In 2006, taking a brief hiatus from the usual Sacramento gridlock, the Legislature passed and Gov. Arnold Schwarzenegger signed AB 32, a pioneering law designed to reduce California’s greenhouse gas emissions to 1990 levels by 2020. This year, a proposition that aims to kill the law was put on the Nov. 2 ballot by two Texas oil companies with a lot at stake. The cynical, misleading argument the companies are using to make their case is that AB 32 will deter job growth at a critical moment in the state’s economic recovery.
Proposition 23 would suspend AB 32 until the state’s unemployment rate falls to 5.5% or below for four consecutive quarters. Backers insist that this wouldn’t negate the law because the rate is achievable — joblessness hit that mark just four years ago. Yet a global recession, which had nothing to do with California’s environmental standards, caused statewide unemployment to skyrocket to 12.4%, and it will take many years to recover from such a severe economic blow. Because meeting AB 32’s 2020 deadline requires immediate action, delaying implementation by even a year could render its goal impossible.
Of course, the question of most concern to voters is whether AB 32 would worsen joblessness and slow the state’s recovery. Supporters and opponents of Proposition 23 draw on studies that reach opposite conclusions; the yes side says AB 32 would cost the state 1 million jobs, while the no side says it has already led to the creation of 500,000. We’re not convinced by either. The economic impact of AB 32 will depend on how it’s implemented by regulators, as well as variables outside anyone’s control or ability to forecast.
The state’s nonpartisan Legislative Analyst’s Office predicts that AB 32 will cause energy prices to rise, but it failed to consider that this doesn’t necessarily mean higher bills of the sort that crimp business expansion — the law will boost energy efficiency, so even if unit costs for electricity are higher, power bills might go down because businesses and consumers would use less of it. That’s exactly what happened after California started mandating efficiency improvements in the 1970s. Moreover, spikes in electricity prices should be short term; it will cost billions to build renewable power plants and transmission lines, but over the long term they will be cheaper to operate than plants fueled by natural gas or coal because their fuel — the sun, wind or heat from the Earth’s core — is free.
Economic forecasts might be murky, but it’s clear that there will be winners and losers if the state, as it’s directed to do by AB 32, caps greenhouse gas emissions at power plants and other big pollution sources. Among the losers would be Valero Energy and Tesoro Corp., the San Antonio-based oil companies that fronted the money to get Proposition 23 on the ballot and have together contributed nearly $5.6 million to the campaign. Among the winners would be venture capitalists and companies that are investing billions of dollars in renewable power plants and research into clean-energy alternatives. But it goes deeper than that. Although Proposition 23’s supporters rightly point out that California, by itself, can’t have much of an impact on global warming no matter how sharply it cuts its carbon emissions, AB 32 will have benefits beyond the fight against climate change. Cleaner energy will also bring cleaner air, reducing public health costs and improving quality of life.
What’s more, that California can’t defeat climate change alone is beside the point. Since the late 1960s, California has led the nation in environmental regulation — and where California leads, other states and Congress almost invariably follow. That’s the real reason the likes of Valero and Tesoro are so afraid of AB 32: They know it will spread. And it’s why Californians must not let them succeed. With Congress currently paralyzed on climate legislation, California is the best hope for a cleaner future in the United States. Vote no on Proposition 23.
The Times’ endorsements in the Nov. 2 election are available at latimes.com/opinion.