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Out-of-state money floods into California over greenhouse gas law

Governor Arnold Schwarzenegger speaking about Prop 23 at Greenwise Sacramento in 2010.

In California next week, the Senate and governor’s races won’t be all that’s hot at the voting polls. There’s a ballot initiative that both sides say might determine a national model for handling U.S. climate change policy.

If passed, Proposition 23 will deactivate the state’s Global Warming Solution’s Act, a landmark commitment to reduce California’s greenhouse gas emissions to 1990 levels within the next 10 years. This anti-greenhouse gas legislation will require companies and industries to cap their emissions and promote clean cars by 2011.

California’s governor, Arnold Schwarzenegger, who shocked opponents when he signed the strict anti-greenhouse gas standards into law in 2006, is speaking out against Proposition 23. According to a capitol spokesperson, major opponents, including California’s chamber of commerce, and many cement, oil and gas companies, had assumed the pro-business Republican governor would not champion an environmental law they say will hurt big energy’s business.

The governor says Prop 23 not only harms the environment but that going green is good for business. California is home to more than half the nation’s green technology, and venture capitalists’ annual green investment in California has gone from the millions to the billions since the climate law passed four years ago. “Companies are coming to California because of our energy policy,” he said earlier this year. “Rather than what some of the greedy oil companies of Texas are claiming that we should roll back our environmental progress that we are making here.”

The companies the governor is referring to are Valero and Tesoro, the top two contributors in support of Prop 23, with a combined contribution of more than $7 million. The companies are among the top 10 U.S. petroleum refiners and own major refineries in California.

California Assemblyman Dan Logue, author of Prop 23, sees the measure as a choice between the environment and jobs for the state. “Why are we driving this bus off this cliff right now at this moment and at this time in California’s history when the rest of the country is on stand by?” he told Need to Know’s correspondent Jon Larson. Logue says that California’s strict limits on carbon emissions, which, if upheld, would go into effect in 2011, would hurt its already sick economy.

The well funded campaigns for and against Prop 23 appear to pit big oil against big green, and a surprising amount of the funding in support of the measure comes from out-of-state energy companies, like Tesoro and Valero in Texas.

According to, a nonpartisan campaign tracking group, more than 90 percent of the funding on the “yes” side comes from oil-related energy companies and nearly 70 percent comes from out of state. The “no” side, which has raised three times the amount as its opposition, is mostly funded by wealthy environmentalists and venture capitalists based in California and includes $3 million from the National Wildlife Federation based in Virginia.

And as voters are asked for the first time to weigh in on global warming law, polls are  currently showing that Californians oppose the measure by a widening margin.

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