Comments (1) The fate of California cleantech will be placed in the hands of voters this November.
A power grab by a pair of Texas-based oil companies is currently masquerading as a job creation initiative in California. And if it is successful, it could spell curtains for the state's burgeoning cleantech industry.
It could even start a ripple effect that would seriously threaten the country's cleantech sector as a whole.
In 2006, California passed a monumental climate change bill — Assembly Bill 32 or AB32 — that set stringent emissions standards and renewable energy requirements.
The hope was that by 2020, California's emissions would be back down to 1990 levels — a 25% reduction. Another goal was for the state to get one-third of its power production from renewable energy.
It had broad bipartisan support from Governor Arnold Schwarzenegger and the Democratically-controlled state congress.
Proposition 23, which citizens will vote on in November, would effectively kill AB32 and undo the progress that has been made since 2006.
A new report by the Clean Economy Network explains why and how Prop 23 “will jeopardize a half million cleantech jobs, 12,000 companies, and billions of dollars of private investment in California, creating a domino effect that will harm U.S. competitiveness.”
The report goes on to argue that repealing AB32 would most certainly gut California's highest growing economic sector and send those jobs elsewhere — specifically China, the nation the U.S. is perpetually lagging behind in cleantech.
In the years right after AB32 was passed, the green economy added jobs at a rate of 5% while the rest of the statewide economy sputtered along at 1% growth.
Famed venture capitalist John Doerr praised the initiative: "Since the passage of that bill [AB32], California has pulled far ahead of the rest of the country... in the number of new energy innovation and conservation jobs created."
Prop 23 would suspend those landmark regulatory measures until California's unemployment rate drops below 5.5% — and stays there for at least a year.
To the 12% of Californians that are unemployed, this may sound like a reasonable proposal. I mean, if we can just stave off the current economic crisis, get people back to work, then we can work on this sticky climate change issue, right?
There is one glaring problem with that philosophy: California has maintained an unemployment rate under 5.5% only three times in the last 40 years!
So what Prop 23 really seeks to do is shift jobs from the cleantech industry back to the old, environmentally unsustainable oil industry... Which would make some oil company bigwigs very, very happy.
Bankrolling the Proposition are two Texas energy companies, Valero Energy Corp. and Tesoro Corp.
Both companies are threatened by the positive growth in renewable energy sources that emerged after AB32 was passed. They want back in on the action...
Those companies both know that even the threat of Prop 23 will put a serious damper on investor confidence in cleantech. There is nothing investors hate more than uncertainly.
China already has a commanding lead in the cleantech sector. They led the world last year with clean energy investments of $34.6 billion — compared to the $22.5 billion invested by the United States...
“There is no question that other countries and governments want these jobs and industries for the same reasons we do,” said Jim Watson, CEO of CMEA Ventures in California.
“And they are willing to do anything to get them. China's government is offering tremendous incentives.”
So while China has its gaze set on the future, here we are threatening to turn the clock back to 2005!
And for what? Backers of Prop 23 say it will help battle unemployment and curb high energy costs.
But according to at least one study, energy costs will actually rise if voters repeal AB32.
UC Berkeley Professor David Roland-Holst found that not only will energy costs jump by a third, but that as many as 500,000 Californians could lose their jobs if the state remains beholden to fossil fuels.
There is widespread opposition to the measure, as over 250 businesses have already lined up against Prop. 23. Just yesterday, famed San Franciscan hedge fund manager Thomas Steyer announced he will donate $5 million to the No on 23 committee, a group apposing the ballot measure.
Steyer, a longtime supporter of the Democratic Party, has joined with Ronald Reagan's former U.S. Secretary of State George Shultz as co-chair of the No on 23 committee — giving the organization a bipartisan appeal.
"Proposition 23 really boils down to one thing," Steyer said in a news release.
"Do we want California to continue moving forward as a leader in a clean energy economy, including continuing to create new jobs, new economic development and new investment, or do we want to allow two Texas-based oil companies … to take our state backward and see the clean energy jobs, business and investment in our state go offshore to a place like China?"
If you're a regular reader of Green Chip Living, you know our answer: Hell no!
You can read the Clean Economy Network report “Going Backward” here.
Be Well,
Jimmy
Subscribe to