(FORTUNE Magazine) – There is a seamy underbelly to the stupendous economic expansion that has brought so much prosperity to Asia: With every uptick in industrial production has come a surge in smoke and hazardous waste, with every point in GDP growth has come an almost precisely predictable increase in garbage. in their race for growth, Asian societies haven't had time until recently to consider what they've been doing to destroy the misty green landscapes so celebrated in paintings and the great sacred rivers adored in their poetry.

But now an increasingly affluent, well-educated middle class is starting to realize that deadly pollution is a high price to pay for the ability to buy Toyotas and Big Macs. In burgeoning democracies across the region, they are raising their voices and prodding their leaders to focus on quality of life and not just growth. "Living here is like living in hell by American standards," says mechanical engineering professor Jeff Chiang as he looks out over Taiwan's smoky landscape studded with refinery smokestacks and riddled with oily black streams. "Since I left Taiwan [to spend a decade studying in the U.S.] per capita GNP has increased...but the quality of life, the air, the water is ten times worse. It's not worth it to have the economy grow so rapidly and have our environment ruined."

Sentiments like Chiang's are helping to create a huge new business: cleaning up the mess. Though the total market for environmental equipment in Asia outside Japan is still a relatively modest $17 billion a year, it is growing in places like Thailand, Indonesia, and China at a galloping 20% to 25% annual clip, according to the consulting firm Environmental Business International of San Diego. Asia is "the most important market area with the strongest growth in the world," says Even Bakke, who's responsible for global air pollution control sales of Swiss-based ABB Asea Brown Boveri.

The potential of this market is obvious--just look at the sulfurous black skies over the steel towns of China, look at the contaminated soil around Korean petrochemical plants, look, if you dare, at the sewage of Calcutta. The Asian Development Bank says that $80 billion to $100 billion of investment would be required in the next five years just to lay the foundation in Asia for an acceptable water infrastructure, the region's most serious problem. Asia already buys $5.7 billion of air pollution equipment a year, and the World Bank figures that the region's plans to double electric power capacity between 1993 and 2002 will create the need for another $50 billion or so in scrubbers, electrostatic precipitators, and the like. Billions of dollars more need to be spent treating and cleaning up theregion's sewage and industrial waste.

Happily, more and more of the newly prosperous Asian countries are now ready and able to pay for this big cleanup. "Money is not the issue," says Dhira Phantumvanit, who heads the Thailand Environment Institute, a major environmental think tank. "Bangkok people are willing to pay for a better environment." Even the poorest countries, such as China, which currently spends $2 billion a year on environmental equipment, and India, are setting aside funds for a massive new drive to improve the environment.

Leading the push for better quality of life are grass-roots environmental organizations. There are 180 in Thailand alone, and in Taiwan they range from a green party that had a member elected to parliament last march to the Homemakers' Union, which lobbies for things like more recycling. But the new, green sentiments are striking a chord even at the highest levels of Asian society. Thailand's revered monarch, King Bhumibol Adulyadej, has made environmental cleanup a priority, and leaders, from President Fidel Ramos of the Philippines to the candidates vying to run Hong Kong after the Chinese takeover next year, are starting to talk green.

For Asia's politicians and its buttoned-down economic bureaucrats, the environment is not just a quality-of-life issue, it's an economic one. Pollution is increasingly seen as a drag on growth. Beginning in the late 1980s, many Asian countries set up environmental protection agencies, often modeled on the American version; a few countries, such as Thailand and Taiwan, borrowed some of the U.S. Environmental Protection Agency's regulations almost wholesale. A growing number of Asian leaders understand that smokestack scrubbers, catalytic converters, and modern sewage systems are just as crucial an entree into the developed-country club as high-tech electronics plants and refrigerators for the masses. "People here want to go right to the latest standards. Asians are justifiably proud of their economic performance and have got to the level where they can expect high standards," says Patrick Heininger, the representative in Thailand for Waste Management International, a subsidiary of WMX Technologies in Illinois.

For now, though, enforcement of these new regulations too often remains spotty at best--and frequently corrupt. But that's where the newly demanding middle class comes in. Because Asian countries tend to be less legalistic, less willing to enforce laws unless a consensus has been reached that they should be, public opinion, according to Heininger, is critical. for companies entering this market, "the key to success is to choose the right time, when environmental awareness has reached the right level," he says. "In that sense, building public awareness that it's immoral to pollute is essential."

Some of the worst polluters from the past--business executives in industries ranging from power generation to chipmaking--are now contributing to this consensus, as they wake up to the fact that it costs money to pour chemicals down the drain. That's not only because "green" habits are seen as good marketing tools in advanced countries, but because for many American and European companies, environmental management has become an integral part of quality control. Singapore's computer and chip-manufacturing firms, for instance, are steady buyers of pollution control equipment, in part because so many are foreign-owned. Fearing they won't be able to sell their goods without meeting a new, emerging set of international environmental standards, Asian exporters and subcontractors are packing seminars, sponsored by governments and private consultants, on how to improve their practices.

The Japanese, who have gained valuable expertise by cleaning up most of their own problems, are the leaders at supplying Asian companies with what they need. At the head of the pack are companies like Mitsubishi Heavy Industries and Hitachi, which make equipment to reduce nitrogen oxide and sulfur dioxide emissions. The Europeans, particularly ABB, which gets half its $1 billion in global air pollution-control sales from Asia, and Germany's Siemens AG, which is strong in air pollution control, are also well entrenched in the region. ABB is even doing good business in India, where the per capita income is just $320. Its 250-person staff in Calcutta sells $50 million to $75 million a year of air pollution-control equipment to the iron, steel, and power industries.

So far, the American environmental protection industry, the largest in the world with $170 billion of sales, is the laggard, exporting just 6% of its out put compared with more than 20% for the Japanese and German industries. But that is starting to change. In Hong Kong, Waste Management is now operating a $455 million landfill and a $168 million chemical waste treatment plant. "The opportunities here are fantastic," says Tom Worthley, who heads up Southeast Asian operations for Metcalf & Eddy, a major Massachusetts-based engineering firm. Smaller U.S. companies, ranging from Clean-Flo Laboratories, a Minnesota maker of water treatment equipment, to Art's Manufacturing & Supply, an Idaho manufacturer of soil-sampling tools, have also ventured into Asian markets in recent years.

But this is not a market for impatient salesmen, as the cautionary tale of Taiwan's ambitious and well-intentioned cleanup plans make clear. In 1987, immense pollution problems--spawned by the very steel, oil, plastics, and petrochemicals industries that have put the island state on the global business map--prompted it to set up an Environmental Protection Agency. Four years later the government announced plans to spend a whopping $12 billion on environmental cleanup over the next six years and invited in foreign bidders. However, Taiwan's competing local and central bureaucracies have often proved to be a nightmare to work with. Westinghouse saw its $226 million deal to build two municipal trash incinerators fall apart after problems with its local partner. Equipment for a hazardous waste incinerator in southern Taiwan has been sitting unused in an industrial park for years, held hostage by intense local opposition to its site.

Indeed, as Asians get more comfortable with exercising their newfound democratic rights to protest, such "not in my backyardism" has flourished. Inept leadership has also proved to be an obstacle in many markets. In Thailand, incessant political meddling and corruption have kept Bangkok's planned mass-transit system in limbo for years. Simple neglect has left the residues of a hazardous chemical explosion inadequately treated in the Klong Tooey slum, where thousands of people live.

Still, there are signs of progress, thanks again to pressure from the middle class. In Bangkok voters swept a new governor into office last June on his promises to solve the city's traffic and pollution problems. The government has at last outlawed leaded gasoline. American engineering giant Montgomery Watson of Pasadena, California, is working with the Thai Environmental Institute to present the Thai government with a plan to clean up waterways that meander over one-third of the sprawling country. Relying on satellites originally designed for pinpointing missile targets, the project uses a sophisticated geographic information system to map pollution sources and socioeconomic patterns across the Chao Phraya watershed in order to model treatment projects. Bangkok has also hired Metcalf & Eddy to install sewer facilities that will serve a million people, whose waste until now has poured directly into the canals where children bathe and housewives wash dishes.

On the success of such projects hinges not only the quality of life for Thailand's people, but for all of us. Without a concerted and costly cleanup drive, the poisons being created in the world's fastest-growing and most populous region represent a major danger to the health of the planet. Japan, for example, is already spending millions of dollars to fight the acid rain wafting over from China that is destroying its forests. But for business people, of course, the mind-boggling vastness of Asia's environmental problems presents a different challenge: how best to seize the opportunities waiting there for entrepreneurs who can see the green through the smog.

REPORTER ASSOCIATE Rajiv M. Rao