Topic: malaysia

Report Finds 85% of Reefs in the Coral Triangle Are Threatened - Now Available in Bahasa Indonesian

Lauren Zelin — Tue, 23 Apr 2013 17:35:32 -0400

“Reefs at Risk Revisited in the Coral Triangle” maps threats to reefs in Indonesia, Malaysia, Papua New Guinea, Philippines, Solomon Islands, and Timor-Leste

The report Reefs at Risk Revisited in the Coral Triangle, released at the 12th International Coral Reef Symposium this past July is now available in Bahasa Indonesian. The report finds that more than 85 percent of reefs in the Coral Triangle are directly threatened by local human activities, substantially more than the global average of 60 percent. Reefs at Risk Revisited in the Coral Triangle shows that the greatest local threats to reefs in the countries that make up the Coral Triangle are overfishing, watershed-based pollution, and coastal development. When these threats are combined with recent coral bleaching, prompted by rising ocean temperatures, the percent of reefs rated as threatened increases to more than 90 percent across the Coral Triangle region.

Reefs at Risk Revisited in the Coral Triangle was developed by the World Resources Institute (WRI) in close collaboration with the USAID Coral Triangle Support Partnership (CTSP), a consortium of WWF, The Nature Conservancy, and Conservation International that assists the six Coral Triangle governments in implementing their regional and national Coral Triangle Initiative plans of action. This report was adapted from WRI’s landmark 2011 global analysis of threats to coral reefs, Reefs at Risk Revisited, supplemented with more recent and detailed data for the Coral Triangle region.

Indonesia is home to 16% of the world’s coral reefs (second only to Australia in total reef area) and the highest reef-associated population in the world, with nearly 60 million people living on the coast near coral reefs. The bahasa Indonesia edition of this report is intended to inform local and national decision-makers of the status of the country’s and region’s coral reefs and support coastal management activities in Indonesia.

To read the full report in Bahasa Indonesian click here: Reefs at Risk Revisited in the Coral Triangle

85% Terumbu Karang di Coral Triangle Tergolong “Terancam”

Lauren Zelin — Tue, 23 Apr 2013 16:44:56 -0400

Laporan lengkap sekarang tersedia dalam Bahasa Indonesia.

“Terumbu Karang yang Terancam di Coral Triangle” memetakan tingkat ancaman terhadap terumbu karang di Indonesia, Malaysia, Papua Nugini, Filipina, Kepulauan Solomon, dan Timor-Leste.

Laporan Terumbu Karang yang Terancam di Coral Triangle (Kawasan Segitiga Terumbu Karang) kini tersedia dalam Bahasa Indonesia. Laporan ini dirilis pada bulan Juli lalu di acara Simposium Internasional Terumbu Karang ke 12. Laporan ini menemukan bahwa lebih dari 85 persen dari terumbu karang di Kawasan Segitiga Terumbu Karang (Coral Triangle) secara langsung terancam oleh aktivitas manusia, jauh melebihi rata-rata global yaitu 60 persen. Temuan laporan ini menunjukkan bahwa ancaman terbesar bagi terumbu karang di negara-negara kawasan Coral Triangle adalah penangkapan ikan yang berlebihan, polusi pada daerah aliran sungai, dan pembangunan kawasan pesisir. Ketika ancaman ini digabungkan dengan pemutihan terumbu karang (coral bleaching) yang didorong oleh kenaikan suhu laut, terumbu karang yang tergolong “terancam” meningkat menjadi 90%.

Laporan Terumbu “Terumbu Karang yang Terancam di Coral Triangle” dikembangkan oleh World Resources Institute (WRI) dan bekerjasama dengan Kemitraan Pendukung Segitiga Terumbu Karang USAID, sebuah konsorsium yang berisi WWF, The Nature Conservancy, dan Conservation International. Konsorsium ini membantu mengimplementasi rencana aksi enam negara yang membentuk Kawasan Segitiga Terumbu Karang. Laporan ini diadaptasi dari analisis WRI tahun 2011 tentang ancaman terhadap terumbu karang pada tingkat global, Reefs at Risk Revisited. Laporan ini dilengkapi dengan data terbaru dan lebih mendetil untuk wilayah Segitiga Terumbu Karang.

Indonesia adalah rumah bagi 16% dari terumbu karang dunia (kedua terbanyak setelah Australia) dan hampir 60 juta penduduk yang mata pencahariannya tergantung pada terumbu karang. Edisi Bahasa Indonesia dari laporan ini diharapkan dapat menginformasikan pembuat kebijakan baik di tingkat lokal maupun nasional mengenai keadaan terumbu karang di wilayah pesisir Indonesia.

Read the full report in bahasa Indonesian here: Reefs at Risk Revisited in the Coral Triangle

RELEASE: 85 Percent of Reefs in the Coral Triangle Are Threatened, New Report Finds

Lauren Zelin — Sun, 08 Jul 2012 18:17:43 -0400

“Reefs at Risk Revisited in the Coral Triangle” maps threats to reefs in Indonesia, Malaysia, Papua New Guinea, Philippines, Solomon Islands, and Timor-Leste

A new report finds that more than 85 percent of reefs in the Coral Triangle are directly threatened by local human activities, substantially more than the global average of 60 percent. Reefs at Risk Revisited in the Coral Triangle shows that the greatest local threats to reefs in the countries that make up the Coral Triangle —Indonesia, Malaysia, Papua New Guinea, the Philippines, Solomon Islands, and Timor-Leste—are overfishing, watershed-based pollution, and coastal development. When these threats are combined with recent coral bleaching, prompted by rising ocean temperatures, the percent of reefs rated as threatened increases to more than 90 percent.

Reefs at Risk Revisited in the Coral Triangle was developed by the World Resources Institute (WRI) in close collaboration with the USAID Coral Triangle Support Partnership (CTSP), a consortium of WWF, The Nature Conservancy, and Conservation International that assists the six Coral Triangle governments in implementing their regional and national Coral Triangle Initiative plans of action. The report was released at the 12th International Coral Reef Symposium in Cairns, Australia.

“Across the Coral Triangle region, coastal communities depend on coral reefs for food, livelihoods, and protection from waves during storms, but the threats to reefs in this region are incredibly high,” said Lauretta Burke, senior associate at WRI and a lead author of the report. “Reefs are resilient—they can recover from coral bleaching and other impacts—particularly if other threats are low. The benefits reefs provide are at risk, which is why concerted action to mitigate threats to reefs across the Coral Triangle region is so important.”

The Coral Triangle features immense biodiversity–it contains nearly 30 percent of the world’s coral reefs and more than 3,000 species of fish—twice the number found anywhere else in the world. More than 130 million people living in the region rely on reef ecosystems for food, employment, and revenue from tourism.

“The influence of coral reefs on the most important aspects of people’s lives cannot be overstated,” emphasized Katie Reytar, research associate at WRI and a lead author. “The influence extends far beyond the Coral Triangle to people around the world who benefit from the fisheries, tourism, medicines, and numerous other services that reefs provide.”

The report calls attention to the vulnerability of coral reefs in the Coral Triangle and factors leading to degradation and loss. The report shows that:
* On the list of countries most vulnerable to social and economic impacts from the loss of coral reef services such as food, employment, and shoreline protection, five of the six Coral Triangle countries topped the list;
* An assessment of the existing coverage and management effectiveness of marine protected areas (MPAs) in the Coral Triangle found that 16 percent of the region’s coral reefs are inside MPAs, which is substantially lower than the global average of 28 percent;
* Less than one percent of MPAs in the Coral Triangle were found to be fully effective at reducing threats such as overfishing and destructive fishing.

Alan White, a contributing author to this report and senior scientist at The Nature Conservancy and partner in CTSP, noted that “while there is still room for improvement in increasing the effectiveness of MPAs, especially large MPAs that require significant resources to manage, a lot of progress has been made in building up awareness about reef protection at the local level and in providing communities with the tools and resources to manage the reefs that they depend on.”

Considered the center of coral diversity in the world, Reefs at Risk Revisited in the Coral Triangle illustrates the vulnerability of the region’s reefs and highlights strategies to protect them. Among the many recommendations offered in the report for protecting reefs in the Coral Triangle, the most urgent is to reduce local pressures such as overfishing, destructive fishing, and run-off from land.

“Reefs at Risk Revisited in the Coral Triangle is an important contribution for supporting the six Coral Triangle countries in making critical decisions related to protecting their marine resources,” said Maurice Knight, a contributing author and Team Leader for CTSP. “The region-wide perspective on the status of coral reefs as depicted in this report demonstrates the urgency of the situation and the need for immediate action.”

Healthy reefs are more likely to survive the negative effects of climate change, such as coral bleaching caused by higher ocean temperatures or reduced coral growth rates due to increased ocean acidity. Tackling the local threats first will buy reefs time until the global community can reduce greenhouse gas emissions.

The Reefs at Risk Revisited in the Coral Triangle report will inform the activities of the Coral Triangle Initiative on Coral Reefs, Fisheries and Food Security (CTI-CFF), a multilateral partnership formed in 2009 by the six countries of the Coral Triangle to promote sustainable fishing, improve MPA management, strengthen climate change adaptation, and protect threatened species in the region.

The new report was adapted from WRI’s landmark 2011 global analysis of threats to coral reefs, Reefs at Risk Revisited, supplemented with more recent and detailed data for the Coral Triangle region.

To download the Reefs at Risk Revisited in the Coral Triangle report visit: http://www.wri.org/publication/reefs-at-risk-revisited-coral-triangle. To watch WRI’s new video “Polyps in Peril!” featuring Celine Cousteau with animation by Jim Toomey visit: www.wri.org/polypsinperil.

Reefs at Risk Revisited in the Coral Triangle

Sarah Parsons — Thu, 05 Jul 2012 10:53:54 -0400

Summary: Reefs at Risk Revisited in the Coral Triangle

Download the 2011 global analysis of threats to coral reefs, Reefs at Risk Revisited

The World Resources Institute produced the report in close collaboration with the USAID-funded Coral Triangle Support Partnership (CTSP). Reefs at Risk Revisited in the Coral Triangle was adapted from WRI’s 2011 global analysis of threats to coral reefs, Reefs at Risk Revisited, and supplemented with more recent and detailed data for the Coral Triangle region.

Threats to coral reefs in the Coral Triangle are much higher than the global average. More than 85 percent of reefs within the Coral Triangle Region are currently threatened by local stressors (such as overfishing, pollution, and coastal development), which is substantially higher than the global average of 60 percent. Nearly 45 percent are at high or very high threat levels. When the influence of recent thermal stress and coral bleaching is combined with these local threats, the percent of reefs rated as threatened increases to more than 90 percent, which is substantially greater than the global average of 75 percent.

Reefs at Risk Revisited in the Coral Triangle studies current and future threats to the Coral Triangle’s reefs, evaluates social and economic vulnerability to reef degradation and loss throughout the six countries, examines reef management initiatives, and identifies solutions to help safeguard reefs.

PRESS RELEASE: 75% of World’s Coral Reefs Currently Under Threat, New Analysis Finds

Michael Oko — Wed, 23 Feb 2011 21:55:53 -0500

“Reefs at Risk Revisited” report presents comprehensive analysis of threats to coral reefs

A new comprehensive analysis finds that 75 percent of the world’s coral reefs are currently threatened by local and global pressures. For the first time, the analysis includes threats from climate change, including warming seas and rising ocean acidification. The report shows that local pressures— such as overfishing, coastal development, and pollution— pose the most immediate and direct risks, threatening more than 60 percent of coral reefs today.

“Reefs at Risk Revisited,” the most detailed assessment of threats to coral reefs ever undertaken, is being released by the World Resources Institute with the Nature Conservancy, the WorldFish Center, the International Coral Reef Action Network, Global Coral Reef Monitoring Network, and the UNEP-World Conservation Monitoring Center, along with a network of more than 25 organizations. Launch activities are taking place in Washington, D.C., London, Malaysia, Indonesia, the Caribbean, Australia, and other locations around the world.

“This report serves as a wake-up call for policy-makers, business leaders, ocean managers, and others about the urgent need for greater protection for coral reefs,” said Dr. Jane Lubchenco, under secretary of commerce for oceans and atmosphere and NOAA administrator. “As the report makes clear, local and global threats, including climate change, are already having significant impacts on coral reefs, putting the future of these beautiful and valuable ecosystems at risk.”

Local pressures – especially overfishing and destructive fishing – are causing many reefs to be degraded. Global pressures are leading to coral bleaching from rising sea temperatures and increasing ocean acidification from carbon dioxide pollution. According to the new analysis, if left unchecked, more than 90 percent of reefs will be threatened by 2030 and nearly all reefs will be at risk by 2050.

“Coral reefs are valuable resources for millions of people worldwide. Despite the dire situation for many reefs, there is reason for hope,” said Lauretta Burke, senior associate at WRI and a lead author of the report. “Reefs are resilient, and by reducing the local pressures we can buy time as we find global solutions to preserve reefs for future generations.”

The report includes multiple recommendations to better protect and manage reefs, including through marine protected areas. The analysis shows that more than one-quarter of reefs are already encompassed in a range of parks and reserves, more than any other marine habitat. However, only six percent of reefs are in protected areas that are effectively managed.

“Well managed marine protected areas are one of the best tools to safeguard reefs,” said Mark Spalding, senior marine scientist at the Nature Conservancy and a lead author of the report. “At their core, reefs are about people as well as nature: ensuring stable food supplies, promoting recovery from coral bleaching, and acting as a magnet for tourist dollars. We need apply the knowledge we have to shore up existing protected areas, as well as to designate new sites where threats are highest, such as the populous hearts of the Caribbean, Southeast Asia, East Africa and the Middle East.”

Reefs offer multiple benefits to people and the economy – providing food, sustaining livelihoods, supporting tourism, protecting coasts, and even helping to prevent disease. According the report, more than 275 million people live in the direct vicinity (30 km/18 miles) of coral reefs. In more than 100 countries and territories, coral reefs protect 150,000 km (over 93,000 miles) of shorelines, helping defend coastal communities and infrastructure against storms and erosion.

For the first time, the report identifies the 27 nations most socially and economically vulnerable to coral reef degradation and loss. Among these, the nine most vulnerable countries are: Haiti, Grenada, Philippines, Comoros, Vanuatu, Tanzania, Kiribati, Fiji, and Indonesia.

“The people at greatest risk are those who depend heavily on threatened reefs, and who have limited capacity to adapt to the loss of the valuable resources and services reefs provide,” said Allison Perry, project scientist at the WorldFish Center and a lead author. “For highly vulnerable nations – including many island nations – there is a pressing need for development efforts to reduce dependence on reefs and build adaptive capacity, in addition to protecting reefs from threats.”

The report is an update of “Reefs at Risk,” released by WRI in 1998, which served as an important resource for policymakers to understand and address the threats of reefs. The new report uses the latest data and satellite information to map coral reefs— including a reef map with a resolution 64 times higher than the original report.

“Through new technology and improved data, this study provides valuable tools and information for decision makers from national leaders to local marine managers,” said Katie Reytar, research associate at WRI and a lead author. “In order to maximize the benefits of these tools, we need policymakers to commit to greater action to address the growing threats to coral reefs.”

Find out more at: www.wri.org/reefs

# # # #

The World Resources Institute (WRI) is a global environmental think tank that goes beyond research to put ideas into action. We work with governments, companies, and civil society to build solutions to urgent environmental challenges. (www.wri.org)

The Nature Conservancy(TNC) is a leading conservation organization working around the world to protect ecologically important lands and waters for nature and people. The Conservancy and its more than one million members have protected more than 480,000 sq km of land and engage in more than100 marine conservation projects. The Conservancy is actively working on coral reef conservation in 24 countries, including the Caribbean and the Coral Triangle. (www.nature.org)

WorldFish Center is an international, nonprofit, nongovernmental organization dedicated to reducing poverty and hunger by improving fisheries and aquaculture. Working in partnership with a wide range of agencies and research institutions, WorldFish carries out research to improve small-scale fisheries and aquaculture. Its work on coral reefs includes ReefBase, the global information system on coral reefs. (www.worldfishcenter.org)

International Coral Reef Action Network (ICRAN) is a global network of coral reef science and conservation organizations working together and with local stakeholders to improve the management of coral reef ecosystems. ICRAN facilitates the exchange and replication of good practices in coral reef management throughout the world’s major coral reef regions. (www.icran.org)

United Nations Environment Programme-World Conservation Monitoring Centre (UNEP-WCMC) is an internationally recognized center for the synthesis, analysis, and dissemination of global biodiversity knowledge. UNEP-WCMC provides authoritative, strategic, and timely information on critical marine and coastal habitats for conventions, countries, organizations, and companies to use in the development and implementation of their policies and decisions. (www.unep-wcmc.org)

Global Coral Reef Monitoring Network (GCRMN) is an operational unit of the International Coral Reef Initiative (ICRI) charged with coordinating research and monitoring of coral reefs. The network, with many partners, reports on ecological and socioeconomic monitoring and produces Status of Coral Reefs of the World reports covering more than 80 countries and states. (www.gcrmn.org)

Reefs at Risk in Southeast Asia

Maggie Barron — Fri, 18 Feb 2011 13:19:51 -0500

The coral reefs in Southeast Asia are the most threatened in the world. About 95 percent are at risk from local threats (i.e., coastal development, overfishing/destructive fishing, marine-based pollution, and/or watershed-based pollution), with almost half in the high and very high threat categories. The few places that are in the low-threat category are located in the more sparsely populated eastern areas.

Download hi-res version (JPEG, 2149 x 1843 px, 1.1 Mb)
View global maps of threats to coral reefs

MEDIA ADVISORY: "Reefs at Risk Revisited" Launch at National Press Club, Wednesday, February 23, 2011

Michael Oko — Fri, 11 Feb 2011 18:16:06 -0500

Dr. Jane Lubchenco, Administrator, NOAA, and leading experts discuss “Reefs at Risk Revisited” report findings and solutions.

WASHINGTON, D.C. – A new comprehensive analysis of the threats to coral reefs will be launched globally on Wednesday, February 23, 2011. More than 25 partners contributed to the report, and events will take place in Washington, D.C.; London, England; Malaysia; Australia; and other locations.

The D.C. event at the National Press Club will feature Dr. Jane Lubchenco, Administrator, NOAA; Jonathan Lash, President, WRI; Lauretta Burke, lead author, WRI; and Dr. Nancy Knowlton, Chair of Marine Science, Smithsonian Institution.

The groundbreaking report, “Reefs at Risk Revisited,” is the most detailed assessment of threats to coral reefs ever undertaken. Led by the World Resources Institute, along with the Nature Conservancy, the WorldFish Center, ICRAN, UNEP-WCMC, and GCRMN, it maps out local and global pressures on reefs; assesses the vulnerability of people in reef-dependent countries; and provides recommendations to safeguard reefs in the future.

WHAT:
“Reefs at Risk Revisited” launch event in Washington, D.C.

WHO:
Dr. Jane Lubchenco, Administrator, National Oceanic and Atmospheric Administration
Jonathan Lash, President, World Resources Institute
Lauretta Burke, Senior Associate and Lead Author, World Resources Institute
Dr. Nancy Knowlton, Sant Chair for Marine Science, Smithsonian Institution

WHEN:
Wednesday, February 23, 2011

TIME:
9:30 a.m. EST

WHERE:
National Press Club, Holeman Lounge 529 14th St. NW, Washington, D.C. 20045

CALL-IN:
US/Toll Free: (888) 989-5157 or
Int’l: +1 (517) 308-9270
Passcode: REEFS

RSVP REQUIRED: press@wri.org

Light breakfast and coffee will be served.

The Year in Illegal Logging: A Look Back

Craig Hanson — Fri, 07 Jan 2011 11:13:09 -0500

2010 was a significant year for global efforts to tackle illegal logging. Here’s a look back on some of that progress.

Long a problem in many of the world’s forests, illegal logging has unsustainable impacts. It deprives governments of tax revenue. It puts law-abiding companies at a competitive disadvantage. And it negatively impacts forest-dependent peoples, not to mention the world’s biodiversity and climate.

But 2010 brought encouraging news on the illegal logging front, and from both ends of the supply chain.

Let’s start with wood-producing countries. In July, the world learned from a Chatham House report that illegal logging fell by 50-75 percent during the past decade in Indonesia, Cameroon, and the Brazilian Amazon, three forest-rich nations. Better law enforcement, improved forest monitoring and increased focus on the issue all contributed to these improvements. More recently, Indonesia announced that it will deliberate a bill to toughen penalties for those involved in illegal logging, while Malaysia revised its Forest Act to stiffen penalties for illegal logging.

These are significant reductions and actions. Governments, many in the private sector, and civil society should be congratulated for their respective roles in these accomplishments.

2010 brought good news from wood-consuming countries, too. The United States indicated that it is serious about using the amended Lacey Act to curtail trade in illegal wood. For instance, reports came to light of a U.S. Fish & Wildlife Service seizure of tropical hardwoods from Peru and of movement on the investigation into Gibson’s alleged purchase of illegal wood from Madagascar.

Likewise, the European Union (EU) approved the EU Illegal Timber Regulation in 2010. Similar to Lacey, the law prohibits the sale in Europe of timber logged illegally under the rules of the country of origin. Furthermore, the Australian government recently announced plans to introduce a Lacey-like ban on illegal timber products.

Climate agreements regarding “Reduced Emissions from Deforestation and forest Degradation in developing countries” (REDD+) have the potential to reinforce existing efforts to curtail illegal logging. The same is true for the visionary forest-climate bilateral agreements between forest-rich countries such as Indonesia or Brazil and nations such as Norway.

The groundwork, therefore, appears to be laid for another year of progress. If so, 2011 would take a further cut out of the illegal cut.

Analyzing Environmental Trends in Asia

Dana Krechowicz — Fri, 25 Jun 2010 10:08:42 -0400

How can the financial community better understand the financial impacts of environmental trends?

Climate change and water scarcity will pose serious threats to countries in South and Southeast Asia over the next several decades. These threats, which range from more extreme weather events (like typhoons, floods, and droughts) to more limited water availability, are likely to have significant impacts on the region’s economies and industrial sectors. Gaining a better understanding of how and when environmental risks may impact company performance will help the region’s financial community accurately assess corporate value.

To that end, WRI and HSBC partnered to identify and quantify environmental risks facing key sectors in South and Southeast Asia, culminating in the recent release of three reports on the power, food and beverage, and real estate sectors.

Why is it so difficult to analyze the financial impacts of environmental trends in Southeast Asia? Today WRI releases Analyzing Environmental Trends: Taking the Pulse of Asia’s Financial Community, a working paper that looks at this question and draws on insights gained from the sector reports, as well as feedback from the region’s financial community. The paper frames the key challenges:

A lack of publicly available data relating to both environmental trends (for example, localized water scarcity data) and company-specific exposure to potential environmental risks (for example, the number of corporate facilities in water scarce areas);
Limited contextual analysis –- including examinations of social, economic and political drivers – for framing the complex connections between environmental trends and their financial impacts;
The highly unpredictable nature of environmental trends which limits analysts’ ability to forecast their likelihood and their magnitude.

Lack of Data

The lack of reliable environmental data raises particularly serious concerns in Asia, because this region is predicted to be among the highest impacted by environmental risks such as climate change. There is an urgent need for investors to engage with companies to obtain key data points, such as the specific location of key facilities and the security of a company’s access to key resource inputs such as water. Better information in these areas will help investors fully understand the extent to which environmental risk will impact companies.

Contextual Analysis

Data alone are not sufficient if they are not accompanied by contextual analysis. Contextual analysis entails understanding the extent to which a company or its facilities are: (1) exposed and (2) vulnerable to environmental impacts. A company’s geographical location (or that of its plants/facilities) determines its exposure to physical environmental trends, while the nature of a company’s operations determines its vulnerability to these trends.

To evaluate exposure to environmental trends, the WRI/HSBC research project used geographical information system (GIS) maps. The maps plotted the location of company operations (including facilities and plants) on areas of environmental exposure. In India, for example, 74 GW—over half of existing and planned capacity for major power companies—are located in areas considered to be water scarce or water stressed, which is significant because traditional power plants typically use significant amounts of water.

Thermal Power and Hydropower Plant Locations and Water Stress Level

Modeling Uncertainty

Arguably the most daunting challenge to assessing the financial impacts of environmental trends is the inherent uncertainty in forecasting both the magnitude of environmental risk and the degree of impact that adverse events would have have on companies. This forecasting ability is further complicated by the difficulty in isolating the impacts of environmental trends on company performance.

The WRI/HSBC research project tackled the challenge of uncertainty by initially engaging with environmental experts and companies in the region to establish qualitative connections between environmental risks and financial value. WRI constructed hypothetical but realistic environmental trend scenarios, which HSBC used as a basis to evaluate how companies would be impacted financially using sensitivity analysis. The primary aim of the research was to establish the connections between environmental risks and company value qualitatively, and then prove that they could also be financially material.

What role can the financial community play in improving understanding of environmental trends?

The WRI/HSBC paper suggests actions aimed at improving the quality of environmental data and at enhancing financial analysis methodologies:

1.Engage with companies to publicly disclose relevant environmental data and provide context for interpretation.

Financial analysis requires data (including resource use and dependencies) at the facility (or local) level as well as the company-wide level. Examples of the type of data required include:

Location of facilities
Revenue broken down by product and/or facility

2.Seek out environmental data sources from private data providers, academics, and governments.

The financial community can encourage governments to provide better environmental data at a national level, while working with private data providers to access environmental data at a local level. Examples of specific data that the financial community should seek from governments include:

Resource (e.g. water) availability data at the smallest scale possible
Data on local climate impact predictions

3.Apply methodologies that simulate financial uncertainties to environmental trends.

For analysts looking to take their environmental analysis one step further, WRI used the following methods to cope with uncertainty in analyzing the power sector:

Sensitivity analysis: For plants dependent on freshwater resources, conduct a plant level sensitivity analysis of Internal Rate of Return (IRR) impacts of outages and load losses. This will reveal which companies have the highest financial risk tied to disruptions.
Scenario analysis: Develop scenarios around water availability at the river basin level for each plant based on future projections (if available) or key risk factors present at the local level. When combined with the sensitivity analysis above, this provides insight into which plants are most at risk from water constraints and the potential magnitude of financial impact.
Management quality analysis: Assess and rank companies based on their strategies for mitigating water risk. (e.g. the extent of their water management strategies; their utilization of advanced technologies, such as air cooling, to reduce water dependency). Use this information to appropriately adjust conclusions from the sensitivity and scenarios analyses detailed above.

The availability and quality of environmental data in South and Southeast Asia remain limited, despite broad consensus that environmental trends are likely to have negative impacts across the region. This situation makes the need for better disclosure and environmental analysis all the more pressing and illustrates the clear role that Asia’s financial community can play in addressing this important gap.

The Government of Japan, through the International Finance Corporation (IFC), generously provided funding for this research.

Analyzing Environmental Trends: Taking the Pulse of Asia’s Financial Community

Maggie Barron — Thu, 24 Jun 2010 09:53:32 -0400

Executive Summary

In 2008, a unique research collaboration between The World Resources Institute (WRI) — a leading environmental think tank —and HSBC — a major global financial institution — was formed to better understand the financial materiality of environmental trends affecting selected sectors in Asia. This research collaboration produced in-depth, peer-reviewed research on the impacts of climate change and water scarcity in South and Southeast Asia’s power, food and beverage, and real estate sectors.

This working paper draws on insights gained from the research as well as feedback from the region’s financial community, to frame the key challenges that analyze the financial impacts of emerging environmental trends in the region.

These challenges can be summarized as:

A lack of publicly available data relating to both environmental trends (for example, localized water scarcity data) and company-specific exposure to potential environmental risks (for example, the number of corporate facilities in water scarce areas);
Limited contextual analysis for framing the complex connections between environmental trends and their financial impacts;
The highly unpredictable nature of environmental trends which limits the ability to forecast their likelihood and their magnitude.

While these challenges are not specific to South and Southeast Asia, this report provides examples of analysis that incorporates environmental trends in the region and suggests practical steps to enhance and expand how Asian (and other emerging) financial markets are responding to emerging environmental issues.

Surveying Risk, Building Opportunity: Financial Impacts of Energy, Water and Climate Risks on Real Estate in Asia

Maggie Barron — Fri, 16 Apr 2010 13:24:59 -0400

Energy insecurity, water scarcity, and climate change pose growing risks for the real estate sector in South and Southeast Asia, yet the connections between these trends and financial impacts are not well understood by analysts, investors, companies, and governments in the region. This report presents a framework to assess risks associated with these trends, and also discusses financial opportunities in the region’s growing green building market. The analysis considers current and planned commercial office buildings in India, Indonesia, Malaysia, Philippines, Thailand, and Vietnam, with a particular focus on the Indian market given the large size of its real estate market and data availability. The report’s lessons and the risk framework may also be applied and adapted to other countries and building types. Although other resource scarcity, demographic and/or environmental trends may be relevant to the region’s buildings (for example, air pollution, waste, or ecosystem degradation), the report’s scope extends only to specific aspects of energy insecurity, water scarcity, and climate change as defined in this report.

Key Points

Emerging energy insecurity, water scarcity, and climate change trends in South and Southeast Asia will affect the risk and return associated with investments in (1) commercial building projects and (2) companies involved in commercial real estate development and investing.
The focus countries’ limited energy and water infrastructure; rapidly growing demand for energy and water resources; and physical exposure and vulnerability to climate change impacts, all increase the likelihood and magnitude of financial impacts.
Green building investments can minimize energy and water-related risks while achieving net positive returns in as few as three years.

Over Heating: Financial Risks from Water Constraints on Power Generation in Asia

Tim Herzog — Fri, 16 Apr 2010 13:23:38 -0400

Key Findings and Context

Water-related risks are receiving more attention than in the past, yet the connection to power sector development is not well understood by investors, governments, and companies in South and Southeast Asia. This report presents a framework for investors and analysts to assess the risk of impacts from water-related issues, including growing water scarcity and declining water quality, on thermal and hydroelectric power generation plants. While this analysis focuses on publicly listed power generation companies in India, Malaysia, Philippines, Thailand, and Vietnam, the risks outlined may apply to listed power generation companies operating in other water scarce regions.

Emerging Asia is projected to have the fastest growth rate of power consumption in the world.

The drivers behind this power appetite – economic and population growth – are also increasing demands on limited freshwater resources.
The power sector requires a steady supply of water for cooling and generation to maintain loads and avoid disruptions.

The availability and quality of freshwater is rapidly declining in many parts of South and Southeast Asia due to demographic pressures and climate change.

India in particular faces critical water shortages in the next decade.
Malaysia, Thailand, the Philippines, and Vietnam are expected to face localized water pollution and shortages, with climatic patterns shifting towards longer dry seasons with more concentrated rainfall periods.

Investors are taking on more water risk.

The power sector is being liberalized in many countries in the region to attract the investment necessary to meet economic goals, with higher risk-reward propositions for investors.
Deregulated power markets may offer little or no protection to shareholders in the event of an outage or load loss resulting in lost revenues or increased costs (if stipulated by operating license).
New thermal and hydro power development places long-term bets on water availability – yet future water supplies are often uncertain and potentially oversubscribed in the most electric power hungry and water scarce regions.

Technology will play a key role in mitigating water risk yet at a price and efficiency tradeoff.

Advanced cooling systems for thermal power such as dry cooling can reduce or eliminate freshwater dependency yet increase carbon emissions per unit power output through efficiency losses.
Likewise there are water penalties for carbon dioxide emission reducing technologies such as carbon capture and storage.
These competing priorities make it difficult for investors and companies to anticipate the impact of future climate change and water policies on investments.

Water risk has been obscured to date by regulatory protections.

Examples of water-related load losses or outages have occurred throughout South and Southeast Asia yet the financial impact has been limited due in part to heavy governmental support that minimizes shareholder risks.
Shareholder protections will become more costly to sustain and may drive regulatory change as freshwater scarcity increases over the longer term.

74 GW – over half of existing and planned capacity for major power companies – is located in areas that are considered to be water scarce or stressed.

WRI mapped water scarcity data with plant locations for the largest publicly listed power generation companies in the region.

In India, 79% of new capacity will be built in areas that are already water scarce or stressed.

NTPC, Tata Power, and Reliance Infrastructure’s (including Reliance Power’s) new capacity is increasingly located in water scarce or stressed areas.
Water scarcity is expected to intensify in the future as the impacts of climate change and demographic pressures decrease renewable water supplies.

Three New Reports Examine Financial Impacts of Environmental Risks in Southeast Asia

Dana Krechowicz — Fri, 16 Apr 2010 13:03:25 -0400

Environmental risks in the power, food and beverage, and real estate sectors can pose new challenges for investors.

What are companies and investors doing about the environmental challenges that will affect their bottom lines? At WRI, we help the financial sector understand environmental risk, be it from climate change, water scarcity, or energy insecurity. We also help companies build resilience in their supply chains and help investors pick the forward-thinking companies that will be good environmental bets in the future.

To that end, the World Resources Institute and HSBC’s Climate Change Centre of Excellence have released new research analyzing the environmental risks facing the food & beverage, power and building sectors in India, Indonesia, Thailand, Malaysia, Vietnam and the Philippines.

The reports show that climate change, energy insecurity and water scarcity are strategic risks for investors in the region, and those companies that manage these risks stand to differentiate themselves from their peers in the future.

Water shortages put the Asian power sector at risk:

In India, for example, 74 GW – over half of existing and planned capacity for major power companies – is located in areas considered to be water scarce or water stressed.
Also in India, 79% of new power capacity will be built in areas that are already water scare or stressed.
Water shortages can cause costly delays and decreases in power production, lowering the rate of return on investment.

Asian food and beverage sector is vulnerable to climate and water risks:

The industry’s dependence on agriculture, aquaculture and water resources for business operations makes it particularly susceptible in a region where climate change is projected to severely intensify water scarcity problems.
Edible oils, starches, and sugar sub-sectors will be most vulnerable to increasing agricultural prices, while aquaculture, poultry, and dairy will be vulnerable to disease and contamination.
As part of the study, HSBC’s analysis on an Indian sugar company shows that a sugarcane price increase of 1 percent can lead to a decline in profit of up to 10 percent.

The commercial real estate sector in South Asia benefits from going green:

As electricity and water prices are expected to increase, “green” building retrofits or new construction can protect the Asian real estate sector from increasing environmental risks emerging in the region.
Most of the energy used by commercial buildings in the region goes toward air conditioning and lighting. In India, for example, lighting accounts for 60 percent of the energy used in commercial buildings while 32 percent goes toward air conditioning.
According to a case study, a typical commercial building (300,000 square feet) in Mumbai, a 1 percent increase in electricity costs could increase annual operating costs by approximately Rs 2.8 million, or around USD 60,000.

About the Reports:

Weeding Risk: Financial Impacts of Climate Change and Water Scarcity on Asia’s Food and Beverage Sector is the first report in the three-part series. It looks at seven food and beverage sub-sectors in the region. Findings suggest that the edible oils, starches, and sugar sub-sectors will be the most vulnerable to increasing environmental trends, such as climate change and water scarcity, in the region.

Over Heating: Financial Risks from Water Constraints on Power Generation, analyzes water-related risks facing thermal and hydroelectric power plants in India, Malaysia, the Philippines, Thailand and Vietnam. The analysis found that water shortages pose the highest risk for power generation companies in India compared to the other countries.

Surveying Risk, Building Opportunity: Financial Impacts of Energy Insecurity, Water Scarcity, and Climate Change on Asia’s Commercial Real Estate Sector, assesses the commercial building sector in the region and the financial impacts it could face from energy insecurity, water scarcity and climate change. The report finds that green building investments can alleviate these risks and achieve a positive return for buildings owners in a few years.

NEWS RELEASE: Water Shortages Put Asian Power Sector at Risk

Jessica Forres — Thu, 15 Apr 2010 16:49:11 -0400

More than half of existing and planned power plants in South and Southeast Asia are located in areas currently considered water scarce or stressed, according to findings in a report released today by the World Resources Institute (WRI) and HSBC’s Climate Change Centre of Excellence.

The new report, Over Heating: Financial Risks from Water Constraints on Power Generation, analyzes water-related risks facing thermal and hydroelectric power plants in India, Malaysia, the Philippines, Thailand and Vietnam. These plants require large amounts of water for cooling and generation.

WRI mapped the water stress level across the region and the location of more than 150 existing and planned facilities of the largest power-generation companies in the region. The analysis found that water shortages pose the highest risk for power generation companies in India.

“Water-related risks are hard to quantify, yet they present a growing risk to power generation,” said Piet Klop, acting director of WRI’s Markets and Enterprise Program. “The next step is to take our analysis to specific companies and their exposure and response to those risks. On the upside, investors have investment opportunities that can come from better understanding water-related risks.”

In India, approximately 62 percent of existing and 79 percent of planned thermal and hydroelectric power plants of the three largest power generation companies (NTPC, Tata Power, and Reliance Infrastructure) are located in water scarce or stressed areas. The country’s water demand is expected to outgrow supply by 50 percent by 2030 and estimates by the World Bank indicate that all available water supplies will be exhausted by 2050.

“The power sector investors and analysts are making long-term bets on water that, in the future, might no longer be reliable,” said Amanda Sauer, a senior associate at WRI. “They need to start assessing their exposure to water-related risks when considering long-term investment strategies.”

The report’s findings suggest that project delays due to water-permitting problems and general shortages may be costly. As part of the study, HSBC’s analysts found that a 12-month delay in commercial operation could lower the rate of return on investment by 1.5 percent. Furthermore, each 5 percent drop in power production due to water shortages could result in nearly a 0.75 percent drop in the project’s rate of return.

“The projected expansion of power generation - whether coal, hydro or gas – is exposed to growing water stress,” said Nick Robins, head of the Climate Change Centre of Excellence (C3E) at HSBC.

Roshan Padamadan, a HSBC analyst at the Centre said, “Investors need to understand how companies are managing these risks, including the specific steps to optimize water use at the plant level.”

Over heating is the second report in a three-part series. The first report, Weeding Risk, looks at climate change and water scarcity impacts on the food and beverage sector in India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. The third report, Surveying Risk, Building Opportunity, assesses environmental risks to commercial real estate in the region.

NEWS RELEASE: Asian Food and Beverage Sector Vulnerable to Climate and Water Risks

Jessica Forres — Thu, 15 Apr 2010 16:35:19 -0400

Environmental trends could have significant financial repercussions for the $40 billion food and beverage industry in South and Southeast Asia, according to a report released today by the World Resources Institute (WRI) and HSBC’s Climate Change Centre of Excellence.

“The food and beverage industry is particularly vulnerable to climate change and water scarcity in Asia. The region is already struggling with increased water demand because of population and economic growth,” said Dana Krechowicz, a WRI associate and co-author of the report.

The industry’s dependence on agriculture, aquaculture and water resources for business operations makes it particularly susceptible in a region where climate change is projected to severely intensify water scarcity problems.

WRI’s report, Weeding Risk, examines the impacts these growing trends will have on seven economically important food and beverage sub-sectors in six countries – India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

The report’s findings suggest that the edible oils, starches, and sugar sub-sectors will be most vulnerable to increasing agricultural prices, while aquaculture, poultry, and dairy will be vulnerable to disease and contamination. As part of the study, HSBC’s analysis on an Indian sugar company shows that a sugarcane price increase of 1 percent can lead to a decline in profit of up to 10 percent.

The risks identified in the report are already affecting some food and beverage sectors. Drought during the monsoon season in India caused sugar prices to reach a 28-year high in 2009. This is particularly troubling considering experts estimate that by 2020, the demand for water in India will exceed all its sources of supply.

“Water stress is set to have a growing role in shaping the sector,” said Nick Robins, head of the Climate Change Centre of Excellence at HSBC. Roshan Padamadan, a HSBC analyst at the Centre stated, “The strategic choices made by a company along its value chain can mitigate these risks, making it important for investors to understand its sourcing, inventory, and operational performance.”

Weeding Risk is the first report in a three-part series. The second report, Over Heating, analyzes the power sector in South and Southeast Asia. Surveying Risk, Building Opportunity, assesses the environmental risks to commercial real estate in the region.