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.

It’s almost comical the amount of money that keeps getting invested in ethanol. I’ve commented on this before, how despite the weak performance of the existing crop of ethanol companies, like VeraSun (VSE), Aventine, (AVR) and Pacific Ethanol (PEIX) investors keep pouring in more money. The latest example: the tepid showing of BioFuel Energy (BIOF), which lowered its offering range from as high as $18 before going public last week at $10.50, where the stock has pretty much stayed. Unlike the others, BioFuel hasn’t even built any plants yet, though it does have a tight tie-up with privately held power Cargill.

On Thursday, a California company called AltraBiofuels announced that it had raised $165.5 million in debt to build more ethanol plants. Last week the Wall Street Journal ran a curious article speculating on ethanol-industry consolidation. I say curious because there doesn’t seem to be any evidence, only wishful thinking of the inevitable.

This is, of course, how bubbles work. They expand and expand well beyond where the pundits expect. Then they pop. This one will too.

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.