Efforts to repeal California’s progressive emissions reduction law
are gaining steam heading into the state’s general elections this
The fate of the bill is likely to become a central issue in the
elections. Already, both Republican gubernatorial candidates have called
for suspending the state’s Global Warming Solutions Act of 2006,
first introduced as AB 32. It was signed into law September 27th, 2006.
With the rhetoric intensifying, it begs the question of what effect
the legislation has had on the state’s clean technology sector and job
While the data below doesn’t prove causality, figures
tracked by the Cleantech Group show California—the blue segment of the
bars below—became the clear dominant U.S. state for cleantech investment
in 2006, when AB 32 was signed into law.
Since then, in every quarter since 3Q06, just as the bill was about
to be signed, cleantech companies based in California have attracted
hundreds of millions of dollars in venture financing, dramatically more
than any other state. And the gap has widened over time.
Cleantech Investment in Top U.S. States
Why is the amount of venture investment material?
Venture capital has proven to be the fastest, most efficient driver
of job creation. A Cleantech Group analysis in conjunction with
environmental policy advocates Environmental Entrepreneurs (E2), estimated
that 2,700 direct jobs are created for every $100M in venture
investment, or about $37,000 per job on average.
By contrast, stimulus spending is much more expensive, and takes
longer. U.S. President Obama has said that the $825 billion in U.S.
stimulus would create or save between 3 million and 4 million American
jobs by 2010. That’s $235,000 per job—more than six times more than
venture capital. And it’s considerably slower, given the time required
for stimulus grant application, selection and funding.
Efforts are underway to gather signatures for a voter ballot
initiative which would suspend California’s AB 32, widely accepted as
one of the most progressive climate change laws in the world. Critics blame it
for job losses in the state, calling the law “the most draconian
regulatory regime” in California’s history.
of AB 32 blame Texas oil companies for funding the initiative, and say
it would destroy the fastest-growing segment of California’s economy
(i.e. cleantech) and put at risk those billions of dollars of investment
above in clean technology companies that have been creating jobs in the
AB 32 takes emission controls well beyond freeway vehicles into
complex areas such as power generation, industry practices and building
requirements. It requires that by 2020 the state’s greenhouse gas
emissions be reduced to 1990 levels, a roughly 25 percent reduction
under business as usual estimates.
Should the ballot initiative gather enough signatures, the decision
to repeal AB 32 will be left to California voters at the polls in