updated 2/28/2005 5:25:49 PM ET 2005-02-28T22:25:49

With trade booming and prices up, it’s no wonder traders are anxious to talk about the world’s latest commodity: pollution permits.

The 850 businessmen, government officials and bankers meeting in the Netherlands Tuesday are holding the first conference on the newly created market in greenhouse gases since the Kyoto Protocol on climate change went into effect.

Though only an exercise in networking, the size of the conference, to be opened by a Dutch Cabinet minister, reflects the explosion in trade in carbon dioxide, the waste product spewed into the air by heavy industry.

Under the climate agreement that took effect Feb. 16, 35 industrial countries must meet specific targets for reducing emissions of carbon and other gases blamed for trapping heat in the atmosphere and causing the planet’s average temperature to rise.

The treaty allows countries and companies that cannot meet their quotas to buy carbon credits from others that produce less carbon than permitted, and thus have a surplus of allowances to sell.

By Monday, about 12,000 industrial plants across Europe were supposed to know their allotted allowances, but the deadline was apparently being missed in many countries.

But the treaty took several other important steps forward Monday.

The Netherlands posted its carbon registry where trades are recorded and companies can buy or sell credits on the Internet, becoming one of the first countries to have the Kyoto structure in place. In Norway, Nord Pool opened the first carbon allowances exchange, operating as a platform the way other exchanges trade in metals, soya or stocks.

CO2 officially became a tradable commodity Jan. 1, although buying and selling in “futures” has been going on for two years. Eventually, companies will trade directly with each other or through banks and exchanges.

“The market is growing quickly,” said Stian Reklev of Point Carbon, a Norwegian-based company that analyzes the trade and is sponsoring the conference.

Reklev said 8 million tons of carbon were traded this month, compared with 6 million in January and about 2.5 million tons in each of the preceding four months.

Prices also shot up, from 6.50 euros per ton ($7.80) a month ago to 9.50 euros ($11.40) on Monday.

Until now, Reklev said, the price fluctuated according to political developments, as the Kyoto Protocol went through an uncertain process of adoption and ratification.

“Now the price is being determined more by fundamentals, like temperatures and rainfall. It’s settling into a normal market,” he said. The current price was boosted by Europe’s cold snap, he said.

Traders estimate that within two years the carbon trade will be worth 10-15 billion euros ($12-18 billion) per year.

About 250 Dutch companies have been assigned caps, or limits on how much carbon they can produce, said Babette Graber of the Ministry for Housing, Spatial Planning and the Environment.

“They received their permits last week” after each company submitted a detailed plan for monitoring their emissions, Graber said. “Everything has been approved in time,” she said, making the Netherlands one of the few countries in Europe to meet the Feb. 28 deadline.

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