The Obama-Biden New Energy Plan for America sets out the following goals:
- Provide short-term relief to American families facing pain at the pump.
- Help create five million new jobs by strategically investing US$150 billion over the next ten years to catalyse private efforts to build a clean energy future.
- Save more oil than the USA currently imports from the Middle East and Venezuela combined within 10 years.
- Put one million plug-in hybrid cars that can get up to 150 miles per gallon on the road by 2015, and which should be built in America.
- Ensure 10% of US electricity comes from renewable sources by 2012, and 25% by 2025.
- Implement an economy-wide cap-and-trade programme to reduce greenhouse gas emissions 80% by 2050.
Often voters find that candidates reduce, or abandon, their promises once in office, but commentators seem convinced that Obama will deliver on his promises. Part of the reason, is that Obama’s energy plan appears to be integral to his pledge to restart the economy.
In addition, the plan, although costly, contains possible funding sources such as income from the sale of permits under the cap-and-trade programme. However, rising electricity costs due to the same programme, could stir opposition in the current financial climate.
Cleantech sector welcomes Obama
According to analyst StrategyEye, the cleantech sector reacted positively to the election of Obama. The analyst firm highlights two cleantech sectors in particular, that are expected to immediately benefit from the new presidency: corn ethanol and wind.
Obama supports maintaining the ethanol import tariff and it is likely that future ethanol production targets will be increased. He also supports the development of next-generation biofuels, and is expected to make money available for research into cellulose and algae-based biofuels, the analyst writes.
When it comes to wind, StrategyEye says it is “highly possible” that Obama will push through a more long-term measure than the one-year extension of the production tax credit (PTC). He also supports the enactment of a national renewable portfolio standard.
In addition, Obama is prepared to use public sector funds to help pay for expensive electricity transmission lines, which are sorely needed to connect wind farms in the mid-west to major coastal population centres.
Challenges
However, StrategyEye also acknowledges the challenges facing the President-elect as candidates often have to make big compromises once they reach the White House.
“Obama faces US national debt of over US$10 trillion and the prospect of a long-lasting recession, which may restrict his ability to implement the changes needed in the sector. However, he will enjoy the support of a Democrat Congress, which should make it easier for him to enact radical legislation.”
The analyst goes even further, saying that Obama may have understated his cleantech ambitions during the campaign to “garner favour with moderate Republicans.”
“Obama may, therefore, turn out to be more favourable to clean technology development than anyone in the sector thought. Throughout the campaign, Obama pushed his plans for a 10 year programme, similar to the Apollo space programme, to develop new energy sources and also showed support for a national emissions trading scheme.
“If these ambitious plans gain traction, it could spur a revival in not just the American, but the world economy. That scenario depends on a number of factors, but one thing is certain – President Obama will be immensely better to the cleantech sector than the outgoing president was.”