A lot of the folks who supported Prop. 23, the soundly defeated plan to suspend California’s climate change law, insisted they were doing so at least in part to preserve the state’s stature as a leader in a variety of industries, from computer chips to gasoline refining.
Not to worry. Computer chip and software companies will continue to be a large presence in places like the Silicon Valley, Orange County, the Conejo Valley corridor along U.S. 101 in Ventura County and San Diego County. There will be no end to refining gasoline in places like Carson and Richmond.
But last night’s defeat of Prop. 23 will cement California’s leadership position in fighting off global warming and in the production of renewable energy products and plants. That leadership would have been at risk if this plan had passed.
It Was Just a Ploy
For Prop. 23 proposed to delay the provisions of California’s landmark anti-climate change law – the 2006 bill known as AB32 – until unemployment dropped below 5.5 percent for a full year. Unemployment numbers so low are rare even in good times, having been reached just twice in the last 20 years.
So this initiative was plainly a ploy, perhaps not as transparent as the also-defeated self-serving measures put forward on last June’s ballot by Pacific Gas & Electric Co. and Mercury Insurance. But definitely a ploy.
This bill was sponsored from the get-go by two Texas oil companies, Valero Energy Corp., whose teal-and-yellow stations dot the California countryside, and Tesoro Corp., which markets its gasoline under the USA and Shell banners.
Their self-interest in this bill actually beggars what PG&E and Mercury stood to gain from their earlier failed efforts. Valero, for instance, estimated its expenses under AB32 would initially be $177 million per year. That would be the cost of beginning to reduce its California refineries’ emissions of carbon dioxide to 1990 levels, which AB32 demands be achieved by 2020. After 2020, the company figures it might be spending more than $500 million on compliance.
The Way AB 32 Will Work
Is it any wonder Valero was one of the initial financiers of the effort to gather signatures for Prop. 23?
The cost to companies like Valero could come either via actual improvements designed to clean up their plants or through the cap-and-trade system AB32 may soon require. Cap-and-trade systems, like the one now used in Europe and that proposed last month by the California Air Resources Board, assign each industrial facility an amount of greenhouse gases it is permitted to emit. That’s the cap, which would be reduced yearly until the 2020 effective date. Companies that emit less than their quota could eventually sell their extra polluting potential to those that emit more than allowed, letting polluting firms offset their excess gases.
It’s a way for clean facilities to profit from their investments in green technology. And it most likely would spur a steady stream of advances in that field. But companies like Valero and Tesoro, which have older equipment, will eventually have to spend big either to buy new stuff or to buy credits from cleaner companies of all kinds.
A system like that was proposed for the entire nation in Congress this year, and got nowhere. So far, California is the only American state doing this. But others will follow, just as they have aped every clean air tactic California has ever employed, from primitive smog control devices to catalytic converters and more. More than a dozen states now have laws requiring them to automatically adopt any new California smog standard within five years of when it is adopted here. As with AB32, large automotive and oil companies have fought every such measure in the past.
Defeat of Prop. 23 ought to ensure this leadership continues. The state is already seeing signs of that, with approval by the state air board of separate new regulations forcing utilities to get one-third of their energy from renewable sources by 2020.
Already, four major solar energy farms producing enough power to electrify Fresno and Bakersfield are approved for construction in the Mojave Desert. Said state Energy Commission member Jeff Byron, “California is the Solar Saudi Arabia.” With almost limitless sunshine, there’s no reason he shouldn’t be correct. Any disputes with environmental groups worrying about endangered species near those plants should be easily resolved with relatively small shifts. There will also be more and larger wind farms.
Plus, the utilities will almost certainly have to offer incentives to home and building owners to install solar panels, further reducing reliance on oil and natural gas. Not to mention electric and probably hydrogen cars in significant numbers.
Some of that could happen even if Prop. 23 had won. But its loss assures that California, and not potential rivals like New Mexico and Colorado, will remain the capital of America’s green industries.
Mr. Elias may be contacted at tdelias@aol.com.
His book, “The Burzynski Breakthrough,” is available in a soft cover, fourth edition. For more Elias columns, visit www.californiafocus.net
