(FORTUNE Magazine) – A connection between the beady-eyed American alligator and the doe-eyed vicuna, the national symbol of Peru, isn't easy to find. Yet the vicuna, a pretty relative of the camel, shares a relationship with the swamp thing: Both were once slaughtered close to extinction to feed the ravenous maw of the luxury goods market.

In 1966 the alligator was classified as an endangered species, and in 1970 the vicuna--its numbers less than 10,000--followed. The alligator recovered partly because authorities allowed market forces to transform what had been contraband into a renewable resource--that took the shape of an elegant bag or a pair of shoes.

Now the Peruvian National Society of Vicuna Breeders and a consortium led by Loro Piana, a producer of high-priced cashmere, will return vicuna--the fabric of the Inca kings--to market after a 20-year absence. Sergio Loro Piana, co-CEO of the company, can happily say, "There is no loser around the table of the vicuna project."

Loro Piana is paying cash incentives to the campesinos who control most of the land where the vicunas dwell to keep the beasts hale and hearty. In the past hunters found it far easier to catch the vicuna, which runs along at 30 mph, with a shotgun. Since the animals can be sheared every two years, the vicuna now only has to deal with the stress of a haircut. As Loro Piana points out, "It's not shaving that kills the animal; it's shooting it."

Market environmentalism is strictly a niche business. A vicuna coat will cost about $15,000, five times that of the most expensive cashmere. But its availability will never match a fifth that of cashmere--even 100,000 naked, shivering vicunas would yield only about 4,000 coats.

One problem: The vicuna has yet to be removed from the U.S.'s Endangered Species Act. Approval to import is expected within a year.

--Bethany McLean