Guest post by Aaron Singer, co-founder and CEO of the Pacific Carbon Exchange, an environmental commodities exchange headquartered in San Francisco, CA.
California’s rules of governance by ballot measure have permitted out-of-state oil companies Tesoro and Valero, plus a political action committee acting as cover for out-of-state coal companies to buy enough signatures to place a referendum on the November ballot that will effectively repeal California’s landmark Global Warming Solutions Act of 2006, better known as AB32.
So why should non-Californians care? Simple – removing AB 32 would be potentially disastrous, if not fatal, to broader international efforts to curb greenhouse-gas emissions and the development of a true, global carbon market. Prop 23 would eliminate any chance of comprehensive climate legislation in the United States for at least a decade or more. You can bet Prop 23’s backers are counting on this – if you can’t defend climate legislation in the State of California, it cannot be defended in the US – plain and simple. This would further undermine voluntary carbon markets, destroy any credibility the US would have at UN climate talks in Cancún this December, and negatively affect emissions trading efforts in the European Union, and budding endeavours in China and India to curb their rapidly growing emissions.
Proposition 23 would delay implementation of AB32 until the Californian economy experiences four straight quarters of 5.5% unemployment or less – it is now over 12%. Repealing AB32 would kill the law’s foundation cap-and-trade programme, the renewable energy portfolio standard and other critical initiatives such as the low-carbon fuel standard. All of this is being done to save “over a million” unspecified jobs and prevent California from losing tens of thousands of businesses apparently threatening to flee the state if AB32 goes forward.
These arguments for Prop 23 stretch the limits of credulity, as neither of the major party’s candidate for governor and not a single business covered under the AB32 cap-and-trade programme has come out in favour of this proposition, and the only major financial supporters behind the Prop 23 effort are out-of-town fossil fuel special interests. In fact, major businesses covered by AB32, such as Pacific Gas & Electric and Sempra Energy have spoken against the measure and the largest oil company operating in California, Chevron, has officially taken a neutral position.
Prop 23, also known as the California Jobs Initiative, argues that meeting the requirements under AB 32 would undercut California’s competitive advantage and raise the cost of doing business in California. However, since 2005, California’s clean and greentech sector has been creating more jobs than other traditional economic sectors by a factor of three to one. There are over 12,000 cleantech startups in California—550,000 new green jobs—and US$80 billion (534 billion yuan) of investment capital and federal stimulus that has poured into cleantech since 2005, whose effects would be instantaneously erased if Prop 23 were to pass.
In 2010, crippling drought, fires and crop failures in Russia, massive population dislocations from flooding in Pakistan and China, record-setting heat waves and huge, destructive storms in the US, and a chunk of Greenland the size of the San Francisco Bay Area floating off into the Atlantic have made it hard to ignore climate change. What more do we need to see to act?
Global carbon market players must join in the fight being waged here on America’s west coast and support the “No on Prop 23” campaign. If you believe that a price on carbon and a free-market solution for lowering global greenhouse-gas emissions are critically important to the global economy, than the health of the planet and the lives of future generations, as well as your business, may depend on California voters.