What happens when environmental fashion collides with a state’s desperate need for jobs and economic growth? That question will be put to the test when Californians vote November 2 on a ballot measure that would suspend the Golden State’s cap-and-trade law until its unemployment rate falls below 5.5%. Today the rate is 12.4%.

Proposition 23 is the number one national target of the green movement this election year. With the failure of cap and tax in Congress, the greens are trying to hold onto this remnant of their anticarbon crusade. Both sides are spending heavily, and the polls show a close vote.

California’s climate change law (known as AB 32) mandates a 30% cut in carbon emissions from cars, trucks, utilities, agriculture and other businesses by 2020, with a web of new taxes and regulations that take effect in 2012. Governor Arnold Schwarzenegger sees AB 32 as his crowning achievement and is assailing supporters of Proposition 23 as “black oil hearts [who are] spending millions and millions of dollars” to promote their own “self-serving greed.”

In reality, dozens of industries support the initiative, and Arnold never mentions that much of the money to defeat Proposition 23 also comes from energy companies. Alternative energy investors realize that without new taxes on carbon energy and mandates for “renewables” like wind and solar, so-called clean energy sources can’t compete.

When AB 32 was signed in 2006, the California economy was flying high, the state unemployment rate was under 5%, and cap and trade seemed a fashionable luxury the state could afford. Not anymore. Today there are 2.5 million unemployed Californians and the state’s finances are a wreck. AB 32 would make all of this worse.

A 2009 study commissioned by the California Small Business Roundtable found that when fully implemented AB 32 would cost the state more than one million jobs and “result in a higher cost to California households of $3,857 per year.” That’s more than the typical California family pays each year in federal income tax. A new study by the Pacific Research Institute predicts job losses of 150,000 by 2012 and 1.3 million by 2020.

Environmentalists counter that “green jobs” will save the day, as if a million Californians will make windmills and solar panels. California already leads the nation in regulations and subsidies to boost alternative energy, and it still has the third highest jobless rate in the nation.

Voters are also told the law would reduce the state’s carbon footprint and save the planet from global warming. Except it can’t and it won’t. No single state—even one the size of California—can reduce global emissions by unilaterally taxing and regulating.

Even the California Air Resources Board, which supports AB 32, acknowledged this when it said in March that “California acting alone cannot reduce emissions sufficiently to change the course of climate change worldwide.” The real objective, they said, is to set an example to move federal and international climate change legislation. But given that so many Democrats are now campaigning against cap and tax around the country, it’s highly unlikely that Congress or many states will follow California.

The state’s own fiscal auditors admitted earlier this year that there will be economic “leakage” to other states and nations from AB 32, and that California’s economy “will likely be adversely affected in the near term by implementing climate-related policies that are not adopted elsewhere.”

Most of this economic pain will be borne, not by wealthy liberals in Santa Barbara and San Francisco, but by middle class and poor Californians who work in industries whose costs will rise. No wonder a recent poll by the Public Policy Institute of California found that Hispanics are the group most opposed to AB 32. They seem to understand they will be first in line to get laid off when the law starts to bite.

With so much at stake, Prop. 23 ought to be a major issue in this year’s election campaign. Democratic candidates Jerry Brown (Governor) and Senator Barbara Boxer both oppose Prop. 23, but GOP gubernatorial candidate Meg Whitman is a fence-sitter. She calls cap and tax a job killer but favors only a one-year suspension. GOP Senate candidate Carly Fiorina is a full-throated supporter of the initiative. With her usual charm, Ms. Boxer accuses her of being “in the pocket of big oil” and “dirty coal.”

Proposition 23 faces an uphill fight against green moneyed interests, but its passage would give California a regulatory reprieve and save tens of thousands of jobs. If it fails, Nevadans and Chinese will rejoice.