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CLSA's new report evaluates risks and challenges posed by Asia air pollution


According to Asia’s leading brokerage house CLSA Asia-Pacific Market’s new pollution report The air we breathe, which examines Asia’s energy and environmental situation, while annual concentrations of several major pollutants are gradually showing a downward trend over the long term, enjoying clean air remains a major challenge. In terms of air quality of nine Asian cities, Singapore, Seoul, Taipei and Tokyo enjoy better air quality than Bombay, Delhi, Hong Kong with Shanghai and Beijing lagging last.

Commissioned by CLSA, the Civic Exchange report notes that with steady growth, China is likely to increase its energy consumption by 150% by 2020. China’s vehicles numbered at 2 million in 1980 have already increased almost 10 times by 2002 to 18 million with 2030 projection exceeding that of the US. In India, vehicles have increased by 245% since 1984 to 10.7 million in 2000. The larger the number of vehicles, the higher the consumption of automotive fuels.

“It is well known how important energy is for economic prosperity and the important of protecting the environment and in particular air quality. The close connection is often lost – energy is the most difficult part of the environment problem, and the environment is the most challenging aspect of the energy problem,” said Christine Loh of Civic Exchange and report author.

The energy challenge requires Asian markets to:

  • boost domestic energy production where possible
  • secure long-term supplies
  • develop a better Asia oil market and build stockpile
  • switch to cleaner fuels (such as natural gas and biofuels) and use clean technologies such as flue gas scrubbing, coal liquefaction and gasification
  • maximise energy efficiency in vehicles, furnaces, factories, offices and homes
  • invest in renewable energy including hydro-electric, solar, wind, geothermal and biomass
  • note what opportunities there are with the implementation of the Kyoto Protocol

With Hong Kong, Shenzhen and Guangzhou likely to grow into the largest urban settlement area in the world reaching 50 million by 2030, there is a call for efforts to take multiple actions to ensure much cleaner production of energy. A consequence of taking a “business as usual” approach will mean even worse air quality. Hong Kong already has poor visibility on average of every five days as a result of worsening air pollution which will impact public health and the economy, even depressing the long term value of residential sites.

“Many business people are expressing serious concern about poor air quality. To clean up, effective action must be taken by industry and government. The good news is that Tokyo and Los Angeles, two of the most polluted cities in the 1970s, have managed to clean up. So must be in South China,” Loh said.

Business opportunities for investors include resource exploration, refining capacities, gas infrastructure, oil/gas market development and the development of biofuels and renewables. Technologies in reducing emissions, creating super-lightweight materials for vehicles and the production of hybrid and gas-powered vehicles and ‘hypercars’ are also marked as good growth areas for investment as well as services on energy efficiency design.

About CLSA Asia-Pacific Markets

CLSA is a leading brokerage, investment banking and private equity group in the Asia-Pacific Markets. Founded in 1986 and headquartered in Hong Kong, CLSA’s major shareholder is France's Credit Agricole, which merged in 2003 with Credit Lyonnais, to form the 5th largest bank in the world by assets and the 5th largest bank in the world by Tier One capital. CLSA enjoys substantial staff ownership which contributes to its independent stance and operations.

CLSA has over 900 dedicated professionals spread across all Asian and international financial centres. Recognised as one of the top research, sales and execution houses in Asia, CLSA is known for its innovative and independent research. In 2003, the CLSA expanded its brand to Japan, offering Japanese equity research and sales services to international investors.

CLSA is consistently ranked in major industry polls. CLSA ranked No.3 overall in Institutional Investor’s All-Asia Research Poll 2006 and No. 2 in The Asset’s Asian Equities Benchmark Survey 2005. CLSA has also been named as the 'Most Independent Research Brokerage House in Asia'.

CLSA’s investment banking division was recognised as ‘Best Small Cap Equity House in Asia’ for 2004 by Finance Asia and as ‘Runner-up Best Mid-Cap Equity Investment Bank in Asia’ for 2003 by both International Financing Review and Finance Asia.

CLSA’s businesses include a series of successful joint ventures including China Euro Securities Limited, the first joint venture to be granted a domestic investment banking licence in China since its entrance into the WTO. CLSA also enjoys an exclusive research cooperation alliance with Sanford Bernstein, the leading independent brokerage in the US.

CLSA has had a longstanding commitment to China. CLSA's China research team is consistently ranked for their in-depth coverage of over 110 companies. CLSA has completed over 140 China-related equity capital market fund raisings in the international capital markets.

More information can be found at www.clsa.com

Media contact:

Grace Hung
Head of Communications
CLSA Asia-Pacific Markets
Tel: 852 2600 8318
Fax: 852 2530 0827
Email: grace.hung@clsa.com