Dem’s Energy Plan Harks Back to 1980s Industrial Policy

By Published On: August 29, 2008

With renewable energy tax credits running out and their extension stalled in Washington, leaders at the Democratic National Convention in Denver this week rallied around Barack Obama’s plan to create 5 million new jobs through a $150 billion clean energy investment plan. Amid the circus atmosphere of clean energy and green technology displays, movie stars in hybrid vehicles, solar-powered concerts, and bloggers pounding keyboards, Democrats, such as Montana Governor Brian Schweitzer, exhorted the party faithful to back Obama. He said Obama “knows there’s no single platform” for solving the nation’s energy problems. “It’s not a question of either wind or clean coal, solar or hydrogen, oil or geothermal,” said Schweitzer, who has played a key role as a spokesperson for Democrats on energy matters–particularly on clean coal and coal to liquid fuel strategies. “We need them all to create a strong American energy system, a system built on American innovation.” Obama’s energy plan is a big tent that pushes clean coal, “safe” nuclear power, and increased drilling and production of domestic oil and gas. At the same time, it also seeks to enhance energy efficiency, including weatherizing a million homes a year. On nuclear energy, Obama wants to enhance security and oversight for spent nuclear fuel to prevent it from being diverted into the hands of terrorists or rogue states. His running mate Senator Joe Biden (D-DE) called for shaking up the Nuclear Regulatory Commission during the Democratic Presidential primary campaign to make it a “watch dog” instead of a “house dog.” He criticized the agency for being too lax on enforcing safety requirements at nuclear plants. Yet, the Democratic nominee’s plan sees that nuclear power will be an option–particularly to meet climate change goals. Obama comes from a state with nuclear industry. His plan calls for a federal greenhouse gas cap-and-trade program that would cut emissions 80 percent below their 1990 levels over the next 50 years, as well as backing U.S. participation in a new international treaty. It also promotes plug-in hybrid vehicles and renewable energy, setting a 10 percent renewable portfolio standard for the nation’s power industry in 2012. The farm state Democrat would set a low carbon fuel standard, requiring a 10 percent reduction in the carbon content of transportation fuels within 10 years, as well as supporting “sustainable” biofuels. In the short run, his plan would seek to provide energy price relief through a “crack down on excessive energy speculation,” releasing crude from the strategic petroleum reserve, and energy rebates to individuals funded by a windfall profits tax on the oil industry. At the heart of his plan, though, is its revival of the industrial policy concept that was the darling of Democrats during the 1980s amid an onslaught of Japanese imports–from autos to electronics. At that time, Democrats sought to strategically subsidize specific technologies and industries with growth potential, such as telecommunications. Obama’s plan would seek to do the same with energy technologies, from clean coal to a new digital electricity grid. He would spend $150 billion to convert the U.S. manufacturing base to produce clean energy technologies. Under his plan, the federal government would help capitalize small and mid-size manufacturers to produce new technologies that could provide up to 5 million new jobs. In addition, the federal government would establish training programs to retool older workers and veterans and attract young people to work in these new energy industries. “In a global economy, you shouldn’t have to leave your home town to find a world class job,” former Virginia governor Mark Warner told the convention in commending the strategy. Warner is running for Senate in the Old Dominion state. As Democrats hailed Obama’s plan, federal lawmakers remained deadlocked on extending tax credits for renewable energy developers, who see them as crucial to financing wind and solar projects. The tax credits are set to expire at the end of the year and numerous attempts to renew them have failed to date. The American Wind Energy Association warned before the convention that projected wind power development next year is down due to uncertainty about the availability of the tax credits. As many as 116,000 jobs could be shed in the solar and wind energy businesses if the credits are not renewed, according to the association. Meanwhile, to underscore the effectiveness of renewable energy, the party is covering its energy use at the convention with renewable energy credits provided by Sterling Planet. In odd highlights of the convention, an event put on by Rolling Stone and Trojan featured a full bar–with condom displays on all the bar tables–movie star Daryl Hannah, and satirist Bill Maher. Editors’ note: For more, please see our sister publication E=MC2 – Energy Meets Climate Challenge. You can find it at www.energymeetsclimate.com.

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