California’s Proposition 23

Back in 2006 California’s Governor Schwarzenegger signed AB 32, the “Global Warming Act,” which set the goal of reducing California’s “greenhouse gas emissions” to 1990 levels by 2020. The bill was set to become implemented in 2012, and for the past few years, the bureaucrats at the California Air Resources Board have been working feverishly to come up with specific regulations. What they have produced is a monstrosity.

To start to come to grips with what AB 32 is going to do to California, read CARB’s own material, their “Climate Change Scoping Plan,” their “Updated Economic Analysis of California’s Climate Change Scoping Plan,” and their “ENERGY 2020 Model Inputs and Assumptions.” You can get an attempt at a summary if you read the post “Implementing California’s Global Warming Act.”

Since the most recent publicized polling results indicate that voters are split roughly 50/50 on Prop. 23 (ref. the Sept. 24th LA Times article “Proposition 23 poll shows a dead heat among California voters“), it is worthwhile to examine the arguments against Prop. 23 that are currently bombarding voters. A good place to review these arguments would be on the “fact sheet” put forward by the group “Californians to Stop the Dirty Energy Proposition.” Here are two principal arguments – with rebuttal:

1 – Prop. 23 would create more air pollution in California and threaten public health.

This argument is based on the proposition that CO2 is pollution, because the intent of AB32 is to regulate CO2 emissions, and little else. California’s regulatory agencies have done a reasonably good job at cleaning up genuine air pollution, and they need to finish the job there, instead of focusing on CO2 emissions. CO2 does not harm the respiratory system in the quantities it currently appears in the atmosphere, or in any conceivable quantities it ever may increase to in the atmosphere. On the other hand, plants cannot live without CO2. To suggest that suspending a measure that regulates CO2 emissions is going to increase pollution is grossly misleading.

2 – Prop. 23 would kill clean technology jobs, innovation and billions of dollars of investment in California.

This “fact” as well is almost completely false. California’s gubernatorial candidate Jerry Brown made a clever argument in favor of retaining AB32 last week in his final debate with candidate Meg Whitman, when he said we need AB32 to stay on the books to reduce “regulatory uncertainty.” This is a good argument applied to a bad law. AB32 – read the scoping report – doesn’t create regulatory certainty in any of the cleantech areas that matter. If you want to encourage development of low carbon fuel, then pass a law requiring a certain percentage of transportation fuel contain lower levels of carbon. This will stimulate innovation in 3rd generation biofuels, which is a good idea. If you want to encourage development of cost-competitive solar energy, the leave in place California’s renewable portfolio standard. If you want to encourage energy efficiency retrofits, then implement tax credits to stimulate activity in that area. You don’t need AB32 to stimulate green jobs.

Opponents of the Prop 23 actually claim that suspending California’s Global Warming Act will increase energy costs and harm California’s economy. This is precisely incorrect. Alternative energy still costs considerably more than conventional energy, and this disparity would be even greater if conventional energy technologies weren’t tied up in environmentalist lawsuits.

Instead of carpeting the landscape with wind generators – talk about pollution, what about the aesthetics of all these wind generators? – Californians should be developing a diverse assortment of conventional energy solutions – more hydroelectric power (which would also create more water supplies), nuclear power, a liquid natural gas terminal, and offshore drilling. Currently Californians pay, on average, about $0.15 per kilowatt-hour, while in states where conventional energy is not overregulated, consumers pay less than half that amount.

AB 32 will further reduce California’s ability to use conventional energy, and this will cause energy prices to go up, not down. And because AB 32 will regulate virtually everything we do, under the assumption that restricting road construction and land development – and adding new regulations to virtually all industries, from farming to manufacturing – will lower the “carbon footprint” of the state, everything will get more expensive. You don’t have to be an economist to grasp this simple economic truth – if you make all the basic resources more expensive, land, water, transportation and energy – then you will make it harder for businesses to compete. And if they can’t compete, they won’t grow. Many of them will leave.

The reason Prop. 23 has attracted so much opposition is because AB 32 appeals not only to the environmentalists – a lobby that has been entirely hijacked and discredited by the global warming alarmists – but the political left, who see another opportunity to expand government, the public sector unions, who never saw a government expansion they didn’t like, and, tragically, the Silicon Valley investors and entrepreneurs who have decided they don’t want to make money any more the old fashioned way, where they create superior innovations that people choose to purchase, but instead want government regulations to force people to buy their “smart meters” and other cleantech innovations.

It is easy to demonize “Big Oil” for standing up to this lobby, but nobody else has come forward, despite the fact that most members of the business community realize the harm AB 32 will wreak on California. A more relevant question is why California’s own big oil company, Chevron, is sitting on the sidelines. Chevron’s craven failure to stand up for its own interests as well as the interests of consumers is a bigger indictment of big oil than Valero and Tesoro’s courage in their decision to fight. There aren’t many companies left in California who will stand up for capitalism and for rational environmental management. This is the core problem, because with California’s voters deadlocked on Prop. 23 despite the avalanche of propaganda against it, Californians are clearly receptive to the truth, if someone will bother to provide it to them.

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3 comments to California’s Proposition 23

  • Wayne

    Great article. I am very afraid for California. I just moved here 2 years ago and love it, but am afraid that we are in the frying pan and that AB 32 is about to tip us over into the fire.

    We need to be easing up on businesses, cutting taxes, simplifying regulations and making a business friendly climate in California.

    Some interesting and frightening facts on companies leaving California.
    http://thebusinessrelocationcoach.blogspot.com/

  • Charles Sainte Claire

    AB 32 is about cutting the generation of energy. The main way to cut CO2 is to burn less carbon based fuels.

    The alternatives are solar, wind, nuclear and hydroelectric. Solar and wind are far more expensive and must be heavily subsidized. Nuclear is still somewhat more expensive and even if permits were being worked on now, any new nuclear plants would be at least a decade down the road. I can’t see any more large hydroelectric dams being built in California.

    The cost of energy will go up. Consumers will pay higher direct costs for electricty and fuel. As mentioned in the above article, everything you buy will have prices go up.

    AB 32 is all about making business smaller and forcing people to change their lifestyles to have less.

    The green movement is a minority political agenda being forced on an unsuspecting general population.

  • Pelye

    Let Californians consume conventional energy to their hearts’ content. Better let the six billion world population do the same thing. Let the sea level rise. Let the bay shrink. Let Maldav sink. Damn those who say otherwise.