NEW YORK (Reuters) – The Kyoto Protocol has sparked carbon emission markets into action but governments must adopt broader carbon rules quickly if trade is to snowball through the global energy business, the president of carbon asset management company Natsource LLC said in an interview. The Kyoto pact has spurred billions of euros in greenhouse trade between companies in Europe and through a program that allows rich countries to pick up credits for investing in clean projects in developing countries. The first phase of the pact requires about 35 developed countries to cut emissions 5 percent from 1990 levels by 2008 to 2012. But carbon dioxide-belching oil refineries and power plants, beyond some in Europe, mostly have yet to join in. That’s mainly because President George W. Bush withdrew the United States – the top polluter – from the international agreement, and as rapidly developing countries like China, India and Brazil oppose emissions limits because they have only recently industrialized. «You have a good two to three years of pulling capital into this space, but it’s going to stop unless there’s a message on what comes next,» Jack Cogen, president of New York-based Natsource, said about the first phase of Kyoto. The pact is meant as a baby step to slow global warming, which many scientists say can cause more heat waves, droughts and flooding. Cogen said stricter carbon emissions targets could transform greenhouse gas trading from a multibillion-dollar market to a trillion-dollar market before mid-century. Enormous amounts of capital would be needed to plug emissions leaks and add carbon capturing equipment at plants, he said. «That won’t happen to a really great extent until there is some clarity on what happens after (2008 to 2012) Kyoto,» he said. Talks on pushing Kyoto beyond 2012 could last until 2010 to allow a wider US role after Bush steps down in early 2009, a climate expert, who leads a UN group looking at how to extend Kyoto, said last month in Oslo. Cogen hopes rich and poor countries will eventually increase carbon trade, in part because banks have stepped up strategies for providing money to emissions-cutting projects. The $1 billion deal, which two entities of Natsource participated in, cuts emissions of an refrigerant gas that has about 12,000 times the global warming potential of CO2. But such projects are few, while vast opportunities in energy lie in wait. «Low-hanging fruit is good, but it’s better to get some real meat at some point,» said Cogen.