Nine lessons about the green economy

Laguna Niguel, Calif. (Fortune) -- Fortune held its second-annual Brainstorm Green conference last week at the Ritz-Carlton in Laguna Niguel, Calif. The mix of people from the worlds of sustainability, policy and senior management of Fortune 500 companies was nearly perfect, with the added juice of luminaries like Bill Ford (a longtime environmental "Bolshevik" - his word - of the auto world) and Bill Clinton, who unsurprisingly is well-versed and inspirational on the subject of constructive ways to improve the environment. Here is an updated and enhanced version of my observations from the conference.

1. Cap-and-trade is a foregone conclusion. Marc Gunther hosted a heavyweight panel Monday night that included industry heavyweights like lawyer Bill Bumpers, enviro honcho Fred Krupp, NRG Energy chief David Crane, and Jim Rogers of Duke Energy (DUK, Fortune 500). To a man, they think the U.S. will have a carbon-trading scheme passed by Congress and signed by President Obama by the first quarter of 2010 at the latest. That expert opinion surprised this non-expert. I thought the overwhelming conventional wisdom was that the Obama administration has downgraded its ambitions for the so-called cap-and-trade plan. I left the panel unsure if the panelists are engaging in wishful thinking or if the conventional wisdom is wrong. Indeed, the most sensible betting is that if cap-and-trade does pass it will be in such a watered down version that its environmental impact may be minimal.

2. One day all cars will be electric. At least that's how I heard Tesla and Better Place investor Alan Salzman say it. It struck me as odd that in our lifetimes we'll replace the 100-year-old and inexpensive gasoline infrastructure. I also wonder if we'll run out of coal if we try to go all-electric. Salzman's response: I'm not forward-thinking enough, and solar, wind and even nuclear will supply plenty of electricity to replace coal. (A really fine recent article by The New Yorker's Peter Boyer has great background on GM's electric-car thinking.

3. Ford's potentially winning strategy: Making lots of bets. Executive Chairman Bill Ford presented the face of a Detroit survivor in an interview with Fortune Managing Editor Andy Serwer. He explained that Ford's approach to all the competing forms of alternative-energy vehicles is to pursue them all -- electric, hybrid, biofuels - but to do it on a single global platform to avoid expensive duplication in multiple markets. It may sound like a wishy-washy "platform agnostic" approach, but to hear Ford describe it, it gives his company badly needed flexibility. Given that Ford (F, Fortune 500) is the sole unbailed-out automaker with the least likelihood of going bankrupt, Bill Ford had a lot of credibility right now.

4. Radical environmentalists are working with corporate America. Author Paul Hawken gave Marc Gunther a fascinating interview under the stars over dinner. He said he's a "slut for change," giving a compelling explanation of how he consults with companies like Wal-Mart (WMT, Fortune 500) and Ford. This guy is interesting. For those of us unfamiliar with "bio-mimicry," it's a whole new topic worth checking out. He said given the problems facing the earth it's too late to be "right or righteous," and that's why he's willing to sit down with (and, apparently, take money from) just about anyone if they're sincere about solving problems.

5. Your electric bill will look like your cell-phone bill. A smart-grid breakfast panel providing a neat window into how startups, like Silver Spring Networks, and utilities, like PG&E (PCG, Fortune 500), are developing systems that will help electric networks communicate better with their customers. The real opportunity here is for electricity generators to get a better sense of where their power is being used and adjust accordingly to produce less and therefore to lower costs. A byproduct will be that consumers will be able to monitor and adjust their behavior according to pricing information they receive from utilities, much the same we currently monitor and adjust our cell-phone usage. "Smart grid" is one of those buzzy topics that industry people buzz about but the rest of us don't get. That will change when utilities stop talking and start delivering services, which they seem set to do. A good primer on the smart grid concept, by the way, is Jeffrey O'Brien's IBM story in the current issue of Fortune. An interesting bit of criticism about smart meters appeared in Monday's Wall Street Journal.

6. Shai Agassi has it all figured out. If you don't know about Shai, then you haven't read any of the many of his electric-car-charging-infrastructure company, Better Place. He presented at our conference, and he said that at just one million cars, the total price of an electric car will be below a car with a gasoline engine. Hmm. About 9 million cars will get sold in the U.S. this year. And will all one million need to be part of Better Place's network? Incidentally, a bevy of auto-industry experts politely disparaged Better Place in a subsequent panel, most convincingly Bill Reinert of Toyota who said car batteries need to be weather tight and that they mix extremely poorly with weather. (Battery changing stations are a key component of the Better Place idea.) This topic will only get more interesting.

7. Toyota sees a future where cars aren't made for individuals. Yes, Reinert also said that. He's thinking way into the future, but he's talking about issues like urban congestion, pollution and other reasons why it's unrealistic that individuals will buy their own cars. It's wild that Toyota is thinking about that. By the way, Henrik Fisker sees a different future. His Fisker Automotive is building a gorgeous $87,000 plug-in electric hybrid car that will get 100 miles per gallon. He figures all his customers will have a garage to plug in their cars, something Toyota knows isn't feasible for all Prius owners. For $87,000 it's a fair bet a buyer will have a garage.

8. Clean coal is anything but. Coal is a nasty, pollution-emitting, mountain-eroding, smelly substance. It also powers about half the electricity generation in the United States and about 70% of the world's power. Hence the hunt for "clean" coal, an expression that provokes waves of controversy all by itself. Making coal clean involves capturing and then essentially hiding the carbon dioxide that is emitted in the coal-burning process. It's something the coal industry supports as a way to improve its lot without doing away with its business. Michael Morris, CEO of American Electric Power (AEP, Fortune 500), spoke Tuesday about a pilot plant AEP is building in West Virginia to pursue so-called carbon sequestration. Mike Brune, executive director of the Rainforest Action Network, told Morris thanks but no thanks. He says we've got to do away with coal. Period. Anything short of abolition guarantees a fouled environment, a dead coral reef, a nonexistent polar ice cap. And that's before things get really bad. Between Brune and Morris (metaphorically but not, alas, physically) sat David Hawkins of the Natural Resources Defense Council, who argued passionately and effectively that allowing the industry to embrace cleaner coal technologies is the only politically acceptable way to achieve meaningful climate-change legislation.

9. E-waste is pretty awful too. A sleeper topic, e-waste refers to the toxic stuff inside our TVs, cell phones, laptop computers and other devices that we think we're recycling when we drop them off at collection sites but instead are exported to developing countries where their reclamation can be a foul, dangerous process. What we learned during our panel was scary. Well meaning companies like Sony and Hewlett-Packard (HPQ, Fortune 500) sponsor costly take-back programs. But even they can't be certain that their recycling partners behave honorably after they cart away the used computers. One problem is that it's only illegal to export old cathode-ray-tube TVs. The rest, while undoubtedly immoral, is legal, so all sorts of manufacturers turn a blind eye to the sneaky export of the stuff. (It's far cheaper to send it away by the containerload than to find a reputable and audit-worthy recycler in the U.S.) One company that oversees this rigorous process for clients is Redemtech. Its president, Robert Houghton, tells me true audits are incredibly tough to come by. National legislation to replace a quilt work of state and local rules would help. That's what Barbara Kyle of the advocacy group Electronics TakeBack Coalition is trying to do. From our afternoon discussion on Tuesday it's clear that there's little national consensus and that solutions to this sad problem are a long way off.

Editor's note: A slightly different version of this piece first appeared on CNNMoney.com on April 27