Obviously, it doesn’ t help that oil has fallen back to the $80-a-barrel range. And obviously, some projects will be squeezed more than others given the “flight to quality” we expect to see. Already we’re seeing some hesitation from U.S. politicians about placing a value on carbon or advancing cap-and-trade schemes. The same discussions are taking place in Europe, and much more passionately. Nobody yet is talking about completely abandoning such things, but there is talk of delays — and this is a concern (see this post in the WSJ’s Environmental Capital).

This is also on the minds of big industry. To repeat the words of GM vice-chairman Bob Lutz, who last week described a scenario in which the automaker’s Volt electric car could hit a brick wall:

“Let us say that over the next 18 months the world goes into a major recession, car sales and fuel use drop dramatically, the steel companies produce less steel and therefore less energy, China finds its main export markets drying up, so they are into a contraction … And at the same time Canadian tar sands come onstream, and coal-to-liquids come onstream. All of a sudden there is a reduction in primary demand in petroleum plus all these additional new supply sources. Oil drops to $25 a barrel and we’re looking at gas pump prices at $1.25 a gallon. I personally don’t think that’s going to happen, but that would be a dramatic event for the Volt because everybody would say, ‘Ha!, why should I bother?”

Only a week later exactly what Lutz described began to happen. Now, we still have $80 oil and gasoline at $3 a gallon, but that has happened in just a month! What Lutz describes was an 18-month horizon. And GM is hurting real bad. Let’s hope we’ve reached bottom, or close to bottom, and that the Volt emerges from the carnage mostly unscathed.

I should emphasize that green or clean technology isn’t just about fighting climate change and saving polar bears. It’s about energy security, becoming more competitive, and creating the economy (and jobs) of the future. In this sense, one could argue the need now is even greater to move in that direction. As California governor Arnold Schwarznegger said at the Solar Power International conference in San Diego on Monday night, “We must not give in to those that say that environmental goals should take a back seat until our economy comes back. It’s backwards thinking and just plain wrong.”

I couldn’t agree more. Problem is, backward thinking has a track record of ruling the day when people start to panic. People become selfish, inward looking, and more nebulous concepts like “climate change” get pushed to the margins. Personally, I don’t think we’ll see a repeat of the 1970s, when the eventual collapse in oil prices led (in North America, at least) to an all-out abandonment of conservation and renewable energy. The reason is because we saw what commitment to such programs did in Japan, parts of Europe and Scandinavia. We know, in retrospect, that it paid off in the long run for these countries to stick with the program, and resist the flight to consumption and excess.

Let’s hope we learn our lesson this time around. I’m convinced, on the whole, that we have.