Prop 23's Regional Repercussions

This post also appeared today in National Journal's Energy & Environment Experts blog.

As others have pointed out in the discussion of California’s Proposition 23, which would suspend the landmark climate law (AB32), passage would have wide-ranging implications for both the state itself and the national debate on comprehensive climate and energy policy in the U.S.  These concerns for both California- and national-level climate action are valid – by creating a policy environment of extreme uncertainty, Prop 23 threatens to freeze the currently expanding investment in clean technology in the state.  It is also arguably the new “battleground” on comprehensive climate legislation in the U.S., given the current state of affairs in the U.S. Congress. 

But there’s an intermediate level of climate action that also is at stake with passage of Prop 23.  Success for the fledgling cap-and-trade portion of the Western Climate Initiative (WCI) hinges on California continuing to be a leader in the development and implementation of the program.  WCI states account for nearly 15% of U.S. greenhouse gas emissions and WCI would be the first emissions-trading scheme in the U.S. to cap emissions from economy-wide sources.  While it may take some time for all WCI states to adopt cap-and-trade, all environmental programs have to start somewhere. And California’s leadership – not to mention the large quantity of emissions the state will add to the new market – is critical to the most comprehensive (in terms of emissions coverage), ambitious climate action initiative in the U.S.  Perhaps this is something the backers of Prop 23 are acutely aware of?

While we’re on the topic of threats to this singularly unique climate law, let’s not forget Prop 23’s much less well-known cousin, Prop 26.  This initiative seeks to tighten how the state constitution defines taxes and regulatory fees, and require a two-thirds supermajority vote in the state Legislature to enact new taxes and many fees.  Perhaps seemingly harmless, lawyers from UCLA this week argued that Prop 26 is a threat to the state's ability to assess fees on polluters for the external costs they impose on the public and will affect a number of existing laws, including the state’s landmark climate law (as well as a green chemistry initiative, two laws blocking chemical products in landfills, and rules on lead).  It’s ironic that Prop 23 could be defeated, while Prop 26, backed with multimillion-dollar contributions from the California Chamber of Commerce, Chevron Corporation, and Philip Morris USA Inc., might slide through and have the same effect on AB32, albeit via different means.  Passage of either proposition would be a setback to California’s ability (and thus, the WCI’s ability) to move forward on climate.

Eileen Claussen is President