Fight for future of California's climate policy nears boiling point

Tensions are mounting over a controversial proposition to abolish California's climate change legislation, after the state's leading Senate candidates clashed over the issue and an investment guru challenged a prominent backer of the proposition to a public debate.

Californians are preparing to vote this autumn on Proposition 23, a highly controversial proposal that would suspend the state's flagship climate change bill, known as AB32, until unemployment drops to 5.5 per cent or lower for four consecutive quarters.

The move has prompted a fierce campaign with oil industry-funded groups urging people to vote yes to the proposition on the grounds that the legislation is a "job killer", and environmental groups and green businesses arguing AB32 is critical to California's position as one of the world's leading clean tech hubs.

Democrat Senator Barbara Boxer and her Republican challenger, former HP boss Carly Fiorina, clashed over the issue at a public debate last week with Fiorina saying she had not yet decided on her position on Prop 23.

Boxer, who is opposing Prop 23, accused her rival of dodging one of the defining issues affecting the state. "If you can't take a stand on Prop. 23, I don't know what you will take a stand on," she said. "If we overturn California's clean-energy policies, that's going to mean that China takes the lead away from us with solar, that Germany takes the lead away from us with wind, but I guess my opponent is kind of used to creating jobs in China and other places. I want those jobs created here in America."

Fiorina responded late last week, issuing a statement saying that she would support Prop 23 on the grounds that California risked losing jobs if it acted independently from other states to tackle global warming.

"Proposition 23 is a band-aid fix and an imperfect solution to addressing our nation’s climate and energy challenges. The real solution to these challenges lies not with a single state taking action on its own, but rather with global action," Fiorina said in her statement. "That's why we need a comprehensive, national energy solution that funds energy R&D and takes advantage of every source of domestic energy we have - including nuclear, wind and solar - in an environmentally responsible way. That said, AB32 is undoubtedly a job killer and it should be suspended."

California's business community now looks as if it could hold its own high-profile debate on rolling back climate change legislation after Tom Steyer, founder of multi-billion dollar hedge fund Farallon Capital Management and co-chair of the No on Prop 23 campaign, wrote to William Klesse, chief executive and chair of oil giant Valero, challenging him to a public showdown.

Pointing out that he and Valero were the two largest respective financial backers of campaigns designed to preserve and overturn AB32, Steyer asked Klesse to travel to California for a debate on the subject.