Q&A: Arnold Schwarzenegger - The Germinator

Fast Company: How do you see the relationship between government and business?

Schwarzenegger: We get a lot more done when we create a great partnership to tackle problems. Whenever government does something alone, inevitably it fails. Why? Because even if we include Democrats and Republicans and Independents and say, "We've got the best brainpower," that's only the public sector. We need the best brainpower from the other half, the private sector. The important thing, as we're creating a vision and setting guidelines, is that we're working with business. We can say, "We want to reverse global warming and go after it from every angle without hurting business." We want to show we're friends and not the enemy.

FC: California's Global Warming Solutions Act is the first environmental law to require companies to dramatically reduce greenhouse-gas emissions--by 25% to 1990 levels. How do you make that sort of mandate palatable to companies?

Schwarzenegger: We want to use a market-based system to give businesses incentives. That's why the cap-and-trade system is a brilliant idea. We're using the typical government "stick" approach--there will be an emissions cap--but we're also recognizing that that alone could hurt businesses and the economy. So we say, "Okay, let's add the trade mechanism so we can accomplish both." We inspire businesses to make the changes as quickly as possible. If they get below the cap, they can trade emissions credits and make a profit while helping a company that can't make as quick a turnaround.

FC: So you reward leading-edge companies. How else are you moving markets to pursue your environmental goals?

Schwarzenegger: With new fuel standards, we're trying to create alternative fuels. [By 2010, California's oil refineries and gas suppliers are required to show how they'll incorporate alternative fuels to reduce carbon emissions by 10%. In January, the governor announced that California, the world's 12th-largest greenhouse-gas emitter, will lower emissions that much by 2020.] We have a very good relationship with the oil companies. I tell them, "Look, we're not saying a different company should be providing the alternative fuel. You could provide it and you could be making the money." We want them to see, here's a great opportunity. This is a new market. This is a new business that we can create here with clean energy that no one has ever asked for.

FC: Where does this notion of using the free market as a mechanism for change come from?

Schwarzenegger: I come from a business background. I studied business in college, and I was always interested in the business side of everything. In all I've ever done--you know, bodybuilding, fitness, the movie business--I've always looked at it not only as the joy of doing the sport or the joy of acting but also, how do we make $1 into $10? How can we make a business out of it? Because everything has a business aspect.

FC: What do you mean?

Schwarzenegger: You can be the greatest painter, but if you don't know how to market your work and showcase it in the right frame and the right gallery, how successful can you be? All this stuff is part of the business. It's marketing. So if you look at everything with that spin and acknowledge that you need this in order to be successful, that helps you. It helped me in my promotion of movies. I recognized that actors in the 1970s and 1980s never went overseas to promote their movies. I said, Wait a minute, the globe is our marketplace. So I went to Italy and France and Spain and India and Japan and Australia, and my movies grossed two-thirds overseas and one-third in America. Normally, it was the other way around. But I was able to increase my salary and increase my partnership because so much more money came in.

FC: Are there parallels between promoting movies and promoting policies such as greenhouse-gas reductions and universal health care?

Schwarzenegger: Nothing changes when you're talking about health care. You still have to market it the right way and make people understand it. You have to get people to participate. That's important. People get very creative if you include them. There are these very smart people, not only in my state but all over the country, who come in and say, "Hey, guys, I heard that you listen to ideas. I have a great idea." Now it may be a bogus idea, but it's worth listening to find out.

To get everyone on board and move the agenda forward, we say, "How do we make it hip?" rather than "Here's another government regulation." We don't want to drag it down. We want: Here's a brilliant idea on how we can make more money and serve more people and insure more people and make people healthier. Here's a great idea on how we can be innovative and reduce the amount of fossil fuel we're using.