Management also sees a lot of long-term potential for air pollution controlfor industries including cement, steel, coking etc. although minimal near-termearnings contribution is expected.
The agency estimates that the new regulation would by 2025 prevent from 320,000 to 960,000 asthma attacks in children, and from 330,000 to 1 million missed school days. It also estimates that by 2025 the rule would prevent 750 to 4,300 premature deaths, 1,400 to 4,300 asthma-related emergency room visits and 65,000 to 180,000 missed workdays. (4)The regulation would come with a high cost to industry, which the E.P.A. Estimates would be $ 3.9 billion in 2015, using a standard of 70 parts per billion. The cost would be $15 billion in 2015 at a standard of 65 parts per billion. (The E.P.A. chose 2025 as an example because that is when the agency expects the regulation to be fully in force。)
Directions: For this part, you are allowed 30 minutes to translate a passage from Chinese into English. You should write your answer on Answer Sheet 2.
Air pollution control for boilers, captive power plants and other industriesAs result of tightening regulation on air pollution, Beijing SPC Environment(002573 CH, Not rated) is seeing a lot of orders for installing additional deSOxand deNOx equipment for coal-fired boilers in China, which represent ~55% ofChina's coal consumption. In addition, captive power plants like that of AluminumCorp of China (2600 HK, Buy) have also been requested by Chinese regulatorsto upgrade emission standard by installing additional environmental facilities.
PPP funding and investment fundsThere may be some near-term sentiment impact on PPP from China's creditmarket tightening and Ministry of Finance's recent policy on managing localgovernment debt (MoF issued policy paper #50 in May requesting inspections onlocal government debts). However, they expect PPP roll-outs to normalize from2H17 as the inspections should be done by end July. Beijing Enterprises Water ishaving smooth negotiation with insurance companies to set up investment fundof RMB10bn. Some industry peers set up associates to hold the PPP projects(instead of consolidating the PPP projects) so that gearing at consolidated leveldoes not rise as fast as otherwise.
Next year, the E.P.A. is expected to make final two more historic Clean Air Act rules aimed at cutting planet-warming greenhouse gas emission from coal-fired power plants. (5)Those rules, which are intended to curb pollutants that contribute to climate change, could lead to the shutdown of hundreds of power plants and freeze construction of future coal plants。
Two-day environmental tour in BeijingWe hosted a two-day environmental tour in Beijing, visiting a number of H-shareand A-share environmental companies. The companies have business exposuresin areas including PPP, water treatment, air pollution treatment and landscapingetc. We summarize the key takeawaysPPP orders and growth outlook; Xiong'an New AreaBeijing Enterprises Water (371 HK, Buy), Orient Landscape (002310 CH, not rated)and Kingland Technology (000711 CH, Not rated) all expect very strong growthin order wins in 2017. As a result, all of them guide for over 25% earnings CAGRin 2016-18. There should also be sizable orders from the Xiong'an New Area forwater treatment (potentially over RMB100bn), although competition should befierce and the orders are unlikely to come through in 2017. Xiong'an is likely torequest high discharge standards (potentially surface water body class IV andabove), benefiting companies with technologies like membrane.
Washington—The Obama administration on Wednesday announced a long-delayed environmental regulation to curb emissions of ozone, a smog-causing pollutant linked to asthma, heart disease and premature death. (1)The sweeping regulation, which are aimed at smog caused by power plants and factories across the country, particularly in the Midwest, is the latest in a series of Environmental Protection Agency controls on air pollution that wafts from smokestacks and tailpipes. Such regulations, released under the authority of the Clean Air Act, have become a hallmark of President Obama’s administration。
In order to improve the environment, the municipal government also plans to build a good number of plants which can use recycled water and to stop illegal construction. In addition, Beijing will punish those people who violate the regulations of emission-reduction more severely。