Proposition 23 Defeated: Big Climate Bootlegger and Baptist Coalition Win in California
Economist Bruce Yandle introduced the idea of Bootleggers and Baptists joining together in political and regulatory coalitions to advance policies to further their goals. Of course, their motivations differ. For example, in Yandle's model preachers demand alcohol prohibition to save their parishioners' souls while bootleggers want it to stay illegal so they can stay in business. We saw this phenomenon in its purest form when California drug prohibitionists and pot growers both came out against California's Proposition 19 which would have made recreational use of marijuana legal in that state. Alas, that coalition was successful on Tuesday.
But Proposition 19 was not the only ballot measure in California to spark the birth of a Bootlegger/Baptist coalition. Proposition 23 which would have delayed the implementation of California's A.B. 32, the Global Warming Solutions Act, faced just such a coalition of environmentalist Baptist and renewable energy rent-seekers.
Some background: A.B. 32 mandates that Californians emit no more greenhouse gases than they did in 1990 by 2020. That's a 25 percent reduction from current emissions.
Fearing that the ambitious plan to address global warming would raise energy prices and futher damage California's already faltering economy, a coalition of businesses came together behind Proposition 23. Prop 23 would have suspended implementation of A.B. 32 until the state's unemployment rate fell from 12.4 percent today back to 5.5 percent which is what it was when the bill was enacted in 2006.
The measure was defeated on Tuesday when 61 percent of voters in California cast their ballots against it. Apparently, some voters were swayed by the argument that Prop 23 was backed by millions from the nefarious out-of-state oil companies, Valero and Tesoro. Never mind that the campaign against Prop 23 outspent the proponents by 3 to 1.
So who were the Baptists and the bootleggers who worked together to defeat Prop 23? As the New York Times explains:
Prop 23 lost behind a coalition of environmental groups, clean-tech companies, Silicon Valley venture capitalists and hedge fund managers who all had a stake in seeing the statewide climate law, A.B. 32, continue its march toward implementation in 2012.
Now let an environmentalist Baptist speak:
Fred Krupp, president of Environmental Defense Fund, said the Prop 23 defeat sends "a big signal" to the rest of the country and the world that Californians stand firmly behind the law, which would cut greenhouse gas emissions in the state to 1990 levels by 2020. He called the level of cooperation between the fledgling clean-tech sector and environmental groups unprecedented, (emphasis added) giving the "No on 23" campaign the street muscle and the money it needed to prevail.
And Reuters cites the rent-seeking bootleggers:
"AB 32 is a stimulus for economic growth and innovation," said Tom Werner, chief executive of California-based solar panel maker SunPower Corp.
With Prop 23 defeated, SunPower will proceed with a plan to open a San Francisco-area manufacturing facility that will employ 100 people. It would have considered putting the factory in another state if Prop 23 had passed, Werner said.
Silicon Valley investors, who have heavily funded solar and wind energy, biofuels and electric cars, poured money into defeating Prop 23 in recent weeks. In total, the campaign raised more than $25 million.
Millions out of the pristine goodness of their hearts. Well, as H.L. Mencken once said, "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."