If California’s climate change bill AB32 — which was passed back in 2006 and creates a plan to reduce the state’s carbon emissions — is repealed, California’s greentech markets will be seriously jeopardized, said venture capitalist Vinod Khosla and Google’s (s GOOG) Green Energy Czar Bill Weihl at an event at Google HQ on Tuesday morning. The main theme for the Google event was a discussion of Proposition 23, a ballot measure that, if passed on the upcoming November ballot, would essentially kill AB32, and is backed by Texas-based oil companies Valero and Tesoro.
Khosla stated his position clearly on the oil-backed ballot measure: “Prop 23 will kill the market and the single largest source of job creation in California in the last two years.” Innovation started happening in California, and the next ten Googles of greentech will be created there, because the market is there, he said. If California’s market is destroyed, countries like China and other states will have a competitive edge and those next ten Googles will be built in those markets, said Khosla.
Google’s Weihl agreed and said that AB32 has helped create companies and jobs and has been one of the brightest spots in the economy in the state. While many studies and researchers back this position, other conflicting studies have also found that AB32 could reduce the number of jobs (which is the fear that Prop 23 is tapping into). Think about AB32 as a 401K, said Khosla, you put aside a little bit month by month, but over time you save a whole lot. “It’s an investment in our future.”
Weihl also noted that, in addition to maintaining AB32 in California, the federal government needs to increase its spending on basic energy research and development, as well as scaling of energy projects. While the stimulus has created a temporary market, the greentech market needs permanent funding over a ten-year period to move forward, said Weihl. Both Khosla and Weihl said that the federal government also needs to focus on funding “home runs” and breakthroughs, instead of funding incremental technology gains.
As Khosla put it: “Right now California is in the pole position to win the greentech race. . . It is our race to lose.”
For more research on cleantech financing check out GigaOM Pro (subscription required):