The growing opposition to the 2006 California climate-change law has led to Proposition 23. Prop 23, which will be voted on in November, puts a hold on the climate-change law until the state's unemployment level reaches below 5.5% for four consecutive, with it currently at 12%. On both sides of the issue, people are raising large sums for the campaign and it is poised to become one of the top debates for November's election. This issue has gained attention from some of the biggest players in the industry, who do not shy away from large political donations. Such players are the well-known Koch brothers from Texas, who contributed $1 million dollars. Valero is said to have contributed $4 million. Also, Carly Fiorina, who is the former head of HP and is now running for California Senate seat, now publicly supports the proposition. If Proposition 23 isn't voted through, then this would mean costly measures for corporations to cut greenhouse-gas emissions. This is what led to Proposition 23 being created.
This effects the energy industry landscape and should be followed tediously for many reasons. First, if it passes, it would mean that the industry could put off the necessary changes for a while. This would release capital that was previously tied up in this project, allowing them to further invest in other more profitable ventures. Therefore, investing in these corporations would be a better and more enticing opportunity for investors. Also, it could keep other states from passing similar climate-change bills of their own. On the other hand, if the proposition does not pass, it will mean costly changes for the companies. They will have to invest much of their capital in updating their facilities to meet the new industry standards for greenhouse-gas emissions. This could both deter investors and cut profits. These are two things that are always avoided by industries, because they negatively effect the business in every way. The campaign for Proposition 23 should be quite interesting and will need to be closely followed, with things like polls, to make sure the companies are ready for the outcome and can prepare for the worst. I feel that Proposition 23 will be a key factor in energy corporations' business plans for the foreseeable future.
http://online.wsj.com/article/BT-CO-20100907-705036.html
The first thing that I thought about the proposition is that if passed it could possibly last for eternity. California may never have an unemplyment rate of less than 5.5%. So, it is possibe then that no real push would ever have to be made in that state. At the same time, I was also wondering if forcing these patch-ups is going to help. These patch-ups are not replacements for dirty energy sources. They are taking away resources that would normally be used to fund truely green and renewable energies.
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