A greener federal government, a modernised electricity grid and a cap-and-trade system for carbon emissions are definitely on the map for the next administration. But the two presidential candidates disagree on key issues.

Senators John McCain and Barack Obama battled it out over their respective energy policies this week after Obama unveiled his energy plan. Whereas McCain wants to lift the federal ban on offshore drilling, Obama condemns the idea, instead focusing on exploiting onshore fields that he says are being underused.

While McCain wants to open 45 nuclear power stations by 2030, Obama is cautious on nuclear power, arguing that the US must adequately address safety and security issues first.

"Instead of hundreds of billions for new nuclear plants with no plan in sight to deal with dangerous nuclear waste, America should invest in clean, renewable energy sources that will create millions of American jobs," said a spokesperson for the League of Conservation Voters, which endorsed Obama last month. "That's why Barack Obama's plan calls for $150 billion for renewable energy development."

The Obama plan pledges $150bn in funding for renewable energy, which he says will create five million jobs. It includes a plan to retask jobless veterans for "green" jobs. McCain's own plan calls for a permanent tax credit equal to 10 per cent of wages spent on R&D.

Environmentalists looking for solace in Obama's plan will dislike some of the proposals. It advocates the use of carbon sequestration as a means of recovering hard-to-reach domestic oil, a technology environmental pressure group Greenpeace has condemned.

Both candidates support a cap-and-trade system, but Obama promises an 80 per cent reduction on 1990 carbon emissions by 2050, whereas McCain sticks with a more conservative 60 per cent. They will both legislate against oil speculation that has helped to drive up fossil fuel prices.

Both candidates have also made promises on alternative transport technologies. McCain had pledged a $5,000 tax refund on purchases of zero-emission vehicles, and a $300m prize for battery technology to support them. Obama pledged $7,000, and wants one million plug-in hybrid electric vehicles (PHEVs) on the road by 2015.

"Barack Obama's plan will increase the availability and affordability of hybrid vehicles," said the League of Conservation Voters spokesperson. "It will significantly reduce global warming pollution and save families thousands of dollars. Senator McCain has repeatedly failed to vote in favour of increasing fuel economy standards."