Thanks for showing some common sense.
Finding a viable, top-down energy policy in the United States is about as elusive as finding a snowman in July. Just this past summer, the last vestiges of any meaningful climate change legislation withered on the vine in the Senate, despite getting previous approval in the House of Representatives.
It was the latest in a long line of frustrating blows to those in favor of cleaner, greener energy – and underlined the fact that the solution to our energy will come from the ground up, rather than the top down. And Tuesday’s elections provided a great example of that, as voters in California emphatically crushed Proposition 23, sending a clear message in support of green energy.
If you missed the news, you’re not alone. Amid the Congressional spanking that the Republicans gave the Democrats and the Tea Party hysteria, few media outlets covered it. But make no mistake: Its repercussions will not only ripple across the other 49 states in the Union, but ultimately around the world.
Score One for Team Green
Proposition 23 was an ill-conceived initiative aimed at suspending a landmark law – the Global Warming Solutions Act (otherwise known as AB32). Simply put, AB32 mandated reducing carbon emission output by 25% to 30% by 2020. The Act became California law in 2006 and was scheduled to take effect in 2012.
And by a staggering 21-point margin, California voters said “no” to suspending it. Proposition 23 was the first time that Americans had a vote directly focused on global warming. Prior to it, climate change actions were limited to Congressional fits and starts. And as we’ve seen, Washington has little to show for its “efforts.”
The bi-partisan co-chairs involved in defeating Proposition 23 were billionaire hedge fund manager Tom Steyer and former Secretary of State George Schultz. A statement from the two men read: “We had a huge victory. It was the biggest ‘NO’ of any statewide proposition vote.”
Steyer spent $5 million of his own money to rally support among fellow business leaders and venture capitalists. Bill Gates also supported the measure. Had it passed, Proposition 23 would have remained in force until California’s unemployment rate dropped below 5.5% or less for a full year. What are the chances of that happening?
Next to zero. California’s unemployment rate has only sat below 5.5% three times since 1970. Right now, it’s at 12.4%, the worst since the Great Depression. So who was behind Proposition 23?
The Big Money Behind Proposition 23
Also throwing their weight behind it was the California Manufacturers and Technology Association, the State Building and Construction Trades Council, plus Americans for Prosperity of California, to name just a few.
As the biggest carbon polluters, the oil companies had a vested interest in seeing Proposition 23 pass. They felt a carbon moratorium was needed. Californians felt otherwise – even if it means living with short-term job losses and a continued anemic economy.
However, those concerns are largely exaggerated. In fact, with the defeat of Proposition 23, it’s far more likely that just the opposite will happen…
Big Oil Will Take a Big Hit… But Not the Job Market
Now that Proposition 23 has failed, there will be consequences…
- For Big Oil: Companies’ balance sheets could take a hit (although I doubt you’ll find too many people shedding tears about that).
- For Green Energy: Aside from the obvious environmental benefits that will come from cutting carbon emissions, the defeat of Proposition 23 – and subsequent implementation of AB32 – should give a huge boost to the green/alternative energy sector in America and open up more job opportunities.
And the sector needs it. You see, despite the fact that the clean-tech industry is already on a tear (on track to rack up roughly $10 billion in sales by the end of this year, with sales projected to total about $80 billion by 2015), Europe and China both have a sizeable lead over the United States in terms of clean-tech jobs.
But AB32 will help the United States become more competitive and create tens of thousands of new positions, some of which will come from companies that don’t even exist yet. And given that California is a leader in alternative energy sources, many of those jobs will go to Californians. However, many jobs will also go to other states, as similar measures are adopted.
What Companies Stand to Benefit?
Solar manufacturers like First Solar, Inc. (Nasdaq: FSLR), Trina Solar, Ltd. (NYSE: TSL) and eSolar are thrilled, to say the least. John Van Scoter, eSolar’s CEO, had this to say when interviewed about Proposition 23′s defeat:
The growing number of green jobs is a testament to the power and momentum of the industry. We at eSolar are pleased to see California voters support clean technology innovation. As California continues to lead the nation in energy policy and investment, solar thermal power will play a major role in the deployment of renewable energy and eSolar looks forward to bringing our projects online.
The bottom line is that green and clean tech is not only alive and well in California, it’s destined to get a significant boost with the defeat of Proposition 23. We’ll be keeping an eye on how it affects future energy policy at the state and national level. It could just be the catalyst that gets clean-tech off to a great start in 2011.