With California facing additional threats of investment leakage, the anxiously awaited decision on Proposition 23 will be levied on Tuesday. Prop. 23 aims to suspend the state’s greenhouse gas law that was in 2006. The law mandated substantial cuts in California’s greenhouse gas emissions by 2020.
The Silicon Valley venture capitalists are in clear objection to the potential ratification of Prop. 23. These venture capitalists have a major stake in the clean technology firms that have sprung up, and thus their investments are at risk if such a proposal were to pass. Jim Watson, managing general partner at the venture-capital firm CMEA Capital is ready to play hardball. “If lawmakers nationwide block legislation that benefits these clean-tech firms,” he says, “we have to start thinking about moving a lot of our investment dollars to China.”
Venture capital investment in California, specifically in clean-tech companies has been on the decline, but has been increasing rapidly in Asia. Prop. 23 is the latest factor to perhaps speed up that investment leak. What I am especially interested in covering this story is the struggle within the private sector that is taking place over Prop 23. While the venture capitalists may lose money on their investment as a result of this, existing firms that emit greenhouse gasses will benefit immensely. A thorough analysis of the economic implications of this proposition on both sides of the debate is required before any sort of affirmation of one position can be made.
It’s an interesting struggle between the established business heavyweights who serve to benefit from Prop. 23 and the risk taking innovators who oppose it. Personally, I feel the proposition is going to pass, and the entrepreneurs may once again be left out of the rain.
Sources: The Wall Street Journal, California Voter's Guide
Sources: The Wall Street Journal, California Voter's Guide
I think it will interesting to see what happens with proposition 23 and the effect it has on venture capital investment in green energy not only in California, but nationwide. From an economic perspective if proposition 23 passes it could signal a change in the alternative energy business world in which China is the global leader in producing energy efficient products. In addition it will be intriguing to see how it affects the United States’ standing internationally in terms of cutting down on greenhouse gases.
ReplyDeletePersonally, I hope Proposition 23 does not go through, and that even further incentives are provided for clean energy companies in America in order that we may greater our foothold of this industry we once dominated. I believe that America cannot continue to cut more and more industries, and depend more greatly on the service industry alone. Governor Arnold Schwarzenegger believes that California needs to fight more for the clean energy market and he believes the federal government needs to fight for it as well. He stated that California was at the vanguard of solar technology 20 years ago, but now it is overshadowed by China's progress. I agree that our nation cannot continue to give up its vital high tech future for companies that continue to thrive in the image of progress that was characteristic of the Industrial Revolution.
ReplyDeletehttp://abcnews.go.com/WN/california-gov-arnold-schwarzenegger-time-office-future-plans/story?id=11983932