Leave it to an environmental activist who bikes to work and uses only renewable sources of energy at home to design Europe's newest financial market -- the trading of carbon emissions from fossil fuels. European Commission economist Peter Vis came up with the idea seven years ago. Now, after a spirited lobbying campaign, his efforts have begun to bear fruit: Last month the European Union decreed that any company wishing to produce more than its share of carbon must buy the excess allowances of other companies or face fines.

"If you can put an economic incentive on the table for a businessman, then you are talking his language," says Vis, who heads the EU's industrial emissions office, which reviews and amends market operations. His outfit sets carbon production allotments for 12,000 energy-intensive EU businesses. Beginning this month the allotments will be accessible online, helping to create a spot market.

The new market is off to a promising start. In the first three weeks of January, more than 1.5 million forward contracts for one ton of carbon emissions each changed hands, at prices ranging from E6 to E7 per contract. Some 4.2 billion tons of carbon emissions have been approved for trading over the next two years.

York native Vis, 44, has been promoting -- and defending -- the emissions-trading scheme since 1998, when he was a policy officer in the EU's Directorate-General for the Environment. "There was a widespread feeling, both at the commission and among the member governments, that it was somehow immoral and dirty to allow financial speculation on the environment," he recalls. The paradigm, as they say, has shifted.