This paper examines the Obama administration's energy policy in the context of America's 21st-century economy. It begins by describing the broad goals of the policy — reducing dependence on foreign oil, combating climate change, and building a clean energy future — and then outlines the specific elements of the Obama-Biden plan, including cap-and-trade, renewable fuel mandates, hybrid vehicle targets, and the Recovery Act's clean energy investments. The paper also presents criticisms of the policy, addressing concerns about emergency energy rebates, the Strategic Petroleum Reserve, speculator regulations, and nuclear energy. It concludes with recommendations for international cooperation with China and Japan and reflects on the long-term prospects for a green energy transition.
For a long time, America has faced great difficulties, chief among them its overdependence on oil. This overdependence has threatened both national security and the economy on a global scale. Repeatedly, Washington D.C. has been unable to resolve the situation due to special interests and political interference, through which politicians promise American citizens solutions during elections that they ultimately fail to deliver. American politics has suffered as a result of this inaction, and the consequences have grown increasingly severe. What needs to be done must be done openly and quickly — encompassing improvements to automobiles, reduced fuel consumption in industries, and greater efficiency in the home.
It has been about thirty-five years since a U.S. president first categorically stated that the government's main goal should be to meet its own energy needs and avoid reliance on foreign energy sources. The concept of energy security has never been far from the American consciousness. The severe oil crisis of recent years has contributed to a rapid increase in consumer awareness regarding the need for an efficient energy policy coupled with better climate change policies.
This paper begins with a general description of the Obama administration's energy policies and then outlines their various elements. After the analysis, it presents the criticisms leveled against the policy, followed by conclusions and recommendations aimed at developing a sound energy plan for America — one that safeguards its citizens from the dangers associated with poorly formulated energy policy.
Following the various challenges that occurred in the U.S. energy sector in the last several years, President Obama's administration launched a concerted effort to establish the best energy policy for the American people. Among their top priorities were energy and climate change. In his inaugural speech, Obama clearly stated: "We will harness the sun and the winds and the soil to fuel our cars and run our factories."
Achieving real solutions would require more than political trickery and the overconsumption of resources. It would require a united effort between the government, businesses, and the American people as a whole. America has overcome many difficulties before, and under strong leadership, the Obama administration bore the resources, strength, and focus needed to establish a revitalized economy supported by clean and secure energy.
Barack Obama and Joe Biden's defined energy plan was designed to provide relief to low-income families. The plan called on the nation to confront several major challenges: reducing America's dependence on imported oil, addressing the moral, economic, and environmental dimensions of global climate change, and building a clean energy future that would benefit all Americans.
The Obama-Biden plan outlined several key commitments. It would assist in the creation of five million jobs by investing $150 billion over ten years to encourage private-sector efforts toward a clean energy future. It would save more oil than America currently imports from the Middle East and Venezuela combined. One million plug-in hybrid cars capable of traveling 150 miles per gallon would be built in America by 2015. The plan would ensure that 10% of America's electricity came from renewable sources by 2012 and 25% by 2025. It would also implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions by 80% by 2050.
The plan also demanded relief for Americans suffering the effects of regulatory loopholes that had enabled serious market manipulation and contributed to increases in crude oil prices in commodity futures markets. The mid-to-long-term solutions proposed were aimed at reducing greenhouse gas emissions, eliminating America's dependence on foreign oil, and boosting economic growth.
In the short term, President Obama's plan called for a $500 tax rebate for individuals and $1,000 for married couples to help Americans cope with high energy costs at the pump. These rebates were to be fully funded by profits from oil companies.
The mid-to-long-term proposals presented six strategies that Obama described as economic, environmental, and moral in nature. These were: lowering the use and cost of energy; promoting domestic energy sources; improving vehicle fuel efficiency; diversifying America's energy sources; addressing climate change; and investing in a green energy economy to create five million jobs.
In the renewable and sustainable energy industry, President Obama called for a $150 billion investment over ten years aimed at creating five million green job opportunities. This investment covered renewable energy sources, next-generation biofuels, low-emission coal plants, plug-in vehicles, modernization of America's electric grid, a clean manufacturing program, and youth training initiatives.
The proposals also addressed several other dimensions of energy policy. To increase domestic energy supplies, the plan called for encouraging greater oil production through a "use it or lose it" policy for companies holding land and offshore drilling leases, accelerating construction of the natural gas pipeline in Alaska, and making better use of existing oil fields. Diversification of energy sources would be achieved by promoting renewable biofuels, safe nuclear energy, and clean coal technology, with a goal that 10% of the country's energy be derived from renewable sources by 2012.
The plan also called for weatherizing the homes of low-income Americans to reduce electricity bills, establishing federal efficiency standards and a national building efficiency standard, promoting the development of green products, and improving the energy efficiency of the federal government itself. Market transparency was another priority: the proposals aimed to close energy industry loopholes and prevent traders from manipulating oil prices at the expense of American consumers.
The plan also relied on new incentives to increase production of renewable biofuels, which naturally have lower emissions. Corn and cellulosic ethanol are among the renewable biofuels referenced. The plan would create incentives for increased research, flexible-fuel vehicles capable of running on ethanol, and investment in cleaner fuels.
President Obama also assembled what he referred to as the "Green Dream Team," a group of key specialists overseeing the implementation of these initiatives. Members included Stephen Chu (Secretary of Energy), Carol Browner (Assistant to the President for Energy and Climate Change), John Holdren (White House Science Advisor), Lisa Jackson (Environmental Protection Agency Administrator), Todd Stern (Special Envoy for Climate Change), and Nancy Sutley (Chairperson of the White House Council on Environmental Quality).
The implementation of a cap-and-trade program to reduce carbon footprints to below 1990 levels was central to the Obama administration's climate strategy. The cap-and-trade concept originates from microeconomic theory and is regarded as an alternative to direct regulation. Under this system, each company would be allocated a share of carbon dioxide emissions equal to its current discharge into the atmosphere. Companies that managed to stay within their cap would accumulate surplus allowances, which they could then sell to firms that needed additional capacity. The underlying logic is that making pollution costly provides companies with a strong incentive to reduce it.
A portion of the revenue generated by the cap-and-trade program — approximately $15 billion — would be channeled into the improvement and development of energy efficiency and clean energy technologies, wildlife protection programs, and next-generation biofuels. The initiative also called for the United States to exercise leadership within the United Nations Framework Convention on Climate Change in encouraging developing countries to reduce and minimize their own greenhouse gas emissions.
Vehicle fuel efficiency was another key component. The plan called on automakers to increase fuel economy by 4% per year, while emphasizing investment in the development of advanced vehicles through biofuel research, authorization of increased sales and manufacture of flex-fuel vehicles, establishment of a low-carbon fuel standard to accelerate the adoption of cleaner fuels, and expansion of supporting infrastructure.
The proposals were also aimed at reducing carbon pollution that threatens the nation's climate and reducing dependence on fossil fuels. While pollutants such as nitrogen oxide and sulfur dioxide had long been subject to regulatory limits, the plan specifically sought to limit the amount of carbon that polluters were permitted to release into the atmosphere.
"Economic and practical objections to key policy elements"
"Recovery Act funding breakdown for clean energy"
"US partnerships with China and Japan for green transition"
America, in its quest to achieve independence in terms of its energy needs, must strive to develop better policies geared toward the research and development of more efficient, environmentally friendly energy methods that are also affordable for American citizens and corporations. Energy is a necessity without which the lifeblood of America's various economic sectors would cease to function.
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