Carbon finance may be the most interesting business that I've ever written about, and it is surely the most important. It is also incredibly complicated and hard to turn into a compelling story. I've spent the last few months trying to understand the business, and my first major story about carbon finance appears in the current issue of FORTUNE (cover date: April 28, cover boy: Warren Buffett), which includes a special section on The Business of Green. The story was posted on fortune.com today and you can read it here.

There were many challenges in putting this story together, not the least of which was trying to explain the industry to those who know very little about it most of the U.S. audience of FORTUNE, I'd guess without dumbing-down the issues for more sophisticated readers. As usual, I would have liked more space but this is an industry that's still relatively small and Eurocentric. It will probably be reinvented when climate-change legislation passes Congress, most likely in 2009. There will, in other words, be many more opportunities to revisit the world of carbon finance.

In the months ahead, the challenge for corporate America will be to work with Congress and NGOs to make sure that we get climate-change legislation right that means coming up with an effective way to create the economic incentives, by putting a price of greenhouse gas emissions, that are needed to move to the U.S. away from fossil fuels and towards a clean-energy economy.

Here's how the story begins:

If all goes according to plan, the business of buying and selling rights to pollute the atmosphere with carbon dioxide and other greenhouse gases - carbon trading, as it is known - will curb global warming and save the world. That is its only purpose. Along the way, a lot of people will get rich.

Last year traders bought and sold about $60 billion worth of emissions allowances, mostly in Europe and Japan, where governments regulate greenhouse gases. If, as expected, regulation comes to the U.S., this country's carbon-trading market is expected to be worth $1 trillion annually by 2020. That's why investment banks, utilities, industrials, and hedge funds - among them GE (GE, Fortune 500), Goldman Sachs (GS, Fortune 500), J.P. Morgan Chase (JPNV.L), and AES (AES) - are rushing into the business of carbon finance. To succeed they will have to master what is surely the most bizarre, complicated, and controversial new industry of the 21st century. We'll try to break it down, beginning with a couple of things any Fortune reader can understand: a pile of pig manure and a private jet.

You can read the rest here.