August 12, 2010

On Tuesday some of California’s leading high tech investors came together for a conference at Google’s headquarters in Silicon Valley, to discuss prospects for clean energy jobs creation in the state. Though California is a state that’s been hit hard by the economic recession, clean tech and an expanding green energy sector have been among the few hopeful areas in its economy. Now companies with an interest in green tech, like Google, are trying to determine whether California will continue to be the best place to locate their plants and the jobs that go with them.

And while California has immense potential to continue in clean energy and green jobs creation, it became clear Tuesday that a well-funded campaign orchestrated by major polluters threatens to stop California from continuing to develop clean energy. Passage of proposition 23, a state ballot initiative up for a vote this November, would not only be a major setback for state efforts to curb global warming pollution but a blow to clean tech industries and green jobs creation.

If passed into law Proposition 23 would suspend California’s major climate law, AB 32, for an indefinite amount of time. From the early days of the campaign to pass Prop 23, it has been well known that the effort’s major backers are Texas oil companies with an interest in delaying action on global warming; the oil corporations Valero Energy and Tesoro have together contributed 75% of the funds used to garner support for the initiative. Unsurprisingly, Prop 23’s backers have attempted to frame their campaign as an effort to stop climate legislation from killing California jobs. But it seems Prop 23 might in fact kill more jobs than it creates – or at least, Google and other clean tech investors think so.

Google’s “green energy czar” Bill Weihl painted a bleak picture for California’s economy if Prop 23 passes. Right now, Weihl said, California is an ideal place for clean energy companies and investors to locate. But disabling the state’s global law would withdraw incentives for clean energy development, and likely cause green companies to move elsewhere. If Prop 23 becomes law companies may choose to locate in other states or in countries like China and India, rather than in California.

Vinod Khosla, of the clean tech investment company Khosla Ventures, also spoke up in opposition to Prop 23 Tuesday. The polluter-backed ballot measure, Khosla said, would destroy California’s chances of attracting the “next ten Googles” of clean energy to locate within its boundaries. Mary Nichols, who heads the California Air Resources Board, also weighed in on the discussion. Nichols claims that California’s climate legislation threatens jobs only hold if you look exclusively at very energy-intensive sectors like heavy manufacturing. High tech and clean tech investments, where much of California’s hopes for job growth lie, are encouraged rather than discouraged by state policies that incentivize clean energy and reduce carbon emissions. Vinod Khosla, of the clean tech investment company Khosla Ventures, also spoke up in opposition to Prop 23 Tuesday. The polluter-backed ballot measure, Khosla said, would destroy California’s chances of attracting the “next ten Googles” of clean energy to locate within its boundaries. Mary Nichols, who heads the California Air Resources Board, also weighed in on the discussion. Nichols claims that California’s climate legislation threatens jobs only hold if you look exclusively at very energy-intensive sectors like heavy manufacturing. High tech and clean tech investments, where much of California’s hopes for job growth lie, are encouraged rather than discouraged by state policies that incentivize clean energy and reduce carbon emissions.

Even the major utility PG&E supports keeping California’s climate law in place, and has joined Google and others in opposing Prop 23. PG&E says clean energy policies in California have already helped the utility create green jobs as it attempts to secure 20% of its electricity from renewable sources. Meanwhile Weihl of Google states that 500,000 jobs have been created in California’s clean tech sector in the last several years, despite the economic downturn.

All this has happened despite the fact that AB 32 is not scheduled to fully kick in until 2012. Up to this point smaller clean energy and climate laws, along with the expectation that AB 32’s implementation will eventually create further incentives for clean tech, have been enough to convince clean energy companies to locate in California. Disabling AB 32 before it even really sets in would make California a much less attractive market for these companies. As other states and countries move forward with their own plans to encourage clean energy, investors may choose to locate there instead.

Despite the focus on what will happen if Prop 23 passes, Tuesday’s conference was not an entirely glum affair. Indeed, many observers saw the event as effectively a kick-off rally to build support for California’s climate law and opposition to Prop 23. Now the job for Google and others will be to make sure Californians across the state understand the true implications of the November ballot measure, and the impact it would have on green industry jobs.