MEXICO CITY - Gabriela Escalante stalks the rumbling streets alongside newspaper, peanut and candy vendors, wading deep into traffic at red lights across town.

Her eyes are fixed on tailpipes.

A member of Mexico City's

ecoguarda

, or environmental police, she and about 50 colleagues are on the lookout for white clouds of toxic exhaust, stopping hundreds of offending motorists each day, issuing $100 fines and confiscating license plates - a small but urgent army fighting the throbbing capital's infamous air pollution.

"We detect, we detain and we fine," Escalante, 27, said. "This is the air we all breathe."

Not long ago, air in Mexico City was so bad that cyclists wore surgical masks. Birds fell dead in midflight, and children used brown crayons to draw the sky. Ozone exceeded safe levels on 97 percent of the days in the year.

But the metropolis ranked the world's most polluted in a 1992 U.N. report has since slashed some of its worst emissions by more than three-quarters and has become a model for improving urban air quality.

When Latin American leaders met here last month to discuss the environment, many looked to Mexico as an example of progress, said Sergio Jellinek, a World Bank spokesman who attended the forum.

Still, a nagging cloud of ozone has been harder to reduce - a sign of the secondary air-pollution problems that cities can expect even after cutting their most visible contaminants.

With the onset of winter, the worst time of year for pollution, Mexico City has said it plans to spend $3 billion by 2012 to expand public transit and further slash emissions.

"There has been a large improvement, and it's important to show it could be done," said Mario Molina, a Nobel Prize-winning Mexican chemist now advising President-elect Barack Obama's transition team on environmental issues. "But there's still a long way to go to get really satisfactory air."

The population and geography of Mexico City, which is ringed by volcanoes and is nearly a half-mile higher than Denver, make it a "perfect factory" for pollution, said Adrian Fernandez, head of the National Institute of Ecology, Mexico's version of the Environmental Protection Agency.

In thin air at more than 7,300 feet, fuel burns less efficiently, releasing more unused particles. Breathing deeper to fill their lungs, people inhale more toxic elements.

High-altitude sunshine speeds the chemical reactions that transform emissions into a lethal stew of smog. That brown cloud blankets the city, lowering temperatures and trapping pollutants on the ground.

"What you have is a casserole dish with a lid on top," said Armando Retama, a chemist at the city's Environment Department.

Mexico City and its suburbs swelled from three million people in 1950 to more than 20 million today, making it the world's second-biggest urban area, after Tokyo. Economic growth kept pace, boosting energy consumption and flooding the roads with more than four million vehicles.

Traffic is so clogged that average speeds have dipped to 13 m.p.h., the Environment Department says. Even with today's cleaner cars, experts agree that 70 to 80 percent of emissions are vehicle-related.

The fumes inspired novelist Carlos Fuentes to rename his toxic capital "Makesicko City" - and it does make people sick.

Studies show that the air irritates the eyes, nose and throat and worsens asthma, allergies, colds, coughs, bronchitis and the flu, while increasing infant deaths and overall mortality. Long-term exposure was found to impair one's sense of smell.

Mexico has been fighting the haze for decades, passing its first antipollution bill in 1971. But enforcement lagged - until the record smog of the early 1990s.

Learning from Los Angeles' air cleanup, Mexico got to work changing technology and laws. Unleaded gasoline was introduced, catalytic converters were required on new cars, a major refinery was closed, and power plants were pushed to switch from oil to natural gas.

The city began emissions tests in 1989 in a landmark program that banned old and failing cars from the road one day a week.

In their first democratic vote for mayor, residents in 1997 elected the green-friendly Democratic Revolution Party, which has since dominated city politics. The capital now vows to slash greenhouse gases 12 percent by 2020 and champions public transit, which accounts for 82.5 percent of daily trips.

But Mexico's federal government still subsidizes gasoline. Most trucks and buses are exempt from emissions tests, and a flood of dirty used cars is set to cross the border from the United States when NAFTA restrictions expire in January.

Drivers pulled over for polluting often say they can't afford to fix their cars. But at

ecoguarda

headquarters, sympathy is short.

"Anyone who has a car should be responsible for keeping it in good condition," said Alejandro Lopez Carrillo, former head of the unit. "I want to have a better world, with better air for our families and futures."