Fail: 3,727,076 / 38.5% Yes votes ...... 5,962,305 / 61.5% No votes

See Also: Index of all Propositions

Summary Prepared by the State Attorney General:

• Suspends State law that requires greenhouse gas emissions be reduced to 1990 levels by 2020, until California's unemployment drops to 5.5 percent or less for four consecutive quarters.

• Suspends comprehensive greenhouse-gas-reduction program that includes increased renewable energy and cleaner fuel requirements, and mandatory emissions reporting and fee requirements for major emissions sources such as power plants and oil refineries.

Fiscal Impact from the Legislative Analyst:

Likely modest net increase in overall economic activity in the state from suspension of greenhouse gases regulatory activity, resulting in a potentially significant net increase in state and local revenues.

Meaning of Voting Yes/No

A YES vote on this measure means:

Certain existing and proposed regulations authorized under state law ("Assembly Bill 32") to address global warming would be suspended. These regulations would remain suspended until the state unemployment rate drops to 5.5 percent or lower for one year.

A NO vote on this measure means:

The state could continue to implement the measures authorized under Assembly Bill 32 to address global warming.

BACKGROUND

Global Warming and Greenhouse Gases. Greenhouse gases (GHGs) are gases that trap heat from the sun within the earth's atmosphere, thereby warming the earth's temperature. Both natural phenomena (mainly the evaporation of water) and human activities (principally burning fossil fuels) produce GHGs. Scientific experts have voiced concerns that higher concentrations of GHGs resulting from human activities are increasing global temperatures, and that such global temperature rises could eventually cause significant problems. Such global temperature increases are commonly referred to as global warming, or climate change.

As a populous state with a large industrial economy, California is the second largest emitter of GHGs in the United States and one of the largest emitters of GHGs in the world. Climate change is a global issue necessitating an international approach. Actions in California regarding GHGs have been advocated on the basis that they will contribute to a solution and may act as a catalyst to the undertaking of GHG mitigation policies elsewhere in our nation and in other countries.

Assembly Bill 32 Enacted to Limit GHGs. In 2006, the state enacted the California Global Warming Solutions Act of 2006, commonly referred to as Assembly Bill 32 or "AB 32." This legislation established the target of reducing the state's emissions of GHGs by 2020 to the level that emissions were at in 1990. It is estimated that achieving this target would result in about a 30 percent reduction in GHGs in 2020 from where their level would otherwise be in the absence of AB 32.

Assembly Bill 32 requires the state Air Resources Board (ARB) to adopt rules and regulations to achieve this reduction. The law also directs ARB, in developing these rules and regulations, to take advantage of opportunities to improve air quality, thereby creating public health benefits from the state's GHG emission reduction activities.

Other Laws Would Reduce GHG Emissions. In addition to AB 32, a number of other state laws have been enacted by the Legislature that would reduce GHG emissions. In some cases, the main purpose of these other laws is specifically to reduce GHG emissions. For example, a 2002 law requires the ARB to adopt regulations to reduce GHG emissions from cars and smaller trucks. Other laws have authorized various energy efficiency programs that could have the effect of reducing GHG emissions, although this may not have been their principal purpose.

"Scoping Plan" to Reach GHG Emission Reduction Target. As required by AB 32, the ARB in December 2008 released its plan on how AB 32's GHG emission reduction target for 2020 would be met. The plan--referred to as the AB 32 Scoping Plan--encompasses a number of different types of measures to reduce GHG emissions. Some are measures authorized by AB 32, while others are authorized by separately enacted laws. Some of these measures have as their primary objective something other than reducing GHGs, such as reducing the state's dependency on fossil fuels.

The plan includes a mix of traditional regulatory measures and market-based measures. Traditional regulations, such as energy efficiency standards for buildings, would require individuals and businesses to take specific actions to reduce emissions. Market-based measures provide those subject to them greater flexibility in how to achieve GHG emission reductions. The major market-based measure included in the Scoping Plan is a "cap-and-trade" program. Under such a program, the ARB would set a limit, or cap, on GHG emissions; issue a limited number of emission allowances to emitters related to the amount of GHGs they emit; and allow emitters covered by the program to buy, sell, or trade those emission allowances.

Some measures in the Scoping Plan have already been adopted in the form of regulations. Other regulations are either currently under development or will be developed in the near future. Assembly Bill 32 requires that all regulations for GHG emission reduction measures be adopted by January 1, 2011, and in effect by January 1, 2012.

Fee Assessed to Cover State's Administrative Costs. As allowed under AB 32, the ARB has adopted a regulation to recover the state's costs of administering the GHG emission reduction programs. Beginning in fall 2010, entities that emit a high amount of GHGs, such as power plants and refineries, must pay annual fees that will be used to offset these administrative costs. Fee revenues will also be used to repay various state special funds that have made loans totaling $83 million to the AB 32 program. These loans have staggered repayment dates that run through 2014.

The Economic Impact of Implementing the Scoping Plan. The implementation of the AB 32 Scoping Plan will reduce levels of GHG emissions and related air pollutants by imposing various new requirements and costs on certain businesses and individuals. The reduced emissions and the new costs will both affect the California economy. There is currently a significant ongoing debate about the impacts to the California economy from implementing the Scoping Plan. Economists, environmentalists, and policy makers have voiced differing views about how the Scoping Plan will affect the gross state product, personal income, prices, and jobs. The considerable uncertainty about the Scoping Plan's "bottom-line" or net impact on the economy is due to a number of reasons. First, because a number of the Scoping Plan measures have yet to be fully developed, the economic impacts will depend heavily on how the measures are designed in the public regulatory process. Second, because a number of the Scoping Plan measures are phased in over time, the full economic impacts of some measures would not be felt for several years. Third, the implementation of the Scoping Plan has the potential to create both positive and negative impacts on the economy. This includes the fact that there will be both "winners" and "losers" under the implementation of the Scoping Plan for particular economic sectors, businesses, and individuals.

A number of studies have considered the economic impacts of the Scoping Plan implementation in 2020--the year when AB 32's GHG emission reduction target is to be met. Those studies that have looked at the economic impacts from a relatively broad perspective have, for the most part, found that there will be some modest reduction in California's gross state product, a comprehensive measure of economic activity for the state. These findings reflect how such things as more expensive energy, new investment requirements, and costs of regulatory compliance combine to increase the costs of producing materials, goods, and services that consumers and businesses buy. Given all of the uncertainties involved, however, the net economic impact of the Scoping Plan remains a matter of debate.

PROPOSAL

This proposition suspends the implementation of AB 32 until the unemployment rate in California is 5.5 percent or less for four consecutive quarters. During the suspension period, state agencies are prohibited from proposing or adopting new regulations, or enforcing previously adopted regulations, that would implement AB 32. (Once AB 32 went back into effect, this measure could not suspend it again.)

IMPACTS OF THIS PROPOSITION ON CLIMATE CHANGE REGULATION

See Figure 1 (click here to view) Historical Unemployment Rate in California

AB 32 Would Be Suspended, Likely for Many Years. Under this proposition, AB 32 would be suspended immediately. It would remain suspended until the state's unemployment rate was 5.5 percent or less for four consecutive quarters (a one-year period). We cannot estimate when the suspension of AB 32 might end. Figure 1 provides historical perspective on the state's unemployment rate. It shows that, since 1970, the state has had three periods (each about ten quarters long) when the unemployment rate was at or below 5.5 percent for four consecutive quarters or more. The unemployment rate in California for the first two quarters of 2010 was above 12 percent. Economic forecasts for the next five years have the state's unemployment rate remaining above 8 percent. Given these factors, it appears likely that AB 32 would remain suspended for many years.

Various Climate Change Regulatory Activities Would Be Suspended. This proposition would result in the suspension of a number of measures in the Scoping Plan for which regulations either have been adopted or are proposed for adoption. Specifically, this proposition would likely suspend:

• The proposed cap-and-trade regulation discussed above. The "low carbon fuel standard" regulation that requires providers of transportation fuel in California (such as refiners and importers) to change the mix of fuels to lower GHG emissions.
• The proposed ARB regulation that is intended to require privately and publicly owned utilities and others who sell electricity to obtain at least 33 percent of their supply from "renewable" sources, such as solar or wind power, by 2020. (The current requirement that 20 percent of the electricity obtained by privately owned utilities come from renewable sources by 2010 would not be suspended by this proposition.)
• The fee to recover state agency costs of administering AB 32.

• New vehicle emission standards for cars and smaller trucks.
• A program to encourage homeowners to install solar panels on their roofs.
• Land-use policies to promote less reliance on vehicle use.
• Building and appliance energy efficiency requirements.

Arguments Submitted to the Secretary of State

Summary of Arguments FOR Proposition 23:

Yes on 23 saves jobs, prevents energy tax increases, and helps families, while preserving California's clean air and water laws. California can't afford self-imposed energy costs that don't reduce global warming. 2.3 million Californians are unemployed; Proposition 23 will save over a million jobs that would be otherwise be destroyed. http://www.yeson23.com

Summary of Arguments AGAINST Proposition 23:

Texas oil companies designed 23 to kill clean energy and air pollution standards in California. 23 threatens public health with more air pollution, increases dependence on costly oil, and kills competition from job-creating Califoria wind and solar companies. American Lung Association in California, California Professional Firefighters: NO on 23.

Contact FOR Proposition 23:

Yes on 23--A coalition of taxpayers, small business, firefighters, labor, agriculture, transportation, food producers, energy and forestry companies and air quality officials.
1215 K Street, Suite 2260
Sacramento, CA 95814
(866) 247-0911
info@yeson23.com
http://www.yeson23.com

Contact AGAINST Proposition 23:

No on 23: Californians to Stop the Dirty Energy Proposition
(888) 445-7880
info@factson23.com
Factson23.com

On October 28, 2010 the information on this proposition [23] was corrected to reflect the Ballot Label as modified by a superior court ruling.

Video Overview

• Analysis of the Ballot Measure - produced by LWV Cupertino-Sunnyvale (3 min video)

Secretary of State

• Full Arguments and Rebuttals
• Full Text of Proposed Law [PDF]

• Full Impartial Analysis of this Measure

League of Women Voters of California Education Fund

• Pros and Cons - A nonpartisan explanation of this state proposition, with supporting and opposing arguments
• Easy Voter Guide - A brief summary of this state proposition

• Forum - KQED San Francisco - A debate on the proposition hosted by Michael Krasny (9/13/10, 52 min)
• KQED State Proposition Guide - A succinct summary of the proposal, background and arguments for and against

• In-Depth Analysis of this Proposition - Prepared by Institute of Governmental Studies at UC Berkeley
• Table of Endorsements For or Against this Proposition - Convenient display of nonprofit organizations, unions, newspapers, political parties and gubernatorial candidates

Secretary of State

• Cal-Access Database - Who contributes money and how is it spent

• Follow the Money - Top 5 Donors - Convenient summary of largest donors in support and opposition

North Coast Journal

• Airing Out Prop. 23