Prop 23: Voters must not leave state's economy to chance

Posted by Jack Stewart, President on Sept. 24, 2010

Prop 23 = temporarily postponing AB 32 until economy improves
Meg Whitman = one-year delay of AB 32
Jerry Brown = Immediate AB 32 implementation and increased costs

Gubernatorial candidate Meg Whitman agrees that AB 32 will be a job killer and hopes that as Governor she would be able to delay it until it can be fixed. But to make sure AB 32 is delayed, voters must support Prop 23. We can't leave this to chance.

California's economy already looks like this:

51st worst place to do business for the last four years according to Chief Executive Magazine

One of the worst public policy climates for small business/entrepreneurship according to the Small Business Survival Index 2009

49th in "business friendliness" according to CNBC's Annual Survey of Top States for Business

Lost more than 630,000 manufacturing jobs over the last decade.

California was a clean tech leader before AB 32, and suspension won't change that:

Hoping that our leaders will take action to fix AB 32 is not enough given our declining manufacturing base and high unemployment rate, notwithstanding our existing greenhouse gas efficiency leadership. CMTA supports Prop 23 as the only sure way to temporarily postpone the high costs of AB 32 until the economy improves.

Voters must choose California's economy and support Prop 23 in November.

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8 reasons to leverage California's venture capital with a competitive environment

Posted by Gino DiCaro, Vice President, Communications on July 22, 2010

California receives a majority of U.S. venture capital (VC). Always has, hopefully always will. Our state produces brilliant creative minds and ideas because of its University power and its sheer size of 35 million people. This unique outcome alone does not however equate, by default, to the meaningful job growth necessary for our many workers whom are unemployed and under-employed (a term becoming all too common for the folks forced to take any job they can find).

We must leverage our built-in VC advantage to ensure that emerging green and other products are actually produced here. California's wealth will be multiplied once VC cash gets beyond the investment board room offices and into the bank accounts of our very own hard working, middle class families.

Recently the LA Times wrote a piece about VC growth in California and the notion that it does, and will, open the floodgates to new green jobs. Often the state's VC numbers are used to support bold California-only mandates and policies, without regard for the state's competitive disadvantage. Now the impressive amount of VC investment is being used to justify opposition to Proposition 23 -- the ballot initiative to suspend AB 32 until our economy is in better shape and unemployment numbers are reduced.

I offer eight recent independent examples and statistics that refute the notion that VC and seminal green projects automatically produce the type of job growth this state needs for its economic recovery.

Silicon Valley-based Solexant solar systems raised $41.5 million in VC but uses a $25 million loan and Oregon tax credits to build 200-employee manufacturing facility in Oregon. Daily Finance article
California-based Fisker automotive purchases manufacturing facility in Delaware to produce it's $90k and $40k plug-in hybrids. (Why didn't these guys get the same deal Tesla got?) Wired article
Orange County-based Amonix has big list of VC investors but purchases 214,000 square foot facility in Nevada for 300 workers to manufacture its solar power systems. Las Vegas Review-Journal article
Oceanside-based biotech firm International Stem Cell Corp. using VC in India to site facilities over there. SD Business Journal article
Richmond-based Vetrazzo recycled glass countertop manufacturer receives $2 million in VC, but only if they move production where they can compete. SF Business Times article
California movie mogul Kevin Costner has spent the past 15 years developing an oil-cleaning centrifuge machine. It's being made in Carson City, Nevada. article
California's overall portion of U.S. new and expanded manufacturing facilities was 1.3% over last five years, while close to half of the country's venture capital continues to funnel to the state. chart
Lastly, a reminder of some other companies that went with more competitive manufacturing locations that were mentioned in our "Why not California" series.

VC might have translated into regional job growth in times long past, but now the world is too mobile, too competitive, too global. California must find a way to compete so we can leverage our VC dollars, creative minds and ideas into broad wealth for all working families.

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A common global warming conversation leading up to California's November election

Posted by Gino DiCaro, Vice President, Communications on July 14, 2010

I received the following e-mail from a cousin and one of my closest friends last night regarding AB 32 as he ponders his position on November's Proposition 23 to suspend California's global warming law. He was kind enough to let me use our communication as a potential window into a few of the living room "carbon" discussions that will occur in our state in the coming months.

For demographic purposes, he is a 33 year old married business owner living in Long Beach. Socially he is a smart, influential, politically independent, community-focused individual. Overall a well-rounded person who is a good snapshot of a percentage of our voting public for whom the Proposition 23 campaign needs to make a solid case.

Here are his questions (in quotes and non-bold) and my overall responses (in bold):

"If possible, I’d like a quick take from you on this bill, AB32. I see similarities between this bill and what happened back in the early 80’s with the auto industry when we didn’t demand improved MPG. I think we would be in a far better position today had we pushed for better MPG over the years. I would guess there would be less demand for oil, less pollution, not having to bailout car companies, etc."

Remember, California has 1.2% of the world's GHG emissions according to the World Resources Institute ... and more importantly, of the world's GHG emissions, only 5.53% are man-made according to the U.S. Energy Information Administration. This means California can't affect meaningful global reductions on its own.

So your MPG analogy illustrates the problem with AB 32. Like GHG reductions, improved MPG can only come from two mediums: market demand or national policies -- not California-only mandates. This is precisely why AB 32 will get the country and the world nowhere in terms of global GHG reductions.

"Restricting emissions will require us to become more innovative with clean energy and a world leader for clean energy corporations. And as someone who lives and breathes next to two of the largest ports in the world, I am very interested in seeing that take place."

California already has the strictest environmental laws in the country and the state is one of the most efficient GHG emission states per capita (we were that way far before AB 32 passed), and Co2 is not something harmful to breath, but necessary. There are laws for pollution. AB 32 is not one of them.

'Restricting emissions' in only California will not make the state more innovative but drive out of state the most important contribution California can make to addressing climate change -- the people, suppliers and companies that will produce the green and other products to serve the market. Think of the state's past innovations, too. Was the state's information technology boom mandated and created by regulation? Was the state's manufacturing leadership created by regulation? Was the massive entertainment industry hub created because of regulation? No, they were all a result of innovation and a friendly business climate for growth in California.

"I completely understand the argument regarding how unfriendly our state is towards business (there are so many taxes that are so lame it’s hard to believe). However, I want to know if you would support this bill in a vacuum. Or better yet, would you support it if you were in the friendliest state to do business (Delaware)?"

It's a bad idea for any single state to adopt a firm AB 32-like target even if the business climate is otherwise friendly -- it adds to costs of doing business and pushes economic activity to other states (this is leakage -- bad for the environment, bad for jobs). It must be done nationally for any of this to work. California shouldn’t sacrifice entire industries and its economy only to see GHG emissions go to other states. It is a global problem.

One more note. California passed this bill on the premise that we would lead others to follow our example and that it would not burden our economy. So far the leadership is in doubt due to failed global warming legislation at the federal level. And no one can guarantee that California consumers and employers will not pay more than the rest of the country, both in costs and jobs.

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