Folks, it’s election day today and as many of you know, a major piece of legislation could very well determine the fate of the greentech industry in California: Prop 23. If passed, the item on the ballot would suspend the state’s AB 32 law (the Global Warming Solutions Act), which has stimulated greentech jobs and investment in California over the past several years.
Prop 23 is backed by a couple of massive oil companies — Valero and Tesoro — so don’t be fooled by the “pro-jobs” rhetoric of Prop 23. Already the threat of Prop 23 passing seems like it has had a cooling effect on greentech investing in California. According to figures from Ernst & Young out this morning, greentech VC investment in California in the third quarter of 2010 fell 71 percent to $295 million from the third quarter of 2009, and the number of deals in that time fell by 44 percent.
Here’s 10 reasons why you should vote no on Prop 23:
1. Follow the Leader(s). The majority of the thought leaders in Silicon Valley, the green technology industry, environmentalists and greentech investors are rallying behind “no on Prop 23″ campaigns. We’ve posted guest columnists from Applied Materials CEO Mike Splinter and VantagePoint Venture Partner’s Alan Salzman, while political and industry heavyweights from President Obama, Bill Gates, Al Gore, Vinod Khosla and Google’s Bill Weihl have landed solidly in the “no” camp.
2. Investors Need Policy Certainty. A yes on Prop 23 would lead to uncertainty for all those investors, companies, and municipalities that have been investing in reducing carbon emissions and cutting energy consumption. While greentech investments have been down dramatically this year, expect if Prop 23 passes, it’ll drop even more. In the same way that a lack of agreement in Copenhagen led to less global greentech business, the same will happen on the state level.
3. How California Goes . . . the rest of the country will follow, or so they say. With policies for climate change, green cars and clean power, California has been leading the way for the rest of the U.S. With the suspension of AB32, California would be giving the signal to other state policy makers that this landmark bill isn’t working.
4. Be in the Majority. According to the latest polls from the Public Policy Institute of California, while 43 percent of voters supported Prop 23 in September, only 37 percent supported Prop 23 in October. Yep, the “no campaign” seems to be working.
5. AB 32’s Stimulating Effect. AB 32, which passed in 2006, has been “the single largest source of job creation in California in the last two years,” according to investor Vinod Khosla. Khosla also explained AB 32 as a little like a 401K, where you put aside a little bit month by month, but over time you save a whole lot. “It’s an investment in our future.” According to the Small Business Majority, AB 32 will add $4.6 billion in revenues by 2020, and more than 15,000 jobs.
6. China’s Edge. Investors like Kleiner Perkin’s John Doerr, and pundits like Thom Friedman have recently emphasized the massive effort by China to build the next generation of green technologies, entrepreneurs and industries. With the repeal of AB 32, California would likely lose its top slot for stimulating green tech investments. What’s next? China dominates.
7. Undercover Texas Oil Companies. Californians didn’t buy the PG&E-backed Prop 16, and there’s good indication that they won’t buy the Texas oil company-backed Prop 23. With the Internet, media transparency and the blogosphere, are the days of large corporate-backed policies over? Probably not, but they’re gettin’ better.
8. Bad for Farmers in the Long Term. California produces half of the fruits and vegetables in the U.S. and 400,000 jobs. As Triple Pundit points out, climate change and severe weather could one day lead to massive crop damage.
9. Kochtopus. The big oil companies aren’t the only ones backing Prop 23; a subsidiary of the Koch brother’s Koch Industries, called Flint Hills Resources, has contributed $1 million. As this New Yorker article points out, Charles and David Koch have poured more than a hundred million dollars into dozens of seemingly independent organizations that have funded climate change denial.
10. AB 32 By the Numbers. While AB 32 is still being carefully crafted, AB 32 has been the catalyst for the creation of more than 500,000 jobs and 12,000 businesses which have attracted more than $10 billion in venture capital — five times more than any other state.
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