Does California need AB32?

This post was originally published on The Energy Collective.

Among the usual slew of propositions California voters face this fall is the much-disputed Prop 23, which would put AB32 on hold indefinitely. AB32 was signed into law by Governor Schwarzenegger in 2006, and if left standing it will reach its full effect in a year or two.

Why the debate about this proposition? Opponents of Prop 23 claim it would set California back in achieving clean energy goals and being a leader for the rest of the country—and that killing AB32 would result in job losses. Proponents claim that we already have enough regulations in place to achieve the goals that AB32 covers—and that leaving it in place would result in job losses.

So, which course of action would result in job losses and other calamities? To get more insight on this, I attended a panel discussion in San Francisco on AB32 and what it means to California’s clean energy economy.

On the side of Prop 23 were 2 lonely panelists out of 6: Anita Mangels, with Yes on Proposition 23, and Gino DiCaro of the CA Manufacturers & Technology Association. Gino’s mantra was that AB32’s main cost, cap and trade, will hurt manufacturing—which is already on thin ice. And while some claim that halting the bill would lure capital away from our state, he noted that venture capital has a history of coming to California extending well before AB32 was enacted, so that’s not likely to stop. He let Anita do a lot of the talking for their side, her main point being that we don’t need AB32. She claimed that the many other laws, programs, and regulations already in place can do what it does at no cost. In fact, she noted, many of those other laws have been passed since AB32 was first enacted, further rendering it unnecessary. Other countries, she said, have backed away from cap and trade regulations. In addition, other states, like Texas with its wind farms, are moving toward clean energy without such a bill.

Adam Stern of Environmental Entrepreneurs, also with No on 23, noted that over 500 companies and organizations, as well as both gubernatorial candidates, are against Prop 23. He complained about the tactics his opponents are using, citing an ad that falsely claims electricity costs will rise by 60% if AB32 stays in place. Venture capitalist Peter Moran noted that though VCs won’t invest in a company solely because of government incentives, regulations like AB32 do encourage investments—such as a solar power plant currently slated to be built in the Midwest rather than elsewhere. Expanding on this, Mike Mielke of the Silicon Valley Leadership Group noted that a third of venture capital is now outside the U.S., as opposed to none 20 years ago, so we need incentives for capital to be spent here. Because clean tech is the only growing sector in the California economy, it’s particularly worth encouraging. We should also encourage California to continue being a leader in clean energy and influencing others. And he claimed that killing AB32 would effectively kill over 70 other programs (which prompted Anita to disagree vehemently—as with many statements made by one side or the other, it’s hard to know which is correct). Danny Kennedy, founder of Sungevity, countered Gino’s concerns about manufacturing with the fact that about 75% of cleantech jobs are in sales, installation, and maintenance. And he shared that when deciding where to start his solar company, he picked California over solar-friendly places like Germany in part because of AB32, which creates a climate that encourages businesses like his. While his company is established enough not to have to leave if AB32 is halted, others might never start up here in its absence.

Naturally, money was discussed. By now it’s widely known that Prop 23 has major funding from oil companies and the infamous Koch brothers, and Prop 23 supporters can get defensive about this. Opponents, in contrast, include the most unlikely of bedfellows, from the Sierra Club to big business to George Schultz.

While it’s unlikely that anyone in the audience for this event was convinced to change their position, it was a good source of information on both the facts and the arguments. No one can know for sure what all the consequences will be of any bill, including this one. But it’s easy to support a bill that helps protect the environment and encourages clean energy.  If we don’t have the courage to support such measures and keep our environment healthy, the issue of jobs will be moot. Let’s hope that the strategy of labeling Prop 23 a job saver will not delude the voters in November, and that California will continue being a leader and an example for the whole country.

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