Lots of encouraging news on the California environment front lately, not only in Silicon Valley-led investments, but in California legislative policy too.

First, California is poised to become the first state in the nation to enforce a limit on the air pollution that causes global warming. A state bill, introduced last week, will, if passed, limit greenhouse gas pollution to 1990 levesl by the year 2020 (free registration), and create a mandatory reporting system to track and monitor emission levels. This will further help spur development of clean technologies. And if all goes well, other states will implement similar messages, just like they followed California’s limits on auto emissions, and then our clean technology companies will be ahead of the curve and make money by selling to other companies. (Press on Mercury News link above for more info about legislation and position by NRDC.)

Meanwhile, Vinod Khosla, the Silicon Valley venture capitalist who has a way of surfing some of the hottest investment waves (his first was the telecom wave of the late 1990s), is apparently making headway (free registration) with his ballot initiative to levy a tax on oil producers and create subsidies for alternative energies. He’s spent $1 million on it so far, and his team says it’ll submit signatures for the ballot by end of this month.

And the latest investment news in this area: Kleiner Perkins, the Silicon Valley venture firm, has invested in a national biofuels company called Altra. The market for alternative energy sources is huge, with biofuels at about $15.7 billion globally in 2005, according to Clean Edge. The biofuel industry faces one big challenge: geography. You need to harvest fuel from crops, and transport it relatively short distances to save on shipping costs. And you need a reliable source of those crops. So Kleiner Perkins has joined a number of other investors and pumped $50 million into Altra, a Los Angeles company that aims to invest in biofuel plants across the nation. And Khosla is invested too, through his private firm, Khosla Ventures. Eighty percent of the company’s revenue will come from the sale of bio-fuels and ethanol to refiners, with the rest mostly from the sale of wet-distillers grain and dry-distillers grain to dairies and cattlemen, according to a report in VentureWire (subscription required). We note that Kleiner’s John Denniston, who has been a lead guy on managing Kleiner’s internal finances until now, and not really leading investments into companies, has apparently expanded his role. He hasn’t participated on that many boards (or so his bio suggests), but will take a board seat at Altra. .

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