US: September 24, 2008


Senior advisers to presidential candidates Barack Obama and John McCain debated how the United States should tackle climate change at a conference in New York on Monday.


The debate between Dan Esty, an Obama adviser and an environmental law professor Yale University, and Douglas Holtz-Eakin, a McCain adviser and a former director of the Congressional Budget Office, focused on the auctioning of permits for the right to pollute greenhouse gases.

Both candidates support a cap and trade program that would issue big polluters, such as power generators and oil and gas companies, permits to emit greenhouse gases.

Under such a system the government would cap emissions; companies that exceed their limits must buy more permits to pollute, while those that come in under their limit may sell their permits. The market is expected to lead to innovation in clean energy and conservation as companies find ways to avoid buying permits.

Obama favors government auctioning of 100 percent of the permits, which would, in effect, make polluters pay at the beginning of the program. McCain has said the permits should be initially given to polluters to help them transition.

They also debated, at a Carbon Disclosure Project conference, whether massive new nuclear power generation would help lead the fight. McCain wants to provide incentives to build 45 new nuclear power plants between now and 2030. Obama supports nuclear, but says disposing of nuclear waste from US plants and solving nuclear proliferation concerns are important.


AUCTIONS OF PERMITS

Esty:

"What we've got is a starting principle, it's a principle that underlies all successful environmental efforts of making polluters pay for the harms they've caused."

"The choice not to auction is a choice to, in effect, give the permits to the incumbent polluters. I think starting with that premise is a mistake. I think we start with the opposite and see if we have to move from there to establish a political consensus.

"(100 percent auctions create) the incentive for people that can provide solutions to come into the market and help others solve their problems, help others not have to pay,

"We're committed to 100 auctions, but we are committed equally to flexibility to get the job done."

Holtz-Eakin:

"The auctions in McCain's plan don't start out at 100 percent but only ramp up over time."

"In a world where cash flows don't matter, if you could borrow and lend infinitely and freely ... it wouldn't matter. But cash flows do matter and when businesses face the cash flow demands to pay for the auctions it will squeeze other aspects of their operations. These things (should) be balanced in a way that will both get through the Senate but also through the House of Representatives where we never had a vote on a climate change bill ever in the history of the United States."


NUCLEAR POWER

Esty

"Let's not torque the choice toward nuclear. McCain favors incentives for old energy, favors oil drilling ... as the centerpiece of the game plan going forward ... and a big commitment to nuclear power that could involve expenditures of US$300 billion that may or may not be the right path forward."

Holtz-Eakin

"We all know in the end, addressing global warming is about innovation and new technologies. But there is one zero-emissions technology that's out there right now, that we can take advantage and Senator McCain believes we should take advantage of it in an aggressive way." (Reporting by Timothy Gardner; Editing by Marguerita Choy and Eric Walsh)


REUTERS NEWS SERVICE