California Midterms: Reading the Tea (Party) Leaves

This posting follows a previous post discussing the potentially far-reaching impact of California's midterm choices on, not only the U.S., but also North American climate change mitigation efforts.

California's midterm election results are in and it appears voters have handed climate change proponents a mixed but generally positive message:

1. Governor:  Democratic candidate Jerry Brown's return to the governorship came at the expense of former eBay CEO Meg Whitman and her spending record of US$141 million on the race. Brown holds a position that is generally seen as more favourable to continuing the development of the state's climate change policies than Whitman would have been. He has expressed the view that "adjustments" may be required but has pointed out that maintaining investor certainty is key to continuing California's leadership in cleantech.
2. Proposition 23:  Climate change proponents can exhale (and continue to buy offsets for those exhalations) thanks to an overwhelming rejection of Prop 23.  Prop 23 was largely funded by oil companies, and proposed suspending the Global Warming Solutions Act of 2006 - a timetable to bring California into compliance with the provisions of the Kyoto Protocol - along with a suite of programs designed to promote innovation in cleantech. Thus, this will be welcome news to Silicon Valley technology companies who have invested heavily in greener technologies. It is also good news for California's partners in the Western Climate Initiative such as the Canadian provinces of B.C., Manitoba, Ontario and Quebec who are moving forward with the development of a linked set of cap-and-trade systems for greenhouse gases.
3. Proposition 26:   The fly in the otherwise green ointment, is the passage of Prop 26, which changes the state’s constitution by requiring cities, counties and the state legislature to have a 2/3 vote instead of a simple majority to increase or enact a fee. It has been dubbed the “Polluter’s Protection Act.” The goal is to reverse the 1997 California Supreme Court unanimous decision in Sinclair Paint Company v. Board of Equalization which upheld a fee on paint producers that would help pay for children at risk from lead-based paint. The court found that such a fee is not a tax but a regulatory fee that could be imposed by a majority vote. Prop 26 also contains a provision that the legislature is not allowed to pass revenue-neutral bills that raise some taxes but lower others, which is a key plank in many cap-and-trade or cap-and-dividend schemes.  A more comprehensive analysis by three UCLA professors explains the impact of Prop 26 on pollution prevention measures generally and climate specifically.  The upshot is it will be trickier to implement the Global Warming Solutions Act. 

Generally speaking, this is all relatively good news for climate change mitigation efforts in California and more broadly across the continent.  It may simply require more creative thinking on the part of the California state legislature or its Air Resources Board (ARB) in maintaining progress in this area.

In fact, the ARB is not wasting any time as it has recently issued its proposed greenhouse gas cap-and-trade program building on the conceptual framework released in November 2009. The 45-day public comment period on the regulation opened November 1, 2010 and closes on December 15, 2010. In addition, ARB staff will present an overview of the proposed program to the Board at its November 18, 2010 meeting. The ARB will then hold a public hearing to consider the cap-and-trade program on December 16, 2010 following the comment period.