The smelly methane gas emitted by the city's rubbish dumps could be a future source of electricity for Cape Town.
The dumps could also generate millions of rands in carbon financing for the city if it followed Durban's lead.
Carbon financing is when developed countries, which are obligated by the Kyoto protocol to cut emissions of greenhouse gasses, pay other countries to do so on their behalf.
Under this arrangement, for every ton of greenhouse gas emission reduced in South Africa, a negotiable credit is earned that can be sold to the market.
The Durban municipality, which has taken the lead in South Africa, will be paid $15-million (about R98-million) by the World Bank for 3,8-million tons of certified emission reduction credits.
Over 12 years the project could generate R205,4-million.
Cape Town plans to collect methane gas from decomposing rubbish at the Bellville South waste disposal site to reduce the escape of greenhouse gases into the atmosphere and move towards using renewable energy, delegates to the City Energy Strategies Conference were told.
John Coetzee, director of consulting engineers Jeffares and Green, said recent waste management initiatives in the city and regulatory requirements, as well as global warming concerns, had brought forward the issue of landfill gas generation and utilisation.
It was found that the landfill site could generate 20 500 tons of landfill gas - half of which is methane gas - each year for at least the next 10 years.
The landfill, when it closes in September 2006, will be 30m high and contain about six million cubic metres of domestic waste.
"This significant energy source could generate revenue for the city from gas sales to industry, as well as carbon financing from to its significant reduction of greenhouse emissions," said Coetzee.
The global warming potential of methane is up to 23 times greater than that of carbon dioxide, and South Africa can claim credits if the gas is used as a fuel that replaces fossil fuel.
Steve Thorne, who leads a team working on clean development around the country, said Cape Town could expect to earn R50-million if it sold the certified emission reduction credits and up to R200-million in gas sales to major industries.
Methane from landfill sites could be used to generate electricity in future.
"It is a good option where you don't have the option to use it directly, but it is cheaper to pump it directly to industries for use in furnaces or boilers," he said.
Methane is produced when vegetation and food decompose, and it plays a larger part in global warming than carbon dioxide.
It will cost the city R60-million to place a cover over the landfill site and drain the water from it.