Capturing Pig Power

Georgina Cano had long resigned herself to the stench from the hog farm just up the road from her rural home.

Stagnant lagoons of waste from thousands of squealing pigs fouled the air for miles in this flat stretch of central Mexico. Cano’s three children complained and occasionally fell ill, but she figured it came with living in a region that produces much of the nation’s pork.

Last year, the smell diminished even as the hog production continued.

“Now I hardly notice it,” said Cano, 37, gesturing toward the low sheds about half a mile from her home. “It’s healthier for the children.”

Cano’s family and neighbors can credit a little known Irish company for helping them to breathe easier these days.

Thanks to the Kyoto Protocol, the 1997 international treaty on climate change, efforts by industrialized countries to fight global warming are popping up in far-flung places like Villagran, a hamlet about 40 miles southwest of the city of Queretero.

Nearly 600 Kyoto-related projects are in the pipeline in the developing world, according to a recent tally by a Danish climate research center funded in part by the United Nations. About 40% of them are in Latin America, including hydroelectric power plants in Honduras and wind-powered turbines in Chile.

The accord, which the United States has not ratified, calls for reducing overall greenhouse-gas emissions by major industrialized countries in the period 2008-2012 to amounts at least 5% below 1990 levels.

More than 150 nations have signed and ratified the treaty, but the burden to reduce emissions falls on about three dozen industrialized countries responsible for most of the climate mess. One way for industrialized countries to meet their reduction targets is to support environmental projects in developing regions. Dubbed the Clean Development Mechanism, it was designed to lower compliance costs for rich nations while funneling much-needed development to poor ones.

The climate agreement set up a trading system -- administered by the U.N. -- in which the rights to spew pollutants can be bought and sold like stocks. That has spurred interest from entrepreneurs who are funneling money into environmentally friendly projects in exchange for anti-pollution credits.

Each credit represents the equivalent of a ton of carbon dioxide kept out of the atmosphere. Although registries for these and other types of emission credits still are being set up by the U.N., buyers and sellers already are making deals.

AgCert International, the Dublin, Ireland-based company that installed clean-up equipment on the hog farm near Cano’s home, has made commitments to provide nearly $90 million of emission credits to European utility companies and petroleum producers to help them meet their reduction goals.

Chief Executive Gregory Haskell, an American and serial entrepreneur with no previous agriculture experience, calculated that more that 1 billion credits would be required to satisfy Kyoto obligations. The opportunity to fill some of that demand led him to found AgCert in 2002.

“We looked for what the need was in the marketplace,” Haskell said.

In Latin America, AgCert has installed pollution-control equipment on about 230 hog and dairy farms in Mexico and Brazil, according to company officials. AgCert hopes to have more than 1,000 facilities operating by the end of 2007 in those nations as well as in Chile and Argentina.

Haskell said about 7% of the world’s production of greenhouse gases could be attributed to large animal feeding operations, which produce several harmful byproducts, including methane.

AgCert replaces open waste lagoons with pits that are lined and covered with a plastic that traps gases emitted by decomposing waste. The gases are piped out of the pit and burned off in a combustion unit that looks like a giant torch. The gases also can be used to fuel generators to provide electricity for the farm, similar to the manure-powered city of Bartertown in “Mad Max Beyond Thunderdome,” the 1985 film starring Mel Gibson.

In addition to providing renewable energy and reducing emissions by around 95%, the system keeps animal waste from leaching into the water table while greatly reducing the foul smell. The process also yields organic fertilizer that farmers can sell or use on their crops.

AgCert pays for the construction and equipment, which averages about $150,000 a farm, and takes care of all maintenance for 10 years.

The company also is working out a formula to give farmers a share of the revenue from sale of the emission credits, said Hernan Mateus, the company’s general manager in Mexico. He said the projects gave jobs to local construction firms and made neighbors living downwind very happy.

“Everybody wins,” Mateus said.

Large swine operations such as the family-owned Grupo Soles, which produces about 260,000 hogs a year in northern and central Mexico, are jumping at the opportunity to upgrade their slurry systems on someone else’s dime. Like their U.S. counterparts, Mexican farmers have found themselves subject to more stringent government rules on air and water quality. That has made managing manure one of the most costly and time-consuming aspects of livestock farming.

“It’s like a tax,” said Jose Buenrostro Pablos, general manager for the group’s operations in central Mexico. “Now thanks to the Kyoto Protocol, we have this opportunity to solve the contamination problems.”

It could also help Mexico produce better pork.

On Soles’ farms in central Mexico, workers and visitors must strip, shower and don company-issued jumpsuits and rubber boots before approaching the squealing animals. The precautions are part of a battle to prevent the spread of hog cholera and other ailments that can devastate herds in this part of the country. Buenrostro said that capping slurry pits and covering open trenches that carry waste from the barns would help cut down on insects and other disease-carrying vermin.

At Soles’ farm near Villagran, Buenrostro walked to the edge of a former manure lagoon now clean enough that the company is considering using it for fish farming. Nearby, a generator hummed close to the covered pit where pig waste was being converted to energy.

The farm is still testing the system. But Buenrostro said it would soon light the barns, run the automatic feeders and water pumps and even heat the water for employees’ showers.

“Can you imagine doing all that from manure?” he asked.

Many experts applaud the effort to give the private sector a major role in reversing climate change. Some analysts predict that trading in emission credits could become a $40-billion market by the end of the decade.

Still, the pay-to-pollute strategy has plenty of critics.

Nations of the former Soviet Union, whose economies tumbled after the fall of the Berlin Wall, are polluting well below their 1990 levels. The Kyoto deal gives them the ability to boost their emissions or sell those rights under certain conditions. Some critics fear that could flood the market with cheap credits while doing little to clean up the atmosphere.

Meanwhile, investors are gravitating toward projects that generate large amounts of credits but virtually nothing in the way of development. Architects of the Clean Development Mechanism strategy envisioned a massive technology transfer, with companies seeding poor nations with renewable energy from the sun, wind and water. Instead, the lion’s share of credits are coming from cleanup projects such as curbing emissions from dirty refrigerant plants.

Although that’s good for the environment, these projects provide little in the way of jobs and infrastructure that many poor countries had hoped Kyoto would deliver. Meanwhile, rich nations benefit from a steady supply of low-cost credits.

“Some developing countries were sold a bill of goods,” said Aaron Cosbey, a senior advisor with the International Institute for Sustainable Development based in Winnipeg, Canada. “The spinoff benefits are minimal.”

Cosbey said the number of clean development projects in the pipeline would need to be about five times as large as it is now to come close to meeting Kyoto targets. And with no agreement to extend the climate treaty beyond 2012, some environmentalists wonder whether investor interest will dwindle within a few years with no guarantees that their credits will be worth something.

But other experts say carbon trading is here to stay. The European Union has set up a parallel, internal system for trading pollution allowances among its members. And some veteran observers believe that the Europeans, who have agreed to lower their emissions by 8% below 1990 levels, will stay the course on greenhouse gas reductions regardless of what comes after the Kyoto pact. After a recent climate conference in Montreal, one analyst noted that more investors were registering their clean development projects with the U.N. in such a way that they could receive credits for as many as 21 years.

“They are betting that there will be a market,” said Jorund Buen, director of Point Carbon, a consulting firm in Oslo. “There is no other good reason for it.”