WE ARE at the farthest spot in America from Wall Street, and it's a good place to be right now."

As Tony Perkins says this, he looks out over a crowd of several hundred clean-tech enthusiasts gathered directly under the Golden Gate Bridge. He is speaking literally and figuratively.

"People here today are pretty happy," he says.

The bridge glows in late-morning autumnal light, and the air is warm, with an occasional brisk breeze. Even by Sausalito standards, it's a stunningly beautiful day. But that's not the main reason people at last week's GoingGreen conference were happy.

The 600 entrepreneurs, engineers, scientists and venture capitalists gathered in Fort Baker all believe they're riding the tip of a huge wave, perched on the crest of a new industrial revolution—one that will remake the world even more profoundly than the last one (the creation of the Internet) and the one before that (the personal computer).

These people are happy because they are, figuratively speaking, a million miles from Wall Street, and they are at work in an industry that is just being born, instead of one that's dying.

Scattered on coffee tables around the patio are newspapers: the Wall Street Journal and The New York Times, as well as the Chron and the Merc. The headlines of the New York papers are all about the Nightmare on Wall Street. On page one of both of the locals is the breaking news that electric car-maker Tesla will build a plant in San Jose, creating 1,000 immediate jobs.

The man behind Tesla, Elon Musk, will be delivering a keynote to this group in an hour. San Jose's Mayor Chuck Reed gave the keynote the previous night. The green-tech pioneers in attendance are pleased about the Tesla deal, but they see it as a drop in the ocean, a ripple on the wave they are riding.

"We predict that within three to five years, the green area is going to be bigger than the IT area." Perkins says.

It's a bold prediction. But then this is the guy who made his first multimillion before he was 25, as the tech guy at Silicon Valley Bank, then founded Red Herring magazine, grew it until it was the size of the phone book, and sold it for a gazillion dollars, just before the market tanked. He wrote a book, The Internet Bubble: Inside the Overvalued World of High-Tech Stocks, which not only successfully predicted another recent economic event, but gave it its name.

Perkins, who now runs the elite AlwaysOn network, is referred to throughout the financial press as an "opinion leader," sometimes as a "visionary." And he now sees big, big money in solar energy, electric cars, smart grids and thousands of similar sustainable technologies.

He says his initial interest in the topic "was about following the money." He and a lot of big brains on Sand Hill Road have become quite bullish on the "green" sector, which is already the third-largest category in venture investment.

In Silicon Valley, innovation is the coin of the realm. That's why clean tech is the brand new new thing: There is a ton of innovation in this new idea—and lots of new stuff coming to market.

What is driving this category is an idea: that we are going to look at everything we do as a society, and try to do it more efficiently. That is the central tenet of the new green-tech movement.

The go-green consciousness has itself always been driven partly by fear of environmental Armageddon and partly by love of the planet and nature. This new version, the Green Gold Rush, is being driven by those lofty ideals—and something else that runs equally deep.

In the labs where these new inventions are being built and in the boardrooms where they are being funded, the quest for green gold is being driven by a rigorous admiration for quality and efficiency.

And here's the secret—the chief value proposition, if you will: Increased efficiency, while creating less pollution and wasting less energy, also saves money.

It's as though this new industry is a more highly evolved technology than the old-fashioned machines we're been stuck with for generations. The idea that seems to be inspiring Silicon Valley is: We can build an economy around a technology that is intrinsically better.

In this view, saving the world from certain ecological collapse and rescuing the economy are one and the same project: just retool the world.

"We are standing at the place where entrepreneurial spirit meets the public good," Perkins says, looking out over a scene that will be re-created in San Jose this weekend, and perhaps many times in the future.

The Dream Team

In a still-controversial 2004 essay titled "The Death of Environmentalism," authors Michael Shellenberger and Ted Nordhaus pointed out a central problem with the movement to which they'd dedicated their careers.

For a political movement to become successful, they said, it needs to present a hopeful vision of the future. Every movement needs its "I have a dream" speech. The message the environmental movement delivers, they said, was: "I have a nightmare." There was plenty of talk about the consequences if we fail to act; much less about the joys of success.

Al Gore's An Inconvenient Truth is our most powerful contemporary example of that speech. Devastating, brilliant, but not exactly hopeful.

The end of the film was, if you recall, anti-climactic. In place of a call to action, Gore delivers a half-baked sermon about inflating your car's tires and turning off the water when you brush your teeth. It was out of place in what was otherwise a work of political-artistic genius.

Off-screen, however, Gore has been working on the "I have a dream" stuff.

His day job, when he's not off winning the Nobel Peace Prize, is working for the gods of Sand Hill Road, at Kleiner Perkins Caufield & Byers (KPCB), where he's a member of the Greentech Initiative. The company says it believes Gore and his team will "help our entrepreneurs change the world."

"As four billion people move from rural to urban living in the next 50 years, they all want clean water, clean power and clean transportation," reads the Cleantech Initiative prospectus. "At the same time, we face climate crisis. Scientific breakthroughs in biology and materials technology mean there's never been a better time to start and grow a great green venture. Greentech could be the largest economic opportunity of the 21st century."

That fund has invested heavily in 10 companies, many of which will be showing off their wares in San Jose this weekend.They include a biofuels (Altra) and electric cars (Fisker), utility-scale solar (Ausra) and coal gasification (GreatPoint), miniaturized fuel cells (Lilliputian) and thin-film photovoltaics (San Jose's Miasolé). These businesses are nobody's pipe dream, but economically sustainable, money-making enterprises.

The idea is not simply to save the ecosystem but also to save the economy. This idea has become a central tenet of the Obama campaign.

But Silicon Valley is not waiting around to find out whether or not Obama makes it to the White House. So far, the clean-tech revolution is a private-enterprise thing.

Just as the World Wide Web would never have been built without the massive infusion of capital from the federal government (for which Gore truly did write the enabling legislation), the hundreds of technological innovations that are launching the New Green Economy would not exist without the capital from Kleiner Perkins and other investment companies in the new, huge "green sector."

Green on Green

When Gore retired from politics, saying he believed he could do more in the private sector, pundits said he was naive—or lying. He may have simply been ahead of the curve. At West Coast Green this weekend, the big news will be the big money. That was definitely the story at GoingGreen last week. Gore's colleagues at Kleiner Perkins were in attendance, as were players from KPCB's neighboring VC firm, Draper Fisher Jurvetson. Morgan Stanley sent the head of its green fund. There were probably a dozen or more players from around the world. They and others will be in San Jose this weekend.

We used to call these events "alternative-energy" fairs, or "appropriate technology" forums; they've been with us since the first Earth Day in 1970. But there have never been people quite like these guys there. Venture capitalists didn't hang with the eco-hippies. Nobody had figured out a way to monetize environmentalism.

That's changed.

Raj Atluru, who heads up Draper Fisher Jurvetson's green fund, has been in the game since he left Stanford, where he'd gotten a masters in environmental studies and later taught the solar lab, in 2001. He was a speaker at GoingGreen and he will be again at West Coast Green.

Draper has invested a half-billion dollars in 57 green businesses worldwide. That makes it the category leader. And it seems to be feeling bullish.

Atluru says he has witnessed an explosion in the appropriate-technology space.

"My first year at DFJ, we got 30 business plans," Atluru says. "This year that number will be in the thousands."

"This really is the next new thing," he says. And the way he says it, it isn't like he's reciting the company motto. It sounds instead like he's just realized it, like: "Whoa. This thing is getting big."

And although he's got a soulful presentation, Atluru, like a lot of valley businessman, speaks in complete PowerPoint slides. "There are three reasons for this explosion of growth," he says.

"The regulatory environment has changed. In 2001, 20 states had RPS standards [which mandate energy savings]. Today there are 34 states. Consumers are over the edge. They have decided that they want to maintain their lifestyles without destroying the environment. The amount of innovation has increased by orders of magnitude. I mean—50 business plans in 2001; 2,000-plus in 2008."

In conclusion, Atluru says, that's the big deal. There is definitely more happening in this category than anybody could have imagined.

"No question," he says. "This really is the new new thing."

He reels off some of the businesses in his portfolio. There's Reva, an Indian company that sells an electric car for $6,900. There's Solicore, which is bringing the cost of photovoltaics way down. And there is BrightSource, which operates solar power plants that could someday put coal and nukes out of business.

The only reason the old technology persists, Atluru says, is that many of its real costs—such as CO2 pollution that is heating the whole world—is borne by the general public, and not the companies that make the mess.

Atluru refers to this as the "Tragedy of the Commons," offhandedly referencing a seminal piece of environmentalist literature that bemoaned the fact that public space that we all share—"the commons"—is often sacrificed for private gain.

Make no mistake, Atluru is an unapologetic capitalist, even if he speaks with conviction about concerns that have not often been voiced by the titans of the Old Economy. "I wouldn't be invested so deeply in this space," he says, "if I didn't believe there is a crisis."

Rocket to the Future

Elon Musk, founder and CEO of Tesla Motors and chairman of SolarCity, is on the front lines of the clean-tech revolution and heads up two of its most high-profile success stories.

He is nevertheless a somewhat unlikely spokesman for the clean-tech industry. In his day job, he is CEO of SpaceX, which builds an extremely ungreen product: rockets.

Musk's keynote at GoingGreen began with a video of his Falcon 1 rocket ship blasting off, followed by CGI clips of spacecraft docking with the International Space Station. SpaceX, in fact, has a contract with NASA, and its Falcon rocket is scheduled to replace the Space Shuttle when it is retired. Musk's company could very well someday be bringing human beings to Mars.

Musk explained that ever since he was a young man he's been obsessed with interplanetary travel, just as he's been committed to clean energy and post-petroleum transportation. This year, SpaceX has presented its owner with his most daunting challenge—in three tries, the Falcon 1 has not yet been able to achieve orbit, although Musk remains stridently optimistic.

In contrast, his other two companies are operating in less-risky sectors, even if their success requires a fundamental shift in the entire world economy.

Musk is, however, a man on a roll. He sold his first venture, the media technology company Zip2, for $307 million when he was 27. He then co-founded PayPal, retained majority ownership while growing it, and sold it to eBay for $1.5 billion.

His two clean-tech companies are based on the principal of building efficiencies into every aspect of both product and process. Tesla's battery and electric motor are, according to most analysts, the best examples of their respective technologies in the world. SolarCity's primary innovation is financial—it allows customers to lease electricity-generating solar panels, eliminating the up-front cost that has hobbled the industry's growth.

To explain this part of his business philosophy, Musk quotes the founder of WalMart, Sam Walton. "It's not about doing one thing 100 percent better, it's about doing 100 things 1 percent better."

Already an extremely wealthy man, Musk seems to be motivated more by a historical imperative than any strictly business or even classically altruistic purpose. He says he started Tesla "to show the car companies what is possible, and accelerate the development of electric vehicles" overall.

The man who, a decade ago, insisted that people would want to do business transactions over the Internet—back when most people were afraid to enter their credit-card numbers into a computer—now insists that the internal combustion economy is dead. He imagines a near future in which everyone drives an electric car and plugs it into a solar-power outlet.

And Elon Musk is able to show a couple of a pretty convincing proof-of-concept examples.

The Tesla Roadster, which will be produced starting next year at the plant in San Jose, goes 0–60 in 3.9 seconds, and the Model-S family sedan is well on its way. He predicts that his cars (now selling for $100,000-plus) will be affordably priced in five years.

SolarCity, meanwhile, is aggressively leasing systems (2.4 kilowatts for $70 a month) through a deal with Morgan Stanley, and is set to go nationwide with its one-stop shop for installation and financing national.

Taken together, Musk's enterprises, and all the others that will be gathering in Discovery Meadow this weekend, could point to a new economy, a new future. If it sounds almost incredible, too good to be true, that may be more proof that it's real. It's just another Silicon Valley startup.

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