How Prop 23 could affect jobs

Climate change headline


Kai Ryssdal: Whether it's actually true or not, it sure seems like everything in the public discourse today is about jobs. Tax policy? Jobs. Currency exchange rates? Jobs. Climate change? Also jobs.

California passed a landmark climate change law four years ago. Back then the unemployment rate here was under 5 percent. Today it's over 12.

Which gets us to the fight over Proposition 23 on California's November ballot. Prop 23 would put the climate change law on ice until unemployment drops back to around 5 percent.

From the Marketplace Sustainability Desk, Eve Troeh reports.

Eve Troeh: A Yes on Prop 23 would postpone California's climate change law indefinitely. Supporters say that would protect companies from steep fines on carbon emissions that contribute to global warming; fines that could force companies to close or move.

Yes on 23 ad: Save jobs. Stop the energy tax. Yes on 23.

And a No on 23 means the climate change law goes forward -- a law supporters say "creates new, green jobs." If 23 passes, they see disaster.

No on 23 ad: 23 would pollute our air, kill clean energy jobs and keep us addicted to costly oil. Vote no on 23.

So since when is the California climate change law only about jobs? Since oil refiners defined the debate that way with their ballot measure.

Bill Day: Don't create green jobs at the expense of already existing manufacturing jobs in the state.

That's Bill Day. He's a spokesman for Valero, a Texas company that refines oil in California. The company helped get Proposition 23 on the ballot and it's spent $4 million to support it. Other oil refiners have spent millions too.

Who's funding the other side? Silicon Valley -- venture capitalists who see the economy moving away from fossil fuels.

Alan Salzman: Where do you think the jobs of the 21st century are going to be?

Alan Salzman is CEO of VantagePoint Venture Partners. He's heavily invested in clean tech like solar power and LED lighting. He says it's short-sighted to stall on building the 21st century economy in order to help oil-dependent business.

Salzman: If you go back to New York City, 1900 to 1910, was it a time to invest in blacksmiths? And stables? The next two or three decades of rapid growth are in the clean tech fields.

He says California is a test case for whether the United States can build its own clean tech market. And investors around the world are watching.

Kevin Parker: Banks, insurance companies, the private investment force that is out there waiting to finance a move to a low carbon economy.

That's Kevin Parker, head of asset management at Deutsche Bank. He says Calfornia's climate change law has already lured billions of investment dollars into wind, solar, and energy efficiency projects. But if Proposition 23 passes, Parker says:

Parker: We have plenty of other places to go with our capital where the regulators and national governments are welcoming private investment.

Parker says the money will go to countries like Germany and China that have committed to building and selling green technologies.

This isn't lost on Kelly Budding. She protested against Proposition 23 outside a Valero gas station in downtown Los Angeles. She wants green jobs here.

Budding: The global greenhouse--[car honking]--See people support, as they drive by in their cars, running on oil.

It's true we still live and work in a fossil fuel economy. And oil refiners like Valero are hurting, because the recession's lowered retail demand for gas. Valero closed a refinery and lost $2 billion last year.

Valero's Bill Day says punishing oil refiners right now only punishes consumers, who still drive regular cars.

Day: We get around by using gasoline and diesel fuel. That's how this country transports itself. That's how California transports itself.

But there are many Californians eager to transport themselves into a clean energy world, and the new jobs that go with it. The latest polls suggest voters will strike down Proposition 23, and California's climate change law will move forward.

In Los Angeles, I'm Eve Troeh for Marketplace.

About the author

Eve Troeh is News Director at WWNO-FM in New Orleans, La., helping build the first public radio news department in the station’s 40-year history. She reported for the Marketplace Sustainability Desk from 2010 to 2013.
Log in to post15 Comments


Eve Troeh says
"carbon emissions that contribute to global warming"

Utter tosh.

"... the global warming scam, with the (literally) trillions of dollars driving it, that has corrupted so many scientists, and has carried APS before it like a rogue wave. It is the greatest and most successful pseudoscientific fraud I have seen in my long life (67 years) as a physicist."

- Professor Harold Lewis, Phycist.


"The Chinese get this" Yeah, right, do a little more research on China and pollution...

@ Wayne: You may be right in that Texas has "triple the installed wind powered electrical generation" that California does, but it is being very heavily subsidized at the federal level. But, the cost of all this "business friendly" environment has been poorer air and water quality for its citizens. It is no accident that the world's preeminent cancer treatment center happens to be in Houston, Texas. Plus, the gas pump unfortunately isn't integrating the costs of the environmental damage, especially the potential for things like the BP disaster. The Chinese get this; California should too.

Between August 2009 and August 2010, the nation created a net of 214,000 jobs. Texas created more than half of them, 119,000. California lost 112,000 jobs during that same period.
As has been noted by others here, Texas has been able to enjoy the benefits from both fossil fuel and green energy without onerous subsidy taxes as the one proposed by California. Despite your claims to the contrary, it’s a job killer. If it’s a viable alternative, investors will come. Opponents simply don’t want to risk their capital. They want their investment protected regardless if the project actually boosts employment or produces significant levels of energy. As we are beginning to see in other countries such as Germany and Spain, the subsidies only protect the investors, but do little for the people in terms of significant environmental improvement, employment or energy output. I say California should follow the Texas model – 14.9 percent unemployed Californians may agree.

In response to Donald's comment, clean energy jobs are actually already being created in California in large numbers. While overall job growth in our state declined during the recession (obviously), clean energy job growth increased. In fact, clean energy is one of the few bright spots in the CA economy right now, but if Prop 23 passes, that bright spot will be blotted out. And many of the CA clean energy jobs will THEN move to places like China. Want to keep these jobs in our state? Then vote NO on Prop 23.

The report on California’s Prop 23 ballot initiative was either a) a perfect example of biased reporting by a left-leaning news organization; or b) a perfect example of “junk journalism” that passes as professional reporting these days.
Where to start?
How about we begin with the idea that green technology will create jobs? In fact that is somewhat true, but alas, not American jobs. How on earth could reporter Eve Troeh neglect to mention several salient points in this regard, like the uproar over U.S. stimulus dollars going toward Chinese-made turbines powering wind farms in Texas (a move that created only 30 American jobs and 2,000 Chinese jobs); and as reported by Marketplace on December 22, 2009: “Still, the numbers are somewhat startling. According to the Investigative Reporting Workshop at American University, 84 percent of the federal clean energy grants so far have gone to projects with foreign participants like Iberdrola, the big Spanish wind developer.”
And speaking of Spain, has Troeh seriously not heard about that country’s failed experiment with “green jobs” that never materialized? In fact, the country saw a loss of more than two jobs for every green job created, and most of those jobs that were created were shipped overseas. And what about Germany, one of President Obama’s shining examples of government-subsidized solar power? According to the Rheinisch-Westfälisches Institut für Wirtschaftsforschung, a German think tank, the country’s experiment has resulted in a lot of government spending with little to show for it. “Similarly disappointing is the net employment balance, which is likely to be negative,” says the report (http://en.rwi-essen.de/publikationen/ruhr-economic-papers/16/).
The idea that green energy will create thousands of jobs is a fantasy.

Troeh quotes Alan Salzman, CEO of VantagePoint Venture Partners, which she describes as being “heavily invested in clean tech like solar power and LED lighting.” She fails to mention that VantagePoint Venture Partners is also heavily invested in BrightSource Energy in California, which earlier this year received nearly $1.4 billion in loan guarantees from the U.S. Department of Energy. The fact is venture capitalists abhor risk, so the best way to remove risk is to have the government guarantee a steady cash flow via subsidies and grants. Prop 23 is a direct threat to their investment. That should have been reported.

Troeh also omits that VantagePoint Venture Partners are heavily invested in biofuels (Solazyme, Mascoma, Cobalt). As is Valero (Solix). Is it possible that Mr. Salzman wants his competitor to subsidize his investment? It’s a valid question that Troeh doesn’t even bother exploring.

As for the threat that investors will leave en masse if they don’t receive government subsidies deserves a big boo-hoo. Tax incentives, sure, but government subsidies have shown again and again to be dismal failures. Germany is the most recent example (see the above cited Rheinisch-Westfälisches Institut für Wirtschaftsforschung report).

Never mind the fact that speculators and big time financiers like George Soros with support from the Obama Administration in the form of a $2 billion loan to Petrobras are betting the mint on drilling for dinosaur energy in Brazil! Isn’t that just a wee bit hypocritical or at least worth mentioning?

And finally Troeh wheels out someone named Kelly Budding. All we know about Kelly Budding is that she’s a protestor. Hmm. Is she a student? Is protesting her full time job? Does she have a regular job or is she, like 12.4 percent of Californians, unemployed and willing to take any job as long as it pays, like protesting Prop 23?

Please, enough with “junk journalism” and let’s get some real reporting.

Thomas Lee,

You forgot to mention the huge tax incentives already in place for green energy... There is a huge market for renewable energy, and it is expanding every day.

Texas has triple the installed wind powered electrical generation as California, and they've done it without a job-killer AB 32. Texas has remained business friendly and still has a growing economy. California is anti-business, and has a shrinking economy as a result.

Just this year, we have lost hundreds of billions of dollars in jobs and revenue, due to the anti-business climate here. We need to be more friendly toward business, and AB 32 will only make us more hostile.

I might agree with Jonathan, except that the oil industry gets billions in subsidies via tax credits for oil exploration and production. So if anyone is getting special treatment, it's the oil companies.

The same goes for Wayne's comment. If the blacksmiths, oat farmers, and stable builders were getting huge subsidies, then the newer technology might not have survived, or would have taken much longer to be adopted. In any case, the next level of technology DID benefit from government intervention, in terms of investment in infrastructure and the aforementioned credits for oil exploration and production.

Technological advancements don't just happen on their own - someone has to invest in them. To invest in them, there has to be a viable market. AB32 creates that market, and Prop. 23 aims to destroy it.

If a company or industry, other than an absolutely new startup, needs subsidies, taxes on its competition, or other government help to survive, that's a sure sign that the government *shouldn't* be helping it. We've been subsidizing the environmental movement for over a decade, and have *nothing* to show for it; if the "green economy" and "green jobs" were ever going to arrive, they would be *here* already. It's time to end the special treatment.


With Generous Support From...