"It's a trivial market, but that is why we are here ... to build this into something that will change the world," said Jack Cogan, president of US based Natsource, which advises companies on how to enter emissions markets.

While the market is small, growth has been fast. The European Union's emission trading scheme set up by the Kyoto Protocol that kicked off early this year has traded nearly $4 billion in emissions credits. The Kyoto pact requires 39 developed countries to cut greenhouse gases below 1990 levels from 2008 to 2012.

And "carbon funds" that operate much like mutual funds, in which investors purchase greenhouse gas emission credits mainly from environmentally friendly wind, solar or agriculture projects, have also taken off this year.

Global carbon funds now total about $3 billion. The World Bank manages eight carbon funds with private and public participants that total about $1 billion.

Natsource has about $700 million under management in carbon funds. And a group of investors will soon launch a carbon fund in Quebec.

The success is sweet to brokers and advisers who have toiled for years to create markets. Particularly after President Bush pulled out of the Kyoto Protocol in 2001, leaving the world's leading carbon dioxide emitter without the fundamental creator of demand - mandatory caps on the emissions of gases, such as carbon dioxide that many scientists believe are warming the planet.

And environmentalists have learned how markets can work to shift money from rich countries in the Northern Hemisphere to clean energy projects such as the burning of methane from decaying manure in countries in the south.

"When I first started out people in the Sierra Club and Greenpeace shunned me, saying 'How dare you try to make money off the environment,' said one player who advises companies on how to enter carbon markets in China and other developing countries. "Now they embrace me."

HITCHES

Another trading opportunity set up by the Kyoto Protocol, the so-called clean development mechanism (CDM), has been slowed down by bureaucracy and by the small size of the UN staff that regulates it.

The UN has approved more than 40 CDM projects and hundreds are waiting in line.

The International Emissions Trading Association, which has more than 100 members of companies that trade emissions or are interested in the market, issued a "Christmas wish list" to the UN office to streamline the program.

In the United States, a plan by nine states in the Northeast to break with Bush and create a regional carbon market has been hit with a delay from Mitt Romney, the Republican governor of Massachusetts, one of the states that has been organizing the plan for years.

And policy movements can shift prices of credits for carbon dioxide equivalents on the European Trading scheme, currently trading at about 20 euros a tonne.

Market players fear that if the environmental ministers from about 190 countries meeting in Montreal this week don't agree to a second phase of the Kyoto Protocol, demand for emissions credits could take a big hit.

Still, many are already planning for trade beyond 2012, when the first phase of Kyoto ends.