When Perry Farrell was getting ready to release the Columbia debut from his new band, Satellite Party, ecology weighed so heavily on his mind that he wanted the project to be available only digitally.

But as often happens with well-intentioned environmental initiatives, economics quickly factored into the discussion. Sony Music executives pointed out that such an approach would truncate potential commerce in a world where, based on Nielsen SoundScan figures, digital accounts for about 24% of U.S. music sales. Also, such a move would have presented brick-and-mortar merchants with an uneven playing field.

Instead, Farrell and Columbia came up with an eco-friendly, green Digipak made exclusively out of recycled paper. "We have a completely carbon neutral CD," Farrell says. "But in the future, you know and I know that the answer is we don't press up CDs at all."

Farrell is not alone among artists taking the lead in green matters. Trailblazers include the Red Hot Chili Peppers, whose 2002 album "By the Way" featured a 12-page booklet on recycled paper. And in 2003, when Neil Young decided to produce a multimedia event around his "Greendale" project, the book version was printed on eco-friendly paper and ink.

In fact, environmentally sound packaging has been an issue for Young as far back as his "Harvest" album in 1972. "Neil Young definitely asked for an album to put out on recycled paper," former Warner Bros. Records head of sales Lou Dennis recalls, "and we did it." Then and now, artists have driven the industry's environmental innovations.

Click here to read the full article and find out the initiatives that labels and merchants are prepping, what's considered to be the worst packaging, what concerns retailers have raised and more.