Climate: Money Vs. Money in the Battle Over California’s Climate Law

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Thanks in part to the Supreme Court’s decision to allow unlimited political spending by corporations and unions, money is flowing into this election like never before. A lot of that funding is coming from corporate sources, and conservatives are receiving the lion’s share of those funds—although because many of those donors are keeping their identities secret (thanks again to the Supreme Court), it’s not easy to trace that campaign cash. But what’s clear is that anyone with a rooting interest in the composition of the next Congress—and that definitely includes business—is apparently willing and able to spend millions to get their way.

For environmentalists, one of the big battlefields is California’s Proposition 23 initiative, which will be on the state ballot this November. If passed, Prop 23 would suspend California’s landmark climate-change law AB32—which requires the state to reduce carbon emissions to 1990 levels by 2020—until California’s unemployment rate’s dropped below 5.5% for four consecutive quarters. Given that California’s unemployment rate—which is currently hovering at around 12%—hasn’t fallen to those levels since 1980, Prop 23 would effectively kill the state’s pioneering climate law.

Unsurprisingly, fossil-fuel interests are channeling money into Yes on Prop 23 campaigns—including the much-maligned Koch Industries, which has spent $1 million on the campaign. Other out-of-state oil refining companies like Tesoro and Valero have spent millions more to support Prop 23. It’s not hard to see why—oil refiners, like other fossil-fuel companies, will be squeezed by Ab32, so they’re exercising their constitutional rights (and shareholder money).

But unlike many other races around the country, where conservative money is carrying the day (and likely the election), in California forces in favor of the climate change law (and against Prop 23) are winning the fundraising battle. As Darren Samuelsohn of Politico reported today, opponents of Prop 23 have amassed some $28 million. Some of that money has come from big-name environmentalists who are donating out of their political convictions. Filmmaker James Cameron—who has emerged as a major environmental figure post-Avatar—has given $1 million to the anti-Prop 23 movement, while California Gov. Arnold Schwarzenegger recently held an event at his home that raised $1 million for no on Prop 23.

But more than a third of the money has come from Silicon Valley and investors in the clean technology industry. According to Samuelsohn, the venture capitalist John Doerr—whose firm Kleiner Perkins has a greentech initiative—has given $2 million. Vinod Khosla—a former CEO of Sun Microsystems who has gone big into clean tech—has given $1.037 million. Former Intel chairman Gordon Moore has given $1 million.

The argument from Silicon Valley—which has become the home base for clean tech companies—is that AB32 has attracted venture capital for clean tech to California, and that reversing the law would threaten to freeze that progress and the jobs that would eventually come with it. As Samuelsohn writes:

“It’s all about invent, manufacture and install,” San Francisco Mayor Gavin Newsom told POLITICO. “That’s Silicon Valley. And those three little words represent everything we need to be focused on and everything this state has been successfully focused on. It’s all about startups. It’s all about capturing that market share and capturing those international resources in the green sector.”

Looking across the Pacific Ocean, Silicon Valley sees China’s state-run government already ordering a major burst in clean energy spending that easily outpaces that of the United States by 2-to-1.

“They can come here, say to a Silicon Valley company, ‘We’ll build a manufacturing plant if you come here and bring your technology, tax free,’” said Mike Mielke, energy specialist at the SVLG. “That’s pretty hard to ignore.”

So the argument from those Silicon Valley donors is that Prop 23 would be bad for California’s economy—hence the need to fight it. Of course, you’ll hear pretty much the opposite case from the initiative’s supporters, who say that a carbon cap will sap California’s already vulnerable economy. Greens see that as disingenuous—the out-of-state companies like Koch and Tesoro are fighting to kill a bill that would cost them money. They’re motivated by dark financial self-interest.

Well, of course they are—and the truth is, so are the clean tech investors spending money to defeat them. Venture capitalists like Doerr and Khosla—and for that matter, Al Gore, a partner at Kleiner Perkins—have real money invested in clean tech companies that stand to benefit from the defeat of Prop 23. They are not green altruists out to selflessly save the world. (Or at least, not just that.) They are capitalists, spending to protect and expand their market.

Now as it happens, I think they’re right—Prop 23 is a mistake, and California’s AB32 climate change law will help the state take and maintain the lead in the global clean tech race. (And the voters seem to agree—support for Prop 23 is down sharply, in part because the opposition forces have a large money lead.) But if greens are going to criticize fossil-fuel companies for spending money to defeat climate legislation, it’s only fair to note that rich climate supporters may be spending to protect their own financial interests. (Of course, it’s also important to note that the Silicon Valley funders have spent their money publicly, while the Koch network seems to prefer to act secretly.) And here’s another lesson for greens—when you’re fighting a political battle, it helps to have the motivated rich on your side.