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Koch-funded Prop 23 study draws oily conclusions

CAPAF’s Rebecca Lefton dismantles another effort by the polluter-backed disinformers to muddy oil up the waters of the clean energy and climate debate.

A new study by Benjamin Zycher, senior fellow at the Koch-funded Pacific Research Institute, examines the historical relationship between employment and energy consumption in California.

It concludes that “the approval of Proposition 23 … would add nearly 150,000 jobs in California in 2011, more than a half million jobs by 2012, and more than 1.3 million jobs by 2020.”  Before anyone gets blown away, remember lesson #1 of Intro to Statistics:  correlation does not equal causation.  Zycher notes this himself.

“The correlations by themselves are not evidence of causation, the determination of which requires application (and statistical testing) of a conceptual framework. But the data displayed in Figure 1 make it reasonable to hypothesize that implementation of AB 32—a tax on energy use—would reduce employment by increasing the cost of energy.”

Nonetheless, Zycher still draws the conclusion that “suspension of AB32 would yield increases in aggregate California employment, relative to the case with implementation of AB 32, of a bit less than 150,000 in 2011, rising to more than a half million in 2012, and about 1.3 million in 2020.”

It’s an interesting hypothesis, but does not carry the weight of numerous studies showing job creation and economic growth that stem from AB 32. Zycher does not include clean-energy jobs created from AB32 in his assumptions.  He stands alone against 118 economists with expertise in California climate and energy issues who warn that delaying the implementation of AB32 will be more costly than acting now.  In an open letter to Californians, the economists wrote that AB32 will “create new business opportunities and more jobs, and provide incentives for innovation.”  Proposition 23 risks wiping out hundreds of thousands existing clean-energy jobs in the state and jeopardizing millions more that will be created from new markets for energy efficiency and clean energy technologies spurred by AB32.

What’s more, Zycher does not address the economic benefits of the clean-energy law, including the $7.5 billion the California Air Resources Board estimates consumers will save on energy prices. In the event of an energy price shock, AB32 will save consumers an additional $4.5 to 9.6 billion.  Proposition 23 will actually make electricity 33 percent more expensive in California by the end of this decade, according to a study by University of California economist.  That means without implementing AB32, consumers will pay up to $100 more in 2020, costing the state $80 billion in gross domestic product and destroying half a million jobs.

In addition, Zycher assumes that the unemployment rate would not reach 5.5% or less for four consecutive quarters, which is the condition that the ballot initiative states is necessary for suspension.  This is actually a safe assumption as it has only happened three times since 1970.  But as CAP has written, the oil companies behind proposition 23 have deceptively framed their efforts as a “jobs initiative” that would merely “suspend” the state’s global warming law.  In reality, the architects behind the proposition are aiming to repeal the law indefinitely to protect their own profits at the risk of California’s economy, national security, and public health.

Out-of-state oil companies are funding the campaign to repeal AB32.  Nearly all of the donations to the Yes on 23 (97%) come from oil companies and 80% comes from Koch, Tesoro and Valero alone.  Koch is also funding the Pacific Research Institute to produce shoddy studies in support of their dirty energy proposition.  The Pacific Research Institute funded the film An Inconvenient Truth…or Convenient Fiction attacking the science of global warming in response to the Nobel Peace Price winner, former Vice President Al Gore’s Inconvenient Truth.  PRI also receives funding from Exxon.

The studies author, Zycher has a history of doing Koch’s dirty work.  Previously, PRI’s Zycher was an adjunct scholar at the Koch-funded Cato Institute and a senior fellow at Manhattan Institute, which is also funded by Koch and Exxon.

Here are five things you can do to fight back against the Zycher’s overgeneralized statistical clap-trap:

  1. Visit the “No on 23″ website, learn the facts & sign up:
  2. Educate yourself on how California’s climate & energy laws have created companies & jobs:
  3. Tell your friends by email, on Facebook, at work, & everywhere else.
  4. Participate in the debate. Write letters to the editor and post comments on blogs & websites.
  5. Contribute (click here). The other side’s leader, right-wing California Assemblyman Dan Logue, has publicly said he expects the oil companies to spend $50 million.

And, if you’re a Golden Stater, vote No on Proposition 23.

Rebecca Lefton.

Joseph Romm's picture

Thank Joseph for the Post!

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Paul O's picture
Paul O on Oct 6, 2010 2:09 pm GMT


Frankly when it comes to the Spinning of Statistics both the Pro and Ati prop 23  sides are Spining away at Warp Speed..

It is impossible to have any faith and confience in Job creation projections because the peole projecting are not true disinterested parties.They seem more akin to emotionally involved activists who are head long committed to a pre-ordained “Green” outcome.

Franly I can’t help but use quite a bit more than a grain of salt as I try to parse my way through all the claims and counterclaims in the Prop 23 debate.

That’s just how I see it.

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