Obama v McCain – who deserves the green business vote?

Credit will not be the only crunch on the mind of the two presidential candidates this week. The US election is looming, and the polls show Obama out in front by a wide margin, while McCain is still hoping to pull the presidency out of the bag.

The world's eyes will be on the result of next week's vote and, along with everyone else, executives at green businesses and cleantech firms will be watching to see who makes it to the finish line, before immediately undertaking the mental calculations to try and work out what the result means for them and their prospects.

Both McCain and Obama have tried floating a green agenda at a time when environmental and energy concerns are at an all-time high. But whose platform stands up?

The balance seems to be tipped fairly strongly in terms of Obama, at least as far as environmental voting groups are concerned.

The League of Conservation Voters (LCV) spends its time tracking the environmental records and policies of people in Congress. It endorsed Obama months ago, giving him a lifetime score of 86 per cent compared to McCain's 24 per cent. The score reflects the percentage of votes in which a candidate came down on the side of the environment. The Republican has taken faced 294 environmental votes in 25 years, says the League, but has voted for the environment only 71 times.

The biggest issue facing Americans today is the one sitting in their garages and furnace rooms – energy security. From that springs most of the other arguments, concerning everything from nuclear energy through to offshore drilling, and of course the climate change argument.

At least both candidates agree on energy security in one sense: they both want it, and want it fast.

But whereas McCain is backing an expansion of offshore drilling, Obama has largely been against the idea. McCain believes that the Congressional moratorium on offshore oil drilling stands in the way of energy security. Obama's stance centres around the more efficient use of onshore oil deposits. That said, he has slightly thawed on the offshore drilling position, arguing that he may consider it as part of a compromise where necessary. He maintains the position that offshore drilling isn't the answer to America’s energy problems, however.

"Even George Bush's Department of Energy says that offshore drilling will have no effect on energy independence or gas prices for almost a decade – even then only two cents per gallon," said a representative for the LCV. "Offshore drilling is an old fashioned land-grab that will create more profits for the oil companies while threatening the health and the economic security of every American who lives near the coast and continuing our addiction to oil."

The other hot button is nuclear power. Again, McCain is for it, and Obama is more cautious. If the republicans win, the US can look forward to 45 new nuclear power plants by 2030 – and a longer term commitment to 100 across the US.

Obama, meanwhile, doesn't rule out nuclear, but he wants better options for nuclear waste disposal before committing to an expansion of the sector.

But, regardless of which candidate comes out on top, they will face significant financial challenges to deliver on their nuclear strategy at a time when budgets are under severe strain.

"While Senator McCain is clearly pro-nuclear, this isn't going to address our energy crisis," says Jane Kochersperger, a spokeswoman for Greenpeace US. " Senator Obama at least recognises the very serious problem we have with nuclear waste – it is the elephant in the room that policy makers really don't want to acknowledge."

For those companies pushing the green agenda, the real question is how much the next president will provide in terms of financial incentives and support. Here, again, Obama seems to win out.

"In general, most people I have spoke to think that an Obama administration would be more favourable than McCain," says Brian Fan, senior director at the Cleantech Group, a company that provides research on the cleantech industry, although he says that after the Bush administration, they both have an easy act to follow. "The bar is pretty low," he says.

The big difference between the two candidates lies in emphasis Fan says, arguing that whereas McCain has emphasised the exploitation of traditional domestic energy sources, Obama has placed a much greater emphasis on renewables. His platform calls for the creation of five million jobs over 10 years, by investing $150bn (£92bn) in the green sector. The money has been earmarked for plug-in hybrid vehicle development, commercial scale renewable energy, clean coal and biofuels.

McCain makes his own case for alternative energy. His platform supports alcohol-based biofuels fuels, and is calling for a more aggressive move to flex-fuel vehicles that can burn up to 85 per cent ethanol.

He has also pledged $2bn per year for clean coal investments, and has promised a 10 per cent tax credit for cleantech R&D. But critics claim that in a world hit by the financial crisis, those benefits are unlikely to have much of an impact. For example, small cleantech companies in the venture capital stage are producing a healthy amount of new technology, yet they are unlikely to be able to use tax credits as they don't make any profit.

Critics claim that the small companies that are past the initial funding stage and are preparing themselves for an IPO need project funding rather than tax breaks. They argue that such a tax break would in fact leave them vulnerable to acquisition by larger firms, who will be better placed to enjoy the chance to write off R&D against tax.

Some other aspects of McCain's energy platform have prompted puzzlement among environmentalists and cleantech experts. For example, he has pledged $300m in prize money for the development of better battery technology that would support plug-in hybrids – an investment that a spokesperson at Canadian electric car vendor Zenn Motors told BusinessGreen.com represented little more than "chump change". It could be argued that the reward for the development of a lower-cost, higher-capacity battery technology – something like the secretive ultracapacitor technology promised by Texan firm eeStor – would come directly from the dominant position such a technology would give the manufacturer in a fast expanding market?

Looking at the wider low carbon economy, both candidates are sold on replicating the EU's carbon cap-and-trade scheme across the US. But again Obama appears to have done more to court the green vote, proposing that the scheme would aim to cut emissions by 80 per cent on 1990 levels by 2050. In contrast, McCain's trading scheme would aim for more modest cuts of 60 per cent.

On balance, Obama seems to have the green business vote wrapped up. His voting record marks him as more committed to environmental protection, and while some green groups have criticised his continued support for generous subsidies for biofuel producers most have praised his plans for investment in low carbon initiatives and tighter green legislation.

However, regardless of who wins, green business leaders expecting rapid changes could yet be disappointed.

Both candidates face a big problem when it comes to turning their energy policies into reality, warns Fan: neither of them may be able to find the cash to fulfill their commitments. "When they get into office, given the fiscal choices between healthcare, bailouts of mortgages and other concerns such as two wars going on, will there be any money to spend on cleantech?" he muses. " Especially given that we're in a recession, and that the price of oil has now dropped to $65 per barrel. A lot of the political pressure has disappeared."

Nevertheless, the next presidency will almost certainly take a much more proactive stance on the environment than the current administration (although how could it not) for a number of reasons.

Firstly, in spite of the recent fall in oil prices, cleantech is likely to continue as one of the powerhouse industrial sectors as the world emerges from recession. Fuelling the industry now therefore serves the dual purpose of cutting emissions and driving economic activity.

Secondly, we need to try and fix the environment, or as problems get worse the electoral college will be the last thing on our minds. We’ll know which candidate gets to take on that daunting job next Tuesday.

McCain v Obama – green platform comparison:

Clean coal

Both candidates want new coal plants to be able to sequester carbon. Obama is mulling the idea of a moratorium on new plants that can't.

Renewable energy

Obama wants 25 per cent of energy to come from renewables by 2025. McCain prefers states to tackle this on their own.

Fuel efficiency

Both support fuel efficiency. McCain gives no figures. Obama wants a 52mpg standard by 2026.

Cap-and-trade

Both candidates support carbon trading, although McCain is unclear on whether credits will be auctioned. McCain supports 65 per cent reductions by 2050. Obama wants 80 per cent.

Information courtesy of the League of Conservative Voters' comparison chart