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The temperature sometimes dips to 40 below at the Rocky Mountain Institute's Snowmass, Colorado, headquarters. It's nice and cozy inside, though, where the staff has managed to grow 26 crops of bananas in a solar-warmed "jungle."

THE FIRST PIECE OF POSITIVE NEWS, oddly, is that Americans waste so much energy. Our biggest undiscovered pools of oil and gas are in our car engines and industrial motors and electric lights, in the walls of our houses and the heating coils of our hot-water tanks. As energy expert Amory Lovins has remarked, if you want to find oil, drill under Detroit.

For three decades, Lovins has been the guru of energy efficiency. Originally a protégé of the Sierra Club's former executive director David Brower, he has become to insulation what Brower was to canyons. From his redoubt at the Rocky Mountain Institute in Snowmass, Colorado, Lovins has worked with firms such as IBM, British Telecom, Alcan, NorskeCanada, and Bayer--which collectively managed to cut their carbon dioxide emissions 60 percent in the past decade, saving $2 billion in the process. There's plenty left to be done, since, to use a couple of Lovins's favorite examples, converting coal at the power plant into incandescent light in homes is only 3 percent efficient, and about 5 percent of U.S. household electricity is lost to energizing computers, televisions, and other appliances that are turned off. Lovins built his own house with so much insulation that, even high in the Rockies, he calculates that he can offset heat lost through the walls and windows by playing with a dog ("A dog can generate about 50 watts of heat, adjustable to 100 watts if you throw a ball to it"). His nonprofit's 4,000-square-foot headquarters consumes "barely more electricity than a single 100-watt lightbulb." And all of it, he insists, is cost-effective. His team has redesigned everything from a chemical plant to a supermarket to a luxury yacht to save half or more of the energy they would ordinarily use.

If this sounds too good to be true, consider one fairly minor piece of technology, the hybrid-electric automobile engine introduced in recent years by Toyota and Honda. I drove my old Civic to the dealership four years ago, bought a new Civic hybrid for less than $20,000, and drove it home. Everything about the two trips was the same, except that my gas mileage went from just 38 or 39 miles a gallon to 53 or 54. I was going to the same place at the same speed with the same radio station at the same volume, but I was using a third less energy. Just like that. "Hybrids are where the action is," says Sierra Club energy expert Dan Becker, who's been badgering Detroit to produce more-efficient cars for many years. "The hybrid solves a lot of the problems of the internal combustion engine and provides a technology that can be improved to solve even more. And it avoids some of the pitfalls of alternative fuels that aren't universally available--or anywhere available, like hydrogen. The biggest advantage is that you can go out and buy one now, instead of waiting several decades for a fuel-cell vehicle."

But hybrids also illustrate just how resistant to change the status quo has become. "General Motors tried every trick in the book to slow them down," says Becker. "They had whisper campaigns. They made all kinds of ridiculous arguments about how if you're in an accident, the paramedics will stand there and watch you burn because they're afraid of messing with your car. But Toyota is not dumb--it gave training manuals to every emergency-medical-service operation in the entire country." Even the new federal tax code designed to help spur hybrid sales shows Detroit's fingerprints. Each manufacturer can offer a full tax credit for only 60,000 vehicles, which means the small, fuel-efficient Japanese models will be competing with GM's first hybrid passenger car, which--this fall, nine years behind the competition--will be ... an SUV.

Even if we do much of what Becker and Lovins recommend, however, it's not going to solve all the problems we face. We still need to generate energy more cleanly than we do now. All the forces of economic gravity--especially the run-up in the price of natural gas--keep pushing us to use more coal. More than 150 new coal-fired power plants have been proposed in the United States. "They're racing to get them built before there's any carbon regulation," says Dave Hamilton, who directs the Club's Global Warming and Energy Program. And though local opposition has slowed some proposals for plants, others pop up constantly: 6 in Wyoming, 16 in Illinois, 17 in Texas. Even those numbers are dwarfed by plans in China and India. Together with the United States, they could add 850 new coal-fired facilities by 2012. If they do, those plants alone will emit up to five times more carbon than the Kyoto treaty will scrub from the atmosphere, according to a comprehensive analysis in the Christian Science Monitor. This is not simply a theoretical prospect--if you visit China, you'll see endless new strings of high-tension lines rippling across the mountains like modern versions of the Great Wall. They carry the juice from all the nation's new coal-fired generators, which have added more power than the equivalent of California's electric supply each of the past two years.

In the face of such momentum, some environmentalists, led by David Hawkins of the Natural Resources Defense Council (NRDC), have argued for massive government investment in carbon-capture-and-storage technology, which in theory would allow coal plants to separate the carbon dioxide from their exhaust streams and then inject it safely into deep seabeds or underground mines. "If China, India, the United States, and the handful of other countries building all these power plants developed a strategy for carbon sequestration," Hawkins says, "it would represent a huge step toward cutting global warming." John Holdren, former Clinton energy advisor and current president of the American Association for the Advancement of Science (AAAS), says that the lifetime emissions from coal-fired power plants projected to be built in the next 25 years will equal all the carbon produced by all the coal we've burned in the past 250 years.

Other advocates, such as Becker and Hamilton, are skeptical about further investments in coal. They point out that carbon-sequestration technology doesn't really exist yet and will always be incredibly complicated and expensive. Hamilton says he's talked with utility executives who promise to outfit their new coal plants with expensive carbon-capture gear "if it becomes cost-effective. But if they're competing with old coal plants--well, it's never going to be cost-effective."

The argument is less about technology than about politics. Hawkins (whose NRDC does more work overseas, where the push toward coal seems even harder to resist) thinks the time may be right for some kind of grand deal between coal producers, utilities, miners unions, and environmentalists. Becker, chastened by many years of watching auto companies coerce Congress, thinks Big Coal will always be able to push regulators around. Both of them know the other may be right (in the it's-a-small-world department: Hawkins was Becker's high school teacher; they often ride the subway to work together), and both of them know the stakes are enormously high.

Meanwhile, some environmentalists have started beating the drum for more nuclear power. James Lovelock (who famously hypothesized in the 1970s that Earth, or "Gaia," functions as a single organism) has argued that environmentalists who opposed reactors in the 1970s and '80s bear some responsibility for today's global-warming woes. Indeed, every state-size chunk of ice that breaks off from Antarctica is a reminder that coal-fired power plants are as dangerous as nuclear ones in at least one respect: Each generates waste we have no idea how to safely dispose of.

But the debate over nuclear power is different from the clash over coal, because--all the other pitfalls aside--the economics don't favor atomic energy. "Enviros are often given the credit--or the blame--for killing off nukes, but it was Wall Street that really did it," says Becker. Most analyses show that atomic energy remains the equivalent of burning $20 bills to generate power. By Becker's estimate, you'd get seven times as much carbon reduction if you spent the $1 billion it takes to build a nuclear plant on efficiency programs. You could give the money in the form of tax credits to factories that buy cleaner motors or to homeowners who purchase better lightbulbs.

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Photo courtesy of Rocky Mountain Institute