California Venture Capitalist Doerr Helps Fund Fight for Pollution Fees

Hedge-fund manager Tom Steyer and venture capitalist John Doerr, who are defending California’s global warming laws from a challenge at the ballot box, have also put $1.4 million toward a fight over government fees.

Steyer, founder of San Francisco-based Farallon Capital Management LLC, gave $1 million last week to the campaign against Proposition 26, which would make it harder for state and local agencies to impose regulatory fees, according to California election records. Doerr, a partner at Kleiner Perkins Caufield & Byers in Menlo Park, gave $400,000.

Steyer and Doerr are two of the biggest donors to the campaign against Proposition 23, an initiative on tomorrow’s ballot to suspend the state’s planned limits on greenhouse gas emissions from power plants, refineries and factories until the economy improves. Environmentalists say Proposition 26, also on tomorrow’s ballot, could create roadblocks to the pollution limits.

“Our concern is this undermines a whole range of clean air, clean water and public health policies, including the implementation of climate legislation,” said Warner Chabot, chief executive officer of the California League of Conservation Voters, an environmental advocacy group based in Oakland.

A committee formed by the environmental group to fight Proposition 23 gave $300,000 last week to the campaign against Proposition 26, which would require certain regulatory fees to be approved by a two-thirds vote instead of a simple majority.

Fee Opposition

Oil producers Chevron Corp. and ConocoPhillips and tobacco company Philip Morris International Inc. are among the businesses that have donated money to support Proposition 26.

The California Air Resources Board, the agency in charge of implementing the global warming law signed in 2006 by Republican Governor Arnold Schwarzenegger, has already endorsed pollution fees and may approve next month a cap-and-trade program which sells some carbon dioxide permits at auction.

If Proposition 26 is approved tomorrow, it could “disrupt” the enforcement of the agency’s greenhouse-gas regulations, which are based on the “polluter-pays principle,” said Richard Frank, executive director of the Center for Law, Energy and the Environment at the University of California, Berkeley.

Business owners may sue the agency arguing the pollution fees and the auction of cap-and-trade pollution rights weren’t approved by two-thirds of the state’s lawmakers, Frank said.

Uncertainty Concern

While the lawsuits might not succeed, “just that level of uncertainty injected into this program would cause a great deal of delay and ambiguity,” he said.

Supporters of Proposition 26 say it closes a loophole that state legislators and local officials have used to disguise taxes as fees.

“The vast majority of California’s environmental fees would not be affected under the proposition,” said Beth Miller, a spokeswoman for the “Yes on 26” campaign. Still, if carbon dioxide permits in the cap-and-trade program are “auctioned off” and the revenue “used for various public policy functions, it could be a tax,” Miller said in an e-mail.

To contact the reporters on this story: Simon Lomax in Washington at slomax@bloomberg.net; Mark Chediak in San Francisco at mchediak@bloomberg.net.

To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net; Susan Warren at susanwarren@bloomberg.net.

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