On a precise note, Senator Barack Obama spoke about "transforming our energy policies" (0:45). However, Geoffrey Styles argues for restraint.
…even assuming that some form of cap and trade or carbon tax will eventually be enacted, it remains an absolute certainty that the 2012 presidential election will take place in the context of very large US energy imports. The next president would be wise to eschew the temptation of quick fixes and instead focus his efforts on promoting energy efficiency and ensuring that the nation has diverse and reliable supplies of conventional energy, as we undertake the long transition to a more sustainable energy mix. If he instead creates the expectation of an energy revolution, how satisfied would the public be with the steady accumulation of incremental progress that is probably the best we can hope for in the near term?
Speaking of energy diplomacy (8:30), the Democratic-controlled US Congress has set an important precedent, Boxer-Lieberman-Warner.
It is unlikely that the bill currently being debated in the Senate this week will become law this year. This is the opening salvo–or really just the most recent round–in a longer process that should also feature prominently in this year’s presidential campaign, particularly since the remaining major-party candidates all support some version of cap & trade. As we attempt to build a national consensus for this measure, we can’t afford to leave the public in the dark concerning the rationale behind the crucial choice between mandates and market-based solutions, and the pros and cons of cap & trade versus a carbon tax.
As The Economist points out, there is a nasty side to the first effort.
But the bill in Congress would allow only a small number of offsets, and only from factories that do not compete with American firms—a big hurdle in a globalised world. Worse, to make the bill more palatable to China-bashing politicians, its authors have strengthened provisions that would impose tariffs on energy-intensive imports from countries that are not taking “comparable action” against climate change, meaning all developing countries. That is a recipe for a trade war, which would only compound the economic pain of global warming.
Styles, again calls for a more realistic energy diplomacy.
If we’re looking for US diplomacy to have an impact on the price American consumers pay for gasoline, the elimination of market-distorting fuel subsidies around the world looks like a better target than exhorting oil producers to increase their output to drive prices down. It would also be more consistent with US policy in other areas, in contrast to our schizophrenic approach to oil drilling.
Slow down, Obama!