Incentives Versus Penalties?

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It's the case of the STICKS versus the CARROTs. Just in from the Wall Street Journal (subscription required):

John McCain, is the dude with the carros.  In a speech at Fresno State University, McCain proposed a $300 million government prize to whoever can develop an automobile battery that can have the 'size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars.' 

McCain hedged his bets too, just in case we can't defy the law of physics, or until this innovation can be achieved. He proposed to offer a $5,000 tax credit to consumers when they purchase a zero-emission vehicle from US car makers (who have yet to make one). McCain last week offered to lift the ban on offshore drilling if individual states want to allow it.

In contrast, Barack Obama using the STICKS approach, refused to allow drilling saying that it would do nothing to address immediate pricing concerns. Instead, Obama offered to increase government oversight of oil speculators whose futures speculation he blamed for the skyrocketing price of oil.

The bounty is a good idea...

...if the rules are clear what meets the goal and what doesn't. President Kennedy's goal to deliver men to the moon and back before the 'end of this decade' was the ideal goal. Measurable (you know if you've landed on the moon or not) and includes a deadline. So if you miss on size of the battery, but deliver on the capacity, cost and power does it win the prize? See where being unclear can be disastrous. We need this project to create engineering projects, not accounting or lawyer projects. 

To be effective, incentives have to be clear, particularly if they will take years to achieve (and no doubt it will, or someone would have invented it by now), and must include a deadline. Besides (and I really hope this won't be a problem), who knows what $300 million will buy in ten years?