Optimism in green tech, despite setbacks by Brian O'Keefe @FortuneMagazine July 21, 2011, 2:16 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons When it comes to green tech, it’s easy to dwell on the bad news. A decade of venture capital investments have so far produced mixed returns. The carbon tax hasn’t gotten off the ground. And let’s just say that U.S. energy policy could be more coherent. Yet, despite it all, we’re poised for a wave of innovation—boosted by information technology—that will transform our energy markets and create huge new business opportunities in coming years. That was the consensus at a lunchtime roundtable discussion at Fortune’s Brainstorm Tech conference in Aspen, Colo. “It’s energy meets IT,” said Amory Lovins, founder and chief scientist of the Rocky Mountain Institute. “Pervading the energy system with communication technology, honest pricing, and real-time feedback enables a of things we couldn’t do even a few years ago.” That sentiment was echoed by Andy Karsner, of investment firm Manifest Energy. Karsner said that the new fiscal conservatism permeating the country will help focus people on enormous opportunities for energy conservation as megabytes meet megawatts. “We now have the economics and the environment” to go with the technology, he said. Progress will be aided by a wave of creative destruction, said Peter Schwartz, head of the Global Business Network, a consulting firm that specializes in advanced business planning. The first big wave of clean tech investment that began around 2000 was built around a lot of unrealistic expectations, he said, about the time it would take to bring technology to market. “Energy is not the same as IT and software,” said Schwartz. “You don’t get a Facebook overnight in energy.” Schwartz predicted that a lot of companies would fail in the near-term, but that there would be great investment opportunities for investors to put money into technology that’s just getting ripe. Consumers can expect a proliferation of options for the fuels they put in their cars, the panelists agreed. And Karsner said that a good role for government would be to insist that all vehicles run on multiple types of fuel. “That should be the intervention of the government,” said Karsner. “It should be the empowerment of the consumer.” There are myriad fuels that could be cheaper and cleaner than gasoline, he said. The transition period as those fuels come to market will be “chaotic,” said Schwartz. But by 2020, he predicted, most new cars will have their wheels turned by electric motors. “Exactly where the electricity comes from is less clear,” he said.