Dust Buster.

Chile's Sustentable.cl aims to make clean air the bottom line.

POLLUTION MIGHT NOT BE A POPULAR subject among business leaders, but it could soon be a lucrative business. Sustentable.cl, a new Chilean Web site, promises to make a good on chemical waste and other unpleasant leftovers. Under the site's scheme, physical waste can be bought and sold and emissions credits, a kilo-per-day measurement of output traded like stock.

Santiaguinos have a long history withal esmog. When winter comes and winds die down, dirt in the air gets trapped in a valley among the Andes mountains. "Emergency" alerts often mean clinics fill with choking children. Schools shut down playgrounds, one by one up the valley, as the smog rises. Clean air proposals in recent years have ranged from spraying water over the city from airplanes to boring a hole in the surrounding foothills to allow pollution to escape.

In Chile's Metropolitan Region, surrounding the smog-bound capital Santiago, state environmental agencies have dissected the air, searching for a few known culprits in their uphill battle against la contaminacion. Industry, they concluded, contributes 20% of floating particulate matter, while buses and cars are responsible for 40%. Other sources include wood-burning fireplaces in Santiago-area homes, which dump about 13% of solid matter into the air.

Picking its battles carefully, the government has focused on industry and private transport first. Companies that plan to expand or open new plants must reduce or compensate their current emissions by 150%. This policy, part of the Clean Air Act in place since 1998, also establishes a cap on emissions until 2011. Industries that have reached output limits must buy emissions credits from other sources which pollute less. The idea is to provide an economic incentive to comply with regulations which might otherwise go unheeded.

Regulators hope contaminants in the air will lessen over time thanks to the introduction of cleaner technologies, in tandem with the compensation requirement of 150%. Since 1998, when emissions rules went into effect, annual levels of particulate matter in the air have fallen significantly to 2,600 tons from 8,200 tons. Dirt trader. Enter Sustentable, pollution's middleman. The site has created the first emissions exchange in Latin America. Since launching in January, Sustentable has earned the respect of both big industry and government agencies. Its main clients, however, are small businesses, which often get weighed down by a bureaucratic permit process which can cost up to US$9,000 a year, an onerous amount for small firms in Chile.

Windsor Industrial Dry Cleaning, a small, family-run business, decided to replace its fuel burner with natural gas, which meant it would pick up credits that could be sold on the online exchange.

Windsor's third-generation owner, Jorge Karzulovic, was among the first to list the company's "stock" in emissions output, currently 8.6 kilos per day. Another company that has already reached full capacity can buy Windsor stock, allowing everyone to continue operating. "Contacting Sustentable just made sense," says Karzulovic. "Now I don't think about the restrictions anymore. It's a much better arrangement. I can put my feet up now in the winter months."

These businesses also need basic services like news--there are no environmental trade publications--and guidance to find technologies that minimize pollution and maximize their emissions quota. "Without a doubt, Sustentable's service is invaluable. The lack of information surrounding the cause and effect of emissions and the ambiguity in the current regulations leaves room for a lot of error," says Alejandro Cofre, general manager of the industrial division at Ambar S.A., an environmental engineering firm.

In coordination with regional government agencies, the Web site provides the proper complaint forms to report a bus spewing black fumes or a business dumping waste in empty lots. It also offers visitors the documents necessary for submitting an opinion on pollution-related proposals, criticism that must be reviewed and included in the final analysis before legislation is proposed.

Gerdau Aza, an air-filter manufacturer with 320 employees, placed its first ad with Sustentable.cl. "I had no where else to go with the my high-tech air filters, so I decided to place an ad on their site," says Fernando Santivanez, general manager at Gerdau Aza. "Then I learned about the other services and now have three items on the residuals exchange. Sustentable has opened doors to new clients,"

Information source. Clemente Perez, Sustentable's director and a former head of the government environmental agency's metro region commission, says helping industry meet clean air standards was an economic niche begging to be filled.

"Most of our business is concentrated in consultant work, because there is a need for basic services and access to information regarding policies which are constantly changing as contamination levels rise and fall," Perez says. "I think it will be successful in the long term, because it is an innovative solution for business and it brings an economic incentive to a loathsome task."

Other polluted cities in the region, such as Mexico City and Sao Paulo, have similar regulations in place for industry yet compliance is low.

According to a study by the U.N.'s Economic Commission on Latin America and the Caribbean, Santiago's industrial sector is ahead of the game, comparatively: 3,000 of its approximately 5,000 industrial pollution sources are up to speed on emissions rules. This translates into fewer emergency alert days and better business, since shutdowns are less frequent.

Mexico City and Sao Paulo maintain the same limits as Santiago on daily emissions but have left industry to police itself, concentrating government resources instead on regulating other pollutors, such as transportation. Santiago, like Mexico City, has alternating days for restriction on private vehicles such as cars, but that's where regulations end, leaving the city choked with freelance bus drivers who contribute up to 40% of particulate matter, as well as other toxins.

The study concluded that in all three cities regulations must be constantly revised to accurately reflect the state of pollution, keeping a close eye on what works and what doesn't. Perez believes compensation laws can and should be extended to other sectors in Santiago, such as public transportation, construction and homes.

Changing rules. Regulations have forced many companies to rebuild their business with newer, cleaner technologies, such as compressed natural gas, which reduces emissions to 2.5% from 7%. As contamination rises, however, the threat of mandated production stoppages makes compensation regulations and waste recycling attractive alternatives in the battle to cut air pollution.

Some authorities say that with the introduction of natural gas over coal and oil an emissions exchange will become superfluous. Perez admits the exchange is still in an embryonic stage.

"No one knew at what price to set their stock, and it has been a step-by-step process," Perez says. He points out, however, that natural gas is not the bottom line in emissions because current regulations only restrict the amount of breathable particulate matter. Other contaminants, he says, such as sulfur dioxide, volatile organic matter and ammonia, will soon be limited under new compensation laws.

An emissions exchange such as Sustentable, Perez believes, can double the success rate of compensation laws, cutting the level of toxins in the air and making smog less and less a part of city life, something for which both manufacturers and school kids in the Santiago valley can be thankful.

Dirty Burgs
Pollution levels in some major
world cities
CITY            SULFUR   LEAD   CARBON   NITROGEN  OZONE
                DIOXIDE        MONOXIDE  DIOXIDE
BEIJING            *      #       @         #        *
BUENOS AIRES       @      #       @         @        @
CALCUTTA           #      #       @         #        @
LONDON             #      #       *         #        #
MEXICO CITY        *      *       *         *        *
NEW YORK           #      #       *         #        *
RIO DE JANEIRO     *      #       #         @        @
SANTIAGO           #      #       *         *        *
SAO PAULO          #      #       *         *        *
SEOUL              *      #       #         #        #
TOKYO              #      @       #         #        *
(*)Serious problem * Moderate pro-
blem (#)Low, only occationally a
problem (@)Insufficient informa-
tion
SOURCE: Economic Commission on
Latin American and the Caribbean.