The war between high-emitting industries and low- and zero-emitting sectors over climate change policies has been largely waged by proxy via the media and government lobby groups. But now, in the US, they are preparing for pitched battle.

The circuit breaker has been a Californian law known as AB32, which proposes to reduce the state’s emissions to 1990 levels by 2020 and will require limits to be set on emissions from cars, oil refineries and other heavy-emitting industries, as well as an ambitious renewable energy target.

The battle will be fought in a state referendum that will pit the powerful oil and manufacturing industries on one side and the emerging cleantech sector and environmental groups on the other.

Taking sides are also the incumbent Republican governor Arnold Schwarzenegger, who passed the Bill into law three years ago, and the new Republican nominee, Meg Whitman, who wants to think about it a while.

The battle has been remarkable because of a vigorous and costly campaign largely sponsored by two Texan oil companies, Valero Energy and Tesoro Corp, and other energy companies, who managed to attract 800,000 signatures and forced the law to be suspended and to be put to a referendum in November.

That ballot, given what’s at stake and the cost of TV advertising, promises to be even more costly, and some local estimates expect $150 million to be spent, as each side tries to convince the public that jobs are at stake — oil and manufacturing jobs on one side, and cleantech jobs on the other.

The state’s largest energy utility, Pacific Gas & Electric Corp, is supporting AB32 and has been joined by hundreds of other companies, even though they are waging a separate battle on whether the local governments would be allowed to break its monopoly and establish their own utilities.

But the growing interest around AB32 is the fear in the high emitting sectors such as the coal industry who see it as a proxy for similar battles being wages over climate legislation in Washington.

They fear that the law could follow other decisions made in California that have then been adopted throughout the nation. According to one report, coal interests have chipped in $4 million to a group campaigning against AB32, and will likely contribute more.

At the very least, the dispute appears set to transform the Californian gubernatorial into the first that revolves around climate change.

Whitman has flagged she wants to suspend the legislation for a year, fearing it might kill jobs and worsen the state’s recession.

Her opponent in the November election to replace Schwarzenegger, the Democrat Jerry Brown, sees the legislation as crucial to the development of a green economy, jobs, and economic expansion. And polling on AB32, and the measure designed to repeal it, Proposition 23, suggests the existence of a large bloc of independent voters who, for now at least, leans toward the Democratic position.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey