Stanford’s Shultz Says No to Prop 23

Watch any of the commercials on Proposition 23, and it is hard to imagine that they refer to the same bill. The “California Jobs Initiative” features a concerned housewife dressed in pink, while the “Dirty Energy Proposition” offers an apocalyptic black and white horizon overflowing with coal plants.

However, both refer to Proposition 23, the polarizing bill that aims to suspend AB32 until state unemployment levels reach 5.5%. AB32, the Global Warming Solutions Act signed by Governor Schwarzenegger in 2006, would enforce stringent emission, fuel, and efficiency standards in an effort to promote clean energy.

Supporters of Proposition 23 – and the housewife in pink – claim that clean energy should become a priority only after California’s economic woes – including a 12% unemployment rate – have been mitigated. Some estimates predict that AB32 would cost Californians up to 1.1 million jobs, and up to a 60% increase in electricity costs.

Opponents insist that Proposition 23, supported by big, out-of-state oil companies, would destroy, not suspend, California’s landmark environmental legislation. Unemployment levels have been at 5.5% only three times since 1970.

The debate seems to be a microcosm of national politics, where there is little room for common ground. But the division has somewhat transcended party lines. Republican Arnold Schwarzenegger, for whom AB32 is a defining legacy, has offered a scathing review of Proposition 23, saying that, “California is America’s last hope for energy change. We intend to win this battle.”

One of the biggest opponents to Proposition 23 is George Shultz, former Secretary of State to President Reagan, and the Thomas W. and Susan B. Ford Distinguished Fellow at the Hoover Institution. A fiscal conservative, Shultz has surprised many members of the Republican Party by his opposition to a bill that some in the party see as recipe for economic disaster.

While Shultz does believe in climate change, the immediate danger, he says, is one of national security.

“The national security aspect of the problem has increased as we worry about who gets the revenues from oil,” Shultz told the Review. “Iran is building a nuclear weapon with those revenues. AB32 is the beginning of an effort to cope with [the problem] here in California.”

Shultz recalls President Eisenhower’s warning long ago that America should import no more than 20% of its oil. After the Arab Oil Embargo, Shultz saw the truth in Eisenhower’s statement.

“I said to myself, you know, Eisenhower had a point,” he said. “He’s a wise man.”

Shultz is no stranger to environmental legislation. He served in the Presidential Cabinet during the creation of both the Environmental Protection Agency (Nixon) and the Montreal Protocol (Reagan). Under the first Bush administration, Shultz worked on a cap-and-trade system. Even so, he believes in the power of a grassroots movement.

“Important things have happened from the ground up: inventions from companies and individuals, initiative from states.”

Perhaps a ground-up movement is what it will take to have a successful national green energy policy. Large international and national efforts to promote clean energy have had little success to date. Just this year, the Waxman-Markey “Clean Energy and Security Act,” which included a cap-and-trade plan, failed to pass in Congress.

“I believe that if we can get something going in California, it will spread,” Shultz said. He notes that the federal government has already put into effect California’s emission standards, which were unfavorable to Californians at the time.

And despite what his opponents say, Shultz insists that the jobs losses will be minimal if AB32 succeeds. There are 12,000 green companies in California, and there have been over 500,000 clean energy jobs created.

“There’s been a virtual explosion of work on alternatives,” he said. “The history of the U.S. labor force is one of change. This an example of it.”

He did note, however, that the method of administering AB32 will make a difference to its success.

“There’s no point in shoving things down people’s throat. You have to bring things into place gradually as long as you keep a clear vision that it’s inevitable.”

Republican gubernatorial candidate Meg Whitman, he said, understands this.

“[Whitman] wants to look carefully at the way AB32 is administered, to see that it comes about through a process that is the least disruptive possible, and I think that’s reasonable,” commented Shultz.

At first, Whitman refused to take a stand on Proposition 23. However, she has now indicated support for a one-year moratorium on AB32, a measure she calls a “job-killer.” But the important thing, according to Shultz, is that she says no on 23.

It is perhaps more difficult for him to justify his support of Carly Fiorina, the Republican Senatorial candidate who is in favor of suspending AB32. While disappointed that Fiorina has not said no to proposition 23, Shultz still believes that she is the better candidate over Senator Boxer.

“It’s an important issue, but there’s lots of other important issues,” Shultz conceded. “One of the great mistakes in politics is the emergence of one issue. You’ve got to judge things on a broad basis.”

In the end, what happens in November will be watched all over the world. It raises the question of whether climate transcends politics or whether climate has become politics. It asks us to rethink the party divisions that increasingly define the nation. It asks us to reconsider the notion that the issue of climate change is the political property of any one faction or group.