Managing Your Money : THE ENVIRONMENT : Green Markets : You too can trade in natural resources. This field is poised to flower.

In the decades ahead, traders and speculators will make money on air, water, forests and fish that environmentalists have long battled to preserve. Someday, so might you.

But far from destroying the planet’s resources, these new investors will nurture and protect natural riches while stimulating economic growth and human well-being, according to a growing cadre of business and environmental visionaries.

“We will see a 21st Century that takes a lot of the financial engineering that we’ve developed here in the United States and applies it to social and environmental problems,” says Richard L. Sandor, executive managing director at Kidder Peabody and adjunct professor at Columbia University’s Graduate School of Business.

The first steps toward a new marketplace of the environment have already been taken. Farthest along are markets in government-issued allowances for businesses to emit air pollutants.

The idea: Government regulators set overall emissions standards, then issue allotments to individual businesses. Total allotments are reduced over time--reducing pollution--but allotment trading is allowed as businesses devise strategies to meet the lowering standards.

Efficient companies may emit so little that they have credits to spare--which they can sell to companies for whom buying credits is more cost-effective than investing in expensive pollution-control technology.

The Chicago Board of Trade, the world’s largest commodities market, will hold an auction next March that opens the nation’s first market in credits controlling emissions of sulfur dioxide, the primary acid rain pollutant. In a plan mainly conceived by Sandor, both cash and futures markets will be established.

“We envision an entire eco-complex” of markets eventually, said CBOT President Thomas R. Donovan when the market was announced in September.

Individual investors will be able to buy as well. But don’t cash in your IRA just yet. Early entry into these developing markets is best left to the specialists. Eventually, though, investment houses can be expected to deal more widely in pollution credits, and savvy individuals will no doubt play the market.

Locally, Southern California’s South Coast Air Quality Management District plans as many as three separate emissions markets--for pollution allotments in nitrogen oxides, hydrocarbons and sulfur oxides.

At the environmental summit in Rio de Janeiro, and with United Nations support, Sandor proposed a similar worldwide market in global-warming carbon dioxide credits--to be open 24 hours a day and operate like the world’s currency exchanges.

Sandor and others look at natural resources in a fundamentally different way from traditional environmentalists. They say that water, air, ocean fisheries and the like shouldn’t be treated as resources held in common, which makes some people consider them free and leads to overuse, but as commodities to be carefully allocated and held as private property.

Yet they have been allocated by political systems that define their values in vague terms--for instance, with surveys that ask people to put a dollar amount on how much they value the abstraction of a dolphin in the wild.

“That isn’t meaningful in getting something accomplished,” Sandor says.

The idea behind the new sulfur dioxide markets can be applied to cleaning up water, says Sandor and other economists. Sandor sees the concept logically expanding to regional and local futures markets in both water and air emissions credits, which would attract not only the regulated businesses but investors.

Other schemes would create markets in the right to use certain resources, an idea Sandor compares to local markets for taxi permits. Fishing rights are a popular example among environmental economists, because many commercial fish have been decimated worldwide in recent years.

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The Japanese have done much to privatize fishing, according to economist Terry L. Anderson and statistician Donald R. Leal of the Political Economy Research Center, an innovative environmental think tank in Bozeman, Mont.

The Japanese government already allocates fishing rights for certain areas to cooperatives, which then assign those areas to individual fishermen. The fishermen profit by protecting and improving the productivity of their own fishing grounds. They would lose by overfishing them.

Investors could also one day participate in the fishing industry through markets in such fishing rights, Leal says.

Australia and New Zealand have issued individual tradable quotas for such fish as the southern bluefin tuna. ITQs, as they are termed, began selling for less than $720 a ton when first issued in 1984. Less than six months later, the least-efficient operators were out of the industry, tuna was no longer being overfished and the ITQs had doubled in value on the open market.

These ITQs now sell for about $13,669, and Australian fishermen are forming lucrative joint ventures with Japanese fish companies, essentially leasing their ITQs.

Since 1990, the National Marine Fisheries Service, a U.S. government agency, has set up similar ITQ systems on the East Coast for the surf clam, the ocean quahog and the wreckfish, all commercial species. Proposed are ITQs in Alaska for the sablefish and the Pacific halibut. Oregon and several Great Lakes states also have ITQ systems in state waters.

The federal service says it fully expects non-fishermen to trade the quotas, much like commodities futures. Investors in Australian ITQ markets already do.

“This is just the beginning,” Sandor says.