters of the Danish wind-turbine company Vestas. In the speech, McCain takes steps to rhetorically distance himself from President Bush’s shameful record of inaction on global warming:

I will not permit eight long years to pass without serious action on serious challenges.

Center for American Progress Senior Fellow Joe Romm notes that McCain has chosen a “clever, but ultimately hypocritical location” for his address, because “conservatives including John McCain, are the main reason McCain has to go to a Danish wind turbine manufacturer to give a climate speech.”

Last year, Sen. McCain told Grist, “The wind industry is doing fine.” In fact, the United States was the market leader in wind technology — following government investments decades ago under President Carter. In the past 26 years that McCain has been in Congress, Romm explains, conservatives “repeatedly gutted the wind budget, then opposed efforts by progressives to increase it, and repeatedly blocked efforts to extend the wind power tax credit.” Now the United States is a bit player in the $36 billion global market.

In these past “eight long years” alone, McCain has worked with other conservatives to kill federal renewable electricity standards and renewable energy production tax credits. Here are some of the lowlights:

McCain Opposes Renewable Electricity Standards. A renewable electricity standard would require utilities to generate a certain portion of their electricity from wind, solar, geothermal, and other renewable energy sources. Twenty six states, including Arizona, have such requirements. The passage of a renewable energy standard in Colorado in 2004 was a key incentive for Vestas in siting its new wind turbine plant in that state. Sen. McCain voted against renewable electricity every time:

– 2002 (Vote 50): Voted against 20 percent requirement.
– 2002 (Vote 55): Voted to gut 10 percent requirement.
– 2002 (Vote 59): Voted to gut 10 percent requirement.
– 2005 (Vote 141): Voted against a renewable portfolio standard.
– 2005 (Vote 363): Cast deciding vote to cut rural Renewable Energy and Energy Efficiency program funding rom $23 million to $3 million.

McCain Opposes Renewable Production Tax Credits. The renewable electricity production tax credit has been key to the growth of the domestic wind industry by supporting power companies, businesses, and individuals who employ wind, geothermal, solar, and other types of renewable electricity. However, the tax credit has been allowed to expire three times in the past decade — in 2004, McCain introduced an amendment that would have eliminated the tax credit entirely. McCain’s continued opposition to the tax credit is putting the wind industry at risk again:

– March 2006 (Vote 42): Voted against extension of tax credits.
– March 2007 (Vote 98): Skipped vote to extend tax credits.
– June 2007 (Vote 223): Skipped vote to extend tax credits.
– December 2007 (Vote 416): Skipped vote to extend tax credits — extension failed by one vote.
– February 2008 (Vote 8): Skipped vote to extend tax credits — extension failed by one vote.

A report from the Union of Concerned Scientists shows how this failure of conservative priorities — from Bush and McCain — “contributes to a boom-bust cycle of development that plagues the wind industry.”

UPDATE: In 2003, Vestas cancelled plans to construct a wind turbine plant in Portland, Oregon and laid off 500 employees because of the uncertainty surrounding the production tax credit.

WHAT: PRESS CALL – McCain Global Warming Plan

WHEN: TODAY, Monday, May 12, 2008 at 12:00 PM EDT

WHERE: By telephone 866.682.6100, ID: McCain Global Warming Plan

WHO: Carol Browner, Principal, the Albright Group LLC, former EPA Administrator, 1993-2001

Daniel J. Weiss, Senior Fellow, Center for American Progress Action Fund

Conservative presidential candidate Sen. John McCain chose a clever, but ultimately hypocritical location for his big climate speech. I hope the media aren’t fooled by his ironic choice of wind turbine company Vestas as the backdrop, but I have little doubt they will run enticing photos and videos of wind turbines. McCain, however, does not deserve to be linked to such images.

I would title the speech “Not the man for the job,” (see “No Climate for Old Men“). [Full text here, further comments in later posts, and other blog critiques here and here. .]

Let’s be clear — conservatives like John McCain, or more accurately, conservatives including John McCain, are the main reason McCain has to go to a Danish wind turbine manufacturer to give a climate speech. With the major government investments in wind in the 1970s, the United States was poised to be a dominant player in what was clearly going to be one of the biggest job creating industries of the next hundred years. But conservatives repeatedly gutted the wind budget, then opposed efforts by progressives to increase it, and repeatedly blocked efforts to extend the wind power tax credit. The sad result can be seen here:

That’s right. The United States is now a bit player in an industry we launched (we had 90% of global installed capacity in the mid-1980s) — thanks to conservatives, including McCain.

In December, McCain himself failed to show up for a key vote that would have extended the wind power production tax credit, which has been a key driver of wind power in this country — allowing it to compete with our better-subsidized power sources (like nuclear) in this country, and to partly offset the much bigger subsidies other countries have for renewables. The vote would have shifted money from subsidies to the oil industry, which hardly needs it given record oil prices and record oil profits (see “How high must oil go before we end subsidies?“)

McCain’s vote could have broken the conservative filibuster blocking the effort to support renewables, since the clean energy tax package failed 59-40, but his spokesperson said that “he would not have supported breaking the filibuster.” This was but one recent example of a series of missed votes or anti-renewable votes McCain has cast in recent years.

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UPDATE: The Wonk Room now also has the McCain campaign talking points, question-and-answer and “fact sheet” handouts.

UPDATE II: David Roberts at Gristmill, A Siegel at Energy Smart, and the Sierra Club praise McCain’s recognition of global warming but find his plan inadequate. Joe Romm at Climate Progress responds to McCain’s hypocrisy for delivering the speech at a Danish wind turbine facility. Matthew Yglesias wonders about McCain’s fixation on nuclear and insufficient goals. David Corn wonders why McCain “didn’t blast Bush on global warming when he was courting Republican voters.”

Here is the full text of Sen. John McCain’s (R-AZ) speech on climate change in Portland, Oregon (changes from prepared remarks are indicated):

Thank you all very much. I appreciate the hospitality of Vestas Wind Technology. Today is a kind of test run for the company. They’ve got wind technicians here, wind studies, and all these wind turbines, but there’s no wind. So now I know why they asked me to come give a speech.

Every day, when there are no reporters and cameras around to draw attention to it, this company and others like it are doing important work. And what we see here is just a glimpse of much bigger things to come. Wind power is one of many alternative energy sources that are changing our economy for the better. And one day they will change our economy forever.

Wind is a clean and predictable source of energy, and about as renewable as anything on earth. Along with solar power, fuel-cell technology, cleaner burning fuels and other new energy sources, wind power will bring America closer to energy independence. Our economy depends upon clean and affordable alternatives to fossil fuels, and so, in many ways, does our security. A large share of the world’s oil reserves is controlled by foreign powers that do not have our interests at heart. And as our reliance on oil passes away, their power will vanish with it.

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