Big Oil’s false choice

Pub date October 12, 2010
WriterRebecca Bowe

Tapping into voters’ economic insecurities at a time of record high unemployment rates, out-of-state oil interests say addressing global warming will cost California more jobs. But a broad coalition that includes environmentalists and top business groups argue that just the opposite is true, saying the economy will suffer if we suddenly kill the incentives now driving the clean energy industry, one business sector that actually grew during the recession.

Proposition 23 would indefinitely suspend Assembly Bill 32, California’s Global Warming Solutions Act. Texas oil companies are bankrolling the initiative, spending millions of dollars to convince voters that they must choose between saving jobs and saving the environment. Since jobs are more important right now, they argue, the environment will have to wait.

But the other side — which includes groups such as the Chamber of Commerce, whose top priority is always job creation — is promoting the compelling idea that the path to economic recovery lies in rising to the challenge of climate change. They argue that addressing global warming now isn’t just about avoiding more out-of-control wildfires, diminishing crop yields, prolonged intense droughts, coastal flooding, and other calamities that climate scientists say global warming will bring to California. It’s also about creating jobs now and trying to lower California’s 12.4 percent unemployment rate, the third highest nationwide.

The push to defeat Prop. 23 has brought together prominent business people, public-health advocates like the American Lung Association, big green organizations such as the Sierra Club, and environmental-justice advocates who are pushing for green jobs as a way to fend off poverty and tackle air quality problems in disadvantaged neighborhoods. If the coalition of unlikely allies is successful, Big Oil’s comfortable lock on the energy market could be thrown off balance by California’s emerging green economy.

“Ultimately, we think it’s going to be a David vs. Goliath battle, because they have very deep pockets,” said No on 23 campaign spokesperson Steve Maviglio. “The proponents are playing to the fears of those most affected by the economy.”

When voters decide on this one, it will signify a choice to proceed down one of two paths at an important crossroads. A global climate summit in Copenhagen late last year failed to produce an effective response to climate change. A push for a federal cap-and-trade system to combat global warming yielded similarly disappointing results. AB32 presents a third chance to set a new standard, and a precedent, for curbing greenhouse gas emissions. But if Prop. 23 passes, environmentalists will have struck out.

A report issued in July by the National Academy of Sciences lays bare the far-reaching implications of policy decisions around climate change. “Emissions reductions choices made today matter in determining impacts experienced not just over the next few decades,” the report notes, “but in coming centuries and millennia.”



In 2006, Gov. Arnold Schwarzenegger signed AB32, mandating a statewide reduction of greenhouse gases to 1990 levels by the year 2020. The law is slated to go into full effect in January 2012, when a cap-and-trade system will make it more costly and burdensome for major polluters to continue burning high quantities of fossil fuels, among other strategies.

The law helps alternative energy companies and creates incentives for large and small businesses to green their operations. Prop. 23, deceptively titled the “California Jobs Initiative,” would suspend AB32 until the state’s unemployment rate drops to 5.5 percent for four consecutive quarters. A decade could pass before such a market condition is in place — in the past 40 years, it’s occurred just three times.

Speaking at the Commonwealth Club in Santa Clara in September, Schwarzenegger blasted Texas-based oil companies Tesoro Corporation and Valero Energy Corporation, which have contributed a combined $5.6 million to the Prop. 23 campaign, for trying to deceive California voters. “They are creating a shell argument that this is about saving jobs,” Schwarzenegger said. “Does anybody really believe that these companies, out of the goodness of their black oil hearts, are spending millions and millions of dollars to protect jobs? It’s not about jobs at all, ladies and gentlemen. It is about their ability to pollute and thus protect their profits.”

Prop. 23 has been unpopular even among many traditional right-wing and business interests. Oil giants Chevron and BP have remained neutral on it. Republican gubernatorial candidate Meg Whitman also renounced it, but straddled the fence by vowing to suspend AB32 for a year anyway.

According to a breakdown of campaign spending issued by opponents, oil interests contributed 97 percent of the funding for Prop. 23, while out-of-state interests were responsible for 89 percent. Kansas-based Koch Industries, run by billionaire siblings David and Charles Koch, dropped $1 million into the effort. The Koch brothers have been singled out as the financial backbone of the Tea Party.

Yet despite bipartisan opposition in Sacramento, polls suggest Prop. 23 could be a close race. A recent Los Angeles Times poll showed a dead heat among California voters, with 40 percent in favor, 38 percent opposed, and about one-fifth of likely voters undecided. The television commercials advocating Yes on 23 drive home a simple yet misleading message: “Save jobs. Stop the energy tax.” A spokesperson from the Yes on 23 campaign did not return the Guardian’s calls seeking comment.

Ironically, jobs are also the cornerstone of the No on 23 campaign’s arguments. “We have very heavy hitters who see this as a job killer,” Maviglio said. The campaign is highlighting the fact that the only economic area that has experienced growth amid the recession is green tech.

Democratic gubernatorial candidate Jerry Brown referenced green jobs as a bright hope for economic recovery in a televised debate against Whitman, and the prospect of green job creation as a way to alleviate poverty is clearly articulated in The Green Collar Economy, a widely influential book by Green for All founder Van Jones. Green for All has joined the Greenlining Institute and a host of 80 organizations statewide in a united front against Prop. 23, called Communities United Against Prop. 23, which is part of the larger opposition campaign dubbed Communities United Against the Dirty Energy Prop.

Low-income communities and communities of color will be disproportionately affected if Prop. 23 wins, said Orson Aguilar, executive director of the Greenlining Institute. “The communities we represent are feeling a double impact,” Aguilar noted. “They’re suffering from pollution,” since power plants and polluting industries tend to be sited in low-income communities, “and they’re suffering from unemployment and the economic crisis. There definitely is a double-whammy.”



At a recent green business symposium hosted by Urban Solutions, a nonprofit that aids small businesses and seeks to create job opportunities in low-income communities, a Castro District merchant explained her decision to enter green-business certification process. “I’m dedicated to going green because, No. 1, it’s the right thing to do,” said Elaine Jennings, who runs Small Potatoes Catering & Events. “No. 2, it’s the right thing to do. And No. 3, it’s the right thing to do.”

But the moderator of the panel, a business reporter, wasn’t as interested in the moral rationale — instead, she followed up by asking whether going green was a wise financial move. Anthony Tsai, green business program manager at Urban Solutions, made the case that it is. Water bills have gone up 40 percent since 2000, Tsai said. Electricity costs have gone up 60 percent and waste disposal fees have increased 250 percent. By conserving energy and water and reducing waste, small businesses can save money during tough economic times.

Aguilar sees energy-efficiency building retrofits as an opportunity to create jobs for disadvantaged populations. In order to comply with the climate regulations under AB32, energy-efficiency retrofits would have to be completed to hit conservation targets. “We have thousands, if not millions, of buildings in California that need to be retrofitted,” he said. “A lot of people who are out of work are in the construction industry. Latinos and African Americans were hit hard when construction fell.” With energy retrofits and solar-panel installations on the agenda, AB32 could be good news for electricians, too, Aguilar said.

There are signs that AB32 is already giving green business a lift. A manufacturer of electric delivery trucks, for example, relocated from Mexico to California’s Central Valley late last year. A wind-energy company recently relocated to San Diego from Spain. The solar industry is growing faster in California, particularly in the Bay Area, than anywhere else nationwide. And in the past five years, roughly $9 billion in venture capital investment has gone into clean tech industries, with more going to California than any other state.

“Prop. 23 would essentially pull the rug out from under this explosive growth, which we’re experiencing during a recession,” Maviglio noted.

Jeanine Cotter, CEO of Luminalt, an independently owned San Francisco solar and installation company, is active in the campaign to defeat Prop. 23. “There is an entire ecosystem that feeds off of good policy,” Cotter said. If Prop. 23 passes, “we will lose the spark that we have and we will go backward.”

Despite the economic downturn, Luminalt experienced its best year in 2009 in the six-year history of the company, and if AB32 goes into effect in 2012 as planned, the demand for new solar installations will only grow. But with less than a month to go before the election, Cotter said she was alarmed by the lack of awareness about Prop. 23, even among environmentalists.

“We were at West Coast Green with No on 23 literature,” she said, referencing a widely attended green-business conference, “and I was shocked at how many people didn’t know what it is.”



Small business owners and conscience-driven activists aren’t the only ones touting this theory of a new energy economy. The San Francisco Chamber of Commerce, a fiscally conservative business association that is often at odds with environmentalists and progressives, is actively campaigning against Prop. 23 — and it’s not out of any sense of moral duty.

If Prop. 23 succeeds, explained Chamber spokesperson Rob Black, it will scare off the venture capitalists. “For them, water’s like money,” he explained. “It will flow to the easiest place to invest.” Regulation like AB32 guarantees a return on investment for climate-friendly technology, he added. But if that regulatory structure is thrown into question, investors may flee overseas because investing would be too risky. “If we walk away from clean tech, the next Microsoft will be a Chinese company,” Black said.

Donnie Fowler, a political consultant who has worked for Al Gore and other top Democrats, is a senior adviser to the Clean Economy Network and a leader in the effort to defeat Prop. 23. Oil companies “went to Washington and spent hundreds of millions” lobbying against climate change regulations, Fowler pointed out. “Now they’ve opened up a second front. If California goes backward, all of those senators and Congressional representatives will say, ‘No way … I’m surely not taking a political risk. If they went backward, there’s no reason we should go forward.'”

Fowler said that for environmentalists, voting No on 23 could be seen as an affirmation of statewide efforts to address climate change in a meaningful way. “This is a real opportunity,” he said, “for Californians to stand up and say we’ve had enough. We are going to take a stand — right now.”