Did you know that companies can now buy and sell "carbon credits" internationally just like other goods and services regularly bought and sold on the international market?

There are two important prerequisites for this new carbon credit business:

1) Your country must have signed the Kyoto Protocol (the United States has still not signed it as of March 2007). These credits are made possible by the Kyoto's Clean Development Mechanism (CDM). That's why sometimes this new line of trading is also referred to simply as "CDM" business.

2) You have to register your "carbon saving" project with the United Nations before you can sell your credits to other international purchasers.

India's leading energy company "Oil and Natural Gas Corp" did exactly that. ONGC expects to sell 850,000 tons worth of "carbon credits" (that is, the right to release that much carbon dioxide into the atmosphere) for Rs 600 million – or RS 705 per ton.

The ongoing rate for carbon credits in the international market hovers (in March 2007) around 11 to 12 Euros per ton.

Some studies suggest, for example, that the total "carbon credit potential" of forests in New Zealand can add up to $13,000 to $20,000 per hectare over the life of the forest. Why? Because trees remove carbon dioxide from the atmosphere.

Who knew the "right to pollute" could be this lucrative a growth market?

So who buys these carbon credits? Western companies from countries that have signed the Kyoto Protocol who for one reason or another either cannot or do not want to reduce their carbon emissions. Such companies find it cheaper to buy the right to release CO2 from more efficient companies in the developing world like ONGC. The Indian giant has announced it will register 11 energy saving projects to reduce gas flaring with the United Nations by the end of 2007. That will of course translate to new authorization to sell more carbon credits and more revenues for ONGC for reducing its CO2 emissions.

Projects to reduce wasted heat in industrial plants or upgrading turbines and equipment for more efficient energy production are all projects that qualify for carbon credits.

Especially lucrative are those projects that curb the emission of methane gas since methane is 21 times more potent than carbon dioxide in terms of contributing to the greenhouse effect.

This is an amazing opportunity for the developing countries to get rich while overhauling their energy infrastructure. It seems to be one case in which you can have your cake and eat it too.