Berkeley Law Pleads the Case for Prop 23 Defeat

My thanks to Heather Haney, a law student at UC-Berkeley, for the comments posted on my blog about Proposition 23 and for providing a copy of a Berkeley Law white paper excerpted below as an independent analysis of the implications of passage of Prop 23.

This white paper entitled “California at the Crossroads: Proposition 23, AB32 and Climate Change” provides Berkeley Law’s analysis of the implications of voter approval of this ballot measure in the upcoming November election.  The white paper comes from the U.C. Berkeley School of Law’s Center for Law, Energy & the Environment (CLEE). Professor and CLEE Faculty Co-Director Daniel Farber, CLEE Executive Director Richard Frank, CLEE Associate Director Steven Weissman and CLEE Administrator Areca Sampson collaborated to write the paper. The conclusions in this white paper are:

“If enacted, Proposition 23 would:

1.    Create uncertainty and increase costs for industries regulated by AB 32 and for state and local officials charged with implement­ing the law. Because Proposition 23 ties the suspension of AB 32 to the ever-changing unemployment rate (currently at high levels due to the broader economic recession), it would generate considerable uncertainty for businesses, investors, entrepreneurs. and for state and local governments. Because Proposition 23 does not change the 2020 deadlines contained in AB 32, the suspension would effectively reduce the amount of time regulated industries have to comply with AB 32. In addition, potential litigation over the measure will likely further complicate planning efforts.

2.    Place additional and potentially inequitable burdens on certain economic sectors to reduce greenhouse gas emissions while exempting other industries. Delaying the implementation of AB 32 may make compliance with certain other environmental statutes and regulations more difficult and increase the economic and compliance burden on certain sectors of the California economy, such as real estate developers and automobile manufacturers, to reduce greenhouse gas emissions. Conversely, the suspension would lift the regulatory requirements on specific business sectors, such as California’s oil and gas industry and electric utilities.

3.    Harm the nascent clean energy sector and limit investment in new technologies, while having an unclear, long-term impact on employment. If enacted, Proposition 23 proponents contend that suspending AB 32 will benefit the state’s economy. The evidence shows that Proposition 23 would result in some direct decreases in future employment due to its inhibiting effect on California’s emerging clean energy sector. The indirect effects of the measure on overall employment are disputed among economists. Because those effects could vary over time, it is not possible at this time to form a firm conclusion about the likely impact of Proposition 23 on long-term employment or other economic indicators.

4.    Reduce revenue for the state. Proposition 23 delays the implementation of the administration fee to be levied against large sources of emissions to cover the costs of AB 32 implementation, including some costs that have already been incurred. The measure would also result in the loss of potential revenues from the auction of allowances for the cap-and-trade program contemplated in CARB’s scoping plan.

5.    Diminish climate change and renewable energy policy momentum. AB 32 has contributed significant momentum within California to transition to a clean energy economy and reinforces the state’s role as a national leader on clean air, clean energy, and energy efficiency. Suspending AB 32 would dampen this in-state progress and could also affect the implementation of a multi-state greenhouse gas reduction effort. Moreover, because California is recognized as a national policy leader, and because states learn from and emulate one another, suspension of AB 32 might raise doubts about climate policy efforts being pursued at the federal, regional, state, and local levels. These effects cannot be quantified but are likely to be significant.

6.    Suspend specific regulatory measures already underway to implement AB 32. Most prominently, Proposition 23 would halt the state’s planned cap-and-trade program; suspend California’s low-carbon fuel standard; jeopardize the executive order requiring the state’s utilities to provide 33 percent of their generated electricity from renewable sources by 2020; and suspend AB 32’s early implementation measures, such as efforts to improve vehicle efficiency, expand landfill methane capture, and limit industrial greenhouse gas emissions, among others. “

Conclusions:  The suspension mandated by Proposition 23 would block the implementation of future regulations under AB 32 and would suspend regulations adopted under AB 32 that are already in place. Proposition 23 would also limit the ability of California state agencies to continue working on implementation plans during the period of suspension mandated by the initiative measure. The suspension would freeze four years of regulatory activity already completed to implement AB 32.”

“This loss of momentum would likely reverberate in the clean technology sector and could dampen greenhouse gas reduction efforts being pursued by other states and by the federal government. However, California could still move forward in some significant ways on climate change policy even during the suspension of AB 32 that Proposition 23 would mandate. In the absence of AB 32, such action would require leadership of the Governor and others in state and local government. Of course, AB 32 would not be available as a mechanism to coordinate and reinforce those efforts. “

“Ultimately, California voters will decide whether to approve Proposition 23, weighing the overall balance of perceived societal benefits and costs—both economic and environmental.”

Now it is up to California Voters

This white paper is a useful read as voters consider the benefits and consequences of Proposition 23. This is an independent analysis of the issues but it is also clear advocacy for AB32 and the strategies being pursued by California under it.  You can sense the palpable anxiety in the white paper that Prop 23 threatens all the progress environmental advocates believe they have made in efforts to set the standard for greenhouse gas emissions reductions.

My purpose in highlighting this white paper and providing access to its summary and conclusions is to call attention to how fundamental a choice Prop 23 gives to Californians.  This really is a referendum on whether the State is going in the right direction or alternatively whether our politicians and regulators have over-reached and over-played the mandate they thought they had from voters.

Californians overwhelmingly support clean environmental strategies.  This debate is not about that fundamental belief—it is about the insidious intrusion into our daily lives by government bureaucrats taking our aspirations and turning them into something onerous and unintended.

In choosing between these policy alternatives the ballot measure is not so much about greenhouse gas emissions, per se, as it is about California’s economic competitiveness, about the size and reach of government and its ability through “administrative fees” to control our lives and decide for us what is best.