Venture capitalist and former California Controller Steve Westly worked with California Gubernatorial candidate Meg Whitman at eBay, but he's not a big fan of her plans to suspend one of the state's regulations for curbing greenhouse gases.

"That would be a stunning step in the wrong direction," Westly said during a recent interview during the Sustainable Capital Forum sponsored by investment bank Wood Warren. (see video.) "Most of the people I know throughout Silicon Valley realize that to be a colossal mistake. This is the highest growth job segment. This state's job engine for the future is in clean technology.

"It is one of the key reasons you will see a Democratic governor in 2010," he added.

Last year, Whitman, the leading Republican candidate for governor, published an op-ed piece last September claiming that AB 32--which seeks to create mechanisms to drop greenhouse gas levels to 1990 levels by 2020 and below 80 percent levels by 2050- and the regulations surrounding it would lead to job losses in the state. As a result, she's promised to put a moratorium on it.

"Signed by Gov. Schwarzenegger in 2006, AB 32 may have been well intentioned. But it is wrong for these challenging times," Whitman wrote." The governor has the ability to issue an executive order putting a moratorium on most AB 32-related rules. I urge him to do so.  And if he does not, I will issue that order on my first day as governor."

Fat chance getting Arnold to act on that suggestion. Schwarzenegger champions AB 32 (also called the Global Warming Solutions Act) and other green policies passed during his time in office as his chief accomplishments. It was also one of those increasingly rare moments of bipartisanship: the original author Fran Pavley is a democrat. The governor has also obtained tax and other credits for green manufacturers: if there's a ribbon cutting ceremony at a factory, he's there.

Whether Whitman would actually go forward with her AB 32 plan-which often gets prominence in the radio ads the multimillionaire currently carpet bombing the airwaves with-remains an open question. She talks about suspending it, but some of the fastest growing employers in the state come from green tech and energy efficiency. Do you kill actual jobs to save jobs that might go away?

Green initiatives also seem to enjoy strong support in Silicon Valley, the entertainment world and in real estate. (LEED certified buildings tend to achieve higher rents and contractors who remain working report an upswing in LEED projects.) And there are enough vague caveats in her statements to let her wriggle free. Nontetheless, expect to hear more as the election moves forward.

Governments historically often helped jumpstart new markets through regulations and funds, Westly added. That's how we got telephones and railroads. The economic benefits of going green are becoming apparent across the U.S. as well.

In any event, Westly is an interesting character. Other things on his mind:

--He is a fan of investing in companies that can exploit waste heat. His firm, in fact, has already invested in a specialist in China. "China is far ahead because the country is covered in smoke stacks" that emit heat.

--Battery start-ups might have to get bought before they get their big sales contracts. "If you are a car company like Tesla or Nissan you are not going to want to take a chance on a small guy. You are going to wait for Sony or Samsung to buy them," he said.

--IPOs could take off this year. In turn, that could slow down the pace of acquisitions.

There's more on the video. Forgive the ambient noise. It was filmed in a restaurant under low light conditions. (Your transparency in the media moment for the day.)

 

Tags: ab 32, california, emissions, green, greenhouse gases, job creation, solar, talk to meg, tesla motors, waste heat, westly, whitman