By Rebecca Brenia, McCarter & English, Hartford
No matter the outcome, today’s election is likely to bring about a dramatic shift in climate change policy within the federal executive branch. Senators John McCain and Barack Obama both support policies to bring about a significant reduction in greenhouse gas emissions over the coming decades. The candidates’ positions with respect to climate change are quite similar, with different tactical approaches in certain areas.
The candidates both support a mandatory, economy-wide cap-and-trade program to dramatically reduce greenhouse gas emissions from major industrial emitters over the next half-century. The incremental reductions that will be required can be achieved directly or by purchasing offsets.
Senator Obama proposes auctioning 100% of available emissions allowances to raise an estimated $250 billion each year for federal programs, including a ten-year, $150 billion program to develop low-emission electricity and to create jobs. The greenhouse gas cap-and-trade bill that Senator McCain co-authored with Senator Lieberman in 2003, 2005, and 2007 tasks the Environmental Protection Agency with determining the best way to allocate emission allowances. (Senator Obama co-sponsored the two most recent versions of the bill). Senator McCain advocates the development of low cost-compliance options, and his website states that allowances will eventually be auctioned to support advanced technologies.
During the second presidential debate, the candidates had an exchange about nuclear power. Senator McCain favors a rapid expansion of nuclear power, which generates minimal greenhouse gases. He has called for 45 new nuclear reactors by 2030. Senator Obama has concerns about the safety and security of nuclear fuel, but has stated that nuclear power can be part of the climate change solution if safeguards are put in place.
The candidates both support policies to reduce greenhouse gas emissions associated with building and transportation. Each candidate pledges to increase the energy efficiency of government-owned or leased buildings, with Senator Obama pledging to require new federal buildings to be carbon neutral by 2025. Both candidates support a tax credit for consumers who purchase zero-emission vehicles. Senator McCain proposes a $300 million prize for the development of advanced battery technology for hybrid and fully-electric cars. Senator Obama calls for a million plug-in vehicles by 2015. Both candidates support flexible fuel technology.
Senators McCain and Obama also share a commitment to participating in the international dialogue on climate change. Both will engage in talks as part of the United Nations Framework Convention on Climate Change, and both have expressed an intent to provide incentives for developing nations to reduce greenhouse gas emissions.
Given the candidates’ agreement that climate change is an urgent problem that deserves the government’s immediate attention and resources, the question is not whether climate change policy will advance as a result of today's election. The question rather is how widespread and rapid the changes will be. Savvy business leaders, investors and entrepreneurs are planning their responses now.