(FORTUNE Magazine) – Hurrying through a Washington, D.C., hotel, Amory Lovins, a balding, mustachioed man resembling a hyperkinetic Hercule Poirot, suddenly veers over to a wall sconce and hops up to check the light inside. "Incandescent," he observes. "Odd." The lights in an exit sign nearby, he explains, would make a Scotsman smile--they're power-conserving LEDs, like the little lights in computer peripherals. Yet for some reason the hotel hasn't replaced its incandescent bulbs with watt-saving compact fluorescents, a simple move that would cut its electric bill by thousands of dollars a year.

He is more than a little piqued by the mystery. In fact it illustrates a form of heedlessness that's vexed him for 30 years. Lovins, a senior statesman of the green movement, is the expert on energy efficiency. Everywhere he goes he sees the equivalent of unclaimed thousand-dollar bills lying around in the form of neglected savings. He estimates, for instance, that the nation's $220 billion annual electric bill could be halved with measures that would mostly pay for themselves in a year. "That's not a free lunch," he quips. "It's a lunch you're paid to eat."

But there's no time to investigate the case of the wanton sconce. As usual, his schedule is utterly devoid of wasteful blanks, and soon he's due at the Capitol to kibitz on energy policy. Lovins believes that in the wake of Sept. 11, a "teachable moment" on energy security is at hand. Trying to make the most of it, he helped convene a blue-ribbon committee to lay out a centrist vision on improving America's energy outlook. The bipartisan group, known as the National Energy Policy Initiative, wound up endorsing moves like raising fuel-efficiency standards for vehicles and rewarding utilities for promoting conservation. Now he's in town for the release of its report to Congress.

Washington is an odd venue for Lovins. Not that he lacks clout in high places--he has briefed more than a dozen heads of state on energy. Policymakers have sought him out since 1976, when he published a prescient piece in Foreign Affairs auguring, among other things, that rising energy efficiency would let GNP grow faster than energy consumption. (That now obvious fact blind-sided most energy strategists--many didn't get it until the 1980s oil glut and price crash.) Still, Lovins has about as much taste for inside-the-Beltway wrangling as Bill Gates does. He has long felt that when it comes to saving the planet, the private sector is where it's at.

That view seems entirely mainstream now that terms like "sustainable business" and "green development" are in vogue. But Lovins started espousing it in the 1970s--back when such locutions would have been dismissed as ludicrous oxymorons. He also acted on it: While working in London circa 1975 for an activist group called Friends of the Earth, he regularly bicycled over to Royal Dutch/Shell's headquarters to hobnob with the oil company's planners. The "think and do tank" he now co-directs, the Rocky Mountain Institute in Snowmass, Colo., follows the same pattern. Though nonprofit, it earns about half its revenues consulting on efficiency.

In short, Lovins is renowned as a Hero for the Planet, as Time magazine anointed him, because he has probably done more than anyone else to foster the greening of business. That trend represents the best news on the environment in decades. To put it in perspective, consider a three-part sketch of the environmental movement. First came the era of the awestruck outdoorsman--its archetype was John Muir, an energetic Scottish immigrant who got Yosemite socked away for posterity. Then came the time of dark prophets, beginning with Rachel Carson, whose galvanizing 1962 book Silent Spring warned of the insidious damage from toxic chemicals.

Now Part III is leafing out, defined by warming relations between green activists and their former corporate adversaries. Environmentalists are increasingly enlisting the market's invisible hand rather than slapping it, a change that's restoring the upbeat tempo of the movement's early days. Lovins perfectly embodies this sanguine, can-do spirit. Says Ralph Cavanagh, an energy expert at the Natural Resources Defense Council in San Francisco: "What makes Amory unique is that he has this relentless optimism about the future that's very compelling. It's been good for environmentalism and a scourge to its critics."

Lovins isn't lacking for the latter. Deep-dyed greenies say he is naive to trust the market, while the far right calls him a utopian dreamer. But the critics haven't scored many points against him. Lovins is a demon for details and famously clever--arguing with him is like trying to walk into a well-aimed fire hose at full gush. It wasn't for nothing that Harvard admitted him at age 16; that Oxford made him a don (in physics) at 21; that he has been awarded seven honorary doctorates; that the MacArthur Foundation gave him a "genius" fellowship; that he has won nine major prizes; and that the Wall Street Journal in 1989 named him one of the 39 people most likely to change the business world.

Still, when enthusing about efficiency, he's known for giving short shrift to the inertia that keeps things like incandescent lights in place. And sometimes he gets carried away by his command of minutiae. "Amory wants to tell you everything he knows and prove it with all the technical details," says L. Hunter Lovins, his longtime co-author and ex-wife. (They were "amicably" divorced in 1999.) "You should see us writing together. Folks think we're going to kill each other."

A self-described lawyer-cowboy, Hunter met me in her office at the Rocky Mountain Institute clad in a Stetson, jeans, and a rodeo "trophy buckle" about the size of a pickup's rearview mirror. She co-directs the institute and rides in rodeos in her spare time--she won the buckle tearing around a cloverleaf "barrel-racing" course on horseback. Like Amory, she has a passel of prizes and honorary doctorates. But the award she's proudest of was for saving a choking victim's life as a member of the local volunteer fire/rescue squad. Her down-home style complements Amory's nerdiness to a T.

Their 1999 book Natural Capitalism is arguably the defining document of the green-business era. Co-written with Paul Hawken, founder of catalog retailer Smith & Hawken, the book cites an eye-opening array of businesses that have raised profits by conserving. Example: Interface, a carpet-tile maker in Atlanta, added $67 million to its income between 1994 and 1998 by cutting waste, which helped triple its earnings.

Perhaps the book's most provocative parts analyze why waste often seems sensible. For instance, many managers see energy-saving programs as not worth the effort, since energy typically accounts for only about 2% of costs. But wait: The saved dollars drop directly to the bottom line, where in percentage terms they tend to have a far larger impact.

Many executives simply aren't aware of the stunning returns possible from efficiency investments, adds Ken Nelson, a former Dow Chemical manager mentioned in the book. Nelson, who left Dow in 1993 to become a consultant in Baton Rouge, ran annual contests at the company's Louisiana unit in which employees vied to come up with the best energy-saving proposals. "I thought it was a really dumb idea at first," he says in an interview. Wrong. During the 12 years he oversaw the program, it racked up savings of $110 million a year with steps as simple as lowering the pressure inside steam turbines. The changes paid for themselves, on average, in about six months.

Perhaps the biggest deterrent to conserving is the Jimmy Carter problem--the idea that conservation means austerity, which the former President fostered when he lowered the White House thermostat and donned a sweater during the 1970s energy crisis. About the time Carter put on his cardigan, "Hunter and I concluded that we were uncomfortable telling other people how to live," says Lovins over sushi at the Rocky Mountain Institute. "So we decided to focus on technical means of raising productivity--you can get not just the same services but better services, with less resources and money."

Nowhere does that rosy idea ring truer than at his institute's headquarters building, which multitasks as his home, office, and alpine banana farm. Erected a few miles from Aspen's ski slopes in the early 1980s, the rambling, superinsulated structure has no furnace, yet remains comfy through winters in which the temperature outside can drop into the minus 40s. Its "passive solar" heating center is a built-in greenhouse the size of a large living room--besides supporting a small stand of tropical fruit trees and a mini fish farm, it sponges up sunlight all day, storing it as heat in massive stone walls and the foundation to help keep the place warm at night.

Resplendent with huge oak beams, hot tub, and indoor waterfall, the building is a showcase of economy without sacrifice. Rooftop solar cells supply much of the electricity, which is banked in industrial-strength batteries. A videoconferencing system lets Lovins beam himself across the planet while watching the sun set on a 900-year-old juniper tree silhouetted on a nearby ridge. The custom-built refrigerator's heat-emitting parts are above the food compartment--where, of course, they should be. The institute dog, now deceased, doubled as a backup heater on very cold days: "He put out 100 watts when you threw the ball for him," deadpans Lovins.

The structure's efficiency extras, he says, save 99% of its heating energy and 90% of its electricity, yet added only $6,000 to its construction costs--they paid for themselves in ten months. But is it all merely a one-off, hothouse wonder? Lovins is ready for that question--it was posed to him over dinner in 1989 by Carl Weinberg, former research director at Pacific Gas & Electric, a San Francisco utility.

"Amory was considered a nut in the utility industry," says Weinberg, now a consultant in Walnut Creek, Calif. "He'd been going around the country saying you could cut 75% of the energy use in new homes without adding to their costs. I asked him if he'd be willing to put that to a test."

With Lovins advising, Weinberg arranged for the construction of a superefficient house in suburban Davis, Calif., that has an ordinary look and feel. After rigorous analysis, PG&E reported in 1996 that the house consumes 52% less energy than a typical new one, and at the same time cost $4,490 less to build. The outcome was close enough to Lovins' prediction that "everyone had to admit he was more right than wrong," says Weinberg.

Importantly, the project vindicated one of Lovins' most stunning claims: If you think big enough, you can break the law of diminishing returns. Consider how planners typically see energy-saving features: After the low-hanging fruit is picked, ever less cost-effective ones remain, so the gain goes down as the fiscal pain rises. Thus installing more insulation than the norm usually seems to be a money-loser. But if you install a whole lot more, and add high-end windows and a few other seemingly pricey extras, you can dispense with the furnace, saving a bundle of money that more than offsets all the extra costs. That's why the Davis house cost less to build--it has no furnace and stays cool without air conditioners.

If Lovins is right, the same thinking will revolutionize cars. To prove it, his institute in 1999 spun out a for-profit company, Hypercar Inc., to design amenity-packed, ultra-fuel-efficient vehicles. Recently the Basalt, Colo., startup unveiled a nifty prototype body for a 99-mpg SUV that it claims would be safe, peppy, and affordable, thanks to a radical design that minimizes overall costs.

Hypercar's quest to light a fire under carmakers may be quixotic, but it is turning heads: Lovins and company (he's chairman) have already won an industry design award--the Nissan Prize--and Car magazine even ranked Lovins as the industry's 22nd-most-powerful person. "I never expected to be the chairman of a car development company," he muses. "But life is full of surprises."

True. Who would have thought that three decades after Lovins helped to block a project by Rio Tinto, a London-based mining company, it would recently have invited him to advise its top brass on conservation? Or that two decades ago Thomas Moorer, chairman of the Joint Chiefs of Staff under President Nixon, would look to Lovins for guidance on terrorist threats to the U.S. energy infrastructure? (Moorer even co-authored the introduction to the Lovinses' seminal 1982 book on the topic, Brittle Power.) Or that both BP, the British energy company, and Shell's recently retired CEO, Mark Moody-Stuart, would invest in Hypercar, whose goal is to drastically reduce demand for oil?

Actually, Lovins isn't all that surprised when business leaders embrace his agenda: "If I were a theologian," he says, "I'd believe in redemption."

There he goes again--the man can't resist droll throwaway lines. He begins the story of his life with another one: "I was the ugliest baby ever born at Garfield Memorial Hospital" in Washington, D.C. The first sign that he was truly abnormal, though, was his refusal to talk until he figured out how to say complete sentences at age 2, says his older sister, Julie Lovins, a linguist and computer programmer in Mountain View, Calif.

His gifts soon showed up in the basement, where he and his dad, an inventive engineer, built ham radios from spare parts. In his teens, he moved on to building complex lab instruments and, at 18, won a patent for a novel circuit--about the time he first published a study in a major physics journal. In his spare time he became an accomplished pianist and Latin scholar. At Harvard he continued as a polymath until the school told him he had to pick a major. "That wasn't user-friendly," he says, so he transferred to Oxford, which was. After struggling to classify Lovins for several years, its Magdalen College gave him a physics degree. But by then he was already following his nose in a new direction--he had conceived a passion for energy and environmental issues.

The latter brought him to the attention of the late David Brower, a legendary John Muir type who founded Friends of the Earth. Brower enlisted him in the fight against a strip-mining operation that Rio Tinto had proposed in Snowdonia National Park in north Wales. The proposal was eventually scuttled, thanks in part to the appearance of a book in 1971 filled with stunning photographs that Lovins and a friend took in the park's craggy mountains.

The episode was Lovins' first and last foray into what he calls "the old-fashioned environmental business" of anticorporate campaigning. Joining Brower's group in London, he instead turned to writing closely reasoned pieces on energy policy. Shell's planners were among the first to find his work compelling--they sought him out to expand their minds. Says Gareth Price, a retired Shell strategist who met Lovins soon after OPEC's 1973 oil embargo: "Our masters had been so shocked by the embargo that you could think almost anything."

But how did Lovins consort with the enemy without losing his green stripes? Tom Burke, a former Friends of the Earth director, explains that he was far too inspiring to impugn: "Amory was clearly a lot smarter than everyone else. He could take on the best and brightest. That had a kind of osmotic effect on the whole environmental movement in Britain. We all felt we had to live up to the extraordinarily high intellectual standard he set."

In 1976, Lovins' landmark article in Foreign Affairs brought international renown. Though the piece was densely written, its core idea was simple: We should put all our energy options on a level playing field by thinking in terms of "end uses," such as hot showers and cold beers, and then letting the market pick the cheapest way to provide each one. If we did, renewable energy and conservation would often win, obviating the need to make huge investments in nuclear and coal power--the strategy most planners called for in the wake of the 1973 shock.

Hunter, then assistant director of a Los Angeles environmental group, was bowled over by the article. "I went to my colleagues and said, 'You gotta read this!'" she says. "They gave a go at it and said, 'We don't have a clue about what this guy's trying to say.' It seemed to me what needed to happen was to translate it into ordinary English so it could be taught to third-graders and senior citizens. So I did." Two years later the two met, began writing together, and, for good measure, got married.

Founding the Colorado institute in 1982 was Hunter's idea. "Amory's first reaction was, 'Oh, horrors, administrivia,' " she says. But it wasn't hard to win him over. Soon he was busy designing its building's energy-saving features, which wound up demonstrating that many of his visions were rock solid. Today the institute, with a staff of about 50, is swamped with projects--in recent years it has consulted on boosting the energy efficiency of everything from U.S. Navy ships to LucasFilm's headquarters.

Still, driving to the institute surrounded by SUVs that get less than 20 miles per gallon, I couldn't help but wonder what keeps Lovins unflaggingly hopeful in a world that must seem to him rife with ruinously clueless spendthrifts. As if on cue, about the time I posed that question to him an urgent e-mail flashed onto his computer screen with news that a Rhode Island-sized piece of the Antarctic ice shelf had suddenly collapsed, an apparent sign of global warming.

His answer, as usual, was witty, compelling, and rigorous. Unfortunately it doesn't fit the space allotted here. But Hunter offered a brief translation: "If we act like we're out of time, everybody just kind of throws their hands up and says, 'Well, let's party.' I know I would. So we concentrate on what's working, and what people can do. Let's get on with it. And if we run out of time, well, we gave it a good one."