Monday, 16 March 2009

Chilean water rights system leaves town parched

By Alexei Barrionuevo
Published: March 15, 2009

QUILLAGUA, Chile: During the past four decades here in Quillagua, a town in the record books as the driest place on earth, residents have sometimes seen glimpses of raindrops above the foothills in the distance. They never reach the ground, evaporating like a mirage while still in the air.
What the town did have was a river, feeding an oasis in the Atacama Desert. But mining companies have polluted and bought up so much of the water, residents say, that for months each year the river is little more than a trickle — and an unusable one at that.
Quillagua is among many small towns that are being swallowed up in the country's intensifying water wars. Nowhere is the system for buying and selling water more permissive than here in Chile, experts say, where water rights are private property, not a public resource, and can be traded like commodities with little government oversight or safeguards for the environment.
Private ownership is so concentrated in some areas that a single electricity company from Spain, Endesa, has bought up 80 percent of the water rights in a huge region in the south, causing an uproar. In the north, agricultural producers are competing with mining companies to siphon off rivers and tap scarce water supplies, leaving towns like this one bone dry and withering.
"Everything, it seems, is against us," said Bartolomé Vicentelo, 79, who once grew crops and fished for shrimp in the Loa River that fed Quillagua.

The population is about a fifth what it was less than two decades ago; so many people have left that he is one of only 120 people still here.
Some economists have hailed the Chilean water rights trading system, which was established in 1981 during the military dictatorship, as a model of free-market efficiency that allocates water to its highest economic use.
But other academics and environmentalists argue that Chile's system is unsustainable because it promotes speculation, endangers the environment and allows smaller interests to be muscled out by powerful forces, like the mining industry.
"The Chilean model has gone too far in the direction of unfettered regulation," said Carl J. Bauer, an expert on Chilean water markets at the University of Arizona. "It hasn't thought through the public interest."
Australia and the Western United States have somewhat comparable systems, but they contain stronger environmental regulation and conflict resolution than Chile's, Dr. Bauer said.
Chile is a stark example of the debate over water crises across the globe. Concerns about shortages plague Chile's economic expansion through natural resources like copper, fruit and fish — all of which require loads of water in a country with limited supplies of it.
"The dilemma we are facing is whether we can permit ourselves to continue to develop with the same amount of water we have now," said Rodrigo Weisner, water director in the Public Works Ministry of Chile.
"There is no political consensus about how to deal with the challenge of producing the resources we have — including the biggest reserves of copper in the world — in a country that has the most arid desert in the world," Mr. Weisner said.
Fernando Dougnac, an environmental lawyer in Santiago, the capital, said that balance was particularly difficult because the "market can regulate for more economic efficiency, but not for more social-economic efficiency."
Lately, the country's approach to water has been showing some cracks. In the Atacama Desert city of Copiapó, unbridled water trading and a two-year drought mean that "there are many more water rights for the river than water that arrives from the river," Mr. Dougnac said.
Quillagua, in Guinness World Records as the "driest place" for 37 years, had prospered off the Loa River, reaching a population of 800 by the 1940s. A long-haul train stopped there — today the station is abandoned — and the town's school was near its 120-student capacity. (Today there are 16 students.)
That prosperity first began to ebb in 1987, when the military government reduced the water to the town by more than two-thirds, said Raul Molina, a geographer at the University of Chile. But the big blows came in 1997 and 2000, when two episodes of contamination ruined the river for crop irrigation or livestock during the critical summer months.
An initial study by a professor concluded that the 1997 contamination had probably come from a copper mine run by Codelco, the state mining giant. The Chilean government then hired German experts, who said the contamination had a natural origin.
The regional Agriculture and Livestock Service of Chile, part of the Ministry of Agriculture, rebutted those findings in 2000, saying in a report that people, not nature, were responsible. Heavy metals and other substances associated with mineral processing were found that killed off the river's shrimp and made the water undrinkable for livestock. (Drinking water for residents had been transported in for decades.)

Codelco, the world's largest copper mining company, rejects any responsibility. Pablo Orozco, a company spokesman, said that the river water had been bad for years and that heavy rains around the time of the contamination episodes had briefly swelled it, sweeping sediments and other substances into the water.
But the debate is largely academic because, without suitable water to raise crops, many residents saw no reason to continue resisting outside offers to buy the water rights in their town. One mining company, Soquimich, or S.Q.M., ended up buying about 75 percent of the rights in Quillagua. Most residents moved away; those who remain average around 50 years old.
"Quillagua cannot resist much longer," said Alejandro Sanchez, 77, pointing a cane at a parched, grassless field where he once grew corn and alfalfa.
In 2007, the national water agency started investigating claims that Soquimich was extracting even more water from the Loa River than it was due. The inquiry is still pending, officials said, though the company says it has never taken more water than it owns rights to.
But early last year, the regional water authority started satellite monitoring along the Loa. After recording no water at all in the summer of 2007, Quillagua suddenly received small amounts last year and again this January.
That has made water authorities suspicious that companies had been draining more water than permitted, according to Claudio Lam, a regional director for the Chilean water agency.
Even so, the water arriving in the summer is still not enough to produce crops, said Victor Palape, the chief of the Aymara Indians in Quillagua.
In a cruel twist, the town survives only because of daily water trucks that are partly financed by Codelco and Soquimich, the two companies that residents blame most for their troubles.
The residents of Quillagua remain determined. Mr. Palape, who owns the town's main restaurant, still dreams of attracting tourists to the 108 meteor crater sites in and around Quillagua.
His sister Gloria is equally proud of Quillagua's place in history.
"To be able to live in the driest place in the world, with everything that has happened, the people have to be resilient, to be stubborn," she said. "We are not giving up."
Pascale Bonnefoy contributed reporting from Santiago.

Ethical and environment reputations are on the slide

By Elizabeth Rigby, Consumer Industries Editor
Published: March 16 2009 02:00

There was no doubt that, in the consumer frenzy that characterised the mid noughties, "green" became the "new black" for retailers when it came to pedalling anything from T-shirts to packs of teabags.
Tapping into a growing environmental awareness among consumers, shopkeepers sought to display their own green credentials in an effort to promote their brands and appeal to a generation of more socially conscious shoppers.
At Marks and Spencer, the UK retailer, these efforts were crystallised in its Plan A ( "because there is no plan B"), which targeted 100 environmental goals for the company, from reducing its carbon footprint to doing away with free plastic bags.
Tesco, Britain's biggest retailer, meanwhile inserted environmental targets into its corporate business plan and staff bonus targets.
But with consumers' minds now squarely focused on more pressing issues of saving money on their weekly shopping bills and making ends meet as the recession begins to bite, are green issues slipping down their agendas? Can retailers afford to allow the environment to slip off their corporate radar as they struggle to survive the downturn?
Sir Stuart Rose, executive chairman of M&S and architect of its Plan A, insists that green remains on-trend despite the downturn.
"We are absolutely as committed as we were and we are not backing off [from Plan A]. For some consumers who are more financially stretched, it has slipped back a bit on their radar screens but research tells us the bulk of consumers still like it.
"It is the right thing to do and it is also giving us the opportunity to find new innovations and cost savings so it is a false economy not to do this."
But despite such reassurances, consumers are sceptical. A recent poll by Populus found that the ethical and environmental reputations of leading DIY, furniture and garden retailers have fallen across the board, with every home or gardens retailer in the poll suffering a fall in how ethically-aware customers rated their behaviour.
Equally, consumers' commitment to green is on the wane.
According to Populus's research, the number of people who would be more likely to buy a product based on value for money, regardless of the company's ethical or environmental credentials has risen from 31 per cent a year ago to 41 per cent now.
Meanwhile, the number of respondents saying they would opt for more ethical and environmental products, even if they do cost a little more, has fallen from 69 per cent a year ago to 59 per cent now.
But while the issues are replaced by fears over unemployment and the economy, those in the green lobby believe that the environmental imperative is here to stay on corporates' "to do" list.
Tessa Laws, partner at Rosenblatt solicitors, which recently carried out research on companies' commitment to the environment, says most companies are holding fast to their pledges regardless of the recession.
Rosenblatt found that one in five companies with corporate environmental policies are planning to ramp them up in early part of 2009.
"Corporates...acknowledge that it should be on their agenda. But the larger corporates have shareholders to answer to and they may be saying 'stop thinking about the environment and start paying us some money' and others will be saying 'you are doing all right and we should be thinking about our future generations'," says Ms Laws. "So it is divided, to be honest, but we found on balance people know that green policies are something that they have to follow."
While consumers might be focusing on more pressing issues in the short term, recent research carried out by Havas, the advertising group, suggests that companies that stay committed to green issues will reap their rewards in the longer term.
Guy Champniss, director of business insights at Havas Media Intelligence, says the research - taking in 25,000 consumers in nine countries - showed that sustainability remains a driver for consumers.
In his research, just over a third of consumers still ranked it as a very important issue behind unemployment and economic uncertainty.
Meanwhile, 80 per cent of respondents said corporates should be involved in solving social and environmental problems, while only 30 per cent thought it was the responsibility of government, not business, to solve these problems, which suggests that a solid corporate social responsibility record is an increasingly important part of branding - recession or not.
"There has to be an interdependence if we are going to tackle climate change," says Lucy Neville-Rolfe, corporate and legal affairs director at Tesco.
"It has to be government, business and consumers working together. Our contribution is trying to generate a green revolution in consumption and actually people will still make green choices if you help them."
Copyright The Financial Times Limited 2009

Unwanted Refineries Go Begging

Valuations Fall Sharply and Environmental Costs Make Closures Unappealing

As demand for oil products slows, some refineries are likely to become a burden that will be hard to shake off.
Refining margins -- the difference between the price refiners pay for crude oil and the price they get for their products, such as gasoline -- remain depressed because of weak demand from recession-hit economies and new refinery capacity coming online in Asia.
Mike Wittner, head of global oil research at Société Générale in London, estimates the European 5-2-2-1 crack spread, a proxy for refining margins, will fall to an average of $3.46 a barrel this year from $6.53 last year.
Associated Press
Total SA said recently it plans to cut 249 jobs at its French refineries by 2013, among other restructurings. Above, Total tank trucks wait to be loaded at a refinery in La Mede, near Marseille, in southern France.
As a result, refiners in Europe and the U.S. are curtailing production to reduce operating costs and stem losses. Those who want to rid themselves of refining plants altogether are finding themselves in a difficult position. Environmental cleanup costs in some cases can make it less expensive to run a refinery at a loss than to shut it down.
Refineries that are up for sale are expected to be a tough pitch. Eni SpA's 84,000-barrel-a-day Livorno refinery in northern Italy and Petroplus Holdings AG's 117,000-barrel-a-day Teesside plant in northern England were put up for sale last month. Teesside refinery's gross margin fell 95% in the fourth quarter to an unaudited 60 cents for every barrel of crude oil it processed, compared with $11.98 in the previous quarter, Petroplus said.
Refinery valuations have dropped about 40% since 2007, said Ennio Senese, an executive partner at Accenture in Rome, largely because of the economic downturn. The Teesside refinery is valued at €70 million to €100 million, or $90 million to $130 million, he said. The Livorno plant is valued at between €120 million and €140 million, he said.
Eni hopes to find a buyer or partner for Livorno in the next few months, an Eni spokesman said in an email Friday, adding that a number of parties had indicated possible interest. Petroplus didn't return calls for comment but said in February that it hoped to sell the refinery within six months. "If they sell low...that would probably release them from huge daily losses," Mr. Senese said.
Simply closing the refineries may itself be too costly for some refiners. "The environmental cleanup bill can be horrendous...the costs of closure won't be palatable," said Richard Griffith, director of oil and gas at Evolution Securities in London.
"Somebody needs to pay the bill eventually, and if a refinery is shut down, the last one to hold the key is the one who is expected to pay," Mr. Senese said.
There is a third option: Turn the refineries into storage sites. Petroplus has said it would consider transforming facilities into storage terminals. The storage business has become more lucrative as oil producers and trading companies hedge their exposure to future oil prices.
Conversion to storage also could help owners eke out some returns from their assets. "It's not as expensive to shut down when you transform it into a storage area," said Olivier Abadie, Paris-based director of downstream oil for Europe at Cambridge Energy Research Associates.
Difficult times for refiners in the next six years could accelerate some restructuring already taking place, Mr. Abadie said, and signs are emerging that more refiners will need to adjust their operations to accommodate their low margins.
French oil major Total SA said recently it plans to cut 249 jobs at its French refineries by 2013, and a further 306 jobs at its petrochemical operations by 2012. If implemented, Total's restructuring plan would reduce the capacity of its Normandy refinery to 12 million metric tons a year from 16 million metric tons, shifting the plant's yield toward diesel and reducing surplus gasoline production.—Alice Dore and Adam Mitchell contributed to this article.

Energy gain from Obama factor

By Hugo Greenhalgh
Published: March 15 2009 09:41

Part of the appeal of the BlackRock BGF New Energy fund can be summed up in one word: Obama.
Since Barack Obama became US president in January, he has pledged $150bn (£109bn, €118bn) over 10 years to “clean energy” measures. Five million new jobs are to be created in the sector and plans are in place to produce 10 per cent of the country’s electricity from renewable sources by 2012, and 25 per cent by 2025.

Yet despite this obvious fillip, Robin Batchelor, co-manager with Poppy Allonby of the $2.3bn fund, denies that a Republican victory would have spelled disaster. There is a certain inevitability driving the underlying trend towards cleaner and renewable sources of energy, he argues.
“The Republican party was waking up to the fact that climate change is an issue and that the US was an outlier in terms of their stance,” Mr Batchelor says.
“We would have had a more pro-active environment even with a Republican president.”
Climate change, renewable energy and carbon emissions are now issues that transcend party politics, he says, stressing that there is nothing faddish about the sector. “Our drivers are government policy around climate change and energy security. Climate change has not gone away and all the scientists continue to be worried about it accelerating.
“In January, Russia gave us a reminder about what energy security is all about. And we still have historically high oil prices at $45. It might not be $140, but in the late 1990s it was $10. Utilities have woken up to the volatility in oil prices and the issues over long-term supply.”
Given these considerations it is perhaps not surprising that the investment process starts with a top-down analysis of macroeconomic and legislative factors.
“We start by looking at the legislation at work in terms of alternative energy in different markets around the world,” explains Mr Batchelor.
One common fallacy, he is keen to correct, is that the market is immature and mainly made up of microcaps. While this may have been true back in 2002 when the fund, which is structured as a Luxembourg Sicav, held 93 per cent of its assets in sub-$1bn companies, now this figure stands at 20 per cent.
“People ask me when the new energy market is going to take off,” he says, “and I’m mildly gobsmacked. There were only 300–odd companies at the turn of the century and there are now well over 1,000 in the sub-sector. They are much more mature and a lot bigger than people realise.”
In performance terms, over three years to March 2, the fund has fallen by 22.36 per cent, compared with a drop in the Morningstar IM SC Energy index of 16.94 per cent.
Mr Batchelor is candid about the fund’s performance: “We have lost clients’ money over the last year, but at least we were in the bigger companies that were earnings positive and have not just disappeared.”
The fund’s investment philosophy is geared around making money today, he says, rather than looking for the high-tech successes of the future. “You can get stuck in a lot of next-generation technologies that might not be around when the next generation comes,” he warns.
Hugo Greenhalgh is editor of Investment Adviser
Copyright The Financial Times Limited 2009

MPs demand greener hue to stimulus

By Fiona Harvey, Environment Correspondent
Published: March 16 2009 02:00

The chancellor must devote a far larger slice of the economic stimulus spending to green measures, or risk the UK falling behind the US and Europe in the race to build the low-carbon economy of the future, a group of MPs and businesses has warned.
Most of the £535m in the pre-Budget report package that was said to be directed towards spending on green measures, such as home insulation, was not new money but spending already earmarked for such measures and brought forward by a few years, an influential select committee of MPs will say today.
They said this meant that the spending would be offset by cuts in future years.
The environmental audit committee will call for more details on how the £2.3bn bail-out of car manufacturers will be accompanied by provisions to ensure they embark on building low-emission cars instead of petrol-guzzlers.
It will also want the chancellor to explain what the net impact on carbon emissions of its £3bn fiscal stimulus package will be.
"The Treasury has announced very little new money for green investments," said Tim Yeo, chairman of the committee. "Yet . . . there is clear evidence that investment in low carbon industries will lead to net job creation. The budget should contain a much bigger and more coherent package of green fiscal stimulus."
The committee's calls were backed by the Aldersgate Group, a group of businesses, which wrote to Mr Darling urging him to enlarge the green stimulus to 20 per cent of the overall package. The group of more than 10 companies, including BT, the homebuilder Barratt, United Utilities and Johnson Matthey, said spending more on low-carbon development would create jobs, give the UK a competitive advantage internationally, and cut fuel bills and improve energy security.
Peter Young, chairman of the Aldersgate Group, said: "The government's aspirations for a low-carbon industrial strategy will only be credible if they are matched with genuine ambition in the upcoming budget. We have heard the rhetoric, we now need to see action."
He also recommended that the green part of the stimulus be boosted to at least £14.2bnin order to match the level of green spending promised by Barack Obama, US president.
This year's Budget will be the first time the government is required to present a "carbon Budget", which will measure the effect of the Budget measures on the UK's carbon emissions, and explain how emissions will be reduced.
Copyright The Financial Times Limited 2009

Carbon cap and trade

Published: March 15 2009 19:12

After years of being cast as the villain of global warming, the US wants to make up for lost time. President Barack Obama’s ambitious environmental plans would leapfrog Europe in carbon dioxide regulation, covering about 80 per cent of US output versus less than half that in Europe. But such a shift also means a tough political haul. Huge compromises are likely, if the plan is ever passed.
Unlike a carbon tax, for which the price is known but the market response unclear, Mr Obama favours a cap and trade scheme. This would create a gradually descending limit on CO2 that would cut emissions 14 per cent by 2020 and 83 per cent by 2050. Meanwhile, there would be an auction among firms of tradeable “pollution permits”, which would raise some $650bn in the first eight years. Point Carbon, a consultancy, estimates such permits would have an initial cost per tonne of $14, implying that consumers would pay an extra 12 cents a gallon for gasoline and 7 per cent for electricity.

As with all Washington initiatives, lobbyists will seek to deflect costs or increase benefits for whichever industry they represent. Politicians from coal mining states, or those that depend most on fossil fuel power, will also howl that the measures punish the heartland in order to please environmentalists on the coasts. Zero-carbon producers, such as nuclear and hydroelectric plants, could reap a bonanza at the expense of less fortunate competitors. Subsidies will be sought for favoured technologies and industries.
The question of how other countries respond will also surely arise. If the result is that US industry shifts its heavy CO2 emitters to poorer emerging countries that lack such schemes, the net effect on climate change will be nil.
Idling all factories in the west may not be enough to stop greenhouse gases reaching disastrous levels if China and India do not also make cuts of their own. The final plan could look very different indeed from Mr Obama’s blueprint.
Copyright The Financial Times Limited 2009

Ten ways to save the World

We get the message. The planet's doomed unless we get our act together PDQ. We even know some of the measures needed to give ourselves a chance. But which less orthodox proposals could stave off disastrous climate change?

Environment editor Geoffrey Lean has a cunning plan
Sunday, 15 March 2009

It has been a really bad week for the climate. Each day brought depressing news as scientists meeting in Copenhagen told us global warming is taking place more rapidly than expected. The seas are rising faster than predicted; the polar ice caps are melting more quickly; and the Amazon rainforest is doomed unless urgent action is taken.
The main solutions are widely agreed. The world needs to forge a much tougher treaty this year to replace the failed Kyoto Protocol. Global emissions of carbon dioxide must be cut by at least half by the middle of the century, much more in industrialised countries. Using energy more efficiently is essential, as is rapidly increasing it from renewable sources. Nuclear power and biofuels are much more controversial, but are likely to be used to some extent. But new, much less familiar solutions are also emerging.

Here are 10 of them.

Sweep away soot
Cutting soot emissions from car exhausts, factories and open fires is probably the fastest way to tackle global warming, and there are calls for a treaty to achieve this. Scientists say the pollutant is the second biggest culprit in climate change after carbon dioxide. Black carbon, which gives soot its colour, has two main effects. It heats the atmosphere by absorbing radiation from the sun and releasing it into the air. And it darkens snow and ice when it falls on them, causing them to reflect less sunlight, heat up and melt – in turn exposing land or water, which also warms rapidly. Reducing emissions is fairly easy, using tried and tested technology. And it has a rapid effect as soot stays only days or weeks in the atmosphere, compared with centuries for carbon dioxide.
Save the ozone
Measures to save the ozone layer have so far been the most effective steps to combat climate change, as many of the chemicals that attack the protective layer in the atmosphere are also global warming gases. A 20-year-old treaty, the Montreal Protocol, has almost phased out their production, coincidentally eliminating the equivalent of 11 billion tons of carbon dioxide a year. This puts to shame the Kyoto Protocol, which aimed to cut emissions by 2 billion tons. Experts want measures to remove the chemicals from equipment such as old fridges, where they acted as coolants, when these are scrapped, saving the equivalent of 20 billion tons of carbon dioxide.
Make connections
Renewable energy is often unreliable: the sun does not always shine, the wind does not blow for ever. But the European Commission and other bodies are drawing up plans to get round this by tapping clean sources and linking them up, so that there will always be enough to meet all Europe's electricity needs. Solar power stations, for example, would be placed in the Sahara, where just a fraction of the desert could provide for the whole continent. Tides would be tapped along Britain's coasts, the world's best place for exploiting this resource. Huge wind farms would be erected in the North Sea, and these would be balanced by hydropower in mountainous areas such as Norway, storing water behind dams and releasing it on calm days. It would all be linked by a continent-wide electricity grid.
Wise up the grid
Barack Obama, David Cameron and Eric Schmidt, the chairman of Google, are all sold on creating a "smart grid", which the Tory leader describes as like moving from "the plain old telephone system to the internet". The present "dumb grid" just delivers electricity from generators to consumers; the smart one would enable them to communicate with each other. So, it can make fridges and washing machines and other appliances use power when it is abundant and cheap, and avoid peak times when it would be much more expensive. Smoothing out demand in this way means that the grid needs fewer power stations, and can accommodate renewable energy more easily. It would also provide a huge boost to a "rooftop revolution", where households generate their own electricity from the sun or the wind and sell what they do not need to the grid.
Rethink cars
Motoring could be revolutionised if cars were marketed like mobile phones – in a manner that would cut carbon dioxide and reduce the cost of driving. Motorists would get subsidised – or possibly even free – electric cars in the same way that customers currently get mobile phone handsets. In return, they would take out a contract for miles, rather than minutes, entitling them to get power either by plugging in to recharging points (at home, in car parks or on the street) or exchanging batteries at filling stations. The idea is the brainchild of a thirty-something former dot-com entrepreneur, Shia Agassi, who believes it would halve motoring costs. It sounds too good to be true, but Israel, Denmark, Hawaii and San Francisco are already starting to put the system in place – and even Gordon Brown has toyed with the idea. But to tackle climate change properly, the electricity has to be provided by renewable sources or nuclear power rather than fossil fuels.
Embrace scum
Slimy scum could prove our saviour, as algae are emerging as one of the most promising and environmentally friendly sources of biofuel. Algae can grow extraordinarily fast, doubling in weight several times a day. They produce at least 15 times as much fuel per hectare as conventional crops like corn or oilseed rape, and do not take up farmland needed to grow food; they can be grown in lakes, the sea or even in the process of cleaning polluted water. Algae take three times their own weight of carbon dioxide from the air while growing, and the fuel they produce packs much more power for its weight than other biofuels. It is therefore being developed as a potential carbon-neutral way of fuelling aircraft: Air New Zealand has already mixed it with ordinary jet fuel for test flights. Cars have run on pure algae biofuel, and big oil companies are investing in it.
Grow houses
Hemp is the world's second fastest growing plant after bamboo, shooting up four metres in just 14 weeks, rapidly taking carbon from the air. One hectare provides enough hemp to construct a house, if mixed with lime to revive an ancient building material. Limetechnology, the Abingdon-based firm pioneering the practice, calculates that growing it will capture 50 times as much carbon dioxide as would be saved by upgrading a traditional home to modern standards of energy efficiency. Biochar, an ancient technique used by Amazonian Indians to fertilise their land by burying charcoal, has even wider applications. Opponents worry that growing trees for it will take land out of food production, but Craig Sams – the co-founder of Green and Black's chocolate, who is now developing it – believes that just 21/2 per cent of the world's productive land would suffice to get carbon dioxide levels down to those of the pre-industrial age by 2050.
Pay for trees
Felling forests, especially in the tropics, is the second biggest cause of carbon dioxide emissions after burning fossil fuels, accounting for a fifth of the world's total. But people and governments have no incentive to leave them standing when they can make money by selling the timber, or farming the cleared land. Now international negotiators are beginning to work out how the world as a whole could compensate them for setting aside the chainsaw. In practice, of course, the money would end up coming from rich countries. Halving emissions from deforestation is estimated to cost about $20bn (£14.3bn) a year, but would avoid pollution costing at least five times as much. Similarly, Ecuador is seeking international compensation for refraining from developing a huge oil field lying under a particularly important area of Amazonian rainforest in the north-west of the country.
Reform taxation
Green taxes are beginning to come back into fashion after being eclipsed for years by sophisticated schemes for trading carbon emissions. They would work best as part of an "ecological tax reform", which would reduce taxes on employment – such as income tax and national insurance – at the same time. By shifting the burden from "goods", such as work, to "bads", such as pollution, it becomes cheaper to lay off barrels of oil than to fire people, reducing pollution and increasing employment. The European Union has estimated that this could create at least 2.7 million jobs across the continent, while combating global warming. The Conservatives and Liberal Democrats have both taken up the idea and promised to introduce it if they get into power. But so did Gordon Brown in opposition, and, despite introducing some modest measures in his 1999 Budget, he backed off after the fuel price protests the next year.
Follow a busker
A former busker, Aubrey Meyer, thought up what is increasingly regarded as the long-term solution to global warming – and, through relentless campaigning, he has managed to get his idea adopted as policy by many governments, especially in developing countries. Dubbed "contraction and convergence", it starts from the principle that everyone on Earth is entitled to emit the same amount of carbon dioxide. It then determines the level of emissions low enough to avoid dangerous climate change. The total amount put into the atmosphere worldwide each year must then be made to "contract" until it reaches this point. Simultaneously, the totals of individual countries have to "converge", so that each emits the same amount for every one of its citizens; rich countries would have to reduce their totals very heavily, while some poor countries could actually be able to increase theirs. Most experts agree that it is the fairest framework. Persuading Americans to agree to emit the same amount as Ethiopians is another matter.
The top six world savers: Key figures
Barack Obama
US President
Transformed prospects for a new, tough international treaty by giving it high priority
Hu Jintao
President of China
If the US and China can agree on what to do, the chances of international action are good
Anders Fogh Rasmussen
Prime Minister of Denmark
Will chair December's crucial treaty negotiating meeting in Copenhagen
R K Pachauri
Chairman, Intergovernmental Panel on Climate Change
The body that provides scientific evidence on global warming
Yvo de Boer
Treaty executive secretary
Tough Dutch UN official responsible for keeping negotiations on track
Gordon Brown
Prime Minister UK
Finally becoming really interested in climate change. But is he up to the job?

Climate change woes at heart of Turkey water meet

The Associated Press
Published: March 15, 2009

ISTANBUL: Climate change, the global economic meltdown and the role of big water companies are on the agenda for thousands of delegates at a conference this week in Turkey focused on the world's water resources.
Global economic turmoil has sparked concerns that dwindling funds for investment in water infrastructure could create growing problems for the world's neediest. Depletion and pollution are already taking a toll.
"The water situation in the world is not going in the right direction," said Ger Bergkamp, director general of the World Water Council, organizer of the forum. "There is a matter of urgency to act."
Two-thirds of the world's population will face water shortages by 2025 as populations expand and ecosystems deteriorate, according to the International Union for Conservation of Nature, an environmental network based near Geneva.
"Climate change will be felt first and foremost through water, whether it be drought, floods, storms, ice melting or sea-level rise," Mark Smith, head of the union's water program, said in a statement. He said river basins and coasts must be protected because they provide water storage and flood control.

The World Water Council, based in Marseilles, France, holds a forum every three years. It was founded to exchange ideas about conservation and the development of water resources.
Group members include the World Bank, the International Committee of the Red Cross and the U.S. Corps of Engineers. Iraqi President Jalal Talabani is among leaders expected to attend the World Water Forum which opens in Istanbul on Monday.
Some non-governmental organizations accuse the forum of serving as a vehicle for big water companies to promote their own interests through privatization, denying the "human right" to water in impoverished communities around the world.
"It's really a big trade show," said Maude Barlow, founder of the Blue Planet Project, an Ottawa, Canada-based group that seeks to protect fresh water. "They deeply believe that water is a commodity to be bought and sold."

Northeast US to suffer most from future sea rise

The Associated Press
Published: March 15, 2009

WASHINGTON: The northeastern U.S. coast is likely to see the world's biggest sea level rise from man-made global warming, a new study predicts.
However much the oceans rise by the end of the century, add an extra 8 inches (20 centimeters) or so for New York, Boston and other spots along the coast from the mid-Atlantic to New England states. That's because of predicted changes in ocean currents, according to a study based on computer models published online Sunday in the journal Nature Geoscience.
An extra 8 inches (20 centimeters) — on top of a possible 2 or 3 feet (60 or 90 centimeters) of sea rise globally by 2100 — is a big deal, especially when nor'easter storms and hurricanes hit, experts said.
"It's not just waterfront homes and wetlands that are at stake here," said Donald Boesch, president of the University of Maryland Center for Environmental Science, who was not part of the study. "Those kind of rises in sea level when placed on top of the storm surges we see today, put in jeopardy lots of infrastructure, including the New York subway system."
For years, scientists have talked about rising sea levels due to global warming — both from warm water expanding and the melt of ice sheets in Greenland and West Antarctica. Predictions for the average worldwide sea rise keep changing along with the rate of ice melt. Recently, more scientists are saying the situation has worsened so that a 3-foot (90-centimeter) rise in sea level by 2100 is becoming a common theme.

But the oceans won't rise at the same rate everywhere, said study author Jianjun Yin of the Center for Ocean-Atmospheric Prediction Studies at Florida State University. It will be "greater and faster" for the Northeast, with Boston one of the worst hit among major cities, he said. So, if it's 3 feet (90 centimeters), add another 8 inches (20 centimeters) for that region.
The explanation involves complicated ocean currents. Computer models forecast that as climate change continues, there will be a slowdown of the great ocean conveyor belt. That system moves heat energy in warm currents from the tropics to the North Atlantic and pushes the cooler, saltier water down, moving it farther south around Africa and into the Pacific. As the conveyor belt slows, so will the Gulf Stream and North Atlantic current. Those two fast-running currents have kept the Northeast's sea level unusually low because of a combination of physics and geography, Yin said.
Slow down the conveyor belt 33 to 43 percent as predicted by computer models, and the Northeast sea level rises faster, Yin said.
So far, the conveyor belt has not yet noticeably slowed.
A decade ago, scientists worried about the possibility that this current conveyor belt would halt altogether — something that would cause abrupt and catastrophic climate change like that shown in the movie "The Day After Tomorrow." But in recent years, they have concluded that a shutdown is unlikely to happen this century.
Other experts who reviewed Yin's work say it makes sense.
"Our coastlines aren't designed for that extra 8 inches of storm surge you get out of that sea level rise effect," said Jonathan Overpeck, director of an Earth studies institute at the University of Arizona.
While Boston and New York are looking at an additional 8 inches (20 centimeters), other places wouldn't get that much extra rise. The study suggests Miami and much of the Southeast would get about 2 inches (5 centimeters) above the global sea rise average of perhaps 3 feet (90 centimeters), and San Francisco would get less than an extra inch (2.5 centimeters). Parts of southern Australia, northern Asia and southern and western South America would get less than the global average sea level rise.
This study along with another one last month looking at regional sea level rise from the projected melt of the west Antarctic ice sheet "provide a compelling argument for anticipating and preparing for higher rates of sea level rise," said Virginia Burkett, chief scientist for Global Change Research at the U.S. Geological Survey.
Burkett, who is based in Louisiana, said eventually New Englanders could be in the same "vulnerability situation" to storms and sea level rise as New Orleans.
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Artificial trees and brightened clouds may help to cool us down

The Sunday Times
March 15, 2009
Techniques for geo-engineering are coming under serious scrutiny as temperatures and CO2 emissions continue to rise
Richard Woods and Jonathan Leake

THE threat of devastating climate change is now so great that some scientists say it is time to investigate a Plan B - geo-engineering on a planetary scale.
Such methods of altering the world’s climate may become necessary, they say, unless emissions of greenhouse gases fall within five years.
Ideas that were once the realm of science fiction - such as creating artificial trees to absorb carbon dioxide, or reflecting sunlight away from the Earth - are coming under serious scrutiny as temperatures and CO2 emissions continue to rise. The issue has become so pressing that the Royal Society, Britain’s national academy of science, is preparing a report on the feasibility of geo-engineering.
Professor John Shepherd, chairman of the working group, said: “Our study aims to separate the science from the science fiction and offer recommendations on which options deserve serious consideration.”

The report is not yet complete but the personal view of Professor Brian Launder, one of its contributors, is that without CO2 reductions or geo-engineering, “civilisa-tion as we know it will end within our grandchildren’s lifetime”.
At present, global emissions of greenhouse gases are still rising by 2% to 3% a year, according to the Met Office. If that continues, average world temperatures are projected to rise by as much as 5.5C by 2100.
Launder, professor of mechanical engineering at Manchester University, reckons that extracting carbon from the atmosphere would be too slow a process to prevent significant warming. In his view “the only rational scheme is to reduce the amount of sunlight reaching Earth and to reflect back more of it”.
One method under detailed analysis is to make clouds brighter – especially in the Pacific where the ocean temperature has great influence on world climate. “If these clouds can be brightened so you increase the sunlight reflected even by a couple of per cent, it looks as though that could be enough . . . to prevent most of the effects of global warming,” said Launder.
Professor Stephen Salter of Edinburgh University is investigating how ships could spray droplets of sea water into the atmosphere where they would evaporate, leaving tiny salt crystals to rise on air currents into the clouds.
The crystals would act as “nuclei” around which water vapour could condense and thus increase the reflective power of the clouds, bouncing more of the sun’s energy back into space. But critics warn that although such schemes might lower temperatures swiftly, they would have to be maintained for long periods and the side-effects are unknown.
Dr Vicky Pope, head of climate change advice at the Met Office, said: “Anything that alters the climate in a different way from reducing carbon has inherent dangers because we don’t understand the climate well enough.”
For this reason Professor Tim Lenton, another climate scientist, prefers technologies that could suck CO2 out of the atmosphere: “We should push for the strongest mitigation [of CO2 emissions] possible. But among the geo-engineering options there are some that might be useful add-ons.”
One idea is to create plantations of fast-growing trees such as willow and turn them into “biochar”. Plants grow by extracting CO2 from the air and converting it to wood, so the idea would be to turn the wood into charcoal, using giant ovens. Then it would be buried so the carbon could never be released back into the air.
Other experts warn that geo-engineer-ing risks diverting attention from the need to create a carbon-neutral economy.
“Wind and solar energy are at least in the pipeline, whereas geo-engineering is much more speculative,” Pope said.

Britain's first electric supercar gets ready to roll

John Vidal, environment editor
The Guardian, Monday 16 March 2009

It is faster out of the blocks than a V12 Ferrari and can do 0-60mph in four seconds. It will go more than 140mph and can be fully charged up over lunch. But the first British electric supercar is not being built by one of the world's great car companies.
It has instead been knocked up in a few months in a Norfolk garage from off-the-shelf parts mostly available on the web.
An A-team of British motorsport engineers was commissioned by Ecotricity wind power company chief Dale Vince last August to "blow the socks off Jeremy Clarkson and smash the stereotype of electric cars".
All have worked for Lotus and between them have developed nearly every car that a generation of petrolheads has swooned over - such as the McLaren F1, Lotus Elan, the Corvette 2R1, the Jaguar XJR15 and the De Lorean. The project leader was director of engineering, and all six problem-solve for the world's top motor sport teams. "The brief was to prove to middle England that electric cars can be quick to develop, beautiful to look at, cheap to run, and run entirely on wind power," said Vince.
The team went on to eBay, and found a second-hand Lotus Exige which they pulled apart. Seven months later, the car, which still has no name, is raised on blocks in the Norfolk garage but is just a few weeks away from full testing.
The consensus is that no large auto company could have developed anything so fast or for the £200,000 budget. "Ford would have taken years and it would have cost millions of pounds," said Ian Doble, project leader.

The next really cool thing

By Thomas L. Friedman
Published: March 15, 2009

SAN FRANCISCO: If you hang around the renewable-energy business for long, you'll hear a lot of tall tales. You'll hear about someone who's invented a process to convert coal into vegetable oil in his garage and someone else who has a duck in his basement that paddles a wheel, blows up a balloon, turns a turbine and creates enough electricity to power his doghouse.
Hang around long enough and you'll even hear that in another 10 or 20 years hydrogen-powered cars or fusion energy will be a commercial reality. If I had a dime for every time I've heard one of those stories, I could buy my own space shuttle. No wonder cynics often say that viable fusion energy or hydrogen-powered cars are "20 years away and always will be."
But what if this time is different? What if a laser-powered fusion energy power plant that would have all the reliability of coal, without the carbon dioxide, all the cleanliness of wind and solar, without having to worry about the sun not shining or the wind not blowing, and all the scale of nuclear, without all the waste, was indeed just 10 years away or less? That would be a holy cow game-changer. Are we there?
That is the tantalizing question I was left with after visiting the recently completed National Ignition Facility, or N.I.F., at the Lawrence Livermore National Laboratory, 50 miles east of San Francisco. The government-funded N.I.F. consists of 192 giant lasers — which can deliver 50 times more energy than any previous fusion laser system. They're all housed in a 10-story building the size of three football fields — the rather dull cover to a vast internal steel forest of laser beams that must be what the engine room of Star Trek's U.S.S. Enterprise space ship looked like.
I began my tour there with the N.I.F. director, Edward Moses. He was holding up a tiny gold can the size of a Tylenol tablet, and inside it was plastic pellet, the size of a single peppercorn, that would be filled with frozen hydrogen.

The way the N.I.F. works is that all 192 lasers pour their energy into a target chamber, which looks like a giant, spherical, steel bathysphere that you would normally use for deep-sea exploration. At the center of this target chamber is that gold can with its frozen hydrogen pellet. Once one of those pellets is heated and compressed by the lasers, it reaches temperatures over 800 million degrees Fahrenheit, "far greater than exists at the center of our sun," said Moses.
More importantly, each crushed pellet gives off a burst of energy that can then be harnessed to heat up liquid salt and produce massive amounts of steam to drive a turbine and create electricity for your home — just like coal does today. Only this energy would be carbon-free, globally available, safe and secure and could be integrated seamlessly into America's current electric grid.
Last Monday at 3 a.m., for the first time, all 192 lasers were fired at high energy precisely at once — no small feat — at the target chamber's empty core. That was a major step toward "ignition" — turning that hydrogen pellet into a miniature sun on earth. The next step — which the N.I.F. expects to achieve some time in the next two to three years — is to prove that it can, under lab conditions, repeatedly fire its 192 lasers at multiple hydrogen pellets and produce more energy from the pellets than the laser energy that is injected. That's called "energy gain."
"That," explained Moses, "is what Einstein meant when he declared that E=mc². By using lasers, we can unleash tremendous amounts of energy from tiny amounts of mass."
Once the lab proves that it can get energy gain from this laser-driven process, the next step (if it can secure government and private funding) would be to set up a pilot fusion energy power plant that would prove that any local power utility could have its own miniature sun — on a commercial basis. A pilot would cost about $10 billion — the same as a new nuclear power plant.
I don't know if they can pull this off; some scientists are skeptical. Laboratory-scale nuclear fusion and energy gain is really hard. But here's what I do know: President Obama's stimulus package has given a terrific boost to renewable energy. It will pay lasting benefits. And we need to keep working on all forms of solar, geothermal and wind power. They work. And the more they get deployed, the more their costs will go down.
But, in addition, we need to make a few big bets on potential game-changers. I am talking about systems that could give us abundant, clean, reliable electrons and drive massive innovation in big lasers, materials science, nuclear physics and chemistry that would benefit, energize and renew many U.S. industries.
At the pace we're going with the technologies we have, without some game-changers, climate change is going to have its way with us. Yes, we'll still need coal for some time. But let's make sure that we aren't just chasing the fantasy that we can "clean up" coal, when our real future depends on birthing new technologies that can replace it.

Credentials that make money-men happy

By Sarah Murray
Published: March 16 2009 02:00

When talking about resource efficiency, SustainAbility, the think-tank and consultancy, cites some compelling company statistics: between 2005 and 2008, Wal-Mart cut its fuel consumption by 25 per cent - and the US retailer reckons an initial 15 per cent improvement in fuel efficiency generated savings of more than $40m a year.
Between 2002 and 2005, a programme to cut power wastage and use more renewable energy saved Pfizer, the pharmaceuticals company, $30m a year.
These are the kinds of figures that make finance directors happy. With recession putting pressure on balance sheets, resource efficiency - something that in recent years has been trumpeted by many companies as evidence of their green credentials - is starting to look even more appealing as part of cost-cutting measures.
"When you're focusing on every penny, you can't afford to let any opportunity to cut costs or improve efficiency go by," says Gwen Ruta, director of corporate partnerships at the US-based Environmental Defense Fund.
For many companies, energy use tops the agenda, often delivering the biggest bang for your buck when it comes to resource efficiency.
Cisco Systems, for example, has developed a system it calls EnergyWise, which helps clients monitor the power used by all their Cisco-connected devices, assess aggregated consumption and create policies to maximise power efficiency.
Cisco says the system could, for example, help the average bank branch cut its energy bills by more than €28,000 a year by powering down equipment when not in use.
However, climate change has put the spotlight on power consumption, plenty of potential exists in other areas to conserve natural resources while also saving money.
Water is one of them. Dow Chemical has identified water saving potential in everything from steam leak elimination to reuse of high-quality effluent streams and alternative cooling techniques. Using seawater cooling for its largest manufacturing site in Freeport, Texas, has helped the company avoid more than $35m in capital spending.
"Most of our capital projects involve assets that are expected to run for the next 20-30 years," says Neil Hawkins, head of sustainability at Dow Chemical.
"We work to incorporate conservation design principles, recycle-reuse thinking and by-product synergies into the plants we build up front. Innovative design can help us reduce both capital outlays and long-term operational costs."
Coca-Cola is also focusing on water, aiming to improve efficiency by 20 per cent by 2012, compared with 2004. While the company's water use is expected to increase, it says the target would eliminate about 50bn litres of that increase in 2012 and avoid $150m in water acquisition, treatment and discharge costs between 2008 and 2011.
Resource efficiency programmes, however, can be difficult to implement. The first challenge is identifying measures that will make the most impact. This means careful auditing of what resources are being used and seeking areas to target for reductions.
Another difficulty is a human one. "The single-most barrier is poor leadership," says Sophia Tickell, director of research, communications and advocacy at SustainAbility.
"Most companies underestimate the power that a clear strategy can play in incentivising enterprise-wide reductions in natural resource use - especially if used in performance management."
Where companies have highly-decentralised structures, enterprise-wide strategies on resource efficiency can be tough to implement. "We often see examples where a capital investment in one department would be paid back through savings in a different department," says Ms Ruta. "This can be very tricky for a company to negotiate."
Another difficulty is applying environmental programmes in the operations of supply chain partners. In 2007, about 79 per cent of Coca-Cola's unit cases were produced and distributed by bottling partners in which it had no ownership interest or had a non-controlling equity interest.
"This means that we do not dictate global sustainability goals," says Lisa Manley, director of environmental communications at the company.
"Instead we work to align our global system around integrated strategies with hard, real performance targets. This takes time and a good bit of internal diplomacy."
It also means clearly making the business case for resource efficiency and communicating that message throughout the enterprise.
Mr Hawkins at Dow Chemical argues that it is crucial for companies to acknowledge the impact of environmental programmes on the bottom line, rather than treating them as add-ons. "They must deliver real, tangible value," he says. "Business value is business value - in good times or bad."
Copyright The Financial Times Limited 2009

Obama says no quick end to ethanol dispute

By Alan Beattie in Washington
Published: March 15 2009 02:37

Barack Obama on Saturday said there would be no quick resolution to a dispute with Brazil over restricting ethanol imports to the US, following his first meeting with President Luiz Inacio Lula da Silva.
The Brazilian president, in his first visit to Washington since Mr Obama took office, said it was wrong for the US continued to levy import tariffs on Brazilian sugarcane ethanol, which is more environmentally friendly than the maize ethanol produced in the US.

“I also can’t understand [why] while the world is concerned with climate change and with carbon emissions … clean fuel also gets tariffs,” Mr da Silva said.
The issue has become a bone of contention between the two countries, with Brazil threatening litigation at the World Trade Organisation over the US’s 54 cent per gallon import tariff.
Brazil has also used the issue to counter US demands for it to cut to zero its own tariffs on so-called “environmental goods” such as renewable energy technology, accusing Washington of hypocrisy.
Mr Obama paid tribute to Brazil’s leadership in biofuel production and said that his administration would continue to work with Brazil on the issue. But he added: “It’s not going to change overnight.”
Mr Obama also played down the chances of a swift resolution to the beleaguered so-called “Doha round” of trade talks, which has stalled on disputes over agricultural tariffs and subsidies and industrial goods protection.
“It may be difficult for us to finalize a whole host of trade deals in the midst of an economic crisis like this one, although we have committed to sitting down with our Brazilian counterparts to find ways that we can start closing the gap on the Doha Round and other potential trade agreements,” Mr Obama said.
“I’m optimistic that we’ll be able to make progress,” he said. “It may not happen immediately.”
Brazil’s highly competitive farmers have pushed for a rapid conclusion to the round and for cuts in US farm subsidies and European farm tariffs to expand their export markets. But resistance from the US and reluctance from developing countries such as India to cut protection for farmers has led to repeated breakdowns in negotiations.
Mr da Silva agreed on Saturday that the economic crisis made it harder to reach a deal in Doha.
Copyright The Financial Times Limited 2009

Everyone Hates Ethanol

These days, it's routine for businesses to fail, get rescued by the government, and then continue to fail. But ethanol, which survives only because of its iron lung of subsidies and mandates, is a special case. Naturally, the industry is demanding even more government life support.
Corn ethanol producers -- led by Wesley Clark, the retired general turned chairman of a new biofuels lobbying outfit called Growth Energy -- want the Obama Administration to make their guaranteed market even larger. Recall that the 2007 energy bill requires refiners to mix 36 billion gallons into the gasoline supply by 2022. The quotas, which ratchet up each year, are arbitrary, but evidently no one in Congress wondered what might happen if the economy didn't cooperate.
Now the recession is hammering demand for gas. The Energy Information Administration notes that U.S. consumption fell nearly 7% in 2008 and expects another 2.2% drop this year. That comes as great news for President Obama, who is achieving his carbon-reduction goals even without a new carbon tax, but the irony is that the ethanol industry is part of the wider collateral damage.
Americans are unlikely to use enough gas next year to absorb the 13 billion gallons of ethanol that Congress mandated, because current regulations limit the ethanol content in each gallon of gas at 10%. The industry is asking that this cap be lifted to 15% or even 20%. That way, more ethanol can be mixed with less gas, and producers won't end up with a glut that the government does not require anyone to buy.
The ethanol boosters aren't troubled that only a fraction of the 240 million cars and trucks on the road today can run with ethanol blends higher than 10%. It can damage engines and corrode automotive pipes, as well as impair some safety features, especially in older vehicles. It can also overwhelm pollution control systems like catalytic converters. The malfunctions multiply in other products that use gas, such as boats, snowmobiles, lawnmowers, chainsaws, etc.
That possible policy train wreck is uniting almost every other Washington lobby -- and talk about strange bedfellows. The Alliance of Automobile Manufacturers, the Motorcycle Industry Council and the Outdoor Power Equipment Institute, among others, are opposed, since raising the blend limit will ruin their products. The left-leaning American Lung Association and the Union of Concerned Scientists are opposed too, since it will increase auto emissions. The Natural Resources Defense Council and the Sierra Club agree, on top of growing scientific evidence that corn ethanol provides little or no net reduction in CO2 over the gasoline it displaces.
The biggest losers in this scheme are U.S. oil refiners. Liability for any problems arising from ethanol blending rests with them, because Congress refused to grant legal immunity for selling a product that complies with the mandates that it ordered. The refiners are also set to pay stiff fines for not fulfilling Congress's mandates for second-generation cellulosic ethanol. But the cellulosic ethanol makers themselves already concede that they won't be able to churn out enough of the stuff -- 100 million gallons next year, 250 million gallons in 2011 -- to meet the targets that Congress wrote two years ago.
So successful but politically unpopular businesses will be punished for not buying a product that does not exist -- from companies that haven't yet found a way to succeed despite generous political and taxpayer advantages. The next step is to use cap and trade to make green alternatives look artificially good by comparison. Even then they'll probably still be bottomless money pits.
To recap: Congress and the ethanol lobby argue that if some outcome would be politically nice, it should be mandated (details to follow). Then a new round of market interventions is necessary to fix the economic harm resulting from the previous requirements, while creating more damage in the process. Ethanol is one of the most shameless energy rackets going, in a field with no shortage of competitors.
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