The more I probe the hardest questions about the future of energy and our best shot at sustainability, the more I am convinced that the real questions are not about technology, but about human nature.

We have all the technology we need to make homes that produce their own energy. We know how to build high-efficiency rail and sailing ships. We know how to grow food organically and sustainably. We have the science to create economic systems that internalize all effects and operate in a beneficial manner. We’ve had the quantitative knowledge for decades that we would eventually go into resource and environmental overshoot.

We certainly have the technology to build an all-electric infrastructure entirely powered by renewables. We will crack the storage problem and all the other technical problems. I have no doubt that the technology also exists to build an all-nuclear solution, or even an all-hydrogen solution.

We have the technology to recycle all our water and reclaim all our waste. We could even control our population… if we had the will.

We also know what real sustainability means. I don’t think I have ever seen it better put than by my friend Paul Hawken in his book, The Ecology of Commerce:

Sustainability is an economic state where the demands placed upon the environment by people and commerce can be met without reducing the capacity of the environment to provide for future generations. It can also be expressed in the simple terms of an economic golden rule for the restorative economy: Leave the world better than you found it, take no more than you need, try not to harm life or the environment, make amends if you do.

The real problem is we don’t want to act that way. Virtually no business in existence meets that standard.

Technology and knowledge simply aren’t the issue.

We don’t want to think about having to put CO2 back in the ground after we burn fuels. We don’t want to worry about the waste from our consumption. We don’t like to hear about limits to anything we want to do. We don’t want to rearrange our stuff, our lifestyles, so that they are truly sustainable. And we certainly don’t like anybody telling us we can’t have more kids.

In fact we don’t even like to think about it… so when the subject comes up, we dismiss it with a flip comment like, “So I suppose you want us all to be living in caves and working by candlelight?”

The upwelling of emotions that this topic inspires — especially fear — usually makes a neutral and scientific discussion out of the question.

And from fear, most people leap to faith: faith in the perfect wisdom of free markets, faith in technology, faith in human ingenuity. No rational discussion needed.

Nor is this aspect of human nature a news flash. ‘Twas ever so. At the suggestion of a smart hedge fund manager buddy, I recently put Thucydides’ history of the Peloponnesian War in my reading queue for clues on how humanity actually performs when presented with serious fiscal and resource challenges.

I know some very smart people who are fully armed with the data on resource depletion and peak oil, and who still choose to believe in a cornucopian future where humanity acts wisely, humanely, justly, and in concert with a view toward long-term planning, solving all of our problems without any serious hardship.

This time, they contend, it will be different. After all, aren’t we entering the Age of Aquarius, when humanity finally embraces unity and understanding?

Well, forgive me for being skeptical. The degree of cooperation they envisage has no precedent whatsoever in human history, and there are thousands of examples to the contrary.

In fact I was a bit shocked today when I looked back on my first opus on sustainability (“Envisioning a Sustainable Future”), published in my online magazine Better World 13 years ago, and realized that all of the problems are the same now as they were then, only worse: population, energy, water, extinction, environmental destruction, flawed economic theory, global warming, and humanity’s problem with long-term planning.

It gave me pause. A long pause. Are all my efforts, and those of my fellow agitators for sustainability, simply battling human nature? And if so, what good is it?

Tantalizing Technologies and Hard Questions

At this point, 13 years later, the questions are even less tangible: How will people respond to the coming changes? Can the political support for truly sustainable solutions be marshaled? Will the economy hold out long enough to accomplish the transformation? And how will declining energy supply impede our efforts?

Certainly, in theory, we could replace 220 million light ICE cars and trucks with electric models, and heavy transport trucks with a combination of biofuels, natural gas, and hydraulic storage technologies. The technology exists. But will we have the investment and primary energy supply to build them, if we simply let the market and politics guide us?

Consider “Cash for Clunkers.” Using data and estimates from the New York Times, I calculate that the program pays off in nine years at $70 oil, and in five years at $120 oil. In terms of effective investment in the future, that’s really not too bad. (The photovoltaic systems I designed and sold in my previous career typically paid off in more like 20 years, before incentives.)

Even so, Cash for Clunkers was reviled for swapping out over a quarter-million cars for more efficient ones at a mere cost of $1 billion. What are the chances we’ll have the political support to do 220 million vehicles that way? Especially if oil gets more expensive and we start having shortages and more heavy industry failures when oil goes into decline a mere two years from now?

Sure, we can run airplanes on “renewable” synthetic diesel fuel made from green waste such as yard clippings, and early investors in such technologies will make a bundle. Rentech’s (AMEX: RTK) recent announcement that it had signed a deal to provide as much as 1.5 million gallons per year of the stuff to eight major airlines sent the stock soaring over 360% in two weeks.

But 1.5 million gallons per year is nothing, and thanks to the transport and handling cost of green waste, it doesn’t scale. If it requires transporting massive amounts of the feedstock with diesel-powered trucks, it isn’t sustainable either. Need we even discuss recycled fryer oil?

Similar problems bedevil the alcohol fuels and biofuels, including algae. There are many interesting approaches to both in the lab, but for a long list of reasons (including water availability and the net energy of the processes), they don’t scale well. I don’t see any of the biofuels making more than a 50% gain from their current paltry levels for a good many years yet — and then we’ll be having so many other problems with energy, water, food, and the economy, that the long-term outlook gets very murky.

Sure, we can try to turn to Canada’s tar sands and deepwater heavy oil as the good cheap stuff runs out, but a cursory look at their net energy tells us that doing so is an attempt to play the oil game into overtime, not an attempt to do something sustainable. Thinking otherwise is simply denial.

A straightforward analysis of the data suggest that once we take peak oil, peak gas, and peak coal into account, there may not be enough time left to use cheap fossil fuels for the decades it would take to accomplish a transformation to true sustainability, let alone the human will to do it. And the experience of the last year gives me no confidence at all that the world can smoothly transit this inflection point in economics.

Yet I want to foster inspiration, not desperation. For most people, hope is as essential to survival as food, water, and air. And there is hope — not for business as usual, but for a much better kind of business. Not for endless growth, but for a more sustainable future.

But I am not one for false hope. I have endeavored to bring a dose of realism to this column for three years now, and I will soldier on. The opportunities to create sustainable solutions and profit from them are probably greater now than they have ever been. It’s our task to find them, promote them, invest in them… and beyond that, hope for the best.

Until next time,

Chris