How do you stop the Governator? California State Treasurer Phil Angelides, 50, who plans to challenge Arnold Schwarzenegger for the governor's seat in 2006, is looking to a new, environmentally conscious investing program that he hopes will generate political returns for him -- along with investment gains for the state's retirees.

Last month Angelides announced a plan to goad the state's biggest public pension funds, CalPERS and CalSTRS, into directing $1.5 billion toward environmentally responsible companies and the development of clean-energy technologies. One third of that sum would go into venture capital and private equity.

If CalPERS and CalSTRS cede to Angelides's prodding -- he maintains a seat on both entities' boards -- his Green Wave program will be more like a tsunami rolling across the venture capital world: Environmentally friendly investments totaled just 6.5 percent -- a mere $1.2 billion -- of 2003 venture funding in the U.S. and Canada, according to research group Cleantech Venture Network. No one doubts that the pension inflows could have a salubrious effect on start-ups (and perhaps help restore a few chinos-and-Tevas jobs to Silicon Valley). Whether the state plans can profit in a sector that has historically been fraught with flops is unclear.

Angelides insists he isn't forgoing investment gains to woo voters, citing Californians with capitalist bona fides as the program's inspiration: legendary venture capitalist John Doerr of Kleiner Perkins Caufield & Byers and Sybase co-founder Robert Epstein. "In a world of choices," Angelides says, "there are plenty of places where we can get good returns for our pension funds -- and good returns for society."

Both funds seem receptive. The CalPERS board will consider green investing opportunities this month; CalSTRS is also researching the matter. "Right now the energy sector -- traditional and non -- represents about 4 percent of our $5 billion private equity portfolio," says CalSTRS CIO Christopher Ailman. "We've talked about doubling that percentage, but it'll depend on the opportunities."