Prop 26: "Stealth Initiative" to Undermine CA's AB32

California’s ballot initiative Proposition 23 has received a tremendous amount of public attention and financial support from both sides over the past few months. Prop 23 would suspend implementation of the state’s AB32 climate change law that seeks to reduce greenhouse gas emissions to 1990 levels by 2020 until unemployment falls below 5.5% for four consecutive quarters. Thanks to the large coalition of investors, politicians, and influential figures that have sided with the ‘No on Prop 23' campaign, it appears as though the measure to prevent climate progress in California has little chance of passing.With the majority of Prop 23 funding coming from two Texas-based oil companies, namely Tesoro and Valero, gaining support to reject this blatant effort by out of state big oil to stop carbon regulation has been relatively easy to do.

While the public has been focused on efforts to stop Prop 23, an alternative “stealth initiative”  filed as Proposition 26 has gone practically undetected by comparison. Prop 26 would effectively derail AB32's carbon reduction mechanisms such as the renewable energy standard and cap and trade program by amending “the state constitution to require a two-thirds majority -- rather than the current simple majority -- to enact any regulatory fees by declaring them taxes,” reports SustainableBusiness.com. The proposition officially named “the Stop the Hidden Taxes Initiative” but commonly referred to as the ”Polluter Protection Act” is being spearheaded by Big Oil, along with tobacco and alcohol companies, to essentially strip away the funding needed to effectively run AB32. Most notably, the California Air Resources Board (CARB) would find it almost impossible to raise the necessary fees needed to implement auctioning, monitoring and reporting systems needed to run an effective cap and trade program if a supermajority vote from the Senate was required.

Polls show that Prop 23 is likely to be voted down, so polluters are funneling millions of dollars into Prop 26. California-based oil companies namely Chevron, Shell, and Exxon in conjunction with the California Chamber of Commerce have sat out of the fight against Prop 23 and have been pursuing more sneaky approaches to underpin AB32. These interest groups have contributed upwards of $14 million to the Yes on Prop 26 campaign with Chevron being the most notable backer with $2.5 million worth of donations. With the wording of this budgetary proposition being so ambiguous, it will no doubt be difficult to gain enough awareness amongst the public about the consequences of Prop 26 and who’s behind the push. With a little over a week left before the November 2nd elections, attention and resources must be mobilized to ensure Prop 26 does not get passed by voters unaware of its consequences.

The detrimental effects that Prop 23 and/or Prop 26 would have on the low-carbon future of not only California but of the United States and North America as a whole would be far reaching. Both of these ballot initiatives would not only kill the likelihood of AB32 coming into force but would in turn make it extremely difficult for other  programs such as the Western Climate Initiative to gain traction. Moreover, those already engaged in the emerging North American carbon markets such as the Climate Action Reserve would be relegated to simply to take action in the voluntary space. For a comprehensive overview of both Proposition 23 and 26, check out the recent special topics series webinar hosted by Climate Action Reserve below.