Robert Novak’s column today is devoted to attacking an upcoming California ballot initiative, the Clean Alternative Energy Initiative, which would impose a severance tax on California oil producers to create a $4 billion investment fund “to help advance clean energy technologies.”
The thrust of Novak’s argument is that the initiative will harm California’s economy. For instance, he warns Gov. Arnold Schwarzenegger (R) against endorsing the measure since “it will be hammered home for the next five months that the oil initiative will mean higher prices and a slower economy.” Novak justifies this conclusion by citing a report by California’s nonpartisan Legislative Analyst Elizabeth Hill:
[According to the report, the] severance tax could reduce property tax, income tax and gasoline tax revenues. The report continued that the tax “could result in a reduction in economic activity reflected . . . in a reduction in jobs.”
But Novak leaves off the critical last few words of that sentence. Here’s the actual report:
To the extent that the measure reduces investment in oil production, the measure could result in a reduction in economic activity, reflected, for example, in a reduction in jobs and/or capital purchases related to the oil industry.
Yes, it’s true: a ballot initiative designed to shift California away from polluting fossil fuels to clean renewable energy sources may result in a loss of jobs in the oil industry. This isn’t exactly a shocking revelation. The more important question is whether those lost jobs will be replaced by new jobs in the alternative energy sector, and it turns out the report Novak cites weighs in on that very question:
[U]sing revenues derived from the severance tax to invest in new technologies may spur economic development in California. … [T]he benefits to the economy from this development may offset, to an unknown extent, any negative economic impacts of the measure.
In fact, economists at UC Berkeley’s Goldman School of Public Policy estimate the initiative “will help create new industries, technologies, and tens of thousands of good paying jobs focused on renewable energy, energy efficiency, clean alternative fuels and clean alternative fuel vehicles.”
Needless to say, none of that made it into Novak’s column.