DR: What happened with Prop. 87 [the Calif. ballot initiative to tax oil company profits]?
TT: Well, it failed. It’s amazing what $97 million of misleading advertising from oil companies will do, even against $50 million from proponents. And to be honest and fair, not all of it was misleading. Some of it was true. It would set up a new bureaucracy, which is a bad word to people. It didn’t have any particular metrics, which is one of the things being argued by the oil companies. There were some other flaws with the measure.
But I supported it because it was a step in the right direction. It was a matter of basic fairness: [California is] the only state in the nation that doesn’t have a severance tax on oil taken from state land. I mean, even Texas and Alaska do. So whether we invested in alternative fuels or schools, we shouldn’t be leaving it on the table.
It’s easier to vote no than to take a leap of faith and vote yes.
DR: I’ve heard criticisms of the Yes on 87 campaign — that it was overly reliant on TV advertising and did too little with the grassroots.
TT: I’d say that’s true. I was talking to Bill Meadows at the Wilderness Society the other night, and he had the same experience I had: we kept lobbing calls offering to help into the campaign and it was a black hole. At the last minute, when things were going south, they came back to guys like Bill and said, “put information about the proposition on your website.” That was their answer.
They were just arrogant, thinking proponents would spend as much as the oil companies, and that people’s anger over oil would translate into action in the ballot box with no more than some TV ads.
DR: Schwarzenegger came out against 87. How much of his opposition was genuine concern about its economic impact and how much was fealty to big contributors?
TT: I know Arnold pretty well, and we talked about this at great length. He was very conflicted. He agreed with the policy, but he had staked out his reelection campaign on “no new taxes” — and that Angelides was going to raise all kinds of taxes. Although Arnold supported the concept, and I think under other circumstances might even support a gas tax or even a carbon tax, he felt he couldn’t say, “well, some taxes are good.” When he made this decision he was three points behind in the polls, and taxes were the defining issue of the campaign.
He did not campaign against it. He was very careful. He said, “every time I’m asked about it I will say ‘I support the policy, and if the voters approve it, I will vigorously enforce it. Unfortunately, I cannot be in favor of a new tax at this time.'” He was careful to separate the good policy from this particular approach.
DR: Is there rising anti-initiative sentiment?
TT: There may be a short-term fatigue, at least in California, because of what happened last year with the special election — which Schwarzenegger admits was a mistake, but nonetheless, he did it. It forced people to go to the polls one more time for a bunch of stuff they ultimately didn’t like.
DR: AB 32 [Calif.’s pioneering greenhouse gas legislation] passed against considerable odds. Do you have any metrics for how it’s doing or how it’s affecting the economy?
TT: There may be some costs passed on in the short term. It’s nothing that’s going to put anyone out of business; it’s a few pennies on a gallon of gasoline to deal with pollution or alternative fuel investments.
That’s another reason the governor’s been pretty clear about wanting regional solutions. We went to the Western Governor’s Association meeting and got a resolution that all the governors would work together on a trading program and other greenhouse-gas reduction strategies. We went to the border governors’ meeting in August — although Rick Perry, the governor of Texas, refused to let anybody talk about climate change because he was in the process of fast-tracking 19 coal-fired powerplants, Arnold did anyway. In his closing remarks, he said, “we weren’t talking about it this year, but we’ll work on it over the course of the next 12 months and the next time we meet in Baja, governor Wardawee and I will have a regional solution to climate.”
The shorter answer to your question is: the economics can be mitigated. The law was very clear to say that the air board, as it develops the regulations to achieve the caps, has got to take that into consideration. You can be sure that the chamber of commerce and the Western States Petroleum Association will be bringing lots of evidence in about the impacts. We think the longer-term economic impacts are beneficial.
DR: Has California hooked up with the Regional Greenhouse Gas Initiative (RGGI) in the Northeast?
TT: We have sort of an MOU [memorandum of understanding] that says, look you RGGI states, get your act together, because we want to align any trading program that comes out of California with yours — a ton of carbon reduction is a ton of carbon reduction no matter where you get it.
We asked Prime Minister Blair to come over for a big summit at the end of July, and brought 30 CEOs of international corporations to talk about how [carbon trading programs] could work internationally.
It’s important you bring down the cost of compliance by having these market-based systems. Let’s say you have a company that wants to buy a carbon credit, but can only buy it from one or two sellers in California. Well, they’re going to jack up the price. If he can shop around, and go to RGGI, go to Europe, go to the stock exchange, even forestry offsets — that forces everyone to sharpen their pencil and bring the cost of carbon offsets down.