Apart from the huge-wheeled compactor driving over garbage on its surface, it looks like an ordinary hillside. And it doesn't even smell. Yet it produces enough energy to power 2,500 homes in Southern California.

Trash, rubbish, whatever you call it, the 1.6 billion tonnes of stuff the world throws away each year -- 250 kilograms per person -- is being touted as a big potential source of clean energy.

As concerns about climate change escalate and prices on fossil fuels like oil and natural gas soar to record levels, more companies are investing in ways to use methane gas to power homes and vehicles.

Around the world, landfills where municipal waste is collected and buried are one of the biggest producers of methane, a gas whose greenhouse effect is 21 times worse than carbon dioxide. If instead that gas is collected and burned to generate electricity, proponents say the resulting emissions of carbon dioxide are less harmful to the environment than the original methane.

In the United States, trash haulers like Waste Management and Allied Waste Industries Inc are rapidly expanding the number of gas-to-energy projects at their landfills, while start-up companies are developing the latest technologies to transform garbage into ethanol, gas and electricity.

"We are able to take that resource and turn it into real value financially for us. In a very basic sense it helps improve our earnings," said Ted Neura, senior director of renewable energy development for Phoenix-based Allied Waste, which is turning waste into energy at 54 of its 169 US landfills, with 16 more projects in the works.

The "green" credentials that go along with the waste-to-energy projects are an added benefit, Neura said.

"You begin to look at landfills a little differently when you couple them with a renewable energy project," he said.

Environmentalists aren't quite as enthusiastic. Nathanael Greene, director of renewable energy policy for the Natural Resources Defence Council, said touting the benefits of landfills was akin to putting "lipstick on a pig." Instead, we should be trying harder to reduce waste.

BIOGAS AROUND THE GLOBE

Biogas, another name for methane produced from waste, manure or other organic matter, is most developed in Europe, where Germany has 70 percent of the global market. In Britain, landfill gas makes up a quarter of the country's renewable energy, giving electricity to some 900,000 homes.

Waste-to-energy projects are also being expanded in the developing world, where rapid economic growth has led to a surge in municipal waste, but efforts to collect the methane emitted by rotting garbage have been slower.

Last year, the World Bank announced a deal to install a gas collection and electricity generation system at a landfill in Tianjin, China, saying the opportunities for other such projects in the world's most populous nation was enormous.

In less developed countries than China, however, a waste infrastructure needs to be installed before energy projects from landfills or garbage incinerators will make sense.

"Some of the developing countries are fascinated by the possibilities of introducing incineration," said Henrik Harjula, principal administrator for the Organisation for Economic Cooperation and Development. "The problem is normally that it is like putting a modern facility in the jungle. There is nobody to take care of the maintenance."