McCain Adviser Questions CAFE, Energy Policies Other Than Cap-and-Trade

Wonk Room — Mon, 24 Mar 2008 14:19:00 -0500

In an interview with Darren Samuelson of E&E News last Thursday, Douglas Holtz-Eakin lays down significant markers for Sen. John McCain’s (R-Ariz.) climate policy.

On policies such as a low-carbon fuel standard or renewable portfolio standard:

“The basic idea is if you go with a cap and trade and do it right with appropriate implementation, you don’t need technology-specific and sectoral policies that are on the books and that others are proposing simultaneously.”

On the rise in CAFE standards in the 2007 energy act:

“He’s not proposing to eliminate those. He simply wants to check as time goes on if they become completely irrelevant. You might want to take them off the books, but we’re not there yet.”

On McCain-Lieberman:

“When he introduced that bill, the floor statement was pretty clear that this was an ongoing process. He wasn’t so much committed to the bill as to an issue.”

On Lieberman-Warner:

“The Lieberman-Warner is a good bill. It’s not his intention to suggest anything different. . . We don’t take positions on Senate legislation given it will change. He’s going to realistically need to have time to study the bill. It’s premature.”

On nuclear subsidies:

“He wants to see the use of nukes. The ultimate policy proposal will be designed to make sure that’s true.”

Holtz-Eakin, director of the Congressional Budget Office from 2003-2005 and chief economist for President Bush 2001-2002, is the top economic advisor for Sen. John McCain’s 2008 presidential campaign.

CAMPAIGN 2008: McCain adviser questions Democrats’ push for more than cap and trade (03/21/2008) Darren Samuelsohn, Greenwire senior reporter
John McCain bucks the traditional Republican establishment with his support for cap-and-trade legislation, but the Arizona senator’s presidential campaign is trying to differentiate itself from its Democratic rivals by rejecting calls for additional climate-themed restrictions.

“The basic idea is if you go with a cap and trade and do it right with appropriate implementation, you don’t need technology-specific and sectoral policies that are on the books and that others are proposing simultaneously,” Douglas Holtz-Eakin, a McCain campaign policy adviser, said in an interview yesterday.

Holtz-Eakin, a former director of the Congressional Budget Office, dismissed the presidential campaign platforms of McCain’s two remaining Democratic rivals, Sens. Barack Obama of Illinois and Hillary Rodham Clinton of New York. Specifically, he questioned the candidates’ calls for a new federal low carbon fuel limit, stronger fuel economy standards and policies to reduce U.S. oil consumption.

Cap and trade, Holtz-Eakin said, is the ideal solution by itself. “You don’t need redundant policies that interfere with the flexibility that is the key to meeting these desirable goals at low costs,” he said.

Asked if this position meant McCain would block implementation of new corporate average fuel economy requirements that President Bush signed into law last December, Holtz-Eakin replied, “He’s not proposing to eliminate those. He simply wants to check as time goes on if they become completely irrelevant. You might want to take them off the books, but we’re not there yet.”

Both Clinton and Obama support setting up a mandatory cap-and-trade program to reduce U.S. heat-trapping greenhouse gas emissions 80 percent by midcentury. They are also identical in backing a 100 percent auction of the emission credits.

Unlike McCain, the two Democratic candidates would push their climate regulations beyond cap and trade.

Clinton, for example, would increase fuel efficiency standards to 55 miles per gallon by 2030 and cut foreign oil imports by two-thirds from 2030 projected levels. Obama says he would double fuel economy standards within 18 years and supports a federal low carbon fuel standard requiring suppliers to reduce the carbon their fuel emits by 10 percent by 2020.

Campaign aides for both Clinton and Obama did not return calls or e-mails requesting comment about the McCain adviser’s efforts to contrast the candidates.

But their surrogates did defend the push for even broader climate policies beyond cap and trade during a panel discussion last week in Santa Barbara, Calif., hosted by the Wall Street Journal.

“He appreciates the problem of climate change is unlike anything we’ve ever faced before,” Obama climate adviser Jason Grumet said. “It’s going to require a kind of social commitment along the lines we’ve not seen in this country since World War II.”

Added Gene Sperling, a Clinton adviser, “It can’t be an all-or-nothing proposition. Senator Clinton has a lot of proposals about what you can do as the executive from day one going forward.”

No position on Lieberman-Warner

McCain also is not wedded to the cap-and-trade bill he introduced in January 2007 with Sen. Joe Lieberman (I-Conn.) that seeks to cut U.S. emissions 60 percent below 1990 levels by 2050. “When he introduced that bill, the floor statement was pretty clear that this was an ongoing process,” Holtz-Eakin said. “He wasn’t so much committed to the bill as to an issue.”

Several climate proposals have been introduced in Congress since Lieberman and McCain teamed up, including a more stringent Lieberman proposal that includes Sen. John Warner (R-Va.) as the lead co-sponsor. “The Lieberman-Warner is a good bill,” Holtz-Eakin said of the legislation due on the Senate floor this June. “It’s not his intention to suggest anything different.”

But Holtz-Eakin said that does not mean McCain will be a guaranteed “yes” vote.

“We don’t take positions on Senate legislation given it will change,” he said. “He’s going to realistically need to have time to study the bill. It’s premature.”

Turning to some cap-and-trade specifics, McCain does have concerns about the idea of using a complete 100 percent auction for emission credits. While McCain’s views remain static on the topic, Holtz-Eakin said the Arizona Republican wants to make sure allowance distribution takes into account international competition for U.S. businesses and also how to distribute costs across the economy.

McCain also continues to support growth in nuclear power. Pressed to explain what beyond a cap-and-trade program would be needed, Holtz-Eakin replied, “He wants to see the use of nukes. The ultimate policy proposal will be designed to make sure that’s true.”

Post-Kyoto deadlines

McCain is planning several environmentally themed speeches later this year as the general election campaign picks up steam—though no firm dates have been set.

The four-term senator also is trying to brandish his foreign policy credentials this week with visits to Iraq, Israel and Europe.

McCain, Lieberman and Sen. Lindsey Graham (R-S.C.) visited British Prime Minister Gordon Brown in London yesterday to talk about a number of issues, including international climate negotiations aimed at getting a new treaty that can succeed the Kyoto Protocol.

“I am convinced that if we work at it, we will be able to convince India and China that it is in their interest to be part of a global agreement to reduce greenhouse gas emissions,” McCain told reporters outside Brown’s 10 Downing Street office. “I believe that we can achieve a global agreement.”

Keeping the focus on climate negotiations, McCain also visited with Stavros Dimas, the top European Commission climate official. And echoing aides to Obama and Clinton, Holtz-Eakin acknowledged that McCain is considering sending staff to the annual U.N. climate conference this December in Poznan, Poland, if he wins the election.

“We have certainly contemplated it,” Holtz-Eakin said.

Climate negotiators have given themselves a 2009 deadline for completing a new post-Kyoto agreement—a schedule some see as difficult to meet given the time it will take for a new U.S. president to get his or her staff and policies in place.

Asked to comment on the post-Kyoto deadline, Holtz-Eakin replied, “Saying anything very definitive about meeting a target that is 11 months into the first term when you don’t have any control in between is really hard. We’ll certainly be interested in moving this process forward as quick as possible.”

Hill Heat: McCain Adviser Questions CAFE, Energy Policies Other Than Cap-and-Trade

McCain Adviser Questions CAFE, Energy Policies Other Than Cap-and-Trade