Alt Opinion: Passing Prop 23 Essential for California’s Economic Future

Editor’s Note: We have been running posts about California’s Prop 23 for the last 2 weeks and have been approached by some folks who believe differently than we do. In the interest of open dialogue today we are offering another point of view on Proposition 23, this one from former White House energy advisor Jack Rafuse.

By Dr. Jack Rafuse

Proponents of California’s landmark environmental legislation Assembly Bill 32 (AB32), the Global Warming Solutions Act, intend to implement unprecedented steps to force renewable energy use and reduce emissions throughout America’s largest state. These are worthy goals, but California cannot afford such a massive regulatory burden right now.

California’s electorate has the opportunity to reverse the course of this far-reaching and burdensome legislation. When voters go to the polls in November, ballot measure Proposition 23 (Prop 23) may be the most important vote that they will cast. This vote is vital; passage of Prop 23 is essential for the future economic health of California.

When Governor Schwarzenegger signed AB 32 into law in 2006, the economic environment was a lot different, and the long time until implementation gave public officials much less concern. Now, unfortunately, California is running the nation’s highest budget deficit and still has the third-highest unemployment rate. If Prop 23 fails, AB 32 will be fully implemented, severely exacerbating the job and budgetary situation, increasing energy prices and forcing more businesses to move out-of-state.

A new study released this week provides a specific – and troubling – demonstration of AB 32’s negative impact on the state’s job market. In The Prospective Effects of Proposition 23 on Employment in California, author Benjamin Zycher calculates that AB 32 will eliminate the jobs of 5 percent of the working-age population statewide. Thus, with a labor force of roughly 18,326,000 working-age citizens in California, enacting AB 32 will force more than 916,000 workers onto the state’s unemployment line.

What is more, suspending AB 32 will lower energy costs for state and local governments. With many of these localities deeply in the red, this savings is greatly needed. And if Prop 23 passes, consumers struggling to pay mortgages and keep their jobs will be saved from energy price spikes, too.

Let us all hope that Golden State voters move past the rhetoric and vote for Prop 23 – a vote for California jobs, investment and fiscal discipline. If passed, Prop 23 will overturn AB 32 until the state’s unemployment rate falls to 5.5 percent or below for four consecutive quarters. That delay will give policymakers time to find ways to restore the health of California’s job market and balance sheet, while at the same time renewing efforts toward a global warming policy that benefits the state’s citizens, its environment and its economy.

Dr. Jack Rafuse, a former White House energy advisor, is principal of the Rafuse Organization. Dr. Rafuse worked for a California-based international energy company for more than 25 years. Visit the Rafuse Organization online or on Twitter at @JackRafuse.

Please visit our Prop 23 series for more points of view, as well as the contact information of Leon Kaye, who is editing the series.

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9 responses

  1. The California Jobs Initiative (CJI) is an oil corporation farce and fraud. There is no connection, whatsoever, between greenhouse gas emission reduction and the loss of jobs. This notion is an insult to the intelligence of the people of California. In fact, there is job growth in the clean, renewable enegy industry. Chevron employs 65,000 worldwide and CJI is not going to change this. CJI will make fantastic profits for the oil industry, increase air pollution, especially in communities around their refineries and there will not be lower gas prices. CJI will make fantastic profits for the oil industry, increase air pollution, especially in communities around their refineries and there will not be lower gas prices. Koch Industries, Valero and Tesoro are super Enrons. Since when did the oil companies start to show any concern for the unemployed and their families and for small businesses? Chevron, Exxon Mobil, Shell and Occidental are silent partners in CJI.

  2. The Texas oil industry has paid for most of the studies cited above, including $40k for the “independent” research by Zycher.

    So far, 98 percent of the money for Prop 23 is from the oil industry and 89 percent is from out of state.

    This is about Texas oil polluters trying to avoid paying to clean up their mess, not California’s economy.

    1. There is absolutely NO connection between any “mess” (if that is intended to imply some sort of environmental degradation) and proposition 23. Proposition 23 is about saving California’s economy and ensuring that CARB does what the law says it is to do. As is, CARB regulations are forceing an INCREASE in GHG emissions, INCREASING dependence on imported oil from extreme regions (and less from friendly Canada.) Must be desparate to attack the source of funding (and ignore that Prop 23 opposition funding comes all from hedge funders (( NOT venture capitalist)) and rent seekers) rather than the merits of the analyses. I guess when you have no facts, ad-hominen works best.

  3. Well, I applaud 3p for taking other opinions into consideration, I still think that a little pain now is better than a lot more pain later. I know a lot of innovative companies that are creating jobs right now who will be shattered if Prop 23 passes. And what jobs get lost if it doesn’t? Nothing. Over time some refinery jobs get phased out, that’s all. I still say VOTE NO in 23

    1. No, read the economic analysis by all impartials—MANY more jobs lost than gained. Read F. Bastiat. Read about Spain, Germany, Italy and Denmark. AB32 is all pain and no gain (even CARB says no effect–zero–on climate.) Let’s pause and take a breath, and get it right–that’s all prop. 23 does. There will be NO business innovation lost (rent seeking is another matter.)

  4. Maybe solar companies should lower what they charge for PVC panels, merge and expand to the rest of US. Sell more for less works and “Big Oil” can’t do anything about that.

  5. There is no such thing as “job creation” or “job destruction” for an entire economy. Jobs are only shifted between industries and geographical areas. California voters need to decide which industry and location is best for them. Oil in Texas or CleanTech in Cali?

    1. If there is no creation nor destruction, then how does an economy keep up with population growth or why does unemployment vary? Why does wealth creation differ from re-distribution? There are many similarities but vast differences between economics and thermodynamics—“conservation” of jobs or of energy are quite different.

  6. The key thing to keep in mind is that, according to CARB, the organization who wrote and will enforce AB32, AB 32 will do NOTHING to help global warming, will cost jobs and have a negative effect on the economy. This comes from the very people who drew it up!

    AB 32 does nothing for local pollution.

    Prop 23 leaves us with the toughest pollution laws in the country, among the toughest in the world. It will NOT increase local pollution

    If Proposition 23 is rejected, here is what will happen according to expert sources:

    •A 60 percent increase in your electricity bill according to the Southern California Public Power Authority.

    •An 8 percent increase in your natural gas bill according to CARB’s economic analysis.

    •$50,000 more for the price of a new home according to an analysis by the National Renewable Energy Laboratory.

    •$3.7 billion a year more for gasoline and diesel according to Sierra Research.

    •A $1,000-$3,000 additional cost for a new car according to CARB and automaker studies.

    On top of all that, a study conducted for the California Small Business Roundtable found that AB 32 regulations would cost small business alone nearly $200 billion, and would result in more than 1 million lost jobs.

    The more I learn about AB 32, the more I fear it. It just gets worse. Please vote yes on Prop23.

    “”2 Guys on the Bay Area Transportation Board told the CARB people, “If you try to do what you are going to do(AB 32) we’ll have gas at $9.07 a gallon and we have freeway tolls at up to $4,500 a year to drive during rush hour.”

    “Part of the plan is to stop suburban development, get people to stop driving, make driving too expensive for people to live out there, force them to live in high-rises, condos, in the city.”

    For months, John and Ken have made Prop 23 their top priority, calling it a necessary step to stop a law they say will kill jobs and cost Californians a fortune in higher gas and energy prices. With an estimated one million listeners per week, these two guys usually manage to rally enough votes to get their way.

    The video has John and Ken explaining why they think this bill is the most important measure on the ballot.

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