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October 27, 2010
Investors Urge California Voters to Reject Proposition 23
    by Robert Kropp

Investor coalition argues that repeal of California's Global Warming Solutions Act would lead to the loss of billions of dollars in clean energy investment in the state.


California's Global Warming Solutions Act, more widely known as Assembly Bill 32 (AB32), passed the State legislature and was signed into law by Governor Arnold Schwarzenegger in 2006. This year, it has become the target of Proposition 23, a statewide ballot initiative to stop its implementation until unemployment levels falls below 5.5% for four consecutive quarters, a rate which has occurred three times in 30 years.

When he signed the bill into law, Governor Schwarzenegger said, "Using market-based incentives, we will reduce carbon emissions to 1990 levels by the year 2020. That's a 25 percent reduction. And by 2050, we will reduce emissions to 80 percent below 1990 levels. We simply must do everything in our power to slow down global warming before it's too late." Mandatory emissions caps are scheduled for implementation in 2012.

Under AB32, companies in high-emitting industries were required to begin reporting on greenhouse gas (GHG) emissions in 2009. Regulations to "achieve the maximum technologically feasible and cost-effective reductions" in emissions are scheduled for 2011, according to the Governor's office.

In a panel discussion held in September, venture capitalist Peter Moran argued that AB32 encourages investment in clean energy technologies, and Mike Mielke of the Silicon Valley Leadership Group noted that one-third of venture capital investment now occurs outside the US. The UC Berkeley Center for Labor Research and Education issued a report in 2008 that found that AB32 would lead to an increase in jobs in California.

Proposition 23 was launched by two Texas oil companies, Valero Energy and Tesoro. In June, 70% of voters in Carpinteria CA voted against a proposal by Venoco, another oil company supporting the ballot initiative, to build an offshore oil rig in the Santa Barbara Channel.

Proposition 23 is supported by the Koch brothers, whose Koch Industries is the second-largest private company in the country. Calling the brothers a "kingpin of climate science denial," a report published earlier this year by Greenpeace identified them as "fighting environmental regulation, opposing clean energy legislation, and easing limits on industrial pollution." Koch Industries has been identified as one of the top ten air polluters in the US.

Now, an investor coalition led by
Ceres, consisting of sixty-eight investors managing $415 billion in assets, has issued a joint statement urging California voters to reject Proposition 23.

Arguing that "we need certainty about the policies that govern the sectors in which we invest so that we can make strategic, profitable investments over the long term," the investors stated that passage of Proposition 23 would lead to the loss of thousands of jobs and billions of dollars in clean energy investment, an increase in energy prices, and damage to public health. Passage of Proposition 23 " could in turn delay the entire nation's transition to cleaner energy and greater energy independence, all while sending a negative message to the rest of the world about America's leadership in clean energy technologies," according to the statement.

 

 
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