The short-term human and economic costs of the Japanese earthquake and tsunami are staggering.

The long-term repercussions could be worse.

That’s because, even if the situation does not deteriorate any further, the fires, explosions, radiation leaks at the Fukushima Daiichi nuclear plant will  lead to greater scrutiny–and higher costs–for new nuclear plants.

That will make it harder to develop low carbon energy to replace fossil fuels and avert potentially catastrophic climate change.

I say this although I believe we should try to avoid a rush to judgment.

It’s hard to know what’s worse: the opportunism of anti-nuclear activists like Ed Markey, the Massachusetts congressman who only hours after the troubles began declared that

what is happening in Japan right now shows that a severe accident at a nuclear power plant can happen here

or the no-need-to-panic defense of industry backers like William Tucker who wrote in the Wall Street Journal on Monday that

If a meltdown does occur in Japan, it will be a disaster for the Tokyo Electric Power Company but not for the general public.

Oh really?

What I hope to do here is provide a little context–about the costs of  nuclear power and the alternatives.

Let’s begin with the alternatives. Thanks to the website oilprice.com, here are a few widgets that show where our energy is coming from, around the world and here in the U.S.:

While I understand that we can’t project a future based on past trends, what jumps out at me from these charts is how thoroughly the global and U.S. energy markets are dominated by fossil fuels. Note that the numbers for solar, wind and geothermal are expressed in mBTU. You have to lop off the last three digits to compare them to the figures for oil, coal, natural gas and nuclear.

Given today’s low natural gas prices, and the abundant supply of coal in the U.S. and China, which are the world’s two biggest energy consumers, as you’ll see below, and the absence of a price on carbon, there’s little doubt that a pullback from nuclear will mean more burning of fossil fuels.

The costs of nuclear plants, meanwhile, are already steep and bound to get steeper. Just last month, the Union of Concerned Scientists published a sobering 146-page report called Nuclear Power: Still Not Viable Without Subsidies. [PDF, download]

“Since its inception more than 50 years ago, the nuclear power industry has benefited—and continues to benefit—from a vast array of preferential government subsidies,” writes Doug Koplow, a Harvard MBA who has written about natural-resource subsidies for years. Virtually every segment of the nuclear business, from the mining of uranium to the construction of power plants to the under-pricing of cooling water, gets favorable government treatment, the report says.

The most important subsidies are not cash, but policies that shift construction and operating risks from the plant owners to taxpayers.  The report says:

Reactor owners, therefore, have never been economically responsible for the full costs and risks of their operations. Instead, the public faces the prospect of severe losses in the event of any number of potential adverse scenarios, while private investors reap the rewards if nuclear plants are economically successful. For all practical purposes, nuclear power’s economic gains are privatized,  while its risks are socialized.

That sounds terribly familiar, doesn’t it?

Particularly relevant in the context of Japan is the Price-Anderson Act, which limits total industry liability in the event of an accident.

You can be sure that the debate about the safety of existing and proposed U.S. plants, which is already underway–see, for example, Can U.S. Nuclear Plants Handle a Major Natural Disaster at ProPublica–will either increase the regulatory costs of developing new plants or impose more redundant (in a good sense) safety measures as part of plant construction, or both.

Today, Kevin Book, the top-notch energy analyst with ClearView Energy Partners, wrote today [PDF, download] :

Fear factor. Yesterday, German Chancellor Angela Merkel suspended electricity production at seven nuclear plants built before 1980, pending a three-month review. … The political response goes well beyond Germany. On Monday, Switzerland froze construction of three already-approved new plants. Austria’s environment minister and the U.K. energy secretary have initiated their own safety investigations. Although U.S. reactions may not be as dramatic, prospective construction faced headwinds from the high absolute costs of nuclear plants and high relative costs vis-à-vis other conventional sources, and we would not be surprised to see lukewarm Congressional nukes supporters cooling to them fast.

None of this is good news for anyone who worries about global warming. Over the past few years, as I’ve spoken to a range of people–Stewart Brand, David Keith and Ken Caldeira, among others–I’ve grown more concerned about the climate crisis and more inclined to support nuclear power as a low-carbon solution, particularly given that all forms of energy production create risks and require tradeoffs.

But the nuclear options looks a whole lot less attractive today than it did a week ago. And that’s a problem.

Recently, after posting a column about BP and socially responsible mutual funds (See Social Funds and BP: How embarrassing!)  I heard from Adam Kanzer, who is managing director and general counsel at Domini Social Investments. While Domini has never owned shares of BP, Adam and I began a conversation about the role  of socially-responsible mutual funds. Adam, who has been in the fund business for twelve years, is a smart and committed executive, but we don’t always agree, so we decided to engage in a dialog about social funds.

Adam Kanzer

Marc: Adam, let’s start with BP. Why did Domini exclude the company? Do you hold any other oil or coal companies?

Adam: Domini has consistently excluded BP from our portfolios because of our concerns about their safety record. Our initial review followed the Texas City explosion in 2005, but our decision was quickly reinforced by the Prudhoe Bay spill the following year.  We met with BP to discuss these and related issues with them. And each time we revisited BP, we found more violations.

We’re looking to identify the key sustainability challenges each company faces. For the oil and gas industries, worker safety and environmental compliance are among a handful of core issues we consider.  I should also note that we have consistently excluded Transocean and Halliburton, both of whom played a role in the Deepwater Horizon project. In addition we have also consistently excluded Massey Energy, the other current poster-child for disaster, as well as Toyota for substantial safety, employee relations and human rights concerns.  We discuss these decisions on our website. And yes, we do hold other oil and gas companies, although we set a high bar for entry. We do not invest in companies whose core business is coal mining.

Marc: Any thoughts on why BP was so widely held by other socially-responsible funds?

Adam: As CEO of BP, Lord Browne made very important statements about the reality of climate change at a time when others in his industry were denying its existence. That was important. In addition, BP has been committed to transparency on its social and environmental performance. I can’t speak for other firms, but I can see how those factors may have led some to hold BP. We felt that the safety and environmental issues outweighed these positives.

If a fund’s benchmark is heavily weighted towards oil, then an SRI manager will need to consider that. This tyranny of the benchmark certainly led many to hold BP and other oil companies that in a perfect world they would have preferred to avoid.

Which brings me to the important question that I have not heard – why did all of the so-called ‘mainstream’ investors buy BP? Why did investors allow this company to become one of the largest in the world by market capitalization? At least social investors weighed these issues and came to a decision. The rest of the market acted as if there was no problem.

Marc: That’s an excellent point, and it makes me wonder why people pay mutual fund managers such high fees. They missed the housing and Wall Street bubbles, and didn’t see or care about the safety issues at BP. Clearly most  funds aren’t very good at managing risk.

Turning to another topic, many SRI funds have their roots in the anti-war movement of the 1960s and 1970s as well as in faith-based investing. So funds like Domini exclude companies that make weapons, alcohol, tobacco and nuclear power. My question is, why? Let’s start with weapons. Don’t we need companies that make weapons in the post 9/11 era?

Adam:   First, it is important to understand that we divide those industries into two general categories – companies that provide addictive products and services, and companies whose products contribute to geopolitical instability. We place military weapons manufacturers and nuclear power in the latter category. We do not consider investments in addiction and global instability to be productive uses of capital.

National defense is too important to be placed in the hands of the same system that brought us the financial crisis. When Eisenhower issued his warnings about the growth of the military-industrial complex, he wasn’t questioning our need for a strong national defense. Yes, we need weapons, but do we need publicly traded companies manufacturing weapons? Are the capital markets an appropriate mechanism for providing these goods, or have the markets distorted our national priorities? That’s a critical debate our nation needs to have.

There are also categories of weapons that violate international humanitarian law because they cannot distinguish between military and civilian targets. These include landmines, clusterbombs and nuclear weapons. These ‘products’ make the world more dangerous, and landmines have caused incalculable misery to innocent civilians – including children – around the world. As investors, we have a responsibility to choose wisely. Our Funds’ shareholders choose not to profit from these violations, so we exclude these manufacturers and companies that manufacture nuclear weapons delivery systems.

Marc: What about nuclear power? Some environmentalists, notably Stewart Brand, say we need to seriously consider nukes in light of the climate crisis?

Adam: Before nuclear power can be seriously considered to be an effective answer to climate change, we need to solve the nuclear waste problem and we need to address the link between nuclear power and nuclear weapons proliferation. To date there is no way to distinguish between the uranium enrichment process that is necessary to fuel a nuclear power plant and the enrichment of uranium for use in a nuclear bomb.This is an issue that Amory Lovins raised decades ago, and it has only increased in importance since then. The risks and the upfront costs of nuclear power are still, in our view, far too high. I believe this is still the ‘mainstream’ view among environmentalists.

Marc: So you don’t like nukes or coal. Do you invest in any companies that provide the baseload power we need to run our lives (including this blog!)?

Adam: Yes. We do invest in energy companies, such as AGL (Australia), EOG and Noble.. We have also approved utilities, such as National Grid, but evaluate the source of the energy. We review each industry and subindustry against a set of corresponding key indicators. For example, we would look at a water utility differently than a company involved in natural gas distribution and transmission, or a nuclear or coal-based utility. And, of course, we’re looking for companies with significant commitments to renewable energy such as wind and solar power generation.

Marc: You mentioned addictive products–do you exclude Starbucks? Coffee’s addictive, right?

Adam: We’ve consistently approved Starbucks. We do not place caffeine addiction on the same level as alcohol, gambling or tobacco addiction in terms of harm to society. It doesn’t distort your decision-making and impair your daily functions in nearly the same way.

Marc: Let’s talk about performance now. Many of us want to invest in ways that are consistent with our values. That’s why I’m a shareholder in the Domini Social Equity Fund. But we also want to maximize our returns.

Generally speaking, SRI funds have tracked broader market indexes, running slightly ahead during some time periods and behind during others. Domini Social Equity, for example, has averaged a –1.02% annual return over the five years ended on June 30, 2010, compared to –0.79% annual return for the S&P500, meaning that an investor would have done slightly better with an index fund.

If I’m not mistaken, you and I share the belief that companies that are socially and environmentally responsible will provide superior shareholder value in long run.So I’m wondering–why haven’t social funds, as a group, outperformed?

Adam: First, if you want an apples to apples comparison, you might want to look at the S&P 500 Index versus the FTSE KLD 400 Social Index, which now has a 20-year track record. From May 1, 1990 through July 31, 2010, the S&P had an annualized return of 8.39% and the KLD 400 an annualized return of 9.14%..

Whether this outperformance on an index-to-index basis will continue is anyone’s guess, but there’s absolutely nothing wrong with simply tracking broader market averages, without outperforming. That means you can do just as well by investing responsibly, and that’s certainly good news.

We have never made any claims that SRI will always outperform. There are times when greed, dishonesty and environmental destruction pays. The market does not consistently reward responsibility, or punish irresponsibility. I think Gap is doing a great job addressing labor conditions in its supply chain, for example, but that doesn’t necessarily mean that the next style they introduce will be well received. Compare BP to Shell. A decision to avoid BP was only rewarded after disaster struck. Meanwhile, the New York Times reports that Shell has had the equivalent of an Exxon-Valdez oil spill in Nigeria every year for the past fifty years. That doesn’t seem to be reflected in Shell’s stock price. Incidentally, we have also never approved Shell for the Domini funds.

We need to be very careful on two fronts here. First, we must never overstate the potential for long-term performance of SRI funds – or any investment strategy for that matter. There are many factors that can affect a fund’s performance over time, including the fund manager’s expertise. When SRI funds underperform in a particular time period, they often do so for the same reasons many actively managed funds underperform. We do believe that social and environmental factors are financially material and can help us to identify better long-term investments, but the market is not always going to reward these particular characteristics.

Second, we need to begin a more important conversation about what it means to earn a ‘responsible’ rate of return. What are the appropriate benchmarks? Why do I need to demonstrate that I can outperform a benchmark dominated by polluters and human rights violators?

What do you mean when you say we wish to ‘maximize’ our returns? Certainly not at any cost? If I could guarantee you a 1,000% return on a direct investment in genocide, I’m sure you wouldn’t have any problem passing up that opportunity. Profit ‘maximization’ is another one of those myths that needs to be exposed. Nobody is truly seeking to ‘maximize’ returns. I would prefer to see a national discussion on the ends we wish to achieve through our investments, rather than this rather narrow discussion of whether SRI can perform. Yes, it can. That’s only the beginning of the story.

The definition of success in investing as outperforming a benchmark is ultimately weak and incomplete. Surely investing has something to do with creating real value—a stable, equitable society moving toward ideals of justice and sustainability. If we define success in investing simply as beating your neighbor, even if the market as a whole or society as a whole is suffering significant losses, I think we have drained the activity of all intrinsic value.

Marc: Interesting points. Of course no one wants to maximize returns at any social and environmental cost. But I don’t agree that there’s a tension between doing the right thing and doing well as a business, at least in the long run. if you don’t believe that over time, companies that are most socially and environmentally responsible will outperform their peers, then we are both fighting a losing battle when it comes to changing the way business is done.

I’ve always longed for an SRI fund that would do deep research and select 20 to 30 leading  companies—companies with strong values and solid businesses—with the belief that those companies would, in fact, outperform the market as a whole. I wrote about companies like Starbucks, Southwest Airlines, Timberland, UPS and Domini in my book, Faith and Fortune, and they were all top performers in every sense. (I picked HP, too, which hasn’t turned out so well.) What do you think of a focused SRI fund that selects a small number of the best companies?

Finally, you write that “we must never overstate the potential for the long-term performance o SRI funds,” but don’t you find it strange that the SRI funds are about the only mutual funds out there that don’t claim to be the best way to invest?

Adam: You’ve packed a number of important points into that question, so let me try to take them one at a time.

First, I’m glad you agree that no one wants to maximize returns at any social or environmental cost. But I see very little evidence of that thinking outside of a relatively small group of investors. BP and Massey are the latest examples – investors were quite happy to own their stock despite their miserable safety records.  PetroChina’s connections to genocide have not led to a mass exodus by investors.

So let me rephrase my statement slightly. When I say nobody really seeks to maximize return, I mean that virtually everyone places some limitation on that quest for profit. We all impose some sort of limit on that “profit maximization” objective. Milton Friedman would say profit “within the rules of the game”, but didn’t define what those rules were. Social investors, and most ordinary rational human beings, would say “without harming others.”

It’s a fairly simple concept that is still largely absent in  mainstream investment circles. Financial theory has established financial risk as the only meaningful limit on profit maximization. It is an inherently amoral, and therefore inhuman system. Thankfully, this attitude appears to be changing. I would strongly disagree that we’re fighting a losing battle. To me, the evidence suggests that we’re winning.

I think it is also important not to get caught in the trap of measuring performance solely in financial terms. Some companies provide greater social and environmental benefits to society than others. Markets may recognize that fact at some times and fail to recognize it at others. But we at Domini invest to achieve a combination of the two—both the social/environmental benefits and the financial return.

Domini does believe that companies with stronger social and environmental profiles should perform better in the long term, and that the use of social and environmental factors can help manage certain types of investment risk. We do believe it is a better way to invest, as well as a more rational, civilized, humane and ultimately beneficial way to invest.

If we sell SRI purely on this concept of ‘outperformance’ we will lose investors the moment the markets turn. SRI is not the latest get rich quick scheme. Social investors tend to stick around, rather than pursue the latest performance fad, because they understand this is a systemic answer to global problems.

Your idea for a focused ‘good guy’ fund is an interesting way to hold out exemplars of good corporate behavior, but it largely ignores the crux of the problem. We can’t simply ignore mid-cap and-large cap companies because they don’t currently meet our definition of purity. Unless you’re willing to say that it is inherently irresponsible to invest in large companies, then large cap investors need responsible options as well. Investors should not have to give up the opportunity to invest as responsibly as possible in well-diversified portfolios of large-cap companies, and they certainly should not give up the opportunity to engage with those companies and move them towards more sustainable business models.

Is SRI the ‘best’ way to invest? That depends on your definition of ‘best’ and the benchmarks you use to make that determination. Once you recognize that our investment decisions have an impact on the world, however, you come to accept that it is not appropriate to ‘outperform’ while destroying ecosystems and harming people. And in that sense, SRI becomes the only way to invest.

Marc: Adam, thank you. Maybe I’m asking too much, but I think it’s desirable–and possible–for a fund to deliver superior financial, social and environmental value. In the meantime, best of luck with your good work at Domini.

Before we discuss big issues like global warming, carbon pricing and renewable energy, I toss a couple of “lightning round” questions at Ralph Izzo, the chairman, president and CEO of  New Jersey-based PSEG, a $13.3-billion a year energy company with strong commitment to solar power and action to curb climate change.

First, Yankees or Mets? Izzo grew up in Queens (Mets country) and pitched for the baseball team at Columbia University (Yankee territory), where he earned an B.S. and M.S. in mechanical engineer and a Ph.D in applied physics. “Yankees, Knicks, Rangers, Giants,” Izzo replied. He’s still a big sports fan.

Second, Democrat or Republican? After a stint as a research scientist at the Princeton Plasma Physics Laboratory, Izzo worked as a science fellow in the office of Sen. Bill Bradley, a New Jersey Democrat, and then as an energy-and-tech policy adviser to New Jersey Gov. Tom Kean, a Republican. “Independent,” he said. “Pretty much down right down the yellow stripe.” True enough–he’s given money to George Bush and Hillary Clinton.

Third, nuclear power or “clean coal”? Much as it would be nice to light up the world with wind, solar or geothermal power, odds are that the U.S. will need nuclear power, coal or natural gas to provide baseload (i.e., round the clock) electricity for the foreseeable future. Izzo, as  a utility CEO and a scientist, gave nuclear his qualified endorsement over clean coal.

“The technology is in existence already,” he said. “It has a more benign environmental footprint. It doesn’t have the mercury, NO2, SO2 or carbon baggage. Having said that, all of our investments right now are in natural gas.”

For about a decade, Izzo explained, new conventional gas and then combined cycle gas plants will satisfy growing demand for peak power from PSE&G’s 2.1 million customers. PSE&G is the regulated utility owned by parent company PSEG, which also owns an independent, unregulated power producer called PSEG Power. PSE&G probably won’t need a big baseload plant until the early 2020s, at which point the company hopes to have a nuclear plant ready to go, as it told the Nuclear Regulatory Commission last month. That’s risky, given the cost and regulatory uncertainty surrounding nukes, but less so than relying on unproven technology to capture and store CO2 from coal.  “To build a new coal plant with a 40-year expected life is a risk that we’re not comfortable taking,” Izzo said.

PSEG and Izzo aren’t well known outside of New Jersey, but they should be. I’d heard Izzo speak a few months ago, and was impressed by his straight talk about climate; we met again last week here in Washington. Unlike some CEOs and politicians, who take what author Eric Pooley calls the “Trojan Horse approach that tucks climate into the belly of the beast and lets clean energy and green jobs pull the contraption along,” Izzo says straight out curbing global warming is the right thing to do, for environmental reasons.

“I don’t understand why we can’t recognize that this is an obligation we have to future generations,” he says.

“I don’t have a problem with saying it’s OK for our generation to pay more for electricity—the EPA is now saying it’s a little more than $100 a year – so that our children and grandchildren and children can inherit a better planet.”

PSEG’s actions reflect those sentiments. Just last week, the Solar Electric Power Association ranked PSEG No. 3  of 143 participating utilities in its solar rankings (PDF available for download here), meaning that the New Jersey firm has integrated more megawatts of installed solar (29.55MW) into its system than any others except No. 1 Pacific Gas & Electric (85.2MW) and No. 2 Southern California Edison (74.2 MW). PSEG has a program called Solar 4 All under which it is installing small solar panels on about 200,000 utility and street lights, building small installations on its own sites and lending money to business and residential customers to buy solar panels. These make business sense because of New Jersey’s generous renewable energy subsidies. Meanwhile, PSEG’s unregulated arm has built solar systems for an M&M factory in New Jersey (lending new meaning to the term “green M&Ms”), and for American Electric Power in Ohio and the Jacksonville Electric Authority in Florida.

PSEG also would like to deliver what it calls “universal access to energy conservation” in much the same way as utilities historically provided universal access to gas and electricity. Targeting cities like Newark and Trenton, the company is bringing energy audits, insulation, programmable thermostats and efficient lights to families and small business–and getting reimbursed by regulators, just the way it would get paid to build new generating plants. Efficiency, it’s sometimes said, is the cheapest and best form of renewable power.

Some other things I learned from my conversation with Izzo:

A CAES plant in Alabama

The company’s energy storage efforts are coming along slowly. Energy storage is often seen as a technology that will enable broader deployment of renewable sources, and PSEG is part owner of a company called Energy Storage & Power, which owns compressed air energy storage (CAES) technology. The idea is to compress air using cheap off-peak electricity from wind or coal plants, then release the air and resell the electricity during peak hours to replace more costly natural gas-fired electricity. Unfortunately, the economics of CAES are challenging for now because natural gas prices are so low, Izzo said. CAES “works from a scientific and technology point of view without question,” Izzo said. “The challenge is, is it economically viable?” Batteries may turn out to be better long-term approach to energy storage. (See Electricity that’s cheaper than free for more on CAES.)

A price on carbon is necessary, but not sufficient to stimulate renewable energy, Izzo says. Some economists say that a national renewable energy standard won’t be needed if the government puts a price on carbon, but Izzo said solar and wind won’t be able to compete with coal and natural gas until the carbon price gets significantly higher than anything proposed on Capitol Hill. “To simply say, let there be a price on carbon, so that renewables are built on the base of the new market price, would result in many parts of the country not building renewables,” he said. Better to nurture the solar and wind industries right away, so that utilities can turn to them at scale when carbon prices rise years from now.

That’s assuming that the U.S. Senate listens to CEOs like Izzo and acts soon to regulate global warming pollutants–no sure thing, alas.

If anyone tells you they know what building a new nuclear power plant is going to cost, be skeptical.

No one has built a commercial nuclear power plant in decades in the U.S. During the 1970s and 1980s, cost overruns derailed more than 100 reactors. (Ever-increasing regulatory burdens and sky-high interest rates drove up costs, too.) In part because no reactor has built here in so long, no bank or group of banks wants to take on the risk of lending more for a new plant. That’s why the Southern Co., which plans to build two new reactors in Georgia, needs the $8.3 billion in U.S. government loan guarantees announced last week by President Obama. While all the other worries swirling around nuclear power—what to do with the waste, fear of proliferation, the threat of terrorism, safety and the rest—play some role, the most important thing standing in the way of a so-called nuclear renaissance in the U.S. is that building big new plants costs too darn much money.

And yet, if we want to stop burning coal, the dirtiest fossil fuel, to generate baseload electricity, we need to explore the nuclear option. That means finding ways to bring down the costs.

One option? Build smaller nukes.

Hyperion's 12-ft tall underground reactor, compared to a 170-foot high above-ground conventional plant

Small nukes–sometimes called backyard nukes, because some of them could literally be buried in a suburban yard–were the topic of an excellent front-page story last week in The Wall Street Journal (Small Reactors Generate Big Hopes, subscription req.) and a panel discussion the following day at the Platt’s nuclear energy conference in Bethesda, Md.  Small nukes are a hot topic right now because three utility companies–Tennessee Valley Authority, First Energy Corp. and Oglethorpe Power Corp.–have agreed to work with Babcock & Wilcox, a longtime industry supplier, to get a small reactor design approved by the U.S. Nuclear Regulatory Commission.

The Babcock & Wilcox reactor, called mPower, would generate 125 to 140 megawatts of power, about a tenth as much as the big plants being proposed by the Southern Co. and others. Other modular nukes are even smaller: NuScale Power, a venture-funded startup, wants to build a reactor that’s 65 feet long and 15 feet in diameter, capable of generating 45 MW of power. Another startup, called Hyperion Power, is touting  a 25MW reactor, which would be compact enough (5 feet across by 12 feet high) to fit in a pickup truck, yet powerful enough to supply about 20,000 homes.

What’s driving interest in small nukes? “The desire to break up the very large upfront capital costs” of conventional nukes, said Daniel Ingersoll, a nuclear engineer at the Oak Ridge National Laboratory, at the Platt’s event.  Like wind turbines or  solar panels, small nukes can be ordered sequentially by a utility company–reducing risk, and allowing profits from the first reactors to pay for those that follow.

“I think we’re on the verge of seeing a paradigm shift in power generation,” Ingersoll said.

Perhaps, but it will be a slow one. The NRC will take years to approve the design of a small nuke, and whichever company builds first will then need years to deploy. Of course, everything in the nuclear industry moves slowly.

Babcock & Wilcox, which is based in Lynchburg, Va., appears to be farthest along because it has interested customers, a big power-generation business and a history of supplying nuclear products and services to the government. Even so, according to Michael Shepherd, vice business – business development, B&W’s first small nuke could be a decade away. “We see construction in 2016,” Shepherd said. “We can see going online in 2019, 2020.”

As startups, NuScale and Hyperion can move quickly but it’s not clear whether they have the financial wherewithal, customer relationships or experience with the NRC to succeed. Both are using government-funded designs–Nuscale, which is based in Corvallis, Oregon, is using a design licensed from the Idaho National Laboratory and Oregon State, while Hyperion, which is based in Santa Fe, New Mexico,  licensed its design from the Los Alamos National Laboratory, where the atom bomb was invented.

Paul Lorenzini, the founder and CEO of NuScale–he’s a lawyer as well as a nuclear engineer–said his company’s design relies upon proven technology and will  sit in an underground pool of water. “We get simplicity,” he said. “And out of the simplicity, we get safety and we get economics.”

Deborah Deal Blackwell, senior vice president at Hyperion, said small nukes could be used to deliver power to remote communities that are off the grids or to poor countries that desperately need electricity for schools, hospitals, transportation and water treatment. The Hyperion nuke would be loaded with enough fuel to last 7 to 10 years, then returned to the factory for refueling.

No company has put a price tag on its product, but there’s talk that they could be built for $4,000 to $5,000 per kilowatt of capacity.

It’s exciting to see the entrepreneurial energy behind backyard nukes, although whether any of them will, or should, get built remains an open question. We’ll hear more during a panel dubbed “Nuclear 2.0″ at Brainstorm Green, FORTUNE’s conference on business and the environment, which will be held April 12-14 in Laguna Beach, CA.  I’m pleased that Paul Lorenzini of NuScale and John “Grizz” Deal, the CEO of Hyperion, have agreed to speak, and I’m recruiting a speaker from Babcock & Wilcox as well. We’ll have supporters of big nukes, like NRG Energy’s David Crane, at the event, and some of America’s most important environmental leaders will be there as well, so the discussion is bound to be lively.

Just last week, Frances Beinecke, the president of the Natural Resources Defense Council, gave a speech to a Chicago business audience and the first question went something like this: I read the Wall Street Journal, I still don’t believe in climate science and I want to hear the full  story.

Beinecke’s new book, Clean Energy Common Sense: An American Call to Action on Global Climate Change (Rowan & Littlefield, $9.95), is aimed at those who are skeptical–or at least curious–about the climate change debate. It’s a slim (106 pages), straightforward, easy-to-read argument that  that attempts to connect the climate issue to everyday concerns like jobs, the economy and national security.

“When you go out to Gary, Indiana, Cleveland or Chicago, people are still uncertain,” Beinecke said, as she unveiled the book at the National Press Club in Washington.” They’re not clear on what the science is, what the solutions are, what the threats are, what the impacts are.”

And so Beinecke, as you’d expect, makes the case that the problem is dire, the solutions affordable and the benefits tangible–new jobs, less reliance on imported oil and a livable planet.

To her credit, though, she’s willing to go beyond the what’s-in-it-for-you argument and describe the climate crisis as what it is–the overarching moral issue of the moment, and one requiring immediate action:

Global climate change is the single greatest environmental challenge of our time. And yet, it is far more than that. It is a humanitarian challenge. It is an economic challenge. It is a national security challenge. It is the great moral challenge of our time.

If only more political leaders would frame the issue that way, instead of appealing only to the narrow self interest of voters.

And, while Americans don’t like to hear it, she also goes straight at the issue of climate justice, writing:

The United States and other high-income nations produced, on average, 15 tones of greenhouse gases per person in 2005, according to World Bank calculations. That’s more than seven times the per-capita rate in low-income countries. And yet, it is low-income people who bear the sharpest risk and most immediate consequence of global climate change.

If that’s not unjust, then I don’t know the meaning of the word.

Beinecke has worked for NRDC for 35 years, since graduating from Yale with one of the first classes of women to do so and earning a master’s degree from the Yale School of Forestry. (Yes, for Yale alums reading this blog, she comes from the family that gave its money and its name to the Beinecke Rare Book and Manuscript Library and she’s a former member of the Yale Corporation, which governs the university.) She has been president of NRDC since 2006, and has devoted herself passionately to the climate change issue for about a decade.

Her book does a couple of things well. First, it makes clear that the science of climate change, while uncertain in many respects, is unequivocal when it comes to the question of whether burning fossil fuels is warming the earth. While temperatures have leveled off for about a decade, she reminds us that “the 15 hottest years on record have all occurred since 1991.” That’s no accident. It should be a big worry. Then there’s this: “Artic ice is essential to the world as we know it, and the fact is it’s melting at an alarming rate.”

Second, the book makes clear that the cost of mitigating carbon emissions is manageable:

Clean energy legislation would cost the average American household $160 a day in 2020, according to the CBO [Congressional Budget Office], or right at 44 cents a day. The EPA estimates the average per-house cost at between $80 and $111 per year–or 30 cents, on the high side, per day. And the DOE has set the cost of this kind of legislation at $83 a year by 2030, or 23 cents a day.

Not a big price to pay for, oh, preserving civilization as we know it.

The book isn’t as specific about solutions. Beinecke writes that we need to do three things: Reduce global warming pollution (duh), promote alternatives to fossil fuels (OK, but which ones?) and help our country make a smooth transition to the clean energy future we need (well, yes, but how?).  NRDC supports a cap-and-trade system, which, in theory, would leave  specifics to the market, but legislation now making its way through Congress is laden with subsidies and prescriptive measures, ranging from efficiency standards for appliances and buildings to big bets with your tax dollars on so-called clean coal. Bipartisan negotiations among Sens. Kerry, Graham and Lieberman (who makes it tripartisan) bring such options as nuclear energy and offshore drilling into play.

I asked Beinecke whether nuclear power was part of the climate solution. She was a little vague, saying “it will continue to play a role.” Well, sure, but should environmentalists be pressing for more nukes? She replied:

…there are several issues that we care a lot about, like waste and security and proliferation, that we think still need to be addressed.  But the overall issue for nuclear has and continues to be cost.

Later, she told me:

We are not in favor of additional subsidies to the nuclear industry. They’ve been subsidized for the last 50 years. It’s a mature industry….Let it compete, on its own, without subsidies.

That’s not a bad answer, except that NRDC and other enviros favor subsidies for cleaner coal (which, to be sure, is newer), wind and solar (which have been around a lot longer). I’m reading Stewart Brand’s fascinating new book, Whole Earth Discipline, and will return to the nuclear issue soon. Ideally, since no one knows for sure which solution is best, and subsidizing all of the above is a cop-out, as well as expensive, we’d wipe out subsidies, put a steep price on carbon and let the market decide–which was the whole idea behind cap-and-trade before the bills in Congress grew past the 1,000-page mark.

If you’ve followed the climate debate, you need not read Clean Energy Common Sense. Read Stewart’s book instead, or Al Gore’s new tome. But if you have a friend or relative who is open-minded or disengaged, buy the book as a gift. As Beinecke says: “This is the time for people to pay attention.” And to act.

Two final notes. I’m delighted that Frances has agreed to speak at FORTUNE’s third Brainstorm Green conference, about business and the environment, which will be held April 12-14 in Laguna Niguel, CA. And here’s a shout out to my Bethesda neighbor Bob Deans, the former White House reporter for Cox Newspapers, who joined NRDC last summer (after writing this lovely farewell), just in time to help Frances write the book.

Frances Beinecke, president, NRDC

Take a look at the full-page ad from Areva below. Notice the symbols: American flag, people at work doing who knows what. Notice the words that stand out: American clean-energy solutions, thousands of American jobs.

So what two words are missing from the ad?

In case you can’t read the text, here it is:

AREVA is America’s largest supplier of innovative solutions for carbon-free energy. AREVA is the biggest employer in our sector with 6,000 highly skilled American workers in 20 states. Thousands more jobs depend on us through our 5,000 American suppliers. AREVA’s investments in America’s energy infrastructure also means new jobs. Our planned $2.5 billion Eagle Rock enrichment facility will help create another 5,000 jobs and enhance our nation’s energy security. And the new $360-million AREVA Newport News facility, a partnership with Northrup Grumman, will add another 500 high-wage U.S. jobs building state of the art EPR reactoirs for America and the world.

Reader of this blog, it should go without saying, are smart and well-informed so by now you have figured out what two words are missing.

One is nuclear.

The other is France.

Areva is, of course, a big French multinational company (13,1 billion euros in 2008 revenues) that develops and builds nuclear reactors around the world, mines uranium and disposes of nuclear waste. (Yes, it has some windpower and lots of transmission assets as well, but its core business is nukes.) Areva is building new nuclear plants in China and India, and it wants to develop them here in the U.S.–which must why it is waving the red, white and blue, making questionable claims about jobs and promising to “enhance our nation’s energy security.” I assume that’s a reference to the U.S. and not France, but who knows?

Now, I don’t really think Areva is trying to hide anything. But what’s going on here? Is nuclear energy so unpopular that the company won’t use those words in its ads? (This page came from The New Republic but I assume the campaign is running in other publications aimed at government officials and opinion leaders.) Is France a negative, too? The words “America,” “American” or “U.S.” appear eight times.

You have probably figured out by now that I don’t think much of this ad. Here’s why:

1. I’m skeptical about the “clean energy jobs” argument. I don’t think the potential for job creation should drive energy policy. If it did, solar on every rooftop would be a lot better idea that building nukes or wind farms.

2. I like France. I’m a U.S. citizen but I’m not ashamed to admit that (like Areva) I was born in Paris.

3. I’m open-minded about nuclear power. Why would a nuclear power company not talk about nukes?

Like a growing number of environmentalists, I think the climate crisis means that we need to take low-carbon nuclear power seriously.In fact, I’d love to hear thoughtful arguments from Areva about why the nuclear industry wants protection from liability, why it needs loan guarantees, why proliferation shouldn’t be a worry and what will happen with waste. That’s an important conversation, one we should be having and one in which Areva’s contributions would be welcome.

Instead we get a slogan: “Building a new American generation for energy generation.” Whatever that means.

Renewable energy threatens the planet. Who knew?

Our nation runs the risk of damaging the environment, in the name of saving the environment.

There are negative consequences from producing energy from the sun, the wind and the earth.

So, at least, said Lamar Alexander, the Republican senator from Tennessee and a long-time conservationist, during a speech today at Resources for the Future.

What’s he worried about? The danger that developing thousands of wind turbines, building solar-thermal power plants which spread across the desert and cultivating acres upon acres of land for biofuels will create “energy sprawl,” consuming too much territory and threatening wildlife.

Citing a a study by the Nature Conservancy, Alexander warned that “during the next 20 years, new energy production, especially biofuels and wind power, will consume a land mass larger than the state of Nebraska.”

What’s his solution? Nuclear power, which produces lots of low-carbon electricity in a way that’s least likely to harm wildlife and the landscape.

Speaking to an audience of environmentalists at RFF, a respected, nonpartisan think tank, Alexander said, “I want to ask you to do something that gives many conservationists a stomach ache whenever it is mentioned—and that is to rethink nuclear power.”

Even though the U.S. hasn’t built a nuclear power plant since 1990 (and 12 states have laws banning them), nukes produce “70% of our carbon-free electricity,” far more than wind or solar power, he noted. Of the world’s major emitters of greenhouse gases, only the U.S. has no nuclear plants under construction. If China and India build lots of nuclear plants, at a reasonable cost—admittedly a big if—they will not only be able to compete against the U.S. with cheap labor, but with cheap low-carbon power, too.

Interesting, no? As I listened to Alexander, he struck me as a Republicans who might be willing to work  with Democrats to deal with the climate crisis. (See yesterday’s blogpost, How Republicans Can Save the Climate Bill.) After all, as he told the crowd at RFF, he grew up hiking and camping in the Great Smoky Mountains, supported strict emission standards for pollutants from coal plants and believes man-made burning of fossil fuels contributes to global warming. He opposes the mountaintop-removal method of coal mining and drives a plug-in hybrid.

Waxing lyrical, he said: “Italy may have its art, India its Taj Mahal, but we have the Great American Outdoors.”

But his love for the outdoors takes him only so far, it turns out.

When it comes to climate change politics, Alexander sticks closely to the Republican message that a cap-and-trade system to regulate carbon pollution is a tax that will raise energy prices. Even if  Democrats were to endorse to embrace the nuclear option–Alexander wants to see 100 new nuclear plants built in the next 20 years, backed by as much as $100 billion in federal loan guarantees—he won’t  support carbon regulation that would raise fuel costs, he told me after his speech.

“I’m all for climate legislation,” Alexander said, “but an economy-wide cap and trade program is a big mistake.”

So much for bipartisanship.

Even so, Alexander has called attention to a real problem–the pressures on land use created by unwise development of wind, solar and biofuels. The Nature Conservancy report, called Energy Sprawl or Energy Efficiency: Climate Policy Impacts on Natural Habitat for the United States of America, is a scientific, peer-reviewed study that compares the land-use impact of energy options. It says, among other things, that

The land-use intensity of different energy production techniques varies over three orders of magnitude, from 1.9–2.8 km²/TW hr/yr for nuclear power to 788–1000 km²/TW hr/yr for biodiesel from soy. In all scenarios, temperate deciduous forests and temperate grasslands will be most impacted by future energy development, although the magnitude of impact by wind, biomass, and coal to different habitat types is policy-specific.

Translating the findings, Alexander said:

The gold standard for land usage is nuclear power. You can get a million megawatt hours of electricity a year–that’s the standard unit the authors chose–per square mile, using nuclear power. The second most compact form of renewable energy is geothermal energy. To generate the same amount of power, coal requires four square miles, taking into account all the land required for mining and extraction. Solar thermal takes six square miles. Natural gas takes seven square miles and petroleum seventeen. Photovoltaic cells that turn sunlight directly into electricity require 14 square miles and wind is even more dilute, requiring 28 square miles.

You get the feeling Alexander really doesn’t like wind power. He says that turbines are “the length of a football field, they are noisy and their flashing lights can be seen for up to twenty miles” and that if we build enough wind turbines to generate 20 percent of the nation’s electricity (186,000) they will kill an estimated 1.4 million birds. (Maybe, but I’ve been told that cats kill more birds than wind turbines.)

By contrast, he’s confident that the nuclear waste problem is solvable and that nuclear plants are safe, citing, among others, Energy Secretary Steven Chu, a lonely pro-nuclear voice on the Obama team. Chu favors expanding federal loan guarantees for nukes.

What to make of all this? First, it’s worth noting (and Alexander did) that The Nature Conservancy did not endorse nukes in its report. In this blogpost, Rob McDonald, one of the authors, writes that his work has been “put to rhetorical use” by many, including Alexander, who assailed renewable energy “as an unprecedented assault on the American landscape” in The Wall Street Journal. That seems a little extreme no? They may not like wind turbines on Cape Cod but in much of the midwest farmers embrace them as a new cash crop.

Second, as McDonald writes:

…climate change is the big threat to America’s wildlife (and to our communities). Severe climate change has the potential to imperil many more species than energy sprawl.

So before we fret too much about energy sprawl–which can be managed by wisely siting renewable power facilities– we ought to have a strong climate regulation program in place. Alexander’s plan for a combination of nukes, electric cars and solar power on rooftops but no economy-wide carbon rules fails to meet that test.

Third, environmentalists should seriously rethink nuclear power. As Alexander put it:

My fellow Tennessean Al Gore won a Nobel Prices for arguing that global warming is the inconvenient problem. If you believe he is right, and if you are also concerned about energy sprawl, then I would suggest that nuclear power is the inconvenient solution.

Energy sprawl?

If climate change is the greatest threat facing mankind, what are the odds of the big environmental groups rethinking their longstanding opposition to nuclear power?

They appear to be slim. Here’s what Environmental Defense says on its website:

Serious questions of safety, security, waste and proliferation surround the issue of nuclear power. Until these questions are resolved satisfactorily, Environmental Defense cannot support an expansion of nuclear generating capacity.

And this comes from the Natural Resources Defense Council website:

New nuclear power plants are unlikely to provide a significant fraction of future U.S. needs for low-carbon energy. NRDC favors more practical, economical and environmentally sustainable approaches to reducing both U.S. and global carbon emissions, focusing on the widest possible implementation of end-use energy-efficiency improvements, and on policies to accelerate commercialization of clean, flexible, renewable energy technologies.

Supporters of nuclear energy—including those who strongly support climate regulation to curb emissions of global warming pollutans—say that doesn’t make sense.

“They (environmentalists) love to hate the biggest thing that can move the needle with respect to climate change,” says David Crane, the chief executive of NRG Energy. NRG is a member, with NRDC and EDF, of the U.S. Climate Action Partnership, an alliance of big companies and environmental groups that back a cap-and-trade program to regulate greenhouse gases.

Crane spoke last week during a lively discussion of nukes led by my colleague David Whitford at FORTUNE’s Brainstorm Green conference about business and the environment. I wish we’d invited an EDF or NRDC representative onto the panel, but the focus was money, not safety, security or waste. David began the conversation by inviting everyone to “consider the evidence and think anew about something about which many of us had made up our minds.”

Good idea. Many years ago, I covered protests again the Seabrook nuclear power plant in New Hampshire for a left-wing publication. My sympathies were with the protestors. Now I’m firmly undecided, and determined to learn more. Given the threat of climate change and the safety record of nuclear plants in the U.S. since Three Mile Island—especially compared the alternative of mining and burning coal—it seems like the right time to rethink nukes.

Here’s what the directors of the national energy laboratories said last year in a report called A Sustainable Energy Future: The Essential Role of Nuclear Energy:

Today, nuclear energy provides 16 percent of the world’s electricity and offers unique benefits. It is the only existing technology with capability for major expansion that can simultaneously provide stability for base-load electricity, security through reliable fuel supply, and environmental stewardship by avoiding emissions of greenhouse gases and other pollutants. Furthermore, it has proven reliability (greater than 90 percent capacity factor), exemplary safety, and operational economy through improved performance.

One of the signatories to the report was Steven Chu, now the energy secretary.

Here are some things I heard during the panel:

As thing stand now, we are unlikely to see the so-called nuclear renaissance that was talked about just a couple of years ago. The global economic slump is the reason why. Lenders are more risk-averse than ever, and few businesses need more capital and pose more risk than new nukes. Demand for electricity is slowing because of the recession. And natural gas prices are down, making it easier to meet new demand for electricity by building natural gas plants.

The U.S. government has set aside about $18 billion in loan guarantees for nuclear plants. That will underwrite perhaps three plants, our experts said. “I’m convinced that there will be three nuclear power plants built in the U.S. in the next 10 says,” said Kevin Book, a partner at ClearView Energy Partners, a research and consulting firm.

Beyond that, it’s anybody’s guess. The utility industry wants to build more—there are 24 applications for new nukes pending at the NRC, all of two to be located near to existing sites, where local support for nuclear energy is strong. No new plant has been approved since the 1980s. By contrast, there are 45 plants now under construction outside of the U.S., most in China, India and Korea, according to Book.

Like beauty, “clean” energy is in the eye of the beholder. Notice how the NRDC statement above says the group would prefer clean and renewable energy to nuclear. Well, Alan Hanson, an executive with Areva, the big French nuclear power company, says that the nuclear waste issue is closer to being solved than, say, the solar waste issue.

France, where more than 80% of the electricity comes from nuclear power, uses a safe and sophisticated system to recycle spent nuclear fuel, Hanson says. (You wouldn’t expect him to say anything else, but still…) Nuclear waste can be stored on the sites of plants “for the next 500 years in we want,” he said—plenty to time to ease the transition to a renewable, low-carbon energy economy.

By contrast, he says, burning coal creates not on CO2 but mercury and other pollutants. And many solar photovoltaic panels are made of cadmium, among other things, for which there’s no recycling plant. “I don’t know of any part of the electricity generating world that treats its waste as well as the nuclear industry does,” Hanson said.

The politics of nuclear are complicated. Chu, who’s probably the smartest guy in the Obama cabinet, supports nuclear energy but Carol Browner, who’s an experienced Washington power player (no pun intended) is said to be a strong opponent. Liberal Democrats on Capital Hill—Nancy Pelosi, Henry Waxman, Barbara Boxer, Harry Reid—also oppose nuclear power. Given a choice between nuclear and coal as a source of baseload power, they’re likely to favor coal.

Crane said: “Right now the dominant wing of the Democratic Party knows they need to accommodate the coal wing of the Democratic Party in order to get energy and environmental policy passed.” That leaves nuclear out of the deal-making.

resident Obama hasn’t said much about nuclear. It may well be that technology breakthroughs in solar, geothermal, wind or battery storage will mean that we don’t need nuclear energy as a source of low-carbon power. But until those breakthroughs come along, shouldn’t we keep the nuclear option open?

That’s how author and sustainability guru Paul Hawken responded when I asked him during FORTUNE’s Brainstorm Green why a small-is-beautiful guy agreed to work for huge companies like Wal-Mart and Ford. And I like to think that’s why nearly 300 business executives, NGO leaders, activists and government types came to our conference on business and the environment earlier this week. They were a diverse and occasionally disputatious group, which is exactly what we want: We had speakers from Greenpeace and the Rainforest Action Network, as well as Big Oil , the nuclear industry and American Electric Power, the nation’s No. 1 emitter of global warming pollution. But while there was disagreement over what path to take, there was broad consensus that business needs to find ways to become more sustainable.

Here are some of my takeaways from the event. One caveat—the quotes below were taken down on the run and may not be word-for-word perfect but they are close.

Bill Clinton doesn’t mind getting his hands dirty. Where do you find the former president these days? Occasionally, mucking around in the waste of cities like Lima, Mexico City and Lagos. “Whenever I think of an urban landfill, I see it not just as an eyesore and a contributor to global warming but a source of great wealth,” Clinton said, during the closing plenary. His Clinton Global Initiative on climate change, he explained, is training scavengers in Lima to be recycling workers, given them a salary and health care and encouraging them to become part of a “new industry in glass and metals.”

Clinton’s speech was a state-of-the-union style laundry list, long on details/solutions. He got all charged up about energy efficiency (hard to do) as he talked about retrofitting the Empire State Building, described extensive efforts to get cities to curb their carbon emissions and explained how he is helping to  make college campuses more efficient. “The most important thing you can do if you are not a member of the U.S. Congress,” he told the crowd, “is to show that the change we are all seeking is good economics.” He had a couple of odd ideas, suggesting that the states of Nevada and Arizona or maybe a Caribbean nation become “energy independent” to show the world that it’s possible. Clinton looked good, by the way—he wore a pair of Texas cowboy boots and hustled out of the hotel after his speech and a photo session to squeeze in a round of golf.

Some big problems, corporate America can’t solve. Fisk Johnson of SC Johnson, Jeff Hollender of Seventh Generation, Bill Valentine of HOK (big architecture firm) and Carl Bass of Autodesk (design company) joined me for a panel called Re-Imagining Consumption. The question put before them was simple but important: How can companies grow their revenues and profits while shrinking their environmental footprint? I thought we’d get into a conversation about cradle-to-cradle products that companies sell, or new business models like ZipCar. But we veered into a discussion of overconsumption after someone mentioned he oft-cited fact that Americans make up roughly 5% of the world’s population and consume 25% of its resources. That’s obviously a problem, and since companies are invented to solve problems, I ask them if there is a business opportunity there. They couldn’t see one although Bill Valentine said HOK often asks its clients whether they really need a new building, Carl Bass said  Autodesk is incorporating sustainability questions into its software, and Fisk and Jeff both talking about “greening” their products and packaging.  The truth us, it’s hard to imagine even progressive companies (except for recycling firms) coming up with products, services or new business models around buying less stuff. This tough job is probably best left to parents or religious leaders.

Environmentalists should reconsider nuclear power. I’m told there was a long and animated dinner conversation one night during which two leading thinkers of the sustainability movement—Janine Benyus of biomimicry fame and Ray Anderson of Interface–peppered Alan Hanson, an executive from Areva, the big French nuclear power company, with probing questions about nuclear power. I was pleased to hear that because I’ve thought for some time that environmentalists need to rethink their almost-religious opposition to nuclear power. (I’m going to write about this in more detail next week.)

If the problem of climate change threatens the very existence of human life on this planet (and it does), shouldn’t we reconsider nukes? Of course we should. We’re going to need baseload power and while a combination of efficiency, renewables and battery storage might get us where we need to go under a best-case scenario, I don’t want to bet the planet’s future on a best-case scenario. It’s likely we’ll face a choice between nuclear and so-called cleaner coal. I’m not sure where I come down on that.

During a panel on nuclear power (read David Whitford’s account here) that focused on its costs, I learned that Steven Chu, the energy secretary, is an advocate for nuclear while Carol Browner, the climate czar, is an opponent. President Obama has punted on the issue—he hasn’t said much of anything, at least according to our panelists. While Browner’s the more powerful figure in D.C., Chu is a brilliant and impressive guy, not to mention the only cabinet member with a Nobel Prize. I’d love to be a fly on the wall when they and Obama get together to talk about nukes.

I’m still not convinced about green jobs. Van Jones, the White House green jobs czar, spoke at Brainstorm Green and he managed to be both inspiring and utterly charming. But he couldn’t come up with a clear-cut definition of a green job. That’s not surprising. Consider the farmer who grows corn for popcorn. He’s a mere farmer. His buddy up the road who grows corn for ethanol? Green job, I presume.

Clinton, too, has hopped on the green jobs bandwagon: “I’ve always believed that work is the best social program,” he said. “Saving the planet from the threat of climate change will create more jobs, more ideas, more interdependence than anything else we can do.”

Hmm. Fred Krupp of the Environmental Defense Fund said the best economic studies about the impact of a cap-and-trade program to regulate greenhouse gases project that the long-term impact on GDP will be very, very slight. But if GHG regulation has even a slight negative effect on GDP, how can it create more jobs?

It’s time to stop feeling guilty about business travel. Brainstorm Green was held at the Ritz Carlton in Laguna Niguel, California—a spectacular place overlooking the Pacific. We had some fabulous meals—prepared by organic chefs—and I got up early to run (a little) each day. At night, I opened the door to my hotel room and fell asleep to the sounds of the waves and an ocean breeze.

As it happens, we were at ground zero for the crisis in business travel. Next door was a St. Regisl where AIG held a meeting last fall that made national news and led to the cancellations of hundreds of business meetings. Luxury hotels and their working-class employees are suffering. What’s good about that?

More important, there was value in getting 300 people together in a relaxing place for a couple of days to talk about things that matter. We learned. We met new people. We built relationships. We showcased leading thinkers and doers, perhaps inspiring others. Maybe a startup that needed money raised some. We may live in an always-connected, everything-linked world, but you can’t do those things very well on email or over the phone or in a video conference.