SAN FRANCISCO -- Venture capital interests and political operatives gearing up for a fight this fall over California's climate change law are pressing donors to counter what they fear will be a campaign war chest in excess of $50 million from those looking to delay the measure.
A coalition has begun forming among clean-tech companies, venture capital firms, environmental groups and veteran strategists who have fought through presidential campaigns as well as tough proposition battles in California. Their goal for now is simple: Start raising money to keep pace with the other side, which calls itself the California Jobs Initiative.
Donnie Fowler, a senior adviser to the Clean Economy Network, said the oil companies behind the effort to repeal the climate measure could spend anywhere from $50 million up to the $94 million they spent in 2006 to defeat Proposition 87, which would have increased gas taxes to fund renewable energy projects.
"They have bottomless pockets," Fowler said. "They're determined not to have any competition."
The California Jobs Initiative, started with funding from Valero Energy Corp. and other oil refiners, is seeking to delay the law, A.B. 32, until the state's unemployment level sinks from 12.6 percent to 5.5 percent for four consecutive quarters. The group last week submitted the roughly 433,000 signatures needed to qualify for the November ballot.
Fowler is no stranger to tough campaigns, having managed President Obama's run to the White House in Indiana in 2008 and Sen. John Kerry's (D-Mass.) Michigan field operation in his 2004 presidential bid. He was recently brought on board the Clean Economy Network, which represents clean-tech companies, specifically to defend the climate law.
Not aiming to match spending
His role is to mobilize the coalition that supports A.B. 32, educate and raise money early in the campaign cycle. Fowler acknowledges that the oil companies will spend more, but he insists that is not a concern because about two-thirds of ballot initiatives fail in the state.
"We don't have to match them dollar for dollar," said Fowler, who founded the political consulting firm Dogpatch Strategies in San Francisco. "But if the opponents don't fight, if they don't engage, there's a really good chance that the oil companies will succeed."
So where will the money originate to defend A.B. 32? On this question, Fowler was coy, as was Steve Maviglio, who manages communications for the Californians for Clean Energy and Jobs campaign. Neither would say if major Silicon Valley players like Google Inc. or the venture giant Kleiner Perkins Caufield & Byers have decided to climb aboard.
"This money is going to come from a lot of places," Fowler said. "There is not one very, very wealthy person in the Bay Area or Los Angeles who is going to pay for this."
Maviglio expects "significant announcements" over the next two weeks about funding. "I think you can expect to see our coffers filling up shortly," he said.
The National Venture Capital Association, which represents a who's who of Silicon Valley venture firms, including Kleiner Perkins and Nth Power, is also on board and taking the ballot measure as a serious threat. Venture firms have millions invested in renewable energy and other energy technology companies, all of which is riding on the carbon limits that would be implemented when A.B. 32 goes live in 2012.
Concerns about a multi-state domino effect
Mark Heesen, president of the Washington-based trade group, said a defeat in California could spark a domino effect that kills carbon-reduction policies in other states. That is why he expects oil companies to give the campaign everything they've got.
"There are many venture-backed companies in California that are working on the premise and were funded on the assumption that A.B. 32 would continue," Heesen said. "This is a wake-up call to other states that if this thing goes through, [the oil companies] have a much better opportunity" to defeat climate initiatives there.
Fowler says that ripple effect could extend from the other 49 states to the U.S. Congress, as the Senate takes up a climate and energy bill.
"If it looks like momentum is favoring oil companies in California, it's going to make it a lot harder to pass climate legislation in Congress," Fowler said. "You can see why the oil companies have smartly decided not just to fight this in Congress but also in California."
Also backing the referendum are business groups from the manufacturing, farming, energy and trucking sectors, to name a few. The California Manufacturers and Technology Association says the state has lost half a million jobs in the economic downturn, arguing that A.B. 32 would favor clean-tech firms and few others.
And some economists, notably Robert Stavins at Harvard University, have recently gone public with the position that California acting alone on climate makes little sense. Moreover, many groups based in Washington are absorbed in the congressional climate debate, which could help those looking to overturn A.B. 32.
"It's somewhat difficult getting their attention right now," Maviglio said of the effort to contact officials in Washington. "We're reaching out to them."