During the midst of this week's financial crisis John Stepek, writing in MoneyWeek.com, saw a bleak outlook for carbon emission initiatives "The only good thing about the coming economic slump," He said, "Is that everyone might stop gibbering about the environment for five minutes. Forget environmental taxes - the coming recession will help sweep away a ton of unnecessary consumption quicker than you can say the words "mass redundancies" and "soaring repossessions."

Since Stepek's article was published the crisis has abated, magic has returned to US and UK markets and the economies of both countries are levitating happily despite the fact that their primary input - oil - is costing industry over $80 a barrel. There is a widely held belief that this situation will not last, that the global economy will stumble at the next fence and oil prices will eventually fall back to below $50 per barrel as a recession reduces global demand. If, or when, this does happen what are the prospects for the renewable, or alternative, energy sector?

The ‘green' economy is in much the same situation as the media and telecoms industry was prior to the bursting of the dot com bubble. Like media and telecoms the renewable energy sector is dominated by companies with potentially disruptive business models and aggressive business strategies. Just as dot com start ups found it difficult to find a defensive strategy when the online services market soured, so the renewable energy pioneers will find few places to run and hide when consumers stop consuming and the oil price falls.

Perhaps first to suffer will be the carbon trading companies. In previous downturns corporate travel was cut and conferences were cancelled. Ironically this market has already been eaten into by some of those media and telecoms companies who survived the dot com crash and are now touting video conferencing as an alternative to face to face meetings. A lot of corporate travel also disappears when companies cut costs - bosses take the view that workers who spend most their time sitting in airport lounges and riding on airplanes are probably dispensable.

A reduction in travel would also represent sudden death for biofuel refiners who will already be under pressure as governments, aware that unemployed people become restless when they cannot afford basic foods, throttle back the supply of grain to the biofuel industry.

Leisure travel will also suffer as people without jobs will be less likely to take a cheap flight to Spain - especially if the house they bought there two years earlier has since been repossessed. Less cheap flights means less guilt to offload and fewer trees to plant.

A shifting focus for emotions will also hit the renewable energy technology market. It is worth considering that the payback period for a small wind turbine or a ground source heat pump is over 10 years. It is over 45 years before a solar water heating and solar electricity generating system pays for itself - longer than most people live in one house or, come to that, have left to live. This means that the purchase of most renewable energy technology is driven by emotion rather than commercial logic. While the consumer has a job that is fine - but once they are unemployed their emotions are focussed on issues much more immediate and closer home than saving the planet.

The only areas of the low carbon emissions market that resemble defensive plays are insulation and draught proofing. While these technologies have a payback period of under 4 years they make few appearances in the Power Point presentations Silicon Valley based alternative energy start ups make to the investment community.

Even so, there are always survivors in any market crash - those video conferencing systems are being produced by companies that must have found somewhere to hide in 2002. While fossil fuels have still not been confined to the dustbin of history they have endured a worst battering during this part of the economic cycle than they did during the slump following the 1970/80's oil crisis. The landscapes of most developed countries are dotted with wind turbines and, in Germany and California, solar energy farms. This time a few hydrogen fuelled vehicles actually made it onto the road and electric cars and motorcycles were purchased by the public. Energy companies and oil producer nations are far from mortally wounded but they are limping a little. The survivors this time will be the companies that can turn groundbreaking ideas into recession breaking products that actually lower input costs for industry and cut the consumer's energy bills. For the investor success will depend on correctly identifying the companies that will survive to become the Ciscos of the renewable energy sector.