Proposition 23 defeated as voters back climate change laws, despite mulit-million dollar campaign from oil giants.

California yesterday retained its position as one of the global leaders in clean technology and climate change policy, after voters rejected a proposition that would have indefinitely suspended the state’s flagship climate change bill.

With results from 48 precincts have been reported, “no” votes against Proposition 23 stood at 59 per cent, representing a significant victory for green campaigners including Bill Gates, Google co-founder Sergey Brin and Avatar director James Cameron, as well as current state governor Arnold Schwarzenegger.

“This is reaffirmation that we are a country of some enlightenment,” Michael Eckhart, president of trade group the American Council on Renewable Energy told Reuters. “A majority of Californians, even in great stress of unemployment and economic demise, will still accept this responsibility. Rejecting an attempt to destroy the environment is a good thing.”

Prop 23 would have suspended the state’s AB 32 law until unemployment fell to 5.5 per cent or less for four straight quarters.

Commentators argued that the move would have effectively scrapped the legislation altogether as the state’s current unemployment rate is running at over 10 per cent and has dipped below 5.5 per cent for only two short periods in the last 20 years.

The vote means that California will retain its target of reducing greenhouse gas emissions to 1990 levels by 2020, ensuring a third of the state’s electricity comes from renewable sources by the same date, and launching a regional emissions trading scheme.

The vote represents a major victory for green businesses and environmental groups after Republican politicians and out-of-state oil companies waged a high profile campaign in favour of Prop 23, spending millions on TV ads in support of the proposition.

It sparked a “No on 23” campaign primarily backed by Silicon Valley investors who have significant interests in solar and wind energy, biofuels and electric cars, that ultimately raised $25m, more than double the Yes campaign.

Polls had consistently shown opposition to Prop 23, but after a particularly bitter campaign in a state hit hard by the recession, plus the failure of national proposals to pass the Senate this summer, green groups had feared that sufficient support might be found to pass the measure.

The proposition’s defeat is a sign that California is serious about establishing a carbon market and would provide confidence for investors in that nascent market, according to Emilie Mazzacurati, head of carbon research North America at Point Carbon.

“With the proposed regulations clarifying a lot of elements on how the market would work, and the political green light from the electorate, we expect emitters, financials and project developers to ramp up their activity out West quite rapidly,” she said. “There are still more hurdles and there may be more delays in the future, but the key is that the end goal has been reaffirmed by Californian voters.”

California now looks set to build on its reputation as a leader in clean technology after Democrat Jerry Brown defeated Republican Meg Whitman in the race to replace out-going governor Arnold Schwarzenegger. Whitman had said she opposed Prop 23, but had also signalled that she could suspend the state’s climate bill for one year as a result of the recession.