The Gold Mine in the Greenhouse:

"The Shenzhen landfill gas project is exactly what Kyoto agreements were designed to make possible," Says James Cameron Vice Chairman of Climate Change Capital.

The following is an abstract of an article published in Environmental Finance by Michael Northrop and David Sassoon explaining how the Kyoto Protocol and EU Emissions Trading scheme, are laying new foundations for an international market directing capital to tackle climate change.

"The port of Shenzhen in China faces south towards Hong Kong across a 35-kilometre stretch of water. Home to a mere 20,000 people in 1979, today you'll find 12 million people there, a bursting economic development zone, a microcosm of the new China. Look a little closer and you'll find the landfill that receives 600 truckloads of garbage a day.The piles grow ever higher and rot in the coastal sunshine. But even this refuse is now generating serious income.

That's why on some days, you'll find Jamie Russell there amid the piles of garbage. He hails from Harvard, McKinsey, Silicon Valley and, most recently, the financial markets of London. He's not down on his luck. Right there in the midst of all that putrescence, he's up to some alchemical magic. He's managing a project that is transforming the pungent stench of Shenzhen's landfill into €70 million ($86 million) of potential value."

"This market has been more innovative than anyone ever thought possible,"- Jamie Russell Head of Special Situations, Climate Change Capital

"We are showing that reducing emissions is not a cost, but a global opportunity. We are competing successfully for funds from investors who expect attractive returns, commensurate with traditional private equity," Jamie Russell says. "I believe the crux of the opposition to carbon mitigation is simply the fear of change. It looks threatening to incumbent industries accustomed to a certain way of doing business, but it doesn't have to be."

"From his perch, Cameron is upbeat. He sees the carbon markets starting to reach impressive scale, and remains encouraged by the simple arbitrage that's possible with carbon. Carbon is selling for €27 a tonne in Europe. In China, you might be able to buy that same tonne of carbon for €10, he points out. It's a question of doing the upstream prospecting and closing the deals as, well, the oil industry has been doing for more than a century. "Over the years, the millions of tonnes of carbon that will be available through the Clean Development Mechanism will comprise a significant percentage of the total demand of the European Union," Cameron says. "It's amazing, if you think about it. My friend Richard Sandor," founder of the Chicago Climate Exchange, "likes to say that the carbon market is already bigger than the US grain market.""

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The Gold Mine in the Greenhouse: