Mixing business and government

Last week, Gov. Arnold Schwarzenegger's team of senior environmental advisors ended a trip to Europe with executives from Chevron, PG&E and other corporations. The trip was designed to study Europe's efforts to curb global warming, but it also spotlighted how the Schwarzenegger administration sometimes deals with the companies it regulates.

It's called "constructive engagement" - treating corporations under regulatory control as partners rather than enemies to be beaten into submission. The agency that regulates California workplaces, Cal-OSHA, often relies on cooperative agreements with company owners rather than threats of huge fines to improve conditions. CalPERS also has attempted to use its tremendous wealth to coax rogue states into ending human rights abuses.

But now, there is more criticism over an agreement between the University of California and BP, the oil-producing giant. BP has committed to spending $500 million on alternative fuels research at UC Berkeley. Jennifer Washburn with the New America Foundation says it's a bad deal that "dispenses with numerous traditional safeguards designed to protect the university's independence. It grants BP unusual control over the institute's research agenda, makes no mention of peer review, downplays commercial conflicts of interest and contains provisions on publication that would violate UC's written policies."

"As such, the alliance would undermine the university's academic freedom, its ability to perform independent research and broadly disseminate results. And, possibly, it might undermine the public's trust. ... In short, for $500 million, the plan would allow BP, a company valued at $250 billion, to turn an academic research institute into its own profit-making subsidiary."

Schwarzenegger (shown with Ross Pillari, president of BP America in 2006) has done several events that have burnished BP's image as environmentally conscious. The UC agreement, announced by Schwarzenegger on Feb. 1, could provide a cautionary note as regulators begin implementing global warming legislation under AB 32. California business has a huge stake in the regulations, and just how embedded they become with government will be closely watched.

Meanwhile, Schwarzenegger is continuing his PR tour on global warming. He will appear on the April 22 episode of MTV's "Pimp My Ride," which transformed a 1965 Chevy Impala to run on pure biodiesel. (Schwarzenegger converted one of his Hummers to biodiesel as well.) The Impala was turned into "an extraordinary 800 horsepower biodiesel 'Clean Machine' that achieves 25 mpg," MTV announced today.

(Photo: Paul Buck/EPA)