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July, 2008:

Olympic Smog Has British Girls Seeing Red

Tuesday, July 29, 2008 –

It was more like jolly smoggy sticks for the British Olympic women’s hockey team.

They have been forced into wearing futuristic red contact lenses to protect their eyes from the Beijing’s pollution.

Goalkeeper Beth Storry and her team-mates had suffered from the hazy conditions at their training camp on the island of Macau, near Hong Kong.

Smog is seen by the human eye as a red colour, and the red lenses work by forcing the eye to filter out red light from the colour spectrum – thus presenting clearer vision.

“They’re like sunglasses but as a contact lens so it just prevents glare,” skipper Kate Walsh explained.

“Both the goalkeepers like to wear them and a couple of the girls do on a really bright day so you’re not squinting a lot, which can cause headaches.”

“They make them look like the devil,” head coach Danny Kerry joked.

“They are high contrast but they also allow you to track the ball and one of the theories is that if you’re squinting all the time, it actually fatigues your muscles quite heavily.

“The girls that have persevered with them swear by them.”

Last week Beijing ordered more than a million of the nation’s 3.3 million cars from the roads and closed dozens of factories in a desperate attempt to slash air pollution levels.

There are now fears the games could be overshadowed, almost literally, by the terrible weather conditions.

China’s Low Costs Are On The Rise

07:56 AM CDT on Tuesday, July 29, 2008 – The Dallas Morning News

HONG KONG – We’ve come to know “the China Price” as the mark of the cheapest goods in the world, dreaded by competing manufacturers, irresistible to buyers.

Well, Asia Foundation vice president Allen Choate follows this topic and has some news:

“I think the China Price is gone,” he said over a dim sum lunch Saturday.

Costs are rising among manufacturers all across the Pearl River Delta, which spreads like a fan north, east and west of Hong Kong. Raw materials and energy prices are up. Taxes are up, thanks to a Chinese government decision to take away preferences for exporters.

The minimum wage rose by a third on July 1. Enforcement of anti-pollution rules is starting to bite.

For the hundreds of thousands of apparel, footwear and consumer electronics buyers who have loved the Pearl River Delta, the bloom is off the romance. For many years, this region brought lower prices to American stores. Now it’s bringing inflation.

Myron “Mike” Ullman, chairman of both J.C. Penney Co. and the National Retail Federation, saw this firsthand on a recent swing through Asia.

Mr. Ullman expects Penney can hold the line on price hikes, but other retailers won’t be so lucky.

“What’s been good news for a long time now is going to be realistic news,” he said.

“Costs are going up. We think apparel at the cost level, not retail, in the first half of ’09 will go up 8 percent for the industry.”

Inflation hawk and Dallas Federal Reserve Bank President Richard W. Fisher says retailers are telling him that Chinese goods are rising in price from 5 to 10 percent.

“Our labor unions were cowed by the fact that cheap stuff at very, very low prices was coming out of China. But their wage rates are increasing at a very, very fast rate,” Mr. Fisher said.

It’s not just the Pearl River Delta. Manufacturers spreading up the Yangtze River from Shanghai are also facing rising costs.

“There’s a labor shortage in the Yangtze River basin,” Mr. Fisher said. “That’s an arresting statement.”

Coming on the heels of higher prices for food and energy, price hikes from China are bad news for American consumers. But this is also a shift in the global economy.

China’s rapid economic growth was built on a seemingly endless supply of inexpensive workers. More than 75,000 Hong Kong manufacturers built factories in the Delta to take advantage of cheap labor and land. Tens of millions of migrant workers – often single women – have poured into the Pearl River Delta over the last 30 years looking for factory jobs.

One result was “the worst excesses of capitalism” in a communist country, said Geoffrey Grothall, editor of the Hong Kong-based China Labour Bulletin. Sweatshops. Child labor. Employers who confiscated wages for decrepit dormitory housing or skipped town without paying employees anything. Pollution and unsafe working conditions.

After several years of this, workers stopped putting up with these conditions. The flood of migrant workers slowed. Employee turnover in many factories rose to 75 percent a year. Many shops were hit with wildcat strikes, and labor rights campaigners publicized the worst excesses through the Chinese media and international consumer awareness campaigns.

These have always been factories operating on thin margins, however, and the rising value of the Chinese currency (up 18 percent against the dollar) has had a major impact on exports.

The Chinese government is now pushing employers toward collective bargaining with their workers. The new minimum wage is 1,000 yuan a month, or about $130. Chinese smog and water pollution are an international embarrassment that’s beginning to get some attention.

“They’re trying to move up the value chain” to more advanced manufacturing and services, Mr. Choate said. Meanwhile, some of the shoe and apparel makers are leaving for cheaper places such as Vietnam.

Hong Kong Chokes In Pollution As Horses Arrive

29 Jul 2008 04:19:08 GMT – Source: Reuters – By James Pomfret

HONG KONG, July 29 (Reuters) – Hong Kong choked in a thick, hot blanket of air pollution on Tuesday with the city gearing up to host Olympic equestrian events, prompting one leading riding nation to bemoan the less than ideal conditions.

With the first equestrian horses having arrived over the weekend and settling into their stables, the exceptionally smoggy weather threatened embarrassment for Hong Kong which has spent $150 million building state-of-the-art facilities and been at pains to play down the risk posed from sub-tropical heat and humidity.

On Monday, the city recorded its highest ever air pollution index (API) reading of 202 on a remote island for a brief period, while in Shatin, where the core Olympics events will be held, the level hit 173 with the general public advised to reduce physical exertion and outdoor activities.

The top-ranked German equestrian team which flew all 14 of their Olympics horses to Hong Kong over the weekend said the poor weather conditions in the former British colony weren’t ideal and a far cry from the usual pristine environment of European events.

“I think it’s very difficult for the horses and for the riders too, they have to acclimatise,” said Reinhard Wendt, the chef de mission for the German equestrian team which includes gold medal contenders Isabell Werth and Ludger Beerbaum.

“We can see how the horses and riders feel. But we don’t know if it’s from the heat or the humidity or the dirty air. We are not used to such circumstances, and the feeling is not so good at the moment,” Wendt told Reuters.

Others teams played down the impact.

“We have no concerns,” Dutch chef d’equipe Mariette Sanders told Reuters. “Okay, it was quite hazy yesterday but there were no problems for us.”

At the Shatin equestrian hub, the air pollution index had dropped substantially from the high reading on Monday.

A spokesperson for the Equestrian Company which is organising the equine events said in a statement that “the condition of all the horses was being very carefully monitored and there was no cause for alarm concerning the horses’ welfare”.

The spike in pollution comes amid a bout of unusually hot and fine sub-tropical weather. Concerns over the summer heat and humidity however sparked the earlier pullout the Swiss dressage team.

Despite intensified government efforts to clean up the smog in recent years which have yielded some results, air pollution has remained a serious problem, with the city’s iconic harbour and top tourist destination cloaked in a thick haze this week.

(Reporting by James Pomfret; Editing by Nick Macfie)

Beijing Smog Awful: Dutch Coach

Posted Tue Jul 29, 2008 7:40am AEST

The Netherlands’ Olympic football coach has described the smog in Beijing as “awful” as his team prepared in Hong Kong for the Games next month.

Coach Foppe de Haan said his side had trained in a special gym back home to prepare them for the hot and humid conditions in Hong Kong and mainland China, but he admitted there was no way of replicating the smog.

“That’s a problem,” de Haan said at a press conference ahead of a four-team pre-Olympic tournament where the Dutch are expected to prove why they are one of the favourites for gold in Beijing.

“I heard today if you are trying to look at the Olympic stadium (in Beijing), you can’t see it from 500 metres. It’s awful, I think.”

But de Haan said their team doctor had told him the players would adapt.

“The doctor told us if you spend five days there it will no longer be a problem because you get used to it.

“The doctor also said even if you don’t have asthma there in Holland you can have it here. But that’s no problem and we can handle it.”

The Netherlands play Cameroon on Wednesday, followed by Ivory Coast on Saturday.

The fourth team competing is the United States.


Is The Hack & Wheeze An Olympic Sport?

29th July – Bleacher report

It’s hard to get psyched about an Olympic Games I won’t be able to see.

Oh sure, NBC, ESPN, TSN, CBC, and dozens of other television networks across the globe will have the games covered like a jimmy hat, but that doesn’t mean we’ll actually “see” the event.

I’m not sure the athletes will either.

On any given day in Beijing, air pollution levels are five times what the World Health Organization deems safe. Living in Beijing is tantamount to being hot-boxed in a 1979 Toyota Corolla only the smoky haze is far less enjoyable, man.

The Beijing Olympic Committee and the city of Beijing itself have tried all kinds of things to clear the air including shutting down close to 150 gas stations. Just last week, the city ordered half of all private vehicles off the road.

It didn’t work.

Organizers has promised a green games but at this point, if they want to keep their promise, they’ll have to bring in Dark Helmet and President Skroob’s Mega-Maid to suck the smog and soot right out of the atmosphere.

Beijing isn’t the only city involved in these games. Hong Kong is too, and that city is no better off.

Home to the equestrian events, Hong Kong recorded its worst ever pollution levels this week, less than two weeks until the opening ceremony. Horseback riding in a thick fog only works if you’re planning to surprise the enemy camp in an early morning raid.

It would appear this year’s must have Olympic accessory is an air mask, and Japanese athletes are considering it. These masks are supplied to construction workers in that country for burly men who deal with concrete dust and dirt on a daily basis.

Lean Olympians are going to have a hard time to pull off the look, but other countries are also looking in to the idea.

Some aren’t even bothering. The Australian delegation is allowing its athletes to withdraw from any event if they feel their health will be put at risk by the acrid, exhaust fumes spewing from the factories scattered all across China.

Australia won’t even be at the opening ceremonies because of the pollution, leaving an awkward space between Aruba and Austria and adding yet another punch to an already puffy black eye for the host country.

One has to wonder, will they even light the Olympic flame? How much pollutants will that spew in to the air?

What will save Beijing is rainy weather. The haze enveloping Beijing like a shroud finally lifted with rainy weather having moved in to the area but then, who wants a rainy Olympics? It dampens the spirit both literally and figuratively.

So, yes, NBC will have wall-to-wall coverage of the games, ESPN SportsCenter will have highlights ad nausea, in high definition no less.

As far as I’m concerned, however, these games will both suck and blow.

Aussie Athletes Allowed To Pull Out If Smog Hurts

Herald Sun – Ben English – July 29, 2008 12:00am

AUSSIE athletes will be allowed to withdraw from events if they believe Beijing’s smog to be a health hazard.

With Beijing again blanketed in a dirty haze yesterday, China announced it was planning more drastic measures to clean up the city before the Games begin next week.

The Australian Olympic Committee said it was taking the matter so seriously it would not stand in the way of Aussie competitors withdrawing from events.

“For us, the athletes’ attitude to the event is paramount,” AOC vice-president Peter Montgomery said after arriving in Beijing yesterday.

“They will be absolutely under no pressure to compete if they feel uneasy or don’t want to compete.”

But Montgomery added he did not expect any of our athletes to take such action.

“It would be extremely unlikely that an athlete would not want to compete, let me say,” he said.

“Most of the athletes have been training for 10 years for this moment.”

Montgomery warned the pollution could trigger unfamiliar and dangerous reactions for the athletes.

“There is also the possibility people may, under severe pressure, develop symptoms they have not had in the past,” he said.

“We think that is unlikely but our doctors have been all over this for our entire team.

“It will be a day-by-day sort of situation.”

The AOC policy comes after a Herald Sun survey of Australia’s Olympians found one in three had concerns about Beijing’s pollution.

But AOC secretary-general Craig Phillips said Australia might gain an advantage from Beijing’s cocktail of smog, heat and humidity as our team had prepared more thoroughly.

“We have done a lot on air quality, but also on heat and humidity,” Phillips said. “We have our recovery centre, ice vests and other measures.

“Also, a lot of our sports prepared for the heat changes, getting into northern Australia and going into South-East Asia in their training.

“We know most other countries are not doing it.”

China’s Olympic pollution crisis was not just in Beijing.

Equestrian horses had to exercise under filthy skies in Hong Kong yesterday.

But Beijing environmental officials said they were ready to implement an emergency plan to take 90 per cent of the city’s cars off the roads.

Only cars whose licence plates ended with the last digit of the date could travel.

Smog Cloud Hangs Over Beijing

AFP Published:Jul 28, 2008

BEIJING – Beijing and co-host Olympic city Hong Kong were today blanketed in smog just 11 days before the Games, raising the stakes for organisers who were planning more emergency measures to clear the air.

Despite years of efforts to rid the Chinese capital of its notorious pollution and a raft of recent attempts at quick fixes, a typically thick haze cut visibility across Beijing to a few hundred metres.

With some athletes already training in Beijing and elsewhere in China, and others due to arrive in the coming days including the US athletics team, the persistent pollution was jeopardising China’s promise of a “Green Games”.

Activist group Greenpeace released a report saying Beijing’s air quality was still well short of international guidelines — and that particulates in the air were twice above levels considered safe.

The state-run China Daily newspaper said the government may ban 90% of private cars and close more factories in a last-ditch bid to clear the skies before the Games start on August 8.

Last week Beijing ordered more than a million cars from the roads and closed dozens of polluting factories, apparently with little impact.

The China Daily, citing an official with the city’s environmental bureau among others, said contingency measures such as the more extreme car ban could be implemented two days before the Games.

“We will implement an emergency plan 48 hours in advance (of the Games) if the air quality deteriorates,” Li Xin, a senior engineer with the bureau, was quoted as saying.

Nevertheless, the Beijing Olympics organising committee said it was still confident athletes would have little to worry about in regards to pollution during the Games.

“With the measures we have taken, we are fully confident that we can ensure clean air for the Games,” committee spokesman Sun Weide told AFP.

“I think it will take some time yet for these measures to show results but, because of the measures we have taken, we are fully confident.”

The pollution woes were not confined to just Beijing, reflecting the long-standing problems across China as the environment has taken a back seat to economic development over the past 30 years.

In the southern city of Hong Kong, which will host the equestrian events, the air quality today appeared to be nearly as bad as in Beijing — and horses preparing for the Games were forced to train in the heavy smog.

The city’s air pollution level was classified as high, although it had not yet crossed the critical 100 mark, the point at which people with respiratory or heart problems are urged to stay at home.

A spokesman for the Equestrian Company, which is responsible for hosting the Olympic equestrian events, said a range of high-tech measures had been employed to protect the horses.

“We have kept our horses in a high-ceilinged, six-star stable,” the spokesman told AFP.

In its report, Greenpeace said levels of particulates, one of the major measures of pollution, were still twice as high in Beijing as recommended by the World Health Organisation.

Jacques Rogge, the head of the International Olympic Committee (IOC), warned last year that poor air quality during the Games could result in the suspension of endurance races such as long-distance cycling and the marathon.

However there have been no specific pollution levels given that would trigger the suspension of an event, and Greenpeace called on the IOC to issue minimum environmental standards for future Olympics.

Alongside pollution, security has become one of the highest-profile Olympic concerns for China.

The government has warned that alleged terrorists from China’s Muslim-populated northwest Xinjiang region were planning attacks on the Olympics.

But the state-run Xinhua news agency denied claims by a separatist group claiming to represent people in Xinjiang that it was behind deadly bus bombings in Shanghai and the southwestern city of Kunming.

Asia Switches On To The Carbon Market

28 Jul 2008 | Author: Rajesh Chhabara –

The Asian economies want a piece of the world’s carbon trading action. The move adds further threat to carbon brokers dealing in over the counter carbon credits

Exponentially growing global carbon trading has caught the fancy of the top financial centres in Asia. Hong Kong, Tokyo, Singapore, Mumbai, Shanghai and Beijing are reported to be considering opening exchanges for trading carbon credits. But analysts warn that it may be too early for Asia to join the party unless the key economies in the region create local demand for credits.

There is a growing recognition of carbon as a soft commodity that can be traded as carbon credits and in the form of other complex financial products, such as derivatives and exchange traded funds.

According to Oslo-based research firm Point Carbon, the global carbon trade crossed €40 billion in 2007, a growth of 80% over the previous year. In terms of volume, 2.1 billion tonnes of carbon dioxide equivalent credits were traded, a hefty 64% increase over 2006. Carbon trading is estimated to hit €100 billion in 2008.

The global carbon market could be worth €2 trillion by 2020, says Point Carbon, if a greenhouse gas cap and trade scheme takes off in the US.

However, Asia’s role in global carbon trading has remained limited as a supplier of carbon reduction emission (CER) or carbon credits under the Clean Development Mechanism (CDM) of the United Nations Framework on Climate Change Convention (UNFCCC), which was born out of the Kyoto protocol.

CDM allows reduction in greenhouse gases achieved in developing countries to be sold as carbon credits to developed countries, which have ratified Kyoto protocol, to help them meet their emission reduction targets.

China alone accounts for 61% of global supply of CERs followed by India with a 12% share. China, India, Malaysia, Thailand and South Korea together generate a staggering 80% of all the CERs. Almost all the CERs are currently purchased by European companies and governments to meet their own emission reduction targets under the Kyoto protocol.

The bulk of the CER trading takes place through brokers, bi-lateral agreements and personal negotiations. Asia does not have any real trading platforms or exchanges for banking or transacting carbon credits.

Asian ambitions

Asian financial centres now want a piece of the action. The Hong Kong Stock Exchange is going over a feasibility study it commissioned toward the end of last year to determine how to position itself in the carbon trading market. Chinese authorities are working on their own plans for a carbon trading platform.

The Multi Commodity Exchange of India – the country’s largest commodities exchange, which has a strategic alliance with the Chicago Climate Exchange – launched futures trading in carbon credits in January this year. Carbon credit futures are exchange-traded derivatives or standard contracts, allowing the buyer and seller enter into a legally binding agreement to buy or sell carbon credits at a certain price to be delivered at a certain date in the future. Futures protect the contracting parties against a price risk.

The South Korea Stock Exchange plans to launch carbon trading sometime this year. Singapore is aiming to become Asia’s carbon trading hub and is offering tax incentives to carbon trading firms. It is banking on its robust financial institutions and proximity to CDM projects in South-east Asia.

Though most players are tight-lipped about their plans and the scope of trading, market sources say the exchanges may be looking at a variety of options. “Trading in CERs, Voluntary Emission Reductions (VERs) and derivatives are the obvious possibilities,” says Rahul Kar, KPMG’s sustainability services manager in Singapore. Derivatives are complex financial instruments based on the value of underlying assets, which in this case are carbon credits. Types of derivatives include futures, forwards, options and swaps.

The VER market is small, but has the potential to grow. Hong Kong-headquartered Cathay Pacific airlines recently introduced carbon offset options for its passengers using VERs. The airline is buying VERs from greenhouse gas emission reduction projects, mainly in China, which are verified using Voluntary Carbon Standard, developed by The Climate Group, the International Emissions Trading Association and the World Business Council for Sustainable Development. Other companies may follow suit to cater to green demands of their customers, or simply to put forward a socially responsible image.

“Hong Kong can possibly aggregate CER volumes from South Asia and South-east Asia and trade them on the exchange for international buyers,” says Marco Monroy, president and chief executive of MGM International, a leading carbon credit project developer.

China trades up

Last year, the governments of Hong Kong and Guangdong province in China agreed to work on a pilot emission trading programme to reduce sulphur dioxide emissions from industries that want to address pollution over the Pearl River Delta.

In another development, the Chinese government announced in June this year that local companies in Hong Kong can now participate in the CDM projects and sell CERs resulting from projects undertaken within Hong Kong. However, Hong Kong companies are still not permitted to generate CERs from CDM projects by their subsidiaries in the mainland China. China has barred companies in Hong Kong, Macau and Taiwan from participating in the CDM projects in the mainland and treats them as foreign entities.

In spite of sitting next to the world’s largest supplier of CERs, a carbon trading exchange in Hong Kong cannot bank on carbon credits from China. China requires all CDM developers to pre-sell all CERs to foreign buyers, who are almost always European entities, above a floor price set by the government, before approving a project. This means primary CERs will not be available for trading on a Hong Kong exchange.

In China, Beijing and Shanghai are competing to take the lead. Another province, Tianjin, even entered into negotiations early this year with the Chicago Climate Exchange to set up a carbon trading bourse in partnership with China National Petroleum Assets Management and the Tianjin Property Rights Exchange (TPRE). However, the deal fell through in June on account of disagreements on the foreign ownership of the exchange.

Last year in February, China announced two carbon trading initiatives. The first aimed at setting up a carbon trading exchange in Beijing in joint venture with the United Nations Development Fund (UNDP); the second involved $1.7 million carbon finance for 12 western Chinese provinces to educate them in carbon trading. However, sources say there has been no progress on the UNDP-partnered plan.

Peng Zhiyuan, managing director of China Beijing Equity Exchange, who was in Singapore in June for a carbon markets conference, said: “We are working on the model and will be introducing carbon trading in the near future”.

China Beijing Equity Exchange is different from Shanghai Stock Exchange. It deals only in state-owned equity transactions: investors willing to buy government-owned companies’ equities go through here. Shanghai Stock Exchange is the national exchange and operates as any other stock exchange in the world.

Both of them plan to have carbon trading. But at this time, it’s not clear how they will position themselves and what will be traded on them. Both are under different regulatory bodies.

For a local exchange to be successful, China will need to change its CDM policy and allow project developers to sell the credits through a local exchange. If this happens, European buyers will have to buy Chinese CERs on a local exchange rather than through bi-lateral agreements with project developers. A China-based exchange will also make brokers who currently play a crucial role in match-making between buyers and sellers redundant. Most of them are European, such as Eco Securities and TFS Green.

Observers say carbon trading in China will benefit local CDM project developers and increase their access to carbon markets. “A local exchange will reduce the transaction cost and bring more transparency to CER pricing,” says Chen Dongmei, the climate change and energy program director of WWF China. Since the bulk of CER trade takes place through bi-lateral agreements, a central database of price movements is not available. Sellers often complain that the brokers only protect the interests of buyers. But if credits are traded on an exchange, daily prices and volumes are available in real time. Exchanges can also develop indices reflecting the price movement. Industry sources say that, currently, prices of primary CERs (yet to be issued) are in the range of $9-$23 a tonne, though no official figures are available.

There are sceptics of China’s trading plans. A market analyst in Hong Kong said on condition of anonymity that China, unlike Hong Kong, does not have an open and efficient financial market infrastructure. The analyst said China would find it hard to convince international buyers to shop on Chinese carbon trading exchanges.

“It will be best if China encourages Hong Kong to explore emissions trading as Hong Kong is the one market on Chinese soil that is not a closed market, while Shanghai still is,” says Christine Loh, a former legislator and the chief executive of Civic Exchange, a Hong Kong based environmental advocacy group.

Chinese financial markets are heavily regulated, protected from foreign competition and underdeveloped, while Hong Kong is a mature and robust international financial centre with hardly any barriers for foreign businesses and no restrictions on capital flow. Hong Kong has been ranked first in terms of economic freedom for 14 years in a row by the Heritage Foundation, a Washington think tank, which publishes an annual index of economic freedom and rates 157 nations.

Hong Kong Stock Exchange is said to be considering emission related-structured products that may include contracts, options and futures. It also plans a listing of green Initial Public Offerings (IPOs). According to a press release by the Hong Kong exchange, green IPOs will involve “listing companies that provide products and services which help to reduce emissions”.

Hong Kong Exchange has also said it is exploring the potential for establishing an auction platform for CERs.

Japan’s cap and trade

Japan is planning an EU-style cap and trade mechanism, announced by the prime minister in June, which can set the stage for a promising carbon market in the country. The city of Tokyo is also considering a cap-and-trade scheme to reduce emissions.

Japan has until now encouraged industries to voluntarily reduce emissions rather than imposing binding targets.

Tokyo Stock Exchange, the world’s second largest bourse, has said it is planning a carbon trading platform. Currently, Japanese companies buy CERs directly from project developers in developing countries or through brokers. A local exchange can reduce transaction costs.

However, Japanese industry associations have opposed the cap-and-trade plans, saying that tougher emission targets will prompt businesses to shift production to developing countries.

Monroy of MGM International says: “It will be cheaper for Japan to import CERs rather than use cap-and-trade to meet compliance obligation. Efficiencies are already high in Japanese industries and achieving further emission efficiency, which will be needed if cap and trade is imposed, will be very expensive for the industry.”

Creating local markets

Some CER project developers are wary of an emissions exchange. Monroy says: “It is too early to have an emission trading exchange in China. An exchange requires liquidity. Both supply and demand are needed for liquidity and China currently does not have demand for carbon credits.”

Market analysts are similarly sceptical about Asia’s carbon trading dream. Though Asia has a large supply for CERs, there is no local demand in the region except from Japan, which remains the sole buyer of CERs in Asia to meet its Kyoto obligations. Other Asian countries still do not have regulations requiring companies to reduce emission or buy credits.

An exchange requires liquidity which comes from a healthy match of demand and supply. The European Climate Exchange (ECX) and Chicago Climate Exchange (CCX) thrive because they have local demand and supply due to the cap-and-trade mechanism. CER is only a small part of their total trade and accounts for only about 20% of global emissions trading.

Roger Raufer, an emission trading expert who worked on the feasibility report for the Hong Kong Stock Exchange, says: “Asia needs to develop its own carbon trading markets rather than simply copying the European or the US markets. It needs to create its own demand based on local emission issues and solutions.”

The story is different in Europe. The European Union’s Emission Trading Scheme (ETS) was launched in January 2005 as a result of Kyoto protocol, before the UNFCCC’s CDM took shape. A cap-and-trade mechanism was introduced covering energy intensive industries. Companies in these industries are issued an allowance for carbon dioxide emissions. If they emit more, they must buy carbon credits, known as European Union Allowance (EUA), from those who have polluted under their allowance, or face a heavy fine.

The ETS created a huge compliance market for carbon credits. The EU later allowed companies to import CERs to meet compliance when the CDM was introduced.

In the process, the ECX and Oslo-based Nord Pool emerged as the largest carbon trading exchanges in the world. According to carbon research and rating firm Idea Carbon, ECX accounted for 87% of global carbon trading in 2007.

The total value of EUAs traded last year was $43.8 billion, most of it transacted over the ECX, while Nord Pool accounted for $1.6 billion worth of EUAs and CERs. In the US, which did not ratify the Kyoto protocol, a voluntary carbon offset market came into operation. The CCX, which was launched in 2003, has become a significant player for trading in VERs and emission reduction related structured products.

Liam Salter, head of climate for WWF Hong Kong, points out that the CDM market is too uncertain to base a trading exchange upon. “The number of CDM projects can fall if the post-Kyoto scenario remains unclear,” he says. Kyoto protocol expires in 2012 and international negotiations are dragging on to decide the post-2012 mechanism.

Athletes Face Mental Problem With Pollution

Athletes face mental problem with pollution says coach

Mon Jul 28, 2008 1:08pm BST – By Julian Linden

HONG KONG (Reuters) – Athletes competing at the Beijing Olympics will face bigger mental issues than physical problems coping with China’s pollution, Netherlands soccer coach Foppe De Haan said on Monday.

De Haan told a news conference his players had undergone a rigorous training programme to get themselves in the best physical shape to handle the heat and humidity.

But he said nothing could prepare them for the psychological challenge of playing under a thick blanket of haze.

“This is not a physical problem, this is a mental thing,” he said. “I heard today that you can’t see the (Beijing) stadium from 500 metres away. That’s awful I think, but there is no point complaining, it is the same for everyone.”

The Dutch, who are playing a warm-up tournament in Hong Kong with the United States, Cameroon and Ivory Coast, were given a stark warning of the potential problems they face.

De Haan ordered all the players to undergo a month of intense physical training, including spending time in humidity chambers that replicated the climate in Beijing, and two players, who had never had any previous problems with asthma, started to develop symptoms.

“We did a three-week programme with a lot of work on aerobic fitness,” De Haan said. “We took all the players to a hospital in The Hague for tests and most of them were fine but two players started to show signs.”

De Haan said the two unidentified players had reported their conditions to the International Olympic Committee in case they needed to take any medication during the Games.

Cameroon coach Martin Mpile said he had no major concerns about the pollution although he conceded the humidity could force some of the more athletic teams to curb their natural instincts to conserve their energy.

“That’s why we have come here early, to adapt to the conditions,” he said. “I don’t know how the other teams will (cope) but we’re going to try and play our own game.

U.S. coach Peter Nowak said he did not expect the conditions would make it any easier for his team to upset some of the top countries.

“There are no more miracles in soccer anymore,” he said. “Anyone can beat anyone on any given day. The conditions are the same for everyone. It’s not going to be easy, but we know that.”

Olympics Emergency Plan Announced

China’s Anti-Pollution Efforts Failing, Olympics Emergency Plan Announced

AHN – July 28, 2008 10:53 a.m. EST – Linda Young – AHN Editor

Beijing, China (AHN) – With only 11 days until the Olympics begin, and with both Beijing and co-host city Hong Kong enshrouded in smog, on Monday China announced a new emergency air pollution plan.

Even with China’s earlier measures to keep half the vehicles off the roads and shut down many pollution-spewing manufacturing plants, the air quality is still poor. Testing at the Olympic Village revealed one pollutant at levels three times the recommended limit.

The amount of particulate matter in the air has been too high for four straight days. On Monday it rose to more than double the standard set by the World Health Organization. Even worse is the fact that China doesn’t even test for ground level ozone that can build up to high levels in high humidity, and Beijing is experiencing high humidity.

Pollution threatens to postpone endurance events, such as the marathon, triathlon and 10km open-water swim, which athletes can’t compete in if they are trying to do so by breathing polluted air.

A professor who advises the government on pollution told BBC news that a new emergency plan could take 90 percent of the cars off the road, close all construction sights and more factories.

“There is a chance… that we cannot meet the air quality standards so stricter measures are needed,” Professor Zhu Tong, of Peking University, told BBC.

And, it isn’t just the athletes who are affected by training in heavy air pollution.

In Hong Kong, the organization responsible for taking care of the horses for the equestrian events being held there told Agency France Press that they have taken a variety of measures to protect the horses from the air pollution.

“We have kept our horses in a high-ceilinged, six-star stable,” the spokesman told AFP.

If China institutes the new measures, it would do so 48-hours in advance in an effort to clear the air of pollutants.