Proposition 23: Nothing More Than Misdirection


After giving my best attempt at an objective summary of Proposition 23 to a colleague, he asked rhetorically, “How can something like this even make it onto the ballot?” He was, of course, familiar with the process that allows any proposition that gathers enough signatures to make it to the ballot in, but the question was really addressing a more fundamental issue: how can something so transparently bad for California even make it to the ballot?

Proposition 23 is the legislative version of the flickering neon sign that reads “lower your standards for global environmental quality to protect state oil interests.”

To recap, Proposition 23 suspends AB 32, otherwise known as California’s Global Warming Solutions Act of 2006, until the state unemployment drops to 5.5% for four consecutive quarters (otherwise known as a year). AB 32 requires that California lower its overall greenhouse gas emissions to 1990 levels by the year 2020—an ambitious goal that may require certain sacrifices. However, the issue requires further investigation.

The author of this proposition is the linguistic equivalent of David Copperfield. First, the wording may lead one to believe that climate legislation and unemployment are somehow correlated. The proposition even seems to imply that climate legislation is causing unemployment and removal of the legislation may lower the unemployment rate.

This misdirects the conversation from the real issue, which is that the oil industry is attempting to self-regulate. The Yes side argues 23 would create a million and a half jobs. I argue that 23 would destroy an entire industry—the nascent clean technology business that so many courageous startups have begun to explore—and that any initial economic uptick would be short lived. Who is right? It doesn’t matter. The conversation has been moved to the only area where proposition 23 actually makes sense: the imaginary.

Proposition 23 will kill the Global Warming Solutions Act for a period of time. It is, literally, a proposition to suspend a solution. But the oil industry is not merely content to delay implementation of clean air standards in California. They would prefer to prevent it altogether, which is where Proposition 26 comes in.

Proposition 26 would cripple AB 32 with legislative bureaucracy, potentially rendering it ineffective. Proposition 26 is as damaging as 23 to the clean technology industry and air quality standards. Yet because of its subtle and often sleep-inducing wording, much of the fight has been focused on 23.

If Proposition 23 is all about flash, Proposition 26 will be the legislation to pull a quarter from behind your ear. Magicians often use sleight of hand techniques to misdirect the attention of audience participants in order to trick them. Proposition 23 may be the distraction, while 26 accomplishes the same goals right from behind our collective ear. Californians should ignore the oil industry illusionists and vote no on both.

Jim Watson is managing general partner at San Francisco-based investment firm CMEA Capital. The firm manages over $1B in venture capital and invests in Information Technology, Life Sciences and Energy. Follow @

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