SAN FRANCISCO -- The chief economist behind a recent state-sponsored report that found California's climate law would do little to upset the state economy is on the board of directors of a nonprofit group that has transferred money to a political campaign to defend the measure from those who want it suspended.
Larry Goulder, a professor at Stanford University, was the lead economist in an analysis released last month by the California Air Resources Board that said the law, A.B. 32, would barely affect employment once implemented in 2012. The updated report was the second stab at an impartial economic analysis by state advisers after a previous study was dismissed by critics as too optimistic (ClimateWire, March 25).
Goulder is also on the board of directors at the Energy Foundation, a group based here that funds clean energy projects in the United States and China with big-money donations from the David and Lucile Packard Foundation and William and Flora Hewlett Foundation, among others.
The Energy Foundation, which doles out millions of dollars to support renewable energy projects and officially supports carbon cap-and-trade policies, is the sole contributor behind the Green Tech Action Fund, a political arm that recently gave $500,000 to the Californians for Clean Energy and Jobs campaign. That campaign was formed to counter an effort led by Republican Assemblyman Dan Logue to suspend A.B. 32 until employment improves in the state.
A spokesman for Californians for Clean Energy and Jobs, Steve Maviglio, confirmed that the Energy Foundation is the "only donor" behind the Green Tech Action Fund on issues pertaining to A.B. 32. But in Maviglio's view, Goulder's role at the Energy Foundation and with the state does not present a new conflict of interest in a campaign that has already seen some robust self-promoting activities.
Degrees of separation?
"There are a couple degrees of separation here," insisted Maviglio, noting that Goulder is not on the GTAF's board of directors (though Eric Heitz is listed as president of both the Energy Foundation and its political offshoot). "The funds from the Energy Foundation were moved into the fund earlier this year, before this campaign was even a glimmer in anyone's eye."
Maviglio's group is trying to block a proposed ballot initiative that would suspend the climate change law until unemployment falls to 5.5 percent from its current level of 12.2 percent. Those backing his group include Google Inc. and Silicon Valley venture capital firms, though they have yet to open their checkbooks.
Also behind the group are two prominent environmental organizations, the Environmental Defense Fund and the Natural Resources Defense Council. EDF has so far given the group $75,000, with NRDC donating $62,500, according to documents provided to the California Secretary of State.
Others on the board at the Energy Foundation include Heitz, president of the foundation and its offshoot; Phil Sharp, president of Resources for the Future and a former congressman; and Susan Tierney, managing principal at Analysis Group Inc.
Goulder, in an interview, acknowledged that Heitz's acting as president of both the foundation and its political arm could give the wrong impression, but he defended his position on the board and said it does not overlap with the Green Tech Action Fund.
"I value my reputation as an economist," Goulder said. "I have no direct involvement with the Green Tech Action Fund."
In the same breath, Goulder said he supports A.B. 32 and believes it should be implemented on schedule, in time to go live in 2012. That support for the law, he insisted, "stems from an analysis of its implications for the environment and the economy, not from any pressure from the Energy Foundation."
'Peeling back the artichoke'
Still, the close-neighbors association could provide fuel to those opposed to A.B. 32. Assemblyman Logue, the lawmaker behind the ballot measure that would halt the law, said Goulder's involvement at the state level and with the Energy Foundation should send warning signals to those seeking to block his movement.
"This is problem with the global warming message from day one," Logue said. "When you peel back the artichoke and look inside it, 80 percent of the people involved would benefit from it either directly or indirectly, financially or positionally."
Logue said the entities that stand to make money from climate policies include academics looking for grants and venture capital firms with millions sunk into clean technology startups. Maviglio countered that the economic advisory committee set up to report on A.B. 32's effects is a 16-member board with no real authority and with experts both for and against A.B. 32 enforcement.
"Goulder is one of the state's top economists on energy, so it makes sense he's on the Energy Foundation board," Maviglio said.
Logue responded: "It's kind of like that old statement, 'You have the family tree of a telephone pole.'"
Still stumping for signatures
As for the ballot measure, Logue said the California Jobs Initiative is still in the signature-gathering phase. He expects to reach the 433,000 autographs needed to qualify for the ballot by the end of May, despite an original expectation that the petitions would be filed by mid-April.
"We're getting 20,000 signature a day," said Logue, claiming the effort is halfway to the finish line.
But Logue's side has had to endure a good deal of negative publicity because its primary funders -- Valero Energy Corp. and Tesoro Corp. -- are based in Texas, prompting calls for a boycott of Valero gas stations throughout the state by Working Assets and the Courage Campaign. That bad run of press appears to have gotten worse this week with news that the Adam Smith Foundation, a conservative group based in Missouri, donated $498,000 to Logue's campaign.
The group, according to a story in the Capitol Weekly in Sacramento, reported only $30,000 in revenue over the last two years but still somehow managed to send nearly half a million dollars to the climate suspension effort. That has sparked rumors that more oil companies are essentially laundering money through the conservative group, which did not return calls or e-mails seeking comment and lists no press contact on its website.
Logue said he doesn't know where the money came from. "If I did, I'd tell you," he said. "I honestly don't know."
Also on the books as supporting the climate ballot effort is Los Angeles-based Occidental Petroleum, the second-largest oil producer in the state. The company donated $300,000 to aid the signature-gathering operation.
Goulder, for his part, agreed that part of the problem in California is that economic reports have been politicized, with each side releasing dueling analyses to counter the other side's supposedly objective view of the climate law's likely effects.
Goulder said reports on both sides -- to include ARB's analysis and a study by Charles Rivers Associates that takes a more negative view -- have strong and weak points that have added substance to the debate over how greenhouse gas emissions reductions to 1990 levels by 2020 will affect the state. A more controversial study completed by a business professor at Sacramento State University, Sanjay Varshney, that predicted steep job losses Goulder called "completely unsound."
"I'm as dismayed as anyone about the nature of some of the claims on both sides about A.B. 32," Goulder said.
The Stanford economist is hoping the politics will subside in deference to a steady view of the climate law that takes all legitimate studies into account. As for his own reputation, Goulder said he gets "a small honorarium" for his work at the Energy Foundation, for attending meetings three times a year, but otherwise has no financial connection to the group.
"What I prize most of all is to be able to call them like I see them," he said. "No one has a monopoly on objectivity."
The air board is scheduled to take up a revision to Goulder's economic analysis today during a workshop in Sacramento. Goulder said he hoped to bring some of these issues to light during that workshop.
Clarification: Updated to include Goulder's statement that his financial connection to the Energy Foundation is limited to the honorarium he receives for coming to meetings.