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Follow the money on Prop 23

by Alan Markow, published

Line up the supporters of Proposition 23 and you’ll get an idea what’s at stake in the battle to repeal California’s pioneering anti-global warming legislation.  Most of the money targeting the repeal of AB-32 – legislation that would require dramatic reductions in the use of greenhouse gases in the state by 2020 – is from big, out-of-state oil companies such as refiners Valero and Tesoro.  Thus far, Big Oil has poured more than $8 million into the Yes on 23 campaign. 

A New York Times editorial this week identified two of the big money backers as Kansas oil and gas barons Charles and David Koch.  The billionaire brothers are also major funders of the Tea Party movement (in which regular Americans are purportedly taking back control of their country from special interests). 

Depending on your point of view, Prop 23 will either protect California jobs or kill the nascent green power industry and the future jobs that it promises.  The claim by oil and gas interests is that AB-32 is a job killer because it will raise domestic energy costs and force more jobs overseas.  That’s a powerful argument when 12.4 percent unemployment persists throughout the state.  However, much of the “jobs” argument by supporters of Prop 23 is based on questionable studies funded by Big Oil lobbyists. 

Arrayed in opposition to Prop 23 are the state’s major public utilities, including PG&E and San Diego Gas and Electric; environmental groups; and green energy companies that are largely start-ups and small businesses.  Prop 23 would deal a devastating blow to businesses that supply solar, wind, and geo-thermal power to the state’s power grid and to individual consumers. 

As is so often the case with California’s ballot initiatives, the forces both for and against the issue stand in stark contrast in terms of their intentions toward the state and the benefits that accrue to them.  Clearly, the fossil fuels industry sees aggressive regulations to reduce greenhouse gases as an imminent threat to its bottom line.  The utilities fear continued reliance on Big Oil and the potential for another Enron-style debacle.  They want to diversify their sources of energy and create more green power locally. 

Both of these industries are looking out for themselves, but the utilities have a uniquely civic link to the state.  They depend on economic development within communities to expand their business.  As California grows and prospers, the utilities do as well.  It wouldn’t make much sense for them to favor job-killing initiatives.  Big Oil has no such direct links to the success of communities.  It sells to the highest bidder, whether they are in California, India or China. 

So it’s not surprising that many cities – including Los Angeles and Sacramento -- oppose Prop 23 and want to see California lead the way in the reduction of greenhouse gases.  But, it is somewhat surprising to see former Ronald Reagan and Richard Nixon cabinet member George Shultz co-chairing the governor’s effort to defeat Prop 23.  Despite his solid conservative credentials, Shultz believes that AB-32 will stimulate the type of technological development that has been critical to the success of Silicon Valley and other technology corridors. One thing that Prop 23 has going for it is confusion.  AB-32, the bill that the proposition would reverse, is a palindrome of Prop 23.  Googling either the State Senate’s bill or the Proposition opposing it yields links to both.  So it will take some careful attention on voters’ parts to realize that when you vote for Prop 23, you’re really opposing AB-32. 

Good luck explaining that in a 30 second ad.

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