But if the greenhouse gas market wanes, it likely will be superceded by other markets.'' Emissions trading remains controversial among environmentalists, but financial analysts see a potential bonanza for banks, investment houses, and accounting firms. ''Technical measures to reduce greenhouse gas emissions usually require investments. Investment banks already active in commodities and securities trading could expand their services towards trading and brokerage of emission credits,'' charging commissions for their services, Hugenschmidt added. Banks also could set up diversified investment funds to spread the risks of financing individual carbon-reducing projects. These schemes would operate like existing mutual funds, through which investors buy the stocks and bonds of a large number of companies rather than tying themselves to the fortunes of only one or two firms. In addition, accounting and consulting firms stand to gain from a surge in demand for ''green'' audits, advice on environmental strategy and verification of carbon reductions, says Clarke, of Ernst and Young.
Environmentalists are less than thrilled with the prospect of profit from pollution.
Given the high stakes involved, many environmentalists favor direct state intervention to promote renewable energy and curb fossil fuel use and exploration. Ironically, say environmentalists, the United States has yet to ratify the Kyoto agreement, arguing that it should require tougher action by key developing countries including China, India and Mexico. These include the Amazon, Central and Latin America, Eastern Europe and Indonesia, according to Seiler. Government agencies are now trying to define 'verification', 'certification', and other key terms.