This week, in my International Security class, we discussed energy and environmental issues like climate change. One of my students asked about President-elect Barack Obama’s plan to “bankrupt the coal industry.”

Alaska Governor Sarah Palin made this charge near the end of the presidential election campaign, based on an interview Obama conducted in January with the editorial board of the San Francisco Chronicle. Palin charged that the liberal paper withheld this story, even though the paper has had the audio and video on its website all year (and promoted this fact). The right is still pushing this story.

Right-leaning NewsBusters on November 2 offered this transcript of the alleged withheld information:

What I’ve said is that we would put a cap and trade system in place that is as aggressive, if not more aggressive, than anybody else’s out there.

I was the first to call for a 100% auction on the cap and trade system, which means that every unit of carbon or greenhouse gases emitted would be charged to the polluter. That will create a market in which whatever technologies are out there that are being presented, whatever power plants that are being built, that they would have to meet the rigors of that market and the ratcheted down caps that are being placed, imposed every year.

So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.

While Obama did use the words “coal” and “bankrupt them” together, he also explained in this interview his support for “clean coal” technology. Indeed, the widely quoted comment was provoked when an editor asked Obama about his seemingly inconsistent support for a specific pro-coal bill and his statements that he only supports coal if it is clean.

After claiming that his policies are consistent, Obama immediately started talking about the need to limit greenhouse gases, which would include coal-fired plants. Then, he adds:

“But this notion of no coal, I think, is an illusion. Because the fact of the matter is, is that right now we are getting a lot of our energy from coal. And China is building a coal-powered plant once a week. So what we have to do then is figure out how can we use coal without emitting greenhouse gases and carbon. And how can we sequester that carbon and capture it.”

He also said, “if technology allows us to use coal in a clean way, we should pursue it.”

Ultimately, Obama called for the market to pick winners and losers based on the ability to operate under cap and trade conditions — presumably new technology made affordable by higher energy costs for traditional means of producing energy. Billions of dollars would be generated from the equivalent of a fossil fuel tax, available then to fund new cleaner energy, such as solar, biodiesel, etc. Obama even said that nuclear power could be an option if scientists develop safe waste disposal means.

I’m not optimistic about the prospects for “clean coal,” but we should not enter a new debate on climate change with the assumption that the new President is out to kill the fossil fuel industries.

If you want to watch for yourself, the coal question is just over 25 minutes into the 53 minute interview. The energy portion is 4 or 5 minutes in length.