The housing bubble was primarily driven by two factors – a market that somehow found a way, in its deconstruction by financial firms, to avoid moral hazard at every step of the way (so money was invested without regard for return because that was someone elses problem) – and then really set in motion by government interest rate policy designed to stimulate housing prices as a mechanism for propping up consumer spending. The internet mania had very little gov’t help (aside from Darpa funding its initial technical invention…) – it came mostly out of investor ignorance (from pros and retail alike) that couldn’t tell between good game changing businesses that were capturing marketshare by changing it permanently – e.g., ebay – and me-too dreck that had no right to be considered similar – e.g., pets.com.

I am not certain the green market follows either path. Certainly the gov’t has its hand in green business on the demand side – e.g., tax subsidies make solar somewhat reasonable if you don’t plan to move for 7 years – but competing technologies – like oil – have tremendous subsidies and create large externalities that are currently borne by the commons and ignored by government as a de facto subsidy (e.g., pollution mitigation, military costs associated with oil access foreign policy, global warming impacts) -all of which combine to make them look economically attractive relative to greener alternatives (which don’t have the same kinds of externalities so remain expensive for the time being)…

So I suppose that aspect of the green bubble could be like the housing market in so much that the gov’t is involved from a policy standpoint – but the subsidies that we talk about mostly have been around forever, its only now that gov’t. has show its incompetence in managing traditional energy supplies, resulting in price spikes, that renewables have even been looked at seriously.

Also, while much of what happened on the internet either created new markets where they didn’t exist – or took old line businesses to school (e.g., craigslist killing the classifieds – and thereby the newspapers) – many green investments can’t do either because they are commodities. Lucky for the green industry there is just burgeoning demand – so much that there is likely a simultaneous bubbles on both sides of the energy equation going on…