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Debate over Proposition 23 heats up

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Proposition 23, which would suspend Assembly Bill 32 -- California’s 2006 emissions reduction legislation -- until the economy recovers, is so hotly debated that even groups that aim toward political neutrality are chiming in.

The goal of AB 32, passed and signed into law in 2006 by Gov. Arnold Schwarzenegger, is to reduce measured greenhouse gas emissions in the state back to 1990 levels by 2020. The legislation gave the state government the power to impose regulations to meet that goal.

The potential effects of Proposition 23, which will be on the Nov. 2 ballot, loom large over Californians from both an environmental and economic standpoint.

The California Center for Sustainable Energy, which often veers away from official political backings despite its cause, has come out against Proposition 23.

“Because we are a nonprofit, we do not take a stand on a lot of legislation,” said Irene Stillings, executive director of the CCSE. “So I think for probably the first time in 10 years, we are taking a position … and our position is to vote no.”

Stillings said the main reasons CCSE opposes the proposition are because it will not only reverse what the center sees as good environmental legislation in AB 32, but also because it could complicate the situation for companies already preparing for the stricter regulations resulting from AB 32.

The Yes on 23 campaign sees the legislation as a job-killer, noting on its website that passing Proposition 23 will save 1.1 million jobs by avoiding higher energy costs. However, the proposition has received criticism for its big-oil ties. Valero Energy Corp. (NYSE: VLO), Tesoro Corp. (NYSE: TSO) and Koch Industries have all contributed major dollars to push the legislation.

Anita Mangels, spokeswoman for the Yes on 23 campaign, stands by the predictions, saying the 1.1 million job loss figure is not even the highest prediction.

“There are several studies that have been done that point to a range slightly below that number or even higher,” Mangels said. “We believe that global warming is an important issue that needs to be addressed, but California’s climate change plan isn’t the right solution for California at this point in time.”

Stillings fears uncertainty among companies already working toward meeting stricter regulation if Proposition 23 -- even if only temporarily -- makes those changes unnecessary or changes the outlook on green jobs in California.

“What’s going to happen to the green jobs now that are already in the state?” Stillings asked, curious of the effect Proposition 23 could have since it will prohibit state agencies from proposing or adopting new regulations or enforcing those previously adopted by AB 32.

Whether Stillings’ concern becomes reality has yet to be seen if the proposition passes, but according to the California Legislative Analyst’s Office -- the state’s nonpartisan fiscal and policy adviser -- Proposition 32 could temporarily discourage or delay investment and job creation in the energy efficiency and clean energy sectors.

But the LAO also said in a report earlier this month that it could potentially lower costs to businesses by reducing regulatory compliance costs, as well as result in an avoidance of energy price increases that would otherwise largely be passed onto consumers.

Temporary is a giant word in the debate over Proposition 23. The language of the proposition clearly doesn’t call for a permanent reversal of AB 32, stating that it would only suspend AB 32 “until such time as the unemployment rate in California is 5.5 percent or less for four consecutive calendar quarters.”

Although it is clear that Proposition 23 would not remain in effect indefinitely, Stillings inferred the language might as well say it will.

“Well, unemployment hasn’t been at 5.5 percent for 30 years,” Stillings said. “It stops all motion.”

According to the U.S. Department of Labor, that’s not exactly the case, but reaching that level of unemployment hasn’t exactly happened with regularity, either.

Figures from DOL show that in 2001, California reached a historical low in unemployment, at 4.7 percent. A preliminary figure for August 2010 on the same report showed state unemployment at 12.4 percent. The report also showed that since 2000, unemployment in the state was at or below 5.5 percent during two periods at least a year long -- once from the beginning of the decade to July 2001 and again between April 2005 and September 2007.

The LAO report mirrored those figures, but did cite that there was only one additional time period since 1970 during which unemployment in California was at or below 5.5 percent for four consecutive quarters.

The LAO also noted that economic forecasts for the next five years have the state’s unemployment rate remaining above 8 percent, meaning that regardless of disagreement over how often the state’s unemployment figures reach Proposition 23’s target, AB 32 might not take effect for some time.

“Things are not black and white in these debates,” Stillings said of the disagreements over potential job losses, both in the traditional energy and green energy sectors. But she still contends that AB 32 will not result in job losses.

The main purpose behind proposition 23, backers say, is to avoid further damaging the economy with regulation that could result in layoffs because of higher energy, gasoline and various other costs for consumers and employers.

“I don’t think there’s any evidence that that really going to happen,” Stillings said, adding that she thinks the problem isn’t that companies will have to make changes, but that those companies aren’t willing to adapt.

Conversely, Stillings thinks that if companies do make the adjustments, jobs won’t be lost, but rather created -- with old positions being filled with clean tech ones.

Mangels, however, said, “The number of those jobs is dwarfed by the sheer number of conventional jobs that are going to be at risk.”

The LAO report did find that the passage of Proposition 23 could result in a halting of air quality improvements that would have public health-related economic benefits. But, at the same time, it also found that it’s likely that the proposition’s passage would result in modestly higher economic activity than if it wasn’t passed, giving both backers and opponents something to argue.

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California Center for Sustainable Energy

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California Center for Sustainable Energy Executive(s):

Leendert Hering

  • Executive Director

Irene Stillings

  • Executive Director

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