Keeping in mind the practicality i personally believe that no one type of cup will suffice. Hence i am suggesting a combination of green cups to ensure it is surely accepted and then taken forward to the next level. I suggest the following cups to be used depending on the requirement
 - Earthen cup: Cup made of mud which is cheap, eco friendly and can be recycled easily
 - Areca Nut Cup: Cups made from the Areca nut. These are again eco friendly and recyclable, though they are a bit more expensive than Earthen cups
 - Corn Plant Starch Cup: Cups made from the starch of the corn plant which are eco friendly and totally recyclable

I feel a combination of the above 3 cups can be used for either drinking in the coffee house (earthen cups / areca nut cups) and for takeaways (corn plant starch cups). This can be introduced gradually as this will help in people getting used to it while working towards the long term goal of reducing non recyclable coffee cups. The cost benefits can inturn be passed over to the customer which will be an incentive for them to choose these cups over the standard cups.

The resources required for the above 3 cups though are cheaper, initially though it might be expensive till the process is established and the cost is brought down due to economies of scale. Over a period of time these will definitely be a lot cheaper than the current cups. Also the enviromental impact of producing these types of cups is minimal compared to producing the current plastic / paper cups. So overall this will help in reducing our carbon footprint.

These are not exactly new ideas, but they are still been accepted in the markets. With increased focus and better technologies, there is further scope of inventions in this area which will further benefit in going green.

At the end of the day the whole experience of drinking coffee easily and on the go will remain unaffected and personally i feel the usage of the above mentioned cups will actually add a different dimension to the idea of catching up over a coffee.
Have a nice day
All please feel free to provide your feedback / comments.