With venture capitalists plowing ever more money into clean technologies, the chances that we'll see a green investment bubble get higher every quarter.

For the first nine months of this year, VCs poured more than $2.5 billion into green-focused companies, a five-fold rise from the amount invested for all of 2005. 

And that's only part of the story. Many investment banks are setting up green funds, and angel investors are also keen to fund companies looking at power conservation, solar power, alternative fuels and other green markets.

It's the kind of frenzy that can lead to over-investment. In a word, a bubble .

At the Venture Summit West conference hosted by the AlwaysOn Network in early December, a panel of investment bankers debated whether we're already in a bubble, whether one can be prevented and, if not, how big it could get.

Although he stopped short of saying a bubble is here, Paul Deninger, vice-chairman of Jefferies & Co.,  said "there could be one, and it could be bigger than the Internet bubble... because the addressable market is so huge."

When Vator.tv caught up with Deninger after the session and asked him to expand on his comments, he echoed something he'd said earlier, that there's little that investment bankers can do to stop a bubble if the demand for green companies is strong enough.

"Stock buyers inflate bubbles, and no one on this panel can stop people from buying stocks," Deninger said. To see more of our interview with Deninger, click on the video above.

The former CEO of boutique investment bank Broadview International, Deninger said that the Internet has fulfilled its promises to reshape many industries. The difference between now and the bubble years is that Internet firms are simply valued more rationally.

"Everything people said would happen with the Internet has happened, but (Internet companies) are valued differently...the valuations got crazy." 

Deninger agreed with something said earlier by Michael Grimes, the head of tech banking at Morgan Stanley -- that a fundamental difference between green companies and Internet companies is that there is already a trillion-dollar global market for energy.

With green companies, "You don't have to create new industries, you just have to cannibalize huge existing ones," Grimes said.

One of the panel members, ThinkEquity Partners CEO Michael Moe, was hosting a green investor conference in San Francisco the same day. He said interest among institutional investors for clean tech companies is phenomenal.

"This is going to be a huge market," Moe said. "It's going to have 12 sub-industries."

Another panel member, Jamie Montgomery, CEO of Montgomery & Co, doubted that either VCs, bankers or investors will show any more discipline this time around then they did during the dotcom heyday. He pointed to the rapid rise and subsequent fall in the price of ethanol earlier this year as proof. "Ethanol got way ahead of itself," he said. 

"We learned nothing" from the Internet bubble, Montgomery said.