There was an insightful snippet in the New York Times Magazine’s Sunday interview with David Frum, the former Bush White House speechwriter generally credited with authoring the memorable expression “Axis of Evil.”

Frum has a new book out, and in it he explains his newfound environmentalism and why he thinks Republicans need to get right with the green movement. The nuance is interesting:

I’m a latecomer to the environmental issue, which for years seemed to me like an excuse for more government regulation. But I can see that in rich societies, voters are paying less attention to economic issues and more to issues of the spirit, including the environment. Republicans must respond to that.

That “issues of the spirit” is quite the turn of phrase. It’s almost as if Frum is saying this isn’t a real issue but so long as it is perceived to be one then politically, at least, Republicans have to embrace it. If I had to guess, Al Gore probably would sigh and say, ‘Better to have him on board than not.’

Frum also apparently reserves special scorn on Gulfstream liberals like the activist Laurie David, who flies on a private jet. Said Frum to the Times: “We are all terribly sensitive when a politician preaches one version of sexual morality and practices another. Why should we not expect self-designated environmental leaders to practice what they preach?”

The private-jet issue is a prickly one. If I could afford it, I’d NEVER fly commercial. Still, there’s no arguing that if one really cared about dumping carbon into the atmospher, Southwest is the way to go.

I wonder what Laurie David thinks.

I’ve written a handful of times in the past year about signs of a green backlash and a bubble in alternative-energy investments. I’m not one of those global-warming deniers, though. Nor do I think reducing carbon emissions is a waste of time and money. (After all, I spent oodles of time co-writing generally favorable articles about ethanol in 2006 and Al Gore in 2007.) I just know a good old-fashioned investment bubble when I see it. A smart idea first attracts true believers, then clever opportunists, then momentum investors and finally the rubes who invest their money at the top of the cycle. Bubbles are productive, by the way, as they usually lead to positive change. You just don’t want to be the investor left holding the bag.

I gained more confidence in my thesis this week when I learned that Firsthand Funds, a San Jose, Calif.-based mutual fund company, has started a new Alternative Energy Fund (ALTEX). Firsthand is a near-perfect bubble indicator. It’s run by a smart guy named Kevin Landis who has been particularly adept over the years at starting new funds and attracting new investors to them.

Three important disclosures. First, Kevin’s a nice guy who, back when I started covering stocks in Silicon Valley, was always generous to me with his time — though media exposure, of course, is central to the mutual-fund game of attracting more assets and collecting more fees. Second, Kevin’s performance, especially at his only big fund, the Technology Value Fund (TVFQX), hasn’t been half bad. Its 15.3 percent annualized return since its inception in 1994 has trounced the 10.8 percent performance in the same time frame of the Nasdaq composite index. As you can see here, its 1-, 3-, and 5-year performance has been great too. Only Tech Value’s 10-year numbers stink. Which leads to my third important disclosure: I bought into the fund in 2000, when its net asset value per share was twice what it is now. I’ve hung onto the investment as a reminder of the perils of buying a hot sector fund.

The Firsthand Funds lesson, though, isn’t so much about Tech Value, which at $300-some million in assets is a shell of its formerly hyped self. It’s in the other funds Landis has started along the way. Importantly, it’s also about when he started them. The Global Technology Fund, for example, launched in Sept. 2000. Ooops. It has had good years and bad, but it’s down overall and has just $13 million in it. Similarly, the e-Commerce Fund looks great if you’ve owned it for five years. If you bought when it began in Sept. 1999? Not so much.

Which gets us back to the new alternative energy fund. Landis started it in October. This week he disclosed its top holdings include the likes of Applied Materials (AMAT), Corning (GLW) and Suntech Power (STP). (Corning is a top holding in two other Firsthand Funds, which is how you know Landis really likes it.)

What’s funny about all this is that Landis always billed himself as an expert in information technology, which is why investors should trust his, ahem, first-hand knowledge. In this regard he’s no different than the scores of other Silicon Valley professionals who are busy re-branding themselves as alternative-energy experts. (Landis has help in this fund, by the way, who presumably have first-hand knowledge of their own. They are the noted investors Audubon, Defenders of Wildlife, National Wildlife Federation, the Sierra Club and World Resources Institute.)

Will the new fund do well? Who knows. Is this a time when everyone and their sister are investing in alternative energy? Sure feels like it. Has Kevin Landis called a top in a market again by starting a new fund? That’s what potential investors will need to judge for themselves.

Fittingly for the day of the Iowa caucuses – a day when presidential wannabes pay obeisance for the last time of the year to the ethanol gods – a high-profile renewable energy company announced a setback.

Imperium Renewables, a Seattle company founded by a former executive at Microsoft (MSFT), the noted energy company, withdrew its plans for an IPO, citing poor “market conditions.” The company didn’t elaborate on just what market conditions it referred to. But clearly it’s not the market for IPOs. NetSuite (N), despite early criticism from ill-informed pundits, proved that the market always is receptive to the right kind of IPOs. No, the market conditions Imperium must mean are the markets for alternative fuels, like ethanol and biodiesel, Imperium’s particular blend of non-petroleum elixir.

Imperium had hoped to raise $345 million, which would add to the gusher of money flowing into ethanol and other alt-fuel projects. (Reuters has lots of good details in its dispatch on the withdrawal.)

It’s been clear for some time now that the renewable fuels investment craze is a classic bubble. That’s not to say ethanol and biodiesel make no sense. They do make sense at some scale and over some time period. But it means that not every project makes sense and that a whole lot of investors will lose plenty of money.

For Imperium’s part, it had intended to use $240 million for three additional biodiesel plants. One wonders if the market conditions will be right for those either.

The Wall Street Journal editorial page opined Tuesday about the Al Gore-Kleiner Perkins connection. Predictably, they didn’t have much nice to say about Gore, Kleiner or anyone else who believes there’s a climate-change crisis. Marc Gunther and I wrote a long article in the current issue of Fortune on the subject, which the Journal’s eco-skeptics graciously referenced.

A few of the points in the Journal editorial merit hashing over. First, the Journal rightly focuses on Gore’s financial opportunity. It’s worth quoting the paper in full.

[L]like the energy barons of an earlier age, Mr. Gore has the chance to achieve enormous wealth after being named last week as a new partner at the famously successful venture capital firm Kleiner Perkins. No fewer than three of his new colleagues sit on the Forbes list of wealthiest Americans. If Mr. Gore can develop market-based solutions to environmental challenges, we will cheer the well-deserved riches flowing his way. On the other hand, if he monetizes his Nobel Peace Prize by securing permanent government subsidies for nonmarket science projects, he’ll have earned a different judgment.

The Journal is onto more than it realizes here. Gore has said, and it has been printed in several places, that he’ll donate his (undisclosed) salary at Kleiner to the Alliance for Climate Protection, an advocacy group of which he is chairman and which he founded. (He’s also giving the group his Nobel winnings of $750,000.) What nobody reported on is that he is NOT giving away his profits from Kleiner’s investments. (I know this because I specifically asked Gore’s spokeswoman.) When venture capital is done well the profits, also known as carried interest, are much, much bigger than a partner’s salary. The profits also currently are taxed at a lower rate than ordinary income, which is the subject of current legislation in Congress.

As for the subsidies issue, it’s not like Sand Hill Road never has benefited from government intervention. The Internet itself grew out of a Defense Department project. And the lions of VC-land have lobbied successfully on a range of issue from visas for skilled immigrants to the accounting of stock options.

The Journal’s most salient point, and one we made in our article, is the inherent riskiness of applying venture capital to the energy industry. Energy projects take time and money, and lots of both. VC projects tend to be fast and cheap. As the noted venture capitalist Bill Draper told me recently, when I asked why his firm, Draper Richards, isn’t invested in green tech: “Capital intensity tends to be anathema to a venture capitalist.”

It’s simply too soon to prove the following point, but I believe that Kleiner’s investment in green technology carries with it the highest possibility of failure of anything it’s ever done. Then again, venture capital is the ultimate example of risk capital. Failure is assumed, and one sensational hit can make a fund.

If these guys succeed, not only will Al Gore get richer but the planet most likely will be in better shape. The Journal says it would be “as happy as the Sierra Club if one or more of these new technologies turns out to solve the secrets of cheap, efficient energy.” But could they stomach a breakthrough like that and Al Gore taking credit?

Together with my colleague Marc Gunther I spent the last two months following Al Gore around the country, watching him learn to be a venture capitalist. The feature story Marc and I wrote is online here. For Marc’s take on our experience, check out his blog.

As I was catching up on my TV viewing over the weekend (big features tend to get one behind on the important stuff in life), I caught up with the latest episode of the NBC show “30 Rock,” in which Gore makes a pretty damn funny cameo. (It’s the lead video in this Huffington Post post.)

That got me thinking about the one thing Marc and I only winked at in our article: Al Gore’s almost superhuman energy levels. We listed his affiliations: advisor to Google; director at Apple (AAPL), chairman of Current TV and Generation Investment Management and the Alliance for Climate Protection, an advocacy group. He’s also an author and tirelessly gives his now famous slideshow. But we still didn’t really convey how hard this guy charges. His Current partner Joel Hyatt — himself a director at Hewlett-Packard (HPQ), giving these guys pretty good Silicon Valley coverage — told me a story that illustrates the point. He recently asked Gore to attend a meeting with cable executives in Denver. Gore needed to be in London before the time of the meeting and Paris after. Hyatt would have more than understood if Gore passed on Denver. But the former veep made all the meetings anyway.

Gore’s critics can’t stand the guy, but I’ve come out of this process completely understanding why he keeps up this pace: He believes he’s making a huge impact on solving the climate-change crisis. Is ego also an explanation? Of course it is. Without ego, driven, ambitious people wouldn’t accomplish what they do. In Gore’s case, I’m guessing self-aggrandizement is no more than, say, 30% of his motiviation. And that’s an aggressive, probably uncharitable estimation.

Will he run again for president? We address that in the article. Short version: He told Marc and me he doesn’t think the “conditions” are right for him to run, meaning that though he has made a lot of progress is getting the public to come around to his view of the environment, he’s got a ways to go yet. Al Gore is 59. He’s a student of history and of politics, which he likes to say is a non-linear process.

My guess? He’ll run again for president. Just not in 2008.

It’s taken me 15 years to get comfortable with that joke. In my second job out of college I was the Washington correspondent for a fine trade publication called Plastics News. I joined shortly after the weekly started, and it’s still alive and thriving. It was my crash course in business journalism as well as my introduction to lobbying and policy issues. At the time the plastics industry was frantically trying to avoid regulation by promoting recycling. All the major producers and users like Dow (DOW), DuPont (DD), Procter & Gamble (PG) and McDonald’s (MCD) were involved in the debates. I wrote about garbage long before Marc Gunther got interested.

Anyway, I’m ruminating on this now because plastics are as relevant as ever, even if General Electric (GE) is getting out of the business it pioneered. GE, in fact, scored a victory by selling the unit for $11.6 billion, far more than the $8 billion or so Wall Street had originally expected. The buyer is the Saudi company Sabic. An interesting side note is that GE early on said it wouldn’t entertain offers from “clubs” of private equity firms. In the end, a buyout fund didn’t get the prize. The New York Times published some interesting history about the unit, which dates to 1930. I’d forgotten that Jack Welch and Jeffrey Immelt, GE’s previous and current CEOs, worked at the plastics division.

Elsewhere this week, investment firms Cerberus and Oaktree Capital (each is in the news themselves for other reasons recently — click on the links) sold their investment in Formica, the historic laminate company that I frankly didn’t know still existed.

That’s the thing about plastic: It just doesn’t go away.

The debate continues to rage about ethanol. Is it good for the environment? Maybe not. Is it good public policy to be supporting U.S. ethanol over imported products? Definitely not. Is there a ton of financing available for green-related projects? Oh yes.

Now comes news Monday that the ethanol gusher continues. VeraSun Energy (VSE), one of the few pure-play ethanol producers to trade publicly in the U.S., announced that it has raised slightly less than half a billion dollars in junk bonds. (The precise after-fee proceeds will be $436.4 million. Read the details here.)

VeraSun will use most of the money for ethanol facilities, which isn’t what it’s done with all of its prodigous fundraising. Last year it hauled in $450 million in an IPO at $23 a share, nearly half of which went to several of its early investors, including Bluestem Funds in South Dakota and the New York firm Eos Funds. This is a good illustration of how market bubbles work in the early stages. Early investors take advantage of subsequent enthusiasm and public investors get suckered into losing their money, at least in the short- and medium-term. VeraSun’s stock now trades for less than $18 per share, which probably explains why the debt markets were a better option than selling more stock. You’ll find similarly ugly stock charts for other ethanol offerings, including Aventine Renewable Energy (AVR) and Pacific Ethanol (PEIX).

This gusher most definitely will continue, by the way. At least until public investors get tired of helping savvy private investors cash out.

Some good stats out today from at outifit named Lux Research on the bubble aborning in green-tech investing. (Bubbles aren’t necessarily a bad thing, by the way, as a new book by my pal Daniel Gross argues.) Lux counts 930 energy startups in the world today, and firm president Matthew Nordan says “there’s no way that more than a fraction … can possibly succeed.” I made similar bubbleicious observations recently in a Fortune column.

Some other nuggets:

* There were $2.04 billion in green venture capital investments in 2006, about half again as much as the total invested since 1995.

* Just a few investments from VCs (think: Khosla Ventures, Kleiner Perkins, VantagePoint, etc.) account for a disproportionate share of the investments: the top 10% of investments have soaked up 39% of the cumulative VC capital deployed.

* “Major print media” mentioned green investing 3,485 times in 2006, representing 70% increases for each of the last two years.

If you read carefully, you’re starting to see a bit of a backlash on all things green, and not necessarily only from the Al Gore-hating rightwing media. Kurt Andersen penned a savvy piece in New York recently called So We’re Green. Now What? Yesterday’s New York Times also ran a thoughtful article in the Week in Review section on the limitations of carbon offsets. It also used the wish-washy headline-writing technique (see above) of asking a question: Carbon-Neutral Is Hip, but is it Green? Brandweek reports that Honda (HMC), a clever marketer, is pulling back on its Environmentology advertising campaign.

The point here isn’t that environmentalism is a crock. Just that merely driving a Prius or planting a tree doesn’t all by itself help the environment that much. Neither does owning shares of First Solar (FSLR), because it is one of the few green-tech success stories so far, or General Electric (GE), because it’s investing heavily in wind power. (Some interesting tidbits on First Solar, by the way, in this article by the one and only Carol Loomis.) And with every bubble comes a backlash. Watch for it.