Suspend AB32 (Global Warming Solutions Act)...No, Thanks.

California’s Global Warming Solutions Act, more commonly referred to as AB 32, is a 2006 landmark piece of legislation aimed at reducing California’s greenhouse gas emissions in a manner that is both cost-effective and maximizes the economic benefits to the State. In the past week, however, a group has launched a ballot initiative to suspend the Act in the hopes of getting California’s economy “back on track” and “putting Californians to work”. The question of AB 32’s impact has also become an issue highlighted by several of the gubernatorial candidates.

Applied Materials is firmly against the repeal of AB 32 and believes the Act’s implementation will not dampen economic growth in California. Given California’s strong potential in the solar, wind and hydropower sectors and our unique expertise in these sectors, the state is uniquely positioned to benefit greatly from this policy.

Now is not the time to put up roadblocks on the path towards a low-carbon future. Blocking the implementation of AB 32 sends the message that we are not serious about committing to the green energy transition and the enormous economic benefits it will bring. Frankly, the citizens of California deserve better.

As you consider the merits of the effort to suspend AB 32, the following points are worth noting:

• There is more than a little irony in an effort to suspend a law that has widespread political and public support and indeed is hailed worldwide as a model for addressing the challenge of reducing greenhouse gas emissions.
• Key elements of AB 32 are still in the design stage and the process has been extraordinarily open and inclusive. It is premature to condemn AB 32 as a drag on the California economy when the final framework is not even in place yet.
• The Air Resources Board, supported by independent economic analyses, estimates that achieving the greenhouse gas emissions reduction targets mandated by AB 32 supports a $76 billion increase in our Gross State Product (GSP), $48 billion increase in real household incomes, and the creation of 403,000 new efficiency- and climate-driven jobs. While this type of analysis is certainly open to further debate, the notion that suspending AB 32 is the key to getting California “back on track” seems extremely misguided.
• In evaluating a ballot initiative, it is often useful to “follow the money”, meaning examine who is sponsoring or financing a signature gathering effort. In the case of the AB 32 suspension, the New York Times has revealed that Tesoro Corp. and Valero Energy, two Texas-based refiners with operations in California, are the funders of the initiative. Both companies will be subject to some of AB32’s regulations and have a direct stake in pushing back. Their participation in the initiative process is entirely legitimate, but that also suggests the claims of economic ruin are hollow. California’s environmental and economic policy should not be dictated by narrow, special interests.

California’s natural environment and its citizens are physically threatened by the impacts of climate change; those impacts are already being felt. Addressing greenhouse emissions and the resulting impacts via AB 32 should be viewed as an imperative and as an enormous economic opportunity for the State rather than merely as a risk-filled policy. The vision of the legislation and hard work that has been devoted to sensibly implementing the Act should not be derailed.