JIM NORTON HAD been the first to warn me that "Western constructs" about environmentalism were useless in China. Pristine wilderness doesn't exist. National parks have hard borders only on maps. The Nature Conservancy's Yunnan Great Rivers Project, for example, includes five "action sites" totaling 25,000 square miles: the rugged Gaoligong Mountain Range; Laojun Mountain and its golden monkeys; the Lashi Lake watershed, high Tibetan habitat for the black-necked crane; Shangri-La Gorge, with its red pandas and rare plants; and the Meili Snow Mountain Range, including 22,241 foot Kawagebo Peak, Yunnan's tallest summit and one of the eight sacred mountains of Tibetan Buddhism. Still, 3.1 million people live inside those boundaries, farming, tending goats, or denuding forests for firewood.

Conservation here requires exceptionally delicate balance. The Nature Conservancy has made poverty alleviation one of its central missions here, installing fuel-efficient stoves, building bamboo houses, and setting up biogas generators (manure tanks) that could help local people use less firewood. In theory, this helps them grow their way out of a damaging subsistence economy.

But even that may not help, warns Alan Rabinowitz, executive director of science and exploration at the Wildlife Conservation Society, in New York. "This whole concept of helping wildlife by helping the people is patently absurd," says biologist, who set up protected zones across the border in Mayanmar. China's Yunnan—unfavorably—to a stand of trees in Central Park, he proclaims, "There's not much left to save!"

Rabinowitz believes that TNC may have taken on too much, mixing multiple projects to protect snow leopards and monkeys, herbs and orchids, watersheds and forests. But TNC started ambitiously in Yunnan and has already been invited by Beijing to go bigger, designing a similar conservation plan for the whole country. "If you take on too large a landscape, too big a project," Rabinowitz warns, "in the end you save nothing."

But TNC has little choice. Its main partner, Yunnan's provincial government, wants dams, economic growth, and protected areas, all at once. So TNC has advocated alternatives—"micro-hydro" projects, conservation, education—without explicitly battling the dams. Despite the difficulties, Ed Norton, the former TNC senior adviser, believes the Yunnan Great Rivers Project will endure, because it is aligned with existing Chinese plans and because the driving impulse behind it is Chinese. Everything in China is changing every year, the conservationist reminds me; in the end foreigners are advisers, with little influence beyond "the power of our ideas."

That hasn't stopped green groups from trying to save China from itself. In addition to the big players—TNC, Conservational International, and the World Wildlife Fund— at least 2,000 foreign and Chinese environmental groups are registered in the capital, with more setting up shop every month. The Chinese require that outside NGOs be sponsored by a "mother-in-law" agency. It often takes years merely to register the paperwork; even then, only a small "demonstration project" might get approved, with officials setting up parallel groups known as GONGOs (government-organized nongovernmental organizations) that suck up much of the same funding.

Life is even harder for Chinese greens. The Communist Party allows only strictly local projects, and prevents national membership. People skirt that issue by organizing around local personalities—crusading journalists like Hu Kanping of China Green Times, or photographers like Huo Daishan of the Huai River Guardians, both of whom have used exposés to rally the public to the defense of the environment. Chinese citizens already stage tens of thousands of local protests, drawing at least four million people a year. Two months before my arrival last February, police shot dead three villagers during a land-use protest in Guangdong. In November, police secretly executed a protester imprisoned for killing a policeman in a 2004 riot against the Pubugou dam, which would displace 100,000 people in Sichuan. When 40,000 villagers and farmers battled police for two days at one factory site, SEPA minister Zhou Shengxian warned his government colleagues that environmental issues were becoming a "blasting fuse" that could set off a social explosion.

What China needs is not a green Mao but "a normal system, i.e., a system," Ma Jun told me. Ma, the author of China's Water Crisis, a 1999 book that Edward Norton (the actor) compared to Rachel Carson's Silent Spring in Time magazine last April. Ma, a poetic 38-year-old with a Yale fellowship behind him, laid out a sparkling vision for me (complete with PowerPoint display and selections from Taoist poetry) in a gleaming Beijing hotel lobby. The real problem in Yunnan, and China, Ma argued, isn't environmental but political. "It is about transparency," he insisted, "disclosure of information, letting people know what is going on, letting them see what is happening to them."

Ma, like other Chinese greens, has skirted the environmental restrictions by establishing a for-profit consultancy rather than an NGO, pushing the idea that technology can still allow the country to develop without despoiling itself completely.

"We can leapfrog," he said, "just like in telecommunications." Energy-efficient lightbulbs, still uncommon in America, are everywhere in electricity-starved China, at one-sixth the U.S. cost. Though solar prices are rising, China is scaling up production of solar panels, which have already made Shanghai businessman Shi Zhengrong into the country's richest man, with assets estimated at $2.2 billion. Even the humble business of recycling paper has earned Hong Kong's Zhang Yin $1.5 billion, making her the richest woman in China. Over the next decade, earth-friendly technologies like wind turbines and smokestack scrubbers will also slide toward a "China price."

Green initiatives are sprouting up everywhere. The 2008 Beijing Olympics aims to be carbon neutral. Sustainability guru William McDonough is designing recyclable cities through the joint China-U.S. Center for Sustainable Development. Chrysler is manufacturing tiny, fuel-efficient cars. But with millions of impoverished people desperate for jobs, energy, and consumer products, these foreign projects can be buried under sprawl and smog, theme parks in an age of brute force.

Still, there's no denying that a profound shift is taking place: Chinese and American entrepreneurs are pushing the smoke-spewing dragon in a new direction.

Here's hoping red is the new green.