As a reporter covering business and the environment, I don’t want to let the perfect become the enemy of the good. We should cheer, or at least politely applaud, the small changes that companies make to lighten their environmental footprint. But we ought not to fool ourselves into believing that incremental change is adequate to the tasks ahead—of slowing down climate change, dealing with water issues, or eventually making our economy sustainable.

Today’s Sustainability column looks at changes made by Taco Bell and Fiji Water. You’ll see that I’m unimpressed by what’s happening at Taco Bell. By contrast, Fiji deserves praise for looking deeply and systematically at its environmental impact—but its business model of shipping water across an ocean or two is flawed, to say the least. Here’s how the column begins:

You knew you could help save the earth by installing energy-efficient light bulbs or swapping your gas guzzler for a hybrid. But have you heard that drinking Fiji Water and dining out at Taco Bell are supposed to be good for the planet, too?

Fiji Water claims to have become the first big beverage company to go “carbon negative,” meaning that it will offset all of its greenhouse gas emissions and then some. “The production and sale of each bottle of FIJI Water will actually result in a net reduction of carbon in the atmosphere,” the company’s Fiji Green website. “Every drop is green.”

Meanwhile, Taco Bell, a unit of restaurant giant Yum! Brands (YUM, Fortune 500), says that it is saving water and energy by replacing steam tables and cabinets with electric grills. A Taco Bell exec says: “Whether you take shorter showers, turn off the water while brushing your teeth or purchase a Grill-to-Order menu item at Taco Bell, you can save water and impact the environment without even thinking about it.”

Well, maybe. But let’s think about it, anyway.

You can read the rest here.

Michael Milken throws a helluva party. His Milken Institute global conference in LA last week attracted such luminaries as Nobel Peace prize winner Muhammad Yunus, human genome sequencer Craig Venter, Gov. Arnold Schwarzenegger and no fewer than four winners of the Nobel prize in economics. Business guys Eric Schmidt, Sam Zell, Eli Broad, Steve Wynn and T. Boone Pickens all spoke, as did tennis great Andre Agassi, music legend Quincy Jones and comedian, writer and actor John Cleese. There was no way to see and hear it all, but here are some things that struck me as interesting…

On the U.S. economy: The four Nobel laureates in economics—A. Michael Spence, Myron Scholes, Gary Becker and Edmund “Ned” Phelps—more or less agreed that the economy, while slumping, is not nearly as bad as it might be, given the credit crunch, the massive losses on Wall Street and the ongoing housing slump. They vigorously disagreed with the bleak outlook voiced recently by Joseph Stiglitz, another Nobel laureate, who said this is going to be one of the worst economic downturns since the Great Depression.

“The American economy is performing remarkably well in light of the financial turmoil,” said Spence. The Great Depression “was a horrible episode,” Becker said. “We’re nowhere near that.” The unemployment rate is currently 5.1% and unlikely to top out any higher than 9%–compared with 25% levels during the 1930s. But housing prices are going to fall further, according to Spence, because homeowners who are waiting for prices to rise before selling “are going to lose their optimism after a while and throw in the towel.” That with further depress home values.

The most serious consequence of the current slump may turn out to be the reputational damage done to big business and the financial markets. Top execs of the big Wall Street firms continue to enjoy fat paydays, despite their reckless behavior and the resulting damage to the economy. Said Phelps: “Our friends in the financial sector have given capitalism a black eye.”

On the power of innovation: Yunus, Venter and Schmidt shared a panel, moderated by Milken, about the power of ideas and creativity to change the world. Venter talked about the genome, and about his current efforts to develop a synthetic biofuel to replace gasoline. “If we can’t do something about the environment,” he said, somewhat facetiously, “there’s no point in trying to cure cancer. We have to come up with new sources of food, fuel and water to sustain human existence.” For hist part, Schmidt talked about how Google is “chaotic by design” as it seeks to use the power of information to attach big problems in such fields as health care and energy. But it was Yunus who stole the show.

His brainchild—microcredit–has taken Bangladesh-based Grameen Bank to a scale where it has 7.5 million borrowers, about $1 billion a year in loans with an average loan of about $150 and, still, no lawyers or contracts with borrowers. Grameen America recently began operations in Queens, N.Y. Dozens of other microfinance institutions have followed his path.

Instead of worrying about whether “people are credit-worthy,” Yunus told the group, we should ask whether banks and other credit institutions are “people-worthy.” He talked about how Grameen recently began making loans to beggars, giving them about $10 or $12 each so they could but and then sell candy, snacks or small toys as they go from house to house. About 11,000 of them have been turned from beggars into door-to-door salesmen, and another 90,000 or so “are in the process of closing down their begging division,” he said.

“It will take them a bit of time,” he joked. “After all, begging was their core business.”

On strategies to fight global poverty: Michael Spence, the Nobel laureate, began with an encouraging data point: Thirteen countries since World War II have managed to achieve sustained high growth—defined as 7% annual GDP growth over a period of 25 years. The result is that today nearly 4 billion people live above the poverty level; the number was closer to 1 billion in 1980. Success stories unfolded in countries that took advantage of “inbound knowledge transfer” (meaning they learned from the developed world) and capitalized on global demand. China’s the classic example of a country that adopted western manufacturing techniques and then became the world’s most productive factory nation.

But many other poor countries are moving in the wrong direction. Richardo Hausmann, an international development expert at the Kennedy School at Harvard, noted that all of the world’s 24 rich industrial countries had their peak per capita income since 2000; they are, despite fits and starts, growing their economies. But only 58% of the 112 developing countries have had their peak per capita income in the 21st century. Others peaked in the 1960s, 1970s or early 1980s, often because they relied on an export product that fell out of favor. “Most growth collapses coincide with export collapses,” he said. Countries need to aim for more “sophisticated” export packages to insure against commodity price fluctuations.

Maria Eitel, who runs Nike’s Foundation, said the company, with help from Spence, thought through its role in fighting global poverty and decided to focus on adolescent girls. More education for girls means later marriage, fewer children, lower rates of HIV, more income that is returned to families than when men work. According to Nike, women do 66% of the work in the world, produce 50% of the food but earn 5% of the income and own just 1% of the property.

On green business: Thanks to my friend Betsy Zeidman, who works at Milken, I moderated a panel called “Green is Green” with Rand Waddoups of Wal-Mart, Eli Halliwell of Jurlique, Dave Haft of Frito Lay, Deborah LaFranchi of investment fund Strategic Development Solutions and Kevin Wall, the founder and CEO of Live Earth. Waddoups is yet another impressive Wal-Martian, obviously excited about the company’s far-reaching efforts while acknowledging (as Lee Scott has) that WMT is far from a green company and has a long, long way to go to reach its goals of generating no waste and powering itself with 100% renewable energy. Haft talked about Frito-Lay’s “net zero” plant in Arizona, which aims to get nearly all of its electricity from renewable sources. (That will enable the company to claim that its Sun Chips are made with solar power.) He also disclosed that Frito-Lay plans to dig into its supply chain to see whether its suppliers can be persuaded to grow, say, potatoes in ways that are less harmful to the environment. Since 1999, Frito-Lay companywide has reduced its water use by 38 percent, natural gas by 27 percent and electricity by 21 percent, cutting $55 million a year in utility costs, according to this report in The New York Times. To be sure, this is eco-efficiency (and not true sustainability) but it is a step in the right direction.

Interesting partnership announced today—private equity firm KKR joining with Environmental Defense Fund to come up with tools for measuring the environmental footprint of KKR’s portfolio companies. It’s the topic of today’s Sustainability column.

Here’s how it begins:

Private equity firms are renowned — and occasionally denounced — for squeezing costs out of companies they buy. Their investors say buyout funds help the economy become more efficient, and build shareholder value. Their critics allege that they do so by exploiting workers, avoiding taxes and polluting the planet.

We won’t try to settle that argument here, but it provides a useful context for Thursday’s announcement of a partnership between Kohlberg Kravis Roberts, one of the world’s leading buyout firms, and the Environmental Defense Fund, a nonprofit environmental group. Their “green portfolio” partnership — the first between a big private equity fund and an environmental group — is intended to measure and improve the environmental performance of KKR’s U.S. companies

This news is, all at once, significant, surprising and predictable.

You can read the rest here.

I covered television, and then the big media companies, for about 20 years before turning to the environment and corporate responsibility, and I have to say that I don’t miss Hollywood. Sure, show biz can be fun, but after a while it’s hard to care about who’s up in the Nielsen ratings or whether MySpace will be a big Internet hit. What I do miss are some of the people I got to know over the years.

That’s why it was great to see Peter Chernin, the second-in-command at Rupert Murdoch’s News Corp., this week at Michael Milken’s global conference in Beverly Hills. (I first met Peter when he was lowly programming exec at Showtime.) Peter wasn’t at the conference to talk about Fox or News Corp., though—he came to speak about his passion for ridding the world of malaria.

The malaria story is incredible, and revealing. Did you know that a child dies every 30 seconds from malaria? That the disease causes more than 1 million deaths a year? And that we could do a great deal to save those lives at a relatively low cost?

The deaths are “the equivalent of a World Trade Center every day. A tsunami, which drew the world’s attention, every month,” Chernin said. “And we can solve it…Shame on us if we don’t act.”

Simple and low-cost measures have proven to be highly effective ways to save lives. They include providing bed nets to people, spraying homes with insecticide, making sure those who contract malaria get treated rapidly and presumptively pregnant women in high-risk areas.

The fact that malaria is such a big problem and that we know how to solve it is what attracted Chernin to the cause. He learned about the disease, which is caused by a parasite spread from person to person by mosquitos, while he was on the board of an AIDS initiative at Harvard. Last year, he became the chairman of a New York-based nonprofit called Malaria No More.

“I’m a businessman,” Chernin said, when asked why this has become his issue. “I’m drawn, ultimately, by issues of effectiveness and return on investment. I’m paid to produce results. This is the most compelling global health crisis facing the world today.”

So what’s the problem? One problem is that, unlike AIDS or cancer, malaria kills people who are poor and live far from the U.S. or Europe—about 90% in sub-Saharan Africa, the rest in Asia and Latin America. “Most congressman don’t have a constituent calling them up and asking for help with malaria,” Chernin said. So the disease was neglected for years.

That’s changing. The Global Fund to Fight AIDS, Tuberculosis and Malaria, a coalition of governments and NGOs, has provided $3.6 billion for malaria programs since it was formed in 2002, according to this excellent article in The Washington Post. In 2006, President Bush launched a malaria initiative; the federal government intends to spend $1.2 billion by 2010. “President Bush and Mrs. Bush have been remarkable leaders on malaria,” said Chernin, a prominent Democrat and party donor. The Gates Foundation has also made stopping malaria one of its priorities.

Businesses are getting active, too. ExxonMobil announced this month that it would donate $10 million to Malaria No More. American Idol, the TV megahit on Fox, raised about $76 million last year on its “Idol Gives Back” episode, of which $9 million went to Malaria No More and $8 million to malaria-related causes.; this year, it expects to raise nearly as much.

The money goes a long way in Africa. “Money can have more of an impact on malaria than virtually any other cause,” Chernin said. It costs about $5 to make a bednet that is impregnated with insecticide and another $5 to get it to an African home; the nets remain effective for about five years. Even more remarkably, new drug therapies “will cure a child completely within three days for a cost of 37 cents,” said Sir Richard Feacham, the former director of the Global Fund, who also spoke at the Milken panel. “Thirty-seven cents to save the life of a child who would otherwise have died. This is a miracle.”

Widespread use of bednets and the drug treatments have succeeded in cutting malaria deaths in half in Rwanda and Ethiopia, according to the World Health Organization. So there’s no mystery about what needs to be done.

To see what you can do, check out Malaria No More.

Say what you will about Shai Agassi, but no one will accuse him of thinking small. Agassi, who recently turned 40, has never worked in the energy industry or the automobile business. But he trying to turn both industries upside down by getting the world to embrace electric cars. And he is making surprising progress.

Shai was the opening speaker at FORTUNE’s Brainstorm: Green conference last week, and I wish we’d given him more time to talk about his very big idea: What he wants to do is create a new kind of battery-powered car, equip metropolitan areas and eventually entire nations with charging stations, drive demand for renewable energy and, not incidentally, create a new model for selling cars and fuel.

“Project Better Place” – that’s the name of his company – “started out with a simple question: how do you run a country without oil?” Shai told me.

He wasn’t thinking about just any country; he was thinking about his home land of Israel, which wants to reduce the world’s dependence on oil, for obvious reasons. So, of course, should the United States, and not merely to reduce emissions of greenhouse gases. Oil-producing nations Saudi Arabia, Russia, Venezuela and Sudan are not exactly beacons of freedom and democracy.

As Agassi tells his story, he was on his way to becoming the CEO of software giant SAP when he left to start Project Better Place. Getting the new company off the ground was not easy. He pitched his idea to more than 200 investors before raising about $200 million. His biggest investor is Israel Corp., an Israeli holding and oil company, which invested $100 million. He also raised money from venture capital firm VantagePoint Venture Partners and Morgan Stanley, and from a handful of individual investors, including James Wolfensohn, the former president of the World Bank, and Seagram’s heir Edgar Bronfman.

He says that January 21, 2008 was “the day that changed the world.” That day, the company announced that the state of Israel would support his efforts to build a national infrastructure for electric cars, and that Carlos Ghosn, the chief executive of Nissan and Renault, had agreed to begin producing the vehicles on a commercial scale in 2010. Several months later, Shai went to Denmark to make a similar announcement—some, but not all, of the country would support his plan. He hopes to persuade several other European nations get behind Project Better Place by the end of the year. He also expects other carmakers to come along.

As Agassi puts it: “One train has left. Carlos Ghosn is in the lead. And we know where the train is going. It’s going to Jerusalem.”

How does the business work? Essentially, by exploiting what Agassi argues are the cost advantages of electric cars over vehicles powered by gasoline and, yes, you read that right—he says it’s significantly cheaper to operate an electric car than a gas-powered one, particularly with oil priced at more than $110 a barrel. (The economics work with much cheaper oil, too, he says.) The low-cost advantage for electric cars is even greater in Europe, he says, where gas prices are the equivalent of $7 to $9 a gallon.

His claim depends on a lot of assumptions—that a battery with a sufficient range can be produced for $10,000 or less, that he can bring the cost of renewable energy down by committing to buying lots of it, and that the costs of building distributed networks of recharging points and service stations will not spiral out of control.

If he’s right, the cost of powering the electric car will be about 5 cents a mile. As for a gas-powered car, you can do the math, but fuel costs for a car that gets 25 miles to the gallon with gas priced at $3.75 a gallon amount to 15 cents a mile.

Even so, there’s a problem—many people don’t want to pay an extra $10,000 up front for a battery, not knowing how long it will take for them to get their money back in the form of reduced fuel costs. So Agassi isn’t asking for that money up ront. Instead, he intends to sell his customers the cars for much less than they cost, provided that they agree to long-term service plans that will supply them with electricity, battery changes when needed, replacement batteries, etc. He estimates that he could afford to give people a free car if they agree to sign onto a service agreement for six years.

This is the cell phone model—where you get the phone for free or at low cost by signing a long term contract—brought to the auto business.

“We’re AT&T,” Agassi says. “Or Vodacar. All the car companies are the Nokias of the world.”

If all goes according to plan—a huge if—Agassi says that the switch from gas-powered cars to electric cars will be rapid. “You won’t buy a car that depends on gasoline if there is a free car on the market that doesn’t depend on gasoline,” he says.

Clearly, much could go awry with this audacious scheme. Lithium-ion batteries for cars remain unproven technology. Customers need to overcome what the automakers call “range anxiety”—meaning, will people be satisfied with a car that can go only 100 miles without recharging. (Most trips and commutes are far less, of course.) How will customers feel about swapping out their batteries for others during longer trips? And, remember, cars are emotional purchases—the first batch sold in Israel are likely to come in just one or two models, and you won’t be able to select your own color or trim.

And yet—Ghosn is a smart guy, the Israelis are no pushovers, getting the Danes to sign on further ratifies the idea and electric utility companies around the world, which would love to get into the transport business, will be cheering on Project Better Place. Here’s a Business Week article about Shai, and here’s a 25-minute video of his talk last month to a Washington advocacy group called NDN.