The American Spectator

Political Hay

A Maverick Climate Policy

By William Yeatman on 3.31.08 @ 12:08AM

(Page 2 of 2)

In addition to mandatory emissions caps, McCain's bill would establish one of the largest ever government research programs, to develop clean energy technology. But government-funded research is unlikely to achieve a clean energy technological breakthrough because politicians are poor judges of which technologies show the most promise. If they were any good at picking winners, they would probably be venture capitalists.

Remember, government has a long history of failed energy initiatives. Synfuels have remained unaffordable for half a century, despite generous government support. The 1970s energy crisis prompted Congress to establish the Solar Energy Research Institute; a generation later, solar power is still far from competitive.

And just last month the White House shelved plans for FutureGen, a multi-billion-dollar clean-coal power plant prototype.

McCAIN CLAIMS THE Climate Stewardship Act is a market-based solution to global warming. It is anything but. He would have the government cap emissions; create the emissions market and rake off the profits; and control clean energy research.

If he really wants to put forward free market alternatives, they do exist. He could advocate the elimination of government market interventions that obstruct emission reductions and discourage the adoption of lower emission technologies.

To wit, the way the electricity market works now -- centralized electricity production transmitted over great distances to consumers -- is grossly inefficient. This wasteful model will persist only as long as government forbids competition in electricity transmission and distribution. Deregulation of the electricity grid would allow entrepreneurs to profit by making the system more energy efficient, and thus more environmentally friendly.

Then there's nuclear power. It leaves virtually no carbon footprint, but plant construction has slowed to a virtual halt because of the regulatory burden imposed on nuclear energy by local and federal governments. Lightening this burden would allow nuclear to compete properly with coal and natural gas, again to the benefit of the climate.

Another effective free market solution is expensing -- the removal of tax penalties on capital investment. By allowing companies to write off more of their investments sooner, expensing would encourage rapid turnover of plants and equipment. In general, newer facilities are more productive than older units, delivering more output per unit of input. Expensing would accelerate carbon intensity decline -- without dreaded energy rationing.

Natural gas has half the carbon footprint of coal. There is enough of it off the Gulf Coast to power American industry for 30 years, but it remains locked away because the federal government refuses to open it up to exploration. A certain someone could pressure his colleagues to do just that.

Congress is considering several climate bills, all of which include cap and trade schemes along the lines of McCain's American jobs killing proposal. If the Arizona senator wants to be a true maverick, he should buck the trend that he helped start -- by supporting free market solutions to global warming that might actually make a difference.

Letter to the Editor

topics:
Trade, John McCain, Economics, Business, Environment, Global Warming, European Union, NATO, Energy, Oil