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January 16th, 2008:

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 –


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