In this case, a Chilean pork producer is eliminating methane fumes from animal waste and selling the resulting ''credits'' to Japanese and Canadian utilities, requiring that much less of them as they reduce carbon dioxide emissions at their coal- and oil-burning power plants.
It is one of the biggest deals in a potential multibillion-dollar market, a global exchange a Canadian executive calls ''absolutely essential'' for meeting targets under the Kyoto Protocol. But some warn that abuses may subvert the spirit of that climate treaty.
Last month in Buenos Aires, Argentina, the annual international climate conference approved an expansion of this Clean Development Mechanism, or CDM, as the exchange is called, and a strengthening of the U.N. office overseeing it.
Carbon dioxide, methane and a few other gases trap heat that otherwise would escape the atmosphere. A scientific consensus, endorsed by a U.N.-sponsored network of climate experts, blames much of the Earth's temperature rise of recent decades on these emissions, and warns it will lead to damaging climate disruptions.
The 1997 Kyoto pact, effective next Feb. 16, sets mandatory targets for industrial nations to reduce emissions by 2012. Although the U.S government rejects Kyoto, other nations are setting emissions quotas for industries that spew out the gases, particularly carbon dioxide, the most common.
The CDM was established under Kyoto on the theory that emission reductions help the climate wherever they occur. It allows northern industries to underwrite reductions in developing countries - where they are not mandatory - and get credit for them.
Japan says up to one-third of its required cutbacks may come from foreign sources. Don Wharton, director of sustainable development for Canada's TransAlta utility, said the CDM is ''absolutely essential'' because there's too little time to install new technologies at home.
''We believe most large Canadian companies will have to rely on offsets [credits] to meet their reduction requirements,'' he said.
TransAlta and Tokyo Electric Power Co. found a partial answer in pig manure pits in the green valleys south of Santiago.
Industrial pork operations usually collect excrement in pits where it decomposes naturally, emitting methane into the open air. But Chilean food producer AgroSuper, spotting the Kyoto opportunity, installed $30 million in technology to handle the waste of 100,000 pigs, covering pits with vast plastic sheets and drawing off the methane, some to flare, some to use in generators to power farm operations.
Though less prevalent than carbon dioxide, methane is a more potent greenhouse gas. Each ton of contained methane earns AgroSuper around 20 ''CERs'' - certified emission reductions equivalent to 20 tons of carbon dioxide.
The Chilean agribusiness will divide 400,000 CERs per year for nine years between the Japanese and Canadian companies. Wharton estimated this would meet 10 percent of TransAlta's needs for reductions.
A credit currently sells on the new European carbon market for about $10. But terms of the AgroSuper deal, still awaiting final U.N. approval, were not disclosed.
That carbon price is expected to rise, and big players are jumping into the market. A firm called CO2e (''carbon dioxide equivalent''), a subsidiary of the New York financial house Cantor Fitzgerald, brokered the AgroSuper deal and is developing another involving Brazilian power plants using sugar cane, a renewable fuel less carbon-heavy than coal or oil. China, meanwhile, is working to qualify more than 500 projects for salable credits.
Environmentalists worry that a flood of questionable projects may win U.N. certification as Kyoto comes into force in 2005. They cite CDM proposals for hydropower dams, for example, saying they often are ''business-as-usual'' projects that are not replacing carbon-heavy alternatives, but would have been built without the Kyoto trading mechanism.
''The fact they're getting CDM credits is not helping the climate,'' said Ben Pearson, Australian founder of a campaign called CDM Watch. He said climate change will be slowed not through ''marginal'' projects with animal waste, but by addressing ''the real issue, which is to fundamentally reform the way we produce and consume energy.''
Santiago lawyer Sergio Vives, who helped negotiate the AgroSuper deal, defends it as a real reduction.
''It's quite clear they probably wouldn't have gone ahead with this technology'' - and methane would still rise into the atmosphere - ''without an incentive like the CDM,'' he said.
The world is taking notice of South America's porcine potential.
A Florida-based firm, AgCert, is installing methane-capture technology at 30 pig farms in Brazil. In one Brazilian state alone, Minas Gerais, 3.4 million pigs produce 7 million tons of waste per year - a lot to work with to keep lights burning in the credits-hungry north.