McCain, Obama, and Clean Coal

PrintPrint

After you’ve watched federal policymaking for a number of years, you realize that the actual effectiveness of federal programs has absolutely no bearing on their survival or level of funding. That’s because the purpose of federal programs is not to solve problems, but to provide a menu of levers that politicians can pull to appeal to certain types of voters.  

We see this at play in the 2008 election with “clean coal,” which has attracted the attention of both candidates. Obama wants to “significantly increase the resources devoted to the commercialization and deployment of low-carbon coal technologies.” Meanwhile, McCain has pledged to spend $2 billion a year on clean coal technology if elected.

Since these pledges make for good bullet points in speeches, the campaigns don’t really care about the actual track record of federal subsidies to clean coal. But after the election, the next president should hesitate to increase such corporate welfare. Here is what I noted in Downsizing the Federal Government:

The federal clean coal program funds projects that burn coal in an environmentally friendly way, but the program is not very taxpayer-friendly. The Government Accountability Office found that many clean coal projects have “experienced delays, cost overruns, bankruptcies, and performance problems.” [GAO-01-854T] The agency examined 13 projects and found that “8 had serious delays or financial problems, 6 were behind their original schedules by 2 to 7 years, and 2 projects were bankrupt.”

One clean coal project in Alaska gobbled up $117 million of federal taxpayer money during the 1990s.[Washington Post, April 24, 2005] But the project never worked as planned, it cost too much to operate, and it was finally closed down as a failure. But project failure is not a problem in Washington because costs are benefits to politicians. Thus in 2005 Republican legislators inserted $125 million of taxpayer money into an energy bill to revive the failed Alaska project.