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Commentary By Max Schulz

Recharging McCain’s Battery Prize

Over the course of this lengthy presidential campaign, John McCain has offered the only truly innovative proposal on energy issued by either candidate. That the media has hardly noticed is one thing. The real mystery is why John McCain himself is so reluctant to bring it up.

Back in June, Senator McCain suggested the federal government offer a $300 million prize "for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars." The current technologies available in things like the Toyota Prius, though celebrated, are only bridges to a much more ambitious future. McCain’s battery prize is designed to incentivize American scientists and engineers get us there, delivering a future in which our cars are powered by electricity (and the things that generate it), not oil.

Offering prizes to spur innovation is not exactly new, of course. In 2004, the Ansari X-Prize awarded $10 million to the winners of a contest to develop a reusable, manned spacecraft. More recently, Virgin's Richard Branson announced his offer of a $25-million prize for the development of a commercially viable design to remove man-made greenhouse gas emissions from the atmosphere. Skeptical environmentalist Bjørn Lomborg suggests that Western nations spend .05 percent of their GDP on clean-energy R&D—but in the form of prizes for technological breakthroughs, rather than straight government subsidies. Such prizes have been effective in the past as well. Charles Lindbergh flew across the Atlantic in 1927 not just for glory, but to claim a $25,000 bounty.

Those efforts were privately funded, a concept wholly alien to the ways of Washington. Government efforts to spur research and development typically promote certain favored technologies—particularly renewable energies like wind and solar—by showering them with subsidies and tax breaks. Renewables have received over $100 billion in subsidies since 1950, yet have gained little foothold in our energy economy. Washington typically sets goals, then shells out a lot of money whether those goals are met or not. Not surprisingly, they usually aren't.The X-Prize, by contrast, met its goal. A team financed by Microsoft pioneer Paul Allen built a rocket ship that made two successful suborbital flights in a two-week period. Perhaps as important as that breakthrough is the more than $100 million in privately funded research the contest unleashed. As Case Western Reserve University professor Jonathan Adler wrote on NRO a year ago, the X-Prize showed that spaceflight "can be far less costly than the typical NASA mission would suggest, and generated a far greater return per dollar spent than the federal space program."

That is what makes McCain's proposal so intriguing. For a candidate who has been criticized by Barrack Obama for suffering from Potomac Fever, McCain has put forward a decidedly un-Washington proposal. It offers an alternative to throwing money down Washington's R&D black hole, as with Jimmy Carter's Synthetic Fuels Corporation ($17 billion), Bill Clinton's Partnership for a New Generation of Vehicles ($7 billion), or even George W. Bush's hydrogen initiative ($1.2 billion and counting). McCain's proposal doesn’t seek to pick winners before the race—the conventional Washington approach—but to reward the first party across the finish line.

As the price of oil and gasoline skyrocketed this summer, McCain was wise to embrace energy issues. He tapped into voters' disgust with Washington's approach by calling for an end to the federal ban on offshore drilling. He also picked a running mate who couldn't be further outside the Beltway, and who has extensive experience dealing with domestic energy production. The public's curiosity about T. Boone Pickens' energy plan this summer shows a hunger for solutions that differ from what comes out of the nation's capital. The proposal to award $300 million to anyone who can provide the breakthrough technology for our automotive future similarly taps into the sentiment that Washington's way of doing things isn't working.

Obviously, a revolutionary new battery technology—one that is powerful, compact, and cheap—is worth a lot more than $300 million. One might argue that anyone who develops it will already be amply rewarded because of patent protections—so what does this incentive accomplish? Still, it's worth noting that not one among the hordes of alternative-energy rent-seekers who are currently pigging out at the public trough are receiving anywhere near $300 million; that amount is, I think, pretty eye catching. But what is really impressive about the McCain proposal is (or was?) what it represents in terms of a real departure from Washington's business-as-usual. Not government subsidies for special interests; a prize for progress alone. Imagine that.

So as the race enters the stretch drive, why has McCain clammed up about it? He rarely mentions the plan in his public remarks. It doesn't come up in his ads. And McCain failed to bring up the topic in the debates, even when the topics turned to energy and climate change. Despite serving in Congress for a quarter century, John McCain prides himself on being an outsider. He calls himself a maverick, unafraid to pillory colleagues for their excesses and unwilling to play by their rules. This proposal fits that mold.

How ironic that the septuagenarian is the real agent of change in this election. But if nobody seems to recognize that fact, McCain has nobody to blame but himself.

This piece originally appeared in National Review Online

This piece originally appeared in National Review Online