The success of California’s AB 32, like the Regional Greenhouse Gas Initiative in the Northeast, gives us concrete evidence that a price for carbon pollution can effectively create jobs by spurring new markets for energy efficiency and clean energy technologies like wind and solar. California’s progressive clean energy policies have given investors and entrepreneurs the long-term market certainty they need, and as a result private investment has been pouring into California’s clean energy economy.
“California’s Global Warming Solutions Act is like a job-creation machine for California,” says Van Jones, Center for American Progress Senior Fellow and former green jobs advisor to President Obama. “Why would Californians let some Texas oil companies come into their state and smash their job creation machine just to protect their profits?”
California’s clean energy sector has continued robust growth despite the economic recession thanks to AB 32. Clean energy jobs have grown 10 times faster than the statewide average since 2005, to over 125,000 [PDF] today. And green jobs grew by 5 percent [PDF] even when the state experienced an overall job loss of 1 percent between 2007 and 2008. Likewise, venture capitalists have invested over $9 billion in clean energy innovation in the state since 2005, supporting the growth of over 12,000 [PDF] clean energy businesses and thousands of new patents [PDF]. Venture capital is one of the fastest and more effective ways to stimulate economic growth, creating by some estimates [PDF] 2,700 new full-time jobs for each $100 million invested — or about six times more jobs per dollar than direct federal spending.
Passing Proposition 23 would severely damage these emerging clean tech industries that have been major job creators despite the recession. The initiative would suspend the crucial price signal and market for carbon pollution that makes clean energy more profitable than dirty energy, and it would also threaten 72 other planned and existing state policies [PDF] that are linked to it along with billions of dollars in direct investment in clean tech investment by the state and local governments.
This would create regulatory chaos for California’s businesses and drive private investment and jobs out of the state or into bankruptcy. The following are just some of the many job-creating policies that would be threatened by Proposition 23:
- The renewable electricity standard
- Solar hot water incentives that help families heat their homes
- The million solar roofs initiative
- Cash for appliance clunker programs
- Government green building policies
- Combined heat and power incentives and standards that are among the most cost-effective energy efficiency policies on the books
- Low-carbon fuel standards
- Light-duty and heavy-duty vehicle emission standards and incentives
- Sulfur-hexafluoride, perfluorocarbon, and methane reduction standards
- Oil and gas extraction and distribution emissions reductions
- Urban runoff management and other water conservation standards
- Sustainable forest targets
- Gas capture and flaring standards for landfills, refineries, and large dairies
- Green schools programs
- Clean ships and clean ports programs
Eliminating these policies would undercut thousands of clean energy businesses and their workers who have built their futures based on the premise that California would be a place where clean energy was profitable energy. As the nonpartisan California Legislative Analyst’s Office says, repeal of California’s clean energy policies would “dampen additional investments in clean energy technologies or in so-called ‘green jobs’ by private firms, thereby resulting in less economic activity than would otherwise be the case.”
Repeal would damage the nation’s engine of energy innovation
California has been a leader in clean energy and energy efficiency for decades. Over the past 35 years California’s model energy efficiency policies have saved consumers over $56 billion [PDF], creating 1.5 million full-time jobs and $45 billion in payroll. And since 2006, AB 32 has been an “incubator of innovation,” according to Google CEO Eric Schmidt, leading to “new job creation in many sectors as business responds to the need for energy-efficient buildings, transportation, and a growing portfolio of renewable energy resources.”
California has become a critical nexus of innovation for our national clean energy economy because of its strong clean technology sector. For instance, in 2007 California’s clean energy innovators patented over 1,400 [PDF] new technologies, roughly a fifth of the nation’s total [PDF]. Over 600 investment firms have put money into California’s clean energy economy, supporting more than 12,000 innovative clean energy businesses. Even in the chilly investment climate of 2009 these clean energy businesses saw $2.1 billion in venture capital investment, which comprised 60 percent of all such investment in North American — all thanks in part to AB 32.
Proposition 23 would endanger our nation’s entire engine of clean energy innovation since California is such an important piece of the national clean energy economy.
As Obama said in his state of the union address this year, “the nation that leads the clean energy economy will be the nation that leads the global economy.” Across the country and across the world it is these emerging industries that are leading the way out of the recession toward sustainable 21st century economic growth. In fact, clean technologies could represent a nearly half trillion dollar export market in the coming century, according to the World Wildlife Foundation.
Yet CAP’s recent report “Out of the Running?” [PDF] reveals that the United States risks being left behind in these new technology sectors by countries such as Germany, Spain, and China, who have comprehensive climate and clean energy policies in place. Implementing AB 32 is adding the state of California to the list of economies that are seizing this multibillion-dollar energy opportunity, but only if the law is protected from short-sighted repeal efforts like Proposition 23.
As California goes, so goes the world?
There is an old saying that says “as California goes, so goes the nation.” This is a reference to the fact that California, with the largest population and largest economy of any American state, often sets an example for the rest of the nation by passing policies later adopted by the federal government. But action taken by California’s voters this November could actually determine the fate of the clean energy economy across the world, not just the nation.
Obama made a commitment in Copenhagen last December that the United States would lead the world toward a multilateral agreement to reduce global warming pollution. Our national credibility is in jeopardy if we cannot meet it. California’s leadership in passing the Global Warming Solutions Act of 2006 created hope that Congress might soon muster the courage to enact the comprehensive clean energy and climate legislation needed to meet this commitment. Passing Proposition 23 in California this November would make it easier for lobbyists in Washington to convince our representatives once again to put Big Oil’s profits ahead of our economy, national security, and environment.
What’s more, AB 32 has created a large market for new clean energy technologies, jumpstarting innovation across the state and the nation even in the absence of federal climate legislation. If our representatives in Washington can’t figure out how to price carbon and declare independence from Big Oil on a federal level, perhaps forward-thinking states and regions can band together to make a difference on their own.
An analysis by Point Carbon showed that a combination of existing regional and state-level climate change policies including California’s Global Warming Solutions Act and the Northeastern States’ Regional Greenhouse Gas Initiative could achieve the equivalent of 41 percent of the United States’ pollution reduction commitments under the Copenhagen Accord while driving $100 billion in state-level clean energy investments. That wouldn’t be enough to secure a global climate change agreement, but it’s a foundation we cannot afford to lose.
Our need to declare independence from dangerous and dirty fuels has never been clearer. Millions of gallons of crude continue to gush into the Gulf of Mexico from BP’s blown-out oil well, and every day we stay addicted to fossil fuels dangerous countries such as Iran grow richer by the millions. California’s landmark clean energy policies are helping build a future free from tar-stained beaches, tragic rig and mine worker deaths, devastated marine habitats, harsher droughts, stronger storms, and rising seas.
No one state can solve these problems alone, but the world is looking to the United States to show leadership, and Congress is looking to California. AB 32 points the way to a cleaner, safer, more secure energy future. Californians can help ensure that the nation and the world will follow by defeating Proposition 23 at the ballot box in November.
