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January, 2008:

HSBC Fund Seeks Firms Tackling Climate Change

Thu Jan 17, 2008 12:29pm GMT – Reuters

By Tom Miles

HONG KONG (Reuters) – HSBC Holdings launched a climate change fund on Thursday to give investors a chance to turn a threat into an opportunity by buying into the increasing number of firms trying to tackle global warming.

“As recently as five years ago, who talked about climate change? Very few people. It was fashionable to be sceptical… It seems the tide has turned quite significantly,” said Patrice Conxicoeur, chief executive of SINOPIA, the quantitative investment arm of the global bank, which will manage the fund.

“The market has taken notice,” he told a news conference to launch the fund.

The fund, “HSBC Global Investment Funds – Climate Change” will aim to outperform HSBC’s own climate change benchmark index by 3 percent per year, which the bank said had shown a 164 percent return since January 1, 2004.

“In terms of return profile, I think this should generate for our investors returns which are commensurate with the type of returns they would expect from investing in emerging companies,” said Conxicoeur.

“Clearly it’s an emerging industry and an emerging theme… It’s not going away. Even if all those companies come up with very nice solutions overnight – which is not going to happen, it’s going to be a long slog.”

The fund, which opened to Hong Kong retail investors on Thursday and is expected to be available globally, will target 50-70 of the 300 companies in the benchmark index.

It will invest in three areas: producers of low carbon energy including renewables, gas and nuclear; firms with energy-efficient products such as fuel cells and insulation; and companies dealing with water, waste and pollution control.

Potential investments might be firms such as environmentally friendly battery maker BYD Co Ltd, solar cell manufacturer Q-Cells AG and water firm Veolia Environnement SA, Conxicoeur said.

The make-up of the index, and therefore the fund’s portfolio, would change over time to reflect development of the sector, potentially adding stocks such as companies building flood defenses and specialized financial firms, he said.

Air Pollution At Historic Highs In China’s Guangdong

Tue Jan 15, 2008 11:29pm EST

HONG KONG, Jan 16 (Reuters) – Air pollution in the southern Chinese province of Guangdong increased markedly last year, with 27 major cities and counties suffering a record number of hazy days, Xinhua news agency said on Wednesday.

China’s industrial heartland of Guangdong, which borders Hong Kong, recorded an average of 75.7 days of haze in 2007, the highest level since the Communists came to power in 1949 and a “marked increase” over normal years, according to a new report released by Guangdong’s meteorological bureau, Xinhua said.

The report found the industrial heartland of the Pearl River Delta, whose factories have powered China’s export growth, fared the worst.

Provincial blackspots included Enping with 240 hazy days and Dongguan with 213, Xinhua added.

“It may take at least 20 or 30 years to bring the haze under control. Cities in the delta region should join in fighting air pollution instead of acting by themselves,” Wu Dui, an atmospheric studies expert from the Guangdong Provincial Meteorological Bureau, was quoted by Xinhua as saying.

Neighbouring Hong Kong has also grappled with chronic air pollution, partly from industrial smog blown in from Guangdong, but also from coal-fired power stations.

The city’s picturesque harbour is now regularly shrouded in a thick smog, particularly during the winter months.

Hong Kong and Guangdong have committed to ambitious air-quality reduction targets by 2010, including cutting sulphur dioxide and suspended particulate emissions by upwards of 50 percent compared with 1997 levels.

But green groups and scientists have expressed scepticism the targets will be met.

China’s coastal waters have remained severely polluted and excessive discharge of industrial waste is the main culprit, a government report said.

A total of 145,000 square km (55,985 sq miles) of Chinese coastal waters did not meet environmental standards, according to the 2007 China Oceanic Environment Report by the State Oceanic Administration.

In another report, the State Oceanic Administration warned that sea levels along China’s coast had risen 90 mm over the past 30 years, faster than the average global rate.

The northern port city of Tianjin had seen an alarming increase of 196 mm in its sea level during the period, while financial centre Shanghai had seen a 115-mm rise. (Reporting by James Pomfret and Guo Shipeng; Editing by Nick Macfie)

Hong Kong Exchange Plans Emissions Trading Center

Shu-Ching Jean Chen, 01.16.08, 8:28 AM ET – Forbes.com

HONG KONG –

Sitting right at the doorstep of the world’s largest greenhouse gas emitter, China, top officials at the Hong Kong Stock Exchange do not need any more evidence to support their optimism about the market potential of a new initiative for a trading center for emissions-related products. All they need do is look out the windows of their harborfront office, to a hazy horizon regularly clouded by pollution and smog.

The Hong Kong Stock Exchange, a listed company that doubles as a market regulator, has hired consultants to look at the possibility of introducing trades of carbon emissions-related products and is moving to draw up a concrete plan by the year end. According to a new policy direction set forth by its board, it will build on its existing business and expertise in initial public offerings, exchange traded funds and index-linked products to “focus on environmental and greenhouse gases markets.”

“We welcome the participation of overseas exchanges, as well as financial institutions,” said Paul Chow, chief executive at Hong Kong Exchanges and Clearing (other-otc: HKXCF – news – people ), in a luncheon speech on Wednesday. “This is a long-term project. We will not get any benefit this year, or possibly [in] 2009.”

The future is as bright as the pollution problem is grave in China. The current size of the emissions-related trading market globally is small, but it is expanding by leaps and bounds. A World Bank report issued in May put it at $30 billion for 2006, roughly a day’s worth of trading on the Hong Kong stock market, but the figure was three times greater than the year before nonetheless.

Public markets for emissions-related products are evolving. Currently, they are dominated by European Climate Exchange, the world’s largest platform for carbon emissions trading, and Chicago Climate Exchange, with many other up-and-coming exchanges from Singapore to Australia clamoring to join in.

China is ideally positioned to launch such a trading center, but talks have been hampered by political sensitivities because China itself has yet to commit to emission reduction targets set out in the Kyoto Protocol.

Yet, the Kyoto Protocol has given China its current dominance as the world’s largest supplier of pollution credits, with a 61% market share in an emission trading system known as Clean Development Mechanism, or CDM. Created under Kyoto Protocol, the system allows Chinese companies to earn cash by reducing their greenhouse gas emissions and selling the equivalent amount in credits, called certified emission reductions, selling them to companies in rich-country economies, which buy the credits to meet their stringent emission targets at home.

Asia as whole has 80% of the CDM market. China’s leadership in the market has declined from 73% in 2005, while rival India has made a great leap, grabbing 12% of market in 2006, up from 3% in 2005, according to the World Bank.

Trading of these credits has created a vast yet largely opaque pool of intermediaries including foreign banks and obscure middlemen who peddle their own trades and set prices arbitrarily. Which is why stock exchanges like Hong Kong have seen a window of opportunity.

“No one knows what the prices are because the market is not transparent,” said Gerald D. Greiner, chief operating officer at the Hong Kong Stock Exchange. He said many innovative products can be developed to help alleviate the dangers of global warming, including creating tradable warrants with underlying indexes of green companies or public auctions of CER credits, potentially the largest source of green trading, betting on China’s No. 1 position.

South China Province Reports Worsening Air Quality

10:39, January 16, 2008

The air quality of south China’s Guangdong Province is getting worse with record hazy days registered last year, a newly-issued environment report shows.

The province, which borders Hong Kong, recorded an average of 75.7 days of haze in 2007, a “marked increase” over normal years and “the most” since 1949 when the New China was founded, according to the report on atmospheric composition of Guangdong released by the provincial meteorological bureau.

Haze is traditionally an atmospheric phenomenon where dust, smoke and other dry particles obscure the clarity of the sky and diminish visibility.

In total, 27 major cities and counties set records in terms of hazy days last year. The situation was relatively more grave in the Pearl River Delta region in eastern Guangdong. Most cities and counties there saw more than 100 hazy days, the report said, citing 213 days in Dongguan City and 238 days in Xinhui City.

Enping City in Guangdong’s northwest recorded 240 hazy days last year, the most in the province, the report said.

Last month saw an average of 11.8 hazy days in Guangdong, the most in 2007, and 22 such days in the provincial capital Guangzhou,the highest since 2000, according to the report.

“The serious situation of hazy days shows the atmospheric pollution in Guangdong, especially in urban areas, is worsening,” it said.

Industrial discharge and auto exhaust were largely blamed for the air pollution, according to Wu Dui, an atmospheric studies expert from the Guangdong Provincial Meteorological Bureau.

He said haze lingering over the Pearl River Delta region was mainly caused by lower atmospheric pollutants brought by air currents along the coastline from Hong Kong, Shenzhen and Dongguan; the haze was rarely blown from the region to Hong Kong — only one to three days in a year.

In addition, the photochemical pollution was grave and the ratio of fine particles was increasing in the atmosphere over the sky of the delta region. This not only greatly reduced visibility in hazy days, but also did harm to people’s health by damaging their respiratory tracts, heart and blood vessels, liver and lungs, Wu said.

The term fine particles — an air pollution — refers to tiny particles or droplets in the air that are 2.5 microns or less in width.

“The environment authorities should issue a pre-warning of fine particles and give timely health advice to the public in addition to publishing air pollution results,” Wu said.

“It may take at least 20 or 30 years to bring the haze under control. Cities in the delta region should join in fighting air pollution instead of acting by themselves,” he added.

Source: Xinhua

Hong Kong Idling Engine Ban

Date: 15 Jan 08

To: Panel on Environmental Affairs

Re: Legislative Council Panel on Environmental Affairs: Special meeting on 16 January 2008 – Idling Engines

Dear all,

Clear The Air is a green organization that seeks to empower the people of Hong Kong to improve the air quality and reduce air pollution.

We are in favour of a comprehensive, all encompassing ban on idling engines, with no exemptions. Aside from economic benefits to vehicle owners and reduction of pollution resulting from banning idling engines, health benefits are by far the biggest concern.

One of our members conducted a test with a specialised machine to measure the number of particles in the air at Fa Yuen street in Mongkok. What he found was the particulate level was 77% higher on the pavement next to idling public light buses then when he was standing in the middle of the street where vehicles were driving by.

We are here to give a voice to the people of Hong Kong. This past week, Minispotters organization and one of our members went out on the streets and surveyed those that work at street-level shops and here’s what we found:

People we talked to worked an average of 10 hrs, breathing in car exhaust just outside their shops.

From a waitress: “We don’t have a choice but to stand on the street to solicit clients to come into the restaurants, thereby we suffer from breathing idling exhaust all day”

Most people complained of increased allergies, sore throat, coughing, respiratory infection, and in general, difficulty in breathing.

85% of the people we interviewed were in favour of the idling engine law.

95% think idling engines have had a negative effect on their health.

We will continue to do this survey on the streets to give the people of Hong Kong a voice.

Yours in Clean Air,
Amy Ng
Secretary, Clear The Air
www.cleartheair.org.hk

Global Concerns Lead To New Programme

Teachers, architects and town planners will now be able to get a better understanding of environmental issues

Mary Luk – Updated on Jan 12, 2008 – SCMP

Why is air pollution in the Pearl River Delta so bad these days? How will climate change affect us? Is Hong Kong at risk of a tsunami? Do we have a secure long-term water supply? Has Hong Kong’s old landslide problem disappeared forever? How big an earthquake can we expect?

The Education Bureau, which is responsible for school curriculum, has responded to these growing concerns by introducing earth sciences into the new curriculum of the University of Hong Kong’s (HKU) Postgraduate Diploma in Earth Sciences, the first programme of its kind in Hong Kong.

Andrew Malone, the university’s director of Applied Geoscience Centre, who contributed to the drafting of the new curriculum, said a cross-section of other universities were consulted in balancing and composing the content.

He said the course provided learning opportunities for school teachers requiring higher education in the earth sciences to enable them to teach the new senior secondary school curriculum which comes into effect next year.

The courses on integrated science, chemistry and geography in the new curriculum include a significant earth sciences component.

In integrated science there is “Water for living, Earth as a System, Weather, Energy and Air Quality and Exploring the Materials World”. Chemistry contains a module on “Planet Earth, Rocks and Minerals” and the geography course contains two elective modules on “Dynamic Earth” (earthquakes and plate tectonics) and “Weather and Climate”.

Professor Malone said the diploma also offered architects, engineers, surveyors and planners information about essential earth sciences to help them build a better and more sustainable Hong Kong.

“The programme provides more comprehensive knowledge on the various latest aspects of earth sciences to these professionals who are not likely to have learned them all in their early days of professional training at university. They might have studied some of them, but not specifically on Hong Kong’s situation. Our new programme, however, is tailor-made to Hong Kong’s needs,” he stressed.

He said town planning, for example, was related to environmental science protection and many environmental issues were connected with the Earth. A professional town planner who wanted to understand where pollution in Hong Kong came from must know the science behind the environmental problems. If they believed the source came from the mainland, they must understand how the wind blew and picked up particles in the Pearl River Delta that affected Hong Kong.

“Narrow town planners are those who don’t realise what happens in Hong Kong. They look at the maps in a two dimensional way. But good town planners should see the world – such as steep hills – in a three dimensional way. They must understand how nature affects the sites they plan. Professional town planners are expected to be able to think about these important impacts on Hong Kong.”

Similarly, he added, a competent architect would consider if the site under construction would be affected by typhoons – which is also related to earth science. The postgraduate diploma programme provided participants with basic science knowledge and looked at related issues more globally, he explained.

The programme will take 20 full-time (one year) and 20 part-time (two years) students.

HKUST Programme In Intelligent Building Technology And Management

Learn about structures of the future now

HKUST programme puts focus on construction of intelligent buildings that can help keep overheads down

Jacqueline Tsang – Updated on Jan 12, 2008 – SCMP

Buildings are no longer just large constructions of concrete and steel – the newest and fastest-growing trend in the building services industry is that of the much-touted intelligent building.

“Intelligent buildings will serve as the new standard for building design in future,” said Qiu Hui-he, director of the master’s of science programme in intelligent building technology and management at the Hong Kong University of Science and Technology (HKUST).

He said the improved waste management, cost maintenance and work efficiency were among the many reasons why more people were looking to these intelligent buildings as the benchmark for future building construction.

The general definition of an intelligent building is one that contains an electronic network which monitors all the lighting and mechanical systems in the structure, thereby controlling costs and reducing energy wastage.

However, Professor Qiu said that while some buildings in Hong Kong, such as the HSBC Central headquarters, The Center and the Cheung Kong Center had some “intelligent” components in their design, a building must satisfy a list of criteria in order to qualify as a fully intelligent building.

“The concept of intelligent buildings began with an eye to human comfort,” said Professor Qiu, “At that time, temperature and lighting were the main concerns.”

He said temperature played a significant role in working efficiency in an office. “It has been shown that 21 degrees Celsius is the optimal temperature for maximum work activity,” he said, explaining that chillier surroundings stimulated people to work faster. “Setting the thermostat to a comfortable 25 degrees, on the other hand, will likely result in overall lethargy in the workplace.”

Intelligent buildings also opt for light emitting diode lighting, and the switch from fluorescent to LED lighting systems benefits residential and office buildings. It is more suitable for applications that go through frequent on-off cycles, making it ideal for home use because it won’t burn out as easily as fluorescent lighting. LED lighting also has a significantly longer life span and emits more light per watt, thereby reducing costs and saving energy.

Other environmentally friendly systems in intelligent buildings include controlling indoor air quality through the reduction of carbon dioxide emissions, and keeping external toxic emissions to the minimum. In designing these buildings, Professor Qiu said there was high demand for construction materials that were more reusable and less toxic, as companies tried to keep their buildings as “green” as possible.

“Research is also being done on waste classification in residential buildings,” the professor said, “Rather than relying on people to sort their recyclable waste materials, we’re aiming for an automatic system that will classify waste accordingly.”

Space utilisation and cost maintenance are also part of the extensive list of criteria a truly intelligent building must fulfil. “In an intelligent building, the space is utilised to its maximum potential,” Professor Qiu said. “Piping and air-conditioning are more strategically placed to increase usable space.”

As for cutting costs, the professor said intelligent buildings employed systems that had a longer life cycle, as with the switch to LED lighting, thus minimising costs from system repairs and maintenance.

Safety is also a key factor in intelligent building design, and the safety systems in Hong Kong buildings are equipped with fire preventive measures. Intelligent buildings in the US, however, often included anti-terrorism and biological devices to better suit defensive needs.

Professor Qiu said that intelligent buildings did not necessarily have aesthetic appeal like the hi-tech facilities that Hongkongers often expected.

“People often have the misconception that exterior design is an integral part of what it is to be an intelligent building,” he said, explaining that while most intelligent buildings were aesthetically pleasing, he did not consider hi-tech visual appeal to be a necessary feature.

The professor said students taking the intelligent building technology and management programme acquired a multifaceted education through classroom training, independent study and internships.

“We have internal and external faculty members involved in the programme,” Professor Qiu said. “They often bring current or past building projects to class for the students to observe and discuss.” There were also opportunities for learning outside the classroom, and the professor explained how students had six independent study credits that they could allocate according to their interests.

“These are practical projects that can range from the mechanics of LED lighting to the evaluation of energy consumption in Hong Kong. The students may choose as they like, so long as they conduct these studies under faculty supervision.”

HKUST also offers an optional internship programme, and the majority of students who take advantage of this opportunity are from the mainland – they make up 40 per cent of the student population. “Unlike the local students, who presumably have considerable experience from their work in related industries, these mainland students have little to no work experience in their fields, and a large number of them sign up for internships every year,” he said.

Professor Qiu saw infinite potential in the future of intelligent buildings. He said that research was being conducted on the possibility of a building having its own self-diagnostic system.

“With the central network controlling a large number of systems it’s immensely difficult to pinpoint the location of the problem when something goes wrong. A self-diagnosing building would be able to define where the trouble areas are.”

Professor Qiu also suggested that the reality of home networking systems was not too far off.

With the right technology, a resident could remotely control appliances at home with a personal digital assistant, he said, and a simple phone call could turn on the air-conditioning to cool the room before arrival, or even turn on the TV and lighting. Research was also being done on at-home health monitoring at residential buildings, allowing residents to stay updated on their daily health status.

Green Campaigner Uses Shame Tactics

By Wang Zhuoqiong (China Daily)
Updated: 2008-01-11 07:30

For a company, a brand matters the most.

Environmentalist Ma Jun, who is well aware of the dictum, has used it to pressure polluters to mend their ways.

He created a website to name and shame companies, and even local governments, that pollute the environment.

“Companies which may ignore fines or other punishments cannot afford their brands being blacklisted,” Ma said Thursday.

“The pressure exerted can help stop pollution at its origin, because the public will penalize polluters by shunning their products.”

On Saturday, the 39-year-old was selected as one of 50 people – including four Chinese – who could save the planet by The Guardian, a leading British newspaper, because of his green efforts in the past decade.

“The award was a surprise to me, and the honor belongs to our team,” said Ma, who in 2006 set up the Institute of Public and Environmental Affairs, a Beijing-based non-governmental organization with five staff members.

The awards to the four Chinese send out a message, Ma said.

“It shows that the world cares about the environment in China, and how this developing country can play a role in solving environmental problems.”

The other Chinese on the list are Pan Yue, 47, vice-minister of the State Environmental Protection Administration; Jia Zhangke, 37, actor/director credited with raising public awareness of the environment; and Shi Zhengrong, 44, a scientist who owns Suntech Power, one of the world’s 10 biggest solar panel producers.

Ma said: “The new interaction between the government, public, enterprises and NGOs will benefit environment protection in China.”

As one of the leaders of environmental NGOs, which are estimated at about 3,000 in the country, Ma said the NGOs have made up for what the government may not be doing very well, such as keeping the public better informed about polluters.

On its part, the government has set in place a series of laws or regulations regarding the environment since 2003, which have enhanced public awareness of the environment.

These efforts have contributed significantly to climate change mitigation, he said.

Ma’s website features a list of polluters based on government data – placed on two web pages widely reported by the media.

On the blacklist are more than 10,000 water-polluting enterprises and over 4,000 that pollute air.

Up to now, about 50 enterprises have approached Ma, explaining their situation and promising to clean up their act.

Eight enterprises have asked independent environmental groups to audit their environmental management system and pollution control facilities. Of them, two have been removed from the blacklist after they passed the audits.

Ma is no stranger to lobbyists from blacklisted enterprises.

“Some come and say they want to support our project. I tell them to check their pollution first.”

But given the fact that 15,000 enterprises remain on the blacklist, “domestic and foreign-funded enterprises in China still have a long way to go to come clean,” he said.

His goal for this year: First, to create a database that categorizes products by type and industry.

“Consumers can check online the products they want to buy and select products from clean companies.”

Second, he wants to set up a new list of polluting suppliers as a reference for big companies.

“I hope big names such as Wal-Mart could one day stand up and say: ‘We don’t buy from polluting suppliers’.”

Ma, a former researcher with Hong Kong-based South China Morning Post, published a book, China’s Water Crisis, in 1999. He shifted from journalism to water protection during his field trips to polluted rivers and lakes in the 1990s.

“China has been facing rising challenges in terms of water shortages and pollution,” he said.

About 400 of 600 cities lack water, and water in about 30 percent of waterways is neither drinkable nor suitable for irrigation.

About 300 million farmers do not have accesses to safe drinking water, according to government figures.

Review Of Air Quality Objectives For Hong Kong

Review of air quality objectives and development of a long-term air quality strategy for Hong Kong

Consultation Forum

Opportunities for the General Public to Express their Views and Concerns

31 January 2008 (Thursday)

Background

The Environmental Protection Department has appointed Ove Arup and Partners Hong Kong Ltd. to commission a study to review Hong Kong’s current Air Quality Objectives (AQO) with an aim to develop a long-term air quality management strategy for Hong Kong.

Before formulating recommendations, the consultants have to examine the latest air quality guidelines and standards advocated by the World Health Organization (WHO), and in the EU and the U3; and also give balanced consideration to factors such as public health, cost effectiveness, society’s expectation, maturity of technologies, the need to work with the Mainland, and the impacts of air quality measures on other government policy areas.

Views from the Hong Kong community will form an important part of the review process. The Hong Kong Productivity Council has been commissioned to organize this forum. Members of the general public who are concerned about the air quality management in Hong Kong are welcome to participate and express their views. A panel of subject experts will give presentations from different perspectives in the forum.

Venue

Exhibition Hall, 4/F., HKPC Building, 78, Tat Chee Avenue, Kowloon Tong, Kowloon

Date & Time

2:00pm – 5:15 pm, 31 January 2008 (Thursday)

See the full program rundown here: http://www.epd.gov.hk/epd/english/environmentinhk/air/air_quality_objectives/files/eng_leaflet_R.pdf

Faulty Data Hampers Drive To Cut Pollution

Cheung Chi-fai – SCMP
Jan 10, 2008

Government officials monitoring air pollution in the Pearl River Delta have had to move the goalposts for pollution reduction after estimating that emissions levels in 1997 were twice as high as had been thought.

The Pearl River Delta Air Quality Management Plan review said particulates emission in the delta region in 1997 was 520,000 tonnes, more than double the 245,000 tonnes previously estimated.

A 40 per cent underestimation in sulfur dioxide and nitrogen oxides emissions were also found in the review. As a result, emissions data from 1997 that serve as a baseline for measuring progress towards reducing pollution have been raised, according to the review paper.

As the 1997 data had been underestimated by as much as 112 per cent in the case of particulates, changes to the baselines would have a big influence on determining how far the region was from achieving emission reduction targets.

In 2002, Hong Kong and Guangdong province agreed to pursue pollution target cuts of between 20 and 55 per cent in four major pollutants by 2010 from 1997 levels.

By underestimating the baseline emissions, the extent of emission reductions required by 2010 would be smaller, making it easier to achieve the targets. Overestimates, however, meant more efforts were needed.

Changes to the baseline data, however, would also lead to different maximum allowable emission limits. The review report said the underestimation on the 1997 data was due to factories failing to declare emission levels accurately, mismatches between reported emissions and amount of fuel used, and industrial processes not taken into account.

The paper said an emission calculation methodology in keeping with standards in the United States and European was completed for Hong Kong and Guangdong in 2005. It was then used to review the 1997 and 2003 emission figures – the most up to date data available for Guangdong.

Alexis Lau Kai-hon, an atmospheric scientist at the University of Science and Technology, said updating the baseline data would have an impact on how targets could be met.

“Lifting the baseline not just means more efforts to cut emissions are needed, it also means higher levels of emissions will be tolerated, too,” he said.

Data released by the Environmental Protection Department showed that not only were the 1997 baselines adjusted, the yearly emission data of Hong Kong have also been revised based on the new formula. As a result, Hong Kong was moving faster towards meeting the 2010 targets.

For example, the city had reported nitrogen oxide emissions in 2005 were 15 per cent below the old 1997 baseline but the difference widened to 17.8 per cent against the revised baseline. Figures from 1996 show the city had already met its 2010 target in nitrogen oxide emissions.