California climate law under fire

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Supporters of California’s climate change law say it will spark a green technology revolution and boost the state’s economy. But, critics say it will hurt the state’s economy at a time when it can ill afford it. Rachael Myrow has this story from San Francisco.

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MARCO WERMAN: California has often led the country, and the world, on environmental policy. The state’s climate change law is no exception. Supporters say it’s helping forge a clean energy revolution that will make California a world leader in green technology. But critics say it’s a revolution California can’t afford right now. And those critics are asking voters to suspend the law when they go to the polls in two weeks. Rachael Myrow reports from San Francisco.

RACHAEL MYROW:  In 2006, the same year Al Gore starred in An Inconvenient Truth,

AL GORE:  Our ability to live is what is at stake.

MYROW: California Governor Arnold Schwarzenegger signed landmark climate legislation into law. Known as the Global Warming Solutions Act, or AB 32, the new law set strict targets for greenhouse gas reductions.

ARNOLD SCHWARZENEGGER: This is something that we owe our children, and that we owe our grandchildren.

MYROW: In effect, AB 32 was a mandate for California’s economy, already among the most energy-efficient in the country, to get a whole lot greener. But critics of the law say it puts a damper on California’s economy at a time when the state can least afford it. And they’re appealing to California voters to pull the plug on the climate change law at least for now.

ANITA MANGELS: It’s strictly about putting it on hold until conditions are much more favorable towards actually making a difference.

MYROW: Anita Mangels is a spokeswoman for the campaign to put AB 32 on ice. Proposition 23 would suspend the law until unemployment in the state drops to five and a half percent and stays there, for a year. And given that the unemployment rate is over 12% now, the ballot question could effectively repeal the Global Warming Solutions Act. That law comes down especially hard on big carbon dioxide emitters. So it’s no surprise the rollback is being bankrolled largely by three oil refiners, all based out of state. Flint Hill Resources, a subsidiary of Koch Industries, based in Kansas and Tesoro and Valero, both based in Texas. Valero’s Benicia refinery rises alongside Suisun Bay, east of San Francisco. Don Cuffel is the plant’s principal environmental engineer.

DON CUFFEL: We can make about 110,000 barrels of gasoline per day.

MYROW: Cuffel says Valero has recently spent more than a billion dollars to meet California’s already tough air quality standards, by putting things like “scrubbers” on their smokestacks to capture a variety of toxic air pollutants. But the climate law would hold Valero accountable for carbon dioxide emissions, too. And that’s a problem of a whole different scale.

CUFFEL:  There isn’t a scrubber for CO2.

MYROW: Cuffel says reducing CO2 will mean higher costs across California’s economy, from the gas pump to the grocery store. And, he says, the public needs to weigh those costs.

CUFFEL: Everyone is a stakeholder in this game, not just industry. And that conversation needs to include the full consequences of any step we take to manage greenhouse gasses.

MYROW: Opponents of the climate law quote a study out of California State University, Sacramento that estimated it would destroy more than a million jobs. That study is widely disputed, though most economists do believe jobs will be lost, especially in fossil fuel-related energy production. Whatever the number, Governor Schwarzenegger says the charge that the climate change law is a “job-killer” is a political smokescreen.

SCHWARZENEGGER: Does anyone really believe that these companies, out of the goodness of their black-oil hearts are spending millions and millions of dollars to protect jobs?

MYROW: Schwarzenegger and other backers of the climate law argue it creates new jobs in green energy. And in recent years, California’s green tech firms have consumed an outsized share of venture capital from around the world. But already, investors are worried about what this political battle will mean for California’s green energy industry.

DAVID NAHAI: Capitol is being drained away from the United States to other countries, principally China.

MYROW: David Nahai spent two years atop the Los Angeles Department of Water and Power. He’s now campaigning against the repeal of the climate change act. Nahai says a win for Proposition 23 would send a loud signal that California and the US in general are not serious about global warming, while countries like China and Germany waste no time getting down to business.

NAHAI:  They will create jobs. They will spur their economies. They will gain at least a measure of independence from fossil fuels. They will add to their grid stability. They will diversify their resources. There are all of these advantages that come with cutting greenhouse gas emissions.

MYROW: Recent polls show voters split on Proposition 23, and energy businesses are, too. Two of California’s three biggest utilities have come out against it, and many other major carbon emitters are sitting on the sidelines, leaving out-of-state oil companies out in front of a divisive issue. Valero, Tesoro and the Koch subsidiary have pumped more than 6 million dollars into this campaign. They’re making a huge bet California voters will cast aside their historic affection for environmental leadership. For the World, I’m Rachael Myrow in San Francisco.

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