As governments, exchanges and corporations make plans for trading on aglobal scale, one-off deals are already beginning to emerge in locations asfar afield as Siberia, Costa Rica, Ontario and New South Wales.

The players -- companies like Bankers Trust, CantorFitzgerald LP, SumitomoCorp, Edison International Inc and a handful of niche firms -- are bettingthey can turn the results of November's United Nations conference on climatechange into a billion-dollar business over the next five years.

"We're seeing the evolution of an over-the-counter emissions market. Nextwill be a move to futures exchanges," said Richard Sandor, chief executiveof US Green derivatives firm Environmental Financial Products.

"But now is the time for entrepeneurs to emerge and find opportunities."Under a blueprint sketched out at the UN summit on climate change in theJapanese city of Kyoto last year, developed nations proposed a 5.2-per centcut in their output of greenhouse gases from 1990 levels by around 2010.

This November, the signatories to that pact will reassemble in Buenos Airesto further the accord and try to bring developing nations into the fold.Advocates say emissions trading would provide a market mechanism allowingparties unable to meet their emissions quotas to buy the right to pollutemore, while also fostering clean air measures in poorer countries.

"The pivotal issue is devising a programme that will involve market-basedrather than voluntary mechanisms," said Graciela Chichilnisky, a technicaladviser on emissions trade to a grouping of 77 developing nations and China.Heeding the call, organisations as diverse as the World Bank, London'sInternational Petroleum Exchange (IPE), the Sydney Exchange, oil giantsRoyal/Dutch Shell and British Petroleum, and the UN Industrial DevelopmentOrganisation have joined the hunt for workable schemes.

This summer, the European Commission and the British government have issuedinvitations to the public sector for potential trading programme designs.Some firms, unwilling to wait for a global model for tradeable emissions totake shape, have chosen instead to find niche trades and act on themindependently.

Analysts say as many as eight deals involving international credit transfershave taken place.

Sandor's Environmental Financial Products, for example, recently spearheadedan $80 million investment in 1.1 million acres (440,000 hectares) of CostaRican rainforest.

Because the forest has the ability to absorb as much as a million metrictonnes of carbon dioxide from the atmosphere, Sandor's investmenttheoretically secures the rights to sell credits to companies at the goingrate of between $10 and $20 per carbon tonne.

Bankers Trust Australia, which recently signed a deal with the government ofNew South Wales to devise a trading system for the region, is investing insoftwood forests to be used as similar "carbon sinks" for regionalcoal-fired utility Pacific Power.

"We have healthy domestic activities, now we are looking at a more robuststructure involving over-the-counter deals with foreign corporations," saidJohn Hughes, vice president with Bankers Trust.

Further North, Japanese power producer Electric Power Development Co inked adeal with Unified Energy Systems to help cut the Russian power utility'scarbon dioxide emissions by converting coal-fired plants to natural gas.The resulting carbon credits, also hotly pursued in Russia by Sumitomo,would be earned under a Kyoto proposal known as joint-implementation andwill help Japan meet its commitments to cut emissions by some six per centfrom 1990 levels by 2008-2112.

Last December, in one of the first cross-border deals, Canada's OntarioHydro bought the right to emit about 10,000 tonnes of carbon dioxide from apool of credits belonging to Edison International's Southern CaliforniaEdison Co.

Edison earned the credits by increasing the efficiency of its Mohavecoal-fired power plant in Nevada.

"With the interest and momentum behind this idea, there could well be a realmarket out there fairly soon," said Robert Williams, a senior officer withthe UN Industrial Development Organisation (Unido).

But Williams and others stress that agreement in Buenos Aires this Novemberon the merits of the trade, and on cooperation from the developing world toreduce greenhouse gases, will be crucial to a global system.

Developing nations, where a wealth of potential carbon credit investmentexists, have so far resisted signing on to the reduction pact. They say theyshould not have to risk slowing their economies to fight a problem createdin large part by developed nations.

For some firms, the haze and uncertainty surrounding the future of organisedtrade is a business in itself.

"Emissions trading at present is a black box for many," said CarltonBartels, managing director of Cantor Fitzgerald's new EnvironmentalBrokerage Services, which helps companies cope with the rapidly changingfield.

"We're being proactive, looking at companies with a large carbon exposure,providing them with hedging tools they will need to navigate the trade,"Bartels said.