Ad Campaigns Launch Soon to Debate California Greenhouse Gas Law
August 20, 2010
Both sides of California’s current greenhouse gas reduction law have raised money for ad campaigns to advocate their position in this highly-contested debate.
Proponents of the current law are going to the airwaves in an effort to convince the citizens of California to vote in November against Proposition 23, a proposition supported by the oil industry which would delay current laws calling for the regulation of California’s carbon emissions starting in 2012.
Signed into law in 2006, the Global Warming Solutions Act mandates that California cut their output of greenhouse gases, arguably linked to climate change, to the levels that the state produced in 1990, by the year 2020. The method by which this law would initiate that change would be through a cap-and-trade program, which would tax carbon emissions and charge businesses for the right to create any greenhouse gases.
Proposition 23 calls for a delay in regulating carbon emissions until California’s 12.3% unemployment rate drops to 5.5% for an entire year.
Current analyses predict unemployment remaining above 8% for at least 5 more years. Records indicate that there have been only 3 periods since 1970 where California’s jobless rate has attained the proposed level.
Tesoro Corp. and Valero Energy Corp., both of which own oil refineries in California, have contributed the majority of the $6.16 million raised to lobby for Proposition 23. Valero Energy, of San Antonio, Texas, which employees 1,600 citizens of California, are rallying against the law in an effort to assure that the resulting higher costs in energy as an effect of the bill don’t contribute to California’s ailing economy.
Supporters of Proposition 23 argue that the current law will keep unemployment rates higher for a longer period of time due to public money needlessly placed into non-traditional energy companies as well as contributing to an increase in gasoline prices, thereby hurting the economy.
One of the supporters of the current law, Kevin Parker, Global Head of Asset Management for Deutsche Bank AG, argues that if California delays regulation of the law, the result would be for other states as well as the federal government to feel less inclined to pass their own greenhouse gas emissions laws. Parker has a stake in maintaining the law, since he oversees up to $7.5 billion in climate change-related investments, as a portion of $700 billion in funds that he manages.
Proponents of the current law also argue that non-traditional energy companies will put their capital into Indian and Chinese markets if Proposition 23 were to pass.
Organizers of the anti-Proposition 23 ad campaign are comprised mainly of companies involved in non-traditional energy sources, such as solar power, wind power, and energy from algae. They have raised $5.56 million from environmental groups as well as individual supporters.
Tom Steyer, founder of the San Francisco-based hedge fund Farallon Capital Management LLC, has contributed $2.5 million to the ad campaign opposing Proposition 23. Steyer also has an interest in maintaining the current law due to investments in non-traditional energy companies.
The total amount of $11.5 million raised by both sides will be spent on television and radio advertising, which will commence after Labor Day on September 6th.