Best of our wild blogs: 15 Feb 11

Happy Valentine's Day! Look what the birds are up to
from Life's Indulgences

Courtship feeding in Coppersmith Barbet
from Bird Ecology Study Group

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Singapore ranked the greenest city in Asia

Cheryl Ong Straits Times 15 Feb 11;

THE little red dot is green, too. An inaugural study commissioned by European technology company Siemens has found Singapore to be the greenest city in Asia.

The Asian Green City Index, put together by the Economist Intelligence Unit (EIU), ranked 22 major cities - including Tokyo, Delhi and Shanghai - in eight categories.

Singapore came up tops in its management of waste and water resources. It also scored consistently above average in the other categories, such as sanitation and environmental governance.

EIU senior consultant Jan Friederich, who led the team that carried out the study in Asia, said Singapore fared well thanks to the Government's emphasis on long-term sustainability.

"It's building on a long legacy of focusing on sustainability, and also on long-term planning that yields results only after a certain period of time, and that's something not as prevalent in other Asian countries," he said.

According to benchmarks set by experts from the United Nations and the World Bank, Singapore is a winner for the way it collects and disposes of waste. The index noted that the Government has raised its target to recycle rubbish from 56 per cent in 2008 to 65 per cent by 2020. Singapore also fared well in its plans for green transport systems, such as investing in doubling the rail network by 2020, and installing new cycling paths in neighbourhoods.

Dr Amy Khor, Minister of State for the Environment and Water Resources, accepted the Green City Award handed out here yesterday.

"Our reputation as a clean and green city is the result of continuous effort, involving all stakeholders from the Government, industry and community," she said.

The closest runner-up in overall rankings was Japan, whose three cities rated in the study - namely Tokyo, Osaka and Yokohama - ranked highly.

"The study of Asian cities shows one thing very clearly: higher income does not necessarily mean higher resource consumption," said Mr Friederich.

He said while countries used more resources as their annual gross domestic product (GDP) rose to €15,000 (S$26,000) per capita, consumption dipped when GDP rose further than that thanks to more efficient infrastructure and greater environmental awareness.

But while Singapore fared well in most of the categories, it raked up carbon emissions on a par with cities like London, and higher than any of the other cities in the study. The study also found that air pollution levels are relatively high in the cities it covered.

Siemens commissioned similar studies of Europe and Latin America in the past two years, in which Copenhagen and Curitiba were found to be the greenest cities.

Siemens' chief sustainability officer Barbara Kux said the study helps countries to learn from each other, and to do so quickly because of the growth of new cities all over Asia.

The United Nations Population Division estimates that more than 40 per cent of people in Asia now live in cities.

This latest finding comes two days after a study by consultancy firm Solidiance compared cities in the Asia-Pacific region according to eco-friendliness.

Singapore was among the top four cities, behind Tokyo, Seoul and Melbourne, for its policies on green buildings and water management.

Yesterday evening, Siemens also handed out its inaugural Green Technology Journalism Award.

The Straits Times' environment correspondent Jessica Cheam picked up the top prize in the sustainability category.

She had submitted a Saturday Special report, published in The Straits Times on Dec 18, about sustainable forestry, which trumped over 190 other entries from Asean countries including Malaysia, Thailand and the Philippines.

Besides the €1,000 in prize money, she will go on a sponsored trip to Germany to attend a seminar organised by the Technical University of Berlin on sustainability and new technologies, and visit Siemens research centres.

Nine other journalists also walked away with awards that covered three categories: industrial productivity, energy efficiency and sustainability.

Singapore tops ranking of Asian green cities
Joyce Hooi Business Times 15 Feb 11;

SINGAPORE has topped the Asian Green City Index which was released yesterday, beating out 21 other major Asian cities.

It was the only city to be rated 'well above average' in a five-rating index that was sponsored by Siemens.

This put it ahead of Hong Kong, Osaka, Tokyo, Yokohama, Seoul and Taipei - which were banded as 'above average'.

The island's neighbouring cities, Kuala Lumpur and Jakarta, both scored an overall rating of 'average'. In the bottom tier of the rankings was Karachi, with a 'well below average' rating.

'The government of Singapore has rigorously targeted the protection of the environment and resources, and sustainable development, ever since the country won its independence in 1965,' said Barbara Kux, a member of Siemens AG's managing board and its chief sustainability officer, at a briefing in Singapore yesterday.

The study, which was carried out by the Economist Intelligence Unit with data collected between April and June last year, assessed cities in eight categories and 29 sub-categories.

Singapore scored a 'well above average' in the waste and water categories, and an 'above average' in the energy and carbon dioxide, land use and buildings, transport, sanitation, air quality and environmental governance categories.

The report noted that Singapore produces 307 kilogrammes (kg) of waste per person annually, lower than the index average of 380 kg.

While Singapore might have a higher-than-average consumption of water - 309 litres per person per day compared to the average of 278 litres - it has the second lowest leakage rate, at 5 per cent, against the average of 22 per cent.

Ms Kux also pointed out that there are some areas for improvement in Singapore, especially where its carbon dioxide emissions were concerned.

'With per capita emissions of 7.4 tonnes of CO2, Singapore is way above the average of the Asian cities we looked at. This is on par with other megacities like London and mostly due to the fact that Singapore is a highly developed city,' said Ms Kux.

'However, it also is a case for action because this level of emissions is not compatible with the widely accepted goal of limiting global warming to two degrees Celsius. I am sure that Singapore will also tackle this challenge with vision, prudence and determination.'

The average carbon emissions for the index are 4.6 tonnes per person.

Amy Khor - South West District Mayor and Minister of State for the Environment and Water Resources - who accepted the Asian Green City Award on behalf of Singapore yesterday, credited the 'culture of continuous innovation' for Singapore's success as a green city in the face of limited resources.

'Going forward, we cannot rest on our laurels. We live in a more resource-constrained world. Higher energy prices, climate change and rising raw material prices all mean that we have to be more prudent with our use of resources,' said Dr Khor yesterday.

Guess where's Asia's greenest city?
Mustafa Shafawi Channel NewsAsia 14 Feb 11;

SINGAPORE: The Asian Green City Index, a study commissioned by Siemens, has concluded that Singapore is Asia's greenest metropolis.

The survey conducted by the Economist Intelligence Unit (EIU) analysed the aims and achievements of 22 major Asian cities with respect to environmental and climate protection.

Singapore stands out in particular for its ambitious environmental targets and its efficient approach to achieving them.

The republic received full marks in the Index for having an energy reduction strategy.

It ranks above average for its robust policies that serve to contain urban sprawl and to protect green spaces from the negative side effects of development.

Singapore also ranks above average for its extensive public transport network, at 0.21km per square kilometre, which is above the 22-city average of 0.17km per square kilometre.

In addition, the city generates lower-than-Index-average waste per person, and the authorities collect and dispose all of it.

Siemens Singapore CEO Lothar Herrmann said the country's many policies, incentive programmes and public awareness campaigns have worked well in improving its urban environment.

He added what's more commendable is that the Singapore government constantly partners the private sector to find new and innovative ways to boost the island's sustainability.


Singapore City Asia's Greenest, KL Average Green
Bernama 14 Feb 11;

SINGAPORE, Feb 14 (Bernama) -- The city of Singapore came out as Asia's greenest metropolis, well above average of other major Asian cities, according to a study commissioned by Siemens.

Siemens today released the findings of The Asian Green City Index, a study carried out by the independent Economist Intelligence Unit (EIU) on 22 major Asian cities over the past few months.

Hong Kong, Osaka, Seoul, Taipei, Tokyo and Yokohama were categorised as above-average cities.

Meanwhile, Kuala Lumpur, joined by Bangkok, Beijing, Delhi, Guangzhou, Jakarta, Nanjing, Shanghai and Wuhan, appeared on the average list in the index.

The Asian Green City Index examines the environmental performance of the cities in eight categories: energy and CO2 (carbon dioxide), land use and buildings, transport, waste, water, sanitation, air quality and environmental governance.

Siemens said the republic's city stood out in particular for its ambitious environmental targets and its efficient approach to achieving them.

"The Asian Green City Index supports cities in their efforts to expand their infrastructures on a sustainable basis. We want to enable Asia's up-and-coming urban centres to achieve healthy growth rates coupled with a high quality of life," said Siemens AG's Chief Sustainability Officer Barbara Kux.

Siemens also said that the study found that many Asian cities were increasingly aware about the importance of environment and climate protection, with some having already introduced comprehensive environmental guidelines.

It said the 22 Asian cities produced an average of 375 kg of waste per capita per year, less than in Latin America (465 kg) and Europe (511 kg).

The biggest challenges facing Asia's cities were the relatively high air pollution levels, Siemens said, adding their average total values had substantially exceeded WHO standards.

The index listed Bengaluru, Hanoi, Kolkata, Manila and Mumbai as the below-average cities, while Karachi was the only city well below average.


Clean and green: Why Japan beats top-ranking Singapore
Straits Times Forum 22 Feb 11;

WHILE Singapore's top ranking in the Asian Green City Index is positive, could we have achieved it without the legions of cleaners who pick up after us? ('Singapore ranked the greenest city in Asia'; Feb 15).

One early Sunday morning, I was at the Henderson Waves bridge of the Southern Ridges and it was strewn with litter. My companion complained that the cleaners were not doing their job, but really it should have been the public who should not have left the rubbish behind.

Sadly, thoughtless littering is common in our public spaces because the prevailing attitude in Singapore is that civic-mindedness is limited to one's backyard.

Japan, which polled second, is a true example of a clean and green nation. Tokyo may be a massively crowded city but it manages to remain clean without an over-reliance on an army of cleaners and bins like in Singapore.

The Japanese clear their own trays at foodcourts and keep their tables fairly clean when they dine, unlike most Singaporeans at food centres.

The recycling bins in Japan serve their proper purpose, unlike here where all manner of rubbish is dumped indiscriminately.

It will take Singaporeans a very long time to attain the level of cleanliness that Japan practises; and the journey begins at home.

If parents do not impress upon their children that we have a collective responsibility to keep Singapore clean and green, our aspirations will remain stuck in wishful thinking.

Charlotte Chu (Ms)

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Singapore: How the Budget can help firms go 'green'

Rachel Kelly Channel NewsAsia 14 Feb 11;

SINGAPORE : Experts have said that with the right incentives, it is quite possible for Singapore to become the world capital for electric vehicles.

Tax consultants have a slew of recommendations on how this Friday's Singapore Budget could give a nudge to businesses and consumers here to go green.

Singapore may have come up tops in comparison to regional peers when it comes to green buildings - according to recent findings by marketing and growth strategy firm Solidiance.

But there are other areas, like adoption of cleaner, more sustainable auto fuels, where experts said fiscal incentives can help Singapore take the lead.

Damien Duhamel, the managing partner of Solidiance, said: "As Singapore's population keeps growing, being green will no longer be a luxury but a necessity. The existing Singapore government programmes are good and should be pursued. However one cannot expect to change behaviour and mentality overnight. We need to look over 5-10 years to see noticeable changes."

Mr Duhamel added that more needs to be done to encourage the use of electric vehicles in Singapore. He said: "The infrastructure is just not there today to sustain anything else than a few weekend electrical cars. Green Vehicles Rebates are quickly obsolete if no one can or knows where to recharge its Electrical Battery. Once again, Singapore is uniquely placed to become the electric vehicle capital of the world."

Allan Lim, chief executive director of Alpha Biofuels, said: "I think we are in a very good position in Singapore to start initiatives to help companies adopt clean technology, and establish Singapore as a regional centre that promotes and provides such technologies to the region.

"One of the incentives which I think is really critical for clean energy to thrive in Singapore is to provide some kind of incentive for SMEs and companies in Singapore to adopt clean energy. Things like solar panels have always been there and the incentives have been done, but what about transportation fuels."

"I think once the adoption of smart grid technologies...starts, the test bedding will come on quite well, and we have a lot of space for this test bed that could then be exported overseas."

Tax experts at Deloitte are calling for a two-year extension to the green-vehicle rebate which is due to expire at the end of this year. They said that an extension is needed to encourage take-up of the industry in Singapore.

Chan Huang Chay, a partner of Business Tax at Deloitte Singapore, said: "There are few areas which we think the government could consider to help Singapore go green.

"The first one is to consider granting enhanced capital allowance of say 150 per cent (instead of the current 100 per cent capital allowance) for certified energy-saving and energy-efficient equipment, probably in the same vein as the enhancement currently available for prescribed automation equipment under the Productivity and Innovation Credit Scheme.

"The other one is to extend the Green Vehicle Rebate Scheme for say another two years as the current scheme is due to expire on 31 December 2011, so as to continue to encourage the adoption of green vehicles.

"The third one is to consider granting further tax deduction for revenue expenditures incurred on usage of recycled products (such as recycled paper for printing) so as to encourage businesses to purchase such green products for their business purposes.

"And lastly, the government may want to provide a subsidy or grant to encourage businesses to undertake recycling and other 'green' projects (for example, reduction of carbon emission, increase in energy efficiency and other environment-friendly projects)".

Others such as KPMG are hoping for tax incentives for green technology and sustainable urban solutions, for example a 10 per cent 'Green Tax Credit' on costs for businesses that develop and implement green technologies.

"Another idea is doubling the amount of capital allowances claimable for plant and equipment that meet certain 'green' criteria such as energy efficiency or water savings. There could also be a lower property tax rate for 'green buildings', instead of the current 10 per cent rate generally applicable to all commercial properties," said Tay Hong Beng, head of tax of KPMG in Singapore.

Latha Matthew, tax partner at Ernst & Young Solutions LLP, said: "One other item on our wish list that we would really like to see happen is some sort of incentive to give home owners a push to install solar panels in their homes. "At the moment, I think to install solar panels is expensive and it is a vicious cycle...few people use it and the cost is high. I think some encouragement in the form of a property tax rebate could help to bring that cost down."

PricewaterhouseCoopers (PwC) said the government should set up an approved fund whose proceeds can be used to promote environmental initiatives. Companies with a high carbon footprint can contribute to that fund and receive a 200 per cent or 250 per cent tax break.

"The government should match the funds donated by the company, and the corpus of the fund should be used for environmentally-friendly initiatives," said Abhijit Ghosh, partner at PwC.

- CNA/ms

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Singapore: Going green will boost energy sector

Business Times 15 Feb 11;

CAN the oil & chemicals and power sectors - traditionally regarded as 'dirty' industries - clean up their act and become 'green' or more environment-friendly as far as carbon emissions are concerned? That's what the US is starting to legislate, while Singapore, without resorting to laws just yet, is actively working towards that together with the industries.

The US Environmental Protection Agency (EPA) has made its stand clear. It's time to act. Last December, it announced that it was setting new standards for climate change-causing greenhouse gas emissions from power plants and oil refineries - and this started last month with polluters such as coal-fired power plants and oil refineries having to obtain permits to emit carbon dioxide (CO2), just as they do for other pollutants including emissions that cause smog and acid rain.

Next, the EPA plans to begin setting performance standards, or limits, for both existing and new facilities later this year, with these taking effect from 2012. This is vital given that America's 500 fossil fuel-firing power plants and about 150 refineries together emit a reported 2.4 billion tonnes of CO2 and other greenhouses gases annually, or nearly 40 per cent of total US emissions.

Last November, Singapore also indicated that it will have to put a price on carbon - possibly in the form of a carbon tax here - if all countries pledge to curb greenhouse gas emissions. While the Cancun United Nations climate change meeting failed to deliver on the latter, Singapore nevertheless has to prepare for an eventual agreement.

This is why Jurong Island Version 2.0 - a 10-year strategic plan currently being hammered out to ensure the Singapore energy industry's continued sustainability and competitiveness - is moving in that direction. Why should dirty industries like oil refineries, or power plants, concern themselves about going green? This is because greenhouse gas emission could be vital to their sustainability and profitability. As oil prices stay high, they must turn to more energy-efficient technologies or production to cut costs.

Singapore's power industry, which in 2005 accounted for almost half of the CO2 emissions here, has already moved from oil-firing to cleaner and more-efficient gas-firing plants (which now account for more than 80 per cent of the electricity here). Singapore's LNG project ensures continued gas supplies here, a crucial part of that strategy. Building on this, Singapore is now looking at whether it can tap unused cold energy from the LNG terminal for cryogenic power generation.

Under its 'green' plan, Singapore is also looking to build a terminal to import alternative liquefied petroleum gas feedstock (most likely from Qatar) for petrochemical crackers here, thus reducing the need to have more oil refineries to provide needed naphtha feedstock. Other options under study include harnessing waste heat for desalination plants, and in the longer term, the use of bio-based feedstocks such as palm oil or plant biomass for chemical plants here. Yes, we must try.

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Not feasible to have full-tunnel North-South Expressway

Royston Sim Straits Times 15 Feb 11;

SEMI-TUNNEL sections of the planned North-South Expressway (NSE) will not be converted to closed tunnels.

Transport Minister Raymond Lim told Parliament this was not feasible, because of the lack of land sites needed for ventilation buildings above such tunnels.

The NSE will have two semi-tunnel sections: between the Seletar Expressway (SLE) and south of Ang Mo Kio Avenue 9; and between Sin Ming Avenue and north of Pemimpin Place.

Ms Lee Bee Wah (Ang Mo Kio GRC), citing feedback from affected residents in her Nee Soon South ward, asked Mr Lim if semi-tunnels close to residential areas could be converted to full tunnels.

He said that while the Land Transport Authority (LTA) has tried to plan for the NSE to be a full tunnel in highly urbanised areas, this was not always possible.

For the semi-tunnel stretches to be full tunnels, more land would be needed for ventilation buildings. These would occupy an area of 15,000 sq m each - the size of nearly 21/2 football fields - and must be built close to the tunnel at intervals.

According to LTA data, six such buildings would be needed if the whole NSE section south of the SLE became a tunnel. But owing to competing land uses, the LTA could identify only five suitable sites.

Mr Lim said possible land sites such as the undeveloped land around Lentor Avenue and Yio Chu Kang Road were either obstructed by the existing MRT viaduct, part of the Defence Ministry's training ground, or close to the Yio Chu Kang MRT station, where land has been reserved for residential use.

A ventilation building in the vicinity of Bishan Park would also be required, but this would affect national water agency PUB's Active, Beautiful and Clean Waters upgrading programme there, he added.

Construction on the NSE is expected to start in two years. The project, which will cost between $7billion and $8 billion, will link northern Singapore to the city, and is expected to be ready by 2020.

The 15.9km northern segment from Admiralty Road West to Toa Payoh Rise was announced on Jan19. It will have the longest viaduct in Singapore, as well as surface roads, semi-tunnels and tunnels.

The NSE is expected to reduce travel time to the city by up to 30 per cent after its opening, and ease congestion on major roads in the north-south corridor, such as the Central Expressway and Thomson Road.

Mr Lim also assured Ms Lee that the LTA would ensure the NSE meets National Environment Agency standards for road traffic noise when it is in operation. The LTA has considerable experience in building major roads close to residential areas, he added.

The minister said the LTA is conducting engineering studies on noise mitigation, and "will try to complete it as soon as possible". Possible measures such as dense planting, using porous asphalt on the roads to reduce traffic noise and shaped screens will be implemented where necessary.

The LTA could also consider how best to construct the project in phases so as to minimise inconvenience to residents, Mr Lim said.

North-South Expressway may be built in stages to minimise disruption and noise to residents
Hoe Yeen Nie Today Online 14 Feb 11;

SINGAPORE-The Land Transport Authority (LTA) has said it will consider building the North-South Expressway in phases, where feasible. This comes after MP for Ang Mo Kio GRC Lee Bee Wah suggested in Parliament that portions closest to residential areas be completed first, with the aim of minimising disruption to residents over what is estimated to be a seven-year project.

Another issue was whether parts of the expressway near homes could be built as full tunnels, to ease traffic and noise disruption after the expressway is completed.

Transport Minister Raymond Lim replied that while the expressway was designed as a full tunnel in highly urbanised areas, this was not always possible because large plots of land about 15,000 square metres, or about two football fields, are needed for the required ventilation buildings.

Besides having to compete with other land uses, Mr Lim said there are also limits to how far possible sites, like the undeveloped land around Lentor Avenue and Yio Chu Kang road, can be developed.


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Work on Changi Motorsports Hub halted

Ian De Cotta Channel NewsAsia 14 Feb 11;

SINGAPORE : Work on the Changi Motorsports Hub has been stopped since the middle of last month.

This comes after SG Changi, which won the bid to build the facility, failed to deliver an instalment for the S$50 million piling work.

MediaCorp has learnt from SG Changi that the S$10 million outstanding amount will be paid on Tuesday, after company chairman and shareholder Fuminori Murahashi secured a personal loan.

"The amount will be enough to cover the entire cost of the piling work, but it is not going to cover the amount needed to complete the project," SG Changi's director and general manager, Moto Sakuma, told MediaCorp.

He added: "We have secured US$200 million from investors in Hong Kong that would have allowed us to do so, but they have frozen the funds."

The S$370 million project came under scrutiny after recent reports said the Corrupt Practices Investigation Bureau had begun a probe into the tender for the project.

It was revealed the consortium's only other shareholder, Thia Yoke Kian, had been assisting the bureau with investigations since November.

The Singapore permanent resident led the group to beat two other consortiums in their bid to build the track, but was dropped from the management team in July.

While Mr Sakuma said they have handed their accounts and records to the Bureau and cooperated fully, they are unsure if the probe in still ongoing or has been concluded.

A karting circuit, a quarter-mile drag racing strip, a motor museum and 35,000 square metres of commercial space are also being planned for the Motorsports Hub.

The probe has spooked interested parties, especially those from Singapore, and SG Changi now plans to court investors from Japan and Europe.

This could inevitably lead to the country's first permanent motor race track being under the total control of foreigners when completed at the end of 2011.

- CNA/ms

Funds crunch puts brakes on motor sports hub
Group is late with instalment payment for piling work
Leonard Lim Straits Times 15 Feb 11;

CONSTRUCTION work on the Changi Motorsports Hub has stopped, after the consortium in charge of the project, SG Changi, failed to deliver an instalment for the $50 million piling work.

The $10 million outstanding amount is expected to be paid today and work may resume.

One of SG Changi's directors, Mr Moto Sakuma, admitted yesterday they had yet to secure the full quantum of the construction cost - estimated to be $380 million - from the private sector.

When The Straits Times visited the 41ha site near the Singapore Airshow grounds yesterday afternoon, all was quiet.

Over 15 minutes, just two trucks arrived at the sea-facing site to deliver long cylindrical equipment. Cranes and other machinery were largely idle.

This, despite SG Changi admitting in past reports it is facing a tight deadline to meet the targeted completion date of end-2011 for the $380 million project.

"Work stopped for about two weeks, around Chinese New Year," a Bangladeshi site supervisor who declined to be named said. He added: "My boss just told me there's some problem."

According to him, there were about 200 workers before. Yesterday, there were only about 20, all sitting in a shaded area.

Construction had started only in December, even though SG Changi said last March - when it was picked ahead of two other bidders by the Government to design, finance, build and manage the facility for 30 years - that it hoped to start work within three months.

It has had to source for funding in terms of bank loans and equity for the project, and there has been talk that the Japanese-led group lacked the necessary financial muscle to pull off the project.

Many in the motor sports industry worried that this would lead to delays in the construction of the hub, which will have a 3.7km track capable of hosting any race except Formula One, a 1.2km karting circuit, grandstands, shopping and food and beverage outlets, and a racing academy.

Yesterday, Mr Sakuma was hopeful that fresh funds would come within a few weeks.

"We have been dealing with a local bank for the last two months," he said. "We're expecting something within this month."

He declined to say how much money had been secured so far, but added that there were no changes to the facility's expected completion date.

"Construction's still going on, I don't have reports though," he claimed.

But later yesterday, when pressed on why construction work had stopped, he said he was in a meeting and would return the call. Further attempts to contact him were unsuccessful.

Another SG Changi director, Singapore businessman Thia Yoke Kian, declined comment.

In response to queries, Mr Alvin Hang, spokesman for the Singapore Sports Council (SSC), which is overseeing the project, would say only: "The SSC expects SG Changi to comply with all its commitments under the project agreement."

The hub is a major plank in Singapore's aim to position itself as a regional motor sports destination, and SG Changi had hoped to stage the first race there by March next year.

The latest news comes a month after the Corrupt Practices Investigation Bureau (CPIB) was reported to have begun a probe into possible irregularities in the hub's tender process.

An official at the SSC's motor sports industry development arm and others involved in the deal have reportedly been called up for interviews and lie detector tests.

A CPIB spokesman yesterday declined to confirm or deny that there is an investigation into the matter.

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Singapore: Plastics more pricey as cost of oil surges

Rise in product costs as plastic firms unable to absorb increases fully
Aaron Low Straits Times 15 Feb 11;

LOCAL plastic manufacturers are struggling to keep costs in check in the wake of surging oil prices that are making their raw materials more expensive.

Prices of everyday items such as plastic spoons, bags and cups have increased over the past six months while mobile phone casings and medical instruments are likely to go up soon.

Mr Wang Gee Hock, chief executive of Superior Multi-Packaging, which produces plastics products, told The Straits Times that some plastic manufacturers here are unable to completely absorb the price rise as the raw materials form a high percentage of their overall costs.

"So if the price increases by $10 a tonne, most of the time, we end up passing on $7 a tonne to customers, and get hit with the other 30 per cent cost increase," he said.

Mr Eddy Chua, managing director of Allswell Polythene, said he used to buy a 2.3kg bag of plastic bags for $5.50.

"Now it costs $6.50, a dollar more, or about 18 per cent higher," said Mr Chua, who sells his wares to convenience stores and hawkers.

"So profit margins have fallen from 20 per cent last year to 8 per cent now."

That means consumers must pay more for plastic products.

A pack of 10 plastic plates costs between $2.20 and $2.60, about 10 per cent higher than six months ago.

Mr Lee Hock Chew, who owns a dry goods store in Commonwealth, said: "I'm still on my last batch before the price went up, but once I sell this batch, I will have to increase the price as well."

The culprit is in plain sight: rising oil prices.

Crude has risen by about 20 per cent over the past 12 months and now hovers at US$101 per barrel.

As plastic is a by-product of oil, it has seen similar increases.

Take polyethylene, the most commonly used plastic. Its price is up about 20 per cent from January last year to US$1,285 (S$1,650) a tonne, according to Bloomberg data.

Mr Wang, who is also assistant secretary-general of the Singapore Plastic Industry Association, said local manufacturers are worried that prices will keep rising.

Oil is tipped to reach around US$115 per barrel this year, said a Bank of America Merrill Lynch report.

"Many companies are worried that oil prices will spike in the next few months, which will most likely mean higher plastic prices as well," said Mr Wang.

Apart from the cost of oil, which is a big factor in plastic prices, plastics analyst Mazlan Razak also noted that demand for the product will play a key role in determining prices.

Mr Mazlan, a vice-president in oil consultancy DeWitt & Company, noted that polyethylene prices may begin to pick up again due to "restocking requirements amid busy plant turnaround in March and April".

The bigger plastic manufacturers are less worried about the cost increases.

Proway Engineering general manager Jasver Foo said the better business activity has mitigated some of the cost increases.

At the same time, his company, which makes parts for mobile phones, circuit boards and medical equipment, is trying to boost productivity by reducing storage costs and increasing staff training.

An assistant general manager, who wanted to be known only as Mrs Ho, said she regularly passes on costs to her customers at a listed manufacturing firm servicing the medical sector.

"Some of our clients may have been turned away but our major clients accept that plastics just cost more," she said.

"But at the end of the day, managing the input price and impact on business has to be a major part of every manufacturer's business plan, so we learn to deal with it."

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Indonesia, Riaus: Oil slick beaches fishermen

The Jakarta Post 14 Feb 11;

An oil slick, reportedly from a vessel bearing a Singaporean flag, has stopped at least 300 fishermen from going out to sea in Tanjung Berakit, Bintan, Riau Islands, an official says.

Bintan Environmental Impact Management Agency head Karya Hermawan told Monday that he was not sure if it was sludge from the ship’s engine or oil from another source. The oil has damaged fishermen’s fishing gear, he said.

The oil had spread up o six kilometers along Padang Lamun Beach, he said.

He said the oil came from a tanker during a cleanup of the vessel and was dumped at night when the north wind was blowing toward Batam. Bintan and Tanjung Pinang.

The agency conducted a cleanup, putting the oil in sacks, in an attempt to prevent the oil from spreading, he said, adding that an investigation was under way.

A fisherman said the pollution became apparent in the wee hours of Saturday. He recalled that sacks containing similar black oil had been found in the water several years ago.

Oil Waste Pollutes Bintan Waters
Tempo Interactive 16 Feb 11;

TEMPO Interactive, Batam:The waters in Bintan, Riau Archipelago, have been polluted with oil, preventing hundreds of fishermen from fishing. The black oil is suspected to have been leaked by a foreign ship anchoring in Singaporean waters. “As usual, when there is the northern wind, there is this sludge oil B3 waste,” said Karya Hermawan, Bintan Environmental Impact Control Board (BAPEDAL) chief, last Monday.

According to Karya, the oil slick is 6 kilometers long across Padang Lamun Beach, Bintan. He is certain the oil is from a foreign ship that was cleaning a tanker in Singapore. Karya said the oil is normally thrown to the sea at night, when the northern wind blows to Batam, Bintan and Tanjung Pinang.


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Malaysia: ‘Green menu’ to help conserve marine life

Isabelle Lai The Star 15 Feb 11;

PETALING JAYA: Restaurants and hotels will soon be roped in to help in marine conservation efforts by offering an alternative “green menu,” WWF Malaysia said.

Senior programme officer G. Chitra Devi said working with the food and beverage (F&B) industry would help combat the depletion of Malaysia’s fishery resources.

“We plan to engage with F&B outlets and ask the operators to provide alternative choices for seafood that have been subjected to overfishing,” she said.

She said this was the next step following the Save Our Seafood campaign launched last June by WWF Malaysia and the Malaysian Nature Society. The six-month campaign included distribution of a seafood guide which informed consumers which seafood to choose (green list) or avoid (red list) based on their sustainability.

Chitra said working with the F&B industry would ensure that consumers were given the opportunity to make responsible choices.

“With the public asking the right questions, the industry will feel the pressure to ensure proper seafood sourcing policies are in place to satisfy their customers,” she said, adding that this, in turn, would pressure fishery operators to practise sustainable fishing activities.

She urged consumers to find out where their seafood came from and whether it was caught using sustainable methods.

Speaking on the campaign, Chitra said public response had been very encouraging, with many wanting to know more about the problem of overfishing.

“We want the public to realise that it isn’t just fishermen who are affected. If nothing is done, consumers won’t have enough fish to eat in future,” she said.

She added that the seafood guide would be translated into Mandarin due to popular consumer demand.

Those who want the seafood guide can download it from

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Malaysia: Palm oil plantations to have clusters of forests

New Straits Times 15 Feb 11;

STABILITY of Altered Forest Ecosystems (SAFE) project scientific coordinator Dr Edgar Turner said that among the goals of the project was to discover whether modified forests were capable of supporting biodiversity.

The central element of the SAFE project will be the creation of clusters of forest patches within an oil palm plantation, in addition to the establishment of research plots categorised into primary forest, logged forest, logged and fragmented forest in addition to oil palm plantation.

The fully integrated research programme will run for an initial period of 10 years and focus on six key areas:

- Animal diversity and communities (birds, mammals, invertebrates).

- Plant diversity and communities (diversity, growth rates and carbon sequestration, etc).

- Water and soils (including water quality, stream flows, erosion, water budgets).

- Carbon cycling (carbon storage in soils and plants, and sophisticated measurements of carbon dioxide fluctuations using a carbon flux tower).

- Nutrient cycling (nitrogen and phosphorus cycling, decomposition rates).

- Microclimate (including air and soil temperature, humidity).

Dr Turner explained that in order for researchers to understand how the ecosystem works, they must first attempt to gain a greater understanding of the linkages in an ecosystem and see how they affect one another as forests undergo changes and become fragmented.

"For example, a 24-hour sampling of temperature in an oil palm plantation shows that it has higher and more varied temperatures compared with a primary forest.

"This may be a problem to the communities living in a plantation. We want to examine how things like these affect the ecological stability in a particular research plot."

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Twisted Tropics: Growth of Vines Imperils Ecosystem

Wynne Parry Yahoo News 15 Feb 11;

Trees are the backbone of a forest, but in tropical forests throughout the Americas, trees appear to be losing ground to the woody vines that climb them in a race to reach the sunlight above. This shift could have important implications for tropical ecosystems and for the globe, according to researchers.

"This is the first major structural change in tropical ecosystems that we have witnessed. That is key," said Stefan Schnitzer, an associate professor at the University of Wisconsin in Milwaukee. Schnitzer is one of the two researchers who pulled together evidence from eight studies that, collective, show a pattern of woody vine growth in American tropical and subtropical forests.

"That is going to have cascading effects on things like species diversity, tropical forest functioning in carbon storage and whole forest water use — really important and practical things that will change the way these forests work," said Schnitzer, who is also a research associate at the Smithsonian Tropical Research Institute in Panama.

Evidence climbs

The first evidence of this pattern emerged in 2002, when a 23-year study showed that woody vines were becoming more abundant relative to trees in the Amazon rain forest, northwest South America and Central America. Since then, other studies have shown an increase in woody vines in Panama, French Guiana and the Bolivian Amazon. For instance, on Barro Colorado Island in Panama, the relative abundance of vines in tree crowns has more than doubled over the past 40 years.

In places like these, the vines are native species, but farther north in subtropical places such as Florida and South Carolina, invasive species, like the infamous kudzu, contribute to the problem, Schnitzer said.

The colder weather of higher latitudes keeps the vines in check, write Schnitzer and his fellow researcher, Frans Bongers from Wageningen University in The Netherlands, in an article published online today (Feb. 14) in the journal Ecology Letters.

The researchers speculate about possible causes: Drier weather in the tropics may aid vines, which, unlike trees, can continue to grow during the dry season. Woody vines are also adept at taking advantage of disturbances in the forest, such as openings created when a tree falls. Once they find a gap, their growth rate far exceeds those of trees. Logging and other human alterations to forests may give woody vines an advantage, and there is also evidence that higher levels of carbon dioxide in the atmosphere — the most prominent greenhouse gas — may benefit woody vines more than trees, they write.

And not only do woody vines possess all these advantages; the presence of more woody vines appears to slow tree growth and increases tree death.

An altered ecosystem?

As the world faces global warming linked to increased greenhouse gas emissions, tropical forests provide an important "carbon sink," by tying up the carbon from the dominant greenhouse gas, carbon dioxide in their wood as they grow, according to Schnitzer.

By interfering with the growth of trees, and increasing tree deaths, the vines reduce the amount of carbon the trees can sequester, but the vines themselves have less wood and store less carbon than the trees they are replacing.

"Vines use tree architecture to ascend to the light. They are more like structural parasites. They use trees to get their leaves to the sun, they don't store very much carbon," he said.

It's possible an increase in woody vines could change the nutrient dynamics of forests, in part because of differences between their leaves and the leaves of tropical trees, all of which ultimately fertilize the forest floor. Water dynamics may also be affected because woody vines appear to exhale more water vapor through their leaves during dry times, researchers said.

The growth of woody vines does not appear to be a worldwide phenomenon, however. Two studies in Africa found evidence of decreases or stable growth.

Tree Stranglers Overtaking Tropical Forests
Andrea Mustain 7 Apr 11;

A creeping menace is taking over the planet's tropical forests, a brand of tree-hugging vine whose embrace — if you're a tree — is of the sinister kind.

Lianas, a type of woody vine, are increasingly abundant across forests in Central and South America, according to new research on the plants.

"They seem to be increasing while trees are not," said Stefan Schnitzer, a professor at the University of Wisconsin-Milwaukee and co-author on a recent study, the first of its kind, which combined data from eight previous investigations of lianas across Central and South America.

In fact, some parts of the Amazon are now called liana forests, Schnitzer said, because the climbing vines have taken over. "And they're not particularly pretty forests, I may add," Schnitzer said.

Schnitzer said it's a scene that would be familiar to anyone who has spent time in the southeastern United States, where another type of prolific liana — kudzu — is taking over the trees.

However, the creeping abundance of lianas has implications beyond mere aesthetics.

"Lianas prevent trees from growing," Schintzer told OurAmazingPlanet. "They're really good competitors."

Tree backstabbers

Lianas use the sturdy trunks of trees as a kind of living trellis, allowing the vines to slither up the length of a tree and reach the canopy, beating out the trees for resources such as water and sunlight.

And a shift in the makeup of forests — a higher percentage of lianas, a lower percentage of trees — can have big ramifications for everyone on the planet, because trees are an excellent carbon sink (meaning they suck up carbon dioxide from the atmosphere and store it for many years), whereas lianas are not.

Trees put a lot of their energy into growing sturdy trunks. "That's where all the carbon is stored, and it can be stored for hundreds and hundreds of years," Schnitzer said.

Lianas don't have to bother — because they hitch a ride on tree trunks. "They have a lot less wood volume, so they don't store nearly as much carbon," Schnitzer said.

What's to blame

Schnitzer said the study data suggest there are several main culprits behind the increase in lianas.

First, if trees are removed from forests, whether by natural or human means, more sunlight penetrates the darkness of the forest floor, which allows lianas to flourish. In addition, it appears that lianas can thrive in drier conditions, and when greater amounts of carbon dioxide are found in the atmosphere, two conditions now seen in some places in the Amazon.

Schnitzer said more study is required to see how big a part all these factors play, and how they may be intertwined.

However, the invading vines aren't bad news for all the residents of the tropics.

Sloth highway

"Lianas are important for animals in tropical forests, because they connect from one tree to the next tree, and provide a lot of resources," Schnitzer said.

Because the hardy vines can thrive in the dry season, they can flower and produce fruit when other plants don't, providing a source of food.

In addition, lianas' vast network of entangled tendrils provide an inter-tree expressway, allowing creatures to climb from tree to tree with relative ease, and providing more real estate for nesting, sleeping and eating.

"These things are really important structural components of the forest for animals," Schnitzer said. "Monkeys, sloths, they're always climbing on lianas. So you can't go in and say, 'Let's just cut down all the lianas, and the forest will be OK.''

Schnitzer said the increase of the vines is a more nuanced issue. "We're hoping that this study will get people to realize this is an important phenomenon," Schnitzer said, "and in another five or 10 years, we'll have more data."

Schnitzer spoke with OurAmazingPlanet from Panama, where he works with the Smithsonian Tropical Research Institute. The study he co-authored is published in the journal Ecology Letters.

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Butterflies make partial comeback in Mexico

Mark Stevenson, Associated Press Yahoo News 15 Feb 11;

MEXICO CITY – The number of monarch butterflies migrating from Canada and the U.S. to Mexico has increased this year, a hopeful sign following a worrying 75 percent drop in their numbers last year, experts reported Monday.

The total amount of forest covered by the colonies — millions of orange-and-black butterflies that hang in clumps from the boughs of fir trees — more than doubled from last year's historic low.

But concerns persist about the monarchs' long-term survival, because their numbers remain well below average.

This winter, there are 9.9 acres (4 hectares) of colonies, more than double the 4.7 acres (1.9 hectares) last year, the lowest level since comparable record-keeping began in 1993.

"These figures are encouraging, compared to last year, because they show a trend toward recovery," said Omar Vidal, director of the conservation group World Wildlife Fund Mexico, which sponsored the study along with the government Commission on Natural Protected Areas and the cell phone carrier Telcel.

Despite the rebound experienced by this mysterious scientific phenomenon, historically a huge tourist draw, the latest numbers are well below the almost 20 acres (8 hectares) covered in the 2008-09 winter season and the record high of 45 acres (18.2 hectares) in 1996-97.

"Fluctuations in insect populations are normal in nature," the study's sponsors said in a statement. "With regard to the monarch butterfly, these fluctuations could be due mainly to climatic conditions," including especially cold or dry years in the United States and Canada, where the butterflies that make the trip are born.

But experts said natural variation doesn't fully account for a long-term decline in average numbers.

The butterfly population also has been hurt by deforestation of the mountaintop pine forests in Mexico's western Michoacan state that serve as "blankets" to protect the insects against winter rain and cold.

The WWF, private companies, international groups and Mexican state and federal governments have been battling deforestation over the past decade. They sent police to raid illegal sawmills and started alternative income projects, such as tree nurseries, for the farm communities that own land in federally protected reserves.

Lincoln Brower, an expert on monarch butterflies and zoology professor at the University of Florida, said this year's recovery is good news, but adds that each time the butterflies "recover," they slip to lower and lower numbers.

"What is ominous is that all of the last seven years have been below average," he said.

Brower points to several possibilities for the decline: climate changes, deforestation, and the existence of genetically modified crops and pesticides, which crowd out the milkweed plants where monarchs lay their eggs.

Brower also noted monarchs have disappeared from some forest patches where they traditionally wintered. The study released Monday said two traditional wintering areas — Cerro Prieto in Michoacan and La Mesa in neighboring Mexico State — had no butterfly colonies this year.

No monarch lives long enough to make a round trip from the U.S. and Canada to Mexico. That is what makes the return of new butterflies each year more fascinating: No single butterfly "remembers" the route.

Some colonies return to patches of forest that have been dangerously denuded by logging or severe storms. The preference for areas they "know" can create a death trap as they try to winter in inadequate surroundings rather than seeking better patches of woodland nearby.

Brower is investigating the hypothesis that if butterflies somehow "mark" their wintering grounds, perhaps chemically, that marker could be replicated and used to lead the monarchs to areas where they would be safe.

Mexico appears to be winning its battle against logging in the monarch reserve. Illegal tree-cutting amounted to 3.7 acres (1.5 hectares) last year, down 97 percent from two years ago. At its peak in 2005, logging devastated as many as 1,140 acres (461 hectares) annually.

Regardless of the area's comeback, the 193,000-acre (56,259-hectare) reserve in Michoacan faces other threats: Drug-fueled violence in the state has prompted travel warnings by foreign governments and cut tourism revenues that farm communities need to offset income lost from logging.

Rosendo Caro, director of the reserve, said the number of tourists has fallen as much as 50 percent in recent years — even though no violence has taken place within the reserve. Previously, more than 110,000 people visited each year.

"The many people who visit realize that, while there is undeniably an atmosphere of violence, that's really more of a problem of perception," Caro said. "The people in the region are friendly and respectful."

Monarch Butterfly Count Bounces Back From Bad Year
Patrick Rucker PlanetArk 16 Feb 11;

Monarch butterfly colonies in Mexico more than doubled in size this winter after bad storms devastated their numbers a year ago, conservationists said on Monday although the migrating insect remains under threat.

Millions of butterflies make a 2,000-mile journey each year from Canada to winter in central Mexico's warmer weather but the size of that migration can vary wildly.

Fewer of the orange and black insects arrived in Mexico last year than ever before, researchers said, but the butterfly colonies increased by 109 percent this year to cover roughly 10 acres of forest. Researchers estimate the size of the butterfly colonies based on the area they occupy in a forest.

"Certainly this is good news and indicates a recovering trend," said Omar Vidal, director of the Mexico branch of the World Wildlife Fund (WWF).

But while the monarch colonies rebounded this winter, it is still the fourth-lowest year for the butterfly since researchers started census-taking in 1993.

Illegal loggers have picked away roughly 3 percent of a 138,000 acre reserve since it was created in 2000 but officials say they now have that illicit harvest under control.

Severe winter weather linked to climate change is more of a long-term threat, along with large-scale farming that crowds out the milkweed that the butterflies dine on during their cross-continental flight.

"The caterpillars feed on milkweed so changing soil use in the United States and Canada is definitely having an impact on the butterflies," said Vidal, who helps manage the authoritative study on monarch populations in Mexico.

Michoacan state is home to the country's monarch butterfly reserve as well as many violent drug gangs that have carved smuggling routes through the often-arid terrain.

While the government is confronting drug gangs on many fronts, smugglers are not inhibiting conservation work, one official said.

"We are being a bit more careful but have not had any security incident to date," said Humberto Gabriel Reyes, who oversees the butterfly reserve for the federal commission for protected areas.

While the uptick in butterfly numbers is heartening, U.S. researcher Lincoln Brower said the insects are still susceptible to harsh conditions.

"The weather conditions we saw last year were among our worst-case scenario," said Brower, 79, of Sweet Briar College in Virginia who has studied the monarch butterflies since the 1950s.

"If there were more harsh weather in Texas or more forest loss in the Mexican reserves, the butterflies could be tested even more severely," said Brower who was one of the first researchers to see the Mexican overwinter sites after they were identified by scientists in 1975.

(Editing by Cynthia Osterman)

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Scramble to stockpile rice in Asia has started

Hanim Adnan The Star 15 Feb 11;

OF late, there is this massive pressure on Asian nations to stockpile rice as part of their national food security efforts.

With the weather pattern wreaking havoc on food crops leading to dwindling supplies and rising food inflation, there is looming fear the current price of rice may soon revisit the all-time record price in 2008, which at one time saw the grain price surging by 200%.

The global rice market has been on the rise again over the past few months after hitting a two-year low in early August 2010. The price of the Asian rice benchmark, Thai 100% grade-B white rice, has steadily risen by about 4.5% since Dec 29 to reach about US$558 per tonne.

Despite the assurance of ample rice supply by the world's largest rice producers Thailand and Vietnam, Indonesia and Bangladesh have become among the earliest Asian nations to extensively boost their rice imports for 2011.

Early this month, Indonesia had ordered its state procurement agency Bulog to secure imports to gradually boost its rice stockpiles to two million tonnes from the current 1.5 million tonnes. Indonesia surprised the market recently by purchasing 820,000 tonnes of rice from Thailand for prompt shipment.

Bangladesh has also said it was buying 200,000 tonnes of parboiled rice from Thailand in the first government-to-government deal for the grain.

Malaysia has also been steadily stockpiling rice. After the bitter experience of 2008, Bernas the local rice custodian has been procuring rice over the past two years via active buying both on the spot and forward contract for two to six months to build up stocks.

According to some quarters, more Asian nations would likely make similar move to boost their rice stockpile should drought-striken China, the world's largest rice consumer, start to procure more rice externally in the near term. China has been self-sufficient of the grain.

Interestingly, Vietnam, the second world largest rice producer, is also stockpiling its rice at about one million tonnes but Thailand intends to reduce its volume of it domestic stockpile to only 100,000 tonnes and export 900,000 tonnes from its stockpile.

Meanwhile, the Thai government is not overly worried about lowering its stockpile as new harvest will start soon. It is likely to export 10.73 million tonnes of the 2010-11 crop, up slightly from 10 million for 2009-10.

So what will be in store next as the scramble to stockpile rice hots up among Asian countries?

Given such a dire situation, it seems the proposal to create a permanent rice emergency reserve by the 10-member Asean together wth China, South Korea and Japan (Asean plus three) may likely be speeded up.

A meeting is slated in Jakarta later this year to discuss the supply and financing, and the mechanism to the countries should a hike in prices occur.

In addition, a blueprint will also be put up for the establishment of a 800,000-tonne strategic rice storage facility with pledges from Asean members, Japan, China and South Korea to protect the region's two billion people from an environmental disaster and a runaway inflation.

# Deputy news editor Hanim Adnan is all for the rice emergency reserve as it will certainly help secure price and food security as well as rice development in the region.

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Rising food prices will spark next big Asian crisis

William Pesek Jr Business Times 15 Feb 11;

FORGET Egypt for a moment. Skip the water crisis in China. Look past angst on the streets of Bangladesh. If you want to see how extreme the effects of surging food prices are becoming, look to wealthy Japan. So big are the increases that economists are talking about them pushing deflationary Japan toward inflation. Yes, rising costs for commodities such as wheat, corn and coffee might do what trillions of dollars of central bank liquidity couldn't.

Yet the economic consequences of food prices pale in comparison with the social ones. Nowhere could the fallout be greater than Asia, where a critical mass of those living on less than US$2 a day reside. It might have major implications for Asia's debt outlook. It may have even bigger ones for leaders hoping to keep the peace.

What a difference a few months can make. Back in, say, October, the chatter was about Asia's invulnerability to Wall Street's woes. Now, governments in Jakarta, Manila and New Delhi are grappling with their own sub-prime crisis of sorts. This one reflects a toxic mix of suboptimal food stocks, exploding demand, wacky weather and zero interest rates around the globe.

It's not hyperbole when Nouriel Roubini, the New York University economist who predicted the US financial crisis, says surging food and energy costs are stoking emerging market inflation that's serious enough to topple governments. Hosni Mubarak can attest to that.

It's important to begin considering the side effects. The United Nations reckons countries spent at least US$1 trillion on food imports in 2010, with the poorest paying as much as 20 per cent more than in 2009. These increases are just getting started. In January, world food prices rose to another record on higher dairy, sugar and grain costs.

This crisis might lead to another: debt. Expect Asian leaders to increase subsidies sharply and cut import taxes. The fiscal implications of these steps aren't getting the attention they deserve. The same is true of social instability risks.

Events in Egypt are a graphic example of how people living close to the edge can get motivated in a hurry to demand change. Keeping that rage bottled in the age of Twitter, YouTube and Facebook won't be easy. Hence Prof Roubini's concerns about geopolitical crises.

There's an extreme irony in the timing of all this. It's coming as the world is becoming a heavier place. Obesity rates have almost doubled since 1980 and almost 10 per cent of humanity was seriously overweight in 2008, according to the medical journal The Lancet. People have never been fatter at the same time when food prices have never been so high. The Westernisation of Asia's diet is partly behind the rise in food costs. Rapid growth, rising incomes, growing populations and urbanisation are conspiring to shift eating habits away from the staples of old toward livestock and dairy products.

The growing pains inherent in shifting consumption patterns will be especially acute in this region. Unlike the food price spike of 2008, this one may be more secular than cyclical. Asia alone, for example, will have another 140 million mouths to feed over the next four years. Add that to almost three billion people in the fast-growing region and you have a recipe for booming demand.

China's size and scope means it will be buying up ever-growing chunks of the world's food supply. As the yuan rises, so will China's ability to outbid everyone else. Increased trade tensions are inevitable and it will show the futility of food subsidies. Prices will rise as long as consumption does.

China also shows how changing weather will bump up against rising living standards. Severe droughts are imperilling wheat crops and creating shortages of drinking water both for China's 1.3 billion people and livestock. It's a reminder that water is the next oil. Governments will be scouring the globe for it before long. Rising food prices will complicate things for China's central bank. That goes, too, for India, Indonesia, the Philippines and even less developed economies from Pakistan to Vietnam. This will be an inconvenient reality check for Asia bulls. Take Indonesia, the fourth-most populous nation. Food prices make it harder to deliver higher living standards and narrow the gap between rich and poor. The same goes for other countries in which population growth often outpaces gross domestic product, like the Philippines.

What's killing households surviving on a few dollars a day is price volatility. If you spend almost half of your income to fill bellies, a 10 per cent surge in cooking oil, wheat or chilli peppers is devastating. It's hard enough to pay rent and handle healthcare costs today, never mind investing in education. Governments need to get busy softening the blow, even at the expense of rattling the folks at Standard & Poor's and Moody's. Otherwise, they will have a bigger crisis on their hands. -- Bloomberg

William Pesek is a Bloomberg News columnist.

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In Food Vs Fuel Debate, U.S. Resolute On Ethanol

Timothy Gardner and Charles Abbott PlanetArk 15 Feb 11;

As world food prices reach new highs, a handful of U.S. politicians and hard-hit corporations are readying a fresh effort to forestall the use of more U.S. corn and soybeans as motor fuel.

They are likely doing so in vain, say experts.

Unlike in 2008, when a wave of global panic over grain supplies provoked a fierce "food vs fuel" debate, there's so far only muted outcry over biofuels, even after corn surged last week to within 10 percent of its 2008 peak following a forecast showing even higher use in the ethanol sector.

While that may yet change as higher prices fuel inflation and trigger worries over supply security, officials and experts say ethanol is too ingrained in public policy and the economy of the U.S. heartland to be easily dislodged.

"What would it take for this public policy to be altered- The answer -- a lot," said Gary Blumenthal of World Perspectives, a private consultant.

"The best voices for demanding change are U.S. consumers themselves, but that will require a food price spike larger than the 2 to 3 percent currently forecast by USDA. And since the Fed focuses on core inflation and ignores food and energy, it gets ignored there as well."

U.S. ethanol production this year will consume 15 percent of the world's corn supply, up from 10 percent in 2008. That share will continue to rise as the industry faces a mandate to boost minimum production an additional 20 percent by 2015. And exports are booming thanks to costly sugar-based rivals.

Ethanol has become a lightning rod for criticism from opponents including foodmakers, livestock feeders, environmentalists and budget hawks.

The largest U.S. meatpacker, Tyson Foods Inc, which also raises chickens, and No. 1 pork processor Smithfield Foods Inc, which raises hogs, say ethanol drives up feed costs sharply and hurts consumers.

"It makes a lot more sense for us to burn our trash than burn our feed," Tyson CEO Donnie Smith said last month.

As yet, foes have not found an electric argument to compel broad-scale change.

On the global stage, the hand-wringing over soaring prices has focused on markets, not biofuel.

French President Nicolas Sarkozy, who has made food security a centerpiece of his one-year term leading the Group of 20 leading economies, has called for rules to curb commodity volatility, not to roll back widespread efforts to convert more crops to fuel.

That finding has the support of a World Bank study released last July, that said: "The effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors ... may have been partly responsible for the 2007-08 spike."

But with spending cuts the top issue for lawmakers this year, ethanol subsidies may be swept into the deficit debate.

"Before this (debate) is over ... I suspect a lot of things will be looked at," said House Agriculture Committee Chairman Frank Lucas of Oklahoma, where major industries are ranching and oil and gas -- two sectors skeptical of ethanol.


Backtracking on existing ethanol mandates would be almost unthinkable at this point. At some 900,000 barrels per day (bpd), ethanol now makes up about 10 percent of the gasoline pool in the world's largest oil consumer.

"The fact is the industry has pretty much been built," Joe Glauber said this week. "This isn't a question of just saying 'cut it off.' It's much more complicated than that."

And food prices, at least at home, have yet to pinch.

Prices at U.S. grocery stores and restaurants shot up 5.5 percent in 2008 without inspiring an ethanol overhaul. They were a negligible 1.8 percent in 2009 and a tiny 0.8 percent last year, so 2.5 percent may seem large this year. The overall inflation rate is forecast for 1.9 percent.

Nor is there great political will to make it an issue.

Republicans, including the Tea Party caucus, pushing for deep budget cuts, could single out the 45-cents-a-gallon fuel tax credit that encourages biofuel production, and helps ensure the sector remains profitable.

But at $6 billion a year, they are a drop in the U.S. budget bucket, and overturning them would likely face stiff opposition from President Barack Obama -- whose determination to boost domestic resources is as resolute as his predecessors.

"Biofuels continue to be an important component of our clean energy strategy," a White House spokesman said when asked about ethanol, tight corn supplies and rising food prices.

"These home-grown, renewable fuels reduce our dependence on oil and create jobs and rural economic development."

Besides the tax credits, a 2007 law guarantees renewable fuels a rising share of the market. For corn ethanol, the mandate is 12.6 billion gallons this year and 15 billion gallons annually from 2015.

Production is set to reach 13.5 billion gallons this year -- up 46 percent from 9.235 billion gallons in 2008. Makers will exceed the mandate this year due to exports and profit-making moments when ethanol is cheaper than gasoline.


When grain prices skyrocketed in 2008, Texas, home of the U.S. oil industry, asked the Bush administration to halve the ethanol mandate for that year. The request was rejected.

Last year, Congress battled over ethanol subsidies before approving a one-year extension. Senator Dianne Feinstein of California is working on legislation to trim ethanol subsidies. "Federal subsidies and tariffs for ethanol are wrong for our fiscal policy and wrong for the environment and rising commodity prices are another indicator of that," she said.

"It's unfathomable that the corn ethanol industry can continue to assert that using 40 percent of the corn crop has no impact on food stocks or commodity prices," said the Environmental Working Group, an ethanol critic.

Ethanol defenders say that critique ignores the benefit of distillers dried grains, an ethanol co-product that can substitute for corn in livestock rations. Forty million tons of grains are available at lower cost than corn, they say.

Comparatively small numbers of lawmakers oppose corn ethanol, while farm-state lawmakers are a strong bloc of support. Last year, the argument centered on possible cuts in the tax credits rather than elimination of them.

The major U.S. makers are privately owned POET, Archer Daniels Midland Co and Valero Energy Corp.

Advanced biofuels, such as ethanol from cellulose found in grass and woody plants, are the darling of corn ethanol critics. But the next-generation fuels amount to only a trickle of output and will need years to grow.

"Without ethanol, you have to have 10 percent more gas derived from oil. If you look at the impact on consumers, it would be huge," said Tom Buis of the ethanol trade group Growth Energy.

(Editing by Russell Blinch)

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