Massive advertising campaigns to support the competing interests of the world’s first climate change policy referendum are about to get under away in California: and the stakes for both sides couldn’t be higher.

Californians will go to the polls in November to elect a new governor and to vote on a range of referenda, including what is known as Proposition 23, an attempt to repeal the state’s climate change and clean energy act, which in turn is known as AB32.

Australia would like to think that the defeat of John Howard in 2007 was the first poll to be influenced by climate change, and several leaders have moved on since for much the same reason.

But in California, it will be the policy itself that will be put to a direct vote of the people. And it's not seen as an environmental debate, but an economic one.

The vote is being portrayed in many ways: one commentator described it as a “fight for the future – a struggle between the industrial behemoths of the old fossil fuel economy and a coalition of environmental groups, Silicon Valley technology companies, financiers, and old-line corporations looking to profit from decarbonising California.”

Proposition 23 wants to put the clean energy bill – which includes proposals to cut emissions, set ambitious renewable energy targets and regulations, and introduce an emissions trading scheme – on hold until the state unemployment rate betters 5.5 per cent for four or more quarters.

That, effectively, means putting it on hold indefinitely, because that rate has only been achieved three times in the last 35 years, and with unemployment now more than 12 per cent, it is not expected to be repeated anytime soon, particularly, argue its opponents, if you kill the cleantech industry, which accounts for half a million jobs in the state.

The proposition is attracting greater importance because of the withdrawal of the federal climate change and energy bill in Congress. If California, which shines as a beacon for cleantech investment and initiative, is also defeated, they fear it could put the industry back by years.

“The urgency of this fight is extreme,” said one cleantech investor this week. Vinod Khosla, the largest cleantech venture capital investor, said Prop 23 “will kill the market and the single largest source of job growth in California in the last two years" and force investors to decamp to India and China. Deutsche Bank said success would be a “major setback” to clean energy in the US.

The fossil fuel economy is represented in this battle by the Texan oil companies Valero Energy and Tesoro Corp, who own facilities that rank among the highest emitters in the state, and invested more than $4 million just to get Proposition 23 to the ballot box. They did that by obtaining 800,000 signatures.

Their campaign, which they dubbed the “California Jobs Initiative”, argues that millions of jobs will be lost if AB32 is retained. They have been joined by Occidental Petroleum, the Adam Smith Foundation and, predictably, by a group of coal companies who have reportedly invested a further $4 million to kick off the advertising campaign that is expected to start after the Labour Day holiday this weekend.

This is expected to be a mere downpayment, with the Public Policy Institute of California  predicting that total campaign spending could top the $US154 million record set in 2006 by Proposition 87, a bill that proposed a levy on oil producers to fund research into alternative energy.

The $US90 million “No” campaign to Prop 87 was largely funded by Chevron Corp ($US30 million) and Aera Energy ($US27 million). The Yes campaign was mostly funded by real estate developer, film producer, and philanthropist Steve Bing, who contributed $US39 million. The NOs won the day by 54.7 per cent to 45.3 per cent.

On the other side of the current campaign stands the major Californian utility PGE, along with the likes of Google, a network of IT firms that includes Yahoo and Apple, and hundreds of smaller cleantech players and financiers, as well as environmental groups. State records show that the major initial funding to the “No to Prop 23” campaign is Thomas Steyer, the founder of San Francisco-based hedge fund Farallon Capital Management, who has pledged $US5 million and will co-chair the campaign committee with George Schulz, the Republican former secretary of state.

Other major donors so far to the No campaign, which have dubbed Prop 23 as the “Dirty Energy Proposition”, include John Doerr, the high profile greentech investment specialist with Kleiner Perkins Caufield & Byers, who has given $US500,000, and Wendy Schmidt, the wife of Google CEO Eric Schmidt , who has given a similar amount. Other supporters include Robert Fisher, former chair of the Gap clothing empire and investor Anne Getty Earhart, an heir to the Getty oil fortune. They have both donated $US250,000 to the No campaign.

The fight over Prop 23 will inevitably end in a draw in the gubernatorial campaign, where billionaire and ex eBay CEO Amy Whitman, a Republican, is doing battle with Democrat Jerry Brown. Whitman has said previously she would suspend AB32 “for a while” but has not endorsed killing it as proposed by Prop 23. Brown says he might amend some aspects of AB32 but is generally supportive. The outgoing governor, Arnold Schwarzenegger, who sponsored AB32, has railed against Prop 23 as “the work of greedy oil companies”.

At stake, though, is more than political reputation. As one unidentified CEO told the website Grist: “If AB32 is sustained by the voters of California, you will have the largest plebiscite in the history of the climate change debate cast by voters in the world’s seventh largest economy. If AB32 survives and Jerry Brown gets elected governor, I think you’ll have cap-and-trade nationally by 2013. “