Proposition 23 is among the most controversial initiatives facing Bay Area and California voters, and the outcome is expected to have global implications. It was developed to suspend Assembly Bill 32 [http://www.arb.ca.gov/cc/ab32/ab32.htm], also know as the Global Warming Solutions Act of 2006, until California’s unemployment rate drops to 5.5 percent and remains there for a full year.
Proposition 23 has been called an initiative pitting environmental health vs. jobs, and California vs. Texas oil.
In a debate hosted by New America Media [http://www.newamericamedia.org], Julian Canete of the California Hispanic Chamber of Commerce [http://www.cahcc.com/ ] suggested the implementation of AB32, which Proposition 23 would likely halt, would cost California’s small businesses an average of $10,000 due to energy efficiency retrofits and rising energy costs.
Cleantech consultant JB Tengco countered that a report by The Brattle Group estimates the cost to small businesses of implementing AB 32 to be closer to $20 per person.
Proponents of “Yes on Proposition 23” believe the initiative, which campaign ads refer to as the “California Jobs Initiative 2010” [www.yeson23.com ], will save jobs. They argue that businesses will be strained under the regulations of AB 32, face higher energy costs and be forced to cut back on jobs.
Opponents of Proposition 23 believe Texas oil companies designed the initiative to not only stall, but kill clean energy efforts and air pollution standards in California. They’re concerned that indefinitely suspending AB 32 would not only result in continued, escalating impact to the environment and public health, but would succeed in pushing the cleantech industry out of California.
What supporters are saying:
Some believe AB 32 makes California an unfriendly place to do business. “It’s all about the regulatory environment in California. It’s the worst place to do business,” says James Duran, chair of the California Hispanic Chamber of Commerce, Silicon Valley [http://www.sanjosehispanicchamberofcommerce.org/chamber/index.html]. “We need to create jobs, not make it more difficult to create jobs.”
According to the Santa Clara Chamber of Commerce, “Proposition 23 is particularly needed to protect Santa Clara’s small and medium businesses that have been hit particularly hard by the recession,” says President and CEO Steve Van Dorn. “The higher energy costs resulting from AB 32 will put our region’s businesses at a significant disadvantage with states and countries that have less draconian global warming regulations.” [http://www.yeson23.com/case-studies/]
Others don’t believe small businesses have time to wait for the economy to pick up and green jobs to kick in under AB 32. In fact, some, like small business owner Edwin Lombard, of Edwin Lombard Management [http://www.lombardmgmt.com/ ] in Sacramento, are concerned that the green jobs gains expected as a result of the implementation of AB 32 will not replace the 2.2 million jobs already loss due to the recession.
The California Hispanic Chamber of Commerce’s Executive Director Julian Canete says the organization joined the ‘yes’ on 23 campaign because they couldn’t get California Air Resources Board (CARB), [http://www.arb.ca.gov/cc/ab32/ab32.htm] the regulatory body for AB 32, to listen to their concerns regarding understanding AB 32’s impact on small businesses. About Proposition 23, he said he thinks “It’s the right thing for small business right now.”
What opponents are saying:
The environment set under AB 32 has apparently helped to draw significant cleantech investment to California.
“In the first half of 2010, the state attracted 40 percent of global cleantech VC (venture capital funding), exceeding the first half of 2009 by two-and-a-half times,” according to a recent study by Next 10. [http://nextten.org/next10/pdf/GII/Next10_GII_2010.pdf] And Deutsche Bank has stated that “if Prop. 23 passes, the signal we send is not to bring cleantech jobs to California,” says Carl Pope of the Sierra Club. [http://www.sierraclub.org/]
Moreover the green sector is responsible for a significant portion of new jobs, according to Dave Room, co-founder and Clean Energy Director of Bay Localize and coordinator of the Local Clean Energy Alliance in Oakland. [http://www.localcleanenergy.org/ ] “Supporters of Proposition 23 are saying this is a job killer. What Proposition 23 would really do is kill the green jobs sector; one where there has been a concerted effort to bring in people of color.”
The unemployment benchmarks in Prop. 23 are also untenable. “In last 40 years, 5.5% sustainable unemployment has only happened three times, says cleantech consultant JB Tengco, “The way it’s worded, it looks like (Prop. 23) is slowing it down, but it’s really a strategic way to kill this (AB32).”
Even more concerning, is that oil companies are the primary funders behind the campaign. If fact, Tengco says “97% of the money is coming from Valero and Tessero. They are among the top 10 polluters in California. They have earned $10 billion in profits from California over the past decade.”
Says Ian Kim, Director of Green-Collar Jobs for the Ella Baker Center [http://www.ellabakercenter.org/index.php?p=gcjc], Yes on Prop. 23 vs. No on Prop. 23 is “money of the past fighting money of the future.”
“Yes on Proposition 23”Endorsements: [http://suspendab32.org/resources/supporters]
Business and Business Groups
Hispanic Chambers of Commerce for: Contra Costa County, Silicon Valley.
Chambers of Commerce for: Santa Clara, Milpitas. Silicon Valley Black Chamber of Commerce.
Local News Agencies
Based on the official site, no Bay Area news agencies appear to be publicly endorsing the ‘yes’ position.
Based on the official Yes on Proposition 23 site, no Bay Area cities appear to be publicly endorsing the ‘yes’ position.
Who is Providing Financial Support?
According to Ballotpedia [http://www.ballotpedia.org/wiki/index.php/California], supporters of Proposition 23 have raised $8 million, with $4 million coming from Texas-based Valero, $1.5 million from Texas-based Tesoro and $1 million from Texas-based Flint Hills Resources, which has oil operations in several states outside of California, and is a division of Koch Industries.
“No on Proposition 23” Endorsements [http://www.stopdirtyenergyprop.com/our-coalition.php]
Business and Business Groups
More than 200 businesses have come out against the initiative, including high profile Bay Area companies such as: Google, Symantec, Virgin America Warner Bros. Entertainment, Inc., Nike Inc., Steven Bochco Productions, Levi Strauss & Co., Gap, Inc., and Cisco. The list appears to be dominated by small businesses, but it is not clear which are local, Bay Area businesses.
Chamber of Commerce for: Fremont, Los Altos, Mountain View, Palo Alto, San Francisco, Sunnyvale; Oakland Black Board of Trade and Commerce; San Mateo Economic Development Association; Silicon Valley Leadership Group
Local News Agencies
Oakland Tribune, San Jose Mercury News, San Francisco Chronicle, SF Bay Guardian, Bay Area Reporter, La Opinion, La Prensa, Marin Independent Journal, Milpitas Post
Bay Area cities coming out against Proposition 23, according to the No on Proposition 23 campaign site are:
The City and County of San Francisco, the cities of Burlingame, Oakland, Palo Alto, San Leandro, San Mateo and Sunnyvale
Who is Providing Financial Support?
According to Ballotpedia [http://www.ballotpedia.org/wiki/index.php/California], campaign committees advocating no on Proposition 23 have raised more than $11.5 million dollars, with $2.5 million coming from California-based Thomas Steyer of Farallon Capital Management, L.L.C., $1.5 million from the California-based Natural Resources Defense Council and $1 million from Robert Fisher, former chair of The GAP.
Chances proposition will pass:
Proposition 23 appears to be going the way of Proposition 16. According to a Los Angeles Times/USC poll [http://www.latimes.com/news/local/la-me-poll-20101025,0,1234526.story], “Prop. 23, which would suspend new emissions standards until unemployment drops, trails 48% to 32% among likely voters.”
Official summary of Proposition 23:Suspends State law that requires greenhouse gas emissions be reduced to 1990 levels by 2020, until California’s unemployment drops to 5.5 percent or less for four consecutive quarters.
Requires State to abandon implementation of comprehensive greenhouse-gas-reduction program that includes increased renewable energy and cleaner fuel requirements, and mandatory emission reporting and fee requirements for major polluters such as power plants and oil refineries, until suspension ends.
Estimated fiscal impact:The suspension of AB 32 could result in a modest net increase in overall economic activity in the state. In this event, there would be an unknown but potentially significant net increase in state and local government revenues.
Potential loss of a new source of state revenues from the auctioning of emission allowances by state government to certain businesses that would pay for these allowances, by suspending the future implementation of cap-and-trade regulations.
Lower energy costs for state and local governments than otherwise.
For more information, visit the California Statewide General Election – Official Voter Information Guide http://www.voterguide.sos.ca.gov/propositions/23/