UNCTAD
TRADE
TRADE
ANDAND
ENVIRONMENT
ENVIRONMENT
REVIEW
REVIEW
20132013
KEY MESSAGES
TRADE AND ENVIRONMENT REVIEW 2013
UNITED NATIONS
• The 2008 food crisis was an important catalyst for realizing the need for a fundamental transformation and questioning
some of the assumptions that had driven food, agricultural and trade policy in recent decades. However, actual results
achieved since 2008 suggest that a paradigm shift has started, but is largely incomplete. Priority remains heavily focused on
increasing industrial agricultural production, mostly under the slogan “growing more food at less cost to the environment”.
The perception that there is a supply-side productivity problem is however questionable. Hunger and malnutrition are mainly
related to lack of purchasing power and/or inability of rural poor to be self-sufficient. Meeting the food security challenges
is thus primarily about empowerment of the poor and their food sovereignty. Furthermore, the current demand trends for
biofuels, concentrate animal feed, excessively meat-based diets and post-harvest food waste are regarded as given, rather
than challenging their rational.
• The fundamental transformation of agriculture may well turn out to be one of the biggest challenges, including for
international security, of the 21st century. Much slower agricultural productivity growth in the future, a quickly rising
population in the most resource-constrained and climate-change-exposed regions (in particular in sub-Saharan Africa and
South Asia) and a burgeoning environmental crises of agriculture are the seeds for mounting pressures on food security
and the related access to land and water. This is bound to increase the frequency and severity of riots, caused by food-price
hikes, with concomitant political instability, and international tension, linked to resource conflicts and migratory movements
of staving populations.
• The world needs a paradigm shift in agricultural development: from a “green revolution” to an “ecological
intensification” approach. This implies a rapid and significant shift from conventional, monoculture-based and highexternal-input-dependent industrial production towards mosaics of sustainable, regenerative production systems that also
considerably improve the productivity of small-scale farmers. We need to see a move from a linear to a holistic approach in
agricultural management, which recognizes that a farmer is not only a producer of agricultural goods, but also a manager
of an agro-ecological system that provides quite a number of public goods and services (e.g. water, soil, landscape, energy,
biodiversity, and recreation).
• The required transformation is much more profound than simply tweaking the existing industrial agricultural system.
Rather, what is called for is a better understanding of the multi-functionality of agriculture, its pivotal importance for pro-poor
rural development and the significant role it can play in dealing with resource scarcities and in mitigating and adapting to
climate change. However, the sheer scale at which modified production methods would have to be adopted, the significant
governance issues, the power asymmetries’ problems in food input and output markets as well as the current trade rules for
agriculture pose considerable challenges.
• Elements and key achievements of the required transformation of agriculture, elaborated upon by the authors of this
Review, include:
- Increasing soil carbon content and better integration between crop and livestock production, and increased incorporation
(not segregation) of trees (agroforestry) and wild vegetation.
- Reduction of direct and indirect (i.e. through the feed chain) greenhouse-gas emissions of livestock production.
- Reduction of indirect (i.e. changes in land-use-induced) GHG emissions through sustainable peatland, forest and grassland
management.
- Optimization of organic and inorganic fertilizer use, including through closed nutrient cycles in agriculture.
- Reduction of waste throughout the food chains.
- Changing dietary patterns towards climate-friendly food consumption.
- Reform of the international trade regime for food and agricultural products.
• In pursuing a fundamental transformation of agriculture, one should take into account systemic considerations
in particular (i) the need for a holistic understanding of the challenges involved due to inter-linkages between sometimes
competing objectives; (ii) the merits and demerits of single climate-friendly practices versus those of systemic changes (such
as agro-ecology, agro-forestry, organic agriculture); and (iii) the need for a two-track approach that drastically reduces the
environmental impact of conventional agriculture, on the one hand, and broadens the scope for agro-ecological production
methods, on the other.
U n i t e d N at i o n s C o n f e r e n c e o n T r a d e A n d D e v e l o p m e n t
MAKE AGRICULTURE
MAKE AGRICULTURE
TRULY SUSTAINABLE
TRULY SUSTAINABLE
NOW FOR
NOW
FOOD
FORSECURITY
FOOD SECURITY
IN A CHANGING
IN A CHANGING
CLIMATE
CLIMATE
EMBARGO
The contents of this Report must not be
quoted or summarized in the print,
broadcast or electronic media before
18 September 2013, 17:00 hours GMT
KEY MESSAGES
tThe 2008 food crisis was an important catalyst for realizing the need for a fundamental transformation and questioning
some of the assumptions that had driven food, agricultural and trade policy in recent decades.)PXFWFSBDUVBMSFTVMUT
BDIJFWFETJODFTVHHFTUUIBUBQBSBEJHNTIJGUIBTTUBSUFECVUJTMBSHFMZJODPNQMFUF1SJPSJUZSFNBJOTIFBWJMZGPDVTFEPO
JODSFBTJOHJOEVTUSJBMBHSJDVMUVSBMQSPEVDUJPONPTUMZVOEFSUIFTMPHBOiHSPXJOHNPSFGPPEBUMFTTDPTUUPUIFFOWJSPONFOUw
5IFQFSDFQUJPOUIBUUIFSFJTBTVQQMZTJEFQSPEVDUJWJUZQSPCMFNJTIPXFWFSRVFTUJPOBCMF)VOHFSBOENBMOVUSJUJPOBSFNBJOMZ
SFMBUFEUPMBDLPGQVSDIBTJOHQPXFSBOEPSJOBCJMJUZPGSVSBMQPPSUPCFTFMGTVGýDJFOU.FFUJOHUIFGPPETFDVSJUZDIBMMFOHFT
JTUIVTQSJNBSJMZBCPVUFNQPXFSNFOUPGUIFQPPSBOEUIFJSGPPETPWFSFJHOUZ'VSUIFSNPSFUIFDVSSFOUEFNBOEUSFOETGPS
CJPGVFMTDPODFOUSBUFBOJNBMGFFEFYDFTTJWFMZNFBUCBTFEEJFUTBOEQPTUIBSWFTUGPPEXBTUFBSFSFHBSEFEBTHJWFOSBUIFS
UIBODIBMMFOHJOHUIFJSSBUJPOBM
tThe fundamental transformation of agriculture may well turn out to be one of the biggest challenges, including for
international security, of the 21st century. .VDI TMPXFS BHSJDVMUVSBM QSPEVDUJWJUZ HSPXUI JO UIF GVUVSF B RVJDLMZ SJTJOH
QPQVMBUJPOJOUIFNPTUSFTPVSDFDPOTUSBJOFEBOEDMJNBUFDIBOHFFYQPTFESFHJPOTJOQBSUJDVMBSJOTVC4BIBSBO"GSJDBBOE
4PVUI"TJB
BOEBCVSHFPOJOHFOWJSPONFOUBMDSJTFTPGBHSJDVMUVSFBSFUIFTFFETGPSNPVOUJOHQSFTTVSFTPOGPPETFDVSJUZ
BOEUIFSFMBUFEBDDFTTUPMBOEBOEXBUFS5IJTJTCPVOEUPJODSFBTFUIFGSFRVFODZBOETFWFSJUZPGSJPUTDBVTFECZGPPEQSJDF
IJLFTXJUIDPODPNJUBOUQPMJUJDBMJOTUBCJMJUZBOEJOUFSOBUJPOBMUFOTJPOMJOLFEUPSFTPVSDFDPOþJDUTBOENJHSBUPSZNPWFNFOUT
PGTUBWJOHQPQVMBUJPOT
tThe world needs a paradigm shift in agricultural development: from a “green revolution” to an “ecological
intensification” approach. 5IJT JNQMJFT B SBQJE BOE TJHOJýDBOU TIJGU GSPN DPOWFOUJPOBM NPOPDVMUVSFCBTFE BOE IJHI
FYUFSOBMJOQVUEFQFOEFOUJOEVTUSJBMQSPEVDUJPOUPXBSETNPTBJDTPGTVTUBJOBCMFSFHFOFSBUJWFQSPEVDUJPOTZTUFNTUIBUBMTP
DPOTJEFSBCMZJNQSPWFUIFQSPEVDUJWJUZPGTNBMMTDBMFGBSNFST8FOFFEUPTFFBNPWFGSPNBMJOFBSUPBIPMJTUJDBQQSPBDIJO
BHSJDVMUVSBMNBOBHFNFOUXIJDISFDPHOJ[FTUIBUBGBSNFSJTOPUPOMZBQSPEVDFSPGBHSJDVMUVSBMHPPETCVUBMTPBNBOBHFS
PGBOBHSPFDPMPHJDBMTZTUFNUIBUQSPWJEFTRVJUFBOVNCFSPGQVCMJDHPPETBOETFSWJDFTFHXBUFSTPJMMBOETDBQFFOFSHZ
CJPEJWFSTJUZBOESFDSFBUJPO
tThe required transformation is much more profound than simply tweaking the existing industrial agricultural system.
3BUIFSXIBUJTDBMMFEGPSJTBCFUUFSVOEFSTUBOEJOHPGUIFNVMUJGVODUJPOBMJUZPGBHSJDVMUVSFJUTQJWPUBMJNQPSUBODFGPSQSPQPPS
SVSBMEFWFMPQNFOUBOEUIFTJHOJýDBOUSPMFJUDBOQMBZJOEFBMJOHXJUISFTPVSDFTDBSDJUJFTBOEJONJUJHBUJOHBOEBEBQUJOHUP
DMJNBUFDIBOHF)PXFWFSUIFTIFFSTDBMFBUXIJDINPEJýFEQSPEVDUJPONFUIPETXPVMEIBWFUPCFBEPQUFEUIFTJHOJýDBOU
HPWFSOBODFJTTVFTUIFQPXFSBTZNNFUSJFTQSPCMFNTJOGPPEJOQVUBOEPVUQVUNBSLFUTBTXFMMBTUIFDVSSFOUUSBEFSVMFTGPS
BHSJDVMUVSFQPTFDPOTJEFSBCMFDIBMMFOHFT
tElements and key achievements of the required transformation of agriculture, elaborated upon by the authors of this
Review, include:
*ODSFBTJOHTPJMDBSCPODPOUFOUBOECFUUFSJOUFHSBUJPOCFUXFFODSPQBOEMJWFTUPDLQSPEVDUJPOBOEJODSFBTFEJODPSQPSBUJPO
OPUTFHSFHBUJPO
PGUSFFTBHSPGPSFTUSZ
BOEXJMEWFHFUBUJPO
3FEVDUJPOPGEJSFDUBOEJOEJSFDUJFUISPVHIUIFGFFEDIBJO
HSFFOIPVTFHBTFNJTTJPOTPGMJWFTUPDLQSPEVDUJPO
3FEVDUJPOPGJOEJSFDUJFDIBOHFTJOMBOEVTFJOEVDFE
()(FNJTTJPOTUISPVHITVTUBJOBCMFQFBUMBOEGPSFTUBOEHSBTTMBOE
NBOBHFNFOU
0QUJNJ[BUJPOPGPSHBOJDBOEJOPSHBOJDGFSUJMJ[FSVTFJODMVEJOHUISPVHIDMPTFEOVUSJFOUDZDMFTJOBHSJDVMUVSF
3FEVDUJPOPGXBTUFUISPVHIPVUUIFGPPEDIBJOT
$IBOHJOHEJFUBSZQBUUFSOTUPXBSETDMJNBUFGSJFOEMZGPPEDPOTVNQUJPO
3FGPSNPGUIFJOUFSOBUJPOBMUSBEFSFHJNFGPSGPPEBOEBHSJDVMUVSBMQSPEVDUT
tIn pursuing a fundamental transformation of agriculture, one should take into account systemic considerations
JOQBSUJDVMBSJ
UIFOFFEGPSBIPMJTUJDVOEFSTUBOEJOHPGUIFDIBMMFOHFTJOWPMWFEEVFUPJOUFSMJOLBHFTCFUXFFOTPNFUJNFT
DPNQFUJOHPCKFDUJWFTJJ
UIFNFSJUTBOEEFNFSJUTPGTJOHMFDMJNBUFGSJFOEMZQSBDUJDFTWFSTVTUIPTFPGTZTUFNJDDIBOHFTTVDI
BTBHSPFDPMPHZBHSPGPSFTUSZPSHBOJDBHSJDVMUVSF
BOEJJJ
UIFOFFEGPSBUXPUSBDLBQQSPBDIUIBUESBTUJDBMMZSFEVDFTUIF
FOWJSPONFOUBMJNQBDUPGDPOWFOUJPOBMBHSJDVMUVSFPOUIFPOFIBOEBOECSPBEFOTUIFTDPQFGPSBHSPFDPMPHJDBMQSPEVDUJPO
NFUIPETPOUIFPUIFS
LL
75$'($1'(19,5210(175(9,(:
1RWH
7KHYLHZVH[SUHVVHGLQWKHDUWLFOHVFRQWDLQHGLQWKLV5HYLHZDUHWKHSHUVRQDOYLHZVRIWKHDXWKRUVDQGGRQRW
QHFHVVDULO\UHÁHFWWKHSRVLWLRQVRIWKHLUUHVSHFWLYHRUJDQL]DWLRQVRULQVWLWXWLRQV7KHUHIRUHWKHYLHZVH[SUHVVHG
LQWKLV5HYLHZVKRXOGEHDWWULEXWHGWRWKHDXWKRUVDQGQRWWRDQ\LQVWLWXWLRQRUWR81&7$'RULWVPHPEHU6WDWHV
$Q\UHIHUHQFHWRDFRPSDQ\DQGLWVDFWLYLWLHVVKRXOGQRWEHFRQVWUXHGDVDQHQGRUVHPHQWE\81&7$'RUE\WKH
DXWKRUVRUWKHLULQVWLWXWLRQVRIWKHFRPSDQ\RULWVDFWLYLWLHV
0DWHULDOLQWKLVSXEOLFDWLRQPD\EHIUHHO\TXRWHGRUUHSULQWHGEXWDFNQRZOHGJHPHQWLVUHTXHVWHGWRJHWKHUZLWK
DUHIHUHQFHWRWKHGRFXPHQWQXPEHU$FRS\RIWKHSXEOLFDWLRQFRQWDLQLQJWKHTXRWDWLRQRUUHSULQWVKRXOGEHVHQW
WRWKH2IÀFHRIWKH'LUHFWRU'LYLVLRQRQ,QWHUQDWLRQDO7UDGHLQ*RRGVDQG6HUYLFHVDQG&RPPRGLWLHV3DODLVGHV
1DWLRQV*HQHYD6ZLW]HUODQG
)RUFRPPHQWVRQWKLVUHYLHZSOHDVHFRQWDFWWUDGHHQYLURQPHQW#XQFWDGRUJ7KLVUHYLHZLVDOVRDYDLODEOHDW
KWWSXQFWDGRUJHQ3DJHV',7&7UDGHDQG(QYLURQPHQW5HYLHZ6HULHVDVS[
81&7$'',7&7('
81,7('1$7,21638%/,&$7,21
,661
&RS\ULJKW‹8QLWHG1DWLRQV
$OOULJKWVUHVHUYHG
LLL
)RUHZRUG
)RUHZRUG
1RWORQJDIWHUWKHIRRGSULFHFULVLVKLJKDQGYRODWLOHIRRGSULFHVDUHEDFNLQWKHLQWHUQDWLRQDODJHQGD
FUHDWLQJUHQHZHGFRQFHUQVIRUZRUOGIRRGVHFXULW\2QFHDJDLQGLVFXVVLRQVDUHPRVWO\IRFXVHGRQVXJJHVWLQJ
TXLFNÀ[HVOLQNHGWRVRPHVSHFLÀFFRQWULEXWLQJIDFWRUVVXFKDVIRRGSULFHVSHFXODWLRQRUWKHLQFUHDVLQJXVH
RIELRHQHUJ\,QVXIÀFLHQWDWWHQWLRQLVEHLQJSDLGWRWKHIDFWWKDWWKHLQFUHDVLQJHQHUJ\LQWHQVLW\RIDJULFXOWXUDO
SURGXFWLRQ DQG WKH GLUHFW DQG LQGLUHFW OLQN EHWZHHQ DJULFXOWXUDO DQG IXHO SULFHV ZDV DPRQJ WKH XQGHUO\LQJ
IDFWRUVWKDWWULJJHUHGWKHFULVLVDQGQRZFRQWULEXWHVDJDLQWRWKHFXUUHQWURXQGRIIRRGSULFHHVFDODWLRQ
)XUWKHUPRUH WKH UHFHQW GURXJKW DIIHFWLQJ WKH PDLQ 86 JUDLQ SURGXFWLRQ ]RQHV SXWWLQJ XSZDUG SUHVVXUH RQ
LQWHUQDWLRQDOJUDLQSULFHVLVDQLQFLGHQWQRZLQFUHDVLQJO\IUHTXHQWDQGZLGHVSUHDGZLWKJOREDOZDUPLQJ$VWKLV
5HYLHZKLJKOLJKWVDJULFXOWXUHLVQRWRQO\FKLHÁ\DIIHFWHGE\JOREDOZDUPLQJEXWDOVRRQHRILWVGULYLQJIRUFHV
4XLFNÀ[HVZLOOQRWEHDEOHWRHIIHFWLYHO\GHDOZLWKWKHFRPSOH[LQWHUSOD\EHWZHHQHQHUJ\LQWHQVLW\JUHHQKRXVH
JDVHPLVVLRQVJOREDOZDUPLQJDQGIRRGVHFXULW\QHHGV5DWKHUZKDWLVFDOOHGIRULVDEHWWHUXQGHUVWDQGLQJRI
WKHPXOWLIXQFWLRQDOLW\RIDJULFXOWXUHLWVSLYRWDOLPSRUWDQFHIRUSURSRRUUXUDOGHYHORSPHQWDQGWKHVLJQLÀFDQWUROH
LWFDQSOD\LQGHDOLQJZLWKUHVRXUFHVFDUFLWLHVDQGLQPLWLJDWLQJDQGDGDSWLQJWRFOLPDWHFKDQJH
'HVSLWHVLJQLÀFDQWLQFUHDVHVLQDJULFXOWXUDOSURGXFWLYLW\DQGWKHIDFWWKDWWKHZRUOGFXUUHQWO\DOUHDG\SURGXFHV
VXIÀFLHQWFDORULHVSHUKHDGWRIHHGDJOREDOSRSXODWLRQRIELOOLRQKXQJHUKDVUHPDLQHGDNH\FKDOOHQJH
$URXQGRQHELOOLRQSHRSOHFKURQLFDOO\VXIIHUIURPVWDUYDWLRQDQGDQRWKHUELOOLRQDUHPDOQRXULVKHG6RPHSHU
FHQWRIWKHVHSHRSOHDUHWKHPVHOYHVVPDOOIDUPHUVRUDJULFXOWXUDOODERUHUV7KHUHIRUHKXQJHUDQGPDOQXWULWLRQ
DUHQRWSKHQRPHQDRILQVXIÀFLHQWSK\VLFDOVXSSO\EXWUHVXOWVRISUHYDLOLQJSRYHUW\DQGDERYHDOOSUREOHPVRI
DFFHVVWRIRRG(QDEOLQJWKHVHSHRSOHWREHFRPHIRRGVHOIVXIÀFLHQWRUHDUQDQDSSURSULDWHLQFRPHWKURXJK
DJULFXOWXUHWREX\IRRGQHHGVWRWDNHFHQWHUVWDJHLQIXWXUHDJULFXOWXUDOWUDQVIRUPDWLRQ0LOOHQQLXP'HYHORSPHQW
*RDOQXPEHURQHLVERXQGWREHPLVVHGPDLQO\EHFDXVHDJULFXOWXUHKDVQRWUHFHLYHGWKHDWWHQWLRQLWGHVHUYHV
IRUDFKLHYLQJIRRGVHFXULW\DQGDVDQHQJLQHRIVXVWDLQDEOHHFRQRPLFVRFLDODQGHQYLURQPHQWDOGHYHORSPHQW
LQGHYHORSLQJFRXQWULHV
1RGRXEWWKHIRRGSULFHFULVLVOHGWRDUHYHUVDORIWKHORQJWHUPQHJOHFWRIDJULFXOWXUHDVDYLWDOHFRQRPLF
VHFWRULQGHYHORSLQJFRXQWULHV$OVRWKHGHFOLQLQJWUHQGRISXEOLFIXQGLQJIRUDJULFXOWXUHZDVDUUHVWHGDQGVRPH
QHZ IXQGLQJ KDV UHFHQWO\ EHHQ FRPPLWWHG +RZHYHU WKH LPSOHPHQWDWLRQ RI WKHVH FRPPLWPHQWV ODFNV ZD\
EHKLQGUHTXLUHPHQWV2QHGRHVQHLWKHUVHHWKHQHFHVVDU\OHYHORIXUJHQF\QRUWKHSROLWLFDOZLOOLQJQHVVIURPWKH
LQWHUQDWLRQDOFRPPXQLW\IRUGUDVWLFFKDQJHV3ULRULW\UHPDLQVKHDYLO\IRFXVHGRQLQFUHDVLQJSURGXFWLRQPRVWO\
XQGHUWKHVORJDQ´PRUHZLWKOHVVµ7KHFXUUHQWO\SXUVXHGDSSURDFKLVVWLOOYHU\PXFKELDVHGWRZDUGVH[SDQVLRQ
RI ´VRPHZKDWOHVVSROOXWLQJµ LQGXVWULDO DJULFXOWXUH UDWKHU WKDQ PRUH VXVWDLQDEOH DQG DIIRUGDEOH SURGXFWLRQ
PHWKRGV,WLVVWLOOQRWUHFRJQL]HGWKDWDSDUDGLJPVKLIWLVUHTXLUHGLQSDUWLFXODUDFFHQWXDWHGE\WKHLQFUHDVLQJ
SUHVVXUHVFRPLQJIURPFOLPDWHFKDQJHPLWLJDWLRQDQGDGDSWDWLRQ$VFRUUHFWO\KLJKOLJKWHGLQWKH5HYLHZJOREDO
ZDUPLQJLVDWKUHDWPXOWLSOLHULWFRPSRXQGVVXSSOHPHQWVRUUHLQIRUFHVRWKHUWKUHDWVVRWKDWWKHELRSK\VLFDO
YXOQHUDELOLW\RIDJULFXOWXUHLQFUHDVHVLPSDFWLQJWKHPRVWYXOQHUDEOHSHRSOHLQWKHZRUOG
6ORZLQJDJULFXOWXUDOSURGXFWLYLW\JURZWKLQWKHIXWXUHKLJKSRSXODWLRQJURZWKLQWKHPRVWUHVRXUFHFRQVWUDLQHG
DQGFOLPDWHFKDQJHH[SRVHGUHJLRQVDQGDEXUJHRQLQJHQYLURQPHQWDOFULVHVLQDJULFXOWXUHDUHWKHVHHGVIRU
PRXQWLQJSUHVVXUHVRQIRRGVHFXULW\DQGWKHUHODWHGDFFHVVWRODQGDQGZDWHU7KLVLVERXQGWRLQFUHDVHWKH
VHYHULW\ DQG IUHTXHQF\ RI ULRWV RULJLQDWHG E\ IRRG SULFH LQFUHDVHV ZLWK FRQFRPLWDQW SROLWLFDO LQVWDELOLW\ DQG
LQWHUQDWLRQDOWHQVLRQFDXVHGE\UHVRXUFHFRQÁLFWVDQGPLJUDWRU\PRYHPHQWVRIVWDUYLQJSRSXODWLRQV7KXVWKH
IXQGDPHQWDOWUDQVIRUPDWLRQRIDJULFXOWXUHPD\ZHOOWXUQRXWWREHRQHRIWKHELJJHVWFKDOOHQJHVLQFOXGLQJIRU
LQWHUQDWLRQDOVHFXULW\RIWKHVWFHQWXU\
,QSDUDJUDSKRIWKH5LR'HFODUDWLRQDGRSWHGLQ-XQH+HDGVRI6WDWHUHDIÀUPWKHLU´FRPPLWPHQWV
UHJDUGLQJWKHULJKWRIHYHU\RQHWRKDYHDFFHVVWRVDIHVXIÀFLHQWDQGQXWULWLRXVIRRGFRQVLVWHQWZLWKWKHULJKW
WRDGHTXDWHIRRGDQGWKHIXQGDPHQWDOULJKWRIHYHU\RQHWREHIUHHIURPKXQJHU7KH\DFNQRZOHGJHWKDWIRRG
LY
75$'($1'(19,5210(175(9,(:
VHFXULW\DQGQXWULWLRQKDVEHFRPHDSUHVVLQJJOREDOFKDOOHQJHDQGLQWKLVUHJDUGWKH\IXUWKHUUHDIÀUPWKHLU
FRPPLWPHQWWRHQKDQFLQJIRRGVHFXULW\DQGDFFHVVWRDGHTXDWHVDIHDQGQXWULWLRXVIRRGIRUSUHVHQWDQGIXWXUH
JHQHUDWLRQVµ,WLVKLJKWLPHIRUWKHVHFRPPLWPHQWVWRFRPHWRUHDOLW\EHIRUHWKH0'*V·GHDGOLQHRI
,Q WKLV 7UDGH DQG (QYLURQPHQW 5HYLHZ PRUH WKDQ LQWHUQDWLRQDO H[SHUWV KDYH FRQWULEXWHG WKHLU YLHZV WR D
FRPSUHKHQVLYH DQDO\VLV RI WKH DERYHRXWOLQHG FKDOOHQJHV DQG WKH PRVW VXLWDEOH VWUDWHJLF DSSURDFKHV IRU
GHDOLQJ KROLVWLFDOO\ ZLWK WKH LQWHUUHODWHG SUREOHPV RI KXQJHU DQG SRYHUW\ FOLPDWH FKDQJH HFRQRPLF VRFLDO
DQGJHQGHULQHTXLW\SRRUKHDOWKDQGQXWULWLRQDQGHQYLURQPHQWDOVXVWDLQDELOLW\7KHDXWKRUVDQGWKH81&7$'
VHFUHWDULDWDUHORRNLQJIRUZDUGWRDQLQVSLULQJGLDORJXHZLWKUHDGHUVRIWKLV5HYLHZRQRQHRIWKHPRVWLQWHUHVWLQJ
DQGFKDOOHQJLQJVXEMHFWVRISUHVHQWGHYHORSPHQWGLVFRXUVH
*HQHYD0DUFK
&DUORV3pUH]GHO&DVWLOOR
&KDLUPDQ&RQVRUWLXP%RDUG
*OREDO5HVHDUFK3DUWQHUVKLSIRU
D)RRG6HFXUH)XWXUH&*,$5
Y
&RQWHQWV
&RQWHQWV
)RUHZRUG&DUORV3pUH]GHO&DVWLOOR&KDLUPDQ&RQVRUWLXP%RDUG&*,$5LLL
$FNQRZOHGJHPHQWV [L
$FURQ\PVDQGDEEUHYLDWLRQV[LL
&KDSWHU.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
/HDG$UWLFOH$JULFXOWXUHDWWKHFURVVURDGVDVVXULQJIRRGVHFXULW\LQGHYHORSLQJFRXQWULHVXQGHUWKH
FKDOOHQJHVRIJOREDOZDUPLQJ 8OULFK+RIIPDQQ81&7$'VHFUHWDULDW
$,QWURGXFWLRQ %$JULFXOWXUHDNH\GULYHUDQGDPDMRUYLFWLPRIJOREDOZDUPLQJ &5HTXLUHGIXQGDPHQWDOWUDQVIRUPDWLRQRIDJULFXOWXUH '7KHSDUDGLJPVKLIWKDVVWDUWHGEXWLVODUJHO\LQFRPSOHWH &RPPHQWDU\,$JULFXOWXUH$XQLTXHVHFWRULQHFRQRPLFHFRORJLFDODQGVRFLDOWHUPV -HDQ)H\GHU$PEDVVDGRU)RUPHU3HUPDQHQW5HSUHVHQWDWLYHRI/X[HPERXUJWRWKH81DQG:72LQ*HQHYD
&RPPHQWDU\,,&RQFHSWXDODQGSUDFWLFDODVSHFWVRIFOLPDWHFKDQJHPLWLJDWLRQWKURXJKDJULFXOWXUH
UHGXFLQJJUHHQKRXVHJDVHPLVVLRQVDQGLQFUHDVLQJVRLOFDUERQVHTXHVWUDWLRQ $0OOHUDQG$*DWWLQJHU5HVHDUFK,QVWLWXWHRI2UJDQLF$JULFXOWXUH)L%/6ZLW]HUODQG
&RPPHQWDU\,,,7KHSRWHQWLDORIVXVWDLQDEOHDJULFXOWXUHIRUFOLPDWHFKDQJHDGDSWDWLRQ $0OOHUDQG81LJJOL5HVHDUFK,QVWLWXWHRI2UJDQLF$JULFXOWXUH)L%/6ZLW]HUODQG
&RPPHQWDU\,9)RRGFOLPDWHFKDQJHDQGKHDOWK\VRLOV7KHIRUJRWWHQOLQN *5$,1
&RPPHQWDU\90LWLJDWLQJFOLPDWHFKDQJHZLWKVRLORUJDQLFPDWWHULQRUJDQLFSURGXFWLRQV\VWHPV $QGUH/HX3UHVLGHQW,QWHUQDWLRQDO)HGHUDWLRQRI2UJDQLF$JULFXOWXUDO0RYHPHQWV,)2$0
&RPPHQWDU\9,$JURHFRORJ\$VROXWLRQWRWKHFULVHVRIIRRGV\VWHPVDQGFOLPDWHFKDQJH 2OLYLHUGH6FKXWWHU816SHFLDO5DSSRUWHXURQWKH5LJKWWR)RRG
&RPPHQWDU\9,,3URPRWLQJUHVLOLHQWDJULFXOWXUHLQVXE6DKDUDQ$IULFDDVDPDMRUSULRULW\LQ
FOLPDWHFKDQJHadaptation 0DUFXV.DSODQ&KLQZH,IHMLND6SHUDQ]DDQG,PPH6FKRO]*HUPDQ'HYHORSPHQW,QVWLWXWH
&RPPHQWDU\9,,,<LHOGDQG\LHOGTXDOLW\RIPDMRUFHUHDOVXQGHUFOLPDWHFKDQJH 3HWUD+|J\DQG$QGUHDV)DQJPHLHU8QLYHUVLW\RI+RKHQKHLP,QVWLWXWHIRU/DQGVFDSHDQG3ODQW(FRORJ\
&RPPHQWDU\,;&RPSDUDWLYHDQDO\VLVRIRUJDQLFDQGQRQRUJDQLFIDUPLQJV\VWHPV
DFULWLFDODVVHVVPHQWRIIDUPSURÀWDELOLW\ 1RpPL1HPHV)$2
&RPPHQWDU\;6WUHQJWKHQLQJUHVLOLHQFHRIIDUPLQJV\VWHPV$SUHUHTXLVLWHIRUVXVWDLQDEOH
DJULFXOWXUDOSURGXFWLRQ 0LJXHO$$OWLHUL8QLYHUVLW\RI&DOLIRUQLD%HUNHOH\DQG3DUYL].RRKDINDQ)$2
&RPPHQWDU\;,'HPRFUDWL]LQJFRQWURORIDJULFXOWXUHWRPHHWWKHQHHGVRIWKHWZHQW\ÀUVWFHQWXU\ 0DUFLD,VKLL(LWHPDQ3HVWLFLGH$FWLRQ1HWZRUN1RUWK$PHULFD
&RPPHQWDU\;,,$JULFXOWXUHIRRGDQGHQHUJ\ *XQQDU5XQGJUHQ*UROLQN$%&RQVXOWDQF\6ZHGHQ
YL
75$'($1'(19,5210(175(9,(:
&RPPHQWDU\;,,,6XVWDLQDEOHDJULFXOWXUHDQGRIIJULGUHQHZDEOHHQHUJ\ 0DH:DQ+R,QVWLWXWHRI6FLHQFHLQ6RFLHW\/RQGRQ
&RPPHQWDU\;,96RLO(URVLRQ$WKUHDWWRIRRGVHFXULW\DQGFOLPDWHFKDQJH 'DYLG3LPHQWHODQG0LFKDHO%XUJHVV&ROOHJHRI$JULFXOWXUHDQG/LIH6FLHQFHV&RUQHOO8QLYHUVLW\
,WKDFD1HZ<RUN
&RPPHQWDU\;9&RPSHWLWLRQIRUZDWHUIRUDJULFXOWXUHWKURXJK %UHQW%RHKOHUW,QGXVWULDO(FRQRPLFV,QFDQG.HQQHWK6WU]HSHN0DVVDFKXVHWWV,QVWLWXWHRI7HFKQRORJ\
&RPPHQWDU\;9,7KHLPSDFWRIDJULIRRGVXSSO\FKDLQVRQJUHHQKRXVHJDVHPLVVLRQV
7KHFDVHRIDFRIIHHYDOXHFKDLQEHWZHHQ7DQ]DQLDDQG*HUPDQ\ (.UDLQ./LQQHDQG0*DHEOHU*,=*HUPDQ\
&RPPHQWDU\;9,,)RRGZDVWHUHGXFWLRQ$JOREDOLPSHUDWLYH -XOLDQ3DUÀWW3ULQFLSDO5HVRXUFH$QDO\VW2DNGHQH+ROOLQV$\OHVEXU\8QLWHG.LQJGRPDQG
0DUN%DUWKHO6SHFLDO$GYLVRU:DVWHDQG5HVRXUFHV$FWLRQ3URJUDPPH%DQEXU\8QLWHG.LQJGRP
&RPPHQWDU\;9,,,7KHUROHRIVXVWDLQDEOHFRQVXPSWLRQLQIRVWHULQJDIXQGDPHQWDO
WUDQVIRUPDWLRQRIDJULFXOWXUH /XFLD5HLVFK&RSHQKDJHQ%XVLQHVV6FKRRO'HQPDUN
&RPPHQWDU\;,;)RRGVDIHW\DQGV\VWHPLFFKDQJH/LPLWDWLRQVRIIRRGFRQWUROVIRU
VDIHJXDUGLQJIRRGVDIHW\ -XWWD-DNVFKH3ROLF\2IÀFHU)RRG)HGHUDWLRQRI*HUPDQ&RQVXPHU2UJDQLVDWLRQV
5HIHUHQFHV 1RWHV &KDSWHU/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
/HDG$UWLFOH/LYHVWRFNSURGXFWLRQDQGIRRGVHFXULW\LQDFRQWH[WRIFOLPDWHFKDQJHDQG
HQYLURQPHQWDODQGKHDOWKFKDOOHQJHV $QLWD,GHO)HGHUDWLRQRI*HUPDQ6FLHQWLVWVDQG7RELDV5HLFKHUW*HUPDQZDWFK
$(IIHFWVRILQH[SHQVLYHHQHUJ\DQGQLWURJHQIHUWLOL]HUV %6XVWDLQDELOLW\UHTXLUHVDQHZGHÀQLWLRQRIWKHWHUPVSURGXFWLYLW\DQGJURZWK &7KHUROHRIDJULFXOWXUDODQGWUDGHSROLF\LQWKHLQGXVWULDOL]DWLRQRIDQLPDOSURGXFWLRQ '5LVNVDVVRFLDWHGZLWKVHOHFWLYHEUHHGLQJIRUKLJKHUSURGXFWLYLW\ (7KHSXVKIRUELRVHFXULW\SRVHVDWKUHDWWRDQLPDODQGFRQVXPHUSURWHFWLRQ ) 'HIRUHVWDWLRQDQGDQLPDOIHHGSURGXFWLRQ **UDVVODQGVDQGUXPLQDQWVDQH[DPSOHRIPLVFRQFHSWLRQVDQGRSSRUWXQLWLHV +*UDVVODQGVRIWKHZRUOG , *OREDOODQGVFDSHJDUGHQHUV - &DWWOHDVLGHDOXVHUVRIIHHG &RPPHQWDU\,([FHVVLYHLQGXVWULDOL]DWLRQRIOLYHVWRFNSURGXFWLRQ7KHQHHGIRUDQHZ
DJULFXOWXUDOSDUDGLJP )ULHGULFK2VWHQGRUII'HSXW\&KDLUPDQ$JULFXOWXUDO&RPPLWWHHRIWKH*HUPDQ3DUOLDPHQW
&RPPHQWDU\,,:K\LQGXVWULDOOLYHVWRFNIDUPLQJLVXQVXVWDLQDEOH -R\FH'·6LOYD&RPSDVVLRQLQ:RUOG)DUPLQJ
&RPPHQWDU\,,,,QWHJUDWHGFURSOLYHVWRFNDQGHQHUJ\PDQDJHPHQW7KHFDVHRIELRJDVLQ
UXUDO(WKLRSLD 6WDQOH\*ZDYX\D.QRZOHGJH0DQDJHPHQW&RRUGLQDWRU3DUWQHUVKLSIRU
'HYHORSPHQW,QLWLDWLYH7UXVW=LPEDEZH
5HIHUHQFHV 1RWHV &RQWHQWV
YLL
&KDSWHU7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
/HDG$UWLFOH7KHUROHRIUHVHDUFKWHFKQRORJ\DQGH[WHQVLRQVHUYLFHVLQDIXQGDPHQWDO
WUDQVIRUPDWLRQRIDJULFXOWXUH +DQV5+HUUHQ3UHVLGHQW0LOOHQQLXP,QVWLWXWH
$,QWURGXFWLRQ %$JULFXOWXUDOSURGXFWLRQDQGYDOXHDGGHG &/LYHVWRFNSURGXFWLRQQXWULWLRQDQGOLYHOLKRRGV '*+*HPLVVLRQV ((QDEOLQJFRQGLWLRQV ) 7KHZD\IRUZDUG &RPPHQWDU\,(IIHFWLYHH[WHQVLRQVHUYLFHVIRUV\VWHPLFFKDQJH$FKLHYHPHQWVDQGEDUULHUVWR
LPSOHPHQWDWLRQ /DXUHQV.OHUN[&RPPXQLFDWLRQDQG,QQRYDWLRQ6WXGLHV:DJHQLQJHQ8QLYHUVLW\7KH1HWKHUODQGV
&RPPHQWDU\,,&RPELQLQJLQGLJHQRXV$IULFDQNQRZOHGJHZLWKPRGHUQNQRZOHGJHV\VWHPVIRU
IRRGVHFXULW\LQFKDQJLQJFOLPDWLFFRQGLWLRQV&KDOOHQJHVDQGSURVSHFWV +2.D\DDQG<16HOHWL,.6&HQWUHRI([FHOOHQFH1RUWK:HVW8QLYHUVLW\0PDEDWKR6RXWK$IULFD
&RPPHQWDU\,,,7KHV\PELRVLVEHWZHHQPRGHUQVFLHQFHDQGWUDGLWLRQDONQRZOHGJHIRU
HQKDQFLQJIRRGVHFXULW\DQGFOLPDWHFKDQJHDGDSWDWLRQ 600EXNX.HQ\D$JULFXOWXUDO5HVHDUFK,QVWLWXWH1DWLRQDO%HHI5HVHDUFK&HQWUHDQG,6.RVJH\
'HSDUWPHQWRI$QLPDO6FLHQFHV(JHUWRQ8QLYHUVLW\1MRUR.HQ\D
&RPPHQWDU\,9$GGUHVVLQJWKHFDXVHVRIODQGGHJUDGDWLRQIRRGDQGQXWULWLRQDOLQVHFXULW\DQG
SRYHUW\$QHZDSSURDFKWRDJULFXOWXUDOLQWHQVLÀFDWLRQLQWKHWURSLFVDQGVXEWURSLFV 5RJHU5%/HDNH\$JURIRUHVWU\DQG1RYHO&URSV8QLW6FKRRORI0DULQHDQG7URSLFDO%LRORJ\
-DPHV&RRN8QLYHUVLW\&DLUQV$XVWUDOLD
&RPPHQWDU\9$GDSWLQJWRFOLPDWHFKDQJHDQGLPSURYLQJKRXVHKROGIRRGVHFXULW\LQ
$IULFDWKURXJKDJURIRUHVWU\6RPHOHVVRQVIURPWKH6DKHO &KULV5HLM)DFLOLWDWRU$IULFDQ5HJUHHQLQJ,QLWLDWLYHV&HQWUHIRU,QWHUQDWLRQDO&RRSHUDWLRQ
)UHH8QLYHUVLW\$PVWHUGDP
&RPPHQWDU\9,*HQHWLFHQJLQHHULQJDQGELRWHFKQRORJ\IRUIRRGVHFXULW\DQGIRU
FOLPDWHFKDQJHPLWLJDWLRQDQGDGDSWDWLRQ3RWHQWLDODQGULVNV -DFN$+HLQHPDQQ&HQWUHIRU,QWHJUDWHG5HVHDUFKLQ%LRVDIHW\DQG6FKRRORI
%LRORJLFDO6FLHQFHV8QLYHUVLW\RI&DQWHUEXU\&KULVWFKXUFK1HZ=HDODQG
5HIHUHQFHV 1RWHV &KDSWHU7KH5ROHRI&KDQJHVLQ/DQG8VH
/HDG$UWLFOH.H\LPSOLFDWLRQVRIODQGFRQYHUVLRQVLQDJULFXOWXUH +DQV+XUQL7KRPDV%UHX3HWHU0HVVHUOLDQG%ULJLWWH3RUWQHU&HQWUHIRU'HYHORSPHQWDQG
(QYLURQPHQW8QLYHUVLW\RI%HUQ6ZLW]HUODQG
$,QWURGXFWLRQ %/DQGFRQYHUVLRQVIRUELRIXHOSURGXFWLRQ &/DQGFRQYHUVLRQIRUOLYHVWRFNSURGXFWLRQ '&RQYHUVLRQVGXHWRVPDOOVFDOHIDUPLQJDQGUXUDOSRYHUW\ (,PSOLFDWLRQVRIODQGFRQYHUVLRQVIRUIRRGVHFXULW\ &RPPHQWDU\,/DQGJUDEELQJDQGIXWXUHFRQÁLFWV 1QLPPR%DVVH\([HFXWLYH'LUHFWRU(QYLURQPHQWDO5LJKWV$FWLRQ&KDLU)ULHQGVRI
WKH(DUWK,QWHUQDWLRQDODQGFRRUGLQDWRU2LOZDWFK,QWHUQDWLRQDO
YLLL
75$'($1'(19,5210(175(9,(:
&RPPHQWDU\,,(YDOXDWLRQRIODQGLQYHVWPHQWGHDOVLQ$IULFD3UHOLPLQDU\ÀQGLQJV $QXUDGKD0LWWDO2DNODQG,QVWLWXWH
5HIHUHQFHV 1RWHV &KDSWHU7KH,PSRUWDQFHRI,QWHUQDWLRQDO7UDGHDQG7UDGH5XOHVIRU
7UDQVIRUPLQJ*OREDO$JULFXOWXUH
/HDG$UWLFOH7KHLPSRUWDQFHRILQWHUQDWLRQDOWUDGHWUDGHUXOHVDQGPDUNHWVWUXFWXUHV /LP/L&KLQJ7KLUG:RUOG1HWZRUNDQG0DUWLQ.KRU6RXWK&HQWUH
$,QWURGXFWLRQ %6WUXFWXUDODGMXVWPHQWDQGLPSRUWOLEHUDOL]DWLRQ &,PEDODQFHLQWUDGHUXOHVJRYHUQLQJDJULFXOWXUH ',PEDODQFHLQPDUNHWVWUXFWXUHV ((QYLURQPHQWDOVXVWDLQDELOLW\ ) $WUDGHIUDPHZRUNVXSSRUWLYHRIIRRGVHFXULW\DQGVXVWDLQDELOLW\ &RPPHQWDU\,(QVXULQJIRRGVHFXULW\DQGHQYLURQPHQWDOUHVLOLHQFH²7KHQHHGIRU
VXSSRUWLYHDJULFXOWXUDOWUDGHUXOHV 1LNRODL)XFKV1H[XV)RXQGDWLRQDQG8OULFK+RIIPDQQ81&7$'VHFUHWDULDW
&RPPHQWDU\,,)URPGXPSLQJWRYRODWLOLW\7KHOHVVRQVRIWUDGHOLEHUDOL]DWLRQIRUDJULFXOWXUH %HQ/LOOLVWRQDQG.DUHQ+DQVHQ.XKQ,QVWLWXWHIRU$JULFXOWXUHDQG7UDGH3ROLF\
&RPPHQWDU\,,,5HWKLQNLQJIRRGVHFXULW\VWUDWHJLHVLQWLPHVRIFOLPDWHFKDQJH7KH
FDVHIRUUHJLRQDOL]DWLRQRIDJULFXOWXUDOWUDGHDQGORFDOPDUNHWV &KULVWLQH&KHPQLW]+HLQULFK%|OO)RXQGDWLRQDQG7LOPDQ6DQWDULXV*HUPDQZDWFK
&RPPHQWDU\,9*HWWLQJIDUPHUVRIIWKHWUHDGPLOO$GGUHVVLQJFRQFHQWUDWLRQLQDJULFXOWXUDO
LQSXWVSURFHVVLQJDQGUHWDLOPDUNHWV (OHQLWD&'DxR$FWLRQ*URXSRQ(URVLRQ7HFKQRORJ\DQG&RQFHQWUDWLRQ
&RPPHQWDU\96RDULQJRLODQGIRRGSULFHVWKUHDWHQDIIRUGDEOHIRRGVXSSO\ 5LFKDUG+HLQEHUJ3RVW&DUERQ,QVWLWXWH
&RPPHQWDU\9,$FULWLFDODQDO\VLVRIFRPPRGLW\DQGIRRGSULFHVSHFXODWLRQ 'LUN0OOHU)LQDQFH(WKLFV
&RPPHQWDU\9,,/HWWKHJRRGSURGXFWVJURZDQGÁRZ 6RSKLD7ZDURJ81&7$'VHFUHWDULDW
&RPPHQWDU\9,,,&RPPXQLW\VXSSRUWHGRUJDQLFSURGXFWLRQ7KHFDVHRIWKH5HJLRQDO
9DOXHDGGHG&LWL]HQ6KDUHKROGHU&RUSRUDWLRQLQVRXWKHUQ*HUPDQ\ &KULVWLDQ+LVV5HJLRQDO9DOXHDGGHG&LWL]HQ6KDUHKROGHU&RUSRUDWLRQ
&RPPHQWDU\,;7KH6(.(0LQLWLDWLYH$FRUQHUSLOODUIRUWKHFRPPXQLW\ +HOP\$ERXOHLVKDQG0DWWKLDV.HLWHO6(.(0(J\SW
5HIHUHQFHV 1RWHV 7DEOHV
&KDSWHU
$JULFXOWXUDOODERXUSURGXFWLYLW\ *UHHQSRWHQWLDORIRUJDQLFDJULFXOWXUHDQGDQDHURELFGLJHVWLRQLQ&KLQD *UHHQSRWHQWLDORI'UHDP)DUP 3HUFHQWDJHRIDJULFXOWXUDOZDWHUWKUHDWHQHGLQWKHJHRSROLWLFDOUHJLRQVQLQHVFHQDULRV &RQWHQWV
L[
&KDSWHU
&RVWEHQHÀWDQDO\VLVRIELRJDVSODQWVFRPSDUHGZLWKGLIIHUHQWWUDGLWLRQDOVRXUFHVRI
KRXVHKROGHQHUJ\LQ(WKLRSLD &KDSWHU
*UHHQVFHQDULR,PSDFWRIJUHHQLQYHVWPHQWVLQDJULFXOWXUHDPRXQWLQJWRSHUFHQWRI*'3 &KDQJHVLQIRRGVHFXULW\LQ$UJHQWLQD &KDSWHU
*OREDOODQGXVHDQGFRYHUW\SHVDQGPDMRUVSDWLDOFKDQJHV *URZWKRIOLYHVWRFNDQGVKDUHVRIGLIIHUHQWOLYHVWRFNE\UHJLRQ² $VVHVVPHQWRIVPDOOVFDOHYHUVXVODUJHVFDOHIDUPLQJDWWKHJOREDOOHYHO 6DPSOLQJRIIDUPODQGOHDVHIHHVE\ODQGGHDO 6DPSOLQJRIDYHUDJHIDUPODQGSULFHVE\VHOHFWHGFRXQWULHV &KDSWHU
,PSRUWVXUJHVRIVHOHFWHGFRPPRGLWLHVDQGWKHLULPSDFWRQORFDOSURGXFWLRQYROXPHYDULRXV\HDUV :RUOG·VWRSVHHGFRPSDQLHV :RUOG·VWRSDJURFKHPLFDOFRPSDQLHV :RUOG·VWRSIRRGDQGEHYHUDJHFRPSDQLHV :RUOG·VWRSIRRGUHWDLOHUV .H\VXVWDLQDEOHPDQDJHPHQWFULWHULD 2YHUYLHZRINH\LQYHVWPHQWVRI5HJLRQDO9DOXHDGGHG&LWL]HQ6KDUHKROGHU&RUSRUDWLRQ %R[HV
&KDSWHU
7KHFRQFHSWRIDGDSWDWLRQ 'LIÀFXOWLHVLQDQDO\VLQJ\LHOGVIURPFRPSDUDWLYHVWXGLHV 3URÀWDELOLW\RIRUJDQLFFRWWRQSURGXFWLRQ ([DPSOHVRIHQYLURQPHQWDOFRVWV 3ROLF\RSWLRQVWRVXSSRUWDWUDQVLWLRQWRVXVWDLQDEOHDJULFXOWXUH &RUSRUDWHLQÁXHQFHRYHUSXEOLFSROLF\ 5HYROYLQJGRRU &KDSWHU
.H\ÀQGLQJVRIWKH(XURSHDQ1LWURJHQ$VVHVVPHQW 5HDVRQVIRUWKHLQVXIÀFLHQWSHUFHSWLRQRIWKHSRWHQWLDORIVXVWDLQDEOHDJULFXOWXUHWR
FRQWULEXWHWRIRRGVHFXULW\DQGVXVWDLQDEOHUXUDOGHYHORSPHQW (UURQHRXVFRQFOXVLRQVRQH[WHQVLYHDQGLQWHQVLYHOLYHVWRFNSURGXFWLRQV\VWHPVGXHWR
LOOGHÀQHGV\VWHPERXQGDULHV 7ZHOYHIDUPDQLPDOZHOIDUHFULWHULD 7KHÀYHIUHHGRPV &KDSWHU
%URNHULQJWKH6RXWK$PHULFDQ3DSD$QGLQDVXVWDLQDEOHYDOXHFKDLQLQQRYDWLRQQHWZRUN ,QQRYDWLRQEURNHULQJIRULQFOXVLYHGHPDQGGULYHQUHVHDUFKDQGLQQRYDWLRQLQ,QGLD
1DWLRQDO$JULFXOWXUDO,QQRYDWLRQ3URJUDPPH &KDSWHU
7KHLPSDFWRIWUDGHOLEHUDOL]DWLRQLQ*KDQD 7KHWUHDGPLOORIH[WHUQDOLQSXWLQWHQVLYHSURGXFWLRQH[SHULHQFHRIDVR\IDUPHULQ$UJHQWLQD 6RLOIHUWLOLW\DQGWKHLPSRUWDQFHRIKXPXV $YRLGLQJFRQIXVLRQRQWKHWHUPV´UHJLRQDO´DQG´ORFDOµ [
75$'($1'(19,5210(175(9,(:
)LJXUHV
&KDSWHU
'HYHORSPHQWRIIRRGDQGIHUWLOL]HUSULFHV² 7RS*+*HPLWWLQJFRXQWULHVIURPDJULFXOWXUH /'&*+*HPLVVLRQVE\VHFWRU 3URMHFWHGFOLPDWHFKDQJHFDXVHGFKDQJHVLQDJULFXOWXUDOSURGXFWLYLW\E\
LQFRUSRUDWLQJWKHHIIHFWRIFDUERQIHUWLOLVDWLRQ 6\VWHPLFHPEHGGLQJRIFOLPDWHIULHQGO\DJULFXOWXUH *KDQDFKLFNHQSURGXFWLRQDQGLPSRUWDWLRQ² +DwWL5LFHSURGXFWLRQDQGLPSRUWV &XVWRPWDULIIVLQWKH(8DQGWKH:HVWHUQ$IULFDQ(FRQRPLFDQG0RQHWDU\8QLRQ8(02$ &RQWULEXWLRQRIWKHJOREDOIRRGSURGXFWLRQV\VWHPWRWRWDO*+*HPLVVLRQV /DQGIRUDJULFXOWXUDOXVH² &2HPLVVLRQVIURPODQGXVHFKDQJHLQVHOHFWHGGHYHORSLQJUHJLRQV² 6WUXFWXUHRIWKHJOREDOVHHGLQGXVWU\RYHUWKHSHULRG² 86$,'IXQGHG$JULFXOWXUDO%LRWHFKQRORJ\6XSSRUW3URMHFW$%633KDVH,,WDUJHWFRXQWULHV
*(FURSVLQGHYHORSPHQWDQGSURMHFWSDUWQHUV 'UHDP)DUPDQLQWHJUDWHGIRRGDQGHQHUJ\V\VWHP 7RWDOSURMHFWHGPXQLFLSDOZDWHUXVHLQ2(&'YHUVXVQRQ2(&'FRXQWULHV² :DWHUZLWKGUDZDOVIRUDJULFXOWXUHDVDSHUFHQWDJHRIPHDQDQQXDOUXQRIILQ 2YHUYLHZRI&2VHTXHVWUDWLRQDQG*+*HPLVVLRQVLQDFURSEDVHGYDOXHFKDLQ &DUERQIRRWSULQWDORQJWKHYDOXHFKDLQIRURQHEUHZHGFXSRI7FKLER5DULW\0DFKDUH3ULYDWH&RIIHH &DUERQIRRWSULQWLQSUHSDULQJDFXSRIFRIIHH 2QIDUPHPLVVLRQVE\FDWHJRU\RIIDUPVLQ%DUDJZL.HQ\D *URZWKUDWHRIPHDWFRQVXPSWLRQRYHUWKHSDVW\HDUV &KDSWHU
:RUOGIHUWLOL]HUFRQVXPSWLRQ² (8LPSRUWVRIVR\EHDQFDNHDQGVR\EHDQV²WR² $UHDXQGHUVR\FXOWLYDWLRQVHOHFWHGFRXQWULHV² 7KHLPSRUWDQFHRIFRZORQJHYLW\WRSURWHFWWKHHQYLURQPHQWWKHFOLPDWHDQGWKHHFRQRP\ &KDSWHU
7KHF\FOHRIODQGGHJUDGDWLRQDQGVRFLDOGHSULYDWLRQ $UHSUHVHQWDWLRQRIWKH\LHOGJDSLQDJULFXOWXUHDQGWKHVWHSVQHHGHGWRFORVHWKHJDS 3URFHGXUHVIRUFORVLQJWKH\LHOGJDS ,QFRPHJHQHUDWHGIURPWUHHVDOHVE\YLOODJHQXUVHULHVDVVRFLDWHGZLWKUXUDOUHVRXUFHVFHQWUHVLQ
QRUWKDQGQRUWKZHVWUHJLRQVRI&DPHURRQDIWHUDQG\HDUV 'HJUHHVRIFRPPLWPHQWWR*0DJULFXOWXUHHVWLPDWHVIRU &RPSDUDWLYH\LHOGVLQ*0DGRSWLQJDQGQRQDGRSWLQJDJULFXOWXUDOV\VWHPV² )RRGVHFXULW\LQ*0DQGQRQ*0DGRSWLQJFRXQWULHVLQ6RXWK$PHULFDFRPSDUHG² &KDSWHU
$FWXDODQGSRWHQWLDOEHQHÀWVIURPDJULFXOWXUDODFWLYLWLHVDFFRUGLQJWRFXUUHQWDJULFXOWXUDOSRWHQWLDO &KDSWHU
'HYHORSPHQWRIIRRGDQGPDLQDJULFXOWXUDOLQSXWSULFHVWRPLG (YROXWLRQRIIRRGDQGIXHOSULFHV² &RUUHODWLRQEHWZHHQWKHQXPEHURI27&FRQWUDFWVDQGFRPPRGLW\SULFHGHYHORSPHQW² 'HYHORSPHQWRIWKHSULFHRIRLO:7,² &RUUHODWLRQEHWZHHQVKDUHDQGFRPPRGLW\SULFHV6HSW²6HSW [L
$FNQRZOHGJHPHQWV
(YROXWLRQRISURGXFWLRQDQGFRQVXPSWLRQRIZKHDW 7KHFRQFHSWXDOVWUXFWXUHRI5HJLRQDO9DOXHDGGHG&LWL]HQ6KDUHKROGHU&RUSRUDWLRQ 6(.(0·VDFWLYLWLHVEDVHGRQLWVYLVLRQIRU(J\SW 7KH6XVWDLQDELOLW\)ORZHU $FNQRZOHGJHPHQWV
7KLV7UDGHDQG(QYLURQPHQW5HYLHZZDVHGLWHGDQGFRPSLOHGE\8OULFK+RIIPDQQ6HQLRU7UDGH3ROLF\$GYLVRU
2IÀFHRIWKH'LUHFWRU'LYLVLRQRQ,QWHUQDWLRQDO7UDGHLQ*RRGVDQG6HUYLFHVDQG&RPPRGLWLHV)UDQN*URWKDXV
DVVLVWHG LQ SURRIUHDGLQJ WKH PDQXVFULSW ,W ZDV SUHSDUHG IRU SXEOLVKLQJ E\ 5DIH 'HQW ZLWK DVVLVWDQFH RQ
JUDSKLFVE\6RSKLH&RPEHWWHDQG1DGHJH+DGMHPLDQ7KHPDQXVFULSWZDVODQJXDJHHGLWHGE\3UDYHHQ%KDOOD
[LL
75$'($1'(19,5210(175(9,(:
$FURQ\PVDQGDEEUHYLDWLRQV
$$$6
$$7)
$E/
$%63
$&3
$)
$)73V
$+%),
$.67
$R$
$5,
$526
$6$/V
$6$5(&$
$6($1
$632
$95'&
%$8
%I5
ELUU
%,6
%0(/)
%5,&
%6(
%6,
%W
%7,
%9/
&
&
&
&$)7$
&$3
&$5(
&$:0$
&%'
&%27
&&
&&3
&&7(&
&'(
&'0
&(2
&(7,0
&)$5
&)6
&)6+/3(
&*&
&*,$5
&+
&,)
&,)25
&,00<7
$PHULFDQ$VVRFLDWLRQIRUWKH$GYDQFHPHQWRI6FLHQFH
$IULFDQ$JULFXOWXUDO7HFKQRORJ\)RXQGDWLRQ
$VVRFLDWLRQIRUVXVWDLQDEOHLHPRUHVRFLDOO\DQGHQYLURQPHQWDOO\EHQHÀFLDODJULFXOWXUH
$UEHLWVJHPHLQVFKDIWElXHUOLFKH/DQGZLUWVFKDIW*HUPDQ\
$JULFXOWXUDO%LRWHFKQRORJ\6XSSRUW3URMHFW
$IULFDQ&DULEEHDQDQG3DFLÀFFRXQWULHV
DJURIRUHVWU\
DJURIRUHVWU\WUHHSURGXFWV
$+DUYHVW%LRWHFK)RXQGDWLRQ,QWHUQDWLRQDO
DJULFXOWXUDONQRZOHGJHVFLHQFHDQGWHFKQRORJ\
$JUHHPHQWRQ$JULFXOWXUHRIWKH:72
$IULFDQ5HJUHHQLQJ,QLWLDWLYH
$VLDQ5HJLRQDO2UJDQLF6WDQGDUG
DULGDQGVHPLDULGODQGV
$VVRFLDWLRQIRU6WUHQJWKHQLQJ$JULFXOWXUDO5HVHDUFKLQ(DVWHUQDQG&HQWUDO$IULFD
$VVRFLDWLRQRI6RXWKHDVW$VLDQ1DWLRQV
$VVRFLDWLRQIRUWKH6WXG\RI3HDN2LO*DV8QLWHG6WDWHV
7KH:RUG9HJHWDEOH&HQWHU
EXVLQHVVDVXVXDOVFHQDULR
)HGHUDO,QVWLWXWHIRU5LVN$VVHVVPHQW*HUPDQ\
(WKLRSLDQFXUUHQF\
%DQNIRU,QWHUQDWLRQDO6HWWOHPHQWV
*HUPDQ)HGHUDO0LQLVWU\IRU)RRG$JULFXOWXUHDQG)RUHVWVVLQFHNQRZQDVWKH)HGHUDO
0LQLVWU\IRU)RRG$JULFXOWXUHDQG&RQVXPHU3URWHFWLRQ
JURXSLQJWKDWUHIHUVWRWKHFRXQWULHV%UD]LOWKH5XVVLDQ)HGHUDWLRQ,QGLDDQG&KLQD
ERYLQHVSRQJLIRUPHQFHSKDORSDWK\PDGFRZGLVHDVH
%ULWLVK6WDQGDUGV,QVWLWXWLRQ
EDFLOOXVWKXULQJLHQVLV
%R\FH7KRPSVRQ,QVWLWXWH
)HGHUDO2IÀFHRI&RQVXPHUDQG)RRG6DIHW\*HUPDQ\
FDUERQ
SKRWRV\QWKHWLFSDWKZD\
FDUERQÀ[DWLRQSKRWRV\QWKHWLFSDWKZD\
&HQWUDO$PHULFD'RPLQLFDQ5HSXEOLF8QLWHG6WDWHV)UHH7UDGH$JUHHPHQW
&RPPRQ$JULFXOWXUDO3ROLF\
&RRSHUDWLYHIRU$VVLVWDQFHDQG5HOLHI
FRPSUHKHQVLYHDVVHVVPHQWRIZDWHUPDQDJHPHQWLQDJULFXOWXUH
&RQYHQWLRQRQ%LRORJLFDO'LYHUVLW\
&KLFDJR%RDUGRI7UDGH
FOLPDWHFKDQJH
&RPPLWWHHRQ&RPPRGLW\3UREOHPV)$2
&RUQHOO8QLYHUVLW\&ROOHJHRI$JULFXOWXUHDQG/LIH6FLHQFHV
&HQWUHIRU'HYHORSPHQWDQG(QYLURQPHQW8QLYHUVLW\RI%HUQ6ZLW]HUODQG
&OHDQ'HYHORSPHQW0HFKDQLVP
FKLHIH[HFXWLYHRIÀFHU
&HQWUH(XURSH7LHUV0RQGH
&OLPDWH)RUHFDVWLQJIRU$JULFXOWXUDO5HVRXUFHVSURMHFW
&RPPLWWHHRQ:RUOG)RRG6HFXULW\)$2
+LJK/HYHO3DQHORI([SHUWVRQ)RRG6HFXULW\DQG1XWULWLRQWRWKH)$2&RPPLWWHHRQ
:RUOG)RRG6HFXULW\
&KLQHVHFRQVWUXFWLRQFRPSDQ\RZQHGE\6,123(&
&RQVXOWDWLYH*URXSRQ,QWHUQDWLRQDO$JULFXOWXUDO5HVHDUFK
PHWKDQH
FRVWLQVXUDQFHDQGIUHLJKW
&HQWHUIRU,QWHUQDWLRQDO)RUHVWU\5HVHDUFK
,QWHUQDWLRQDO0DL]HDQG:KHDW,PSURYHPHQW&HQWHU
$FURQ\PVDQGDEEUHYLDWLRQV
&,3
&,5$'
&,6
&,:)
&/,581,,
&19
&2
&2H&2HT
&25$)
&2526
&UDG/
&5&
&5)
&5,
&5,
&53
&6'
&6(
&6,52
&63
&87
'$&
'$3
'()5$
',7&
'2.WULDOV
($&&
($236
(%'$
(&
(($
(('
((65&
()5V
()6$
(+(&
(-
(0%2
(1$
(5('3&
(52,
(60$3
(7%
(7&*URXS
(8
(XURVWDW
)$2
)$267$7
)$5$
)$7
)$:&
)$=
)',
))6
)L%/
),63
)2%
)3,)
,QWHUQDWLRQDO3RWDWR5HVHDUFK&HQWHU
$JULFXOWXUDO5HVHDUFKIRU'HYHORSPHQW&HQWUH)UDQFH
&RPPRQZHDOWKRI,QGHSHQGHQW6WDWHV
&RPSDVVLRQLQ:RUOG)DUPLQJ
K\GURORJLFPRGHO
FRQYHQWLRQDOV\VWHP
FDUERQGLR[LGH
FDUERQGLR[LGHHTXLYDOHQW
:HVWHUQDQG&HQWUDO$IULFDQ&RXQFLOIRU$JULFXOWXUDO5HVHDUFKDQG'HYHORSPHQW
&RPPRQ2EMHFWLYHVDQG5HTXLUHPHQWVIRU2UJDQLF6\VWHPV
&DSDUR5HQHZDEOH$JULFXOWXUH'HYHORSPHQWV/WG
&KHPLFDO5XEEHU&RPSDQ\3UHVV
&RUQHOO5HVHDUFK)RXQGDWLRQ
&RSHQKDJHQ5HVRXUFH,QVWLWXWH
&OLPDWH5LVN,QGH[
&RQVHUYDWLRQ5HVHUYH3URJUDP
81&RPPLVVLRQRQ6XVWDLQDEOH'HYHORSPHQW
&RRSHUDWLYHRI6(.(0(PSOR\HHV
&RPPRQZHDOWK6FLHQWLÀFDQG,QGXVWULDO5HVHDUFK2UJDQL]DWLRQ
&RQVHUYDWLRQ6WHZDUGVKLS3URJUDP
&RPSRVW8WLOL]DWLRQ7ULDO
'HYHORSPHQW$VVLVWDQFH&RPPLWWHHRIWKH2(&'
GLDPPRQLXPSKRVSKDWH
'HSDUWPHQWIRU(QYLURQPHQW)RRGDQG5XUDO$IIDLUV8QLWHG.LQJGRP
'LYLVLRQRQ,QWHUQDWLRQDO7UDGHLQ*RRGVDQG6HUYLFHVDQG&RPPRGLWLHV81&7$'
ELRG\QDPLFELRRUJDQLFFRQYHQWLRQDOFRPSDULVRQ
:RUOG%DQNV(FRQRPLFVRI$GDSWDWLRQWR&OLPDWH&KDQJHDQDO\VLV
(DVW$IULFDQ2UJDQLF3URGXFWV6WDQGDUG
(J\SWLDQ%LRG\QDPLF$VVRFLDWLRQ
(XURSHDQ&RPPLVVLRQ
(XURSHDQ(QYLURQPHQW$JHQF\
&KXUFK'HYHORSPHQW6HUYLFH*HUPDQ\
(WKLRSLDQ(QHUJ\6WXG\DQG5HVHDUFK&HQWHU
HQYLURQPHQWDOÁRZUHTXLUHPHQWV
(XURSHDQ8QLRQ)RRG6DIHW\$XWKRULW\
HFROLEDFWHULXP
H[DMRXOH
(XURSHDQ0ROHFXODU%LRORJ\2UJDQL]DWLRQ
(XURSHDQ1LWURJHQ$VVHVVPHQW
(WKLRSLD5XUDO(QHUJ\'HYHORSPHQW$VVHVVPHQWDQG3URPRWLRQ&HQWHU
HQHUJ\UHWXUQRQHQHUJ\LQYHVWHG
(QHUJ\6HFWRU0DQDJHPHQW$VVLVWDQFH3URJUDPPH81'3:RUOG%DQN
(WKLRSLDQELUU
(URVLRQ7HFKQRORJ\DQG&RQFHQWUDWLRQ*URXS
(XURSHDQ8QLRQ
(XURSHDQ6WDWLVWLFDO2IÀFH
)RRGDQG$JULFXOWXUDO2UJDQL]DWLRQRIWKH8QLWHG1DWLRQV
6WDWLVWLFV'LYLVLRQRIWKH)$2
)RUXPIRU$JULFXOWXUDO5HVHDUFKLQ$IULFD
6ZLVV5HVHDUFK,QVWLWXWHIRU$JULFXOWXUHDQG$JULFXOWXUDO(QJLQHHULQJ
)DUP$QLPDO:HOIDUH&RXQFLO
)UDQNIXUWHU$OOJHPHLQH=HLWXQJDQDWLRQZLGH*HUPDQQHZVSDSHU
IRUHLJQGLUHFWLQYHVWPHQW
IDUPHUÀHOGVFKRROV
5HVHDUFK,QVWLWXWHIRU2UJDQLF$JULFXOWXUH6ZLW]HUODQG
)DUP,QSXW6XEVLG\3URJUDP
IUHHRQERDUG
)RUHLJQ3ROLF\LQ)RFXV
[LLL
[LY
)38V
)6&
)67
IW
)7$V
)92
*
*$3
*$77
*&0V
*&0V
*'3
*(
*($
*()
*(2
*)5$6
*+*
*,*$
*,=
*/3
*0
*02
*20$
*5,
*52
*W
*7=
*:3
KD
+J
+/3(
+5&
,$$67'
,$3
,$73
,&*(%
,&5$)
,&5,6$7
,&7V
,&76'
,($
,(&$
,(5
,)$'
,I(8
,)2$0
,)35,
,*%3
,,('
,,7$
,.
,.6
,/&
,/5,
,/8&
,0$3
,0)
75$'($1'(19,5210(175(9,(:
IRRGSURGXFWLRQXQLWV
IRRGVXSSO\FKDLQ
IDUPV\VWHPVWULDO
IHHW
IUHHWUDGHDJUHHPHQWV
)RRGDQG9HWHULQDU\2IÀFH(8
JURXSRIGHYHORSHGFRXQWULHV
JRRGDJULFXOWXUDOSUDFWLFH
*HQHUDO$JUHHPHQWRQ7DULIIVDQG7UDGH
JHQHUDOFLUFXODWLRQPRGHOV
JOREDOFOLPDWHPRGHOV
JURVVGRPHVWLFSURGXFW
JHQHWLFDOO\HQJLQHHUHGJHQHWLFHQJLQHHULQJ
*UHHQLQJWKH(FRQRP\ZLWK$JULFXOWXUH
*OREDO(QYLURQPHQW)DFLOLW\
*OREDO(QYLURQPHQW2XWORRN81(3SXEOLFDWLRQ
*OREDO)RUXPIRU5XUDO$GYLVRU\6HUYLFHV
JUHHQKRXVHJDVHPLVVLRQV
*HUPDQ,QVWLWXWHIRU*OREDODQG$UHD6WXGLHV
*HUPDQ$JHQF\IRU,QWHUQDWLRQDO&RRSHUDWLRQ
JOREDOODQGSURMHFW
JHQHWLFDOO\PRGLÀHG
JHQHWLFDOO\PRGLÀHGRUJDQLVPV
*OREDO2UJDQLF0DUNHW$FFHVVSURMHFW)$2,)2$081&7$'
*OREDO5HSRUWLQJ,QLWLDWLYH
JROGHQULFHRQOLQH
JLJDWRQ
*HUPDQ$JHQF\IRU7HFKQLFDO&RRSHUDWLRQQRZ*,=VHHDERYH
JOREDOZDUPLQJSRWHQWLDO
KHFWDUHV
KHFWRJUDPV
+LJKOHYHO3DQHORI([SHUWVRQ)RRG6HFXULW\DQG1XWULWLRQ)$2
+XPDQ5LJKWV&RXQFLO
,QWHUQDWLRQDO$VVHVVPHQWRI$JULFXOWXUDO.QRZOHGJH6FLHQFHDQG7HFKQRORJ\IRU'HYHORSPHQW
,QWHUQDWLRQDO$VVRFLDWLRQIRU3DUWQHUVKLSLQ(FRORJ\DQG7UDGH
,QVWLWXWHIRU$JULFXOWXUHDQG7UDGH3ROLF\
,QWHUQDWLRQDO&HQWHUIRU*HQHWLF(QJLQHHULQJDQG%LRWHFKQRORJ\
,QWHUQDWLRQDO&HQWUHIRU5HVHDUFKLQ$JURIRUHVWU\
,QWHUQDWLRQDO&URSV5HVHDUFK,QVWLWXWHIRUWKH6HPL$ULG7URSLFV
LQIRUPDWLRQDQGFRPPXQLFDWLRQWHFKQRORJ\LHV
,QWHUQDWLRQDO&HQWUHIRU7UDGHDQG6XVWDLQDEOH'HYHORSPHQW
,QWHUQDWLRQDO(QHUJ\$JHQF\
,QWHUQDWLRQDO(URVLRQ&RQWURO$VVRFLDWLRQ
,QVWLWXWG·(FRQRPLH5XUDOH
,QWHUQDWLRQDO)XQGIRU$JULFXOWXUDO'HYHORSPHQW
,QVWLWXWHIRU(QHUJ\DQG(QYLURQPHQW*HUPDQ\
,QWHUQDWLRQDO)HGHUDWLRQRI2UJDQLF$JULFXOWXUDO0RYHPHQWV
,QWHUQDWLRQDO)RRG3ROLF\5HVHDUFK,QVWLWXWH
,QWHUQDWLRQDO*HRVSKHUH%LRVSKHUH3URJUDPPH
,QWHUQDWLRQDO,QVWLWXWHIRU(QYLURQPHQWDQG'HYHORSPHQW
,QWHUQDWLRQDO,QVWLWXWHRI7URSLFDO$JULFXOWXUH
LQGLJHQRXVNQRZOHGJH
LQGLJHQRXVNQRZOHGJHVWXGLHVV\VWHPV
,QWHUQDWLRQDO/DQG&RDOLWLRQ
,QWHUQDWLRQDO/LYHVWRFN5HVHDUFK,QVWLWXWH$IULFDEDVHG
LQGLUHFWODQGXVHFKDQJHV
JOREDO0$RUJDQL]DWLRQ
,QWHUQDWLRQDO0RQHWDU\)XQG
[Y
,1%,
,16$+
,3
,3&&
,3*5,
,30
,33&
,35V
,5,
,52&%
,55,
,6$$$
,6,6
,62
,62)$5
,7&
,:0,
NFDO
.'*&%3
NJV
NP
N:K
/$3
OEVDF
/'&/'&V
/($'
/('
/(*
/+6
//&
/7$5
/8&&*
0,
0$5
0'*V
0($
0(1$
0-
PP
0W
1
1U
1
12
1$)7$
1$,3
1$6
1$6$
1%3(
1&$5
1&&5
1)$
1*2
1+
113&
12
133
139
&HQWUHIRU,QWHJUDWHG5HVHDUFKLQ%LRVDIHW\
,QVWLWXWGX6DKHO
LQWHOOHFWXDOSURSHUW\
,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH
,QWHUQDWLRQDO3ODQW*HQHWLF5HVRXUFHV,QVWLWXWH
LQWHJUDWHGSHVWPDQDJHPHQW
,QWHJUDWHG3ROOXWLRQDQG&RQWURO(8GLUHFWLYH
LQWHOOHFWXDOSURSHUW\ULJKWV
,QWHUQDWLRQDO5HVHDUFK,QVWLWXWHIRU&OLPDWH3UHGLFWLRQV
,QWHUQDWLRQDO5HTXLUHPHQWVIRU&RQIRUPLW\$VVHVVPHQW%RGLHV
,QWHUQDWLRQDO5LFH5HVHDUFK,QVWLWXWH
,QWHUQDWLRQDO6HUYLFHIRUWKH$FTXLVLWLRQRI$JUL%LRWHFK$SSOLFDWLRQV
,QVWLWXWHRI6FLHQFHLQ6RFLHW\
,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ
,QWHUQDWLRQDO6RFLHW\RI2UJDQLF$JULFXOWXUH5HVHDUFK
,QWHUQDWLRQDO7UDGH&HQWUHRI81&7$':72
,QWHUQDWLRQDO:DWHU0DQDJHPHQW,QVWLWXWH
NLORFDORULH
.HQ\D'DLU\*RDWDQG&DSDFLW\%XLOGLQJ3URMHFW
NLORJUDPV
FXELFNLORPHWHU
NLORZDWWKRXU
/LE\D$IULFD,QYHVWPHQW3RUWIROLR
SRXQGVSHUDFUH
OHDVWGHYHORSHGFRXQWU\LHV
/LYHVWRFN(QYLURQPHQWDQG'HYHORSPHQW,QLWLDWLYH
OLJKWHPLWWLQJGLRGH
RUJDQLFOHJXPHV\VWHP
OHIWKDQGVLGH
OLPLWHGOLDELOLW\FRPSDQ\
ORQJWHUPDJURHFRORJLFDOUHVHDUFK
/DQG8VH&OLPDWH&KDQJH5HSRUWWRWKH:HOVK$VVHPEO\*RYHUQPHQW
PXQLFLSDODQGLQGXVWULDO
PHDQDQQXDOUXQRII
0LOOHQQLXP'HYHORSPHQW*RDOV
0LOOHQQLXP(FRV\VWHP$VVHVVPHQW
0LGGOH(DVWDQG1RUWK$IULFDUHJLRQ
PHJDMRXOHV
PLOOLPHWHU
PHJDWRQV
QLWURJHQLQVRLO
UHDFWLYHQLWURJHQ
QLWURJHQPROHFXOHRIWZRDWRPV
QLWURXVR[LGH
1RUWK$PHULFDQ)UHH7UDGH$JUHHPHQW
1DWLRQDO$JULFXOWXUDO,QQRYDWLRQ3URJUDPPHRIWKH,QGLDQ&RXQFLORI$JULFXOWXUDO5HVHDUFK
1DWLRQDO$FDGHP\RI6FLHQFHV86
1DWLRQDO$HURQDXWLFVDQG6SDFH$GPLQLVWUDWLRQ
1DWLRQDO%LRJDV3URJUDPPH(WKLRSLD
1DWLRQDO&HQWHUIRU$WPRVSKHULF5HVHDUFK8QLWHG6WDWHV
6ZLVV1DWLRQDO&HQWUHRI&RPSHWHQFHLQ5HVHDUFK
1DWLRQDO)RRG$GPLQLVWUDWLRQRI6ZHGHQ
QRQJRYHUQPHQWDORUJDQL]DWLRQ
DPPRQLXP
1LJHULDQ1DWLRQDO3HWUROHXP&RUSRUDWLRQ
QLWULFR[LGH
JOREDOWHUUHVWULDOQHWSULPDU\SURGXFWLRQ
QHWSUHVHQWYDOXH
[YL
18(
2'$
2',
2($
2(&'
2(&''$&
2*6V
2,
27&
27'6
3$11$
3$6
3%6
3&)
3(3
3*$
3*6
3,&7,3$3$
SSP
35$,
36'$
39
3Z&
5'
5$6))
5(''
5(1
5+6
51(
56
56%
5X%3
59$&6&
66(
6$1
6$1&2
6$5
6$5'
6&$5
6&17
6&23(
6&25(
6')
6'7
6(.(0
61135
619
62&
62)$
620
63
65(6
66$
66*
660
69&
W&2HT
7('
75$'($1'(19,5210(175(9,(:
QLWURJHQXVHHIÀFLHQF\
RIÀFLDOGHYHORSPHQWDVVLVWDQFH
2YHUVHDV'HYHORSPHQW,QVWLWXWH
(QYLURQPHQWDO$VVHVVPHQWRI2JRQLODQG
2UJDQL]DWLRQIRU(FRQRPLF&RRSHUDWLRQDQG'HYHORSPHQW
2(&''HYHORSPHQW$VVLVWDQFH&RPPLWWHH
RUJDQLFJXDUDQWHHV\VWHPV
2DNODQG,QVWLWXWH
RYHUWKHFRXQWHUWUDQVDFWLRQV
RYHUDOOWUDGHGLVWRUWLQJVXSSRUW
3HVWLFLGH$FWLRQ1HWZRUN1RUWK$PHULFD
3XEOLF$YDLODEOH6SHFLÀFDWLRQ
3URJUDPIRU%LRGLYHUVLW\
3URGXFW&DUERQ)RRWSULQW
SKRVSKRHQROS\UXYDWH
SKRVSKRJO\FHUDWH
SDUWLFLSDWRU\JXDUDQWHHV\VWHP
,QWHUQDWLRQDO3RWDWR/DWH%OLJKW7HVWLQJ3URJUDP
SDUWVSHUPLOOLRQ
3ULQFLSOHVIRU5HVSRQVLEOH$JULFXOWXUDO,QYHVWPHQW
3ULYDWH6HFWRU'HYHORSPHQWLQ$JULFXOWXUH
SKRWRYROWDLF
3ULFHZDWHUKRXVH&RRSHUV
UHVHDUFKDQGGHYHORSPHQW
5DSLG$OHUW6\VWHPRI)RRGDQG)HHG(8
UHGXFWLRQRIHPLVVLRQVIURPGHIRUHVWDWLRQDQGIRUHVWGHJUDGDWLRQ
5HQHZDEOH(QHUJ\3ROLF\1HWZRUNIRUWKHVW&HQWXU\
ULJKWKDQGVLGH
*HUPDQ&RXQFLOIRU6XVWDLQDEOH'HYHORSPHQW
5R\DO6RFLHW\
5RXQGWDEOHRQ6XVWDLQDEOH%LRIXHOV
ULEXORVHELVSKRVSKDWH
5HJLRQDO9DOXHDGGHG&LWL]HQ6KDUHKROGHU&RUSRUDWLRQ
6RXWK6RXWK(DVW
6XVWDLQDEOH$JULFXOWXUH1HWZRUN
'LUHFWRUDWH*HQHUDOIRU+HDOWKDQG&RQVXPHU$IIDLUV(XURSHDQ&RPPLVVLRQ
6SHFLDO$GPLQLVWUDWLYH5HJLRQ
VXVWDLQDEOHDJULFXOWXUHDQGUXUDOGHYHORSPHQW
6WDQGLQJ&RPPLWWHHRQ$JULFXOWXUDO5HVHDUFKRIWKH(XURSHDQ&RPPLVVLRQ
6RPDWLF&HOO1XFOHDU7UDQVIHUFORQLQJ
6FLHQWLÀF&RPPLWWHHRQ3UREOHPVRIWKH(QYLURQPHQW
6XVWDLQDEOH&RQVXPSWLRQ5HVHDUFK([FKDQJH
6(.(0'HYHORSPHQW)RXQGDWLRQ
VSHFLDODQGGLIIHUHQWLDOWUHDWPHQW
DQFLHQW(J\SWLDQIRU´YLWDOLW\IURPWKHVXQµ
6RXWKHUQ1DWLRQV1DWLRQDOLWLHVDQG3HRSOHV5HJLRQ
1HWKHUODQGV'HYHORSPHQW2UJDQL]DWLRQ
VRLORUJDQLFFDUERQ
7KH6WDWHRI)RRGDQG$JULFXOWXUH)$2SXEOLFDWLRQ
VRLORUJDQLFPDWWHU
VSHFLDOSURGXFWV
6SHFLDO5HSRUWRQ(PLVVLRQV6FHQDULRV,3&&
VXE6DKDUDQ$IULFD
VSHFLDODJULFXOWXUDOVDIHJXDUG
VSHFLDOVDIHJXDUGPHFKDQLVPV
6FLHQWLÀF9HWHULQDU\&RPPLWWHH(8
WRQVRIFDUERQGLR[LGHHTXLYDOHQW
7UDGH(QYLURQPHQW&OLPDWH&KDQJHDQG'HYHORSPHQW%UDQFKRI81&7$'
[YLL
7(5
WRHV
WRQQHV&KD
8(
8(02$
8.
81
81'(6$
81&7$'
81'3
81(3
81(6&2
81)&&&
81*&
81,6,67
811$'$)
815,6'
8162
86&56
8686$
86$,'
86'$
86)'$
8:
9$0
9((7&
9=%9
:$5'$
:%
:)3
:+2
:02
:2&$7
:5$3
:5,
:6&
:7,
:72
:8(
\U
7UDGHDQG(QYLURQPHQW5HYLHZ
WRQVRIRLOHTXLYDOHQWV
WRQQHVRIFDUERQSHUKHFWDUH
8QLRQHXURSpHQQH
:HVWHUQ$IULFDQ(FRQRPLFDQG0RQHWDU\8QLRQ
8QLWHG.LQJGRP
8QLWHG1DWLRQV
81'HSDUWPHQWRI(FRQRPLFDQG6RFLDO$IIDLUV
8QLWHG1DWLRQV&RQIHUHQFHRQ7UDGHDQG'HYHORSPHQW
8QLWHG1DWLRQV'HYHORSPHQW3URJUDPPH
8QLWHG1DWLRQV(QYLURQPHQW3URJUDPPH
8QLWHG1DWLRQV(GXFDWLRQDO6FLHQWLÀFDQG&XOWXUDO2UJDQL]DWLRQ
8QLWHG1DWLRQV)UDPHZRUN&RQYHQWLRQRQ&OLPDWH&KDQJH
8QLWHG1DWLRQV*OREDO&RPSDFW
8QLWHG1DWLRQV,QWHUQDWLRQDO6FLHQWLÀF,QIRUPDWLRQ6\VWHP
8QLWHG1DWLRQV1HZ$JHQGDIRUWKH'HYHORSPHQWRI$IULFD
8QLWHG1DWLRQV5HVHDUFK,QVWLWXWHIRU6RFLDO'HYHORSPHQW
8QLWHG1DWLRQV6WDWLVWLFDO2IÀFH
8QLWHG6WDWHV&RQJUHVVLRQDO5HVHDUFK6HUYLFHV
8QLWHG6WDWHVRI$PHULFD
86$JHQF\IRU,QWHUQDWLRQDO'HYHORSPHQW
8QLWHG6WDWHV'HSDUWPHQWRI$JULFXOWXUH
8QLWHG6WDWHV)RRGDQG'UXJ$GPLQLVWUDWLRQ
8QLYHUVLW\RI:LVFRQVLQ
YHVLFXODUDUEXVFXODUP\FRUUKL]DHIXQJL
9ROXPHWULF(WKDQRO([FLVH7D[&UHGLW86
)HGHUDWLRQRI*HUPDQ&RQVXPHU2UJDQLVDWLRQV9HUEUDXFKHU]HQWUDOH%XQGHVYHUEDQG
:HVW$IULFD5LFH'HYHORSPHQW$VVRFLDWLRQ
:RUOG%DQN
81:RUOG)RRG3URJUDPPH
:RUOG+HDOWK2UJDQL]DWLRQ
:RUOG0HWHRURORJLFDO2UJDQL]DWLRQ
:RUOG2YHUYLHZRI&RQVHUYDWLRQ$SSURDFKHVDQG7HFKQRORJLHV
:DVWHDQG5HVRXUFHV$FWLRQ3URJUDPPH
:RUOG5HVRXUFHV,QVWLWXWH
:RUOG6KLSSLQJ&RXQFLO
:HVW7H[DV,QWHUPHGLDWHRLOSULFH
:RUOG7UDGH2UJDQL]DWLRQ
ZDWHUXVHHIÀFLHQF\
\HDU
[YLLL
75$'($1'(19,5210(175(9,(:
([SODQDWRU\QRWHV
&ODVVLÀFDWLRQE\FRXQWU\RUFRPPRGLW\JURXS
7KHFODVVLÀFDWLRQRIFRXQWULHVLQWKLV5HYLHZKDVEHHQDGRSWHGVROHO\IRUWKHSXUSRVHVRIVWDWLVWLFDORUDQDO\WLFDO
FRQYHQLHQFHDQGGRHVQRWQHFHVVDULO\LPSO\DQ\MXGJHPHQWFRQFHUQLQJWKHVWDJHRIGHYHORSPHQWRIDSDUWLFXODU
FRXQWU\RUDUHD
7KHPDMRUFRXQWU\JURXSLQJVXVHGLQWKLV5HYLHZIROORZWKHFODVVLÀFDWLRQE\WKH8QLWHG1DWLRQV6WDWLVWLFDO2IÀFH
81627KH\DUHGLVWLQJXLVKHGDV
‡ 'HYHORSHGRULQGXVWULDOL]HGFRXQWULHVWKHFRXQWULHVPHPEHUVRIWKH2(&'RWKHUWKDQ0H[LFRWKH5HSXEOLF
RI.RUHDDQG7XUNH\SOXVWKHQHZ(8PHPEHUFRXQWULHVDQG,VUDHO
‡ 7UDQVLWLRQHFRQRPLHVUHIHUVWR6RXWK(DVW(XURSHDQGWKH&RPPRQZHDOWKRI,QGHSHQGHQW6WDWHV&,6
‡ 'HYHORSLQJFRXQWULHVDOOFRXQWULHVWHUULWRULHVRUDUHDVQRWVSHFLÀHGDERYH
7KHWHUPV´FRXQWU\µ´HFRQRP\µUHIHUDVDSSURSULDWHDOVRWRWHUULWRULHVRUDUHDV
5HIHUHQFHVWR´/DWLQ$PHULFDµLQWKHWH[WRUWDEOHVLQFOXGHWKH&DULEEHDQFRXQWULHVXQOHVVRWKHUZLVHLQGLFDWHG
5HIHUHQFHVWR´VXE6DKDUDQ$IULFDµLQWKHWH[WRUWDEOHVGRQRWLQFOXGH6RXWK$IULFDXQOHVVRWKHUZLVHLQGLFDWHG
)RUVWDWLVWLFDOSXUSRVHVUHJLRQDOJURXSLQJVDQGFODVVLÀFDWLRQVE\FRPPRGLW\JURXSXVHGLQWKLV5HYLHZIROORZ
JHQHUDOO\WKRVHHPSOR\HGLQWKH81&7$'+DQGERRNRI6WDWLVWLFV8QLWHG1DWLRQVSXEOLFDWLRQVDOHVQR()
,,'XQOHVVRWKHUZLVHVWDWHG7KHGDWDIRU&KLQDGRQRWLQFOXGHWKRVHIRU+RQJ.RQJ6SHFLDO$GPLQLVWUDWLYH
5HJLRQ+RQJ.RQJ6$50DFDR6SHFLDO$GPLQLVWUDWLYH5HJLRQ0DFDR6$5DQG7DLZDQ3URYLQFHRI&KLQD
2WKHUQRWHV
7KHWHUP´GROODUµUHIHUVWR8QLWHG6WDWHVGROODUVXQOHVVRWKHUZLVHVWDWHG
7KHWHUP´ELOOLRQµVLJQLÀHVPLOOLRQ
7KHWHUP´WRQVµUHIHUVWRPHWULFWRQV
$QQXDOUDWHVRIJURZWKDQGFKDQJHUHIHUWRFRPSRXQGUDWHV
([SRUWVDUHYDOXHG)2%DQGLPSRUWV&,)XQOHVVRWKHUZLVHVSHFLÀHG
8VH RI D GDVK ² EHWZHHQ GDWHV UHSUHVHQWLQJ \HDUV HJ ² VLJQLÀHV WKH IXOO SHULRG LQYROYHG
LQFOXGLQJWKHLQLWLDODQGÀQDO\HDUV
$QREOLTXHVWURNHEHWZHHQWZR\HDUVHJVLJQLÀHVDÀVFDORUFURS\HDU
$GRWLQGLFDWHVWKDWWKHLWHPLVQRWDSSOLFDEOH
7ZRGRWVLQGLFDWHWKDWWKHGDWDDUHQRWDYDLODEOHRUDUHQRWVHSDUDWHO\UHSRUWHG
$GDVKRUD]HURLQGLFDWHVWKDWWKHDPRXQWLVQLORUQHJOLJLEOH
'HFLPDOVDQGSHUFHQWDJHVGRQRWQHFHVVDULO\DGGXSWRWRWDOVEHFDXVHRIURXQGLQJ
75$'($1'(19,5210(175(9,(:
'#&46+%.'U U
8OULFK+RIIPDQQ
81&7$'VHFUHWDULDW
$EVWUDFW
7KHSUREOHPVRIFOLPDWHFKDQJHKXQJHUDQGSRYHUW\HFRQRPLFVRFLDODQGJHQGHULQHTXLW\SRRUKHDOWK
DQG QXWULWLRQ DQG HQYLURQPHQWDO VXVWDLQDELOLW\ DUH LQWHUUHODWHG DQG QHHG WR EH VROYHG E\ OHYHUDJLQJ
DJULFXOWXUH·VPXOWLIXQFWLRQDOLW\$JDLQVWWKLVEDFNJURXQGDIXQGDPHQWDOWUDQVIRUPDWLRQWRZDUGVFOLPDWH
IULHQGO\DJULFXOWXUHFRQVLVWLQJRIDPRVDLFRIDJURHFRORJLFDOSURGXFWLRQSUDFWLFHVPXVWEHFRPHWKHQHZ
SDUDGLJPEXWLWVKRXOGQRWFRPSURPLVHRWKHUYHU\LPSRUWDQWGHYHORSPHQWREMHFWLYHV
‡ $GGUHVVLQJWKHHTXLW\FKDOOHQJHQRWDEO\IRRGVHFXULW\DQGIDUPHUOLYHOLKRRGV
‡ (QKDQFLQJVXVWDLQDEOHSURGXFWLYLW\EDVHGRQDQHZV\VWHPLFDOO\GLIIHUHQWGHÀQLWLRQWKDWIRFXVHVRQ
WRWDOIDUPRXWSXWLQVWHDGRISURGXFWLYLW\SHUXQLWRIODERXUDQG
‡ 6WUHQJWKHQLQJUHVLOLHQFHWRUHVRXUFHDQGHQHUJ\VFDUFLW\DQGFOLPDWHFKDQJH
,WLVWKHUHIRUHLPSRUWDQWWRWKLQNLQV\VWHPVUDWKHUWKDQRYHUHPSKDVL]LQJDFOLPDWHIRFXV
$,QWURGXFWLRQ
&OLPDWH FKDQJH && KDV WKH SRWHQWLDO WR GDPDJH
LUUHYHUVLEO\ WKH QDWXUDO UHVRXUFH EDVH RQ ZKLFK
DJULFXOWXUH GHSHQGV ZLWK JUDYH FRQVHTXHQFHV IRU
IRRG VHFXULW\ && FRXOG DOVR VLJQLÀFDQWO\ FRQVWUDLQ
HFRQRPLFGHYHORSPHQWLQWKRVHGHYHORSLQJFRXQWULHV
WKDW ODUJHO\ UHO\ RQ DJULFXOWXUH IRU PRUH LQIRUPDWLRQ
VHH /LP /L &KLQJ 7KHUHIRUH PHHWLQJ WKH
GXDO FKDOOHQJH RI DFKLHYLQJ IRRG VHFXULW\ DQG
RWKHU GHYHORSPHQWDO FREHQHÀWV RQ WKH RQH KDQG
DQG PLWLJDWLQJ DQG DGDSWLQJ WR && RQ WKH RWKHU
UHTXLUHVSROLWLFDOFRPPLWPHQWDWWKHKLJKHVWOHYHOIRUD
IXQGDPHQWDODQGXUJHQWWUDQVIRUPDWLRQRIDJULFXOWXUH
,Q IDFW WLPH LV JHWWLQJ WKH PRVW LPSRUWDQW VFDUFLW\
IDFWRULQGHDOLQJZLWK&&+RIIPDQQ
7KH 81&7$' 7UDGH DQG (QYLURQPHQW 5HYLHZ JLYHV DQ RSSRUWXQLW\ WR PRUH WKDQ H[SHUWV WR
DQDO\]H YDULRXV VSHFLÀF DVSHFWV RI WKH IXQGDPHQWDO
WUDQVIRUPDWLRQ RI DJULFXOWXUDO SURGXFWLRQ PHWKRGV
DQG V\VWHPV UHTXLUHG IRU GHDOLQJ ZLWK WKH VHULRXV
FKDOOHQJHV HPDQDWLQJ IURP JOREDO ZDUPLQJ DQG WKH
WUDGHRIIVWREHPDGHLQHQKDQFLQJWKHPLWLJDWLRQDQG
DGDSWDWLRQSRWHQWLDORIDJULFXOWXUHDVSDUWDQGSDUFHO
RI D SURSRRU GHYHORSPHQW DSSURDFK LQ DJULFXOWXUH
IXOO\H[SORLWLQJDJULFXOWXUH·VPXOWLIXQFWLRQDOLW\
%$JULFXOWXUHDNH\GULYHUDQGDPDMRU
YLFWLPRIJOREDOZDUPLQJ
$V PRVW RI WKH JUHHQKRXVH JDVHV *+* ZLWK
WKH H[FHSWLRQ RI PHWKDQH KDYH D KDOI OLIH RI RYHU D
KXQGUHG \HDUV JOREDO *+* HPLVVLRQV ZLOO KDYH WR
SHDNE\DQGGURSE\SHUFHQWLQWKHSHULRG
WR WR OLPLW JOREDO ZDUPLQJ WR GHJUHHV 7KH
&OLPDWH*URXS<HWWRWDO*+*HPLVVLRQV
IRUDUHHVWLPDWHGWRKDYHLQFUHDVHGE\PRUHWKDQ
SHU FHQW D KLVWRULFDO UHFRUG 7KH *XDUGLDQ DQG,($DIROORZHGE\DQHVWLPDWHGLQFUHDVH
RISHUFHQWLQ$OVRDFFRUGLQJWRHVWLPDWHV
RIDQDO\VWVDW3ULFHZDWHUKRXVH&RRSHUV3Z&JOREDO
FDUERQ LQWHQVLW\ LH FDUERQ HPLVVLRQV SHU XQLW RI
*'3KDVLQFUHDVHGIRUWKHÀUVWWLPHLQPDQ\\HDUV
´,QVWHDG RI PRYLQJ WRR VORZO\ LQ WKH ULJKW GLUHFWLRQ
ZHDUHQRZPRYLQJLQWKHZURQJGLUHFWLRQµVDLGRQH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
RIWKH3Z&DQDO\VWV,QSULQFLSDOZHIROORZWKH*+*
HPLVVLRQVWUHQGVXQGHUWKHZRUVWFDVHVFHQDULRRIWKH
,QWHUJRYHUQPHQWDO 3DQHO RQ &OLPDWH &KDQJH ,3&&
DQGWKH,QWHUQDWLRQDO(QHUJ\$JHQF\,($)LQDQFLDO
7LPHV
$JULFXOWXUDO HPLVVLRQV RI PHWKDQH &+ DQG QLWURXV
R[LGH 12 ZKLFK DFFRXQW IRU RYHU SHU FHQW RI
WRWDODJULFXOWXUDO*+*HPLVVLRQVJUHZE\SHUFHQW
LQWKHSHULRG²,3&&DURXJKO\
SURSRUWLRQDWH IRU LQVWDQFH WR WKH LQFUHDVH LQ JOREDO
FHUHDOV· SURGXFWLRQ YROXPH EXW DERXW WKUHH WLPHV
DV IDVW DV SURGXFWLYLW\ LQFUHDVHG LQ JOREDO FHUHDOV·
SURGXFWLRQ 7KHVH *+* HPLVVLRQV DUH SUHGLFWHG
WR ULVH E\ SHU FHQW E\ LQ UHVSRQVH WR
SRSXODWLRQJURZWKDQGFKDQJLQJGLHWVLQGHYHORSLQJ
FRXQWULHV LQ SDUWLFXODU WRZDUGV JUHDWHU FRQVXPSWLRQ
RI UXPLQDQW PHDWV DQG GDLU\ SURGXFWV DV ZHOO DV
WKH IXUWKHU VSUHDG RI LQGXVWULDO DQG IDFWRU\ IDUPLQJ
SDUWLFXODUO\ LQ GHYHORSLQJ FRXQWULHV ,3&& D
,Q RWKHU ZRUGV LQVWHDG RI FXWWLQJ DJULFXOWXUDO
HPLVVLRQVE\VRPHSHUFHQWE\LQUHDOLW\ZH
IROORZH[DFWO\WKHRSSRVLWHWUHQG
$V FDQ EH VHHQ IURP ÀJXUH WKH UHFHQW DQG IXWXUH
ULVH LQ JOREDO DJULFXOWXUDO *+* HPLVVLRQV LV PDLQO\
RFFXUULQJ LQ GHYHORSLQJ FRXQWULHV ,Q WKH
ODWWHU DFFRXQWHG IRU WKUHH TXDUWHUV RI QLWURXV R[LGH
DQG PHWKDQH HPLVVLRQV LQ WKH DJULFXOWXUDO VHFWRU
7KHVH HPLVVLRQV DUH PDLQO\ FDXVHG E\ VRPH GHYHORSLQJ FRXQWULHV VHH ÀJXUH 7KH FRXQWULHV
LQ ÀJXUH FDXVH RYHU SHU FHQW RI DJULFXOWXUDO
HPLVVLRQV ZRUOGZLGH $OWKRXJK WKH OHDVW GHYHORSHG
FRXQWULHV /'&V DUH QRW D VLJQLÀFDQW FRQWULEXWRU WR
JOREDODJULFXOWXUDOHPLVVLRQVWKHODWWHUDFFRXQWIRUWKH
EXON RI QDWLRQDO *+* HPLVVLRQV DV FDQ EH VHHQ LQ
ÀJXUH LQ /'&V DJULFXOWXUHUHODWHG *+* HPLVVLRQV
DFFRXQWIRUDERXWSHUFHQWRIWRWDO*+*HPLVVLRQV
*OREDOZDUPLQJLVDWKUHDWPXOWLSOLHULHFRPSRXQGLQJ
VXSSOHPHQWLQJRUUHLQIRUFLQJRWKHUWKUHDWVVRWKDWWKH
ELRSK\VLFDO YXOQHUDELOLW\ RI DJULFXOWXUH LQFUHDVHV
7KH PDLQ LPSDFW RI JOREDO ZDUPLQJ RQ DJULFXOWXUDO
SURGXFWLRQFDQEHVXPPDUL]HGDVIROORZV
‡ +LJKHU WHPSHUDWXUHV DIIHFW SODQW DQLPDO DQG
IDUPHUV·KHDOWKHQKDQFHSHVWVDQGUHGXFHZDWHU
VXSSO\ LQFUHDVLQJ WKH ULVN RI JURZLQJ DULGLW\ DQG
ODQGGHJUDGDWLRQ
‡ 0RGLÀHG SUHFLSLWDWLRQ SDWWHUQV ZLOO HQKDQFH ZDWHU
VFDUFLW\ DQG DVVRFLDWHG GURXJKW VWUHVV IRU FURSV
DQGDOWHULUULJDWLRQZDWHUVXSSOLHV7KH\DOVRUHGXFH
WKHSUHGLFWDELOLW\IRUIDUPHUV·SODQQLQJ
‡ 7KH HQKDQFHG IUHTXHQF\ RI ZHDWKHU H[WUHPHV
)LJXUH(VWLPDWHGKLVWRULFDODQGSURMHFWHGQLWURXVR[LGHDQGPHWKDQHHPLVVLRQVLQWKHDJULFXOWXUDOVHFWRURI
GHYHORSLQJDQGGHYHORSHGFRXQWULHV²LQWKRXVDQGW&2HT
1 2 0 DQXUH
1 2 6 RLOV
1 2 % XUQLQJ
& + 5 LFH
& + 0 DQXUH
& + ( QWHULF
& + % XUQLQJ
'HYHORSLQJFRXQWULHV
6RXUFH,3&&D
'HYHORSHGFRXQWULHV
75$'($1'(19,5210(175(9,(:
UK
Venezuela
Ethiopia
Vietnam
Canada
DRC
Turkey
Mexico
Myanmar
Pakistan
Bangladesh
6RXUFH:RUOG5HVRXUFHV,QVWLWXWHTXRWHGLQ0OOHUHWDOD
1RWH&2HPLVVLRQVDUHFRQÀQHGWRIRVVLOIXHOFRPEXVWLRQRQO\
)LJXUH/'&*+*HPLVVLRQVE\VHFWRUSHUFHQWRIWRWDOHPLVVLRQV
0 DQXIDFWXULQJDQG
FRQVWUXFWLRQ
7 UDQVSRUWDWLRQ
( OHFWULFLW\DQGKHDW
) XJLWLY HHP LVVLRQV
,QGXVWULDOSURFHVVHV
2 WKHUIXHOFRP EXVWLRQ
: DVWH
( QHUJ\
$ JULFXOWXUH
6RXUFH81&7$'
/DQGXVHFKDQJHVDQG
IRUHVWU\
Per capita (million metric tons CO2-e/person)
-0
Germany
0-
Thailand
-1
Colombia
200 -
France
-2
Austria
400 -
Nigeria
-3
Russia
600 -
Indonesia
-4
Argentina
800 -
India
-5
US
1,000 -
Brazil
-6
EU-27
1,200 -
China
Total (million metric tons CO2-e)
)LJXUH7RS*+*HPLWWLQJFRXQWULHVIURPDJULFXOWXUHWRWDODQGSHUFDSLWDHPLVVLRQVLQ&2HTIRUWKH\HDU
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
)LJXUH3URMHFWHGFOLPDWHFKDQJHFDXVHGFKDQJHVLQDJULFXOWXUDOSURGXFWLYLW\E\LQFRUSRUDWLQJWKHHIIHFWRI
FDUERQIHUWLOLVDWLRQ
<-25
-25 to -15
-15 to -5
-5 to 0
0 to 5
5 to 15
15 to 25
>25
n.a.
6RXUFH&OLQHDQG<RKH
6RXUFH&OLQHDQG<RKQHWDO
‡
‡
‡
‡
‡
‡
PD\VLJQLÀFDQWO\LQÁXHQFHERWKFURSDQGOLYHVWRFN
SURGXFWLRQ ,W PD\ DOVR FRQVLGHUDEO\ LPSDFW RU
GHVWUR\SK\VLFDOLQIUDVWUXFWXUHIRUDJULFXOWXUH
(QKDQFHG DWPRVSKHULF FRQFHQWUDWLRQV RI &2
PD\ IRU D OLPLWHG SHULRG RI WLPH OHDG WR ¶QDWXUDO·
FDUERQ IHUWLOL]DWLRQ DQG WKXV D VWLPXOXV WR FURS
SURGXFWLYLW\
+LJKHUWHPSHUDWXUHVJRKDQGLQKDQGZLWKKLJKHU
R]RQH FRQFHQWUDWLRQV 2]RQH LV KDUPIXO WR DOO
SODQWV EXW VR\EHDQV ZKHDW RDWV JUHHQ EHDQV
SHSSHUVDQGVRPHW\SHVRIFRWWRQDUHSDUWLFXODUO\
YXOQHUDEOH)$2D
*OREDO ZDUPLQJ ZLOO DOVR QHJDWLYHO\ LPSDFW WKH
QXWULWLRQDO TXDOLW\ RI VRPH IRRG LQ SDUWLFXODU
WKH SURWHLQ DQG PLFURQXWULHQWV· FRQWHQW IRU PRUH
LQIRUPDWLRQ VHH WKH FRPPHQW RI +|J\ DQG
)DQJPHLHULQWKLV&KDSWHU
+LJKHU WHPSHUDWXUHV DUH OLNHO\ WR LQFUHDVH WKH
H[SRVXUH RI SODQWV DQG DQLPDOV WR GLVHDVHV DQG
SHVWV WKXV LQFUHDVLQJ SURGXFWLRQ DQG KDQGOLQJ
ORVVHV
6HD OHYHO ULVH LV OLNHO\ WR LQÁXHQFH WUDGH LQIUD
VWUXFWXUH IRU DJULFXOWXUH PD\ LQXQGDWH SURGXFLQJ
DUHDVDQGDOWHUDTXDFXOWXUHSURGXFWLRQFRQGLWLRQV
*OREDOZDUPLQJLVQRWXQLIRUPO\SUREOHPDWLF,WZLOO
OHDG WR LPSURYHG FURS SURGXFWLYLW\ LQ SDUWV RI WKH
WURSLFDOKLJKODQGVDQGH[WHQGFURSSLQJSHULRGVRU
DOORZ PXOWLSOH KDUYHVWV LQ WHPSHUDWH ]RQHV )$2
D
7KH DERYHPHQWLRQHG ULVNV DQG VWUHVV IDFWRUV DFW
LQGLYLGXDOO\ EXW ZH ZLOO DOVR VHH LQFUHDVLQJ VWUHVV
FRPELQDWLRQV 7KHUH LV D JUHDW GHDO WKDW LV DV \HW
XQNQRZQ DERXW KRZ VXFK VWUHVVHV PD\ FRPELQH
WKHUHIRUHPRUHUHVHDUFKRQWKHLQWHUDFWLRQVEHWZHHQ
GLIIHUHQWDELRWLFDQGELRWLFVWUHVVHVLQNH\DJULFXOWXUDO
V\VWHPV LV XUJHQWO\ UHTXLUHG )$2 D
)XUWKHUPRUHWHPSHUDWXUHLQFUHDVHVDUHOLNHO\WRKDYH
QRQOLQHDUHIIHFWVRQ\LHOGVDQGIRRGTXDOLW\
&OLPDWHFDODPLWLHVDUHOLNHO\WRKLWWKHSRRUVHJPHQWV
RI WKH SRSXODWLRQ DQG SRRU FRXQWULHV SDUWLFXODUO\
KDUGDVWKHLUDGDSWLYHFDSDFLW\DQGUHVLOLHQFHLVWKH
ORZHVW:HOORIIVHJPHQWVRIWKHSRSXODWLRQFDQ¶EX\·
IRRGVHFXULW\DWOHDVWLQWKHVKRUWUXQ)$2D
7KH LPSDFW RI JOREDO ZDUPLQJ KDV VLJQLÀFDQW
FRQVHTXHQFHV IRU DJULFXOWXUDO SURGXFWLRQ DQG WUDGH
RI GHYHORSLQJ FRXQWULHV DV ZHOO DV DQ LQFUHDVHG ULVN
RIKXQJHU3UHOLPLQDU\HVWLPDWHVIRUWKHSHULRGXSWR
VXJJHVW D GHFOLQH RI VRPH SHU FHQW RI
DJULFXOWXUDO SURGXFWLYLW\ LQ WKH PRVW FOLPDWHFKDQJH
H[SRVHG GHYHORSLQJFRXQWU\ UHJLRQV $IULFD 6RXWK
$VLDDQG&HQWUDO$PHULFDVHHÀJXUH)RUVRPH
FRXQWULHVLQWKHVHUHJLRQVWRWDODJULFXOWXUDOSURGXFWLRQ
FRXOGGHFOLQHE\XSWRSHUFHQW$FFRUGLQJWR)$2
D ´LQ VRPH ORFDWLRQV D FRPELQDWLRQ RI
WHPSHUDWXUH DQG SUHFLSLWDWLRQ FKDQJHV PLJKW UHVXOW
LQ FRPSOHWH ORVV RI DJULFXOWXUDO DFWLYLW\ LQ D IHZ
ORFDWLRQV DJULFXOWXUH PLJKW EHFRPH LPSRVVLEOHµ
7KH SRRUHVW IDUPHUV ZLWK OLWWOH VDIHJXDUGV DJDLQVW
FOLPDWHFDODPLWLHVRIWHQOLYHLQDUHDVSURQHWRQDWXUDO
GLVDVWHUV 0RUH IUHTXHQW H[WUHPH HYHQWV ZLOO FUHDWH
ERWKDKXPDQLWDULDQDQGDIRRGFULVLV)$2D
$JULFXOWXUHSURYLGHVHVVHQWLDOQRXULVKPHQWIRUSHRSOH
DQG LV WKH QHFHVVDU\ EDVLV IRU PDQ\ HFRQRPLF
DFWLYLWLHV,QDODUJHQXPEHURIGHYHORSLQJFRXQWULHV
DJULFXOWXUH DFFRXQWV IRU EHWZHHQ RI *'3
DQG SURYLGHV WKH OLYHOLKRRGV IRU DSSUR[LPDWHO\ ELOOLRQ SHRSOH LH VRPH RI JOREDO SRSXODWLRQ
)$2D:KDWLVPRUHDFFRUGLQJWR'H-DQYU\
DQG 6DGRXOHW DJULFXOWXUHGULYHQ JURZWK LV
WKUHH WLPHV PRUH OLNHO\ WR UHGXFH SRYHUW\ WKDQ *'3
JURZWKLQRWKHUVHFWRUVRIWKHHFRQRP\
7KHFXUUHQWV\VWHPRILQGXVWULDODJULFXOWXUHSURGXFWLYH
DV LW KDV EHHQ LQ UHFHQW GHFDGHV VWLOO OHDYHV DERXW
ELOOLRQ SHRSOH XQGHUQRXULVKHG DQG SRYHUW\
VWULFNHQRIZKRPOLYHLQUXUDODUHDV0LOOHQQLXP
'HYHORSPHQW *RDO 0'* RQH DLPV DW HUDGLFDWLQJ
H[WUHPHKXQJHUDQGSRYHUW\2QHRIWKHPRVWHIIHFWLYH
ZD\VRIKDOYLQJERWKWKHQXPEHURIKXQJU\DQGSRRU
E\ LV WR WDNH WKH QHFHVVDU\ VWHSV RI WUDQVLWLRQ
WRZDUGV PRUH VXVWDLQDEOH IRUPV RI DJULFXOWXUH WKDW
75$'($1'(19,5210(175(9,(:
QRXULVKWKHODQGDQGSHRSOHDQGSURYLGHDQRSSRUWXQLW\
IRU GHFHQW ÀQDQFLDOO\ UHZDUGLQJ DQG JHQGHU HTXDO
MREV 0HHWLQJ KHDOWK WDUJHWV IURP 0'* DQG DUH
DOVR OLQNHG WR PDMRU FKDQJHV LQ DJULFXOWXUH UHVXOWLQJ
LQDPRUHGLYHUVHVDIHQXWULWLRXVDQGDIIRUGDEOHGLHW
7KHUHIRUHWKHSUREOHPVRIFOLPDWHFKDQJHKXQJHUDQG
SRYHUW\ HFRQRPLF VRFLDO DQG JHQGHU LQHTXLW\ SRRU
KHDOWK DQG QXWULWLRQ DQG HQYLURQPHQWDO VXVWDLQDELOLW\
DUHLQWHUUHODWHGDQGQHHGWREHVROYHGE\OHYHUDJLQJ
DJULFXOWXUH·VPXOWLIXQFWLRQDOLW\+HUUHQHWDO
$JDLQVW WKLV EDFNJURXQG FOLPDWHIULHQGO\ DJULFXOWXUH
PXVW EHFRPH WKH QHZ SDUDGLJP EXW LW VKRXOG QRW
FRPSURPLVH RWKHU YHU\ LPSRUWDQW GHYHORSPHQWDO
REMHFWLYHV
‡ $GGUHVVLQJ WKH HTXLW\ FKDOOHQJH QRWDEO\ IRRG
VHFXULW\DQGIDUPHUOLYHOLKRRGV
‡ (QKDQFLQJ VXVWDLQDEOH SURGXFWLYLW\ EDVHG RQ D
QHZ V\VWHPLFDOO\ GLIIHUHQW GHÀQLWLRQ WKDW IRFXVHV
RQWRWDOIDUPRXWSXWLQVWHDGRISURGXFWLYLW\SHUXQLW
RIODERXU
‡ 6WUHQJWKHQLQJ UHVLOLHQFH WR UHVRXUFH DQG HQHUJ\
VFDUFLW\DQGFOLPDWHFKDQJHDQG
‡ 5HÁHFWLQJDQGFDSLWDOL]LQJRQWKHPXOWLIXQFWLRQDOLW\
RIDJULFXOWXUH
)LJXUH6\VWHPLFHPEHGGLQJRIFOLPDWHIULHQGO\DJULFXOWXUH
22SSRVLWHGLUHFWLRQ
66DPHGLUHFWLRQ
55HLQIRUFQJORRS
%%DODQFLQJORRS
6RXUFH+HUUHQ
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
,WLVWKHUHIRUHLPSRUWDQWWRWKLQNLQV\VWHPVUDWKHUWKDQ
RYHUHPSKDVL]LQJDFOLPDWHIRFXVVHHÀJXUH
&5HTXLUHGIXQGDPHQWDOWUDQVIRUPDWLRQ
RIDJULFXOWXUH
7R XQGHUVWDQG WKH GLUHFWLRQ DQG VWUXFWXUH RI WKH
UHTXLUHG IXQGDPHQWDO WUDQVIRUPDWLRQ LW LV LPSRUWDQW
WR DSSUHFLDWH WKH SDWWHUQV RI WKH WHFKQLFDO FOLPDWH
PLWLJDWLRQ SRWHQWLDO LQ DJULFXOWXUH $FFRUGLQJ WR WKH
IRXUWK DVVHVVPHQW UHSRUW RI ,3&& D SHUFHQWRIWKHWHFKQLFDOPLWLJDWLRQSRWHQWLDOLVUHODWHG
WRVRLOFDUERQVHTXHVWUDWLRQDERXWSHUFHQWOLQNHG
WR PLWLJDWLRQ RI PHWKDQH DQG RQO\ DERXW SHU FHQW
WLHG WR PLWLJDWLRQ RI QLWURXV R[LGH HPLVVLRQV IURP
VRLO FRUUHODWLQJ ZLWK QLWURJHQ IHUWLOL]HU XVH $V WKH
ZRUOG FXUUHQWO\ IROORZV WKH ZRUVW FDVH VFHQDULR RI
*+* HPLVVLRQV SURMHFWHG E\ ,3&& DQG ,($ LH
LPSO\LQJ D JOREDO ZDUPLQJ RI GHJUHHV &HOVLXV
FOLPDWH UHVLOLHQFH DQG DGDSWDWLRQ LQ FRPELQDWLRQ
ZLWK SURGXFWLYLW\ LQFUHDVHV VKRXOG EH SULRULWL]HG
,Q JHQHUDO *+* HPLVVLRQV IURP DJULFXOWXUH FDQ
EH UHGXFHG E\ FKDQJH RI SURGXFWLRQ V\VWHPV DQG
PDQDJHPHQWSUDFWLFHVWKDWLQPDQ\FDVHVDOVRIRVWHU
SURGXFWLYLW\DQGHQKDQFHUHVLOLHQFH)$2D
$JDLQVW WKLV YHU\ EDFNJURXQG WKH UHTXLUHG
WUDQVIRUPDWLRQ RI DJULFXOWXUH QHHGV WR PHHW WKH
IROORZLQJ REMHFWLYHV DQG DSSURDFKHV ZKLFK DUH
IXUWKHUHODERUDWHGRQE\WKHDXWKRUVRIWKLV5HYLHZ
‡ ,QFUHDVLQJWKHVRLOFDUERQFRQWHQWFRPELQHGZLWK
FORVHGQXWULHQWF\FOHVDQGDQLQWHJUDWHGDSSURDFK
WRDJULFXOWXUDOSURGXFWLRQ
‡ 5HGXFWLRQ RI GLUHFW DQG LQGLUHFW LH WKURXJK WKH
IHHGFKDLQ*+*HPLVVLRQVRIOLYHVWRFNSURGXFWLRQ
‡ 5HGXFWLRQ RI LQGLUHFW LH FKDQJHV LQ ODQGXVH
LQGXFHGHPLVVLRQVWKURXJKVXVWDLQDEOHSHDWODQG
IRUHVWDQGJUDVVODQGPDQDJHPHQW
‡ 2SWLPL]DWLRQ RI RUJDQLF DQG LQRUJDQLF IHUWLOL]HU
XVH LQFOXGLQJ WKURXJK FORVHG QXWULHQW F\FOHV LQ
DJULFXOWXUH
‡ 5HGXFWLRQRIZDVWHWKURXJKRXWWKHIRRGFKDLQV
‡ &KDQJLQJGLHWDU\SDWWHUQVWRZDUGVFOLPDWHIULHQGO\
IRRGFRQVXPSWLRQ
‡ 5HIRUP RI WKH LQWHUQDWLRQDO WUDGH UHJLPH IRU IRRG
DQGDJULFXOWXUDOSURGXFWV
,Q LPSOHPHQWLQJ WKH DERYHRXWOLQHG HOHPHQWV RI D
IXQGDPHQWDOWUDQVIRUPDWLRQRIDJULFXOWXUHRQHVKRXOG
QRWRYHUORRN
7KHLQWHUOLQNDJHVEHWZHHQWKHHOHPHQWV
7KH PHULWV DQG GHPHULWV RI VLQJOH FOLPDWHIULHQGO\
SUDFWLFHV YHUVXV WKRVH RI V\VWHPLF FKDQJHV
WKURXJK DJURHFRORJ\ DJURIRUHVWU\ RUJDQLF
DJULFXOWXUH
7KHQHHGIRUDWZRWUDFNDSSURDFK
L UHGXFLQJ HQYLURQPHQWDO LPSDFW RI FRQYHQWLRQDO
DJULFXOWXUHDQG
LL EURDGHQLQJ VFRSH IRU DQG IXUWKHU GHYHORSLQJ
DJURHFRORJLFDOSURGXFWLRQPHWKRGV
'7KHSDUDGLJPVKLIWKDVVWDUWHGEXWLV
ODUJHO\LQFRPSOHWH
7KHIRRGFULVLVRIZDVDQLPSRUWDQWFDWDO\VWIRU
UHDOL]LQJ WKH QHHG IRU IXQGDPHQWDO WUDQVIRUPDWLRQ
DQG TXHVWLRQLQJ VRPH RI WKH DVVXPSWLRQV WKDW KDG
GULYHQIRRGDQGDJULFXOWXUDOSROLF\LQUHFHQWGHFDGHV
7KH FULVLV OHG WR D UHYHUVDO RI WKH ORQJWHUP QHJOHFW
RI DJULFXOWXUH DV D YLWDO HFRQRPLF VHFWRU $OVR WKH
GHFOLQLQJ WUHQG RI SXEOLF IXQGLQJ IRU DJULFXOWXUH ZDV
DUUHVWHG DQG VRPH QHZ IXQGLQJ VHFXUHG ZKLFK
KRZHYHU LV VWLOO PXFK EHKLQG FRPPLWPHQWV DQG
UHTXLUHPHQWV 6RPH RI WKH DGGLWLRQDO IXQGLQJ LV
QRZPRUHRSHQWRFRXQWU\OHGSURJUDPVZLWKVWURQJ
VWDWH LQYROYHPHQW ,Q WKLV FRQWH[W VRPH RI WKH
DGGLWLRQDO IXQGLQJ JRHV WR LPSRUWDQW DUHDV VXFK DV
VPDOOKROGHUVXSSRUWUROHRIZRPHQLQDJULFXOWXUHWKH
HQYLURQPHQWDO FULVLV RI DJULFXOWXUH LQFOXGLQJ FOLPDWH
FKDQJHDQGZHDNQHVVRILQWHUQDWLRQDOPDUNHWV
+RZHYHUZHQHLWKHUVHHWKHQHFHVVDU\OHYHORIXUJHQF\
QRU SROLWLFDO ZLOOLQJQHVV IRU GUDVWLF FKDQJH 3ULRULW\
UHPDLQV KHDYLO\ IRFXVHG RQ LQFUHDVLQJ SURGXFWLRQ
PRVWO\ XQGHU WKH VORJDQ ´PRUH ZLWK OHVVµ 7KH
FXUUHQWO\SXUVXHGDSSURDFKLVVWLOOYHU\PXFKELDVHG
WRZDUGV H[SDQVLRQ RI ´VRPHZKDWOHVVSROOXWLQJµ
LQGXVWULDO DJULFXOWXUH UDWKHU WKDQ PRUH VXVWDLQDEOH
DQG DIIRUGDEOH SURGXFWLRQ PHWKRGV $OVR WKH PDLQ
SUREOHPRIKXQJHULVVWLOOQRWDSSUHFLDWHGDFFHVVWR
DIIRUGDEOH IRRG LQ UXUDO DUHDV WKH ODFN RI PHDQV RI
SURGXFWLRQDQGDFFHVVWRUHVRXUFHVIRUVPDOOKROGHUV
2QH GRHV VWLOO QRW UHFRJQL]H WKDW D SDUDGLJP VKLIW
LV UHTXLUHG UHVXOWLQJ IURP L GHHSHQLQJ LQWHJUDWLRQ
RI IRRG HQHUJ\ DQG ÀQDQFLDO PDUNHWV LL UHVRXUFH
FRQVWUDLQWV SODQHWDU\ ERXQGDULHV DQG LLL WKH
LQFUHDVLQJULVNFDXVHGE\FOLPDWHFKDQJH7KHFXUUHQW
GHPDQGWUHQGVIRUELRIXHOVH[FHVVLYHO\PHDWEDVHG
GLHWV DQG SRVWKDUYHVW IRRG ZDVWH DUH UHJDUGHG DV
JLYHQ UDWKHU WKDQ FKDOOHQJLQJ WKHLU UDWLRQDO 7KHUH LV
DOVR OLWWOH UHFRJQLWLRQ RI WKH SUHYDLOLQJ PDUNHW SRZHU
DV\PPHWULHVLQIRRGLQSXWDQGRXWSXWPDUNHWV)LQDOO\
WKHUHLVWRROLWWOHDQGWRRODWHSURJUHVVRQUHVWULFWLRQV
DQGWKHGHYHORSPHQWRIUHJXODWLRQRQODQGJUDEV
7KHVWLOOXQUHVROYHGUHIRUPDJHQGDLWHPVDUH
‡ 5HGXFH IXHOLQWHQVLYH H[WHUQDO LQSXWGHSHQGHQW
DJULFXOWXUDO SURGXFWLRQ PHWKRGV WRZDUGV DJUR
HFRORJLFDO SUDFWLFHV UHFRJQL]LQJ WKH PXOWL
IXQFWLRQDOLW\RIDJULFXOWXUH
‡ 'LVFRXUDJH LQGXVWULDO OLYHVWRFN SURGXFWLRQ DQG
DVVRFLDWHGPDVVLYHXVHRIFRQFHQWUDWHIHHG
‡ 'LVFRXUDJH H[SDQVLRQ RI ELRIXHO SURGXFWLRQ
GLVFRQWLQXH EOHQGLQJ TXRWDV UHGXFH VXEVLGLHV
UHYLVHWUDGHUHVWULFWLRQV
‡ 5HGXFH ÀQDQFLDO VSHFXODWLRQ LH ÀQDQFLDOL]DWLRQ
RI IRRG PDUNHWV DQG OLPLW LUUHVSRQVLEOH ODQG
LQYHVWPHQWV VHH WKH FRPPHQWDU\ RI 0OOHU LQ
&KDSWHU
75$'($1'(19,5210(175(9,(:
‡ 5HIRUP JOREDO DJULFXOWXUDO WUDGH UXOHV JLYLQJ
JUHDWHU SROLF\ VSDFH IRU DVVXULQJ QDWLRQDO IRRG
VRYHUHLJQW\ FOLPDWHFKDQJH DGDSWDWLRQUHVLOLHQFH
UHWKLQN IRFXV RQ LQWHJUDWLQJ VPDOOKROGHUV LQWR
JOREDOVXSSO\FKDLQVVHH&KDSWHU
‡ 5HGXFH IRRG SULFH YRODWLOLW\ ZLWKRXW EHGGLQJ
H[FOXVLYHO\RQKHGJLQJRSWLRQV
,QHVVHQFHDVSRLQWHGRXWE\1DHUVWDGSDUW,,
S ´D PRUH UDGLFDO WUDQVIRUPDWLRQ RI DJULFXOWXUH
LV QHHGHG RQH JXLGHG E\ WKH QRWLRQ WKDW HFRORJLFDO
FKDQJH LQ DJULFXOWXUH FDQQRW EH SURPRWHG ZLWKRXW
FRPSDUDEOH FKDQJHV LQ WKH VRFLDO SROLWLFDO FXOWXUDO
DQGHFRQRPLFDUHQDVWKDWDOVRFRQIRUPDJULFXOWXUHµ
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
1//'06#4;U )4+%7.674'U0+37''%614+0%101/+%X
%1.1)+%#.#0&1%+#.'4/5
-HDQ)H\GHU
$PEDVVDGRU)RUPHU3HUPDQHQW5HSUHVHQWDWLYHRI/X[HPERXUJWRWKH81DQG:72LQ*HQHYD
$EVWUDFW
0RUHWKDQRQHELOOLRQSHRSOHDUHVXIIHULQJIURPKXQJHUDQGPDOQXWULWLRQ3DUDGR[LFDOO\PRVWRIWKHPDUHLQ
UXUDODUHDVDQGRQO\SHUFHQWDUHLQFLW\VOXPVZKLOHDVPDOOPLQRULW\DUHYLFWLPVRIZDURUFLYLOFRQÁLFW
/RZSULFHVRIIRRGSURGXFWVSURGXFHGE\VPDOOKROGHUIDUPHUVFDQDIIHFWWKHLULQFRPHVDQGFRQWULEXWHWR
SRYHUW\DQGKXQJHU2QO\VWDEOHDQGIDLUSULFHVZLOOJLYHWKHPLQGLVSHQVDEOHEX\LQJSRZHU
$GHTXDWH UHJXODWLRQ RI DJULFXOWXUDO PDUNHWV LV QHHGHG WR VKLHOG VPDOO SURGXFHUV IURP LQWHUQDWLRQDO
FRPSHWLWLRQDQGGXPSLQJRIIRRGLPSRUWV
)DVWGHWHULRUDWLQJHFRV\VWHPVFOLPDWHFKDQJHDQGZDWHUVFDUFLW\VHULRXVO\WKUHDWHQIRRGVHFXULW\7KHVH
FKDOOHQJHVFDQEHVWEHPHWWKURXJKWKHDGRSWLRQRIDJURHFRORJ\RUJDQLFDQGRWKHUVXVWDLQDEOHIDUPLQJ
PHWKRGV
$JULFXOWXUHKDVWREHSXWDWWKHKHDUWRIDQ\SRYHUW\
UHGXFWLRQ VWUDWHJ\ ,W LV D PXOWLGLPHQVLRQDO VHFWRU
GLUHFWO\ OLQNHG WR WKH ÀJKW DJDLQVW KXQJHU DQG
PDOQXWULWLRQ DQG WR IRRG VHFXULW\ $W WKH VDPH WLPH
LW LV VWURQJO\ LQÁXHQFHG E\ LQWHUQDWLRQDO WUDGH
ÀQDQFH GHYHORSPHQW FRRSHUDWLRQ DQG LQFUHDVLQJO\
LW LV DIIHFWHG E\ FOLPDWH FKDQJH DQG HQYLURQPHQWDO
GHJUDGDWLRQ7KLVGLYHUVLW\RIIXQFWLRQVDQGDFWLYLWLHV
UHTXLUHVWKDWLVVXHVUHODWLQJWRDJULFXOWXUHEHWUHDWHG
LQDKROLVWLFPDQQHUDQGWKDWWKHFKDOOHQJHRISROLF\
FRKHUHQFHEHWDFNOHGERWKDWQDWLRQDODQGLQWHUQDWLRQDO
OHYHOVIRUPRUHGHWDLOVHH)H\GHU
+XQJHU DQG PDOQXWULWLRQ DUH WKH PDLQ FDXVHV RI
PRUWDOLW\LQWKHZRUOGWRGD\(DFKGD\WKH\NLOODERXW
SHRSOHPRVWO\FKLOGUHQ$VDUHVXOWWKHLUULJKW
WROLIHDQGWKHLUULJKWWRIRRGDUHPRVWÁDJUDQWO\YLRODWHG
7KHLQWHUQDWLRQDOFRPPXQLW\DJUHHGWRZDJHZDURQ
WKLV VFRXUJH RI KXPDQLW\ ZKHQ +HDGV RI 6WDWH DQG
*RYHUQPHQW DGRSWHG WKH 0LOOHQQLXP 'HYHORSPHQW
*RDOV 0'*V 7KH ÀUVW JRDO FRPPLWWHG WR KDOYH
E\ WKH SURSRUWLRQ RI WKH ZRUOG·V SRSXODWLRQ
VXIIHULQJ IURP KXQJHU DQG PDOQXWULWLRQ ² VRPH PLOOLRQSHRSOH
+RZHYHU\HDUVODWHUPRUHWKDQDELOOLRQSHRSOH²
RQHSHUVRQLQVHYHQ²DUHVWLOOVXIIHULQJIURPKXQJHU
DQGPDOQXWULWLRQ7KLVLVXQGRXEWHGO\RQHRIWKHPRVW
OHWKDO HIIHFWV RI WKH ZRUOG IRRG DQG ÀQDQFLDO FULVHV
WRJHWKHUZLWKWKHHFRQRPLFUHFHVVLRQRIWKHSDVWIHZ
\HDUV 7KHVH FULVHV KDYH UHYHUVHG WKH IRUPHU WUHQG
RI D GHFUHDVLQJ QXPEHU RI SHRSOH VXIIHULQJ IURP
KXQJHU DQG PDOQXWULWLRQ %XW WKH )$2 DOVR VWUHVVHV
WKDWWKLVWUHQGREVHUYHGEHIRUHWKHFULVHVZRXOGQRW
LQIDFWKDYHEHHQVXIÀFLHQWWRDFKLHYHWKHÀUVWRIWKH
0LOOHQQLXP'HYHORSPHQW*RDOV
3DUDGR[LFDOO\ PRVW RI WKH YLFWLPV RI KXQJHU DQG
PDOQXWULWLRQ UHVLGH LQ UXUDO DUHDV $FFRUGLQJ WR WKH
)$2SHUFHQWRIWKHPDUHVPDOOSHDVDQWVSHU
FHQWDUHODQGOHVVSHUFHQWDUHQRPDGLFKHUGVPHQ
RUVPDOOÀVKHUPHQDQGSHUFHQWOLYHLQFLW\VOXPV
2QO\ D VPDOO PLQRULW\ VXIIHU EHFDXVH RI ZDU RU FLYLO
FRQÁLFW$QGZKHUHDVLQWKH(8WKHIDUPLQJSRSXODWLRQ
FRQVWLWXWHVRQO\SHUFHQWRIWKHWRWDOSRSXODWLRQLWLV
DERXWSHUFHQWLQ&KLQDSHUFHQWLQ,QGLDDQG
EHWZHHQ DQG SHU FHQW LQ VXE6DKDUDQ $IULFD
)H\GHU
7KLV UXUDO VRFLDO FODVV LV DERYH DOO RIWHQ D YLFWLP RI
PDUJLQDOL]DWLRQ DQG H[FOXVLRQ IURP LWV JRYHUQLQJ
FODVVHVSROLWLFDOHFRQRPLFDQGÀQDQFLDODVZHOODV
IURPWKHXUEDQPLOLHXZKHUHWKHUHLVDFRQFHQWUDWLRQ
RI SRZHU DQG NQRZOHGJH DQG WKHUHIRUH PRQH\
LQFOXGLQJIXQGVIRUGHYHORSPHQW2IWHQWKHXUEDQDQG
UXUDO ZRUOGV DUH VHSDUDWHG E\ D FXOWXUDO DE\VV ZLWK
WKH IRUPHU GLVSOD\LQJ LQGLIIHUHQFH LQFRPSUHKHQVLRQ
DQGFRQWHPSW
+XQGUHGV RI PLOOLRQV RI VPDOO SHDVDQWV PDLQO\
ZRPHQFXOWLYDWHDQDYHUDJHRIEHWZHHQRQHDQGWZR
7KHÀQDQFLDOL]DWLRQRIDJULFXOWXUHLVEHFRPLQJDPDMRU
QHZULVN/DQGJUDEELQJRIWHQOHDGVWRWKHH[SXOVLRQ
RIYXOQHUDEOHUXUDOFRPPXQLWLHV)LQDQFLDOVSHFXODWLRQ
RQIRRGFRPPRGLWLHVFRQWLQXHVWREHDPDMRUFDXVH
RIWKHSULFHVXUJHDQGYRODWLOLW\ZLWQHVVHGRYHUWKHSDVW
IHZ\HDUV81&7$'81&7$'DQG&KDPEHURI
/DERXU 9LHQQD 7KLV LVVXH TXLWH ULJKWO\ KDV
EHHQ DW WKH WRS RI WKH LQWHUQDWLRQDO DJHQGD DQG LQ
*PHHWLQJV
7KH SURGXFWLRQ RI DJURIXHOV WDNHV PRUH DQG PRUH
ODQG DZD\ IURP IRRG SURGXFWLRQ <HW HYHQ WKRXJK
WKHXVHRIWKHVHIXHOVFRQWULEXWHVOLWWOH²LIDWDOO²WR
UHGXFLQJ &2 HPLVVLRQV WKHLU SURGXFWLRQ FRQWLQXHV
WRVRDU
2QH RI WKH PDLQ DQG PRUH VWUXFWXUDO FDXVHV RI WKH
IRRG FULVLV LV GLVLQYHVWPHQW LQ DJULFXOWXUH D VHFWRU
WKDW KDV ORQJ EHHQ QHJOHFWHG 2IÀFLDO GHYHORSPHQW
DVVLVWDQFH WR UXUDO DQG DJULFXOWXUDO GHYHORSPHQW
GURSSHGIURPSHUFHQWWRSHUFHQWEHWZHHQ
DQG)H\GHU
6WUXFWXUDO DGMXVWPHQW SROLFLHV KDYH OHG WR PDVVLYH
WUDGH OLEHUDOL]DWLRQ DQG WKH RSHQLQJ XS RI PDUNHWV
JLYLQJ FRQVXPHUV DFFHVV WR FKHDS LPSRUWHG IRRG
0HDQZKLOH SHDVDQWV KDYH EHHQ HQFRXUDJHG WR
FRQFHQWUDWH RQ SURGXFLQJ H[SRUW FURSV +RZHYHU
WKH IRRG FULVLV KDV UDGLFDOO\ FKDOOHQJHG WKH
UHOHYDQFHRIWKLVGHYHORSPHQWPRGHO
,Q WKH GHYHORSLQJ FRXQWULHV HVSHFLDOO\ WKH /'&·V
LPSRUWVRIFKLFNHQULFHWRPDWRFRQFHQWUDWHDQGPLON
SRZGHU KDYH ULVHQ UDSLGO\ UXLQLQJ ORFDO SURGXFWLRQ
DQG WKH VXUYLYDO FRQGLWLRQV RI WHQV RI PLOOLRQV RI
SHDVDQW IDPLOLHV QRW WR PHQWLRQ WKH ORVV RI MREV LQ
WKHFUDIWDQGLQGXVWULDOVHFWRUVDVWKH\WRRKDYHEHHQ
XQDEOHWRZLWKVWDQGLQWHUQDWLRQDOFRPSHWLWLRQÀJXUH
DQG7KHWUDGHEDODQFHLQIRRGSURGXFWVIRUOHDVW
GHYHORSHGFRXQWULHVPRYHGIURPDELOOLRQVXUSOXV
\HDUVDJRWRDGHÀFLWRIELOOLRQLQDQG
ELOOLRQLQ)H\GHU
)LJXUH*KDQDFKLFNHQSURGXFWLRQDQGLPSRUWDWLRQ
80,000 70,000 60,000 -
Chicken
production
Chicken
imports
50,000 Tons
KHFWDUHVRIODQG²DQGRIWHQHYHQOHVV²ZLWKKRHVDQG
PDFKHWHVZKLFKDUHWKHRQO\WRROVDWWKHLUGLVSRVDO
%\ FRQWUDVW D :HVWHUQ (XURSHDQ IDUPHU SRVVHVVHV
DQ DYHUDJH KROGLQJ RI KHFWDUHV FXOWLYDWHG ZLWK
LQFUHDVLQJO\ SRZHUIXO WUDFWRUV DQG RWKHU PDFKLQHU\
DQG HPSOR\V ODUJH TXDQWLWLHV RI SHVWLFLGHV DQG
IHUWLOL]HUV7KLVDOVRH[SODLQVWKHKXJHSURGXFWLYLW\JDS
LQ DJULFXOWXUH EHWZHHQ LQGXVWULDOL]HG FRXQWULHV DQG
D QXPEHU RI HPHUJLQJ FRXQWULHV VXFK DV %UD]LO RQ
WKH RQH KDQG DQG WKH JUHDW PDMRULW\ RI GHYHORSLQJ
FRXQWULHVRQWKHRWKHU
75$'($1'(19,5210(175(9,(:
40,000 30,000 20,000 10,000 02002
2007
6RXUFH)$267$7
7KXVWKHGXPSLQJRIIRRGRQWRGHYHORSLQJFRXQWULHV
KDVSHQDOL]HGGRPHVWLFSURGXFHUVZKRDUHIRUFHGWR
VHOO DW UHGXFHG SULFHV WR IHZHU EX\HUV $FFRUGLQJ WR
81&7$'WKHSULFHVRIIRRGSURGXFWVDQGDJULFXOWXUDO
UDZ PDWHULDOV IHOO E\ SHU FHQW DQG SHU FHQW
UHVSHFWLYHO\ EHWZHHQ DQG ,Q WKH
SULFH RI FRIIHH ZDV RQO\ SHU FHQW RI ZKDW LW KDG
EHHQLQDQGWKDWRIFRWWRQZDVSHUFHQW1XUL
SVHHDOVR)$2GÀJXUH%XWZKLOH
SURGXFHUVLQGHYHORSHGFRXQWULHVFDQXVXDOO\FDOORQ
WKHLUJRYHUQPHQWVIRUFRPSHQVDWLRQZKLFKIRUPDQ\
UHSUHVHQWVXSWRSHUFHQWRIWKHLULQFRPHIDUPHUV
LQGHYHORSLQJFRXQWULHVKDYHQRVXFKUHFRXUVHDQG
LQFUHDVLQJO\ DUH XQDEOH WR FRYHU WKHLU FRVWV 7KLV
GXPSLQJRIFKHDSIRRGRQWRGHYHORSLQJFRXQWULHVKDV
UHVXOWHG LQ KXQJHU IRU SHDVDQWV DQG PDLQWDLQV WKHP
LQSRYHUW\:LVH$VDUHVXOWRIWKLVGHVSHUDWH
VLWXDWLRQHYHU\\HDUVRPHPLOOLRQSHRSOHOHDYHWKH
UXUDODUHDVLQVHDUFKRIDOWHUQDWLYHOLYHOLKRRGVOHDGLQJ
WRXQFRQWUROOHGXUEDQL]DWLRQ
,Q WKH V +DLWL ZDV YLUWXDOO\ VHOIVXIÀFLHQW LQ
ULFH SURGXFWLRQ ZKLFK LV RQH RI LWV PDLQ VWDSOH
FURSV +RZHYHU DV D FRQVHTXHQFH RI LWV VWUXFWXUDO
DGMXVWPHQWSURJUDPPHWKHFXVWRPVWDULIILQFOXGLQJ
RQULFHLPSRUWHGLQWR+DLWLZDVUHGXFHGIURPSHU
FHQW WR SHU FHQW PDNLQJ LW WKH PRVW ´OLEHUDOL]HGµ
FRXQWU\LQWKHZRUOG7RGD\OHVVWKDQSHUFHQWRI
LWVULFHQHHGVDUHPHWE\ORFDOSURGXFWLRQÀJXUH
)RU\HDUVLQVHYHUDO8QLWHG1DWLRQVERGLHVLQFOXGLQJ
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
)LJXUH+DwWL5LFHSURGXFWLRQDQGLPSRUWV
)LJXUH&XVWRPWDULIIVLQWKH(8DQGWKH:HVWHUQ$IULFDQ
(FRQRPLFDQG0RQHWDU\8QLRQ8(02$
100 -
100,000 50,000 -
60 50 40 30 -
Sugar products
150,000 -
70 -
Milk powder
200,000 -
Rice
imports
Cereals
Tons
250,000 -
UEMOA
80 -
Rice
production
Customs tariffs (per cent)
300,000 -
UE
90 -
Meat
350,000 -
20 -
01980
2004
2009
10 0-
6RXUFH)$267$7
6RXUFH%HUWKHORW
DV&KDLURI81&7$'·V7UDGHDQG'HYHORSPHQW%RDUG
, KDYH EHHQ GHQRXQFLQJ WKLV QHJDWLYH LPSDFW RQ
DJULFXOWXUDO DQG LQGXVWULDO GHYHORSPHQW LQ FRXQWULHV
OLNH +DLWL $W WKH EHJLQQLQJ RI 0DUFK IRUPHU
8QLWHG 6WDWHV 3UHVLGHQW %LOO &OLQWRQ ZKR LV FXUUHQWO\
WKH 8QLWHG 1DWLRQV 6HFUHWDU\*HQHUDO·V 6SHFLDO
5HSUHVHQWDWLYH IRU +DLWL SXEOLFO\ DFNQRZOHGJHG
EHIRUH D 8QLWHG 6WDWHV 6HQDWH FRPPLWWHH WKDW WKLV
SROLF\ ZKLFK KH VXSSRUWHG DV IRUPHU 8QLWHG 6WDWHV
3UHVLGHQW KDG EHHQ D PLVWDNH +H PDGH D VLPLODU
VWDWHPHQW FRQFHUQLQJ DJULFXOWXUH LQ $IULFD ZKHQ KH
VDLG ´ZH EOHZ LWµ +H ZHQW RQ WR VXJJHVW ZH GUDZ
OHVVRQVIURPWKHVHHUURUVDQGKHOSFRXQWULHVOLNH+DLWL
WR ÀQG WKHLU ZD\ EDFN WR VHOIVXIÀFLHQF\ LQ WKH IRRG
VHFWRU
:RUOG%DQNQRZDUJXHVWKLVZRXOGQRWRQO\LQFUHDVH
DJULFXOWXUDOSURGXFWLYLW\EXWDOVRUHGXFHSRYHUW\WKUHH
WRIRXUWLPHVPRUHUDSLGO\WKDQLQRWKHUVHFWRUVRIWKH
HFRQRP\:RUOG%DQN%XWWKHFRPPLWPHQWV
PDGH DW WKH /·$TXLOD 6XPPLW RI WKH * LQ WR
UHVHUYHPRUHWKDQELOOLRQRYHUDWKUHH\HDUSHULRG
IRULQYHVWPHQWLQDJULFXOWXUHDUHIDUIURPEHLQJIXOÀOOHG
7KHVROXWLRQVIRUIHHGLQJWKHJURZLQJZRUOGSRSXODWLRQ
DQGRYHUFRPLQJKXQJHUDQGPDOQXWULWLRQDUHFRPSOH[
DQG PXVW WDNH LQWR DFFRXQW WKH GLYHUVLW\ DQG PXOWL
IXQFWLRQDOLW\ RI DJULFXOWXUH WKH VSHFLÀF FRQGLWLRQV RI
HDFKFRXQWU\DVZHOODVFOLPDWHFKDQJHDQGLQFUHDVLQJ
ZDWHU VFDUFLW\ ,Q GHYHORSLQJ WKHLU DJULFXOWXUDO SROLF\
JRYHUQPHQWV VKRXOG VHHN WKH DFWLYH SDUWLFLSDWLRQ RI
IDUPHUV·DVVRFLDWLRQV
6LQFH YDULRXV LQWHUQDWLRQDO FRQIHUHQFHV KDYH
EHHQ VWUHVVLQJ WKH QHHG IRU UHQHZHG LQYHVWPHQW LQ
DJULFXOWXUHLQRUGHUWRUHODXQFKDJULFXOWXUDOSURGXFWLRQ
0RUH QDWLRQDO DQG LQWHUQDWLRQDO IXQGV DUH QHHGHG
WR KHOS LPSURYH UXUDO LQIUDVWUXFWXUHV DQG IDFLOLWDWH
DFFHVV WR LQSXWV FUHGLW DQG NQRZOHGJH $V WKH
$ SROLF\ RI IDLU DQG VWDEOH SULFHV LV HVVHQWLDO WR
HQDEOH SHDVDQWV WR HPHUJH IURP SRYHUW\ DQG WR
SURYLGH WKHP ZLWK VXIÀFLHQW EX\LQJ SRZHU 7KLV DOVR
UHTXLUHV DGHTXDWH UHJXODWLRQ RI DJULFXOWXUDO PDUNHWV
VR DV WR VKLHOG YXOQHUDEOH DJULFXOWXUDO SURGXFHUV
DJDLQVW GXPSLQJ DQG SULFH YRODWLOLW\ ,Q SDUWLFXODU
VXFK UHJXODWLRQ VKRXOG SURWHFW DJULFXOWXUDO PDUNHWV
LQ GHYHORSLQJ FRXQWULHV DQG HVSHFLDOO\ LQ WKH /'&V
DQG SURYLGH IRU WKH VHWWLQJ XS RI SURSHUO\ PDQDJHG
PDUNHWLQJ ERDUGV DV ZHOO DV D QHWZRUN RI UHVHUYH
VWRFNV DW QDWLRQDO DQG UHJLRQDO OHYHOV ,W KDV WR EH
QRWHG WKDW D QXPEHU RI LQGXVWULDOL]HG FRXQWULHV DQG
LQSDUWLFXODUWKH(8FRQWLQXHWRDSSO\FXVWRPVWDULIIV
IRUWKHLUPRVWVHQVLWLYHDJULFXOWXUDOSURGXFWVFHUHDOV
PLON SRZGHU PHDW DQG VXJDU SURGXFWV DW OHYHOV IDU
EH\RQGWKRVHDSSOLHGE\PDQ\GHYHORSLQJFRXQWULHV
DQGLQSDUWLFXODU/'&VÀJXUH
,Q RUGHU WR LQWURGXFH WKHVH FKDQJHV WKH FRQFHUQHG
JRYHUQPHQWV QHHG WR PDNH PD[LPXP XVH RI WKH
ÁH[LELOLW\ EHWZHHQ DSSOLHG DQG ERXQG UDWHV RIIHUHG
XQGHU:72UXOHV7KLVDSSURDFKKDVWREHXQGHUVWRRG
DFFHSWHG DQG HYHQ HQFRXUDJHG E\ DOO FRQFHUQHG
SDUWLHV LQFOXGLQJ WKH :RUOG %DQN DQG WKH ,0) DV
ZHOO DV WKH LQGXVWULDOL]HG FRXQWULHV PLQGIXO RI WKH
FRQGLWLRQVWKDWOHGWRWKHLURZQGHYHORSPHQW6LPLODUO\
ELODWHUDOWUDGHDJUHHPHQWVZLWKWKHVHFRXQWULHVVKRXOG
EHEDVHGRQWKHSULQFLSOHRIQRQUHFLSURFLW\
0DQ\ FRXQWULHV QHHG WR DGGUHVV WKH VHQVLWLYH LVVXH
RI DJUDULDQ UHIRUP LQFOXGLQJ DFFHVV WR ODQG DV D
QHFHVVDU\ SUHFRQGLWLRQ IRU UHODXQFKLQJ DJULFXOWXUH
DQG DFKLHYLQJ D VXEVWDQWLDO UHGXFWLRQ LQ SRYHUW\
IROORZLQJ WKH H[DPSOH RI D QXPEHU RI (DVW $VLDQ
FRXQWULHV 7KH 6WDWH PLJKW JXDUDQWHH WKH SHDVDQWV
DFFHVVWRODQGEXWWKLVGRHVQRWQHFHVVDULO\LQYROYH
JLYLQJRZQHUVKLSULJKWVWRLQGLYLGXDOV
(FRV\VWHPV DUH GHWHULRUDWLQJ DW DQ XQSUHFHGHQWHG
UDWH SDUWLFXODUO\ WKH FOLPDWH ZDWHU ELRGLYHUVLW\ DQG
ÀVKUHVRXUFHV6XGGHQO\SHDVDQWVZRUOGZLGHKDYHWR
UHDOL]HZLWKXQEHOLHYDEOHEUXWDOLW\WKDWWKHFRQGLWLRQV
75$'($1'(19,5210(175(9,(:
LQ ZKLFK WKH\ OLYH DQG ZRUN DUH GHWHULRUDWLQJ IDVW
HURVLRQLVDGYDQFLQJDQGFOLPDWHFKDQJHLVDIIHFWLQJ
FXOWLYDWLRQ FRQGLWLRQV DQG KDUYHVWV $V D UHVXOW
IRRG VHFXULW\ HVSHFLDOO\ IRU WKH PRVW YXOQHUDEOH LV
EHFRPLQJPRUHXQFHUWDLQ7KHGHYHORSLQJFRXQWULHV
DQG DERYH DOO WKH SRRUHVW DQG WKH LVODQG FRXQWULHV
ZKLFKDUHWKHOHDVWUHVSRQVLEOHIRUWKHVHFKDQJHVUXQ
WKHJUHDWHVWULVNV7KHKLJK\LHOGPRGHOLQLQGXVWULDOL]HG
FRXQWULHV LV QRZ EHLQJ FDOOHG LQWR TXHVWLRQ 7KHUH
DUH IRUPLGDEOH FKDOOHQJHV RI DGDSWDWLRQ HVSHFLDOO\
IRU SHDVDQWV DURXQG WKH ZRUOG $QG LW LV EHFRPLQJ
FOHDUWKDWVPDOOVFDOHDJULFXOWXUDOXQLWVDUHEHVWDEOH
WRPHHWWKLVFKDOOHQJHDJURHFRORJ\RUJDQLFIDUPLQJ
DQG VRPH RWKHU VXVWDLQDEOH SURGXFWLRQ PHWKRGV
WKDW DUH UHVSHFWIXO RI QDWXUH VKRZ WKH ZD\ WRZDUGV
SURGXFLQJPRUHDQGEHWWHUTXDOLW\IRRGEXWZLWKOHVV
LQSXWVZKLFKDUHPRVWO\ORFDOO\DYDLODEOHDQGEDVHG
RQFORVHGQXWULHQWF\FOHV
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
1//'06#4;U 10%'267#.#0&4#%6+%#.52'%651(.+/#6'
*#0)'+6+)#6+10*417)*)4+%7.674'U
'&7%+0)4''0*175'#5/+55+105#0&
0%4'#5+0)1+.#4$10'37'564#6+10
$0OOHUDQG$*DWWLQJHU
5HVHDUFK,QVWLWXWHRI2UJDQLF$JULFXOWXUH)L%/6ZLW]HUODQG
$EVWUDFW
0LWLJDWLRQLQDJULFXOWXUHQHHGVWREHEDVHGRQWZRSLOODUV
‡ 7HFKQLFDOO\QLWURJHQLQSXWVVKRXOGEHUHGXFHGRUJDQLFIHUWLOL]HUVVKRXOGUHSODFHV\QWKHWLFIHUWLOL]HUV
DQG VWRUDJH ORVVHV VKRXOG EH PLQLPL]HG ,QWHJUDWHG V\VWHPV ZLWK FORVHG HIÀFLHQW QXWULHQW F\FOHV
VKRXOGEHWKHRUGHURIWKHGD\LQWKHIXWXUH
‡ 6RFLDOO\IRRGZDVWDJHVKRXOGEHPLQLPL]HGDQGPHDWFRQVXPSWLRQUHGXFHG
,Q JHQHUDO UHGXFLQJ *+* HPLVVLRQV DQG LQFUHDVLQJ
VHTXHVWUDWLRQ LQ DJULFXOWXUH LV QR HDV\ WDVN HLWKHU
FRQFHSWXDOO\RULQSUDFWLFH%XWWKHUHDUHDWOHDVWÀYH
FOHDU H[FHSWLRQV SOXV RQH SRVVLEOH H[FHSWLRQ DW WKH
FRQFHSWXDOOHYHO
)LUVW DYRLGLQJ RSHQ EXUQLQJ RI ELRPDVV UHGXFHV
HPLVVLRQV *LYHQ WKDW RSHQ ELRPDVV EXUQLQJ LV WKH
WKLUGODUJHVWFRQWULEXWRURIGLUHFW*+*HPLVVLRQVIURP
DJULFXOWXUH ² DFFRXQWLQJ IRU PRUH WKDQ SHU FHQW
² DIWHU QLWURXV R[LGH HPLWWHG IURP IHUWLOL]HG VRLOV DQG
PHWKDQHIURPHQWHULFIHUPHQWDWLRQLQUXPLQDQWVWKHUH
LVDFRQVLGHUDEOHDQGXQGRXEWHGPLWLJDWLRQSRWHQWLDO
OLQNHG WR WKLV 6PLWK HW DO E %HOODUE\ HW DO
,QPRVWLQGXVWULDOL]HGFRXQWULHVRSHQEXUQLQJ
RIELRPDVVLVSURKLELWHGEXWLQGHYHORSLQJFRXQWULHV
LWLVVWLOOFRPPRQSUDFWLFH
6HFRQG UHGXFLQJ WKH JOREDO QXPEHUV RI UXPLQDQWV
ZRXOG GLUHFWO\ UHGXFH WKH FRUUHVSRQGLQJ PHWKDQH
HPLVVLRQV WKDW DFFRXQW IRU DERXW SHU FHQW RI
WRWDO GLUHFW *+* HPLVVLRQV IURP DJULFXOWXUH 6PLWK
HW DO E %HOODUE\ HW DO 7KLV LV PDLQO\
DQ LVVXH IRU LQGXVWULDOL]HG OLYHVWRFN V\VWHPV DQG
QRW IRU VPDOOKROGHUV 'XH WR FDUERQ VHTXHVWUDWLRQ
LQ SDVWXUHV SDVWRUDO OLYHVWRFN V\VWHPV FDQ HYHQ EH
FDUERQQHXWUDOLIVWRFNLQJUDWHVDUHDGHTXDWHO\ORZ
7KLUG ² SHU FHQW RI IRRG LV ORVW JOREDOO\ PDLQO\
DV D UHVXOW RI ZDVWDJH LQ LQGXVWULDOL]HG FRXQWULHV
DQG E\ VWRUDJH ORVVHV LQ GHYHORSLQJ FRXQWULHV
$YRLGLQJORVVHVDQGZDVWDJHZRXOGWKHUHIRUHUHGXFH
WKH RXWSXW QHHGHG DQG WKH FRUUHVSRQGLQJ *+*
HPLVVLRQV*RGIUD\HWDO*LYHQWKHPDJQLWXGH
RIORVVHVDQGZDVWDJHUHGXFLQJWKHPLVHVVHQWLDOLQ
DQ\HIIHFWLYHFOLPDWHPLWLJDWLRQSROLF\IRUDJULFXOWXUH
)RXUWK FRQYHUVLRQ RI SDVWXUHV DQGRU IRUHVWV WR
DJULFXOWXUDO ODQG DQG RI IRUHVWV WR SDVWXUHV QHHGV
WREHUHGXFHGDVWKLVOHDGVWRKLJK&2HPLVVLRQV
RIURXJKO\WKHVDPHRUGHUDVWRWDOGLUHFWDJULFXOWXUDO
*+* HPLVVLRQV 6PLWK HW DO E %HOODUE\ HW
DO ,QVRIDU DV VXFK ODQGXVH FKDQJH LV GXH
WR DQLPDO KXVEDQGU\ DQG IHHGVWXII SURGXFWLRQ IRU
UXPLQDQWVLGHDOO\WKLVUHGXFWLRQVKRXOGEHFRPELQHG
ZLWKUHGXFHGDQLPDOQXPEHUV
)LQDOO\WKHPLWLJDWLRQSRWHQWLDORIFDUERQVHTXHVWUDWLRQ
LQ RSWLPDOO\ PDQDJHG DJULFXOWXUDO VRLOV VKRXOG EH
H[SORLWHG 7KLV SRWHQWLDO LV RI WKH VDPH RUGHU RI
PDJQLWXGHDVWRWDODJULFXOWXUDOHPLVVLRQV6PLWKHWDO
D%HOODUE\HWDO6RLOFDUERQORVVHVFDQEH
UHGXFHG DQG VHTXHVWUDWLRQ LQFUHDVHG E\ DSSOLFDWLRQ
RI RUJDQLF IHUWLOL]HUV PLQLPDO VRLO GLVWXUEDQFH DQG
SODQWLQJOHJXPHOH\VLQFURSURWDWLRQV
&RQFHSWXDOO\ WKHVH ÀYH DVSHFWV DUH XQFRQWHVWHG
EXWUHJUHWWDEO\WKH\DUHWKHRQO\RQHVRIVXFKFODULW\
DQGLPSRUWDQFH$GGUHVVLQJWKHRWKHUPRVWUHOHYDQW
HPLVVLRQ VRXUFHV LQ DJULFXOWXUH HJ QLWURXV R[LGH
HPLVVLRQV IURP VRLOV PHWKDQH IURP ULFH SURGXFWLRQ
PDQXUHPDQDJHPHQWLVRIWHQKLJKO\FRPSOH[7KHUH
DUHLQGLFDWLRQVWKDWDFWLRQVDQGVWUDWHJLHVUHODWLQJWR
HDFK RI WKH VRXUFHV PD\ UHGXFH HPLVVLRQV EXW WKH
KLJK GHJUHH RI FRPSOH[LW\ DQG FRQWH[W GHSHQGHQF\
RI WKH XQGHUO\LQJ SURFHVVHV DQG WKHLU LQWHUDFWLRQV
ZLWK RWKHU SURFHVVHV RIWHQ KLQGHU FOHDU VWDWHPHQWV
)RUH[DPSOHUHGXFHGQLWURJHQLQSXWWHQGVWRUHGXFH
QLWURXV R[LGH HPLVVLRQV EXW FRQVLGHUDWLRQV RI RWKHU
FKDUDFWHULVWLFV RI D ORFDWLRQ DQG FURSSLQJ V\VWHP
VXFK DV WHPSHUDWXUH KXPLGLW\ VRLO W\SH FURSV DQG
IHUWLOL]HU W\SHV PD\ GRPLQDWH RU UHGXFHG ÁRRGLQJ
RI ULFH ÀHOGV FXWV PHWKDQH HPLVVLRQV EXW WHQGV WR
LQFUHDVH QLWURXV R[LGH HPLVVLRQV 1HYHUWKHOHVV
LQGLFDWLRQV DUH VWURQJ HQRXJK WR PHQWLRQ UHGXFHG
QLWURJHQ DSSOLFDWLRQV DV D VL[WK UHDOLVWLF RSWLRQ WKH
ULJKWW\SHSODFHUDWHDQGWLPLQJRIQLWURJHQIHUWLOL]HU
DSSOLFDWLRQV DUH LPSRUWDQW IRU PRUH GHWDLOV VHH
0OOHUHWDOD0OOHUDQG$XEHUW
5HJDUGLQJ HPLVVLRQV IURP HQHUJ\ XVH DJULFXOWXUH
SOD\VDPLQRUUROHIDUPPDFKLQHU\DFFRXQWVIRURQO\
SHUFHQWRIGLUHFWDJULFXOWXUDO*+*HPLVVLRQVZKLOH
HIÀFLHQF\LPSURYHPHQWVLQLUULJDWLRQZRXOGFRQWULEXWH
VRPHZKDW PRUH DV LUULJDWLRQ DFFRXQWV IRU DERXW SHUFHQWRIHPLVVLRQV%HOODUE\HWDO+RZHYHU
UHGXFWLRQ RI HQHUJ\ XVH DORQJ WKH DJULFXOWXUDO YDOXH
FKDLQ KDV XQGRXEWHG PLWLJDWLRQ SRWHQWLDO 7KHUH DUH
VLJQLÀFDQW HPLVVLRQV IURP WUDQVSRUW SURFHVVLQJ
DQG VWRUDJH DOO RI ZKLFK DUH DWWULEXWHG E\ HPLVVLRQ
LQYHQWRULHV WR VHFWRUV RWKHU WKDQ DJULFXOWXUH 7KXV
LQFUHDVLQJHIÀFLHQF\DQGUHGXFLQJWKHDPRXQWRIURDG
DQGDLUWUDQVSRUWZRXOGFRQVLGHUDEO\UHGXFHHPLVVLRQV
IURPWKHIRRGV\VWHPIRUPRUHLQIRUPDWLRQRQVXSSO\
FKDLQUHODWHG *+* HPLVVLRQV VHH FRPPHQWV E\
5XQGJUHQ.UDLQ/LQQHDQG*DHEOHULQWKLVFKDSWHU
5HJDUGLQJWUDQVSRUWLWLVZRUWKSRLQWLQJRXWWKDWWKHUH
LV VLJQLÀFDQW PLVUHSRUWLQJ RI HPLVVLRQV LQ QDWLRQDO
*+* LQYHQWRULHV DV LPSRUWV DUH QRW DFFRXQWHG IRU
1DWLRQDO ERXQGDULHV DUH WKH EDVLV IRU HPLVVLRQV
DFFRXQWLQJ DQG ´JUH\µ HPEHGGHG HPLVVLRQV LQ
LPSRUWHGSURGXFWLRQLQSXWVDQGFRQVXPSWLRQJRRGV
DUH DGGHG WR WKH EDODQFH RI WKH FRXQWULHV RI RULJLQ
7KLVFRQVLGHUDEO\GLVWRUWVQDWLRQDOHPLVVLRQVIURPWKH
IRRGV\VWHPVRIFRXQWULHVZKHUHLPSRUWVDQGH[SRUWV
SOD\DFUXFLDOUROH
:LWK WKHVH UHPDUNV ZH KRSH WR KDYH RIIHUHG VRPH
RSWLRQV DW WKH FRQFHSWXDO OHYHO $W WKH SUDFWLFDO
OHYHO WKHUH DUH VRPH GLIÀFXOWLHV EXW GLIIHUHQWLDWLQJ
WKUHHSKDVHVKHOSV3UDFWLFDOLPSOHPHQWDWLRQPHDQV
RIIHULQJ LQFHQWLYHV DQG HVWDEOLVKLQJ PRQLWRULQJ DQG
HQIRUFHPHQWPHFKDQLVPV
3URYLGLQJLQFHQWLYHVDQGHQIRUFHPHQWDUHDFKDOOHQJH
LQPDQ\UHVSHFWVEXWPRQLWRULQJLVUHODWLYHO\HDV\IRU
75$'($1'(19,5210(175(9,(:
WKH ÀYH SURSRVDOV RXWOLQHG DERYH DYRLGLQJ EXUQLQJ
UHGXFLQJDQLPDOQXPEHUVDYRLGLQJORVVHVDQGZDVWH
DQG SUHYHQWLQJ GHIRUHVWDWLRQ DQG ODQG FRQYHUVLRQ
0RQLWRULQJ VRLO FDUERQ FKDQJHV FDQ EH PRUH
GHPDQGLQJEXWLWLVIHDVLEOH*LYHQWKHQHFHVVLW\RI
IXQGDPHQWDO FKDQJHV LQ DJULFXOWXUDO SURGXFWLRQ LQ
RUGHUWRLQFUHDVHLWVVXVWDLQDELOLW\WKHVHÀYHDVSHFWV
QHHG WR SOD\ D FHQWUDO UROH LQ DQ\ PLWLJDWLRQ SROLF\
IRU DJULFXOWXUH ,Q DGGLWLRQ UHGXFLQJ QLWURJHQ LQSXWV
VKRXOG EH D NH\ SROLF\ WDUJHW DQG FKDQJHV LQ KRZ
HPLVVLRQV IURP LPSRUWV DQG H[SRUWV DUH DFFRXQWHG
IRUDUHQHHGHGWRHQDEOHXQELDVHGDQGPRUHDFFXUDWH
DVVHVVPHQWVRIFRXQWULHV·HPLVVLRQV
:H GR QRW WRXFK RQ HQIRUFHPHQW KHUH EXW ZKDW
IROORZVDUHVRPHUHPDUNVRQDFWLRQVWKDWQHHGWREH
WDNHQWRPRYHWRZDUGVDPRUHVXVWDLQDEOHDJULFXOWXUDO
V\VWHPDVRXWOLQHGDERYH
)LUVW RSHQ EXUQLQJ RI DJULFXOWXUDO ZDVWH VKRXOG EH
SURKLELWHG DV KDV EHHQ LPSOHPHQWHG VXFFHVVIXOO\
E\ LQGXVWULDOL]HG FRXQWULHV ,QIRUPDWLRQ DQG WUDLQLQJ
DQGLIQHFHVVDU\HYHQVRPHÀQDQFLDOVXSSRUWVKRXOG
DFFRPSDQ\VXFKDEDQ7KLVZLOOSDUWO\LQÁXHQFHZHHG
DQGSHVWPDQDJHPHQWDQGDOWHUVRPHQXWULHQWÁRZV
WKRXJK VRPH DGGLWLRQDO LQYHVWPHQW RU ODERXU FRVWV
PD\ DFFUXH HJ LQ VXJDUFDQH ZLWKRXW SUHKDUYHVW
EXUQLQJ 7KH ELRPDVV QRW EXUQHG LV D YDOXDEOH
UHVRXUFH ZKLFK FDQ EH XVHG DV VRXUFH PDWHULDO IRU
FRPSRVW RU PXOFK LH DV RUJDQLF IHUWLOL]HU RU IRU
ELRHQHUJ\SURGXFWLRQ&OHDUO\WKHVHDOWHUQDWLYHXVHV
QHHG WR EH VXSSRUWHG E\ LQIRUPDWLRQ DQG WUDLQLQJ
DQGSHUKDSVDOVRE\LQYHVWPHQWVXSSRUW7KHUHPD\
EH VRPH RSWLRQV IRU REWDLQLQJ ÀQDQFLDO DVVLVWDQFH
IURP WKH FDUERQ PDUNHWV HJ UHQHZDEOH HQHUJ\ RU
FRPSRVWLQJ SURMHFWV XQGHU WKH &OHDQ 'HYHORSPHQW
0HFKDQLVPV
6HFRQG UHGXFHG DQLPDO QXPEHUV DQG ODQGXVH
FKDQJH FDQ EH DGGUHVVHG RQ WKH SURGXFHUV· VLGH
WKURXJK RSWLPDO VWRFNLQJ UDWHV HIÀFLHQW JUDVVODQG
PDQDJHPHQW DQG SDVWRUDOLVP IRUHVW SURWHFWLRQ DQG
ODQGXVHOHJLVODWLRQ$QRSWLPDOFRPELQDWLRQRIFURS
IDUPLQJ DQG DQLPDO KXVEDQGU\ SURGXFHV WKH PRVW
HIÀFLHQW QXWULHQW F\FOHV +RZHYHU UHGXFLQJ DQLPDO
QXPEHUV LV XVXDOO\ QRW DQ LVVXH IRU VPDOOKROGHUV
LQ GHYHORSLQJ FRXQWULHV DQG DQLPDO KXVEDQGU\
LV HVVHQWLDO IRU WKHLU IRRG VHFXULW\ $FWLRQV RQ WKH
SURGXFHUV· VLGH ZRXOG LQFOXGH PDNLQJ LQSXWV PRUH
H[SHQVLYH DQG FRUUHVSRQGLQJO\ LQFUHDVLQJ RXWSXW
SULFHVZKLFKWRVRPHH[WHQWZRXOGUHGXFHGHPDQG
2QWKHGHPDQGVLGHLWLVSULPDULO\DQLVVXHRQDJOREDO
VFDOHDQGFRQFHUQVPDLQO\PRUHZHDOWK\FRQVXPHUV
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
ZKRVH LQFUHDVLQJ GHPDQG IRU PHDW DQG GDLU\
SURGXFWVQHHGVWREHGLVFRXUDJHG2QHSRVVLEOHZD\
WRUHGXFHGHPDQGZRXOGEHE\LPSRVLQJD´PHDWWD[µ
WLHG WR WKH HPLVVLRQV IURP DQLPDOV ,W LV KRZHYHU
TXHVWLRQDEOH ZKHWKHU SULFH LQFUHDVHV FRXOG EH KLJK
HQRXJK WR DFKLHYH WKH QHFHVVDU\ UHGXFWLRQV WKHUH
DOVRQHHGVWREHDGLVFXVVLRQRIFRQVXPHUEHKDYLRXU
OLIHVW\OHVDQGTXDOLW\RIOLIHDQGKRZWKHVHDUHOLQNHG
WRH[FHVVLYHFRQVXPSWLRQDQGPHDWFRQVXPSWLRQLQ
SDUWLFXODU
7KH WKLUG LVVXH FORVHO\ UHODWHG WR WKH LVVXH RI IRRG
ZDVWDJH FRQFHUQV FRQVXPHU EHKDYLRXU DQG
SHUFHSWLRQVRITXDOLW\IUHVKQHVVDQGQHHGVZKLFKDUH
GHFLVLYHLQWKLVUHVSHFW0DNLQJIRRGPRUHH[SHQVLYH
WKURXJK LQWHUQDOL]DWLRQ RI DOO H[WHUQDO FRVWV ZRXOG
KHOSEXWDVSHFWVRIMXVWLFHQHHGWREHNHSWLQPLQGDV
VLJQLÀFDQWSULFHLQFUHDVHVDIIHFWWKHIUHHGRPRIFKRLFH
RIOHVVZHDOWK\SHRSOHPXFKPRUHWKDQWKDWRIZHDOWK\
SHRSOH 7KXV DJDLQ VXVWDLQDEOH OLIHVW\OHV QHHG WR
EHFRPH D PDMRU FRQVLGHUDWLRQ LQ SROLF\ GLVFXVVLRQV
IRU D GHWDLOHG GLVFXVVLRQ RI WKHVH DVSHFWV VHH WKH
FRPPHQWDU\RI5HLVFKLQWKLVFKDSWHU
7KHRWKHUDVSHFWRIZDVWDJHLVVWRUDJHORVVHVLQPDQ\
GHYHORSLQJFRXQWULHV,QWKHVHFRXQWULHVLQYHVWPHQWLQ
VWRUDJHDQGSURFHVVLQJIDFLOLWLHVDQGLQIRUPDWLRQDQG
WUDLQLQJZRXOGJUHDWO\KHOS7KLVVKRXOGEHRISULPDU\
LPSRUWDQFHDVLWZRXOGUHGXFHWKHQHHGHGOHYHODQG
LQWHQVLW\ RI DFWLRQV RQ WKH RWKHU DVSHFWV PHQWLRQHG
KHUH (DFK XQLW ORVV DYRLGHG UHGXFHV SUHVVXUH RQ
SURGXFWLRQ 7KXV LW LV OHVV DERXW DGGLWLRQDO PRQH\
QHHGHGIRUWKHVHPHDVXUHVWKDQDERXWDVKLIWLQIRFXV
RQZKHUHWRFKDQQHOWKHPRQH\WKDWDOUHDG\ÁRZVLQWR
DJULFXOWXUHDQGWKHIRRGV\VWHPVHHWKHFRPPHQWDU\
RI3DUÀWWDQG%DUWKHOLQWKLVFKDSWHU
)RXUWK UHGXFHG QLWURJHQ LQSXWV FDQ EH DFKLHYHG
WKURXJK UHJXODWLRQ IROORZLQJ WKH H[DPSOH RI WKH
VXFFHVVIXO (8 1LWURJHQ 'LUHFWLYH 7D[LQJ LQSXWV LV
DQRWKHU RSWLRQ D KHDY\ FDUERQ WD[ ZRXOG VHUYH D
VLPLODUJRDOGXHWRWKHXVHRIIRVVLOIXHOIRUV\QWKHWLF
IHUWLOL]HU SURGXFWLRQ +RZHYHU QLWURJHQ UHJXODWLRQ
VKRXOG JR IXUWKHU WKDQ RQO\ LQSXW UHGXFWLRQ &ORVHG
QXWULHQWF\FOHVDQGLQFUHDVHGXVHRIRUJDQLFIHUWLOL]HUV
VKRXOG EH WKH ÀQDO JRDO DV WKLV ZRXOG DOVR KDYH
KLJKO\EHQHÀFLDOHIIHFWVRQVRLOFDUERQOHYHOVDQGWKH
FRUUHVSRQGLQJPLWLJDWLRQVHHWKHFRPPHQWDU\RI/HX
ODWHULQWKLVFKDSWHU
7KLV LV OLQNHG WR HIIRUWV IRU LQFUHDVLQJ VRLO FDUERQ
VHTXHVWUDWLRQ 7R DFKLHYH WKLV WKH QHFHVVDU\ VWHSV
LQFOXGH DEROLVKLQJ VXEVLGLHV IRU V\QWKHWLF IHUWLOL]HUV
DQG VXSSRUWLQJ RUJDQLF IHUWLOL]HUV UHGXFLQJ VRLO
GLVWXUEDQFHLQWLOODJHRSHUDWLRQVDQGSODQWLQJOHJXPH
OH\VLQFURSURWDWLRQV6XSSRUWVKRXOGFRQVLVWRIERWK
LQYHVWPHQW VXSSRUW DQG H[WHQVLRQ VHUYLFHV HJ IRU
RSWLPDO FRPSRVWLQJ DQG FRPSRVW XVH $GGLWLRQDO
EHQHÀWV IURP KLJKHU VRLO FDUERQ OHYHOV LQFOXGH
LPSURYHGVRLOVWUXFWXUHVRLOIHUWLOLW\DQGVRLOOLIHZKLFK
FRQWULEXWH WR ZDWHU KROGLQJ DQG UHWHQWLRQ FDSDFLW\
ZLWKFRUUHVSRQGLQJSRVLWLYHHIIHFWVRQFOLPDWHFKDQJH
DGDSWDWLRQ LH LQFUHDVHG UHVLVWDQFH WR GURXJKW DQG
H[WUHPHZHDWKHUHYHQWV
)LQDOO\HPEHGGHGHPLVVLRQVQHHGWREHPDGHYLVLEOH
1DWLRQDO*+*LQYHQWRULHVVKRXOGEHDPHQGHGWRWDNH
LQWRDFFRXQWLPSRUWVDQGH[SRUWVLQRUGHUWRREWDLQD
IXOODQGPRUHDFFXUDWHSLFWXUHRIQDWLRQDOHPLVVLRQV
DQG QRW RYHUORRN WKH UHVSRQVLELOLWLHV RI FRQVXPHUV
DEURDG
75$'($1'(19,5210(175(9,(:
1//'06#4;U *'16'06+#.1(756#+0#$.')4+%7.674'(14
.+/#6'*#0)'&#26#6+10
$0OOHUDQG81LJJOL
5HVHDUFK,QVWLWXWHRI2UJDQLF$JULFXOWXUH)L%/6ZLW]HUODQG
$EVWUDFW
$GDSWDWLRQLQDJULFXOWXUHQHHGVWREHEDVHGRQIRXUSLOODUV
‡ ,QFUHDVLQJVRLOIHUWLOLW\WKLVFDQEHDFKLHYHGE\UHSODFLQJV\QWKHWLFIHUWLOL]HUVZLWKRUJDQLFIHUWLOL]HUV
DQGPRQRFXOWXUHVZLWKGLYHUVHFURSURWDWLRQV
‡ ,QFUHDVLQJELRGLYHUVLW\WKURXJKGLYHUVHPHDVXUHVVXFKDVFURSURWDWLRQVXVHRIORFDOYDULHWLHVFDWFK
FURSVKHGJHVDQGRWKHUODQGVFDSHHOHPHQWV7KLVDSSOLHVWRÀHOGIDUPDQGODQGVFDSHOHYHOV,Q
DGGLWLRQ WKH XVH RI VXVWDLQDEOH DQG HVSHFLDOO\ RUJDQLF FURS SURWHFWLRQ ZLOO IRVWHU ELRGLYHUVLW\ RI
LQVHFWVZHHGVHDUWKZRUPVDQGRWKHURUJDQLVPV
‡ 3URYLGLQJLQIRUPDWLRQDQGH[WHQVLRQVHUYLFHVWRVXSSRUWVXVWDLQDEOHDJULFXOWXUDOSUDFWLFHVDQGRUJDQLF
DJULFXOWXUHDJURHFRORJ\DQGDJURIRUHVWU\
‡ &UHDWLQJDOHYHOSOD\LQJÀHOGIRUVXVWDLQDEOHDJULFXOWXUHDWWKHJOREDOOHYHO7KLVLQYROYHVDEROLVKLQJ
GLVWRUWLQJVXEVLGLHVVXFKDVIRUV\QWKHWLFIHUWLOL]HUVDQGLQWHUQDOL]DWLRQRIH[WHUQDOFRVWV
2UJDQLFDJULFXOWXUHLVDQLGHDOVROXWLRQDVLWUHVSRQGVWRWKHÀUVWWKUHHSLOODUV,QDGGLWLRQJOREDOSROLFLHV
DQGWUDGHDQGFRPSHWLWLRQLVVXHVQHHGVHSDUDWHDWWHQWLRQ
$GDSWLQJDJULFXOWXUHWRFOLPDWHFKDQJHLVXQDYRLGDEOH
)RUDGDSWDWLRQRQWKHFRQFHSWVHHER[WRVXFFHHG
LWLVQHFHVVDU\IRUIDUPVWRWDNHFRQFUHWHDGDSWDWLRQ
PHDVXUHVEXWDOVRJHQHUDOORQJWHUPVRFLHWDODFWLRQV
DUH QHHGHG 2XU FRPPHQWV KHUH IRFXV PDLQO\ RQ
DGDSWDWLRQPHDVXUHVIRUIDUPV
$QDVSHFWRIWHQQHJOHFWHGLQFXUUHQWGLVFXVVLRQVRQ
DGDSWDWLRQLQDJULFXOWXUHGLVFXVVHGLQGHWDLOLQ0OOHU
HWDOLVWKDWDGDSWDWLRQVWUDWHJLHVDOVRQHHGWR
RIIHU IDUPLQJ IDPLOLHV VROXWLRQV RXWVLGH DJULFXOWXUH LI
DJULFXOWXUDOSURGXFWLRQEHFRPHVLPSRVVLEOHIRUWKHP
)RUH[DPSOHGURXJKWUHVLVWDQWYDULHWLHVDQGLPSURYHG
HIÀFLHQF\RIZDWHUXVHZRXOGKHOSDGDSWDWLRQEXWLQ
VRPH FDVHV ZDWHU DYDLODELOLW\ PD\ EHFRPH WRR ORZ
WR FRQWLQXH ZLWK DJULFXOWXUH ,Q VXFK VLWXDWLRQV WKH
NH\TXHVWLRQLVZKHUHDJULFXOWXUDOSURGXFWLRQPD\EH
RSWLPDOO\ ORFDWHG RYHU WKH QH[W IHZ GHFDGHV ZKHUH
LW PD\ EH EHWWHU WR DEDQGRQ LW DQG ZKLFK OLYHOLKRRG
DOWHUQDWLYHVZLOOEHDYDLODEOH
7KHUH DUH ÀYH NH\ LPSDFWV DQG FKDUDFWHULVWLFV RI
FOLPDWH FKDQJH LQ DJULFXOWXUH HJ (DVWHUOLQJ HW DO
0HHKO HW DO 5RVHQ]ZHLJ DQG 7XELHOOR
‡ &OLPDWHFKDQJHLPSDFWVZLOOYDU\FRQVLGHUDEO\E\
UHJLRQVRPHUHJLRQVZLOOEHDIIHFWHGSRVLWLYHO\DQG
RWKHUVQHJDWLYHO\+RZHYHUFKDQJHVLQSURGXFWLRQ
FRQGLWLRQV ZLOO RFFXU HYHU\ZKHUH QHFHVVLWDWLQJ
DGDSWDWLRQ 5HJLRQV EHQHÀWLQJ IURP WKH SRVLWLYH
HIIHFWV RI FOLPDWH FKDQJH VKRXOG EH DEOH WR WDNH
IXOODGYDQWDJHRIWKHLUFKDQJHGFLUFXPVWDQFHV
‡ :DWHU ZLOO EHFRPH D NH\ LVVXH ,Q VRPH UHJLRQV
WKHUHZLOOEHLQFUHDVHGZDWHUVFDUFLW\DQGGURXJKW
ZKLOHLQRWKHUVH[WUHPHSUHFLSLWDWLRQZDWHUORJJLQJ
DQGÁRRGLQJZLOOEHFRPHPRUHIUHTXHQW
‡ 3UHVVXUH IURP ZHHGV SHVWV DQG GLVHDVHV ZLOO
LQFUHDVH
‡ ,QFUHDVLQJ QXPEHUV RI H[WUHPH ZHDWKHU HYHQWV
HJKHDWZDYHVDQGKHDY\SUHFLSLWDWLRQZLOOSRVH
DIXUWKHUFKDOOHQJHWRDJULFXOWXUDOSURGXFWLRQ
‡ 5LVNV LQ DJULFXOWXUDO SURGXFWLRQ ZLOO LQFUHDVH GXH
SDUWO\WRJUHDWHUFOLPDWHYDULDELOLW\
$GDSWDWLRQLQDJULFXOWXUHQHHGVWRUHGXFHH[SRVXUHWR
WKHVHLPSDFWVDVZHOODVVHQVLWLYLW\DQGYXOQHUDELOLW\WR
WKHP7KLVFDQEHDFKLHYHGE\DGRSWLQJVXVWDLQDEOH
DJULFXOWXUDOSURGXFWLRQV\VWHPVVXFKDVDJURHFRORJ\
DJURIRUHVWU\ RU RUJDQLF DJULFXOWXUH 0LOHVWDG DQG
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
%R[7KHFRQFHSWRIDGDSWDWLRQ
:HXVHWKHWKUHHFRQFHSWVRI´H[SRVXUHµ´VHQVLWLYLW\µDQG´YXOQHUDELOLW\µWRIUDPHDGDSWDWLRQLQDJULFXOWXUH´([SRVXUHµ
GHVFULEHVWKHOLNHOLKRRGWKDWDV\VWHPZLOOH[SHULHQFHFHUWDLQFRQGLWLRQVVXFKDVGURXJKWHJ6PLWDQG:DQGHO
´6HQVLWLYLW\LVWKHGHJUHHWRZKLFKDV\VWHPLVDIIHFWHGHLWKHUDGYHUVHO\RUEHQHÀFLDOO\E\FOLPDWHYDULDELOLW\RUFKDQJHµ
,3&&E´9XOQHUDELOLW\LVWKHGHJUHHWRZKLFKDV\VWHPLVVXVFHSWLEOHWRDQGXQDEOHWRFRSHZLWKDGYHUVHHIIHFWV
RIFOLPDWHFKDQJHµ,3&&E
'DUQKRIHU%RUURQ1LJJOL(O+DJH
6FLDODEED DQG 0OOHU/LQGHQODXI 0OOHU HW DO
VKHOWHU DQG IDYRXUDEOH PLFURFOLPDWHV LPSURYLQJ
PRLVWXUHPDQDJHPHQWDQGFDSDFLW\WRDGDSWWRKLJK
WHPSHUDWXUHV
7KHUHDUHPDQ\UHDVRQVZK\VXVWDLQDEOHDJULFXOWXUHLV
DV\VWHPZHOOVXLWHGWRDGDSWDWLRQ)LUVWWUDGLWLRQDOO\LW
XVHVORFDOO\DGDSWHGYDULHWLHVDQGFURSSLQJSUDFWLFHV
DQGLWFDQWKHUHIRUHEHWWHUDGMXVWWRORFDOYDULDELOLW\RI
FOLPDWHFKDQJHLPSDFWV
)LIWK WKH KLJK ELRGLYHUVLW\ RQ VXVWDLQDEO\ PDQDJHG
IDUPV HJ RUJDQLF DOVR UHGXFHV WKH ULVN RI WRWDO
SURGXFWLRQORVVHVGXHWRFOLPDWHFKDQJHDQGJHQHUDOO\
LQFUHDVHVWKHUHVLOLHQFHRIDJURHFRV\VWHPV$OWLHULDQG
1LFKROOV &DPSEHOO HW DO 7KURXJK WKH
FRPELQDWLRQRIFURSDQGOLYHVWRFNSURGXFWLRQDVZHOO
DV D ODUJHU QXPEHU RI FURSV JURZQ WRWDO HFRQRPLF
IDLOXUH FDQ EH DYRLGHG $GGLWLRQDOO\ WKH HFRQRPLF
ULVNVDUHORZHUIRURUJDQLFIDUPVDVWKH\XVHIHZHURII
IDUP LQSXWV DQG FRUUHVSRQGLQJO\ LQFXU ORZHU XSIURQW
FRVWV 3ULFH SUHPLXPV IRU LQVWDQFH UHVXOWLQJ IURP
FHUWLÀHGRUJDQLFSURGXFWLRQRIIHUIXUWKHUSRWHQWLDOIRU
LPSURYLQJ SURGXFHUV· HFRQRPLF VLWXDWLRQV $OO WKHVH
DVSHFWV FRPELQHG SURYLGH LQH[SHQVLYH EXW HIIHFWLYH
ULVN PDQDJHPHQW VWUDWHJLHV LQ SDUWLFXODU LQVXUDQFH
DJDLQVWFURSIDLOXUH(O+DJH6FLDODEEDDQG+DWWDP
(\KRUQ
6HFRQGLWFDQUHVSRQGWRLQFUHDVHGZDWHUVWUHVVE\
PDLQWDLQLQJ DQG LQFUHDVLQJ VRLO RUJDQLF PDWWHU DV
WKLV LQFUHDVHV WKH VRLO·V ZDWHU KROGLQJ DQG UHWHQWLRQ
FDSDFLW\8VLQJRUJDQLFIHUWLOL]HUVVXFKDVFRPSRVW
DQG DGRSWLQJ GLYHUVH FURS VHTXHQFHV LQ SDUWLFXODU
ZLWK OHJXPH OH\V DUH LPSRUWDQW PHDQV RI DFKLHYLQJ
WKLV 7KHVH DUH FRUH SUDFWLFHV RI VXVWDLQDEOH
DJULFXOWXUHDQGRIRUJDQLFDJULFXOWXUHLQSDUWLFXODUZLWK
LWV VWURQJ IRFXV RQ VRLO IHUWLOLW\ VRLO TXDOLW\ DQG SODQW
KHDOWK 7KH KLJKHU ELRGLYHUVLW\ LQ RUJDQLF DJULFXOWXUH
UHVXOWLQJ IURP DQ RSWLPDO FRPELQDWLRQ RI FURSV ZLWK
GLIIHUHQWQHHGVDOVRFRQWULEXWHVWRRSWLPDOZDWHUDQG
QXWULHQWXVH
7KLUG KLJK ELRGLYHUVLW\ DOVR KHOSV UHGXFH WKH
RFFXUUHQFHDQGVHYHULW\RIZHHGVDQGSHVWRXWEUHDNV
DQG SODQW DQG DQLPDO GLVHDVHV 6PLWK HW DO 1LJJOL ,Q DGGLWLRQ FRPSOH[ FURS URWDWLRQV
FRQWULEXWHWRFRQWUROOLQJSHVWVPRUHHIIHFWLYHO\DVWKH\
EUHDNWKHLUOLIHF\FOHV,PSURYHGVRLOIHUWLOLW\DQGSODQW
KHDOWK IXUWKHU UHGXFH YXOQHUDELOLW\ WR SUHVVXUHV IURP
LQFUHDVHG SHVWV ZHHGV DQG GLVHDVHV $OWLHUL 3RQWL
DQG1LFKROOV
)RXUWK LPSURYHG VRLO TXDOLW\ DQG KLJKHU FRQWHQW RI
RUJDQLF PDWWHU LQ WKH VRLO DOVR UHGXFH YXOQHUDELOLW\
WR H[WUHPH HYHQWV VXFK DV GURXJKW ÁRRGLQJ DQG
ZDWHUORJJLQJ DQG HURVLRQ 6LHJULVW HW DO )OLHVVEDFK HW DO 1LJJOL (O+DJH
6FLDODEED DQG 0OOHU/LQGHQODXI ,Q DGGLWLRQ
PXOFKLQJ DQG FRYHU FURSV DUH FRPPRQ SUDFWLFHV
LQ VXVWDLQDEOH DJULFXOWXUH EDUH IDOORZV DUH DYRLGHG
DQGHURVLRQLVFRUUHVSRQGLQJO\UHGXFHG/DQGVFDSH
HOHPHQWV VXFK DV KHGJHV RU DJURIRUHVWU\ SURYLGH
$JURHFRORJ\ DJURIRUHVWU\ DQG LQ SDUWLFXODU RUJDQLF
DJULFXOWXUH WKXV UHGXFH YXOQHUDELOLW\ WKURXJK ULVN
UHGXFWLRQ EDVHG RQ GLYHUVLÀFDWLRQ RI OLYHOLKRRG
VWUDWHJLHV FURSSLQJ SDWWHUQV DQG ORZHU LQSXW
FRVWV 7KH IRFXV RQ VRLO IHUWLOLW\ VRLO KHDOWK DQG KLJK
ELRGLYHUVLW\ UHGXFHV VHQVLWLYLW\ 7KLV LV RI SDUWLFXODU
UHOHYDQFH IRU RSWLPDO ZDWHU PDQDJHPHQW DQG IRU
RSWLPDO VWUDWHJLHV WR FRSH ZLWK SHVWV DQG GLVHDVHV
5HGXFLQJH[SRVXUHLVWKHPRVWGLIÀFXOWDVWKLVPHDQV
VKLIWLQJFURSSLQJORFDWLRQVRUDEDQGRQLQJDJULFXOWXUH
DOWRJHWKHULQVRPHFLUFXPVWDQFHV
+RZ VXFK IXQGDPHQWDO FKDQJHV FDQ EH VXSSRUWHG
ZKHUH QHFHVVDU\ QHHGV IXUWKHU UHVHDUFK +RZHYHU
WKHUHDUHVRPHUHDGLO\DYDLODEOHVWUDWHJLHVWKDWUHGXFH
YXOQHUDELOLW\DQGVHQVLWLYLW\DVEULHÁ\GHVFULEHGEHORZ
)LUVW VRLO IHUWLOLW\ QHHGV WR EH EXLOW XS DQG VRLO
GHJUDGDWLRQ KDOWHG )RU WKLV VXEVLGLHV IRU V\QWKHWLF
IHUWLOL]HUV VKRXOG EH DEDQGRQHG ZKHUH SRVVLEOH
ZLWKRXWFRPSURPLVLQJIRRGVHFXULW\:KHUHWKLVLVDQ
LVVXHFDUHIXOO\GHVLJQHGWUDQVIRUPDWLRQIURPV\QWKHWLF
WR DW OHDVW SDUWO\ RUJDQLF IHUWLOL]HUV UHGHVLJQHG FURS
URWDWLRQV ZLWK OHJXPHV DQG SODQWV ZLWK GLIIHUHQW
URRWLQJ GHSWKV DV ZHOO DV FORVHG QXWULHQW F\FOHV
VKRXOG EH LPSOHPHQWHG 7KH VLPXOWDQHRXV XVH RI
V\QWKHWLFDQGRUJDQLFIHUWLOL]HUVPD\QRWEHDGYLVDEOH
IRU FOLPDWH FKDQJH PLWLJDWLRQ GXH WR WKH UHVXOWLQJ
KLJKHUQLWURXVR[LGHHPLVVLRQV+RZHYHUSDUWLFXODUO\
LQDGHYHORSPHQWFRQWH[WDGDSWDWLRQLQDJULFXOWXUHLV
NH\DQGPLWLJDWLRQPXVWQHYHUFRPSURPLVHRQWKLV
6HFRQG ELRGLYHUVLW\ QHHGV WR EH HQKDQFHG /RFDO
EUHHGLQJ SURJUDPPHV VKRXOG EH HVWDEOLVKHG RU
UHYLWDOL]HG DQG VXSSRUWHG DQG IDUPHUV VKRXOG EH
DEOH WR SURGXFH WKHLU RZQ VHHGV 3UDFWLFHV VXFK DV
DJURIRUHVWU\ DQG ZHOOGHVLJQHG FURS URWDWLRQV QHHG
WREHVXSSRUWHG/DQGVFDSHHOHPHQWVDOVRFRQWULEXWH
WR DGDSWDWLRQ DV WKH\ LPSURYH WKH PLFURFOLPDWH
3D\PHQWVIRUHFRV\VWHPVHUYLFHVFRXOGEHRQHW\SH
RIÀQDQFLDOLQFHQWLYHPHFKDQLVPWRHQFRXUDJHWKHVH
SUDFWLFHV
7KLV OLQNV WR WKH WKLUG SRLQW LQIRUPDWLRQ DQG WUDLQLQJ
75$'($1'(19,5210(175(9,(:
DUH FUXFLDO IRU VXFFHVVIXO LPSOHPHQWDWLRQ RI WKHVH
DGDSWDWLRQ VWUDWHJLHV 6XVWDLQDEOH DJULFXOWXUDO
SUDFWLFHV DQG RUJDQLF DJULFXOWXUH DV D KROLVWLF
DJULFXOWXUDO SURGXFWLRQ V\VWHP UHO\ RQ WKH SUHVHQFH
RIDFRQVLGHUDEOHERG\RINQRZOHGJH
)RXUWKWREHVXFFHVVIXODGDSWDWLRQVWUDWHJLHVQHHG
WR EH DFFRPSDQLHG E\ SROLF\ DQG WUDGH PHDVXUHV
0DVVLYH WUDGH GLVWRUWLRQV VXFK DV WKH FXUUHQW
VXEVLGLHVIRUFRQYHQWLRQDOSURGXFWLRQHJFRWWRQ LQ
WKH 8QLWHG 6WDWHV QHHG WR EH DEROLVKHG 6LPLODUO\
WKHPDUNHWSRZHURIDJULEXVLQHVVFRUSRUDWLRQVLQWKH
VHHG PDUNHWV DQG LQ SODQW SURWHFWLRQ LV D KLQGUDQFH
WKDWQHHGVWREHUHPRYHG
)LQDOO\ DOO H[WHUQDO FRVWV RI DJULFXOWXUDO SURGXFWLRQ
VKRXOG EH UHÁHFWHG LQ WKH SULFH :LWKRXW WKLV
FRQYHQWLRQDO SURGXFWLRQ ZLOO DOZD\V KDYH DQ XQIDLU
FRPSHWLWLYH DGYDQWDJH GXH WR GLVWRUWHG SURGXFWLRQ
FRVWV WKDW GR QRW LQFOXGH DOO WKH HQYLURQPHQWDO DQG
VRFLDOFRVWVRISURGXFWLRQ,IWKRVHH[WHUQDOFRVWVZHUH
WR EH LQFOXGHG LQ FRQYHQWLRQDO SURGXFWLRQ LW ZRXOG
SURYHWREHPRUHFRVWO\WKDQVXVWDLQDEOHDJULFXOWXUH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
1//'06#4;U 11&X.+/#6'*#0)'#0&'#.6*;1+.5U
*'
14)166'0+0*5$,1
$EVWUDFW
$JULFXOWXUH LV VWDUWLQJ WR JHW PRUH DWWHQWLRQ LQ LQWHUQDWLRQDO QHJRWLDWLRQV DURXQG FOLPDWH FKDQJH 7KH
FRQVHQVXV LV WKDW LW FRQWULEXWHV ² SHU FHQW RI DOO JOREDO DQWKURSRJHQLF JUHHQKRXVH JDV *+*
HPLVVLRQV PDNLQJ LW RQH RI WKH NH\ GULYHUV RI FOLPDWH FKDQJH %XW ORRNLQJ DW DJULFXOWXUH DORQH LV QRW
HQRXJKLWLVDOVRQHFHVVDU\WRORRNDWWKHODUJHUIRRGV\VWHP%H\RQGWKHHPLVVLRQVWKDWRFFXURQWKH
IDUPWRGD\·VGRPLQDQWLQGXVWULDOIRRGV\VWHPJHQHUDWHV*+*VE\WUDQVSRUWLQJIRRGDURXQGWKHZRUOGE\
GHIRUHVWDWLRQWRPDNHZD\IRUSODQWDWLRQVDQGE\JHQHUDWLQJZDVWH3XOOLQJWRJHWKHUWKHDYDLODEOHGDWDRQ
WKHVHVRXUFHVRIHPLVVLRQVUHYHDOVWKDWWKHJOREDOIRRGV\VWHPLVUHVSRQVLEOHIRUDURXQGKDOIRIDOOJOREDO
*+*V7KXVLWLVWKHIRRGV\VWHPDVDZKROHZKLFKLVDWWKHFHQWUHRIWKHSUREOHPRIFOLPDWHFKDQJH
,IPHDVXUHVDUHWDNHQWRUHVWUXFWXUHDJULFXOWXUHDQGWKHODUJHUIRRGV\VWHPEDVHGRQIRRGVRYHUHLJQW\
VPDOOVFDOHIDUPLQJDJURHFRORJ\DQGORFDOPDUNHWVJOREDO*+*HPLVVLRQVFRXOGEHFXWE\KDOIZLWKLQD
IHZGHFDGHV7KHUHLVQRQHHGIRUFDUERQPDUNHWVRUWHFKQRÀ[HV:KDWLVQHHGHGDUHWKHULJKWSROLFLHV
DQGSURJUDPPHVWKDWEULQJDERXWDVKLIWIURPWKHFXUUHQWLQGXVWULDOIRRGV\VWHPWRDVXVWDLQDEOHHTXLWDEOH
DQGWUXO\SURGXFWLYHRQH
$)RRGDQGFOLPDWHSLHFLQJWKH
SX]]OHWRJHWKHU
$FFRUGLQJ WR PRVW VWXGLHV WKH FRQWULEXWLRQ RI
DJULFXOWXUDO HPLVVLRQV ² WKH HPLVVLRQV SURGXFHG RQ
WKHIDUP²LVEHWZHHQDQGSHUFHQWRIDOOJOREDO
HPLVVLRQV:KDWRIWHQJRHVXQVDLGKRZHYHULVWKDW
PRVW RI WKHVH HPLVVLRQV DUH JHQHUDWHG E\ LQGXVWULDO
IDUPLQJ SUDFWLFHV WKDW UHO\ RQ FKHPLFDO QLWURJHQ
IHUWLOL]HUVKHDY\PDFKLQHU\UXQRQSHWURODQGKLJKO\
FRQFHQWUDWHG LQGXVWULDO OLYHVWRFN RSHUDWLRQV WKDW
SXPSRXWPHWKDQH
7KH GDWD IRU DJULFXOWXUH·V FRQWULEXWLRQ DOVR RIWHQ
QHJOHFW WR WDNH LQWR DFFRXQW WKH FRQWULEXWLRQ RI
ODQGXVH FKDQJHV DQG GHIRUHVWDWLRQ ZKLFK DUH
UHVSRQVLEOHIRUQHDUO\DÀIWKRIJOREDO*+*HPLVVLRQV
:5, XQGDWHG ,3&& :RUOGZLGH DJULFXOWXUH
LV SXVKLQJ LQWR VDYDQQDKV ZHWODQGV FHUUDGRV DQG
IRUHVWVDQGLVSORXJKLQJKXJHDPRXQWVRIODQG7KH
H[SDQVLRQRIWKHDJULFXOWXUDOIURQWLHULVWKHGRPLQDQW
FRQWULEXWRUWRGHIRUHVWDWLRQDFFRXQWLQJIRU²SHU
FHQW RI JOREDO GHIRUHVWDWLRQ )$2 .DQQLQHQ
HW DO 7KLV PHDQV WKDW VRPH ² SHU FHQW
RI JOREDO *+* HPLVVLRQV DUH SURGXFHG E\ ODQGXVH
FKDQJH DQG GHIRUHVWDWLRQ IRU DJULFXOWXUH $QG KHUH
WRRWKHJOREDOIRRGV\VWHPDQGWKHLQGXVWULDOPRGHO
RI DJULFXOWXUH DUH WKH FKLHI FXOSULWV 7KH PDLQ GULYHU
RI WKLV GHIRUHVWDWLRQ LV WKH H[SDQVLRQ RI LQGXVWULDO
SODQWDWLRQVIRUWKHSURGXFWLRQRIFRPPRGLWLHVVXFKDV
VR\VXJDUFDQHRLOSDOPPDL]HDQGUDSHVHHG6LQFH
WKH DUHD SODQWHG ZLWK WKHVH ÀYH FRPPRGLW\
FURSVJUHZHQRUPRXVO\E\SHUFHQW*5$,1
7KHVH HPLVVLRQV IURP DJULFXOWXUH DFFRXQW IRU RQO\ D
SRUWLRQ RI WKH IRRG V\VWHP·V RYHUDOO FRQWULEXWLRQ WR
FOLPDWHFKDQJH(TXDOO\LPSRUWDQWDUHWKHHPLVVLRQV
FDXVHG DOO DORQJ WKH FKDLQ IURP ZKHQ WKH SURGXFH
OHDYHVWKHIDUPXQWLOLWLVFRQVXPHG
)RRG SURGXFWLRQ LV WKH ZRUOG·V ODUJHVW HFRQRPLF
DFWLYLW\ LQYROYLQJ PRUH WUDQVDFWLRQV DQG HPSOR\LQJ
PRUHSHRSOHE\IDUWKDQDQ\RWKHUVHFWRU7RGD\IRRG
LVSUHSDUHGDQGGLVWULEXWHGXVLQJHQRUPRXVDPRXQWV
RI SURFHVVLQJ SDFNDJLQJ DQG WUDQVSRUWDWLRQ DOO RI
ZKLFK JHQHUDWH *+* HPLVVLRQV DOWKRXJK GDWD RQ
VXFK HPLVVLRQV DUH KDUG WR ÀQG 6WXGLHV ORRNLQJ DW
WKH (8 FRQFOXGH WKDW DERXW RQH TXDUWHU RI RYHUDOO
WUDQVSRUWDWLRQ LQYROYHV FRPPHUFLDO IRRG WUDQVSRUW
(XURVWDW 6FDWWHUHG ÀJXUHV RQ WUDQVSRUWDWLRQ
DYDLODEOH IRU RWKHU FRXQWULHV VXFK DV .HQ\D DQG
=LPEDEZH LQGLFDWH WKDW WKH SHUFHQWDJH LV HYHQ
KLJKHU LQ QRQLQGXVWULDOL]HG FRXQWULHV ZKHUH ´IRRG
SURGXFWLRQ DQG GHOLYHU\ DFFRXQWV IRU RI WKH
WRWDO HQHUJ\ ² KXPDQ SOXV DQLPDO SOXV IXHO ² XVHGµ
.DUHNH]L DQG /D]DUXV :LWK WUDQVSRUWDWLRQ
75$'($1'(19,5210(175(9,(:
)LJXUH&RQWULEXWLRQRIWKHJOREDOIRRGSURGXFWLRQV\VWHPWRWRWDO*+*HPLVVLRQV
2 WKHUQRQIRRGUHODWHG
HP LVVLRQV
: DVWH
3 URFHVVLQJWUDQVSRUW
SDFNLQJDQGUHWDLO
/DQGXVHFKDQJHDQG
GHIRUHVWDWLRQ
$ JULFXOWXUDOSURGXFWLRQ
6RXUFH(VWLPDWHVRI*5$,1
DFFRXQWLQJIRUSHUFHQWRIJOREDO*+*HPLVVLRQV
(8GDWDHQDEOHDQHVWLPDWH²DOEHLWDFRQVHUYDWLYHRQH
²IRUWKHFRQWULEXWLRQRIWKHWUDQVSRUWRIIRRGWR*+*
HPLVVLRQV RI DW OHDVW SHU FHQW 6LPLODUO\ (8 GDWD
GHULYHG IURP VWXGLHV RQ SURFHVVLQJ DQG SDFNDJLQJ
RI IRRG ZLWKLQ WKH (8 VKRZ WKDW WKHVH DFWLYLWLHV
DFFRXQWIRU²SHUFHQWRI*+*HPLVVLRQV%ROOD
DQG 3HQGRORYVND ZKLOH UHIULJHUDWLRQ RI IRRG
DFFRXQWVIRU²SHUFHQWRIWRWDOHPLVVLRQV*DUQHWW
DQG-DFNVRQDQGIRRGUHWDLOIRUDQRWKHUSHU
FHQW7DVVRXHWDO9HQNDW%DNDV
%DVHGRQWKHGDWDIRUWKH(8DQGH[WUDSRODWLQJIURP
WKH VFDUFH ÀJXUHV WKDW H[LVW IRU RWKHU FRXQWULHV ZH
FDQHVWLPDWHFRQVHUYDWLYHO\WKDWDWOHDVW²SHUFHQW
RIHPLVVLRQVUHVXOWIURPIRRGWUDQVSRUW²SHUFHQW
IURP IRRG SURFHVVLQJ DQG SDFNDJLQJ ² SHU FHQW
IURPUHIULJHUDWLRQDQGDQRWKHU²SHUFHQWIURPUHWDLO
7KLVDPRXQWVWRDWRWDOFRQWULEXWLRQRI²SHUFHQW
RIJOREDOHPLVVLRQVIURPDOOWKHVHDFWLYLWLHV
1RW DOO RI ZKDW WKH IRRG V\VWHP SURGXFHV JHWV
FRQVXPHG 7KH LQGXVWULDO IRRG V\VWHP GLVFDUGV XS
WR KDOI RI DOO WKH IRRG WKDW LW SURGXFHV LQ LWV MRXUQH\
IURP IDUPV WR WUDGHUV WR IRRG SURFHVVRUV WR VWRUHV
DQGVXSHUPDUNHWV7KLVLVHQRXJKWRIHHGWKHZRUOG·V
KXQJU\ VL[ WLPHV RYHU 6WXDUW 0XFK RI WKLV
ZDVWHURWVRQJDUEDJHKHDSVDQGODQGÀOOVSURGXFLQJ
VXEVWDQWLDO DPRXQWV RI *+*V 'LIIHUHQW VWXGLHV
LQGLFDWHWKDWEHWZHHQDQGSHUFHQWRIJOREDO
*+* HPLVVLRQV FRPH IURP ZDVWH DQG WKDW RYHU SHU FHQW RI WKHP FRPH IURP PDWHULDOV RULJLQDWLQJ LQ
DJULFXOWXUH DQG LWV SURFHVVLQJ %RJQHU HW DO 7KLVPHDQVWKDWWKHGHFRPSRVLWLRQRIRUJDQLFZDVWH
RULJLQDWLQJ LQ IRRG DQG DJULFXOWXUH LV UHVSRQVLEOH IRU
²SHUFHQWRIJOREDO*+*HPLVVLRQV
&RQVLGHULQJ DOO WKHVH IDFWRUV LW ZRXOG DSSHDU WKDW
WKH FXUUHQW JOREDO IRRG V\VWHP SURSHOOHG E\ DQ
LQFUHDVLQJO\ SRZHUIXO WUDQVQDWLRQDO IRRG LQGXVWU\ LV
UHVSRQVLEOHIRUDURXQGKDOIRIDOODQWKURSRJHQLF*+*
HPLVVLRQV²EHWZHHQDORZRISHUFHQWDQGDKLJK
RISHUFHQW
%7XUQLQJWKHIRRGV\VWHPXSVLGHGRZQ
&OHDUO\ ZH ZLOO QRW UHVROYH WKH FOLPDWH FULVLV LI WKH
JOREDO IRRG V\VWHP LV QRW XUJHQWO\ DQG GUDPDWLFDOO\
WUDQVIRUPHG7KHSODFHWRVWDUWLVZLWKWKHVRLO)RRG
SURGXFWLRQ EHJLQV DQG HQGV ZLWK VRLO ,W JURZV RXW
RIWKHVRLODQGHYHQWXDOO\JRHVEDFNLQWRLWWRHQDEOH
PRUH IRRG WR EH SURGXFHG 7KLV LV WKH YHU\ F\FOH RI
OLIH%XWLQUHFHQW\HDUVKXPDQVKDYHLJQRUHGWKLVYLWDO
F\FOHZHKDYHEHHQWDNLQJIURPWKHVRLOZLWKRXWJLYLQJ
EDFN
7KH LQGXVWULDOL]DWLRQ RI DJULFXOWXUH ZKLFK VWDUWHG LQ
(XURSH DQG 1RUWK $PHULFD DQG ZDV ODWHU UHSOLFDWHG
LQWKH*UHHQ5HYROXWLRQWKDWWRRNSODFHLQRWKHUSDUWV
RIWKHZRUOGZDVEDVHGRQWKHDVVXPSWLRQWKDWVRLO
IHUWLOLW\ FRXOG EH PDLQWDLQHG DQG LQFUHDVHG WKURXJK
WKHXVHRIFKHPLFDOIHUWLOL]HUV/LWWOHDWWHQWLRQZDVSDLG
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
WRWKHLPSRUWDQFHRIRUJDQLFPDWWHULQWKHVRLO
$ ZLGH UDQJH RI VFLHQWLÀF UHSRUWV LQGLFDWH WKDW
FXOWLYDWHG VRLOV KDYH ORVW WR SHU FHQW RI WKHLU
RUJDQLFPDWWHUGXULQJWKHWZHQWLHWKFHQWXU\ZKLOHVRLOV
XQGHUSDVWXUHVDQGSUDLULHVKDYHW\SLFDOO\ORVWXSWR
SHUFHQW:LWKRXWGRXEWWKHVHORVVHVKDYHSURYRNHG
DVHULRXVGHWHULRUDWLRQRIVRLOIHUWLOLW\DQGSURGXFWLYLW\
DV ZHOO DV D KLJKHU ULVN H[SRVXUH WR GURXJKWV DQG
ÁRRGV
7DNLQJ DV D EDVLV VRPH RI WKH PRVW FRQVHUYDWLYH
ÀJXUHVSURYLGHGE\WKHVFLHQWLÀFOLWHUDWXUHWKHJOREDO
DFFXPXODWHG ORVV RI VRLO RUJDQLF PDWWHU 620 RYHU
WKH SDVW FHQWXU\ FDQ EH HVWLPDWHG WR EH EHWZHHQ
DQGELOOLRQWRQV1RWDOOWKLVRUJDQLFPDWWHU
KDVHQGHGXSLQWKHDLUDV&2VLJQLÀFDQWDPRXQWV
KDYH EHHQ ZDVKHG DZD\ E\ HURVLRQ DQG GHSRVLWHG
DW WKH ERWWRP RI ULYHUV DQG RFHDQV +RZHYHU LW FDQ
EH HVWLPDWHG WKDW DW OHDVW WR ELOOLRQ WRQV RI
&2 KDYH EHHQ UHOHDVHG WR WKH DWPRVSKHUH GXH WR
WKHJOREDOGHVWUXFWLRQRIVRLORUJDQLFPDWWHU,QRWKHU
ZRUGVWRSHUFHQWRIWKHFXUUHQWH[FHVVRI&2
LQWKHDWPRVSKHUHUHVXOWVIURPWKHGHVWUXFWLRQRIVRLOV
DQGWKHLURUJDQLFPDWWHU
7KHUHLVVRPHJRRGQHZVKLGGHQLQWKHVHGHYDVWDWLQJ
ÀJXUHV WKH &2 WKDW KDV EHHQ HPLWWHG LQWR WKH
DWPRVSKHUH WKURXJK VRLO GHSOHWLRQ FDQ EH SXW EDFN
LQWRWKHVRLOWKURXJKDFKDQJHLQDJULFXOWXUDOSUDFWLFHV
7KHUHKDVWREHDVKLIWDZD\IURPSUDFWLFHVWKDWGHVWUR\
RUJDQLF PDWWHU WR RQHV WKDW EXLOG XS WKH RUJDQLF
PDWWHULQWKHVRLO:HNQRZWKLVFDQEHGRQH)DUPHUV
DURXQG WKH ZRUOG KDYH EHHQ HQJDJLQJ LQ WKHVH YHU\
SUDFWLFHVIRUJHQHUDWLRQV5HVHDUFKE\*5$,1
KDVVKRZQWKDWLIWKHULJKWSROLFLHVDQGLQFHQWLYHVZHUH
LQSODFHZRUOGZLGHVRLORUJDQLFPDWWHUFRQWHQWVFRXOG
EH UHVWRUHG WR SUHLQGXVWULDO DJULFXOWXUDO OHYHOV ZLWKLQ
DSHULRGRI\HDUVZKLFKLVURXJKO\WKHVDPHWLPH
IUDPHWKDWLQGXVWULDODJULFXOWXUHWRRNWRUHGXFHLW7KH
FRQWLQXLQJ XVH RI WKHVH SUDFWLFHV ZRXOG DOORZ WKH
RIIVHWRI²SHUFHQWRIFXUUHQWJOREDODQQXDO*+*
HPLVVLRQV
7KH QHZ VFHQDULR ZRXOG UHTXLUH D UDGLFDO FKDQJH
LQ DSSURDFK IURP WKH FXUUHQW LQGXVWULDO DJULFXOWXUH
PRGHO,WZRXOGIRFXVRQWKHXVHRIWHFKQLTXHVVXFK
DV GLYHUVLÀHG FURSSLQJ V\VWHPV EHWWHU LQWHJUDWLRQ
EHWZHHQFURSDQGDQLPDOSURGXFWLRQDQGLQFUHDVHG
LQFRUSRUDWLRQ RI WUHHV DQG ZLOG YHJHWDWLRQ 6XFK DQ
LQFUHDVH LQ GLYHUVLW\ ZRXOG LQ WXUQ LQFUHDVH WKH
SURGXFWLRQSRWHQWLDODQGWKHLQFRUSRUDWLRQRIRUJDQLF
PDWWHU ZRXOG SURJUHVVLYHO\ LPSURYH VRLO IHUWLOLW\
FUHDWLQJ D YLUWXRXV F\FOH RI KLJKHU SURGXFWLYLW\ DQG
JUHDWHUDYDLODELOLW\RIRUJDQLFPDWWHU7KHFDSDFLW\RI
VRLOWRKROGZDWHUZRXOGLQFUHDVHZKLFKZRXOGPHDQ
WKDWH[FHVVLYHUDLQIDOOZRXOGOHDGWRIHZHUOHVVLQWHQVH
ÁRRGVDQGGURXJKWV6RLOHURVLRQZRXOGEHFRPHOHVV
RI D SUREOHP DQG VRLO DFLGLW\ DQG DONDOLQLW\ ZRXOG
IDOO SURJUHVVLYHO\ UHGXFLQJ RU HOLPLQDWLQJ WKH WR[LFLW\
WKDWKDVEHFRPHDPDMRUSUREOHPLQWURSLFDODQGDULG
VRLOV $GGLWLRQDOO\ LQFUHDVHG VRLO ELRORJLFDO DFWLYLW\
ZRXOG SURWHFW SODQWV DJDLQVW SHVWV DQG GLVHDVHV
(DFKRQHRIWKHVHHIIHFWVLPSOLHVKLJKHUSURGXFWLYLW\
DQGKHQFHPRUHRUJDQLFPDWWHUDYDLODEOHWRVRLOVWKXV
PDNLQJ SRVVLEOH KLJKHU WDUJHWV IRU LQFRUSRUDWLRQ RI
VRLO RUJDQLF PDWWHU RYHU WKH \HDUV 0RUH IRRG ZRXOG
EHSURGXFHGLQWKHSURFHVVVHHDOVRWKHFRPPHQWDU\
RI/HXRQPLWLJDWLQJFOLPDWHFKDQJHZLWKVRLORUJDQLF
PDWWHULQRUJDQLFSURGXFWLRQV\VWHPVLQWKLVFKDSWHU
7KLV VKLIW LQ DJULFXOWXUDO SUDFWLFHV ZRXOG UHTXLUH
EXLOGLQJ RQ WKH VNLOOV DQG H[SHULHQFH RI WKH ZRUOG·V
VPDOO IDUPHUV UDWKHU WKDQ XQGHUPLQLQJ DQG IRUFLQJ
WKHPRIIWKHLUODQGVDVLVQRZWKHFDVH$JOREDOVKLIW
WRZDUGVDQDJULFXOWXUHWKDWEXLOGVXSRUJDQLFPDWWHULQ
WKHVRLOZRXOGDOVRFRQWULEXWHWRUHPRYLQJVRPHRIWKH
RWKHUPDMRUVRXUFHVRI*+*VIURPWKHIRRGV\VWHP
7KHUH DUH WKUHH RWKHU PXWXDOO\ UHLQIRUFLQJ VKLIWV WKDW
QHHGWRWDNHSODFHLQWKHIRRGV\VWHPWRVXSSRUWLWV
RYHUDOOFRQWULEXWLRQWRFOLPDWHFKDQJH7KHÀUVWLVDVKLIW
WRORFDOPDUNHWVDQGVKRUWFLUFXLWVRIIRRGGLVWULEXWLRQ
ZKLFK ZRXOG UHGXFH WUDQVSRUWDWLRQ DQG WKH QHHG IRU
SDFNDJLQJSURFHVVLQJDQGUHIULJHUDWLRQ7KHVHFRQG
LV D UHLQWHJUDWLRQ RI FURS DQG DQLPDO SURGXFWLRQ
ZKLFK ZRXOG DOVR FXW WUDQVSRUWDWLRQ DV ZHOO DV WKH
XVH RI FKHPLFDO IHUWLOL]HUV DQG WKH SURGXFWLRQ RI
PHWKDQH DQG QLWURXV R[LGH HPLVVLRQV JHQHUDWHG E\
LQWHQVLYH PHDW DQG GDLU\ RSHUDWLRQV $QG WKH WKLUG
LV WKH VWRSSLQJ RI ODQG FOHDULQJ DQG GHIRUHVWDWLRQ
ZKLFK ZLOO UHTXLUH JHQXLQH DJUDULDQ UHIRUP DQG D
UHYHUVDORIWKHH[SDQVLRQRIPRQRFXOWXUHSODQWDWLRQV
IRUWKHSURGXFWLRQRIDJURIXHOVDQGDQLPDOIHHG,IWKH
ZRUOGEHFRPHVVHULRXVDERXWXQGHUWDNLQJWKHVHIRXU
VKLIWV LW LV TXLWH SRVVLEOH IRU JOREDO *+* HPLVVLRQV
WR EH FXW E\ KDOI ZLWKLQ D IHZ GHFDGHV DQG LQ WKH
SURFHVVWKLVZRXOGJRDORQJZD\WRZDUGVUHVROYLQJ
WKHRWKHUFULVHVDIIHFWLQJWKHSODQHWVXFKDVSRYHUW\
DQGKXQJHU7KHUHDUHQRWHFKQLFDOKXUGOHVVWDQGLQJ
LQ WKH ZD\ WKH ZRUOG·V IDUPHUV DOUHDG\ SRVVHVV WKH
UHTXLVLWH NQRZOHGJH DQG VNLOOV DQG WKHVH FDQ EH
IXUWKHU GHYHORSHG 7KH RQO\ KXUGOHV DUH SROLWLFDO
ZKLFKLVZKHUHZHQHHGWRIRFXVRXUHIIRUWV
75$'($1'(19,5210(175(9,(:
1//'06#4;U +6+)#6+0).+/#6'*#0)'9+6*1+.4)#0+%
#66'4+04)#0+%41&7%6+10;56'/5
$QGUH/HX
3UHVLGHQW,QWHUQDWLRQDO)HGHUDWLRQRI2UJDQLF$JULFXOWXUDO0RYHPHQWV,)2$0
$EVWUDFW
3DVW DQG SUHVHQW JOREDO HIIRUWV DLPHG DW UHGXFLQJ FDUERQ GLR[LGH HPLVVLRQV E\ LPSURYLQJ HQHUJ\XVH
HIÀFLHQF\DQGWKHDGRSWLRQRIUHQHZDEOHHQHUJ\VRXUFHVKDYHEHHQXQVXFFHVVIXO,WLVWKHUHIRUHFULWLFDOWR
ORRNDWDOOUHDGLO\DYDLODEOHRSWLRQVWKDWFRXOGVLJQLÀFDQWO\PLWLJDWHUXQDZD\FOLPDWHFKDQJH
6HTXHVWHULQJ&2LQWRWKHVRLOFRXOGEULQJDERXWDVLJQLÀFDQWUHGXFWLRQLQ*+*OHYHOV7KHUHLVVFLHQWLÀF
HYLGHQFH WKDW WKLV FDQ EH DFKLHYHG ZLWK FXUUHQW JRRG RUJDQLF DJULFXOWXUDO SUDFWLFHV DQG WKDW WKH EHVW
RUJDQLFIDUPLQJSUDFWLFHVFDQDFKLHYHHYHQKLJKHUOHYHOVRI&2VHTXHVWUDWLRQ%XLOGLQJXSVRLORUJDQLF
PDWWHULVRQHRIWKHOHDVWFRVWO\FOLPDWHFKDQJHPLWLJDWLRQPHWKRGV
+HOSLQJIDUPHUVDGRSWWKHVHPHWKRGVRQDZLGHVSUHDGEDVLVZRXOGPDNHDVLJQLÀFDQWGLIIHUHQFHWRWKH
OHYHOV RI &2 LQ WKH DWPRVSKHUH DQG LQ WKH ZRUOG·V RFHDQV ,PSRUWDQWO\ WKLV LV QRW EDVHG RQ XQWHVWHG
FRQFHSWVVXFKDVFDUERQFDSWXUHDQGVWRUDJHLWLVEDVHGRQFXUUHQWSUDFWLFHVWKDWFDQEHDGRSWHGE\
RWKHUODQGPDQDJHUV
7KLVFRXOGEHÀQDQFHGWKURXJKFDSDQGWUDGHV\VWHPVWKDWWD[HPLVVLRQV7KHVHWD[HVFRXOGWKHQEHXVHG
WRSD\IDUPHUVIRUWKHLUHFRV\VWHPVHUYLFHVWKDWÀ[WKHDWPRVSKHULF&2LQWKHVRLO6XFKDV\VWHPFRXOG
EHHLWKHUJRYHUQPHQWDGPLQLVWHUHGRUPDUNHWEDVHG
$,QWURGXFWLRQ
7KHZRUOGLVIDLOLQJWRUHGXFH*+*HPLVVLRQVGHVSLWH
FRPPLWPHQWV PDGH XQGHU WKH .\RWR 3URWRFRO
$FFRUGLQJ WR WKH ,QWHUQDWLRQDO (QHUJ\ $JHQF\ ,($
E HQHUJ\UHODWHG &2 HPLVVLRQV UHDFKHG D
UHFRUGKLJKRIJLJDWRQQHV*WLQ²DSHU
FHQWMXPSIURPWKHSUHYLRXVUHFRUGLQ0RUHRYHU
WKH UHGXFWLRQ LQ HFRQRPLF DFWLYLW\ GXH WR WKH JOREDO
HFRQRPLF DQG ÀQDQFLDO FULVLV KDV QRW UHGXFHG WKH
JURZWKRI*+*HPLVVLRQV
:KLOHWKHÀUVWFRPPLWPHQWSHULRGRIWKH.\RWR3URWRFRO
DQGLWV&OHDQ'HYHORSPHQW0HFKDQLVP&'0OHGWR
DVPDOOUHGXFWLRQLQHPLVVLRQVE\WKH$QQH[SDUWLHV
WRWKH3URWRFROWKH\IDLOHGWRUHGXFHWKHRYHUDOOUDWH
RI JOREDO *+* HPLVVLRQV 7KH &'0 KDV KDG YHU\
OLWWOHLPSDFWEHFDXVHLWVFRPSOH[UXOHVPDNHLWGLIÀFXOW
WR DFKLHYH HIIHFWLYH SURMHFW UHVXOWV $ PDMRU LVVXH
KDV EHHQ *+* OHDNDJH RU UDWKHU RXWVRXUFLQJ IURP
WKH $QQH[ FRXQWULHV WR GHYHORSLQJ FRXQWULHV $Q\
VPDOO JDLQV WKDW KDYH EHHQ DFKLHYHG E\ WKH IRUPHU
LQ UHGXFLQJ *+* HPLVVLRQV KDYH EHHQ PRUH WKDQ
ORVWE\WKHSROOXWLQJLQGXVWULHVPRYLQJWRGHYHORSLQJ
FRXQWULHVDQGLPSRUWLQJ*+*LQWHQVLYHSURGXFWVIURP
WKHUH 7KH QRQ$QQH[ FRXQWULHV QRZ DFFRXQW IRU
WKH PDMRULW\ RI WKH ZRUOG·V *+* HPLVVLRQV FDXVHG
E\H[SDQGLQJLQGXVWULHVGHIRUHVWDWLRQWKHEXUQLQJRI
VDYDQQDKVDQGWKHORVVRIVRLOFDUERQWKURXJKSRRU
DJULFXOWXUDOSUDFWLFHV
7KH FXUUHQW VWDWH RI WKH HFRQRPLHV RI GHYHORSHG
FRXQWULHVZLWKWKHLUPDVVLYHGHEWVPHDQVWKDWWKH\
GRQRWKDYHWKHIXQGVWRVKLIWVLJQLÀFDQWO\WRWKHXVH
RIUHQHZDEOHHQHUJLHVDQGLPSURYHHQHUJ\HIÀFLHQF\
LQ WKH VKRUW WHUP )XUWKHUPRUH WKH SROLWLFDO FOLPDWH
KDV FKDQJHG VLQFH WKH 8QLWHG 1DWLRQV &OLPDWH
&KDQJH &RQIHUHQFH LQ &RSHQKDJHQ LQ ZLWK
YHU\IHZJRYHUQPHQWVZLOOLQJWRDFFHSWDVORZGRZQLQ
HFRQRPLFDFWLYLW\WRPHHWHPLVVLRQUHGXFWLRQWDUJHWV
RUWRLQWURGXFHPDMRU*+*UHGXFWLRQVWUDWHJLHV
7KH&DQFXQ&OLPDWH&KDQJH$JUHHPHQWVPHDQWKDW
VHTXHVWUDWLRQ KDV WR EH SDUW RI DQ\ VWUDWHJ\ PL[ WR
VWDELOL]H WKH OHYHO RI DWPRVSKHULF &2 81)&&&
7KLV JDV DFFRXQWV IRU DURXQG SHU FHQW RI
DQWKURSRJHQLF*+*V:02
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
%6RLOVDVDFDUERQVLQN
6RLOV DUH WKH JUHDWHVW FDUERQ VLQN DIWHU WKH RFHDQV
$FFRUGLQJ WR 3URIHVVRU 5DWWDQ /DO RI 2KLR 6WDWH
8QLYHUVLW\ RYHU *W RI FDUERQ LV VWRUHG LQ
VRLOV ZRUOGZLGH 7KLV LV FRQVLGHUDEO\ PRUH WKDQ WKH
FRPELQHGWRWDORI*WLQWKHDWPRVSKHUHDQGWKH
*WLQELRPDVV/DO
7KHDPRXQWRI&2LQWKHRFHDQVLVDOUHDG\FDXVLQJ
D UDQJH RI SUREOHPV SDUWLFXODUO\ IRU VSHFLHV ZLWK
FDOFLXP H[RVNHOHWRQV VXFK DV FRUDO 6FLHQWLVWV DUH
FRQFHUQHG WKDW WKH LQFUHDVH LQ DFLGLW\ FDXVHG E\
KLJKHUOHYHOVRI&2LVGDPDJLQJWKHVHVSHFLHVDQG
WKUHDWHQV WKH IXWXUH RI PDULQH HFRV\VWHPV VXFK DV
WKH *UHDW %DUULHU 5HHI 7KH ZRUOG·V RFHDQV OLNH WKH
DWPRVSKHUH FDQQRW DEVRUE DQ\ PRUH &2 ZLWKRXW
FDXVLQJSRWHQWLDOO\VHULRXVHQYLURQPHQWDOGDPDJHWR
PDQ\ DTXDWLF HFRV\VWHPV +RHJK*XOGEHUJ HW DO
'HVSLWH WKH IDFW WKDW VRLO LV WKH ODUJHVW UHSRVLWRU\
RI FDUERQ DIWHU WKH RFHDQV DQG KDV WKH SRWHQWLDO WR
VHTXHVWHU PRUH &2 WKDQ ELRPDVV QHLWKHU VRLO QRU
DJULFXOWXUHLVLQFRUSRUDWHGLQDQ\IRUPDODJUHHPHQWRI
WKH8QLWHG1DWLRQV)UDPHZRUN&RQYHQWLRQRQ&OLPDWH
&KDQJH81)&&&RUWKH&'0
7KLV QHHGV WR EH FKDQJHG EHFDXVH DFFRUGLQJ WR
WKH )RRG DQG $JULFXOWXUH 2UJDQL]DWLRQ RI WKH 8QLWHG
1DWLRQV ´$JULFXOWXUH QRW RQO\ VXIIHUV WKH LPSDFWV RI
FOLPDWHFKDQJHLWLVDOVRUHVSRQVLEOHIRUSHUFHQWRI
JOREDOJUHHQKRXVHJDVHPLVVLRQV%XWDJULFXOWXUHKDV
WKH SRWHQWLDO WR EH DQ LPSRUWDQW SDUW RI WKH VROXWLRQ
WKURXJK PLWLJDWLRQ ³ UHGXFLQJ DQGRU UHPRYLQJ ³
D VLJQLÀFDQW DPRXQW RI JOREDO HPLVVLRQV 6RPH SHUFHQWRIWKLVPLWLJDWLRQSRWHQWLDOFRXOGEHUHDOL]HGLQ
GHYHORSLQJFRXQWULHVµ)$2E
&6RLOFDUERQVHTXHVWUDWLRQWKURXJK
DJULFXOWXUDOSUDFWLFHV
7KHDELOLW\RIVRLOVWRDEVRUEHQRXJK&2LQRUGHUWR
VWDELOL]H FXUUHQW DWPRVSKHULF &2 OHYHOV LV D FULWLFDO
LVVXHDQGWKHUHLVDPDMRUGHEDWHRYHUZKHWKHUWKLV
FDQEHDFKLHYHGWKURXJKIDUPLQJSUDFWLFHV/DO
6DQGHUPDQHWDO
7ZRLQGHSHQGHQWJOREDOPHWDUHYLHZVKDYHORRNHGDW
WKH DYHUDJH DPRXQW RI &2 VHTXHVWHUHG E\ RUJDQLF
IDUPLQJV\VWHPV
$ SUHOLPLQDU\ VWXG\ E\ )L%/ SXEOLVKHG E\ )$2
FROODWHGSHHUUHYLHZHGFRPSDULVRQWULDOVEHWZHHQ
RUJDQLF DQG FRQYHQWLRQDO V\VWHPV WKDW XVHG GDWDVHWV)$2E7KHVHVWXGLHVLQFOXGHGGDWD
IURPJUDVVODQGVDUDEOHFURSVDQGSHUPDQHQWFURSV
LQ VHYHUDO FRQWLQHQWV $ VLPSOH DQDO\VLV RI WKH GDWD
VKRZV WKDW RQ DYHUDJH WKH RUJDQLF V\VWHPV KDG
KLJKHU OHYHOV RI VRLO FDUERQ VHTXHVWUDWLRQ *DWWLQJHU
HWDO
$QGUHDV *DWWLQJHU DQG FROOHDJXHV REVHUYHG
´,Q VRLOV XQGHU RUJDQLF PDQDJHPHQW WKH
62& >VRLO RUJDQLF FDUERQ@ VWRFNV DYHUDJHG WRQQHV&KDLQFRPSDULVRQWRWRQQHV&KD
XQGHU QRQRUJDQLF PDQDJHPHQWµ 7KLV PHDQV WKDW
WKHDYHUDJHGLIIHUHQFHEHWZHHQWKHWZRPDQDJHPHQW
V\VWHPVRUJDQLFDQGFRQYHQWLRQDOZDVWRQQHV
RI FDUERQ 8VLQJ WKH DFFHSWHG IRUPXOD WKDW 62& [
&2WKLVPHDQVDQDYHUDJHRIPRUHWKDQ
WRQQHVRI&2ZDVVHTXHVWHUHGLQWKHRUJDQLFV\VWHP
FRPSDUHG WR WKH FRQYHQWLRQDO V\VWHP 7KH DYHUDJH
GXUDWLRQ RI PDQDJHPHQW RI DOO LQFOXGHG VWXGLHV ZDV
\HDUV*DWWLQJHUHWDO7KLVPHDQVWKDWDQ
DYHUDJH RI NJV RI &2 ZDV VHTXHVWHUHG SHU
KHFWDUHHYHU\\HDULQWKHRUJDQLFV\VWHPFRPSDUHGWR
WKHFRQYHQWLRQDOV\VWHP
$QRWKHUVWXG\E\WKH8QLWHG.LQJGRP6RLO$VVRFLDWLRQ
IRXQG WKDW DYHUDJH RUJDQLF IDUPLQJ SUDFWLFHV
UHPRYHGDERXWNJRI&2SHUKHFWDUHSHU\HDU
$]HH]7KLVLVFULWLFDOLQIRUPDWLRQDVLWFOHDUO\
VKRZVWKDWRUJDQLFIDUPHUVDUHFXUUHQWO\VHTXHVWHULQJ
VLJQLÀFDQWDPRXQWVRIFDUERQ0RVWLPSRUWDQWO\WKLVLV
QRWEDVHGRQXQWHVWHGFRQFHSWVOLNH´FDUERQFDSWXUH
DQGVWRUDJHµDQG´FOHDQFRDOµLWLVEDVHGRQFXUUHQW
SUDFWLFHVWKDWFDQEHDGRSWHGE\RWKHUIDUPHUV
'3RWHQWLDORIRUJDQLFSUDFWLFHV
%DVHGRQWKHVHÀJXUHVWKHZLGHVSUHDGDGRSWLRQRI
FXUUHQWRUJDQLFSUDFWLFHVJOREDOO\KDVWKHSRWHQWLDOWR
VHTXHVWHU*WRI&2ZKLFKLVDURXQGSHUFHQW
RIWKHZRUOG·VFXUUHQW*+*HPLVVLRQV
*UDVVODQG
KD
$UDEOHFURSV
KD
3HUPDQHQWFURSV
KD
7RWDO
KD
6RXUFH)$2
2UJDQLF#WRQVSHUKHFWDUH*WRI&2
$]HH]
$QQXDO*+*HPLVVLRQV *WRIFDUERQGLR[LGH
HTXLYDOHQW&2H
,3&&F
(3RWHQWLDOH[LVWVIRUKLJKHUOHYHOVRI&2
VHTXHVWUDWLRQ
$OO GDWD VHWV WKDW XVH DYHUDJLQJ KDYH RXWO\LQJ GDWD
7KHVH DUH H[DPSOHV WKDW DUH VLJQLÀFDQWO\ KLJKHU RU
VLJQLÀFDQWO\ORZHUWKDQWKHDYHUDJH7KH\DUHDOZD\V
ZRUWK H[DPLQLQJ WR ÀQG RXW ZK\ 5HVHDUFK LQWR
WKHP ZLOO DOORZ DQ XQGHUVWDQGLQJ RI ZKLFK SUDFWLFHV
VLJQLÀFDQWO\LQFUHDVHVRLOFDUERQDQGZKLFKGHFUHDVH
RUGRQRWLQFUHDVHLW
7KHUH DUH VHYHUDO H[DPSOHV RI VLJQLÀFDQWO\ KLJKHU
OHYHOV RI FDUERQ VHTXHVWUDWLRQ WKDQ WKH DYHUDJHV
TXRWHG LQ WKH VWXGLHV DERYH 7KH 5RGDOH ,QVWLWXWH LQ
3HQQV\OYDQLD 8QLWHG 6WDWHV KDV EHHQ FRQGXFWLQJ
ORQJUXQQLQJFRPSDULVRQVRIRUJDQLFDQGFRQYHQWLRQDO
FURSSLQJ V\VWHPV IRU RYHU \HDUV ZKLFK FRQÀUP
WKDW RUJDQLF PHWKRGV DUH HIIHFWLYH DW UHPRYLQJ &2
IURP WKH DWPRVSKHUH DQG À[LQJ LW DV RUJDQLF PDWWHU
LQWKHVRLO/D6DOOHDQG+HSSHUO\ZURWH´,Q
WKH)67>IDUPV\VWHPVWULDO@RUJDQLFSORWVFDUERQZDV
VHTXHVWHUHGLQWRWKHVRLODWWKHUDWHRIOEVDF\HDU
LQDFURSURWDWLRQXWLOL]LQJUDZPDQXUHDQGDWDUDWHRI
DERXWOEVDF\HDULQDURWDWLRQXVLQJOHJXPHFRYHU
FURSV
'XULQJWKHVUHVXOWVIURPWKH&RPSRVW8WLOL]DWLRQ
7ULDO &87 DW 5RGDOH ,QVWLWXWH ² D \HDU VWXG\
FRPSDULQJ WKH XVH RI FRPSRVWV PDQXUHV DQG
V\QWKHWLF FKHPLFDO IHUWLOL]HU ² VKRZ WKDW WKH XVH RI
FRPSRVWHG PDQXUH ZLWK FURS URWDWLRQV LQ RUJDQLF
V\VWHPV FDQ UHVXOW LQ FDUERQ VHTXHVWUDWLRQ RI XS WR
OEVDF\HDU %\ FRQWUDVW ÀHOGV XQGHU VWDQGDUG
WLOODJH UHO\LQJ RQ FKHPLFDO IHUWLOL]HUV ORVW DOPRVW SRXQGVRIFDUERQSHUDFUHSHU\HDUµ
&RQYHUWLQJ WKHVH ÀJXUHV LQWR NLORJUDPV RI &2
VHTXHVWHUHG SHU KHFWDUH XVLQJ WKH DFFHSWHG
FRQYHUVLRQ UDWH RI SRXQG SHU DFUH NJKDDQGVRLORUJDQLFFDUERQ[ &2JLYHVWKH
IROORZLQJUHVXOWV
‡ 7KH)67OHJXPHEDVHGRUJDQLFSORWVVKRZHGWKDW
FDUERQ ZDV VHTXHVWHUHG LQWR WKH VRLO DW WKH UDWH
RI DERXW OEVDF\HDU 7KLV LV HTXLYDOHQW WR D
VHTXHVWUDWLRQUDWHRINJRI&2KD\U
‡ 7KH)67PDQXUHGRUJDQLFSORWVVKRZHGWKDWFDUERQ
ZDVVHTXHVWHUHGLQWRWKHVRLODWWKHUDWHRIOEV
DF\HDU7KLVLVHTXLYDOHQWWRDVHTXHVWUDWLRQUDWHRI
NJRI&2KD\U
‡ 7KH &RPSRVW 8WLOL]DWLRQ 7ULDO VKRZHG WKDW FDUERQ
ZDV VHTXHVWHUHG LQWR WKHVRLO DW WKHUDWH RI
OEVDF\HDU 7KLV LV HTXLYDOHQW WR D VHTXHVWUDWLRQ
UDWHRINJRI&2KD\U
75$'($1'(19,5210(175(9,(:
7KXV WKHUH DUH VLJQLÀFDQW EHQHÀWV IURP DGGLQJ
FRPSRVW
)7KHSRWHQWLDOLQGHVHUWFOLPDWHV
6HNHPLVWKHROGHVWELRG\QDPLFIDUPLQ(J\SW,WZDV
IRXQGHGLQE\'U,EUDKLP$ERXOHLVK7KH/RXLV
%RON,QVWLWXWHDQG6RLO0RUHWZRRUJDQLVDWLRQVEDVHG
LQWKH1HWKHUODQGVKDYHPDGHDVWXG\WRFDOFXODWHVRLO
FDUERQ VHTXHVWUDWLRQ DW 6HNHP 7KHLU UHVXOWV VKRZ
WKDW RQ DYHUDJH 6HNHP·V PDQDJHPHQW SUDFWLFHV
KDYH UHVXOWHG LQ NJV RI FDUERQ EHLQJ VWRUHG LQ
WKHVRLOSHUKHFWDUHSHU\HDULQWKHÀHOGVWKDWZHUH
\HDUVROG8VLQJWKHDFFHSWHGIRUPXODRI62&[
&2WKLVPHDQVWKDW6HNHPKDVVHTXHVWHUHG
NJRI&2SHUKHFWDUHSHU\HDUIRU\HDUV/XVNHDQG
YDQGHU.DPS.RRSPDQVHWDO%DVHG
RQWKHVHÀJXUHVWKHZLGHVSUHDGDGRSWLRQRI6HNHP·V
SUDFWLFHV JOREDOO\ KDV WKH SRWHQWLDO WR VHTXHVWHU *WRI&2ZKLFKLVDURXQGSHUFHQWRIWKHZRUOG·V
FXUUHQW*+*HPLVVLRQVLQWRVRLOVKD[
NJV JW&2\U
*7KHSRWHQWLDOLQWURSLFDOFOLPDWHV
5HVHDUFKHUV DW WKH 5R\DO 7KDL 2UJDQLF 3URMHFW QHDU
&KLDQJ0DLLQ7KDLODQGKDYHPDQDJHGWRLQFUHDVHWKHLU
VRLORUJDQLFPDWWHUOHYHOVIURPSHUFHQWWRSHUFHQW
RYHUDSHULRGRIHLJKW\HDUVSHUVRQDOFRPPXQLFDWLRQ
7KLV PHDQV WKDW WRQV RI &2KD KDYH EHHQ
VHTXHVWHUHG WKURXJK WKLV SURMHFW ZKLFK HTXDWHV WR
WRQV RI &2KD\U ,I WKLV ZDV DSSOLHG JOREDOO\ LW
ZRXOGVHTXHVWHU*W&2KD\U²PRUHWKDQGRXEOH
WKHZRUOG·VFXUUHQW*+*HPLVVLRQVKD
[WRQVRI&2KD\U *W&2\U
+'HHSHUFDUERQV\VWHPV
7KHUH LV DQ HPHUJLQJ ERG\ RI VFLHQFH ZKLFK VKRZV
WKDWWKHPRVWVWDEOHIUDFWLRQVRIVRLOFDUERQDUHVWRUHG
GHHSHULQWKHVRLOWKDQPRVWRIWKHFXUUHQWVRLOFDUERQ
PHDVXUHPHQWVXVHGRQIDUPV0RVWVRLOWHVWVWHQGWR
ZRUNDWDGHSWKRIDURXQGWRFPDVWKLVLVWKH
XVXDO URRW ]RQH IRU PDQ\ FURSV 5HVHDUFK LV ÀQGLQJ
WKDWDVLJQLÀFDQWDPRXQWRIFDUERQLVVWRUHGDWORZHU
GHSWKVDQGWKDWWKLVWHQGVWREHYHU\VWDEOH
5HVHDUFK E\ 5HWKHPH\HU DQG FROOHDJXHV XVLQJ
UDGLRFDUERQWHFKQLTXHVWRDQDO\VHYDULRXVVRLOFDUERQ
IUDFWLRQVLQGLFDWHGDSURJUHVVLYHHQULFKPHQWRIVWDEOH
RUJDQLFFRPSRXQGVZLWKLQFUHDVLQJVRLOGHSWKWR
FP5HWKHPH\HUHWDO
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
5HVHDUFK E\ 3URIHVVRU 5DWWDQ /DO DQG FROOHDJXHV
IURP 2KLR 6WDWH 8QLYHUVLW\ FRPSDUHG FDUERQ OHYHOV
EHWZHHQ QRWLOO DQG FRQYHQWLRQDO WLOODJH ÀHOGV DQG
IRXQG WKDW LQ VRPH FDVHV FDUERQ VWRUDJH ZDV
JUHDWHU LQ FRQYHQWLRQDO WLOODJH ÀHOGV 7KH NH\ LV VRLO
GHSWK 7KH\ FRPSDUHG WKH FDUERQ VWRUDJH EHWZHHQ
QRWLOODQGSORXJKHGÀHOGVZLWKWKHSORXJKGHSWK²WKH
ÀUVWLQFKHVFPRIWKHVRLO²DQGIRXQGWKDWWKH
FDUERQVWRUDJHZDVJHQHUDOO\PXFKJUHDWHULQQRWLOO
ÀHOGVWKDQLQSORZHGÀHOGV:KHQWKH\H[DPLQHG
LQFKHV FP DQG GHHSHU WKH\ IRXQG PRUH FDUERQ
VWRUHG LQ SORXJKHG ÀHOGV WKDQ LQ WKH QRWLOO RQHV
7KH UHVHDUFKHUV FRQFOXGHG WKDW IDUPHUV VKRXOG QRW
PHDVXUH VRLO FDUERQ EDVHG MXVW RQ VXUIDFH GHSWK
7KH\ UHFRPPHQGHG JRLQJ WR DV PXFK DV IHHW PHWUHEHORZWKHVRLOVXUIDFHWRJHWDPRUHDFFXUDWH
DVVHVVPHQW RI VRLO FDUERQ &KULVWRSKHU /DO DQG
0LVKUD
$FFRUGLQJ WR *DWWLQJHU DQG FROOHDJXHV UHVHDUFKHUV ZRUNLQJ RQ ORQJWHUP FRPSDULVRQ WULDOV
EHWZHHQ RUJDQLF DQG FRQYHQWLRQDO IDUPLQJ V\VWHPV
LQ 6ZLW]HUODQG WKH '2. WULDOV IRXQG WKDW ZKHQ
URWDWLRQ SKDVHV LQFOXGHG WZR \HDUV RI GHHSURRWLQJ
JUDVVFORYHUOH\VSHUFHQWRIWKHWRWDO62&VWRFNV
ZHUH GHSRVLWHG EHWZHHQ ² FP VRLO GHSWKV ´,Q
PDQ\ SDUWV RI WKH ZRUOG RUJDQLF IDUPLQJ V\VWHPV
DUHUHO\LQJRQWKHVRLOIHUWLOLW\EXLOGXSRIGHHSURRWLQJ
JUDVVOHJXPH PL[WXUHV DQG RQ WKH LQFRUSRUDWLRQ RI
SODQW UHVLGXHV E\ GHHSGLJJLQJ HDUWKZRUPV PDNLQJ
LW TXLWH OLNHO\ WKDW WKH FXUUHQWO\ DYDLODEOH GDWD VHWV
XQGHUHVWLPDWHWKH62&VWRFNVLQRUJDQLFDOO\PDQDJHG
VRLOV 7KLV LV SDUWLFXODUO\ VLJQLÀFDQW FRQVLGHULQJ WKDW
LQ GHHSHU VRLO KRUL]RQV 62& VHHPV WR EH PRUH
VWDELOL]HGµ)OLHVVEDFKHWDO
,*UD]LQJV\VWHPV
7KHPDMRULW\RIWKHZRUOG·VDJULFXOWXUDOODQGVSHU
FHQW DUH XVHG IRU JUD]LQJ )$2 7KHUH LV DQ
HPHUJLQJ ERG\ RI SXEOLVKHG HYLGHQFH ZKLFK VKRZV
WKDW SDVWXUHV DQG SHUPDQHQW JURXQG FRYHU VZDUGV
LQSHUHQQLDOKRUWLFXOWXUHEXLOGXSVRLORUJDQLFFDUERQ
IDVWHU WKDQ DQ\ RWKHU IDUPLQJ V\VWHP DQG ZLWK
FRUUHFWPDQDJHPHQWWKLVLVVWRUHGGHHSHULQWKHVRLO
)OLHVVEDFKHWDO6DQGHUPDQHWDO
2QH RI WKH VLJQLÀFDQW UHDVRQV IRU WKLV KDV EHHQ WKH
KLJKHU SURSRUWLRQ RI SODQWV WKDW XVH WKH & SDWKZD\
RISKRWRV\QWKHVLVDVWKLVPDNHVWKHPPRUHHIÀFLHQW
DWFROOHFWLQJ&2IURPWKHDWPRVSKHUHHVSHFLDOO\LQ
ZDUPHUDQGGULHUFOLPDWHV$FFRUGLQJWR2VERUQHDQG
%HHUOLQJ´3ODQWVZLWKWKH&SKRWRV\QWKHWLF
SDWKZD\ GRPLQDWH WRGD\·V WURSLFDO VDYDQQDKV DQG
JUDVVODQGV DQG DFFRXQW IRU VRPH RI JOREDO
WHUUHVWULDOFDUERQÀ[DWLRQ7KHLUVXFFHVVVWHPVIURPD
SK\VLRORJLFDO &2FRQFHQWUDWLQJ SXPS ZKLFK OHDGV
WRKLJKSKRWRV\QWKHWLFHIÀFLHQF\LQZDUPFOLPDWHVDQG
ORZDWPRVSKHULF&2FRQFHQWUDWLRQVµ
7KLV NQRZOHGJH LV QRZ EHLQJ DSSOLHG LQ LQQRYDWLYH
ZD\VVXFKDVKROLVWLFVWRFNPDQDJHPHQWHYHUJUHHQ
IDUPLQJ DJURIRUHVWU\ LQ SDVWXUHV DQG SDVWXUH
FURSSLQJ
-3DVWXUHFURSSLQJ
3DVWXUH FURSSLQJ ZRUNV RQ WKH SULQFLSOH WKDW
DQQXDOV JURZ QDWXUDOO\ WKURXJK SHUHQQLDO SDVWXUHV
LQ WKHLU QRUPDO F\FOHV ,W LV QRW WKH SXUSRVH RI WKLV
SDSHU WR H[SODLQ WKH WHFKQLFDO GHWDLOV RI KRZ LW LV
EHLQJ VXFFHVVIXOO\ LPSOHPHQWHG LQ D ZLGH YDULHW\ RI
FOLPDWHV DQG VRLO W\SHV DURXQG WKH ZRUOG +RZHYHU
D EULHI RYHUYLHZ KDV EHHQ LQFOXGHG LQ $QQH[ WR
KHOSXQGHUVWDQGWKHV\VWHP7KHFULWLFDOLVVXHIRUWKH
SXUSRVH RI WKLV SDSHU LV WR SUHVHQW WKH SUHOLPLQDU\
GDWDRQVRLOFDUERQVHTXHVWUDWLRQVRWKDWWKHSRWHQWLDO
RIWKLVV\VWHPFDQEHIXUWKHULQYHVWLJDWHG
5HVHDUFK E\ -RQHV DW :LQRQD WKH SURSHUW\ RI &ROLQ
DQG 1LFN 6HLV LQ 1HZ 6RXWK :DOHV $XVWUDOLD ZKR
XVH D FRPELQDWLRQ RI SDVWXUH FURSSLQJ DQG KROLVWLF
VWRFN PDQDJHPHQW VKRZV WKDW WKD RI &2
ZDV VHTXHVWHUHG RYHU \HDUV 7KH VHTXHVWUDWLRQ
UDWHIRUWKHODVWWZRRIWKH\HDUVDQG
ZDVWRQVRI&2KD\U-RQHV7KLVV\VWHP
FDQEHDQGLVEHLQJVXFFHVVIXOO\XVHGLQERWKDUDEOH
DQGSDVWXUHV\VWHPVLQFOXGLQJLQKRUWLFXOWXUH,IWKLV
ZDV DSSOLHG DURXQG WKH ZRUOG LW FRXOG SRWHQWLDOO\
VHTXHVWHU*WRI&2\UKD;
WRQQHV *W
7KLV LV VLJQLÀFDQWO\ PRUH WKDQ WKH ZRUOG·V *+*
HPLVVLRQV RI *W DQG ZRXOG KHOS UHYHUVH FOLPDWH
FKDQJH 7KH LQFUHDVH LQ VRLO FDUERQ ZRXOG DOVR
VLJQLÀFDQWO\ LPSURYH WKH SURGXFWLRQ DQG DGDSWDWLRQ
FDSDFLWLHVRIJOREDOJUD]LQJV\VWHPV
.7KHXUJHQWQHHGIRUPRUHSHHU
UHYLHZHGUHVHDUFK
,W LV QRW WKH LQWHQWLRQ RI WKLV SDSHU WR XVH WKH DERYH
W\SHV RI JHQHULF H[HUFLVHV RI JOREDOO\ H[WUDSRODWLQJ
GDWD DV VFLHQWLÀF SURRI RI ZKDW FDQ EH DFKLHYHG E\
VFDOLQJ XS RUJDQLF V\VWHPV 7KHVH W\SHV RI YHU\
VLPSOHDQDO\VHVDUHXVHIXOIRUSURYLGLQJDFRQFHSWXDO
LGHDRIWKHFRQVLGHUDEOHSRWHQWLDORIRUJDQLFIDUPLQJ
WR UHGXFH *+* HPLVVLRQV RQ D ODQGVFDSH VFDOH
7KH FULWLFDO LVVXH KHUH LV WKDW XUJHQW SHHUUHYLHZHG
UHVHDUFK LV QHHGHG WR XQGHUVWDQG KRZ DQG ZK\
DQG IRU WKH VFHSWLFV ² LI WKHVH V\VWHPV VHTXHVWHU
VLJQLÀFDQWOHYHOVRI&2DQGWKHQORRNDWKRZWRDSSO\
WKHÀQGLQJVIRUVFDOLQJXSRQDJOREDOOHYHOLQRUGHUWR
DFKLHYHDVLJQLÀFDQWOHYHORI*+*PLWLJDWLRQ
7KHSRWHQWLDORIWKHVHIDUPLQJPHWKRGVLVHQRUPRXV
FRQVLGHULQJ WKDW WKHVH GDWD DUH EDVHG RQ FXUUHQW
SUDFWLFHV
/3HUPDQHQFH
2QHRIWKHPDMRUGHEDWHVDURXQGVRLOFDUERQLVEDVHG
RQ KRZ LW FDQ PHHW WKH &'0 \HDU SHUPDQHQFH
UHTXLUHPHQWV
6RLO FDUERQ LV D FRPSOH[ PL[ RI IUDFWLRQV RI YDULRXV
FDUERQFRPSRXQGV7ZRRIWKHVHKXPXVDQGFKDUFRDO
FKDUDUHYHU\VWDEOHUHVHDUFKVKRZVWKDWWKH\FDQ
ODVWIRUWKRXVDQGVRI\HDUVLQWKHVRLO2WKHUIUDFWLRQV
DUH OHVV VWDEOH ODELOH DQG FDQ EH HDVLO\ YRODWLOL]HG
LQWR &2 6RLO FDUERQ WHQGV WR YRODWLOL]H LQWR &2 LQ
PRVWFRQYHQWLRQDOIDUPLQJV\VWHPV+RZHYHUFRUUHFW
PDQDJHPHQW V\VWHPV FDQ FRQWLQXRXVO\ LQFUHDVH
ERWKWKHVWDEOHDQGODELOHIUDFWLRQVWKURXJKDQXPEHU
RI DSSURDFKHV VHYHUDO RI ZKLFK DUH GLVFXVVHG ODWHU
LQWKLVSDSHU
7KHUHVHDUFKFRQGXFWHGE\-RQHVDW:LQRQDVKRZHG
WKDW WKH PDMRULW\ RI WKH QHZO\ LQFUHDVHG VRLO FDUERQ
ZDVLQWKHVWDEOHIUDFWLRQV6KHUHSRUWHGWKDWSHU
FHQWRIWKHQHZO\VHTXHVWHUHGFDUERQZDVLQWKHQRQ
ODELOH KXPLF IUDFWLRQ RI WKH VRLO DQG WKLV UHQGHUHG
LW LQWR KLJKO\ VWDEOH ORQJ FKDLQ IRUPV +HU UHVHDUFK
IRXQGWKDWWKHFDUERQOHYHOVLQWKHFPLQFUHPHQW
ZHUHIURPWKHUHFHQWGHFRPSRVLWLRQRIRUJDQLFPDWWHU
DQGIRUPHGVKRUWFKDLQXQVWDEOHFDUERQ7KHFDUERQ
EHORZFPZDVFRPSRVHGRIWKHKXPLFVRLOIUDFWLRQ
DQGZDVKLJKO\VWDEOH-RQHV-RQHV·VUHVHDUFK
LVFRQVLVWHQWZLWKWKHÀQGLQJVRI&KULVWRSKHU/DODQG
0LVKUDDQG5HWKHPH\HUHWDO
/RQJWHUP UHVHDUFK FRQGXFWHG IRU PRUH WKDQ \HDUV DW WKH 5RWKDPVWHG 5HVHDUFK 6WDWLRQ LQ WKH
8QLWHG.LQJGRPDQGWKH8QLYHUVLW\RI,OOLQRLV0RUURZ
3ORWV LQ WKH 8QLWHG 6WDWHV VKRZHG WKDW WKH WRWDO VRLO
FDUERQOHYHOVFRXOGVWHDGLO\LQFUHDVHDQGWKHQUHDFK
DQHZVWDEOHHTXLOLEULXPLQIDUPLQJV\VWHPVWKDWXVH
RUJDQLF PDWWHU LQSXWV 7KLV PHDQV WKDW JRRG VRLO
RUJDQLF PDWWHU PDQDJHPHQW V\VWHPV FDQ LQFUHDVH
75$'($1'(19,5210(175(9,(:
DQGPDLQWDLQWKHODELOHIUDFWLRQVDVZHOODVWKHVWDEOH
IUDFWLRQVRYHUWKHWLPHSHULRGVUHTXLUHGE\WKH&'0
/DO
0$GDSWDWLRQ
(YHQ LI WKH ZRUOG VWRSSHG SROOXWLQJ WKH SODQHW ZLWK
*+*VLWZRXOGWDNHPDQ\GHFDGHVWRUHYHUVHFOLPDWH
FKDQJH7KLVPHDQVWKDWIDUPHUVKDYHWRDGDSWWRWKH
LQFUHDVLQJ LQWHQVLW\ DQG IUHTXHQF\ RI DGYHUVH DQG
H[WUHPHZHDWKHUHYHQWVVXFKDVGURXJKWVDQGKHDY\
GDPDJLQJ UDLQIDOO ,QGHHG PDQ\ DUHDV RI WKH SODQHW
DUHDOUHDG\H[SHULHQFLQJWKLV$QGHUVRQ6WHHU
1*UHDWHUUHVLOLHQFHLQDGYHUVH
FRQGLWLRQV
3XEOLVKHGVWXGLHVVKRZWKDWRUJDQLFIDUPLQJV\VWHPV
ZRXOG EH PRUH UHVLOLHQW WR WKH SUHGLFWHG ZHDWKHU
H[WUHPHV DQG FRXOG SURGXFH KLJKHU \LHOGV WKDQ
FRQYHQWLRQDO IDUPLQJ V\VWHPV LQ VXFK FRQGLWLRQV
'ULQNZDWHU :DJRQHU DQG 6DUUDQWRQLR :HOVK
3LPHQWHOHWDOVHHDOVRWKHFRPPHQWRI
1HPHV LQ WKLV FKDSWHU )RU LQVWDQFH WKH :LVFRQVLQ
,QWHJUDWHG&URSSLQJ6\VWHPV7ULDOVIRXQGWKDWRUJDQLF
\LHOGV ZHUH KLJKHU LQ GURXJKW \HDUV DQG WKH VDPH
DV FRQYHQWLRQDO LQ QRUPDO ZHDWKHU \HDUV 3RVQHU
%DOGRFNDQG+HGWFNH
6LPLODUO\ WKH 5RGDOH )67 VKRZHG WKDW WKH RUJDQLF
V\VWHPV SURGXFHG PRUH FRUQ WKDQ WKH FRQYHQWLRQDO
V\VWHP LQ GURXJKW \HDUV 7KH DYHUDJH FRUQ \LHOGV
GXULQJWKHGURXJKW\HDUVZHUH²SHUFHQWKLJKHU
LQWKHWZRRUJDQLFV\VWHPV7KH\LHOGVZHUHDQG
NJSHUKDLQWKHRUJDQLFDQLPDODQGWKHRUJDQLF
OHJXPH V\VWHPV UHVSHFWLYHO\ FRPSDUHG ZLWK NJSHUKDLQWKHFRQYHQWLRQDOV\VWHP3LPHQWHOHWDO
7KHUHVHDUFKHUVDWWULEXWHGWKHKLJKHU\LHOGVLQ
WKHGU\\HDUVWRWKHDELOLW\RIWKHVRLOVRQRUJDQLFIDUPV
WR EHWWHU DEVRUE UDLQIDOO 7KLV LV GXH WR WKH KLJKHU
OHYHOVRIRUJDQLFFDUERQLQWKRVHVRLOVZKLFKPDNHV
WKHPPRUHIULDEOHDQGEHWWHUDEOHWRVWRUHDQGFDSWXUH
UDLQZDWHUZKLFKFDQWKHQEHXVHGIRUFURSV/D6DOOH
DQG+HSSHUO\
2,PSURYHGHIÀFLHQF\RIZDWHUXVH
5HVHDUFKDOVRVKRZVWKDWRUJDQLFV\VWHPVXVHZDWHU
PRUHHIÀFLHQWO\GXHWREHWWHUVRLOVWUXFWXUHDQGKLJKHU
OHYHOVRIKXPXVDQGRWKHURUJDQLFPDWWHUFRPSRXQGV
/RWWHU6HLGHODQG/LHEKDUW3LPHQWHOHWDO
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
/RWWHUDQGFROOHDJXHVFROOHFWHGGDWDIRURYHU\HDUV
GXULQJWKH5RGDOH)677KHLUUHVHDUFKVKRZHGWKDWWKH
RUJDQLFPDQXUHV\VWHPDQGRUJDQLFOHJXPHV\VWHP
/(* WUHDWPHQWV LPSURYH WKH VRLOV· ZDWHUKROGLQJ
FDSDFLW\LQÀOWUDWLRQUDWHDQGZDWHUFDSWXUHHIÀFLHQF\
7KH /(* PDL]H VRLOV DYHUDJHG D SHU FHQW KLJKHU
ZDWHUFRQWHQWWKDQFRQYHQWLRQDOV\VWHP&19VRLOVDW
WKHVDPHFURSVWDJHDQGSHUFHQWKLJKHUWKDQ&19
VRLOV LQ VR\EHDQ SORWV /RWWHU 6HLGHO DQG /LHEKDUW
7KHPRUHSRURXVVWUXFWXUHRIRUJDQLFDOO\WUHDWHGVRLO
DOORZVUDLQZDWHUWRTXLFNO\SHQHWUDWHWKHVRLOUHVXOWLQJ
LQ OHVV ZDWHU ORVV IURP UXQRII DQG KLJKHU OHYHOV RI
ZDWHU FDSWXUH 7KLV ZDV SDUWLFXODUO\ HYLGHQW GXULQJ
WKH WZR GD\V RI WRUUHQWLDO GRZQSRXUV IURP KXUULFDQH
)OR\GLQ6HSWHPEHUZKHQWKHRUJDQLFV\VWHPV
FDSWXUHGDURXQGGRXEOHWKHDPRXQWRIZDWHUDVWKH
FRQYHQWLRQDO V\VWHPV /RWWHU 6HLGHO DQG /LHEKDUW
3&ULWLFDOGLIIHUHQFHVEHWZHHQRUJDQLF
DQGFRQYHQWLRQDOIDUPLQJ
2UJDQLF IDUPLQJ KDV D UDQJH RI SUDFWLFHV WKDW DUH
UHJDUGHG DV HVVHQWLDO IRU DOORZLQJ WKH V\VWHP WR EH
FHUWLÀHGDVRUJDQLF0RVWRIWKHVHSUDFWLFHVDUHHDVLO\
WUDQVIHUUDEOH WR RWKHU IDUPLQJ V\VWHPV DQG PDQ\ RI
WKHP DUH QRZ EHLQJ DGRSWHG XQGHU WKH HPHUJLQJ
WHUP´FOLPDWHVPDUWµDJULFXOWXUH)$2F
47KHDGGLWLRQRIRUJDQLFPDWWHU
7KH WHUP RUJDQLF IDUPLQJ LV GHULYHG IURP WKH IDFW
WKDWRUJDQLFIDUPLQJV\VWHPVLPSURYHVRLOKHDOWKDQG
IHUWLOLW\WKURXJKWKHUHF\FOLQJRIRUJDQLFPDWWHU7KHUH
LV D YHU\ VWURQJ ERG\ RI HYLGHQFH ZKLFK VKRZV WKDW
WKH DGGLWLRQ RI RUJDQLF PDWWHU LPSURYHV VRLO RUJDQLF
FDUERQ 62& OHYHOV DQG WKLV LV PRUH HIIHFWLYH WKDQ
V\QWKHWLF ZDWHU VROXEOH IHUWLOL]HUV /DO SURYLGHVDQH[WHQVLYHOLVWIURPWKHVFLHQWLÀFOLWHUDWXUH
WKDWGHPRQVWUDWHVWKLV
´$SSOLFDWLRQ RI PDQXUHV DQG RWKHU RUJDQLF
DPHQGPHQWV LV DQRWKHU LPSRUWDQW VWUDWHJ\ RI 62&
VHTXHVWUDWLRQ 6HYHUDO ORQJWHUP H[SHULPHQWV LQ
(XURSHKDYHVKRZQWKDWWKHUDWHRI62&VHTXHVWUDWLRQ
LV JUHDWHU ZLWK DSSOLFDWLRQ RI RUJDQLF PDQXUHV WKDQ
ZLWK FKHPLFDO IHUWLOL]HUV -HQNLQVRQ :LWWHU HW
DO &KULVWHQVHQ .RUVFKHQV 0XOOHU
6PLWK HW DO ,QFUHDVH LQ WKH 62& SRRO
LQ WKH ² FP GHSWK E\ ORQJWHUP XVH RI PDQXUH
FRPSDUHG WR FKHPLFDO IHUWLOL]HUV ZDV RYHU \HDUV LQ 'HQPDUN &KULVWHQVHQ RYHU \HDUV LQ *HUPDQ\ .RUVFKHQV 0XOOHU RYHU\HDUVDW5RWKDPVWHG8.-HQNLQVRQ
DQGRYHU\HDUVLQ6ZHGHQ:LWWHUHWDO
7KH GDWD IURP 0RUURZ SORWV LQ ,OOLQRLV LQGLFDWHG WKDW
PDQXUHG SORWV FRQWDLQHG 0JKDï PRUH 62&
WKDQ XQPDQXUHG FRQWURO $QGHUVRQ HW DO ,Q
+XQJDU\$UHQGV&DVWKREVHUYHGDQLQFUHDVH
LQ62&FRQFHQWUDWLRQE\²E\PDQXULQJ6PLWK
HW DO HVWLPDWHG WKDW DSSOLFDWLRQ RI PDQXUH DW
WKH UDWH RI 0JKDï WR FURSODQG LQ (XURSH ZRXOG
LQFUHDVH WKH 62& SRRO E\ RYHU \HDUV ,Q
1RUZD\ 8KOHQ DQG 8KOHQ 7YHLWQHV UHSRUWHGWKDWPDQXUHDSSOLFDWLRQZRXOGLQFUHDVH62&
VHTXHVWUDWLRQDWWKHUDWHRI².JKDï\UïRYHU
²\HDUSHULRGµ
5&RPSRVWV·PXOWLSOHEHQHÀWV
&RPSRVWLQJ ZDV SLRQHHUHG E\ WKH RUJDQLF IDUPLQJ
PRYHPHQW WKURXJK WKH ZRUN RI 6LU $OEHUW +RZDUG LQ
WKH V DQG V DQG WKHQ VWURQJO\ SURPRWHG
E\ -HURPH 5RGDOH LQ KLV QXPHURXV SXEOLFDWLRQV
HVSHFLDOO\ LQ 2UJDQLF )DUPLQJ DQG *DUGHQLQJ WKDW
KDYHEHHQZLGHO\VWXGLHGDURXQGWKHZRUOGIRUPRUH
LQIRUPDWLRQVHHZZZURGDOHLQVWLWXWHRUJ
7KHUHLVDQLQFUHDVLQJERG\RIHYLGHQFHWKDWFRPSRVWV
DUHVXSHULRUWRUDZPDQXUHVLQLQFUHDVLQJWKHOHYHORI
VRLORUJDQLFPDWWHU7KH5RGDOH,QVWLWXWHVWXGLHVKDYH
GHPRQVWUDWHGWKDWJRRGRUJDQLFSUDFWLFHVXVLQJUDZ
PDQXUHV DQG FRYHU FURSV FDQ VHTXHVWHU NJ
RI &2KD\U DQG WKDW ZKHQ FRPSRVW LV DGGHG WKLV
LQFUHDVHV WR NJ RI &2KD\U /D6DOOH DQG
+HSSHUO\
6$YRLGHGHPLVVLRQV
&XUUHQWO\ PRVW RI WKH IRRG DQG RWKHU SURGXFWV IURP
IDUPV DUH H[SRUWHG IURP WKH IDUP DQG VHQW WR FLWLHV
7KH GLVSRVDO RI WKH RUJDQLF UHVLGXHV LQ ODQGÀOOV LV
UHVSRQVLEOH IRU PHWKDQH HPLVVLRQV 0HWKDQH LV D
VLJQLÀFDQW*+*&RUUHFWFRPSRVWLQJDQGELRGLJHVWHU
PHWKRGV DUH QRZ UHFRJQL]HG DV HIIHFWLYH ZD\V RI
DYRLGLQJVXFKHPLVVLRQVIRUPRUHLQIRUPDWLRQRQWKH
VFLHQFHRIVRLOPHWKDQHDQGVRLORUJDQLFPDWWHUVHH
$QQH[5HVHDUFKE\)L%/VKRZVWKDWPRUH*+*V
FDQEHDYRLGHGE\WKHVHPHWKRGVWKDQE\PRVWRWKHU
IDUPLQJSUDFWLFHV*DWWLQJHUHWDO)RUH[DPSOH
WKH FRPSRVW SURMHFW DW 6HNHP LQ (J\SW KDV RIIVHW
PHWKDQHHPLVVLRQVVLQFH-DQXDU\%\XVLQJWKH
FRUUHFW FRPSRVWLQJ PHWKRGV IRU RUJDQLF PDWHULDOV
WKHSURMHFWZDVDEOHWRUHGXFHPHWKDQHHPLVVLRQVE\
WRQQHVRI&2H+HOP\$ERXOHLVKSHUVRQDO
FRPPXQLFDWLRQ
&RPSRVWLQJ WKH RUJDQLF ZDVWHV LQ FLWLHV DQG
WUDQVSRUWLQJWKHPWRWKHIDUPEULQJVPXOWLSOHEHQHÀWV
LQFORVLQJWKHQXWULHQWF\FOHE\UHWXUQLQJWKHQXWULHQWV
WKDW DUH H[SRUWHG IURP WKH IDUP DYRLGLQJ PHWKDQH
HPLVVLRQV DQG LQFUHDVLQJ WKH UDWH RI VRLO FDUERQ
VHTXHVWUDWLRQ
76\QWKHWLFQLWURJHQIHUWLOL]HUVGHJUDGH
VRLOFDUERQ
2QH RI WKH PDLQ UHDVRQV IRU WKH GLIIHUHQFHV LQ VRLO
FDUERQEHWZHHQRUJDQLFDQGFRQYHQWLRQDOV\VWHPVLV
WKDWDVUHVHDUFKVKRZVWKHUHLVDGLUHFWOLQNEHWZHHQ
WKHDSSOLFDWLRQRIV\QWKHWLFQLWURJHQRXVIHUWLOL]HUVDQG
DGHFOLQHLQVRLOFDUERQ
6FLHQWLVWV DW WKH 8QLYHUVLW\ RI ,OOLQRLV DQDO\VHG WKH
UHVXOWVRID\HDUDJULFXOWXUDOWULDODQGIRXQGWKDWWKH
DSSOLFDWLRQRIV\QWKHWLFQLWURJHQIHUWLOL]HUKDGUHVXOWHG
LQDOOWKHFDUERQUHVLGXHVIURPWKHFURSGLVDSSHDULQJ
DV ZHOO DV DQ DYHUDJH ORVV RI DURXQG NJ RI
VRLOFDUERQSHUKHFWDUH7KLVLVDURXQGNJRI
&2SHUKHFWDUHRYHUDQGDERYHWKHPDQ\WKRXVDQGV
RI NLORJUDPV RI FURS UHVLGXH WKDW LV FRQYHUWHG LQWR
&2 HYHU\ \HDU .KDQ HW DO 0XOYDQH\ .KDQ
DQG(OOVZRUWK7KHUHVHDUFKHUVIRXQGWKDWWKH
KLJKHU WKH DSSOLFDWLRQ RI V\QWKHWLF QLWURJHQ IHUWLOL]HU
WKHJUHDWHUZDVWKHDPRXQWRIVRLOFDUERQORVWDV&2
7KLVLVRQHRIWKHPDMRUUHDVRQVZK\WKHUHLVDGHFOLQH
LQVRLOFDUERQLQFRQYHQWLRQDODJULFXOWXUDOV\VWHPVDQG
LWVLQFUHDVHLQRUJDQLFV\VWHPV
2QWKHRWKHUKDQGWKHUHLVDJRRGERG\RIUHVHDUFK
ZKLFK VKRZV WKDW XVLQJ OHJXPHV DQG FDUERQEDVHG
VRXUFHVVXFKDVFRPSRVWLQFUHDVHVWKHOHYHOVRIVRLO
RUJDQLFFDUERQ/D6DOOHDQG+HSSHUO\
5HVHDUFKHUV IURP 1RUWK $PHULFD DQG (XURSH KDYH
DOVR VKRZQ WKDW RUJDQLF V\VWHPV DUH PRUH HIÀFLHQW
LQXVLQJQLWURJHQWKDQFRQYHQWLRQDOIDUPLQJV\VWHPV
6LJQLÀFDQWO\ EHFDXVH RI WKLV HIÀFLHQF\ YHU\ OLWWOH
QLWURJHQOHDYHVWKHIDUPVDV*+*VRUDVQLWUDWHWKDW
SROOXWHV DTXDWLF V\VWHPV 'ULQNZDWHU :DJRQHU DQG
6DUUDQWRQLR0DGHUHWDO
8'LYHUVHFURSSLQJV\VWHPV
$QRWKHU FULWLFDO DVSHFW RI RUJDQLF SURGXFWLRQ LV WKH
XVH RI GLYHUVH FURSSLQJ V\VWHPV &HUWLÀHG RUJDQLF
SURGXFWLRQV\VWHPVSURKLELWFRQWLQXRXVPRQRFXOWXUHV
75$'($1'(19,5210(175(9,(:
LQ FURSSLQJ V\VWHPV (YHU\ FHUWLÀHG RUJDQLF IDUP
QHHGV WR KDYH D PDQDJHPHQW SODQ WKDW RXWOLQHV LWV
FURS DQG VWRFN URWDWLRQ V\VWHPV /DO FLWHVWKHVFLHQWLÀFOLWHUDWXUHWRLQGLFDWHWKDWWKLVGRHV
PDNHDGLIIHUHQFH
´6RLOV XQGHU GLYHUVH FURSSLQJ V\VWHPV JHQHUDOO\ KDYH
D KLJKHU 62& SRRO WKDQ WKRVH XQGHU PRQRFXOWXUH
'LFN HW DO %X\DQRVNL HW DO 'ULQNZDWHU
HWDO%X\DQRVNL:DJQHU(OLPLQDWLRQRI
VXPPHU IDOORZ LV DQRWKHU RSWLRQ IRU PLQLPL]LQJ ORVVHV
RI WKH 62& SRRO 'HOJDGR HW DO 5DVPXVVHQ HW
DO *URZLQJ D ZLQWHU FRYHU FURS HQKDQFHV VRLO
TXDOLW\ WKURXJK 62& VHTXHVWUDWLRQ ,Q WKH 8. )XOOHQ
$XHUVZDOGUHSRUWHGWKDWJUDVVOH\VVHWDVLGH
LQFUHDVHG 62& FRQFHQWUDWLRQ E\ SHU \HDU IRU
\HDUV,Q$XVWUDOLD*UDFH2DGHVREVHUYHG
WKDW WKH 62& SRRO LQ WKH ² FP OD\HU LQFUHDVHG
OLQHDUO\ZLWKLQFUHDVHLQIUHTXHQF\RISDVWXUHLQWKHFURS
URWDWLRQF\FOH,QFRPSDULVRQZLWKFRQWLQXRXVFURSSLQJ
LQFRUSRUDWLRQ RI FRYHU FURSV LQ WKH URWDWLRQ F\FOH
HQKDQFHG 62& FRQFHQWUDWLRQ LQ WKH VXUIDFH OD\HU E\
LQ6ZHGHQ1LOVVRQLQ7KH1HWKHUODQGV
9DQ'LMNDQGLQWKH8.-RKQVWRQRYHU
>D@²\HDUSHULRG6LPLODUUHVXOWVZHUHUHSRUWHGE\
/DOHWDOIRUWKH86FURSODQGµ
9(URVLRQDQGVRLOORVV
7KHKLJKHVWSHUFHQWDJHRIVRLOFDUERQLVFRQWDLQHGLQ
WKH ÀUVW FP RI VRLO +DQGUHN +DQGUHN DQG
%ODFN6WHYHQVRQ6RLOORVVDQGHURVLRQ
IURP IDUPLQJ V\VWHPV LV D OHDGLQJ FRQFHUQ DURXQG
WKHZRUOG0LOOHQQLXP(FRV\VWHP$VVHVVPHQW
,$$67' D ,W LV D PDMRU FDXVH RI ORVV RI VRLO
FDUERQVLQFHWKHKLJKHVWOHYHOVRIVRLORUJDQLFPDWWHU
DUHLQWKHWRSOD\HURIWKHVRLO
&RPSDULVRQVWXGLHVKDYHVKRZQWKDWRUJDQLFV\VWHPV
GHPRQVWUDWHOHVVVRLOORVVGXHWREHWWHUVRLOKHDOWKDQG
DUHWKHUHIRUHDEOHWRPDLQWDLQJUHDWHUVRLOSURGXFWLYLW\
WKDQ FRQYHQWLRQDO IDUPLQJ V\VWHPV 5HJDQROG (OOLRWW
DQG8QJHU5HJDQROGHWDO0DGHUHWDO
3LPHQWHOHWDO5HJDQROG(OOLRWWDQG8QJHU
FRPSDUHG WKH HIIHFWV RI RUJDQLF DQG FRQYHQWLRQDO
IDUPLQJRQSDUWLFXODUSURSHUWLHVRIWKHVDPHVRLORYHU
D ORQJ SHULRG DQG IRXQG ´WKH RUJDQLFDOO\IDUPHG
VRLO KDG VLJQLÀFDQWO\ KLJKHU RUJDQLF PDWWHU FRQWHQW
WKLFNHU WRSVRLO GHSWK KLJKHU SRO\VDFFKDULGH FRQWHQW
ORZHU PRGXOXV RI UXSWXUH DQG OHVV VRLO HURVLRQ WKDQ
WKHFRQYHQWLRQDOO\IDUPHGVRLOµ5HJDQROGHWDO
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
&ULWLFVRIRUJDQLFV\VWHPVSRLQWWRFRQYHQWLRQDOQRWLOO
SURGXFWLRQ V\VWHPV DV VXSHULRU WR RUJDQLF V\VWHPV
EHFDXVHWKHODWWHUXVHWLOODJH7RRXUNQRZOHGJHWKHUH
LVRQO\RQHSXEOLVKHGVWXG\FRPSDULQJFRQYHQWLRQDO
QRWLOO ZLWK RUJDQLF WLOODJH V\VWHPV 7KH UHVHDUFKHUV
IRXQGWKDWWKHRUJDQLFV\VWHPKDGEHWWHUVRLOTXDOLW\
$FFRUGLQJ WR 7HDVGDOH &RIIPDQ DQG 0DQJXP
´ WKH 25 >RUJDQLF@ V\VWHP LPSURYHG
VRLO SURGXFWLYLW\ VLJQLÀFDQWO\ DV PHDVXUHG E\ FRUQ
\LHOGVLQWKHXQLIRUPLW\WULDOKLJKHUOHYHOVRIVRLO&DQG
1ZHUHDFKLHYHGGHVSLWHWKHXVHRIWLOODJHFKLVHOSORZ
DQG GLVN IRU LQFRUSRUDWLQJ PDQXUH DQG RI FXOWLYDWLRQ
ORZUHVLGXHVZHHSFXOWLYDWRUIRUZHHGFRQWURO2XU
UHVXOWV VXJJHVW WKDW V\VWHPV WKDW LQFRUSRUDWH KLJK
DPRXQWV RI RUJDQLF LQSXWV IURP PDQXUH DQG FRYHU
FURSV FDQ LPSURYH VRLOV PRUH WKDQ FRQYHQWLRQDO QR
WLOODJHV\VWHPVGHVSLWHUHOLDQFHRQDPLQLPXPOHYHORI
WLOODJHµ
7KHODWHVWLPSURYHPHQWLQRUJDQLFORZQRWLOOV\VWHPV
GHYHORSHG E\ WKH 5RGDOH ,QVWLWXWH VKRZV WKDW WKHVH
V\VWHPV FDQ GHOLYHU KLJK \LHOGV DV ZHOO DV H[FHOOHQW
HQYLURQPHQWDORXWFRPHV5RGDOH0R\HU
:6RLOFDUERQVHTXHVWUDWLRQFDQKHOS
DOOHYLDWHSRYHUW\
7KH DJUHHPHQWV RI WKH 81)&&& FRQIHUHQFH LQ
&DQFXQSURSRVHGWKDWKXQGUHGVRIELOOLRQVRIGROODUV
VKRXOGEHXVHGIRUIXQGLQJFOLPDWHFKDQJHPLWLJDWLRQ
DFWLYLWLHV )$2 EHOLHYHV WKDW SHU FHQW RI WKH
SRWHQWLDOEHQHÀWVIURPDJULFXOWXUDOPLWLJDWLRQFRXOGJR
WRIDUPHUVLQGHYHORSLQJFRXQWULHV)$2F
6FKHPHV WKDW SD\ IDUPHUV IRU VHTXHVWHULQJ FDUERQ
LQWR WKH VRLO FRXOG KHOS DOOHYLDWH UXUDO SRYHUW\ DQG
SURYLGH D VWURQJ ÀQDQFLDO LQFHQWLYH WR DGRSW JRRG
IDUPLQJSUDFWLFHVLIWKH\DUHGRQHIDLUO\DQGSURSHUO\
$W DQ DYHUDJH RI WRQV RI &2 SHU KHFWDUH DW SHU WRQ IDUPHUV FRXOG HDUQ SHU KHFWDUH SHU
\HDU:KLOHWKLVPD\QRWVHHPOLNHPXFKIRUPDQ\RI
WKH ZRUOG·V IDUPHUV ZRUNLQJ RQ RQO\ D IHZ KHFWDUHV
DQG HDUQLQJ OHVV WKDQ D \HDU DQ H[WUD LV
H[WUHPHO\ YDOXDEOH 2Q D FRPPXQLW\ VFDOH LW ZRXOG
PHDQPDQ\WKRXVDQGVRIGROODUVJRLQJLQWRYLOODJHV
ZKLFKZRXOGEHVSHQWLQWKHORFDOFRPPXQLW\FUHDWLQJ
WKH PXOWLSOLHU HIIHFW RI DGGHG EHQHÀWV 9HU\ FULWLFDOO\
LIWKLVLVORRNHGDWRYHUWKHORQJWHUPWKHVHDPRXQWV
FDQ EHFRPH YHU\ ZRUWKZKLOH WR WKH IDUPHUV $V DQ
H[DPSOH 6HNHP KDV VHTXHVWHUHG NJV RI &2
SHUKHFWDUHSHU\HDUIRU\HDUV$WDWRQWKLVLV
ZRUWK D WRWDO RI SHU KHFWDUH IRU WKH WRWDO WLPH
SHULRGWRQVRI&2DWSHUWRQ KD\U
%DVHGRQWKHUHVXOWVRIWKH5R\DO7KDL2UJDQLF3URMHFW
7KDLIDUPHUVFRXOGHDUQSHUKHFWDUHSHU\HDUIRU
HLJKW\HDUVZKLFKDPRXQWVWRSHUKHFWDUHIRU
WKDW WLPH SHULRG WRQV RI &2 DW SHU WRQ KD\U
,I IDUPHUV DGRSWHG V\VWHPV VLPLODU WR WKH &ROLQ DQG
1LFN6HLVSDVWXUHFURSSLQJPHWKRGVXVHGDW:LQRQD
WKH\FRXOGHDUQSHUKHFWDUHSHU\HDUIRU\HDUV
ZKLFKWRWDOVSHUKHFWDUHRYHUWKDWSHULRG
WRQVRI&2DWSHUWRQ KD\U
7KHPRVWSUDFWLFDOZD\WRHQVXUHVPDOOKROGHUIDUPHUV
UHFHLYH IXQGLQJ LV IRU WKHP WR EH RUJDQL]HG LQWR
JURXSV 7KH RUJDQLF VHFWRU DOUHDG\ GRHV WKLV ZLWK
YDULRXV JURXS FHUWLÀFDWLRQ VFKHPHV VXFK DV WKLUG
SDUW\ V\VWHPV DQG SDUWLFLSDWRU\ JXDUDQWHH V\VWHPV
3*6 ,W ZRXOG EH UHODWLYHO\ VLPSOH WR LQFOXGH D VRLO
FDUERQPHDVXUHPHQWV\VWHPLQFXUUHQWRUJDQLFDXGLW
V\VWHPV 6XFK V\VWHPV FRXOG EH JURZHU FRQWUROOHG
DQGGHVLJQHGWRHQVXUHIDLUQHVVDQGWUDQVSDUHQF\VR
WKDWWKHIXQGVUHDFKWKHIDUPHUVDQGWKHLUFRPPXQLWLHV
UDWKHUWKDQEHQHÀWLQJWKHPRQH\PDUNHWWUDGHUV
,PSOHPHQWHGSURSHUO\WKHVHVFKHPHVFRXOGEHVHHQ
DV VRFLDO MXVWLFH V\VWHPV ZKHUH WKH &2SROOXWLQJ
LQGXVWULHV ZRXOG EH SD\LQJ PDQ\ RI WKH SRRUHVW
SHRSOHRQWKHSODQHWIRUWKHLUHFRV\VWHPVHUYLFHVRI
VHTXHVWHULQJ *+*V )RU H[DPSOH ELOOLRQ KHFWDUHV
DW SHU KHFWDUH KDV WKH SRWHQWLDO WR UHGLVWULEXWH
ELOOLRQ IURP &2SROOXWLQJ LQGXVWULHV WR UXUDO
FRPPXQLWLHV$VLJQLÀFDQWSURSRUWLRQRIWKLVFRXOGJR
WRVPDOOKROGHUVLQGHYHORSLQJFRXQWULHV)$2F
:HOOGHVLJQHG VRLO FDUERQ VFKHPHV WKDW LQFOXGH VRLO
FDUERQ VHTXHVWUDWLRQ KDYH WKH SRWHQWLDO WR UHGXFH
*+*HPLVVLRQVLQWKHDWPRVSKHUHDVZHOODVDOOHYLDWH
UXUDOSRYHUW\LQGHYHORSLQJFRXQWULHVDQGWKH\ZRXOG
SURYLGHDVXEVWDQWLDOÀQDQFLDOLQFHQWLYHWRDGRSWJRRG
IDUPLQJSUDFWLFHV
7KH\ FRXOG EH ÀQDQFHG WKURXJK JRYHUQPHQW
DGPLQLVWHUHGFDSDQGWUDGHV\VWHPV7KHVHV\VWHPV
SXWDFDSRQWKHWRWDODPRXQWRIHPLVVLRQVDQGE\
WD[LQJHPLVVLRQVWKDWDUHDERYHWKHWDUJHWVWKH\IRUFH
WKH HPLWWHUV WR UHDFK WKHLU WDUJHWV WKURXJK HQHUJ\
HIÀFLHQF\ WKH DGRSWLRQ RI UHQHZDEOH HQHUJ\ RU E\
RWKHURIIVHWV7KHFDSFRXOGEHSURJUHVVLYHO\ORZHUHG
WKHUHE\ IRUFLQJ WKH LQGXVWULHV WR FRQWLQXRXVO\ ÀQG
ZD\V WR UHGXFH HPLVVLRQV 7KHVH WD[HV FRXOG WKHQ
EHXVHGWRSD\IDUPHUVIRUWKHLUHFRV\VWHPVHUYLFHV
RIVWULSSLQJWKH&2RXWRIWKHDWPRVSKHUHDQGÀ[LQJ
75$'($1'(19,5210(175(9,(:
LW LQ WKH VRLO 7KH VFKHPHV FRXOG EH JRYHUQPHQW
DGPLQLVWHUHGRUPDUNHWEDVHG
7KHUH KDYH EHHQ PDQ\ FRQFHUQV H[SUHVVHG DERXW
PDUNHWEDVHG V\VWHPV HVSHFLDOO\ WKRVH WKDW ZDQW
WR GHYHORS FRPSOH[ ÀQDQFLDO LQVWUXPHQWV DV WKH
WUDGLQJ EDVLV IRU FDUERQ 7KH FROODSVH RI WKH SULFH
IRUFDUERQLQPDUNHWEDVHGV\VWHPVDVZHOODVVRPH
VFKHPHVZKHUHPRVWRIWKHSULFHKDVJRQHWRZDUGV
DGPLQLVWHULQJ WKH VFKHPH UDWKHU WKDQ SD\LQJ WKH
ODQG KROGHUV VKRZ WKDW WKHUH DUH PDMRU SUREOHPV
ZLWK WKHVH VFKHPHV ,W LV LPSRUWDQW WKDW PRVW RI
WKH IXQGV JR WR WKH IDUPHUV UDWKHU WKDQ WR VFKHPH
DGPLQLVWUDWRUV EURNHUV FDUERQ WUDGHUV DQG RWKHU
LQWHUPHGLDULHV 7KHVH H[SHULHQFHV VKRZ WKH UHDO
QHHGIRUDGHTXDWHJRYHUQPHQWUHJXODWLRQUDWKHUWKDQ
DOORZLQJXQUHJXODWHGFDUERQPDUNHWV
7KHVLJQLÀFDQWUHGXFWLRQLQWKHSULFHRIFDUERQLQ
LQWKHJRYHUQPHQWDGPLQLVWHUHG(XURSHDQ8QLRQ
VFKHPH VKRZV WKH QHHG IRU D UHDOLVWLF JRYHUQPHQW
$QQH[WR&RPPHQWDU\9
3DVWXUHFURSSLQJ²DQQXDOVLQD
SHUHQQLDOV\VWHP
3DVWXUHFURSSLQJLVZKHUHWKHDQQXDOFURSLVSODQWHG
LQ D SHUHQQLDO SDVWXUH LQVWHDG RI LQ D SORJKHG ÀHOG
7KLV ZDV ÀUVW GHYHORSHG E\ &ROLQ 6HLV LQ $XVWUDOLD
7KH SULQFLSOH LV EDVHG RQ D VRXQG HFRORJLFDO IDFW
QDPHO\WKDWDQQXDOSODQWVJURZLQSHUHQQLDOV\VWHPV
7KH NH\ LV WR DGDSW WKLV SULQFLSOH WR WKH DSSURSULDWH
PDQDJHPHQWV\VWHPIRUWKHVSHFLÀFFDVKFURSVDQG
FOLPDWH
,Q &ROLQ·V V\VWHP WKH SDVWXUH LV ÀUVW JUD]HG XVLQJ
KROLVWLF PDQDJHPHQW WR HQVXUH WKDW LW LV YHU\ VKRUW
7KLVDGGVRUJDQLFPDWWHULQWKHIRUPRIPDQXUHFXW
JUDVV DQG VKHG URRWV DQG VLJQLÀFDQWO\ UHGXFHV WKH
FRPSHWLWLRQ IURP WKH SDVWXUH ZKHQ WKH FDVK FURS LV
VHHGHGDQGJHUPLQDWHV7KHFURSLVGLUHFWO\SODQWHG
LQWKHSDVWXUH
$FFRUGLQJ WKH &ROLQ 6HLV ´,W ZDV DOVR OHDUQW WKDW
VRZLQJ D FURS LQ WKLV PDQQHU VWLPXODWHG SHUHQQLDO
JUDVVVHHGOLQJVWRJURZLQQXPEHUVDQGGLYHUVLW\JLYLQJ
FRQVLGHUDEO\PRUHWRQHVKHFWDUHRISODQWJURZWK7KLV
SURGXFHVPRUHVWRFNIHHGDIWHUWKHFURSLVKDUYHVWHG
DQGWRWDOO\HOLPLQDWHVWKHQHHGWRUHVRZSDVWXUHVLQWR
PDQGDWHG ÁRRU SULFH IRU FDUERQ WR HQVXUH WKDW
ODQGKROGHUV DUH DGHTXDWHO\ FRPSHQVDWHG IRU WKHLU
VHUYLFHVRIVHTXHVWHULQJ&2DQGQRWVXEMHFWHGWRWKH
YDJDULHVRIPDUNHWSULFHÁXFWXDWLRQV
2QHFULWLFDOLVVXHFRQFHUQVRZQHUVKLSRIWKHFDUERQ
7KH FDUERQ VKRXOG EHORQJ WR WKH IDUPHUODQGKROGHU
DQG WKH SD\PHQW VKRXOG EH IRU WKH VHUYLFH RI
VHTXHVWHULQJ LW RXW RI WKH DWPRVSKHUH DQG VWRULQJ LW
LQWKHVRLO7KHSD\PHQWLVQRWIRUWKHFDUERQDVWKLV
FDQQRWDQGVKRXOGQRWEHVHSDUDWHGIURPWKHVRLO
*LYHQ WKH FXUUHQW WUHQGV RI JOREDO *+* HPLVVLRQV
DQG WKH ZRUVW FDVH VFHQDULR ZH VHHP WR IROORZ IRU
JOREDOZDUPLQJLWLVFULWLFDOWKDWVRLOFDUERQLVLQFOXGHG
LQWKH81)&&&SURFHVVHVDQGYHU\LPSRUWDQWO\WKDW
WKHUH DUH PHFKDQLVPV WR ÀQDQFLDOO\ UHZDUG IDUPHUV
ZKR HQJDJH LQ SURYHQ SUDFWLFHV VXFK DV RUJDQLF
DJULFXOWXUHWKDWVHTXHVWHU&2LQWRWKHVRLO
WKH FURSSHG DUHDV &URSSLQJ PHWKRGV XVHG LQ WKH
SDVWUHTXLUHWKDWDOOYHJHWDWLRQLVNLOOHGSULRUWRVRZLQJ
WKHFURSDQGZKLOHWKHFURSLVJURZLQJµ
´)URPDIDUPHFRQRPLFSRLQWRIYLHZWKHSRWHQWLDOIRU
JRRG SURÀW LV H[FHOOHQW EHFDXVH WKH FRVW RI JURZLQJ
FURSV LQ WKLV PDQQHU LV D IUDFWLRQ RI FRQYHQWLRQDO
FURSSLQJ7KHDGGHGEHQHÀWLQDPL[HGIDUPVLWXDWLRQ
LVWKDWXSWRVL[PRQWKVH[WUDJUD]LQJLVDFKLHYHGZLWK
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
WKLV PHWKRG FRPSDUHG ZLWK WKH ORVV RI JUD]LQJ GXH
WR JURXQG SUHSDUDWLRQ DQG ZHHG FRQWURO UHTXLUHG LQ
WUDGLWLRQDO FURSSLQJ PHWKRGV $V D JHQHUDO UXOH DQ
XQGHUOLQLQJ SULQFLSOH RI WKH VXFFHVV RI WKLV PHWKRG
LV ¶2QH KXQGUHG SHUFHQW JURXQG FRYHU RQH KXQGUHG
SHUFHQWRIWKHWLPH¶µ
´«D +D FURS RI (FKLGQD RDWV WKDW ZDV VRZQ DQG
KDUYHVWHGLQRQ«´:LQRQDµ7KLVFURS·V\LHOGZDV
WRQQH+DEDJVDFUH7KLV\LHOGLVDWOHDVWHTXDO
WR WKH GLVWULFW DYHUDJH ZKHUH IXOO JURXQG GLVWXUEDQFH
FURSSLQJ PHWKRGV ZHUH XVHGµ 7KLV SURÀW GRHV QRW
LQFOXGH WKH YDOXH RI WKH H[WUD JUD]LQJ 2Q :LQRQD LW LV
EHWZHHQ>DQG@KDEHFDXVHWKHSDVWXUHLVJUD]HG
XSWRWKHSRLQWRIVRZLQJ:KHQXVLQJWUDGLWLRQDOFURSSLQJ
SUDFWLFHV ZKHUH JURXQG SUHSDUDWLRQ DQG ZHHG FRQWURO
PHWKRGVDUHXWLOLVHGIRUSHULRGVRIXSWRIRXUWRVL[PRQWKV
EHIRUH WKH FURS LV VRZQ WKHQ QR TXDOLW\ JUD]LQJ FDQ EH
DFKLHYHG
´2WKHU EHQHÀWV DUH PRUH GLIÀFXOW WR TXDQWLI\ 7KHVH DUH
WKH YDVW LPSURYHPHQW LQ SHUHQQLDO SODQW QXPEHUV DQG
GLYHUVLW\ RI WKH SDVWXUH IROORZLQJ WKH FURS 7KLV PHDQV
WKDWWKHUHLVQRQHHGWRUHVRZSDVWXUHVZKLFKFDQFRVW
LQ H[FHVV RI SHU KHFWDUH DQG FRQVLGHUDEO\ PRUH
VKRXOGFRQWUDFWRUVEHXVHGIRUSDVWXUHHVWDEOLVKPHQWµ
,QGHSHQGHQW VWXGLHV DW :LQRQD RQ SDVWXUH FURSSLQJ
E\ >WKH@ 'HSDUWPHQWRI/DQGDQG:DWHUKDYHIRXQGWKDW
SDVWXUHFURSSLQJLVPRUHSURÀWDEOHWKDQFRQYHQWLRQDO
DJULFXOWXUH >DQG@ WKLV LV FRXSOHG ZLWK JUHDW HQYLURQPHQW
EHQHÀWV WKDW ZLOO LPSURYH WKH VRLO DQG UHJHQHUDWH RXU
ODQGVFDSHVµ
%XLOGLQJVRLOIHUWLOLW\ZLWKRXW
V\QWKHWLFIHUWLOL]HUV
&KULVWLQH -RQHV KDV FRQGXFWHG UHVHDUFK DW &ROLQ
6LHV·VSURSHUW\ZKLFKVKRZVWKDWLQWKHODVW\HDUV
WKDRI&2ZDVVHTXHVWHUHG
‡ 7KHVHTXHVWUDWLRQUDWHLQWKHODVWWZR\HDUV²
KDV EHHQ WRQV RI &2 SHU KHFWDUH SHU
\HDU
&RPSDULVRQRIVRLOEHWZHHQ
:LQRQDDQGQHLJKERXU
,Q WKLV SDLUHG VLWH FRPSDULVRQ SDUHQW PDWHULDO
VORSHDVSHFWUDLQIDOODQGIDUPLQJHQWHUSULVHVDUH
WKHVDPH/HYHOVRIVRLOFDUERQLQERWKSDGGRFNV
ZHUHRULJLQDOO\WKHVDPH
/+6²FPVRLOSURÀOHIURPDSDGGRFNLQZKLFK
JURXQGFRYHUKDVEHHQDFWLYHO\PDQDJHGFURSSHG
DQGJUD]HGWRHQKDQFHSKRWRV\QWKHWLFFDSDFLW\
5+6 ² FP VRLO SURÀOH IURP D FRQYHQWLRQDOO\
PDQDJHG QHLJKERXULQJ SDGGRFN PHWUHV
WKURXJKWKHIHQFHWKDWKDVEHHQVHWVWRFNHGDQG
KDVDORQJKLVWRU\RISKRVSKDWHDSSOLFDWLRQ
1RWHV
L7KHFDUERQOHYHOVLQWKH²FPLQFUHPHQWDUH
YHU\ VLPLODU 7KLV VXUIDFH FDUERQ UHVXOWV IURP WKH
GHFRPSRVLWLRQ RI RUJDQLF PDWWHU OHDYHV URRWV
PDQXUH HWF IRUPLQJ VKRUWFKDLQ XQVWDEOH ¶ODELOH·
FDUERQ
LL7KHFDUERQEHORZFPLQWKH/+6SURÀOHKDV
UDSLGO\LQFRUSRUDWHGLQWRWKHKXPLFQRQODELOHVRLO
IUDFWLRQ /RQJFKDLQ QRQODELOH FDUERQ LV KLJKO\
VWDEOH
-RQHV
‡ 7KLVLQFUHDVHRFFXUUHGGXULQJWKHZRUVWGURXJKWLQ
UHFRUGHG$XVWUDOLDQKLVWRU\
‡ 7KHIROORZLQJLQFUHDVHVLQVRLOPLQHUDOIHUWLOLW\KDYH
RFFXUUHG LQ \HDUV ZLWK RQO\ WKH DGGLWLRQ RI D
VPDOO DPRXQW RI SKRVSKRUXV FDOFLXP SHU
FHQWPDJQHVLXPSHUFHQWSRWDVVLXPSHU
FHQW VXOSKXU SHU FHQW SKRVSKRUXV SHU
FHQW]LQFSHUFHQWLURQSHUFHQWFRSSHU
$QQH[WR&RPPHQWDU\9
0HWKDQH6RLOPDQDJHPHQWFDQ
UHGXFHDWPRVSKHULFPHWKDQH
7KHVFLHQFHRQVRLOPHWKDQHDQGVRLORUJDQLFPDWWHULV
VWLOOLQLWVLQIDQF\ZLWKPDQ\XQDQVZHUHGTXHVWLRQVGXH
WRWKHODFNRIUHVHDUFK+RZHYHUDUHFHQWPHWDVWXG\
E\YDQ*URHQLJHQ2VHQEHUJDQG+XQJDWHKDV
VKRZQWKDWPHWKDQHRXWSXWIURPWKHVRLOZLOOLQFUHDVH
DVWKHFOLPDWHZDUPVZKLFKUDLVHVFRQFHUQVWKDWWKH
SHUFHQWDJHVRI*+*VWKDWDUHVHTXHVWHUHGLQIRUHVWU\
V\VWHPVDUHRYHUHVWLPDWHG
7KH PHWKDQH PRGHO XVHG E\ YDQ *URHQLJHQ HW DO
PHDVXUHG ZKDW ZDV YRODWLOL]HG EXW QRW WKH DPRXQW
RI WKH PHWKDQH WKDW ZDV ELRGHJUDGHG LQ WKH VRLO
0HWKDQH LV SURGXFHG DQG GHJUDGHG DV D QDWXUDO
F\FOH LQ QDWXUH DQG PRVW RI WKLV GHJUDGDWLRQ WDNHV
SODFHLQELRORJLFDOO\DFWLYHVRLOVDQGLQWKHRFHDQVE\
PHWKDQRWURSKLFPLFUREHV
+LVWRULFDOO\DSDUWIURPDIHZH[FHSWLRQDOHYHQWVGXULQJ
JHRORJLFDO WLPH SHULRGV WKH DPRXQW RI PHWKDQH LQ
WKHDWPRVSKHUHIURPWKHHQRUPRXVKHUGVRIJUD]LQJ
DQLPDOVRQWKHSUDLULHVVDYDQQDKVDQGVWHSSHVDQG
IURP WKH GHFD\ RI RUJDQLF PDWWHU LQ WKH YDVW IRUHVWV
DQGZHWODQGVRIWKHSODQHWZDVUHODWLYHO\VWDEOHXQWLO
KXPDQDFWLYLWLHVRYHUWKHODVW\HDUVGLVUXSWHGWKH
QDWXUDOF\FOHVRIPHWKDQHSURGXFWLRQDQGGHJUDGDWLRQ
+HLPDQQ0XUDWHWDO
6WXGLHV E\ +HOOHEUDQG DQG +HUSSLFK DQG
/HYLQHHWDOVKRZHGWKDWDVLJQLÀFDQWDPRXQW
RIPHWKDQHLVELRGHJUDGHGLQVRLOVDQGWKDWWKLVKDV
EHHQXQGHUHVWLPDWHGGXHWRDODFNRIUHVHDUFK:KLOH
WKH YDQ *URHQLJHQ HW DO VWXG\ VKRZV DQ LQFUHDVH
LQ PHWKDQH RXWSXW IURP VRLOV ZKHQ WKH WHPSHUDWXUH
75$'($1'(19,5210(175(9,(:
SHUFHQWERURQSHUFHQWPRO\EGHQXP
SHUFHQWFREDOWSHUFHQWDQGVHOHQLXPSHU
FHQW-RQHV
)RUPRUHLQIRUPDWLRQRQ
‡ 3DVWXUH FURSSLQJ VHH KWWSZZZZLQRQDQHWDX
IDUPLQJKWPO
‡ +ROLVWLFPDQDJHPHQWVHH
KWWSKROLVWLFPDQDJHPHQWRUJ
LQFUHDVHVWKH+HOOHEUDQGDQG+HUSSLFKVWXGLHVVKRZ
WKDWWKHLQFUHDVHLQWHPSHUDWXUHZLOOGULYHXSWKHUDWH
RIELRORJLFDOGHJUDGDWLRQRIPHWKDQHE\PHWK\ORWURSLF
EDFWHULD DQG RWKHU PHWKDQRWURSKLF PLFURRUJDQLVPV
7KLV H[SODLQV ZK\ KLVWRULFDO DWPRVSKHULF PHWKDQH
OHYHOV KDYH EHHQ UHODWLYHO\ VWDEOH DQG DOVR ZK\
QDWXUDOO\SURGXFHGPHWKDQHOHYHOVPD\QRWLQFUHDVH
DVWKHFOLPDWHJHWVZDUPHU
0DQ\ VWXGLHV RI PHWKDQH SURGXFWLRQ RQO\ FDOFXODWH
WKHPHWKDQHSURGXFHGE\WKHV\VWHPVDVDRQHZD\
RXWSXW LQWR WKH DWPRVSKHUH 7KLV FDQ EH FRUUHFW IRU
VRPH SURGXFWLRQ V\VWHPV VXFK DV FRQÀQHG DQLPDO
IHHGORWVDQGJDUEDJHVHQWWRODQGÀOOKRZHYHULWLVQRW
FRUUHFW IRU PRVW QDWXUDO SURGXFWLRQV V\VWHPV VXFK
DV DQLPDO JUD]LQJ RQ JUDVVODQGV FURS SURGXFWLRQ
RQ ELRORJLFDOO\ DFWLYH VRLOV RUFKDUGV DQG IRUHVWV DV
WKHVHV\VWHPVDUHEDVHGRQF\FOHVWKDWDOVRGHJUDGH
PHWKDQH 7KLV RYHUVLJKW RI WKH DPRXQW RI PHWKDQH
WKDWFDQEHELRGHJUDGHGE\WKHVRLORUWKHRFHDQVLVD
PDMRUÁDZWKDWQHHGVWREHUHFWLÀHG
8QWLO WKH GHFD\ F\FOHV DUH SURSHUO\ LGHQWLÀHG
PHDVXUHG DQG PRGHOOHG WKH DPRXQWV RI PHWKDQH
WKDW DUH HPLWWHG E\ V\VWHPV DUH QRW DQ DFFXUDWH
PHDVXUH RI PHWKDQH·V FRQWULEXWLRQ WR WRWDO *+*V
8QGHUVWDQGLQJ WKHVH F\FOHV DQG WKH ELRORJLFDO
FRQGLWLRQV QHHGHG WR ELRGHJUDGH PHWKDQH ZLOO JLYH
VFLHQWLVWV DQG ODQGKROGHUV D PDMRU WRRO WR PDQDJH
RQHRIWKHPRVWLPSRUWDQW*+*V
7KHQHHGIRUJRRGVRLOPDQDJHPHQWSUDFWLFHV
$VWXG\E\)XX0LQJ.DLHWDOVXJJHVWVWKDW
WKH UHFHQW UHGXFWLRQV LQ PHWKDQH RXWSXW DUH GXH WR
FKDQJHV LQ IDUPLQJ SUDFWLFHV 7KLV VWXG\ DGGV WR
WKHGDWDVKRZLQJWKDWWKHUHLVJRRGHYLGHQFHRIWKH
SRWHQWLDO WR UHGXFH WKH DPRXQW RI PHWKDQH LQ WKH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
DWPRVSKHUH WKURXJK WKH IROORZLQJ VRLO PDQDJHPHQW
SUDFWLFHVDVGHVFULEHGEHORZ
$YRLGLQJDQDHURELFVRLOFRQGLWLRQV0HWKDQHIRUPV
LQDQDHURELFFRQGLWLRQVVXFKDVULFHSDGGLHV1HZ
PHWKRGVVXFKDVWKHV\VWHPRIULFHLQWHQVLÀFDWLRQ
65, XVH PRUH IUHTXHQW VKRUWHU ZDWHULQJ
F\FOHV WKDW DYRLG DQDHURELF FRQGLWLRQV WKHUHE\
VLJQLÀFDQWO\UHGXFLQJPHWKDQHSURGXFWLRQ
2SHQ ZHOODHUDWHG VRLOV 2UJDQLF PDWWHU FDQ
YRODWLOL]H LQWR &2 PHWKDQH DQG RWKHU JDVHV LQ
IDUPLQJ V\VWHPV +RZHYHU FRUUHFW PDQDJHPHQW
V\VWHPVFDQFRQWLQXRXVO\LQFUHDVHWKHSURSRUWLRQ
RI WKH QRQYRODWLOH FRPSRXQGV DQG IRUP VWDEOH
IUDFWLRQV RI VRLO RUJDQLF PDWWHU 7KH UHVHDUFK
FRQGXFWHG E\ -RQHV DW :LQRQD VKRZHG WKDW WKH
PDMRULW\RIWKHQHZO\LQFUHDVHGVRLOFDUERQZDVLQ
WKHVWDEOHIUDFWLRQVRIWKHQHZO\VHTXHVWHUHG
FDUERQZDVLQWKHQRQODELOHKXPLFIUDFWLRQRIWKH
VRLOUHQGHULQJLWKLJKO\VWDEOH
3URPRWLQJ ELRORJLFDOO\ DFWLYH VRLOV ZLWK KLJK OHYHOV
RI PHWKDQRWKURSLF PLFUREHV 7KH UHVHDUFK E\
/HYLQHHWDOIRXQGWKDWWKHNH\WRPHWKDQH
GHJUDGDWLRQ LV ODQG PDQDJHPHQW SUDFWLFHV WKDW
DFKLHYH KLJK OHYHOV RI GLYHUVLW\ RI PHWKDQRWKURSLF
PLFUREHV
5HVHDUFK QHHGV WR EH FRQGXFWHG LQWR DOO RI WKHVH
DUHDV WR DFFXUDWHO\ HVWDEOLVK WKH EHVW SUDFWLFHV
7KLVPXVWEHEDVHGRQFULWHULDWKDWDUHPHDVXUDEOH
UHSOLFDEOHDQGHDVLO\DGRSWHGE\ODQGPDQDJHUV
75$'($1'(19,5210(175(9,(:
1//'06#4;U )41'%1.1);U1.76+10616*'4+5'51(
11&
;56'/5#0&.+/#6'*#0)'
2OLYLHUGH6FKXWWHU
816SHFLDO5DSSRUWHXURQWKH5LJKWWR)RRG
$EVWUDFW
7KH IRRG SULFH KLNHV RI DQG ² ZHUH SDUWO\ WKH UHVXOW RI ZHDWKHUUHODWHG HYHQWV OLQNHG WR
FOLPDWH FKDQJH DQG SDUWO\ GXH WR WKH GHSHQGHQFH RI IRRG SURGXFWLRQ RQ IRVVLO HQHUJLHV WKDW FDXVHG
D PHUJHU EHWZHHQ IRRG DQG HQHUJ\ PDUNHWV RQ WKLV LVVXH VHH DOVR WKH FRPPHQW E\ 5XQGJUHQ LQ WKLV
FKDSWHUDVZHOODVWKHÀQDQFLDOL]DWLRQRIIRRGPDUNHWV7KHFXUUHQWHIIRUWVWRUHLQYHVWLQDJULFXOWXUHVKRXOG
WDNHLQWRDFFRXQWWKHQHHGWRLPSURYHWKHUHVLOLHQFHRIIRRGV\VWHPVVRDVWRUHGXFHWKHLUYXOQHUDELOLW\
WRH[WUHPHZHDWKHUHYHQWVDQGWRWKHLQFUHDVLQJO\YRODWLOHSULFHVRIQRQUHQHZDEOHIRVVLOHQHUJLHV7KLV
DUWLFOHH[SORUHVKRZDJURHFRORJ\XQGHUVWRRGDVWKHDSSOLFDWLRQRIWKHVFLHQFHRIHFRORJ\WRDJULFXOWXUDO
V\VWHPVFDQUHVXOWLQPRGHVRISURGXFWLRQWKDWDUHQRWRQO\PRUHUHVLOLHQWEXWDOVRERWKKLJKO\SURGXFWLYH
DQGVXVWDLQDEOHHQDEOLQJWKHPWRFRQWULEXWHWRWKHDOOHYLDWLRQRIUXUDOSRYHUW\DQGWKXVWRWKHUHDOL]DWLRQ
RIWKHULJKWWRIRRG
$5HLQYHVWLQJLQDJULFXOWXUH
7KH IRRG SULFH VSLNHV RI DQG ²
SURPSWHG JRYHUQPHQWV WR VWDUW UHLQYHVWLQJ LQ
DJULFXOWXUHDVHFWRUWKDWKDVEHHQQHJOHFWHGLQPDQ\
GHYHORSLQJFRXQWULHVIRUWKHSDVW\HDUV+RZHYHU
LQYHVWPHQWV WKDW LQFUHDVH IRRG SURGXFWLRQ ZLOO QRW
PDNH VLJQLÀFDQW SURJUHVV LQ FRPEDWLQJ KXQJHU DQG
PDOQXWULWLRQLIWKH\GRQRWOHDGWRKLJKHULQFRPHVDQG
LPSURYHG OLYHOLKRRGV IRU WKH SRRUHVW ² SDUWLFXODUO\
VPDOOVFDOH IDUPHUV LQ GHYHORSLQJ FRXQWULHV $QG
VKRUWWHUP JDLQV ZLOO EH RIIVHW E\ ORQJWHUP ORVVHV LI
WKH\ FDXVH IXUWKHU GHJUDGDWLRQ RI HFRV\VWHPV WKXV
WKUHDWHQLQJ WKH DELOLW\ WR PDLQWDLQ FXUUHQW OHYHOV RI
SURGXFWLRQ LQ WKH IXWXUH 7KH TXHVWLRQ WKHUHIRUH LV
QRWVLPSO\KRZPXFKEXWDOVRKRZWKHLQYHVWPHQWV
DUH PDGH 3RXULQJ PRQH\ LQWR DJULFXOWXUH ZLOO QRW
EH VXIÀFLHQW WKH LPSHUDWLYH WRGD\ LV WR WDNH VWHSV
WKDW IDFLOLWDWH WKH WUDQVLWLRQ WRZDUGV D ORZFDUERQ
UHVRXUFHFRQVHUYLQJ W\SH RI DJULFXOWXUH WKDW EHQHÀWV
WKHSRRUHVWIDUPHUV
$JURHFRORJ\ FDQ SOD\ D FHQWUDO UROH LQ DFKLHYLQJ
WKLV JRDO 'H 6FKXWWHU D 'H 6FKXWWHU DQG
9DQORTXHUHQ ,W LV SRVVLEOH WR VLJQLÀFDQWO\
LPSURYH DJULFXOWXUDO SURGXFWLYLW\ ZKHUH LW KDV EHHQ
ODJJLQJ EHKLQG DQG WKXV WR LQFUHDVH SURGXFWLRQ
ZKHUH LW QHHGV PRVW WR EH LQFUHDVHG LH SULPDULO\
LQ SRRU IRRGGHÀFLHQW FRXQWULHV ZKLOH DW WKH VDPH
WLPHLPSURYLQJWKHOLYHOLKRRGVRIVPDOOKROGHUIDUPHUV
DQG FRQVHUYLQJ HFRV\VWHPV 7KLV ZRXOG DOVR VORZ
WKH WUHQG WRZDUGV LQFUHDVLQJ XUEDQL]DWLRQ LQ WKH
FRXQWULHVFRQFHUQHGZKLFKLVSODFLQJVWUHVVRQWKHLU
SXEOLFVHUYLFHV0RUHRYHULWZRXOGFRQWULEXWHWRUXUDO
GHYHORSPHQW DQG SUHVHUYH WKH DELOLW\ RI VXFFHHGLQJ
JHQHUDWLRQV WR PHHW WKHLU RZQ QHHGV ,Q DGGLWLRQ
WKHUHVXOWLQJKLJKHULQFRPHVLQWKHUXUDODUHDVZRXOG
FRQWULEXWH WR WKH JURZWK RI RWKHU VHFWRUV RI WKH
HFRQRP\E\VWLPXODWLQJGHPDQGIRUQRQDJULFXOWXUDO
SURGXFWV$GHOPDQ
%7KHGLDJQRVLV
6LQFH WKH JOREDO IRRG FULVHV PRVW RI WKH IRFXV KDV
EHHQRQLQFUHDVLQJRYHUDOOSURGXFWLRQXVLQJPHWKRGV
FRQVLVWHQWZLWKFODVVLF*UHHQ5HYROXWLRQDSSURDFKHV
7KH FULVHV KDYH EHHQ DWWULEXWHG WR D PLVPDWFK
EHWZHHQ VXSSO\ DQG GHPDQG UHÁHFWLQJ D JDS
EHWZHHQ VORZHU SURGXFWLYLW\ JURZWK DQG LQFUHDVLQJ
QHHGV $ ZLGHO\ FLWHG HVWLPDWH LV WKDW WDNLQJ LQWR
DFFRXQW GHPRJUDSKLF JURZWK DV ZHOO DV FKDQJHV
LQ WKH FRPSRVLWLRQ RI GLHWV DQG FRQVXPSWLRQ OHYHOV
DVVRFLDWHG ZLWK JURZLQJ XUEDQL]DWLRQ DQG KLJKHU
KRXVHKROGLQFRPHVWKHRYHUDOOLQFUHDVHLQDJULFXOWXUDO
SURGXFWLRQVKRXOGUHDFKSHUFHQWE\%XUQH\
HWDO
+RZHYHUDSDUWIURPWKHIDFWWKDWWKLVHVWLPDWHWDNHV
WKH FXUUHQW GHPDQG FXUYHV DV JLYHQ DQG GRHV QRW
FRQVLGHU WKH OHDNDJHV DQG ZDVWH LQ WKH FXUUHQW
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
IRRGV\VWHPV81(3WKHIRFXVRQLQFUHDVLQJ
SURGXFWLRQ PD\ QRW DGHTXDWHO\ FRQVLGHU WKH IDFW
WKDW KXQJHU WRGD\ LV QRW VR PXFK D FRQVHTXHQFH
RI VWRFNV EHLQJ WRR ORZ RU WR JOREDO VXSSOLHV EHLQJ
XQDEOH WR PHHW GHPDQG UDWKHU LW LV GXH WR SRYHUW\
,W LV WKHLU ODFN RI SXUFKDVLQJ SRZHU WKDW PDNHV LW
GLIÀFXOW IRU WKH SRRUHVW VHJPHQWV RI WKH SRSXODWLRQ
LQFOXGLQJPDUJLQDOVPDOOVFDOHIDUPHUVZKRDUHRIWHQ
QHWIRRG EX\HUV WR ZLWKVWDQG HFRQRPLF VKRFNV
VXFK DV WKRVH WKDW UHVXOW IURP VXGGHQ LQFUHDVHV LQ
WKHSULFHVRIEDVLFIRRGFRPPRGLWLHV,QFUHDVLQJWKH
LQFRPHV RI WKH SRRUHVW LV WKHUHIRUH WKH EHVW ZD\ WR
FRPEDW KXQJHU ,QYHVWPHQW LQ DJULFXOWXUH LV QHHGHG
EXW LW VKRXOG QRW RQO\ IRVWHU SURGXFWLRQ WR PHHW
JURZLQJQHHGVLWVKRXOGDOVRUHGXFHUXUDOSRYHUW\E\
ERRVWLQJWKHLQFRPHVRIVPDOOVFDOHIDUPHUV2QO\E\
VXSSRUWLQJVPDOOSURGXFHUVZLOOLWEHSRVVLEOHWRKHOS
EUHDN WKH YLFLRXV F\FOH WKDW OHDGV IURP UXUDO SRYHUW\
WR WKH H[SDQVLRQ RI XUEDQ VOXPV LQ ZKLFK SRYHUW\
EUHHGVPRUHSRYHUW\
,Q DGGLWLRQ DJULFXOWXUH PXVW QRW FRPSURPLVH RQ LWV
DELOLW\WRVDWLVI\IXWXUHQHHGV7KHORVVRIELRGLYHUVLW\
(VTXLQDV$OFi]DU 6ZDQVRQ WKH
XQVXVWDLQDEOHXVHRIZDWHUDVZHOODVWKHGHJUDGDWLRQ
DQG SROOXWLRQ RI VRLOV DQG ZDWHU XQGHUPLQH WKH
FRQWLQXLQJ DELOLW\ RI WKH HDUWK·V QDWXUDO UHVRXUFHV WR
VXSSRUWDJULFXOWXUH&OLPDWHFKDQJHZKLFKWUDQVODWHV
LQWRPRUHIUHTXHQWDQGH[WUHPHZHDWKHUHYHQWVVXFK
DVGURXJKWVDQGÁRRGVDQGOHVVSUHGLFWDEOHUDLQIDOO
LV DOUHDG\ VHYHUHO\ DIIHFWLQJ WKH DELOLW\ RI FHUWDLQ
UHJLRQV DQG FRPPXQLWLHV WR IHHG WKHPVHOYHV DQG
LW LV GHVWDELOL]LQJ PDUNHWV 7KH FKDQJH LQ DYHUDJH
WHPSHUDWXUHV LV WKUHDWHQLQJ WKH DELOLW\ RI HQWLUH
UHJLRQVSDUWLFXODUO\WKRVHZKHUHUDLQIHGDJULFXOWXUHLV
SUDFWLFHGWRPDLQWDLQWKHLUH[LVWLQJOHYHOVRIDJULFXOWXUDO
SURGXFWLRQ 6WHUQ ,3&& E /HVV IUHVK
ZDWHUZLOOEHDYDLODEOHIRUDJULFXOWXUDOSURGXFWLRQDQG
WKHULVHLQVHDOHYHOVLVDOUHDG\FDXVLQJWKHVDOLQL]DWLRQ
RIZDWHULQFHUWDLQFRDVWDODUHDVUHQGHULQJWKDWZDWHU
XQVXLWDEOHIRULUULJDWLRQSXUSRVHV
$V LV ZHOO NQRZQ FXUUHQW DJULFXOWXUDO SUDFWLFHV DUH
H[DFHUEDWLQJ WKLV VLWXDWLRQ LQ D QXPEHU RI ZD\V )RU
LQVWDQFH GHIRUHVWDWLRQ WR HQDEOH WKH H[SDQVLRQ RI
FXOWLYDWHGDUHDVUHSUHVHQWVDPDMRUVRXUFHRIFDUERQ
GLR[LGH&2HPLVVLRQVDFFRXQWLQJIRUSHUFHQWRI
WRWDODQWKURSRJHQLF*+*HPLVVLRQVZKLOHPHWKDQH
&+HPLVVLRQVUHVXOWIURPULFHSDGGLHVDQGOLYHVWRFN
GLJHVWLRQDFFRXQWLQJIRUSHUFHQWRIHPLVVLRQV
$QRWKHU*+*HPLVVLRQLVQLWURXVR[LGH12ZKLFK
LV SURGXFHG LQ SDUWLFXODU WKURXJK WKH +DEHU%RVFK
SURFHVV RI IDEULFDWLQJ QLWURJHQEDVHG IHUWLOL]HUV
DFFRXQWLQJ IRU DQRWKHU SHU FHQW $OOHQ HW DO
0HLQKDXVHQHWDO
$JURHFRORJ\ LV LQFUHDVLQJO\ VHHQ DV RQH ZD\ WR
DGGUHVV WKHVH FRQVLGHUDEOH FKDOOHQJHV $ ZLGH
UDQJHRIH[SHUWVZLWKLQWKHVFLHQWLÀFFRPPXQLW\DQG
LQWHUQDWLRQDODJHQFLHVVXFKDVWKH)$2DQG%LRYHUVLW\
,QWHUQDWLRQDODQG81(3YLHZLWDVDZD\
WR LPSURYH WKH UHVLOLHQFH DQG VXVWDLQDELOLW\ RI IRRG
V\VWHPV ,$$67' D :H]HO HW DO D ,W LV
DOVRJDLQLQJJURXQGLQFRXQWULHVDVGLYHUVHDV%UD]LO
)UDQFH*HUPDQ\DQGWKH8QLWHG6WDWHV:H]HOHWDO
&$JURHFRORJ\PLPLFNLQJQDWXUH
$JURHFRORJ\ KDV EHHQ GHÀQHG DV WKH ´DSSOLFDWLRQ
RI HFRORJLFDO VFLHQFH WR WKH VWXG\ GHVLJQ DQG
PDQDJHPHQW RI VXVWDLQDEOH DJURHFRV\VWHPVµ
$OWLHUL *OLHVVPDQ ,W VHHNV WR LPSURYH
DJULFXOWXUDO V\VWHPV E\ PLPLFNLQJ RU DXJPHQWLQJ
QDWXUDOSURFHVVHVWKXVHQKDQFLQJEHQHÀFLDOELRORJLFDO
LQWHUDFWLRQVDQGV\QHUJLHVDPRQJWKHFRPSRQHQWVRI
DJURELRGLYHUVLW\ $OWLHUL &RPPRQ SULQFLSOHV
RI DJURHFRORJ\ LQFOXGH UHF\FOLQJ QXWULHQWV DQG
HQHUJ\ RQ IDUPV UDWKHU WKDQ DXJPHQWLQJ QXWULHQWV
ZLWK H[WHUQDO LQSXWV LQWHJUDWLQJ FURSV DQG OLYHVWRFN
GLYHUVLI\LQJ VSHFLHV DQG JHQHWLF UHVRXUFHV LQ WKH
DJURHFRV\VWHPVRYHUWLPHDQGVSDFHIURPWKHÀHOG
WR ODQGVFDSH OHYHOV DQG LPSURYLQJ LQWHUDFWLRQV DQG
SURGXFWLYLW\WKURXJKRXWWKHDJULFXOWXUDOV\VWHPUDWKHU
WKDQ IRFXVLQJ RQ LQGLYLGXDO VSHFLHV $JURHFRORJ\ LV
KLJKO\ NQRZOHGJHLQWHQVLYH EDVHG RQ WHFKQLTXHV
WKDWDUHQRWGHOLYHUHGWRSGRZQEXWGHYHORSHGRQWKH
EDVLV RI IDUPHUV· NQRZOHGJH DQG H[SHULPHQWDWLRQ
,WVSUDFWLFHVUHTXLUHGLYHUVLI\LQJWKHWDVNVRQWKHIDUP
DQGOLQNLQJWKHPWRWKHGLYHUVLW\RIVSHFLHVLQFOXGLQJ
DQLPDOVWKDWLQWHUDFWDWÀHOGOHYHO
$ YDULHW\ RI WHFKQLTXHV KDYH EHHQ GHYHORSHG DQG
VXFFHVVIXOO\WHVWHGLQDUDQJHRIUHJLRQVWKDWDUHEDVHG
RQ WKLV DSSURDFK 3UHWW\ ,QWHJUDWHG QXWULHQW
PDQDJHPHQWUHFRQFLOHVWKHQHHGWRÀ[QLWURJHQLQWKH
VRLO E\ LPSRUWLQJ LQRUJDQLF DQG RUJDQLF VRXUFHV RI
QXWULHQWVDQGUHGXFLQJQXWULHQWORVVHVWKURXJKHURVLRQ
FRQWURO 7KXV LW DOVR EXLOGV XS VRLO RUJDQLF PDWWHU
ZKLFKHQKDQFHV VRLO IHUWLOLW\DQGFDQ ELQG VLJQLÀFDQW
DPRXQWV RI FDUERQ LQ WKH VRLO VHH FRPPHQWDU\
RI /HX RQ WKLV LVVXH LQ WKLV FKDSWHU $JURIRUHVWU\
LQFRUSRUDWHV PXOWLIXQFWLRQDO WUHHV LQWR DJULFXOWXUDO
V\VWHPV :DWHU KDUYHVWLQJ LQ GU\ODQG DUHDV HQDEOHV
WKHFXOWLYDWLRQRIIRUPHUO\DEDQGRQHGDQGGHJUDGHG
ODQGVDQGLPSURYHVWKHZDWHUSURGXFWLYLW\RIFURSV
7KHLQWHJUDWLRQRIOLYHVWRFNLQWRIDUPLQJV\VWHPVVXFK
DVGDLU\FDWWOHSLJVDQGSRXOWU\LQFOXGLQJXVLQJ]HUR
JUD]LQJ FXW DQG FDUU\ SUDFWLFHV SURYLGHV D VRXUFH
RI SURWHLQ WR IDPLOLHV ZKLOH DOVR IHUWLOL]LQJ VRLOV 7KH
LQFRUSRUDWLRQ RI ÀVK VKULPSV DQG RWKHU DTXDWLF
UHVRXUFHVLQWRIDUPV\VWHPVVXFKDVLQWRLUULJDWHGULFH
ÀHOGVDQGÀVKSRQGVSURYLGHVVLPLODUEHQHÀWV7KHVH
DSSURDFKHVLQYROYHWKHPDLQWHQDQFHRULQWURGXFWLRQRI
DJULFXOWXUDOELRGLYHUVLW\DVDUHVXOWRIWKHLQWHJUDWLRQRI
GLYHUVHFURSVOLYHVWRFNDJURIRUHVWU\ÀVKSROOLQDWRUV
LQVHFWVVRLOELRWDDQGRWKHUFRPSRQHQWV
6XFK
UHVRXUFHFRQVHUYLQJ
ORZH[WHUQDOLQSXW
WHFKQLTXHV KDYH D KXJH \HW VWLOO ODUJHO\ XQWDSSHG
SRWHQWLDO WR DGGUHVV WKH FRPELQHG FKDOOHQJHV RI
SURGXFWLRQFRPEDWLQJUXUDOSRYHUW\DQGFRQWULEXWLQJ
WR UXUDO GHYHORSPHQW ZKLOH DOVR SUHVHUYLQJ
HFRV\VWHPVDQGPLWLJDWLQJFOLPDWHFKDQJH
$JURHFRORJ\DVDUHVSRQVHWRVXSSO\FRQVWUDLQWV
$JURHFRORJLFDO WHFKQLTXHV KDYH D SURYHQ SRWHQWLDO
WR VLJQLÀFDQWO\ LPSURYH \LHOGV 3UHWW\ HW DO FRPSDUHG WKH LPSDFWV RI UHFHQW VXVWDLQDEOH
DJULFXOWXUH SURMHFWV LQ GHYHORSLQJ FRXQWULHV
FRYHULQJPLOOLRQKDUHSUHVHQWLQJSHUFHQWRIWKHLU
FXOWLYDWHG DUHD 7KH\ IRXQG WKDW WKH LQWHUYHQWLRQV
LQFUHDVHG FURS SURGXFWLYLW\ RQ PLOOLRQ IDUPV E\
DQ DYHUDJH RI SHU FHQW ZKLOH DOVR LPSURYLQJ WKH
VXSSO\ RI FULWLFDO HQYLURQPHQWDO VHUYLFHV $ ODUJH
VFDOHVWXG\E\)RUHVLJKWDRQ*OREDO)RRGDQG
)DUPLQJ )XWXUHV FRPPLVVLRQHG E\ WKH *RYHUQPHQW
RIWKH8QLWHG.LQJGRPZKLFKUHYLHZHGSURMHFWVLQ
$IULFDQFRXQWULHVZKHUHVXVWDLQDEOHLQWHQVLÀFDWLRQ
ZDV GHYHORSHG GXULQJ WKH V UHDFKHG VLPLODU
FRQFOXVLRQV
7KHSRWHQWLDORIDJURHFRORJ\WRLQFUHDVHWKH
LQFRPHVRIVPDOOVFDOHIDUPHUV
2QH DGYDQWDJH RI DJURHFRORJ\ LV LWV UHOLDQFH RQ
ORFDOO\ SURGXFHG LQSXWV 0DQ\ $IULFDQ VRLOV DUH
QXWULHQWSRRU DQG KHDYLO\ GHJUDGHG DQG WKHUHIRUH
QHHGUHSOHQLVKPHQW$GGLQJQXWULHQWVWRWKHVRLOFDQ
EH GRQH E\ DSSO\LQJ QRW RQO\ PLQHUDO IHUWLOL]HUV EXW
DOVROLYHVWRFNPDQXUHRUE\JURZLQJJUHHQPDQXUHV
)DUPHUV FDQ DOVR HVWDEOLVK ZKDW KDV EHHQ FDOOHG D
´IHUWLOL]HU IDFWRU\ LQ WKH ÀHOGVµ E\ SODQWLQJ WUHHV WKDW
WDNHQLWURJHQRXWRIWKHDLUDQG´À[µLWLQWKHLUOHDYHV
ZKLFK DUH VXEVHTXHQWO\ LQFRUSRUDWHG LQWR WKH VRLO
:RUOG $JURIRUHVWU\ &HQWUH $JURHFRORJ\
75$'($1'(19,5210(175(9,(:
UHGXFHV WKH GHSHQGHQFH RI IDUPHUV RQ DFFHVV WR
H[WHUQDO LQSXWV ² DQG WKXV RQ VXEVLGLHV ² DQG RQ
ORFDO UHWDLOHUV RI IHUWLOL]HUV RU SHVWLFLGHV DV ZHOO DV
RQ ORFDO PRQH\OHQGHUV 'LYHUVLÀHG IDUPLQJ V\VWHPV
SURGXFHWKHLURZQIHUWLOL]HUVDQGSHVWFRQWUROV\VWHPV
WKXV UHGXFLQJ WKH QHHG IRU SHVWLFLGHV 'H 6FKXWWHU
7KH ORFDO DYDLODELOLW\ RI DGDSWHG VHHGV
SODQWLQJ PDWHULDOV DQG OLYHVWRFN EUHHGV DOVR RIIHUV
PXOWLSOH DGYDQWDJHV ERWK IRU WKH IDUPHU DQG IRU
HQVXULQJWKHVXSSO\RIWKHUHTXLUHGGLYHUVLW\RIVXFK
PDWHULDOVIRUPDMRUFURSVVXFKDVPDL]HULFHPLOOHW
VRUJKXP SRWDWR DQG FDVVDYD 'H 6FKXWWHU D
7KLV LV SDUWLFXODUO\ EHQHÀFLDO WR VPDOOVFDOH IDUPHUV
²HVSHFLDOO\ZRPHQ²ZKRKDYHORZRUQRDFFHVVWR
FUHGLW DQG DOVR ODFN FDSLWDO DQG DFFHVV WR IHUWLOL]HU
GLVWULEXWLRQ V\VWHPV SDUWLFXODUO\ VLQFH WKH SULYDWH
VHFWRU LV XQOLNHO\ WR LQYHVW LQ WKH PRVW UHPRWH DUHDV
ZKHUHFRPPXQLFDWLRQURXWHVDUHSRRUDQGZKHUHIHZ
HFRQRPLHVRIVFDOHFDQEHDFKLHYHG
$JURHFRORJ\·VFRQWULEXWLRQWRUXUDOGHYHORSPHQW
DQGWRRWKHUVHFWRUVRIWKHHFRQRP\
$JURHFRORJ\ FRQWULEXWHV WR UXUDO GHYHORSPHQW
EHFDXVH LW LV UHODWLYHO\ ODERXULQWHQVLYH DQG LV PRVW
HIIHFWLYHO\SUDFWLFHGRQUHODWLYHO\VPDOOSORWVRIODQG
7KH LQLWLDO SHULRG LV SDUWLFXODUO\ ODERXULQWHQVLYH
EHFDXVHRIWKHFRPSOH[LW\RIWKHWDVNVRIPDQDJLQJ
GLIIHUHQW SODQWV DQG DQLPDOV RQ WKH IDUP DQG RI
UHF\FOLQJWKHZDVWHSURGXFHGEXWWKLVKLJKHUODERXU
LQWHQVLW\ RI DJURHFRORJ\ GLPLQLVKHV VLJQLÀFDQWO\ LQ
WKHORQJHUWHUP$MD\LHWDO$QGDOWKRXJKLW
LVVHHQE\PDQ\DVDOLDELOLW\RIVXVWDLQDEOHIDUPLQJ
HVSHFLDOO\ZKHUHJRYHUQPHQWVJLYHSULRULW\WRODERXU
VDYLQJ PHDVXUHV WKH FUHDWLRQ RI HPSOR\PHQW LQ
WKH UXUDO DUHDV LQ GHYHORSLQJ FRXQWULHV PD\ LQ IDFW
FRQVWLWXWHDQDGYDQWDJHLIOLQNHGWRSURGXFWLYLW\JDLQV
,QGHHG LW FRXOG SUHVHQW DQ HQRUPRXV DGYDQWDJH LQ
WKH FRQWH[W RI PDVVLYH XQGHUHPSOR\PHQW DQG KLJK
GHPRJUDSKLFJURZWKLQPDQ\GHYHORSLQJFRXQWULHV,W
ZRXOGDOVRUHVSRQGWRWKHXUJHQWQHHGWRVORZGRZQ
UXUDOXUEDQ PLJUDWLRQ DV DFWLYLWLHV LQ WKH VHUYLFHV
VHFWRULQWKHXUEDQDUHDVDSSHDUXQDEOHWRDEVRUEWKH
H[FHVVODERXU*URZWKLQDJULFXOWXUHFDQEHHVSHFLDOO\
EHQHÀFLDO WR RWKHU VHFWRUV RI WKH HFRQRP\ LI LW LV
EURDGEDVHG DQG LQFUHDVHV WKH LQFRPHV RI D ODUJH
QXPEHU RI IDUPLQJ KRXVHKROGV UDWKHU WKDQ OHDGLQJ
WRDIXUWKHUFRQFHQWUDWLRQRILQFRPHVLQWKHKDQGVRI
D IHZ UHODWLYHO\ ODUJH ODQGRZQHUV ZKR UHO\ RQ ODUJH
VFDOH KHDYLO\ PHFKDQL]HG SODQWDWLRQV $GHOPDQ
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
$JURHFRORJ\·VFRQWULEXWLRQWRLPSURYLQJQXWULWLRQ
7KHDSSURDFKHVHVSRXVHGE\WKH*UHHQ5HYROXWLRQLQ
WKHSDVWIRFXVHGSULPDULO\RQERRVWLQJWKHSURGXFWLRQ
RIFHUHDOFURSV²ULFHZKHDWDQGPDL]H²LQRUGHUWR
SUHYHQW IDPLQHV +RZHYHU WKHVH FURSV DUH PDLQO\
D VRXUFH RI FDUERK\GUDWHV DQG FRQWDLQ UHODWLYHO\
IHZ SURWHLQV DQG WKH RWKHU QXWULHQWV HVVHQWLDO IRU
DGHTXDWHGLHWV<HWRIWKHRYHUSODQWVSHFLHV
DYDLODEOH WR KXPDQV WKHVH WKUHH FURSV VXSSO\ WKH
EXON RI RXU SURWHLQ DQG HQHUJ\ QHHGV WRGD\ )ULVRQ
HW DO 7KH VKLIW IURP GLYHUVLÀHG FURSSLQJ
V\VWHPVWRVLPSOLÀHGFHUHDOEDVHGV\VWHPVKDVWKXV
FRQWULEXWHG WR PLFURQXWULHQW PDOQXWULWLRQ LQ PDQ\
GHYHORSLQJ FRXQWULHV 'HPPHQW HW DO $V D
UHVXOWQXWULWLRQLVWVQRZLQFUHDVLQJO\LQVLVWRQWKHQHHG
IRUPRUHYDULHGDJURHFRV\VWHPVLQRUGHUWRHQVXUHD
PRUHGLYHUVLÀHGQXWULHQWRXWSXWIURPIDUPLQJV\VWHPV
$OORZD\'H&OHUFNHWDO7KHGLYHUVLW\RI
VSHFLHVRQIDUPVPDQDJHGIROORZLQJDJURHFRORJLFDO
SULQFLSOHVDVZHOODVLQXUEDQRUSHULXUEDQDJULFXOWXUH
LVDQLPSRUWDQWDVVHWLQWKLVUHJDUG
$JURHFRORJ\DQGFOLPDWHFKDQJH
$JURHFRORJ\ FDQ VXSSRUW WKH SURYLVLRQ RI D QXPEHU
RI VHUYLFHV WR HFRV\VWHPV LQFOXGLQJ E\ SURYLGLQJ D
KDELWDW IRU ZLOG SODQWV VXSSRUWLQJ JHQHWLF GLYHUVLW\
DQG SROOLQDWLRQ DQG ZDWHU VXSSO\ DQG UHJXODWLRQ ,W
DOVR VWUHQJWKHQV UHVLOLHQFH WR FOLPDWH FKDQJH ZKLFK
LV FDXVLQJ PRUH H[WUHPH ZHDWKHUUHODWHG HYHQWV
5HVLOLHQFHLVVWUHQJWKHQHGE\WKHXVHDQGSURPRWLRQ
RIDJULFXOWXUDOELRGLYHUVLW\DWHFRV\VWHPIDUPV\VWHP
DQGÀHOGOHYHOVPDGHSRVVLEOHE\PDQ\DJURHFRORJLFDO
DSSURDFKHV 3ODWIRUP IRU $JURELRGLYHUVLW\ 5HVHDUFK
$JURHFRORJ\DOVRSXWVDJULFXOWXUHRQWKHSDWK
RI VXVWDLQDELOLW\ E\ GHOLQNLQJ IRRG SURGXFWLRQ IURP D
UHOLDQFH RQ IRVVLO HQHUJ\ RLO DQG JDV ,Q DGGLWLRQ
LW FRQWULEXWHV WR PLWLJDWLQJ FOLPDWH FKDQJH ERWK
E\ LQFUHDVLQJ FDUERQ VLQNV LQ VRLO RUJDQLF PDWWHU
DQG DERYHJURXQG ELRPDVV DQG E\ UHGXFLQJ &2
DQG RWKHU *+* HPLVVLRQV WKURXJK ORZHU GLUHFW DQG
LQGLUHFWHQHUJ\XVH
'6FDOLQJXSDJURHFRORJ\
7KHUH LV D FOHDU DQG XUJHQW QHHG IRU D UHRULHQWDWLRQ
RIDJULFXOWXUDOGHYHORSPHQWWRZDUGVV\VWHPVWKDWXVH
IHZHU H[WHUQDO LQSXWV OLQNHG WR IRVVLO HQHUJLHV DQG
LQVWHDGXVHSODQWVWUHHVDQGDQLPDOVLQFRPELQDWLRQ
PLPLFNLQJ QDWXUH LQVWHDG RI LQGXVWULDO SURFHVVHV
DW WKH ÀHOG OHYHO +RZHYHU WKH VXFFHVV RI VXFK D
UHRULHQWDWLRQZLOOGHSHQGRQWKHDELOLW\WROHDUQIDVWHU
IURP UHFHQW LQQRYDWLRQV DQG WR GLVVHPLQDWH ZKDW
ZRUNV PRUH ZLGHO\ *RYHUQPHQWV KDYH D NH\ UROH
WR SOD\ LQ WKLV UHJDUG (QFRXUDJLQJ D VKLIW WRZDUGV
VXVWDLQDEOHDJULFXOWXUHLPSOLHVWUDQVLWLRQFRVWVVLQFH
IDUPHUV PXVW OHDUQ QHZ WHFKQLTXHV DQG UHYLWDOL]H
WUDGLWLRQDODQGORFDONQRZOHGJHPRYLQJDZD\IURPWKH
FXUUHQW V\VWHPV WKDW DUH ERWK PRUH VSHFLDOL]HG DQG
OHVV DGDSWLYH DQG KDYH D ORZHU LQQRYDWLRQ FDSDFLW\
3UHWW\ ,Q RUGHU WR VXFFHHG LQ LPSOHPHQWLQJ
VXFK D WUDQVLWLRQ WKH VSUHDG RI DJURHFRORJ\ VKRXOG
EHGLUHFWHGDWWKHIDUPHUVWKHPVHOYHVZKRZLOOEHLWV
PDLQ EHQHÀFLDULHV 7KXV IDUPHUWRIDUPHU OHDUQLQJ LQ
IDUPHU ÀHOG VFKRROV RU WKURXJK IDUPHUV· PRYHPHQWV
VKRXOG EH HQFRXUDJHG DV LQ WKH &DPSHVLQRD
&DPSHVLQRPRYHPHQWLQ&HQWUDO$PHULFDDQG&XED
'HJUDQGH HW DO +ROW*LPpQH] 5RVVHW
HWDO
$QLPSURYHGGLVVHPLQDWLRQRINQRZOHGJHE\KRUL]RQWDO
IDUPHUWRIDUPHU PHDQV WUDQVIRUPV WKH QDWXUH RI
NQRZOHGJH LWVHOI ZKLFK EHFRPHV WKH SURGXFW RI D
QHWZRUN:DUQHUDQG.LUVFKHQPDQQ,WVKRXOG
HQFRXUDJH IDUPHUV SDUWLFXODUO\ VPDOOVFDOH IDUPHUV
OLYLQJ LQ WKH PRVW UHPRWH DUHDV DQG WKRVH HNLQJ RXW
D OLYLQJ IURP WKH PRVW PDUJLQDO VRLOV WR ZRUN ZLWK
H[SHUWV WRZDUGV D FRFRQVWUXFWLRQ RI NQRZOHGJH
HQVXULQJ WKDW DGYDQFHV DQG LQQRYDWLYH VROXWLRQV ZLOO
EHQHÀW WKHP DV D PDWWHU RI SULRULW\ UDWKHU WKDQ RQO\
EHQHÀWLQJWKHEHWWHURIISURGXFHUV8SKRIID
7KLV LV NH\ WR WKH UHDOL]DWLRQ RI WKH ULJKW WR IRRG
)LUVW LW HQDEOHV SXEOLF DXWKRULWLHV WR EHQHÀW IURP
WKH H[SHULHQFHV DQG LQVLJKWV RI WKH IDUPHUV 5DWKHU
WKDQ WUHDWLQJ VPDOOKROGHU IDUPHUV DV EHQHÀFLDULHV
RI DLG WKH\ VKRXOG EH VHHQ DV H[SHUWV ZKR KDYH
NQRZOHGJH WKDW LV FRPSOHPHQWDU\ WR IRUPDOL]HG
H[SHUWLVH 6HFRQG SDUWLFLSDWLRQ FDQ HQVXUH WKDW
SROLFLHVDQGSURJUDPPHVDUHWUXO\UHVSRQVLYHWRWKH
QHHGV RI YXOQHUDEOH JURXSV DV WKRVH JURXSV ZLOO
TXHVWLRQ SURMHFWV WKDW IDLO WR LPSURYH WKHLU VLWXDWLRQ
7KLUGSDUWLFLSDWLRQHPSRZHUVWKHSRRU²DYLWDOVWHS
WRZDUGVSRYHUW\DOOHYLDWLRQEHFDXVHODFNRISRZHULV
D VRXUFH RI SRYHUW\ DV PDUJLQDO FRPPXQLWLHV RIWHQ
UHFHLYHOHVVVXSSRUWWKDQWKHJURXSVWKDWKDYHEHWWHU
FRQQHFWLRQV ZLWK JRYHUQPHQW 0RUHRYHU SRYHUW\
H[DFHUEDWHV WKLV ODFN RI SRZHU FUHDWLQJ D YLFLRXV
FLUFOHRIIXUWKHUGLVHPSRZHUPHQW)RXUWKSROLFLHVWKDW
DUHFRGHVLJQHGZLWKIDUPHUVKDYHJUHDWHUOHJLWLPDF\
DQG WKXV IDYRXU EHWWHU SODQQLQJ RI LQYHVWPHQW DQG
SURGXFWLRQDQGEHWWHUXSWDNHE\RWKHUIDUPHUV)$2
DQG,,('3DUWLFLSDWLRQRIIRRGLQVHFXUHJURXSV
LQ WKH SROLFLHV WKDW DIIHFW WKHP VKRXOG EHFRPH D
FUXFLDOHOHPHQWRIDOOIRRGVHFXULW\SROLFLHVIURPSROLF\
GHVLJQWRWKHDVVHVVPHQWRIUHVXOWVWRWKHGHFLVLRQRQ
UHVHDUFKSULRULWLHV,QGHHGLPSURYLQJWKHVLWXDWLRQRI
PLOOLRQVRIIRRGLQVHFXUHVPDOOKROGHUIDUPHUVFDQQRW
EHGRQHZLWKRXWWKHP
75$'($1'(19,5210(175(9,(:
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
1//'06#4;U 41/16+0)'5+.+'06)4+%7.674'+07$g
#*#4#0(4+%##5##,144+14+6;+0.+/#6'g
*#0)'&#26#6+10
0DUFXV.DSODQ&KLQZH,IHMLND6SHUDQ]DDQG,PPH6FKRO]
*HUPDQ'HYHORSPHQW,QVWLWXWH/ Deutsches Institut für Entwicklungspolitik (DIE)
$EVWUDFW
‡ 3ROLFLHVWRSURPRWHDGDSWDWLRQWRFOLPDWHFKDQJHLQVXE6DKDUDQ$IULFDZKLOHDOVRKHOSLQJWRDOOHYLDWH
SRYHUW\ZLOOUHTXLUHPXOWLSOHLQYHVWPHQWVLQUXUDODUHDVWRUDLVHDJULFXOWXUDOSURGXFWLYLW\DQGLPSURYH
HFRQRPLFLQIUDVWUXFWXUHDQGVRFLDOVHUYLFHVDVSULRULWLHV
‡ ,QFUHDVHG LQYHVWPHQW LQ DJULFXOWXUH VKRXOG WDNH LQWR DFFRXQW LWV PXOWLSOH VRFLDO HFRQRPLF DQG
HQYLURQPHQWDO IXQFWLRQV LQ RUGHU WR DFKLHYH SRYHUW\ UHGXFWLRQ DQG IRRG VHFXULW\ DQG LPSURYH WKH
UHVLOLHQFHRIUXUDOOLYHOLKRRGVWRPXOWLSOHVKRFNVLQFOXGLQJFOLPDWHFKDQJH
‡ 6FHQDULRV RI WKH ORFDO LPSDFWV RI FOLPDWH FKDQJH VKRXOG LQFOXGH H[WUHPH ZHDWKHU DQG FOLPDWH
FRQGLWLRQV LH ZLWK UHJDUG WR WHPSHUDWXUH RU YDULDELOLW\ RI UDLQIDOO LQ RUGHU WR EH SUHSDUHG IRU WKH
HIIHFWVRIGDQJHURXVFOLPDWHFKDQJHLHPRUHIUHTXHQWDQGLQWHQVLYHGURXJKWVDQGÁRRGVWKDWLQ
WKHZRUVWFDVHFRXOGIRUFHORFDOSRSXODWLRQVWRSHUPDQHQWO\PRYHRXWRIDIIHFWHGDUHDV
$&KDOOHQJHVIDFLQJDJULFXOWXUHLQVXE
6DKDUDQ$IULFD
EXWDOVRWRWDNHDEURDGHUYLHZDQGDLPWRLQFUHDVHWKH
RYHUDOOUHVLOLHQFHRIUXUDOSHRSOHDQGWKHLUOLYHOLKRRGV
$JULFXOWXUDO SURGXFWLRQ LQ VXE6DKDUDQ $IULFD 66$
DQG WKHUHIRUH DOVR OLYHOLKRRGV WKDW GHSHQG RQ
DJULFXOWXUH ZLOO EH VHYHUHO\ DIIHFWHG E\ WKH LPSDFWV
RI FOLPDWH FKDQJH 'HSHQGLQJ RQ WKHLU JHRJUDSKLFDO
ORFDWLRQ YDULRXV VXEUHJLRQV DUH OLNHO\ WR H[SHULHQFH
HLWKHU OHVV RU PRUH UDLQIDOO ULVLQJ WHPSHUDWXUHV DQG
D KLJKHU QXPEHU DQG LQWHQVLW\ RI H[WUHPH ZHDWKHU
HYHQWV *HQHUDOO\ \LHOGV ZLOO GHFOLQH DOWKRXJK
WROHUDQFH RI GLIIHUHQW FURSV WR WHPSHUDWXUH FKDQJHV
DQG ZDWHU DYDLODELOLW\ ZLOO YDU\ FRQVLGHUDEO\ /REHOO HW
DO/LXHWDO:KLOHWKHPDMRUWUHQGVDUH
FOHDUFRQVLGHUDEOHXQFHUWDLQWLHVUHPDLQ0OOHU
)RUH[DPSOHIRUDQXPEHURIDUHDVLQ:HVWHUQ$IULFD
VRPH JOREDO FLUFXODWLRQ PRGHOV H[SHFW LQFUHDVHV LQ
SUHFLSLWDWLRQ ZKLOH RWKHUV SURMHFW OHVV UDLQIDOO IRU WKH
FRPLQJ GHFDGHV 'HVSLWH WKLV XQFHUWDLQW\ DJULFXOWXUH
WKURXJKRXW$IULFDIDFHVDVHULRXVULVNRIH[SHULHQFLQJ
QHJDWLYH LPSDFWV IURP FOLPDWH FKDQJH 0OOHU HW DO
E8QGHUVXFKFLUFXPVWDQFHVLWZLOOEHSDUWLFXODUO\
FKDOOHQJLQJ IRU SRRU IDUPHUV WR SUHSDUH IRU WKH
XSFRPLQJ FKDQJHV ,W LV WKHUHIRUH DGYLVDEOH WR IRFXV
QRWRQO\RQGLUHFWPHDVXUHVWRVXSSRUWDGDSWDWLRQRI
DJULFXOWXUDODFWLYLWLHVWRWKHLPSDFWVRIFOLPDWHFKDQJH
0RVWSRRUSHRSOHLQGHYHORSLQJFRXQWULHVOLYHLQUXUDO
DUHDV7KH:RUOG%DQNPDQ\RIZKRPGHSHQG
RQ DJULFXOWXUDO DFWLYLWLHV IRU WZR SXUSRVHV ÀUVW WR
HQVXUHIRRGVHFXULW\IRUWKHLUIDPLOLHVDQGVHFRQGIRU
LQFRPHJHQHUDWLRQDVDJULFXOWXUHLVRIWHQWKHLUPDLQRU
HYHQRQO\HFRQRPLFDFWLYLW\%RWKDVSHFWVDOVRKDYH
LPSOLFDWLRQV IRU RWKHU QRQIDUP UXUDO KRXVHKROGV
HLWKHUWKURXJKWKHGHJUHHRIDYDLODELOLW\RIIRRGZKLFK
FDQFDXVHÁXFWXDWLRQVLQORFDOSULFHVRUDVDQLQGLUHFW
VRXUFHRIHPSOR\PHQW
,QPDQ\UXUDODUHDVRI66$DJULFXOWXUHIDFHVYDULRXV
ZHOONQRZQFKDOOHQJHVZKLFKFRQVWUDLQWKHVRFLDODQG
HFRQRPLFGHYHORSPHQWRIWKHVHFWRUDQGRIWKHSHRSOH
ZKRGHSHQGRQLW7KHIXQGDPHQWDOFRQVWUDLQWVLQFOXGH
LQVHFXUHDFFHVVRIORFDOSURGXFHUVWRODQGXQVNLOOHG
DJULFXOWXUDO PDQSRZHU IRU LQQRYDWLYH DJULFXOWXUDO
SURGXFWLRQ V\VWHPV OLPLWHG DFFHVV WR DJULFXOWXUDO
LQSXWV DV ZHOO DV OLPLWHG NQRZOHGJH RI KRZ WKH
ORFDO FOLPDWH HJ KRPRJHQHRXV UDLQIDOO ]RQHV WKDW
H[WHQGRYHUYLOODJHVLVFKDQJLQJDQGLVH[SHFWHGWR
FKDQJHLQWKHIXWXUH7KHVHFRQVWUDLQWVUHVXOWLQORZHU
SURGXFWLYLW\%UXLQVPD5RVHJUDQWHWDO
DQG WKH SUHYDOHQFH RI XQVXVWDLQDEOH DJULFXOWXUDO
SUDFWLFHV ZLWK QHJDWLYH HFRORJLFDO LPSDFWV :DWHU
VWUHVV DQG VFDUFLW\ DUH LQFUHDVLQJ ZKLOH ELRGLYHUVLW\
LV GHFOLQLQJ 6RLO GHJUDGDWLRQ DQG GHFOLQLQJ IHUWLOLW\
WKURXJKIRUH[DPSOHLQDSSURSULDWHVRLOPDQDJHPHQW
DQG ORZ LQSXWV FUHDWH VHULRXV SUREOHPV IRU
FXUUHQW DQG IXWXUH DJULFXOWXUDO SURGXFWLYLW\ LQ PDQ\
SDUWV RI 66$ 0F,QW\UH HW DO D 9OHN /H DQG
7DPHQH )XUWKHUPRUH ORZRXWSXW DJULFXOWXUH
QHFHVVLWDWHVWKHXVHRIPRUHODQGWRPDLQWDLQLWVOHYHO
RI SURGXFWLRQ ZKLFK LV ZK\ DJULFXOWXUH LV WKH PDLQ
GULYHURIGHIRUHVWDWLRQLQQHDUO\DOOGHYHORSLQJFRXQWULHV
6FKHUU DQG 6WKDSLW 6XFK ODQGXVH FKDQJHV
IRUIRRGSURGXFWLRQFDXVH&2HPLVVLRQVWKURXJKWKH
UHOHDVH RI FDUERQ IURP DERYHJURXQG ELRPDVV DQG
JUD]LQJ OLYHVWRFN UHGXFHG FDUERQ VHTXHVWUDWLRQ LQ
VRLOVDQGXQVXVWDLQDEOHDJULFXOWXUDOSUDFWLFHV6FKHUU
DQG 6WKDSLW $V D UHVXOW ODQGXVH FKDQJHV
LQFOXGLQJ GHIRUHVWDWLRQ DFFRXQW IRU DERXW SHU
FHQWRIWRWDODQWKURSRJHQLF*+*HPLVVLRQV6PLWKHW
DOEZKLOHELRPDVVEXUQLQJDQGWKHFRQYHUVLRQ
RI ZHWODQGV FRQWULEXWH WR PHWKDQH &+ HPLVVLRQV
DQGWKHDSSOLFDWLRQRIIHUWLOL]HUVUHVXOWVLQQLWURXVR[LGH
HPLVVLRQV81)&&&
7RGD\QHZJOREDOSDWWHUQVFUHDWHDGGLWLRQDOFKDOOHQJHV
WKDW IXUWKHU DJJUDYDWH WKHVH NQRZQ FRQVWUDLQWV RQ
D SURGXFWLYH DQG VXVWDLQDEOH DJULFXOWXUDO VHFWRU LQ
66$,QDGGLWLRQWRHFRQRPLFWUHQGVVXFKDVJUHDWHU
LQWHUQDWLRQDO FRPSHWLWLRQ IRU ODQG IRU YDULRXV XVHV
ÁXFWXDWLQJ IRRG SULFHV KLJKHU HQHUJ\ SULFHV DQG
LQWHUQDWLRQDOWUDGHSROLFLHVFOLPDWHFKDQJHVHULRXVO\
WKUHDWHQVWKHSURGXFWLYLW\RIWKHDJULFXOWXUDOVHFWRUDQG
LWVFRQWULEXWLRQWRHFRQRPLFDQGVRFLDOGHYHORSPHQW
7KHSRRUHUSHRSOHZKRGHSHQGGLUHFWO\RQHFRV\VWHP
VHUYLFHV IRU WKHLU OLYHOLKRRGV DUH WKH PRVW YXOQHUDEOH
WR SHUPDQHQW FKDQJHV LQ WHPSHUDWXUH DQG ZDWHU
DYDLODELOLW\ DV ZHOO DV WR DQ RYHUDOO KLJKHU YDULDELOLW\
LQ FOLPDWLF SDWWHUQV 7KH\ QRW RQO\ KDYH OHVV DFFHVV
WR YDULRXV W\SHV RI UHVRXUFHV EXW WKH\ DOVR KDYH
IHZHU RSSRUWXQLWLHV IRU GLYHUVLI\LQJ WKHLU OLYHOLKRRGV
WRLQFOXGHRWKHULQFRPHJHQHUDWLQJDFWLYLWLHVLQRUGHU
WRUHGXFHWKHLUGHSHQGHQFHRQDJULFXOWXUHDQGRWKHU
HFRV\VWHPVHUYLFHV
2QH RI WKH PDLQ UHDVRQV IRU WKH SRRU VLWXDWLRQ DQG
WKH KLJK YXOQHUDELOLW\ RI IDUPHUV DQG DJULFXOWXUH LQ
66$ LV WKH ORQJWHUP QHJOHFW RI WKLV VHFWRU E\ ERWK
QDWLRQDO JRYHUQPHQWV DQG WKH LQWHUQDWLRQDO GRQRU
FRPPXQLW\ VWDUWLQJ LQ WKH V 3XEOLF VSHQGLQJ
RQ IDUPLQJ DFFRXQWV IRU RQO\ SHU FHQW RI WRWDO
JRYHUQPHQW VSHQGLQJ LQ 66$ :RUOG %DQN DQGWKHDJULFXOWXUDOVHFWRULVWD[HGDWDUHODWLYHO\KLJK
75$'($1'(19,5210(175(9,(:
OHYHO,QDGGLWLRQWKHVKDUHRIWKHDJULFXOWXUDOVHFWRULQ
RIÀFLDOGHYHORSPHQWDVVLVWDQFH2'$GHFOLQHGIURP
SHU FHQW LQ WR SHU FHQW LQ :RUOG
%DQN7RGD\WKHLPSRUWDQFHRIDJULFXOWXUHIRU
HFRQRPLFJURZWKKDVJHQHUDOO\EHHQUHFRJQL]HGDQG
QDWLRQDOUHJLRQDODQGLQWHUQDWLRQDORUJDQL]DWLRQVDUH
PDNLQJ JUHDWHU HIIRUWV WR VXSSRUW LWV GHYHORSPHQW
&KDOOLQRU HW DO +D]HOO HW DO ,Q WKHLU
0DSXWR 'HFODUDWLRQ RI PHPEHU FRXQWULHV RI
WKH $IULFDQ 8QLRQ FDOOHG XSRQ $IULFDQ JRYHUQPHQWV
WRLQFUHDVHLQYHVWPHQWLQWKHDJULFXOWXUDOVHFWRUWRDW
OHDVWSHUFHQWRIWKHLUQDWLRQDOEXGJHWV+RZHYHU
PRVW $IULFDQ FRXQWULHV DUH VWLOO IDU IURP UHDFKLQJ
WKLVWDUJHW0RUHRYHUHYHQWKRXJKWKHVHFWRULVQRZ
UHFHLYLQJPRUHDWWHQWLRQRZLQJWRWKHORQJSHULRGRI
QHJOHFWWKHPDQ\FKDOOHQJHVDKHDGZLOOEHGLIÀFXOWWR
RYHUFRPH
)XUWKHUPRUHPRVWSXEOLFWUDQVIHUVDUHODUJHO\DLPHG
DW PLWLJDWLQJ FOLPDWH FKDQJH UDWKHU WKDQ VXSSRUWLQJ
DGDSWDWLRQ WR LWV LPSDFWV SHU FHQW RI GHGLFDWHG
PXOWLDQGELODWHUDOIXQGVZHUHDSSURYHGIRUPLWLJDWLRQ
SURMHFWVSHUFHQWLIDFWLYLWLHVIRUUHGXFLQJHPLVVLRQV
IURP GHIRUHVWDWLRQ DQG IRUHVW GHJUDGDWLRQ 5(''
DUH LQFOXGHG DQG RQO\ SHU FHQW IRU DGDSWDWLRQ
SURMHFWV %LODWHUDO 2'$ VKRZV D VOLJKWO\ GLIIHUHQW
SDWWHUQZLWKSHUFHQWDSSURYHGIRUPLWLJDWLRQDQG
SHU FHQW IRU DGDSWDWLRQ 81(3 0RUHRYHU
PRVWDFWLYLWLHVDQGIXQGVIRFXVRQUHGXFLQJHPLVVLRQV
DQGLQFUHDVLQJHIÀFLHQF\LQWKHHQHUJ\DQGWUDQVSRUW
VHFWRUVZKLOHDGDSWDWLRQDQGPLWLJDWLRQLQDJULFXOWXUH
DUHVWLOOXQGHUIXQGHG/RRNLQJDWELODWHUDO2'$DJDLQ
DJULFXOWXUH UHFHLYHG RQO\ SHU FHQW RI DOO IXQGV
GHGLFDWHG WR PLWLJDWLRQ FRPSDUHG ZLWK SHU FHQW
IRUDGDSWDWLRQDFWLYLWLHVLQ81(3
%2SWLRQVIRUPXOWLIXQFWLRQDODJULFXOWXUH
DQGUHVLOLHQWOLYHOLKRRGV
7KH YDULRXV FRQVWUDLQWV RQ $IULFDQ DJULFXOWXUH DV
RXWOLQHG DERYH FDOO IRU PXOWLIXQFWLRQDO DSSURDFKHV
WKDWLQFUHDVHWKHUHVLOLHQFHRIDJULFXOWXUDOV\VWHPVDQG
OLYHOLKRRGV WR WKH LPSDFWV RI H[WHUQDO GLVWXUEDQFHV
LQFOXGLQJ FOLPDWH FKDQJH 6XFK DJULFXOWXUDO
PDQDJHPHQWVKRXOGDLPWRFRQWULEXWHWRIRRGVHFXULW\
DQGWRVXSSRUWHFRQRPLFDQGVRFLDOGHYHORSPHQWIRU
DOO VWDNHKROGHUV ZKLOH DW WKH VDPH WLPH PLQLPL]LQJ
QHJDWLYHLPSDFWVRQHFRV\VWHPV7DNLQJLQWRDFFRXQW
WKHODUJHFRQWULEXWLRQRIWKHDJULFXOWXUDOVHFWRUWRJOREDO
JUHHQKRXVHJDV*+*HPLVVLRQVDFRPSUHKHQVLYH
DSSURDFK VKRXOG DOVR VWULYH WR DYRLG PDQDJHPHQW
SUDFWLFHV WKDW LQFUHDVH HPLVVLRQV ,QGHHG WKHUH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
DUH YDULRXV DSSURDFKHV WKDW PD\ HYHQ FRQWULEXWH WR
UHGXFLQJDJULFXOWXUDO*+*HPLVVLRQVLILPSOHPHQWHG
SURSHUO\
'XH WR WKH FXUUHQWO\ ORZ SURGXFWLYLW\ RI DJULFXOWXUH
LQ 66$ WKHUH LV D ODUJH SRWHQWLDO IRU LPSURYHPHQWV
WRZDUGV UHVLOLHQW DQG PXOWLIXQFWLRQDO SUDFWLFHV
0RVW RI WKHVH VXVWDLQDEOH PDQDJHPHQW SUDFWLFHV
ZHUH DOUHDG\ ZHOO NQRZQ EHIRUH WKH LPSDFWV RI
FOLPDWH FKDQJH LQFUHDVHG WKH XUJHQF\ RI WKHLU
LPSOHPHQWDWLRQ ,Q WKHLU PRVW FRPSUHKHQVLYH IRUP
LQWHJUDWHGDSSURDFKHVDOVRWDNHLQWRDFFRXQWLPSDFWV
RI DJULFXOWXUDO DQG ODQGXVH PDQDJHPHQW RQ ORFDO
OLYHOLKRRGVVRFLDOHTXLW\DQGLQFOXVLRQDQGDUHSDUW
RI ZLGHU LQWHJUDWHG QDWXUDO UHVRXUFHV PDQDJHPHQW
,$$67'E,QWHJUDWHGV\VWHPVGRQRWUHTXLUH
D VLQJOH VWULFWO\ GHÀQHG WHFKQRORJ\ UDWKHU WKH\
UHTXLUH D VHW RI YDU\LQJ SUDFWLFHV DGDSWHG WR ORFDO
ELRSK\VLFDODQGVRFLRHFRQRPLFFRQGLWLRQV$OOWKHVH
DSSURDFKHVKDYHRQHIHDWXUHLQFRPPRQWKH\VHHN
WRGHSHQGOHVVRQH[WHUQDOLQSXWV,QVWHDGWKH\UDWKHU
PDQDJH WKH FRPSOH[ G\QDPLFV DQG LQWHUDFWLRQV
EHWZHHQ GLIIHUHQW FRPSRQHQWV RI DJURHFRV\VWHPV
DQG DGMRLQLQJ HFRV\VWHPV E\ PLPLFNLQJ QDWXUH
DQG E\ UHO\LQJ RQ WHFKQRORJLHV DQG LQSXWV WKDW DUH
DYDLODEOH ZLWKLQ WKH V\VWHP 'H 6FKXWWHU %XFNDQG6FKHUU,QWHJUDWHGV\VWHPVVXSSRUW
DGDSWDWLRQ WR FOLPDWH FKDQJH E\ VWUHQJWKHQLQJ WKH
UHVLOLHQFHRIWKHDJURHFRV\VWHPWRDQ\GLVWXUEDQFHV
E\ LQFUHDVLQJ WKH GHJUHH RI GLYHUVLÀFDWLRQ DQG
LPSURYLQJWKHSURYLVLRQRIHQYLURQPHQWDOVHUYLFHV$W
WKH VDPH WLPH WKHLU ORZ XVH RI IHUWLOL]HUV DQG RWKHU
H[WHUQDO LQSXWV FDQ UHGXFH DGYHUVH LPSDFWV RQ
HFRV\VWHPFRPSRQHQWVDQGUHVXOWLQORZHUHPLVVLRQV
IURPWKHSURGXFWLRQDQGWUDQVSRUWSURFHVV,QVWHDGRI
UHO\LQJRQODUJHTXDQWLWLHVRIH[WHUQDOPDWHULDOLQSXWV
IDUPHUV· NQRZOHGJH LV WKH PDMRU UHVRXUFH DQG NH\
WR WKH DSSURSULDWH DSSOLFDWLRQ RI LQSXWV DQG WR WKH
VXFFHVVIXO LPSOHPHQWDWLRQ RI QHZ PDQDJHPHQW
SUDFWLFHV
,W LV VWLOO XQFHUWDLQ ZKHWKHU PXOWLIXQFWLRQDO DQG LQWH
JUDWHG PDQDJHPHQW SUDFWLFHV FDQ HQVXUH IRRG
VHFXULW\ DQG ZKHWKHU WKH\ DUH FRPSHWLWLYH ZLWK
FRQYHQWLRQDO KLJKLQSXW DJULFXOWXUDO V\VWHPV ZLWK
UHJDUG WR SURGXFWLYLW\ :KLOH WKHVH DVSHFWV DUH VWLOO
WKH VXEMHFW RI RQJRLQJ GLVFXVVLRQV %DGJOH\ HW DO
&RQQRU *LDQHVVL 3LPHQWHOHWDO
WKHUH LV VRPH HYLGHQFH WKDW FRPSDUHG ZLWK
KLJK\LHOGLQJV\VWHPVLQGHYHORSHGFRXQWULHVRUJDQLF
DJULFXOWXUHDQGRWKHUW\SHVRILQWHJUDWHGDSSURDFKHV
UHVXOW LQ ORZHU \LHOGV %DGJOH\ HW DO &RQQRU
+RZHYHU LQ PDQ\ UHJLRQV LQ 66$ ORZLQSXW
V\VWHPVSUHYDLOVRPHRIZKLFKFDQEHUHJDUGHGDV
RUJDQLFV\VWHPVDVWKH\XVHIHZLIDQ\H[WHUQDOLQSXWV
WKDW DUH HLWKHU QRW DFFHVVLEOH RU DUH WRR H[SHQVLYH
,Q VXFK V\VWHPV D FRPSOHWH VKLIW WR LQWHJUDWHG DQG
DGHTXDWHO\ PDQDJHG V\VWHPV PD\ LQFUHDVH \LHOGV
%DGJOH\ HW DO 3UHWW\ 81(381&7$'
)RU D PRUH GHWDLOHG GLVFXVVLRQ RI WKH
SURGXFWLYLW\DQGSURÀWDELOLW\RIRUJDQLFDJULFXOWXUHVHH
WKHFRPPHQWDU\RI1HPHVLQWKLVFKDSWHU
7KH$IULFDQFRQWLQHQWVWLOOIDFHVWKHKLJKHVWSRSXODWLRQ
JURZWK UDWHV LQ WKH ZRUOG )$2 %LQVZDQJHU
0NKL]H 7KLV DORQJ ZLWK FXUUHQW GHÀFLHQFLHV
LQ IRRG VHFXULW\ DQG SRVVLEOH IXWXUH FKDQJHV LQ
GLHWV UHLQIRUFHV WKH XUJHQF\ WR LQFUHDVH DJULFXOWXUDO
SURGXFWLRQ :KHWKHU WKLV REMHFWLYH VKRXOG EH PDLQO\
SXUVXHGE\HLWKHULQWHQVLI\LQJSURGXFWLRQRQH[LVWLQJ
DJULFXOWXUDO ODQG RU E\ H[SDQGLQJ DJULFXOWXUDO ODQG
WR SUHYLRXVO\ XQXVHG DUHDV LV FXUUHQWO\ DQ LVVXH RI
GHEDWH(YHQLQDODQGULFKFRQWLQHQWVXFKDV$IULFD
WKHDPRXQWRIODQGVXLWDEOHIRUDJULFXOWXUDOSXUSRVHV
LVGHFOLQLQJUDSLGO\ÀJXUHDQGWKHFRQYHUVLRQRI
RWKHU ODQG XVHV SDUWLFXODUO\ IRUHVWV IRU DJULFXOWXUDO
SXUSRVHVSURGXFHVDGGLWLRQDO&2HPLVVLRQVÀJXUH
0RUHRYHU ODQG FRQYHUVLRQ PD\ MHRSDUGL]H
WKH OLYHOLKRRGV RI SHRSOH ZKR JHQHUDWH HFRV\VWHP
VHUYLFHV IURP WKH IRUPHU ODQG XVHV IRU D PRUH
HODERUDWHGLVFXVVLRQVHHWKHFRPPHQWVRI3LPHQWHO
DQG*5$,1LQWKLVFKDSWHU
,QWHQVLÀFDWLRQ RQ WKH RWKHU KDQG PD\ HLWKHU EH
LPSOHPHQWHG WKURXJK LQWHJUDWHG DJURHFRORJLFDO
DSSURDFKHV DV RXWOLQHG DERYH RU WKURXJK ODUJHU
VFDOH FRQYHQWLRQDO DJULFXOWXUH ZKLFK PD\ LQFUHDVH
SUHVVXUH RQ QDWXUDO UHVRXUFHV DQG ZKLFK DOVR UXQV
WKHULVNRIOHDYLQJVPDOOKROGHUVEHKLQG7KHSURFHVV
RILQWHQVLI\LQJSURGXFWLRQRQH[LVWLQJDJULFXOWXUDOODQG
QHHGV LPSURYHPHQWV LQ DJULFXOWXUDO PDQDJHPHQW
DQGRUDGGLWLRQDOLQSXWVSDUWLFXODUO\HLWKHUPLQHUDORU
RUJDQLF IHUWLOL]HUV +RZHYHU LQWHQVLI\LQJ SURGXFWLRQ
UHTXLUHVDFFHVVWRWKHVHLQSXWVZKLFKFXUUHQWO\UHPDLQ
XQDIIRUGDEOHWRORFDOIDUPHUVDQGWRNQRZOHGJHDQG
LQIRUPDWLRQ LQ RUGHU WR LPSOHPHQW QHZ PDQDJHPHQW
SUDFWLFHVLQDQDSSURSULDWHZD\2WKHUZLVHDGGLWLRQDO
LQSXWVPD\UHVXOWLQKLJKHUHPLVVLRQVRIQLWURXVR[LGH
DQGFDUERQGLR[LGH
+RZHYHU HYHQ LI JRYHUQPHQWV DQG WKH LQWHUQDWLRQDO
FRPPXQLW\ ZHUH WR SD\ JUHDWHU DWWHQWLRQ WR WKH
DJULFXOWXUDO VHFWRU LW LV OLNHO\ WKDW LQ VRPH DUHDV
DJULFXOWXUH ZLOO EHFRPH H[WUHPHO\ GLIÀFXOW RU ZLOO
QR ORQJHU EH YLDEOH GXH WR FOLPDWH FKDQJH DQG
75$'($1'(19,5210(175(9,(:
)LJXUH/DQGIRUDJULFXOWXUDOXVH²KDSHUFDSLWD
4.0 Sub-Saharan Africa
3.5 -
Hectares per capita
3.0 -
North Africa
2.5 -
2.0 -
North America
1.5 World
1.0 -
2010 -
2000 -
1990 -
1960 -
0.0 -
1980 -
Asia
1970 -
0.5 -
6RXUFH%DVHGRQ)$267$7
)LJXUH&2HPLVVLRQVIURPODQGXVHFKDQJHLQVHOHFWHGGHYHORSLQJUHJLRQV²
1,000 -
600 -
Latin America
400 -
S and SE Asia
200 -
Tropical Africa
0-200 -
1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 -
CO2 emmissions (TgCy-1)
800 -
6RXUFH*OREDO&DUERQ3URMHFW
HQYLURQPHQWDOGHJUDGDWLRQHJ)LVFKHUHWDO
,Q WKRVH LQVWDQFHV DGDSWDWLRQ VWUDWHJLHV VKRXOG EH
DGRSWHG WKDW DLP WR GLYHUVLI\ WKH OLYHOLKRRGV RI UXUDO
KRXVHKROGV 'LYHUVLÀFDWLRQ LQ IDUPLQJ UHODWHV WR ULVN
VSUHDGLQJWKURXJKYDULRXVDJULFXOWXUDOSUDFWLFHVVXFK
DV DJURIRUHVWU\ RU PL[HG FURSOLYHVWRFN V\VWHPV
WKDW UHO\ RQ D ODUJHU QXPEHU RI GLIIHUHQW FURSV DQG
RU OLYHVWRFN SURGXFWV WR UHGXFH WKH WKUHDW RI FURS
IDLOXUH LQ FDVH RI XQIDYRXUDEOH FOLPDWLF FRQGLWLRQV
,QFRPHGLYHUVLÀFDWLRQLQWRQRQIDUPDFWLYLWLHVUHGXFHV
WKH GLUHFW GHSHQGHQFH RQ HFRV\VWHP VHUYLFHV DQG
FDQ RIWHQ JHQHUDWH KLJKHU LQFRPHV WKDQ DJULFXOWXUDO
DFWLYLWLHV 7KLV VXSSOHPHQWDU\ LQFRPH FDQ DJDLQ
EH XVHG IRU DGGLWLRQDO LQYHVWPHQWV LQ DJULFXOWXUDO
DFWLYLWLHV ZKLFK LQ WXUQ FRXOG LQFUHDVH LQFRPH
JHQHUDWLRQ IURP IDUPLQJ (OOLV DQG )UHHPDQ 2WKHU DVSHFWV VXFK DV LPSURYHPHQW RI HGXFDWLRQ
LQUXUDODUHDV-D\QH0DWKHUDQG0JKHQ\LRU
EHWWHULQIUDVWUXFWXUHPD\DOVRFRQWULEXWHWRLQFUHDVLQJ
WKHUHVLOLHQFHRIUXUDOOLYHOLKRRGVZLWKRXWEHLQJGLUHFWO\
UHODWHGWRDJULFXOWXUH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
&,QFUHDVLQJWKHUHVLOLHQFHRIDJULFXOWXUDO
V\VWHPV
'RPHVWLF DQG H[WHUQDO LQWHUYHQWLRQV WR GHYHORS DQG
VWUHQJWKHQ DJULFXOWXUH ZLOO KDYH WR RYHUFRPH WKH
IXQGDPHQWDOFRQVWUDLQWVRQDJULFXOWXUDOGHYHORSPHQW
LQ 66$ VXFK DV ODFN RI DFFHVV WR ODQG DJULFXOWXUDO
LQSXWV DV ZHOO DV NQRZOHGJH DQG LQIRUPDWLRQ QRWHG
DERYH ,I WKHVH FRQVWUDLQWV DUH QRW DGGUHVVHG
DGDSWDWLRQ WR FOLPDWH FKDQJH ZLOO RQO\ EH GHDOLQJ
ZLWK WKH V\PSWRPV RI ORZ DGDSWLYH FDSDFLW\ KLJK
YXOQHUDELOLW\ DQG ORZ UHVLOLHQFH 7KH FRQVWUDLQWV DUH
MHRSDUGL]LQJDJULFXOWXUDOSURGXFWLRQDWDWLPHZKHQWKH
LPSDFWVRIFOLPDWHFKDQJHFDQDOUHDG\EHREVHUYHG
7KXVWKHUHLVQRWLPHOHIWWRDOORZDVHTXHQFHRIÀUVW
DGGUHVVLQJWKHIXQGDPHQWDOLVVXHVEHIRUHUHVSRQGLQJ
WRFOLPDWHFKDQJH5DWKHUDOOFXUUHQWFKDOOHQJHVKDYH
WR EH WDFNOHG WKURXJK DQ LQWHJUDWHG HIIRUW WRJHWKHU
ZLWKDSSURSULDWHPHDVXUHVWRVXSSRUWDGDSWDWLRQDQG
LQFUHDVHWKHRYHUDOOUHVLOLHQFHRIDJULFXOWXUDOV\VWHPV
DQGUXUDOOLYHOLKRRGV
6SHFLÀF RSWLRQV IRU GRPHVWLF DFWLRQ DQG H[WHUQDO
VXSSRUWIRUWKRVHDFWLRQVDUHGLVFXVVHGEHORZ
3URYLGLQJDFFHVVWRODQG
3URSHU ODQG UHIRUP ODQG UHJLVWUDWLRQ DQG VHFXUH
ODQGWHQXUH ULJKWV IRU ZRPHQ DQG PHQ QHHG WR EH
JXDUDQWHHG WR HQDEOH LQYHVWPHQW LQ VXVWDLQDEOH
IDUPLQJSUDFWLFHVWKHEHQHÀWVRIZKLFKRIWHQDFFUXH
RQO\ LQ WKH ORQJ WHUP 5HFHQWO\ LQFUHDVHG IRUHLJQ
GLUHFWLQYHVWPHQWLQODQGKDVUHFHLYHGPXFKDWWHQWLRQ
LQ$IULFDDVLWFRQWULEXWHV²DWOHDVWLQVRPHFRXQWULHV
² WR FRPSURPLVLQJ WUDGLWLRQDO ODQG XVH ULJKWV IRU D
PRUHHODERUDWHDQDO\VLVVHHWKHFRPPHQWRI0LWWDOLQ
FKDSWHU)RUWKHVHUHDVRQVLQWHUQDWLRQDOJXLGHOLQHV
IRU PDQDJLQJ WKH LPSDFWV RQ ORFDO ODQG WHQXUH RI
ODUJH IRUHLJQ LQYHVWPHQWV LQ ODQG DUH QHHGHG 7KH
UHFHQW VXFFHVVIXO FRQFOXVLRQ RI LQWHUJRYHUQPHQWDO
QHJRWLDWLRQV RQ 9ROXQWDU\ *XLGHOLQHV RQ WKH
5HVSRQVLEOH*RYHUQDQFHRI7HQXUHRI/DQG)LVKHULHV
DQG )RUHVWV )$2 OHG E\ WKH &RPPLWWHH RQ
:RUOG)RRG6HFXULW\&)6DQGWKHUHSRUWRIWKH+LJK
/HYHO3DQHORI([SHUWVRIWKH&)6)$2FPDUNV
D VWDUWLQJ SRLQW ,W LV YLWDO WKDW QDWLRQDO JRYHUQPHQWV
IROORZ WKHVH JXLGHOLQHV UHYLHZ WKHLU ODQG ODZV DQG
LQFRUSRUDWH FKHFNV DQG EDODQFHV WR HQVXUH WKDW WKH
LQYHVWPHQWVLPSURYHUXUDOGHYHORSPHQWDUHSURSRRU
DQGGRQRWMHRSDUGL]HDGDSWLYHFDSDFLWLHV
,QYHVWPHQW LPSDFW DVVHVVPHQWV DUH DQRWKHU KHOSIXO
LQVWUXPHQW 7KH\ VKRXOG EH FDUULHG RXW SULRU WR D
ODQG LQYHVWPHQW DQG QHHG WR DQDO\VH L ZKHWKHU
DQG KRZ PXFK DQ LQYHVWPHQW LQ ODQG KLQGHUV ORFDO
SHRSOH·VDFFHVVWRUHVRXUFHVWKDWWKH\DOUHDG\XVHRU
DUHOLNHO\WRXVHLQWKHIXWXUHDVDQDGDSWDWLRQRSWLRQ
DQG LL KRZ PXFK WKH LQYHVWPHQW LV FRQWULEXWLQJ WR
HPSOR\PHQWDQGKXPDQFDSDFLW\EXLOGLQJ,QYHVWPHQW
LPSDFW DVVHVVPHQWV VKRXOG EH FDUULHG RXW E\ DQ
DJULFXOWXUDO VHFWRU FRRUGLQDWLRQ XQLW WKDW LQFOXGHV
WKH ÀQDQFH DQG MXVWLFH PLQLVWULHV DQG WKH DFWLYLWLHV
RI WKHVH XQLWV VKRXOG EH LQIRUPHG E\ LQIRUPDWLRQ
JDWKHUHG E\ GRPHVWLF DQG LQWHUQDWLRQDO QRQ
JRYHUQPHQWDORUJDQL]DWLRQV1*2VZKHQPRQLWRULQJ
VXFKLQYHVWPHQWV:KLOHIRUHLJQLQYHVWPHQWLVQRWWKH
RQO\IDFWRUKLQGHULQJDFFHVVWRODQGVXFKLQYHVWPHQW
VKRXOG QHYHUWKHOHVV EH DVVHVVHG XUJHQWO\ DV LW
PLJKWIXUWKHUKDPSHUDFFHVVWRODQGIRUVPDOOKROGHU
IDUPHUVDQGRWKHUYXOQHUDEOHDFWRUV7KLVLVEHFDXVH
WKHFRPSHWLWLRQIRUODQGLVEHWZHHQDFWRUVRIXQHTXDO
SRZHU&RXQWULHVVXFKDV.HQ\DDUHDOUHDG\IRFXVLQJ
RQ KRZ WR LPSURYH DFFHVV WR ODQG WKURXJK D QHZ
FRQVWLWXWLRQWKDWHQVXUHVHTXDODFFHVVWRODQGE\PHQ
DQGZRPHQ,QDGGLWLRQSRSXODWLRQSUHVVXUHDQGWKH
HQVXLQJ ODQG IUDJPHQWDWLRQ FRXOG EH DGGUHVVHG E\
VWUDWHJLFDOO\ GHYHORSLQJ WKH VNLOOV RI SRSXODWLRQV WR
DOORZWKHPWRPRYHRXWRIDJULFXOWXUH
(QVXULQJVNLOOHGDJULFXOWXUDOPDQSRZHUIRU
LQQRYDWLYHDJULFXOWXUDOSURGXFWLRQV\VWHPV
&XUUHQWO\ORZSURGXFWLYLW\OHYHOVRIDJULFXOWXUHLQ66$
DOUHDG\ LQGLFDWH WKDW VNLOO GHÀFLWV DQG FKDQJHV LQ
QDWXUDO SDUDPHWHUV ZLOO UHQGHU DJHORQJ LQGLJHQRXV
NQRZOHGJH EXLOW IURP RQH JHQHUDWLRQ WR DQRWKHU
LQDGHTXDWH)DUPHUVQHHGNQRZOHGJHDQGLQIRUPDWLRQ
RQ QHZ FOLPDWLF SDUDPHWHUV LQ RUGHU WR LPSOHPHQW
LQQRYDWLYH SURGXFWLRQ V\VWHPV WKDW DUH PRUH
UHVLOLHQW DQG DW WKH VDPH WLPH PRUH SURGXFWLYH 7KH
GLVVHPLQDWLRQ RI H[LVWLQJ LQGLJHQRXV SUDFWLFHV IURP
RWKHUFOLPDWLFUHJLRQVFRXOGDOVRIDFLOLWDWHDGDSWDWLRQ
WR QHZ FOLPDWLF SDUDPHWHUV $GDSWDWLRQ ZLOO QHHG WR
EH RULHQWHG WRZDUGV PDNLQJ PRUH HIIHFWLYH XVH RI
WKH QDWXUDO HQGRZPHQWV RI IDUPV 7KLV LQFOXGHV IRU
H[DPSOH HQKDQFLQJ VRLO IHUWLOLW\ E\ EXLOGLQJ XS VRLO
RUJDQLF PDWWHU WKURXJK UHF\FOLQJ RI ELRPDVV DQG
FRPSRVWLQJ ZKLFK ZLOO VLJQLÀFDQWO\ LPSURYH VRLO
UHVLOLHQFH DQG LWV ZDWHU UHWHQWLRQ FDSDFLW\ ,W DOVR
LQFOXGHV WKH XVH RI ELRPDVV DQG RUJDQLF ZDVWH IRU
RIIJULGHQHUJ\JHQHUDWLRQ
7KHQHHGIRULQQRYDWLRQRIIHUVRSSRUWXQLWLHVIRUSXEOLF
SULYDWHSDUWQHUVKLSVLQDGDSWDWLRQWRFOLPDWHFKDQJH
DVWKHIROORZLQJWZRH[DPSOHVVKRZ)LUVWLQQRYDWLYH
LQIRUPDWLRQ DQG FRPPXQLFDWLRQ WHFKQRORJLHV ,&7V
VXFK DV VKRUW PHVVDJH VHUYLFHV RQ PRELOH SKRQHV
606DUHFXUUHQWO\EHLQJXVHGLQ66$WRGLVVHPLQDWH
PDUNHW LQIRUPDWLRQ DQG WUDQVIHU PRQH\ $NHU DQG
0ELWL -DFN DQG 6XUL &RPPXQLFDWLRQ
HQWHUSULVHV LQ FROODERUDWLRQ ZLWK XQLYHUVLWLHV
H[WHQVLRQ VHUYLFHV 1*2V DQG RWKHU SDUWQHUV FRXOG
GHYHORS LQIRUPDWLRQ VHUYLFHV WR ZKLFK IDUPHUV
FRXOG VXEVFULEH 0RVW KRXVHKROGV LQ UXUDO DUHDV LQ
GHYHORSLQJ FRXQWULHV KDYH PRELOH WHOHSKRQHV DQG
E\ LPSURYLQJ FRYHUDJH RI WKH QHWZRUN LQIRUPDWLRQ
FRXOGEHGLVVHPLQDWHGWRORFDOSURGXFHUVDWOLWWOHFRVW
RUH[LVWLQJLQIRUPDWLRQVHUYLFHVFRXOGEHH[WHQGHGWR
LQFOXGHLQQRYDWLRQUHODWHGLVVXHV
6HFRQG VXFFHVVIXO LQQRYDWLRQ ZLOO LQFUHDVLQJO\
GHSHQG RQ IDFLOLWDWLQJ RQIDUP OHDUQLQJ DPRQJ
IDUPHUV7KLVFDQEHVXSSRUWHGE\IDUPHUÀHOGVFKRROV
DQG QHZ IRUPV RI KDQGVRQ FROODERUDWLRQ EHWZHHQ
IDUPHUV H[WHQVLRQ ZRUNHUV DQG UHVHDUFKHUV VHH
DOVR WKH FRPPHQWV RI .OHUN[ DV ZHOO DV 0EXNX DQG
.RVJH\ LQ &KDSWHU RI WKLV 5HYLHZ ,Q WKH FDVH RI
FDVK FURSV SULYDWH FRUSRUDWLRQV DUH DOVR SURPRWLQJ
WKH GHYHORSPHQW DQG GLVVHPLQDWLRQ RI VXVWDLQDEOH
DJULFXOWXUDOSUDFWLFHVLQRUGHUWRUHVSRQGWRFRQVXPHU
GHPDQG DQG WR VWDELOL]H WKH VXSSO\ RI DJULFXOWXUDO
LQSXWV 2QH H[DPSOH LV 8QLOHYHU ZKLFK DLPV DW
VXVWDLQDEOH VRXUFLQJ IRU DOO SURGXFWV E\ DQG
FKRVH WHD IDUPLQJ LQ .HQ\D DV D SLRQHHULQJ DFWLYLW\
6PDOOKROGHUV DQG WKH .HQ\DQ H[WHQVLRQ VHUYLFH
DUH PDMRU SDUWLFLSDQWV LQ WKLV SURJUDPPH DQG ORFDO
SURGXFWLRQDQGGLVVHPLQDWLRQRIQHZNQRZOHGJHLVD
NH\PHFKDQLVP
([WHQVLRQVHUYLFHVDUHFUXFLDOIRULPSURYLQJDJULFXOWXU
DOSURGXFWLYLW\DQGIRULQFUHDVLQJWKHUHVLOLHQFHRIWKLV
VHFWRUWRFOLPDWHFKDQJH,QFRXQWULHVVXFKDV.HQ\D
DQG 0DODZL HQWHUSULVLQJ IDUPHUV DUH QRZ DFTXLULQJ
WKHLQIRUPDWLRQDQGNQRZOHGJHWKH\QHHGWRPDLQWDLQ
DQG VXVWDLQ WKHLU SURGXFWLRQ WKHPVHOYHV ,IHMLND
6SHUDQ]D+RZHYHULQDGGLWLRQORFDOSURGXFHUV
FRXOGEHWUDLQHGDVH[WHQVLRQRIÀFHUVUHFRJQL]HGE\
WKHJRYHUQPHQWLQRUGHUWRRIIHUH[WHQVLRQVHUYLFHVWR
RWKHUIDUPHUVZKRODFNWKLVFDSDFLW\7KLVFRXOGKHOS
WRDGGUHVVPDQ\VKRUWFRPLQJVRIFXUUHQWJRYHUQPHQW
H[WHQVLRQ VHUYLFHV VXFK DV WKH OLPLWHG IXQGLQJ DQG
WKHIUHTXHQWWUDQVIHUVRIH[WHQVLRQRIÀFHUVIURPRQH
ORFDWLRQ WR DQRWKHU ZKLFK SUHYHQW WKH GHYHORSPHQW
RI DQ HFRORJLFDO DQG VRFLRHFRQRPLF PHPRU\ WKDW
PLJKW XQGHUSLQ WKH FRQVROLGDWLRQ RI GHYHORSPHQW
LQWHUYHQWLRQV )RUPDOO\ WUDLQHG H[WHQVLRQ RIÀFHUV
FRXOGWKHQIRFXVRQPRUHVSHFLDOL]HGVHUYLFHVVXFK
75$'($1'(19,5210(175(9,(:
DV FURSVSHFLÀF VHUYLFHV IRU PRUH LQIRUPDWLRQ VHH
WKH FRPPHQW RI .OHUN[ LQ FKDSWHU RI WKLV 5HYLHZ
)LQDOO\ VWXGLHV RQ WKH DGRSWLRQ RI FRQVHUYDWLRQ
DJULFXOWXUDOSUDFWLFHVVKRZWKDWSDUWQHUVKLSVEHWZHHQ
UHVHDUFKJRYHUQPHQWH[WHQVLRQVHUYLFHVDQGSULYDWH
FRPSDQLHV DUH FUXFLDO IRU LQFUHDVLQJ IDUPHUV·
SURGXFWLYLW\
,PSURYLQJDFFHVVWRLQSXWV
9DULRXV FURS UHVHDUFK LQVWLWXWLRQV KDYH DOUHDG\
GHYHORSHG LPSURYHG FURS YDULHWLHV WKDW ZRXOG
UHVSRQG WR PRVW RI WKH LPSDFWV RI FOLPDWH FKDQJH
LQ $IULFD HJ WROHUDQFH WR GURXJKW DQG KLJKHU
WHPSHUDWXUHV HDUO\ PDWXULW\ KLJKHU \LHOGV KLJKHU
SURWHLQFRQWHQWDQGSHVWUHVLVWDQFHLQWKHVKRUWWHUP
,&5,6$7 +RZHYHU LPSURYHG FURS YDULHWLHV
DUH RI QR XVH LI WKH IDUPHUV FDQQRW DFFHVV WKHP
GXH WR ODFN RI LQIRUPDWLRQ DQG UHTXLUHG DGGLWLRQDO
LQSXWV RU EHFDXVH WKH\ FDQQRW DIIRUG WKHP $FFHVV
WR LQIRUPDWLRQ DERXW WKHVH QHZ YDULHWLHV FDQ EH
LPSURYHG E\ XVLQJ FRPPXQLFDWLRQ DQG H[WHQVLRQ
VHUYLFHV DV GLVFXVVHG DERYH )XUWKHU RSSRUWXQLWLHV
OLH LQ GHYHORSLQJ LQGLJHQRXV VHHG HQWHUSULVHV DQG
SDUWQHUVKLSV ZLWK QDWLRQDO DJHQFLHV IRU UDSLG IDUPHU
SDUWLFLSDWRU\YDULHWDOWHVWLQJDQGUHOHDVHDQGWKURXJK
WKH SURYLVLRQ RI LQIRUPDWLRQ WR IDUPHUV H[WHQVLRQ
RIÀFHUVDQG1*2JURXSVDERXWQHZYDULHWLHV7KHVH
OHDUQLQJ H[SHULHQFHV DUH DOVR LPSRUWDQW IRU WHVWLQJ
QHZ YDULHWLHV LQ WKH ÀHOG DQG IRU DQDO\VLQJ SUDFWLFDO
UHDVRQV ZK\ WKHUH PLJKW EH UHGXFHG DFFHSWDQFH
,PSURYLQJ WKH SROLF\ HQYLURQPHQW IRU GLVVHPLQDWLQJ
VHHGV DFURVV ERUGHUV LV DOVR D VWUDWHJ\ IROORZHG E\
UHVHDUFK LQVWLWXWLRQV WR HQVXUH WKDW LPSURYHG VHHGV
UHDFK WKH IDUPHUV +DUPRQL]DWLRQ RI UHJLRQDO VHHG
UHJXODWLRQVLQ$IULFDLVH[SHFWHGWRLPSURYHWKHUDWHV
RIUHOHDVHRIQHZYDULHWLHVORZHUWKHFRVWVLQGHDOLQJ
ZLWKUHJXODWRU\DXWKRULWLHVLQFUHDVHWUDGHLQLPSURYHG
VHHG YDULHWLHV DQG XOWLPDWHO\ WKHLU DGRSWLRQ E\
IDUPHUV0LQRWHWDO
)DUPHUVDOVRKDYHOLPLWHGNQRZOHGJHRIDQGDFFHVVWR
WKHVHQHZFURSWHFKQRORJLHV.LMLPD:$5'$
,&5,6$7&,00<7,,7$7RDGGUHVV
WKHVH VKRUWFRPLQJV JRYHUQPHQWV FDQ ÀQDQFLDOO\
VXSSRUW ORFDO VHHG EUHHGLQJ FRPSDQLHV DQG
GLVWULEXWHIUHHWULDOVWRIDUPHUVRQDSURPRWLRQDOEDVLV
DIWHU ZKLFK WKH\ ZRXOG KDYH WR SD\ IRU VXEVHTXHQW
VXSSOLHV0LFURFUHGLWIRULQQRYDWLYHIDUPLQJZLOODOVREH
QHFHVVDU\WRKHOSRYHUFRPHWKHKLJKXSIURQWFRVWVRI
QHZPDQDJHPHQWSUDFWLFHVUHTXLUHGIRUFRQVHUYDWLRQ
IDUPLQJDQGRWKHULQWHJUDWHGDSSURDFKHV)RUDQLQLWLDO
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
WUDQVLWLRQSHULRGJRYHUQPHQWVXEVLGLHVPD\DOVREH
ZDUUDQWHGDVLQ0DODZLZKHUHD)DUP,QSXW6XEVLG\
3URJUDP ),63 KDV EHHQ VKRZQ WR LQFUHDVH PDL]H
DQGOHJXPHSURGXFWLRQ&KLEZDQDHWDODQG
KDV EHHQ GHVFULEHG DV D VPDUW VXEVLG\ +RZHYHU
&KLEZDQD HW DO DOVR KLJKOLJKW WKH GLIÀFXOW\
RIVXFKLQWHUYHQWLRQVUHDFKLQJWKHSRRUDV´WKHPRVW
YXOQHUDEOHSHRSOHLQWKH0DODZLDQFRPPXQLWLHVZHUH
QRWWKHPDLQUHFLSLHQWVRI),63FRXSRQVµHYHQZKHQ
LQWHQGHG DV WKH WDUJHW JURXSV 7KH LQSXW VXEVLGLHV
LQLWLDOO\ OHG WR D JUHDWHU VSHFLDOL]DWLRQ LQ PDL]H DQG
WRUHGXFHGFURSGLYHUVLÀFDWLRQDQGDOORFDWLRQRIODQG
WR OHJXPH FURSV GXH WR D ODFN RI OHJXPH VHHGV LQ
WKHPDUNHW7KH),63ODWHUOHGWRLQFUHDVHGPDL]HDQG
OHJXPHFURSSURGXFWLRQZKHQIDUPHUVZHUHSURYLGHG
ZLWK ERWK LPSURYHG PDL]H DQG OHJXPH VHHGV
&KLEZDQDHWDOWKXVDUJXHWKDWZKLOHWKH),63
FRQWULEXWHG WR 0DODZLDQ IRRG VHFXULW\ LW QHHGV WR
EH DGDSWHG WR PDNH LW OHVV SURQH WR WKH XQLQWHQGHG
HIIHFWV RI FRQFHQWUDWLQJ SURGXFWLRQ RQ RQH FURS
UHODWLYHWRWKHRWKHUVLQSDUWLFXODUZLWKUHJDUGWRKLJK
LQSXWSULFHV
,PSURYLQJNQRZOHGJHDERXWORFDOFOLPDWHFKDQJHV
.QRZLQJ KRZ WKH ORFDO FOLPDWH LV FKDQJLQJ DQG
LV H[SHFWHG WR FKDQJH LQ WKH IXWXUH DV ZHOO DV WKH
DVVRFLDWHG ULVNV LV FUXFLDO IRU SULRULWL]LQJ DGDSWDWLRQ
VWUDWHJLHV DQG D VKLIW WRZDUGV JUHDWHU UHVLOLHQFH)RU
H[DPSOH 6DIDULFRP IURP .HQ\D ZKR UHYROXWLRQL]HG
PRQH\ WUDQVIHU LQ .HQ\D SURPRWHG DFFHVV WR
LQIRUPDWLRQ LQ UXUDO .HQ\D WKURXJK 6DIDULFRP
)RXQGDWLRQ /LIHOLQH UDGLR VHWV ZKLFK VHUYH DV D
SODWIRUP IRU UDGLR VHUYLFH EURDGFDVWV E\ WKH .HQ\D
0HWHRURORJLFDO 'HSDUWPHQW 6DIDULFRP )RXQGDWLRQ
'HYHORSPHQW FRRSHUDWLRQ VKRXOG EH DZDUH
RI VXFK LQQRYDWLYH SURMHFWV DQG SURJUDPPHV DQG
DSSURDFKSULYDWHFRPSDQLHVWRH[SORUHSDUWQHUVKLSV
IRU WKHLU DGDSWDWLRQ DQG IXUWKHU GHYHORSPHQW
$QRWKHU VWHS LV WR V\VWHPDWLFDOO\ LQWHJUDWH FOLPDWH
UHOHYDQWLQIRUPDWLRQLQWRH[LVWLQJQDWLRQDODJULFXOWXUDO
SURJUDPPHV LQ RUGHU WR UDLVH WKH DZDUHQHVV RI
GHFLVLRQPDNHUV DERXW WKH ULVNV WKHLU GHYHORSPHQW
LQWHUYHQWLRQV PLJKW HQFRXQWHU 7KLV ZLOO DOUHDG\ KHOS
WR LQWHJUDWH FOLPDWH FKDQJH DGDSWDWLRQ LQWR SROLFLHV
DQG SURJUDPPHV EHIRUH WKHLU LPSOHPHQWDWLRQ DW WKH
ORFDOOHYHO
$GRSWLQJDVHFWRUDODSSURDFKWRDGDSWDWLRQ
$JULFXOWXUHLVVWLOOWKHPDMRUGULYHURIUXUDOHFRQRPLHVLQ
GHYHORSLQJFRXQWULHVLQFUHDVLQJUHVLOLHQFHWRFOLPDWH
FKDQJH UHTXLUHV D VHFWRUDO DSSURDFK UDWKHU WKDQ D
QDUURZ IRFXV RQ WKH SURGXFWLYLW\ RI FURSV OLYHVWRFN
DQG ÀVKHULHV 6XFK DQ DSSURDFK ZRXOG DFFRXQW IRU
WKH LQWHUOLQNDJHV EHWZHHQ YDULRXV ODQG XVHV ZLWK
WKH JRDO RI DFKLHYLQJ PXOWLSOH JRDOV LQFOXGLQJ WKH
SURWHFWLRQRIORFDOOLYHOLKRRGVFRQVHUYDWLRQRIZDWHU
IRUHVWV DQG ELRGLYHUVLW\ LPSURYLQJ IRRG VHFXULW\ DV
ZHOODVFRQWULEXWLQJWRUHQHZDEOHHQHUJ\SURGXFWLRQ
,QWHJUDWHG ZDWHU UHVRXUFH PDQDJHPHQW ZLOO EH
SLYRWDO IRU HQVXULQJ ZDWHU DYDLODELOLW\ IRU HFRQRPLF
VRFLDO DQG HQYLURQPHQWDO XVHV XQGHU FRQGLWLRQV RI
FOLPDWHFKDQJH7KLVLVHYHQPRUHXUJHQWDVWKHVKLIW
WRZDUGVUHQHZDEOHHQHUJ\WHFKQRORJLHVZLOOLQFUHDVH
FRPSHWLWLRQ IRU ZDWHU UHVRXUFHV K\GURSRZHU YHUVXV
LUULJDWLRQ DQG IRU ODQG IRU IRRG FURSV ELRIXHOV
OLYHVWRFN IRUHVWV DQG ELRGLYHUVLW\ SURWHFWLRQ DQG LW
PD\DOVRH[DFHUEDWHH[LVWLQJORFDOFRQÁLFWVRYHUODQG
WHQXUHULJKWV
0DQ\ DSSURDFKHV WKDW JHQHUDWH DGDSWDWLRQ EHQHÀWV
DQGLQFUHDVHUHVLOLHQFHDOVRUHGXFH*+*HPLVVLRQV
DQGWKHUHIRUHSUHVHQWDQRSSRUWXQLW\IRUDQHYHQPRUH
FRPSUHKHQVLYH PDLQVWUHDPLQJ HIIRUW WKDW LQFOXGHV
PLWLJDWLRQDVSHFWV7KHUHIRUHQHZSROLF\FRRUGLQDWLRQ
PHFKDQLVPV QHHG WR EH HVWDEOLVKHG RU LPSURYHG DW
ORFDOQDWLRQDOUHJLRQDODQGJOREDOOHYHOV,QWHJUDWLQJ
FOLPDWHUHOHYDQW LQIRUPDWLRQ LQWR H[LVWLQJ QDWLRQDO
DJULFXOWXUDOSURJUDPPHVPD\FRQWULEXWHWRUDLVLQJWKH
DZDUHQHVVRIGHFLVLRQPDNHUVWRWKHULVNVFRQIURQWLQJ
WKHLU GHYHORSPHQW LQWHUYHQWLRQV $W WKH ORFDO OHYHO D
ODQGVFDSH DSSURDFK FRXOG EH DGRSWHG WDNLQJ LQWR
DFFRXQWWKHLQWHUOLQNDJHVEHWZHHQZDWHUIRUHVWVDQG
DJULFXOWXUDOODQGVDQGWKHIDFWWKDWLQPRVWFDVHVWKH
VDPHORFDOSURGXFHUVZKRSURGXFHIRRGDOVRPDQDJH
DQGXVHZDWHUUHVRXUFHVDQGWKHIRUHVWV
2QH LPSRUWDQW REMHFWLYH RI FRRUGLQDWHG DQG
LQWHJUDWHGVHFWRUDOSROLFLHVDWQDWLRQDODQGORFDOOHYHOV
LV WR LQFUHDVH WKH LQFHQWLYHV IRU PRUH VXVWDLQDEOH
DJULFXOWXUDO SURGXFWLRQ V\VWHPV DW WKH IDUP OHYHO
6XFKSURGXFWLRQV\VWHPVZRXOGUHGXFHSUHVVXUHRQ
QDWXUDOUHVRXUFHVVXFKDVVRLOVDQGZDWHUDQGZRXOG
FRQWULEXWH WR LPSURYLQJ WKH SURYLVLRQ RI HFRV\VWHP
VHUYLFHV ZKLFK DUH HVVHQWLDO IRU DJULFXOWXUDO
SURGXFWLRQDQGSURGXFWLYLW\,QWKLVUHJDUGVXSSRUWLQJ
WKH DFFXPXODWLRQ RI VRLO RUJDQLF PDWWHU DQG WKXV
LQFUHDVLQJ VRLO IHUWLOLW\ LV RQH RI WKH PRVW LPSRUWDQW
H[DPSOHVRIZKDWLVQHHGHGDQGDPDMRUFKDOOHQJHLQ
66$IRUDPRUHHODERUDWHDQDO\VLVRQWKLVLVVXHVHH
WKHFRPPHQWDU\RI/HXLQWKLVFKDSWHU
75$'($1'(19,5210(175(9,(:
1//'06#4;U +'.&#0&+'.&7#.+6;1(#,14'4'#.5
0&'4.+/#6'*#0)'
3HWUD+|J\DQG$QGUHDV)DQJPHLHU
8QLYHUVLW\RI+RKHQKHLP,QVWLWXWHIRU/DQGVFDSHDQG3ODQW(FRORJ\
$EVWUDFW
$WPRVSKHULF&2HQULFKPHQWPD\SURYLGHWKHEHQHÀWVRIKLJKHU\LHOGVEXWFRQFRPLWDQWO\LWFRXOGZRUVHQ
FHUHDO TXDOLW\ LQ WHUPV RI SURWHLQ DPLQR DFLG DQG PLQHUDO FRQWHQW &XUUHQWO\ DOPRVW KDOI RI WKH ZRUOG·V
KXPDQSRSXODWLRQDOUHDG\VXIIHUVIURPPLFURQXWULHQWGHÀFLHQFLHVDQGWKLVJOREDOKHDOWKSUREOHPZLOOIXUWKHU
GHWHULRUDWHDVDUHVXOWRI&2HQULFKPHQW2QWKHRWKHUKDQGDQLQFUHDVHLQWHPSHUDWXUHDQGFKDQJLQJ
SUHFLSLWDWLRQSDWWHUQVPD\UHGXFH\LHOGZKLOHKDYLQJDSRVLWLYHHIIHFWRQQXWULWLYHYDOXHDQGSURFHVVLQJ
$OWKRXJKVHYHUDOGHYHORSPHQWVLQDJULFXOWXUHVXFKDV
EUHHGLQJDQGPDQDJHPHQWSUDFWLFHVKDYHLQFUHDVHG
\LHOG SURGXFWLYLW\ DQG DYDLODELOLW\ RI FHUHDOEDVHG
IRRGV RYHU WKH SDVW \HDUV PRUH WKDQ RQH ELOOLRQ
SHRSOHZRUOGZLGHDUHDWULVNRIIRRGLQVHFXULW\WRGD\
)$2 E )RRG LQVHFXULW\ DULVHV ZKHQ SHRSOH
GR QRW KDYH DFFHVV WR VXIÀFLHQW DQG QXWULWLRXV IRRG
WR PHHW WKHLU GLHWDU\ QHHGV $Q DGHTXDWH LQWDNH RI
FDORULHVGRHVQRWDXWRPDWLFDOO\HQVXUHWKDWWKHQHHG
IRUPLFURQXWULHQWVKDVEHHQPHW,QWKHIXWXUHFOLPDWH
FKDQJHPD\UHSUHVHQWDQDGGLWLRQDOO\XQSUHFHGHQWHG
WKUHDW WR JOREDO IRRG VHFXULW\ HVSHFLDOO\ IRU SHRSOH
LQ GHYHORSLQJ FRXQWULHV ZKR GHSHQG KHDYLO\ RQ
DJULFXOWXUHIRUWKHLUOLYHOLKRRGV
7KHPDLQGULYLQJIRUFHEHKLQGFOLPDWHFKDQJHLVWKH
UHOHDVHRIJUHHQKRXVHJDVHV*+*VVXFKDVFDUERQ
GLR[LGH&2GXHWRKXPDQDFWLYLWLHV$QGWKLVLVOLNHO\
WRLQFUHDVHRYHUWKHQH[WIHZGHFDGHV,3&&G
%\FRQVHUYDWLYHHVWLPDWHVWKHFXUUHQWFRQFHQWUDWLRQRI
DWPRVSKHULF&2RIDERXWSDUWVSHUPLOOLRQSSP
ZLOOLQFUHDVHWRQHDUO\SSPE\LQGHHGLW
LVLQFUHDVLQJIDVWHUWKDQH[SHFWHG$PLGUDSLGO\ULVLQJ
IRRG GHPDQG JOREDO DWPRVSKHULF &2 HQULFKPHQW
ZLOODIIHFWDJURHFRV\VWHPVERWKGLUHFWO\DQGLQGLUHFWO\
UHVXOWLQJ LQ FKDQJHV LQ \LHOG RI PDMRU FHUHDOV EXW
SRWHQWLDOO\DIIHFWLQJ\LHOGTXDOLW\WUDLWVDVZHOO$VFHU
HDOVVXSSO\WKHEXONRIFDORULHVIRUPDQ\SRSXODWLRQV
LQ WKH GHYHORSLQJ ZRUOG ZKLOH DOVR FRQVWLWXWLQJ WKH
SULPDU\ VRXUFH RI ERWK SURWHLQ DQG PLFURQXWULHQWV
FOLPDWH FKDQJH LV VHW WR H[DFHUEDWH PDQ\ RI WKH
SUREOHPV ZKLFK GHYHORSLQJ FRXQWULHV DOUHDG\ KDYH
WR GHDO ZLWK &XUUHQWO\ WKHUH KDV EHHQ VXUSULVLQJO\
OLWWOH UHVHDUFK VSHFLÀFDOO\ JHDUHG WR PDLQWDLQLQJ RU
HQKDQFLQJWKHSURGXFWLYLW\RIDJULFXOWXUDOHFRV\VWHPV
XQGHUFOLPDWHFKDQJH1HLWKHUKDVWKHUHEHHQPXFK
UHVHDUFK WKDW DGGUHVVHV WKH LVVXH RI YXOQHUDELOLW\ WR
FOLPDWHFKDQJHRIRWKHUDVSHFWVRIIRRGV\VWHPVVXFK
DV\LHOGTXDOLW\5LFKDUGVRQHWDO
$'LUHFWHIIHFWVRIDWPRVSKHULF&2
HQULFKPHQW
$WPRVSKHULF&2LVWKHSULPDU\VRXUFHRIFDUERQIRU
FHUHDOVZKLFKLVWDNHQXSE\WKHOHDIWKURXJKVWRPDWD
&HUHDOV PXVW DEVRUE OLJKW WR HQDEOH SKRWRV\QWKHVLV
WR FRQYHUW &2 LQWR RUJDQLF FRPSRXQGV VXFK DV
FDUERK\GUDWHVDQGDPLQRDFLGV:DWHUDQGQXWULHQWV
DUHXVXDOO\DFTXLUHGIURPWKHVRLODQGWRJHWKHUZLWK
SKRWRV\QWKDWHDUHXVHGWRFUHDWHQHZSODQWWLVVXHV
&2 HIIHFWV GLIIHU DFFRUGLQJ WR WKH SKRWRV\QWKHWLF
SDWKZD\ (OHYDWHG &2 DIIHFWV & FHUHDOV E\
LPSURYLQJ QLWURJHQ XVH HIÀFLHQF\ 18( DQG ZDWHU
XVHHIÀFLHQF\:8(ZKLOH&FHUHDOVDUHDIIHFWHG
H[FOXVLYHO\ YLD LPSDFWV RQ :8( 0DMRU FHUHDOV WKDW
KDYH WKH & SKRWRV\WKHWLF SDWKZD\ LQFOXGH ZKHDW
EDUOH\DQGULFHZKLOHPDL]HVRUJKXPDQGVXJDUFDQH
DUH&VSHFLHV,Q&FHUHDOVHOHYDWHG&2LVH[SHFWHG
WR KDYH SRVLWLYH SK\VLRORJLFDO HIIHFWV E\ VWLPXODWLQJ
SKRWRV\QWKHVLV PDLQO\ E\ HQKDQFLQJ &2 À[DWLRQ
RI WKH FKORURSODVW HQ]\PH 5XELV&2 DQG LQGXFLQJ
VWRPDWDO FORVXUH $V D FRQVHTXHQFH HOHYDWHG &2
UHVXOWVLQVKLIWVLQELRPDVVDOORFDWLRQDQGKLJKHU\LHOG
SURGXFWLRQ WKH VRFDOOHG ´&2 IHUWLOL]DWLRQ HIIHFWµ
UHIHUUHG WR E\ 3ULWFKDUG DQG $PWKRU *LYHQ
DGHTXDWHZDWHUWKHHIIHFWRI&2HQULFKPHQWRQ\LHOG
SHUIRUPDQFH LV KLJKHU IRU & FHUHDOV ² SHU
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
FHQWSSP&2+DUWÀHOGHWDOWKDQIRU&
FURSV SHU FHQW SSP &2 +DUWÀHOG HW DO
EHFDXVH & SKRWRV\QWKHVLV LV QRW VDWXUDWHG
XQGHUDPELHQW&2OHYHOV
2Q WKH RWKHU KDQG ERWK & DQG & FHUHDOV PLJKW
EHQHÀW IURP HOHYDWHG &2 XQGHU GURXJKW VWUHVV GXH
WR LPSURYHPHQWV LQ ZDWHU XVH HIÀFLHQF\ +RZHYHU
WKHSRVLWLYH\LHOGUHVSRQVHWRHOHYDWHG&2KDVRIWHQ
EHHQGXHWRPRUHJUDLQVUDWKHUWKDQODUJHUJUDLQV,Q
DGGLWLRQ WR WKHVH HIIHFWV RQ WKH TXDQWLW\ LW DSSHDUV
WKDW&2HQULFKPHQWDOVRDIIHFWVWKHQXWULWLRQDOTXDOLW\
RI & FHUHDOV .LPEDOO .RED\DVKL DQG %LQGL ,Q PDQ\ LQVWDQFHV WKH H[WUD FDUERQ LV FRQYHUWHG
LQWR FDUERK\GUDWHV VXFK DV VWDUFK &RQVLVWHQWO\
WKH DP\ORVH FRQWHQW RI ULFH JUDLQV ZKLFK LV DPDMRU
GHWHUPLQDQWRIFRRNLQJTXDOLW\KDVEHHQREVHUYHGWR
LQFUHDVHXQGHU&2HQULFKPHQW&RQUR\HWDO
UHVXOWLQJLQPRUHÀUPQHVVRIFRRNHGULFHJUDLQV
$ QHJDWLYH LQWHUDFWLRQ EHWZHHQ QLWURJHQ VWDWXV LQ
SODQWV DQG JUDLQ TXDOLW\ KDV EHHQ REVHUYHG LQ &
FHUHDOV PDGH ZRUVH E\ &2 HQULFKPHQW GXH WR
FKDQJHVLQOHDIQLWURJHQPHWDEROLVP6XFKFKDQJHV
DUHODUJHO\WKHUHVXOWRIVPDOOHUSDUWLWLRQLQJRIQLWURJHQ
LQ SKRWRV\QWKHWLF SURFHVVHV .LPEDOO HW DO $VVPDOOJUDLQHGFHUHDOVVXFKDVEDUOH\ZKHDWDQG
ULFHPD\UHPRELOL]HXSWRSHUFHQWRIWKHQLWURJHQ
IURPWKHYHJHWDWLYHSODQWSDUWVGXULQJJUDLQÀOOLQJOHVV
QLWURJHQ LQYHVWPHQW LQ WKH SODQW XQGHU HOHYDWHG &2
FRXOGEHWKHSULPDU\FDXVHRIUHGXFWLRQLQJUDLQSURWHLQ
FRQFHQWUDWLRQ$OWKRXJKLWLVNQRZQWKDWQLWURJHQLVD
NH\UHJXODWRURISODQWUHVSRQVHVWR&2WKHFKDQJHV
LQ QLWURJHQ PHWDEROLVP DUH QRW ZHOO XQGHUVWRRG DW
D ELRFKHPLFDO OHYHO +RZHYHU WKH QXWULWLRQDO YDOXH
RI WKHVH WKUHH FHUHDOV PD\ GHWHULRUDWH GXH WR &2
LQGXFHGGHFUHDVHVLQJUDLQSURWHLQFRQFHQWUDWLRQE\
²SHUFHQW7DXE0LOOHUDQG$OOHQZLWK
VHULRXVFRQVHTXHQFHVIRUPRVWDSSOLFDWLRQVLQWHUPV
RI SURFHVVLQJ VXFK DV EUHDGPDNLQJ $V HOHYDWHG
&2 LQKLELWV QLWUDWH DVVLPLODWLRQ LQ & FHUHDOV LW ZLOO
EH FULWLFDO IRU IDUPHUV WR FDUHIXOO\ PDQDJH QLWURJHQ
IHUWLOL]DWLRQ LQ RUGHU WR SUHYHQW ORVV RI JUDLQ SURWHLQ
%ORRPHWDO
,GVRDQG,GVRRQWKHRWKHUKDQGKDYHDUJXHG
WKDWDQ\HIIHFWVRI&2HQULFKPHQWRQSURWHLQFRQWHQW
LQFHUHDOVFRXOGEHDPHOLRUDWHGE\LQFUHDVHGXVHRI
QLWURJHQIHUWLOL]HU,WLVDSSDUHQWWKDWJUHDWHUDWWHQWLRQ
ZLOO KDYH WR EH JLYHQ WR QLWURJHQ PDQDJHPHQW LQ
FHUHDOV XQGHU &2 HQULFKPHQW LQ RUGHU WR LQFUHDVH
SURGXFWLRQHIÀFLHQF\DQGWRPDLQWDLQERWK\LHOGVDQG
SURWHLQFRQFHQWUDWLRQVLQJUDLQV+RZHYHULWVKRXOGEH
NHSWLQPLQGWKDWHVSHFLDOO\LQGHYHORSLQJFRXQWULHV
WKH DYDLODELOLW\ RI QLWURJHQ LQ DJULFXOWXUH LV RIWHQ
LQVXIÀFLHQWWRDFKLHYHDGHTXDWHFURS\LHOGVDQGWKLV
LV RQH RI WKH FDXVHV RI PDOQXWULWLRQ 0RUHRYHU &2
LQGXFHG DOWHUDWLRQV LQ WKH FRPSRVLWLRQ RI SURWHLQV
DQGDPLQRDFLGVPD\DOVRDIIHFWWKHQXWULWLYHYDOXHRI
JUDLQVDQGSURFHVVLQJTXDOLW\VXFKDVEUHDGPDNLQJ
+|J\ DQG )DQJPHLHU +|J\ HW DO ,Q
DGGLWLRQ VXEWOH LPEDODQFHV LQ PDFUR DQG PLFUR
HOHPHQWSURSHUWLHVPD\RFFXUXQGHU&2HQULFKPHQW
UHVXOWLQJ LQ KLJKHU ULVN RI ´KLGGHQ KXQJHUµ DQG
PDOQXWULWLRQ/RODG]H
,QULFHFRQFHQWUDWLRQVRILURQDQG]LQF²LPSRUWDQWIRU
KXPDQQXWULWLRQ²ZHUHVHHQWREHORZHUXQGHUHOHYDWHG
&26HQHZHHUDDQG&RQUR\6LPLODUO\+|J\HW
DOUHSRUWHGDGHFUHDVHLQLURQLQZKHDWJUDLQV
XQGHU&2HQULFKPHQW7KHVHÀQGLQJVDUHYLWDOIRUWKH
LPSRUWDQWWDVNRIWDFNOLQJPLFURQXWULHQWGHÀFLHQFLHVRI
LURQ]LQFFRSSHULRGLQHDQGVHOHQLXPDVWKHPDMRU
JUDLQFURSVDUHDFULWLFDOVRXUFHRIWKHVHQXWULHQWVIRU
PDQ\ SRSXODWLRQV DURXQG WKH ZRUOG &DXOÀHOG DQG
%ODFN6WROW]IXVHWDO&XUUHQWO\DOPRVW
KDOI RI WKH KXPDQ SRSXODWLRQ DOUHDG\ VXIIHUV IURP
PLFURQXWULHQW GHÀFLHQFLHV DQG WKLV JOREDO KHDOWK
SUREOHPZLOOZRUVHQXQGHU&2HQULFKPHQW
5HFHQWO\ LW KDV EHHQ UHSRUWHG WKDW WKH QLWURJHQ
QXWULWLRQDO VWDWXV RI FHUHDOV DSSHDUV WR EH FULWLFDO
DV WKH WUDQVSRUWLQJ RI LURQ IURP WKH UKL]RSKHUH LQWR
JUDLQV LV GHSHQGHQW RQ YDULRXV SURWHLQV DQG RWKHU
QLWURJHQRXVFRPSRQHQWV&DNPDNHWDO&2
HQULFKPHQWFDQKDYHWKHHIIHFWRIUHGXFLQJWKHJUDLQ
LURQ FRQFHQWUDWLRQ E\ ZRUVHQLQJ WKH JUDLQ SURWHLQ
FRQFHQWUDWLRQ DQG WKHUHE\ WKH VLQN VWUHQJWK RI WKH
JUDLQIRULURQ
&2LQGXFHG LPSDFWV RQ \LHOG TXDOLW\ RI FHUHDOV
DUH FXUUHQWO\ QRW ZHOO XQGHUVWRRG DQG WKH DYDLODEOH
LQIRUPDWLRQLVVWLOOLQFRQVLVWHQW'D0DWWDHWDO
0RUHWWL HW DO 1HYHUWKHOHVV LW VHHPV WKDW
PDFURDQGPLFURQXWULHQWPDQDJHPHQWLVQHFHVVDU\
IRUPDLQWDLQLQJJUDLQTXDOLW\XQGHU&2HQULFKPHQW,Q
DGGLWLRQLQQRYDWLRQVLQWKHSURFHVVLQJRIVWDSOHFURSV
DQGFKDQJHVLQSHRSOH·VGLHWVZLOOEHQHHGHGLQDKLJK
&2 ZRUOG 7KH HIIHFWV RI &2 LQ WHUPV RI UHGXFLQJ
WKHQXWULWLRQDOYDOXHRIFHUHDOVZRXOGSULPDULO\LPSDFW
RQSRSXODWLRQVLQSRRUHUFRXQWULHVZKRDUHOHVVDEOH
WRFRPSHQVDWHE\HDWLQJPRUHIRRGDQGPRUHYDULHG
GLHWV RU SRVVLEO\ WDNLQJ QXWULWLRQDO VXSSOHPHQWV 7R
PHHW WKH LQFUHDVLQJ GHPDQG IRU KHDOWK\ IRRG DQG
ZLWK WKH ZRUOG·V SRSXODWLRQ SUHGLFWHG WR LQFUHDVH WR
ELOOLRQE\8QLWHG1DWLRQVLWZLOOEH
QHFHVVDU\ WR LQFUHDVH FURS SURGXFWLRQ 7KH XVH RI
FHUHDOVWKDWFDQUHVSRQGHIIHFWLYHO\WR&2HQULFKPHQW
ZKLOHPDLQWDLQLQJKLJKTXDOLW\WUDLWVPD\EHDSRZHUIXO
RSWLRQWRUHVSRQGWRWKHVHLQFUHDVHGUHTXLUHPHQWV
,QFRQFOXVLRQHOHYDWHGDWPRVSKHULF&2FRQFHQWUDWLRQ
ZLOOKDYHDGLUHFWHIIHFWRQPDMRU&FHUHDOVUHVXOWLQJ
LQ KLJKHU JUDLQ \LHOGV +RZHYHU DW WKH VDPH WLPH
PDQ\TXDOLWDWLYHFRPSRXQGVDVVRFLDWHGZLWKFHUHDOV
DVIRRGFURSVZLOOEHDGYHUVHO\DIIHFWHGLQWKHIXWXUH
QRWDEO\ GHFOLQHV LQ SURWHLQV DPLQR DFLGV DQG
PLQHUDOVVXFKDVLURQDQG]LQF$VPHQWLRQHGHDUOLHU
WKHVH HIIHFWV KDYH EHHQ REVHUYHG LQ JUDLQV XQGHU
&2HQULFKPHQWUHVXOWLQJLQDKLJKHUULVNRI´KLGGHQ
KXQJHUµ DQG PDOQXWULWLRQ HVSHFLDOO\ LQ GHYHORSLQJ
FRXQWULHV
%,QGLUHFWHIIHFWVRIULVLQJWHPSHUDWXUHV
DQGFKDQJHVLQSUHFLSLWDWLRQSDWWHUQV
,QGLUHFW LPSDFWV RI DWPRVSKHULF &2 HQULFKPHQW RQ
DJULFXOWXUDO HFRV\VWHPV PD\ RFFXU GXH WR JOREDO
ZDUPLQJ*OREDOWHPSHUDWXUHVDUHOLNHO\WRLQFUHDVHE\
DWOHDVWƒ&EHIRUHWKHHQGRIWKLVFHQWXU\0RUHRYHU
JOREDOZDUPLQJLVOLNHO\WRLQFUHDVHWKHIUHTXHQF\RI
KHDWVWUHVVHSLVRGHV,WLVZHOONQRZQWKDWDJULFXOWXUDO
SURGXFWLYLW\ LV VHQVLWLYH WR WHPSHUDWXUH GXULQJ WKH
JURZLQJ VHDVRQ $V PDQ\ FURSV DUH QHDU WKHLU
PD[LPXP WHPSHUDWXUH WROHUDQFH LQ $IULFD $VLD DQG
/DWLQ$PHULFD\LHOGVDUHOLNHO\WRIDOOVKDUSO\ZLWKHYHQ
VPDOO LQFUHDVHV LQ WHPSHUDWXUH 7KXV GHYHORSLQJ
FRXQWULHV ZKLFK IDFH UDSLG SRSXODWLRQ JURZWK DUH DW
D SDUWLFXODUO\ KLJK ULVN RI IRRG VKRUWDJHV FDXVHG E\
WHPSHUDWXUH LQFUHDVHV 6HYHUDOO VWXGLHV FRQÀUP WKDW
D ƒ& ULVH LQ WHPSHUDWXUH FRUUHVSRQGV WR D URXJKO\
SHU FHQW UHGXFWLRQ LQ \LHOG RI PDMRU FHUHDOV VXFK
DVZKHDWULFHDQGPDL]HGXHWRDVKRUWHQLQJRIWKH
JUDLQÀOOGXUDWLRQ%DWWLVWLDQG1D\ORU/REHOOHW
DO
7KH UHVSRQVH RI FHUHDOV WR WHPSHUDWXUH FKDQJH
KDV EHHQ REVHUYHG WR EH QRQOLQHDU EHFDXVH RI
WKH LQWHUDFWLRQ RI ZDWHU DQG KHDW VWUHVV /REHOO
0RUHRYHU FHUHDOV UHVSRQG GLIIHUHQWO\ WR
WHPSHUDWXUH GXULQJ WKHLU OLIH F\FOH ZLWK D KLJKHU
WHPSHUDWXUH RSWLPXP GXULQJ WKHLU YHJHWDWLYH
GHYHORSPHQW FRPSDUHG ZLWK WKH SHULRG RI
UHSURGXFWLYH GHYHORSPHQW 7KH SROOLQDWLRQ SKDVH
RI GHYHORSPHQW LQ SDUWLFXODU LV RQH RI WKH PRVW
VHQVLWLYH WR HSLVRGLF WHPSHUDWXUH LQFUHDVH DQG
WHPSHUDWXUH H[WUHPHV GXULQJ WKH UHSURGXFWLYH
VWDJH FDQ SURGXFH VRPH RI WKH JUHDWHVW LPSDFWV
75$'($1'(19,5210(175(9,(:
RQ FHUHDO SURGXFWLRQ )ORUDO VWHULOLW\ FDXVHG E\
HOHYDWHGWHPSHUDWXUHPD\ORZHUVLQNGHPDQGVIRU
FDUERK\GUDWHVDQGWKXVKLQGHUWKHWUDQVORFDWLRQRI
SKRWRV\QWKDWHVIURPVKRRWVRXUFHWRJUDLQVLQN
UHVXOWLQJ LQ DQ DFFXPXODWLRQ RI GU\ PDWWHU LQ WKH
VKRRW HYHQ DIWHU ÁRZHULQJ 2Q WKH RWKHU KDQG WKH
JUDLQVL]HRIFHUHDOVUHPDLQVUHODWLYHO\FRQVWDQWDQG
GHFOLQHV RQO\ VORZO\ ZLWK LQFUHDVLQJ WHPSHUDWXUHV
XQWLOWKHSROOLQDWLRQIDLOXUHSRLQW
%HVLGHV \LHOG SDUDPHWHUV JUDLQ TXDOLW\ WUDLWV RI
WKH FURSV SURGXFHG DUH DOVR KLJKO\ YXOQHUDEOH
WR WHPSHUDWXUH 7HPSHUDWXUHV XS WR WKH VSHFLHV
GHSHQGHQWRSWLPXPDFFHOHUDWHWKHUDWHRIPDWXUDWLRQ
FDXVLQJ LQFUHDVHV LQ SURWHLQ FRQWHQW DFFRPSDQLHG
E\FKDQJHVLQJUDLQSURWHLQFRPSRVLWLRQDQGGRXJK
TXDOLW\ FKDUDFWHULVWLFV VXFK DV GRXJK VWUHQJWK
&RUEHOOLQLHWDO$FFHOHUDWHGVHQHVFHQFHOHDGV
WRQLWURJHQUHPRELOL]DWLRQIURPYHJHWDWLYHSODQWSDUWV
DQG DPLQR DFLGV GHULYHG IURP SURWHLQ GHJUDGDWLRQ
FRPSHQVDWH IRU WKH WHPSHUDWXUHLQGXFHG GHFUHDVH
LQJUDLQÀOOLQJWLPHDQGWKHQLWURJHQVKRUWDJHGXHWR
UHGXFWLRQRIQLWURJHQXSWDNHIURPVRLOE\FHUHDOURRWV
$JDLQWKHWLPLQJRIVWUHVVRFFXUUHQFHLVDQLPSRUWDQW
IDFWRU LQ GHWHUPLQLQJ WKH HIIHFW RQ JUDLQ SURWHLQ
FRQFHQWUDWLRQ,QULFHKLJKWHPSHUDWXUHVGXULQJJUDLQ
ÀOOLQJ ZHUH REVHUYHG WR LQFUHDVH WKH DFFXPXODWLRQ
RI DOO FODVVHV RI VWRUDJH SURWHLQV DW WKH HDUO\ ÀOOLQJ
VWDJH ZKHUHDV WKH\ UHGXFHG WKH DFFXPXODWLRQ RI
SURODPLQVDWPDWXUDWLRQ/LQHWDO,QFRQWUDVW
FDUERK\GUDWH V\QWKHVLV LQ JUDLQV GHSHQGV SULPDULO\
RQFRQFXUUHQWFDUERQÀ[DWLRQGXULQJJUDLQÀOOLQJWKXV
JUDLQ VWDUFK GHFOLQHG GXH WR VKRUWHQHG GXUDWLRQ RI
VWDUFK DFFXPXODWLRQ RU GXH WR WKH LQKLELWLRQ RI NH\
HQ]\PHVLQYROYHGLQVWDUFKV\QWKHVLV
&KDQJHVLQSUHFLSLWDWLRQERWKDPRXQWDQGIUHTXHQF\
FDQDOVRKDYHGHYDVWDWLQJLPSDFWVRQDJULFXOWXUHZLWK
JUDYH FRQVHTXHQFHV IRU KXPDQ QXWULWLRQ DQG JOREDO
KHDOWK 6LQFH ZDWHU VWDWXV LV LPSRUWDQW IRU PLQHUDO
PRELOL]DWLRQZDWHUGHÀFLHQF\PD\UHGXFHWKHXSWDNH
RI LURQ ]LQF DQG FRSSHU IURP WKH VRLO UHVXOWLQJ LQ
GHFUHDVHGFRQFHQWUDWLRQVRIWKHVHPLQHUDOVLQFHUHDO
JUDLQV VXFK DV PDL]H 2NWHP 0LFURQXWULHQW
PDOQXWULWLRQKDVHQRUPRXVVRFLRHFRQRPLFLPSDFWV
VXFK DV LQFUHDVHG PRUWDOLW\ DQG PRUELGLW\ LPSDLUHG
JURZWKGHYHORSPHQWDQGOHDUQLQJFDSDFLW\LQLQIDQWV
DQG FKLOGUHQ DV ZHOO DV ORVV RI ZRUNLQJ FDSDELOLWLHV
RI DGXOWV 7KLV LQ WXUQ XQGHUPLQHV HFRQRPLF JURZWK
DQG SHUSHWXDWHV SRYHUW\ :RUOG %DQN :+2
&OLPDWH FKDQJH LV H[SHFWHG WR DOWHU WKH
WLPLQJ DQG TXDQWLW\ RI ZDWHU DYDLODEOH IRU DJULFXOWXUH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
ZKLOH LQFUHDVLQJ WKH QHHGV RI FURSV IRU ZDWHU DV
WHPSHUDWXUHVULVH
7RGD\ PDQ\ IDUPHUV DURXQG WKH ZRUOG DUH
DOUHDG\ H[SHULHQFLQJ OHVV SUHGLFWDEOH UDLQIDOO DQG
WHPSHUDWXUHV DV ZHOO DV H[WUHPH ZHDWKHU HYHQWV
$V GLIIHUHQW FXOWLYDUV UHVSRQG GLIIHUHQWO\ WR FOLPDWLF
IDFWRUVDQGXQFHUWDLQWLHVH[LVWDERXWIXWXUHFRQGLWLRQV
IRUFHUHDOSURGXFWLRQQHZYDULHWLHVRIFXOWLYDUVQHHG
WREHGHYHORSHGZLWKWUDLWVVXFKDVKHDWDQGGURXJKW
UHVLVWDQFH
2YHUDOOLWFDQEHFRQFOXGHGWKDWLQGLUHFWLPSDFWVGXH
WRDWPRVSKHULF&2HQULFKPHQWVXFKDVWHPSHUDWXUH
LQFUHDVHVDQGFKDQJHVLQSUHFLSLWDWLRQSDWWHUQVPD\
UHGXFHWKHJUDLQ\LHOGRIPDMRUFHUHDOV2QWKHRWKHU
KDQGSURWHLQFRQFHQWUDWLRQPD\LQFUHDVHXQGHUULVLQJ
WHPSHUDWXUHV UHVXOWLQJ LQ D KLJKHU QXWULWLYH YDOXH RI
JUDLQV+RZHYHUGHFUHDVHVLQDFFXPXODWLRQRIVWDUFK
DQGPLQHUDOVVXFKDVLURQ]LQFDQGFRSSHULQPDMRU
FHUHDOV PD\ DIIHFW WKH QXWULWLRQDO TXDOLW\ RI WKH HQG
SURGXFWDQGIRRGVHFXULW\DVZHOODVWKHXVHRIWKRVH
FHUHDOVIRUSURFHVVLQJLQWKHIXWXUH
&2XWORRN
&2LQGXFHG HIIHFWV RQ JUDLQ \LHOG DQG FURS TXDOLW\
ZLOOOLNHO\GLIIHUVXEVWDQWLDOO\DPRQJLQGLYLGXDOFXOWLYDUV
DQGVSHFLHVXQGHUYDU\LQJUHJLRQDOFOLPDWLFFRQGLWLRQV
$V KLJK &2 FRQFHQWUDWLRQV FDXVH DOWHUDWLRQV LQ
HYDSRWUDQVSLUDWLRQWKLVPD\DOVRUHVXOWLQIHHGEDFNRQ
ZDWHUPDJDJHPHQWDQGGURXJKWV:DWHUFRQVHUYDWLRQ
PD\DOORZH[WHQVLRQRIWKHJURZWKSHULRGZKHQZDWHULV
OLPLWHG/HVVLQIRUPDWLRQLVDYDLODEOHRQWKHLQWHUDFWLYH
HIIHFWV RI FOLPDWH YDULDELOLW\ DQG &2 HQULFKPHQW RQ
WKH HIÀFLHQF\ RI UHVRXUFH XVH HJ ZDWHU QXWULHQWV
DQGLWVFRQVHTXHQFHVIRU\LHOGTXDQWLW\DQGTXDOLW\RI
PDMRUFHUHDOV+LJKHUWHPSHUDWXUHVDQGYDULDWLRQVLQ
SUHFLSLWDWLRQ PLJKW UHGXFH WKH SRVLWLYH &2LQGXFHG
LPSDFWVRQFHUHDOSHUIRUPDQFH
:LWKUHJDUGWRWKHDYDLODELOLW\RIDGHTXDWHIRRGVXSSO\
LQWKHIXWXUHDPDMRUWDVNLVWKHUHIRUHWRLGHQWLI\WKH
LPSDFWVRIFOLPDWHFKDQJHRQ\LHOGTXDOLW\LQWHUPVRI
QXWULWLYHYDOXHDQGHQGXVHSURFHVVLQJ$GDSWDWLRQRI
FHUHDO SURGXFWLRQ DQG SURFHVVLQJ WR DQ LQFUHDVLQJO\
YDULDEOH FOLPDWH LV WKXV RI WKH XWPRVW LPSRUWDQFH
SDUWLFXODUO\LQGHYHORSLQJFRXQWULHVWRHQVXUHQRWRQO\
VXIÀFLHQW VXSSOLHV RI FHUHDOV EXW DOVR WKHLU QXWULWLYH
TXDOLW\,QRUGHUWRDVVXUHIRRGVHFXULW\LQWKHIXWXUH
LW LV YLWDOO\ LPSRUWDQW WR XQGHUVWDQG WKH FRPSOH[
UHODWLRQVKLSVEHWZHHQJOREDOHQYLURQPHQWDOFKDQJHV
IDUPLQJSUDFWLFHVGLHWDQGKXPDQKHDOWK
75$'($1'(19,5210(175(9,(:
1//'06#4;U 1/2#4#6+8'0#.;5+51(4)#0+%#0&
10g4)#0+%
#4/+0);56'/5U4+6+%#.
55'55/'061(
#4/41(+6#$+.+6;
1RpPL1HPHV
)$2
$EVWUDFW
$QDQDO\VLVRIRYHUHFRQRPLFVWXGLHVGHPRQVWUDWHVWKDWLQWKHPDMRULW\RIFDVHVRUJDQLFV\VWHPVDUH
PRUHSURÀWDEOHWKDQQRQRUJDQLFV\VWHPV+LJKHUPDUNHWSULFHVDQGSUHPLXPVRUORZHUSURGXFWLRQFRVWV
RUDFRPELQDWLRQRIWKHWZRJHQHUDOO\UHVXOWLQKLJKHUUHODWLYHSURÀWVIURPRUJDQLFDJULFXOWXUHLQGHYHORSHG
FRXQWULHV7KHVDPHFRQFOXVLRQFDQEHGUDZQIURPVWXGLHVLQGHYHORSLQJFRXQWULHVEXWWKHUHKLJKHU\LHOGV
FRPELQHGZLWKKLJKSUHPLXPVDUHWKHXQGHUO\LQJFDXVHVRIWKHLUUHODWLYHO\JUHDWHUSURÀWDELOLW\
2UJDQLF DJULFXOWXUH KDV WULJJHUHG D FRQWURYHUVLDO
GHEDWHRYHUWKHSDVWIHZGHFDGHVODUJHO\EHFDXVHLW
H[SRVHVWKHWUXHFRVWVDQGGDUNHUVLGHVRIFKHPLFDO
LQWHQVLYH LQGXVWULDO IDUPLQJ V\VWHPV 7KHUH LV QRZ D
VWURQJERG\RIHYLGHQFHWRSURYHWKDWRUJDQLFIDUPLQJ
LV PRUH HQYLURQPHQWDOO\ IULHQGO\ SRWHQWLDO EHQHÀWV
DULVHIURPIRUH[DPSOHLPSURYHGVRLOIHUWLOLW\RUJDQLF
PDWWHU FRQWHQW DQG ELRORJLFDO DFWLYLW\ EHWWHU VRLO
VWUXFWXUH DQG OHVV VXVFHSWLELOLW\ WR HURVLRQ UHGXFHG
SROOXWLRQ IURP QXWULHQW OHDFKLQJ DQG SHVWLFLGHV DQG
LPSURYHG SODQW DQG DQLPDO ELRGLYHUVLW\ .DVSHUF]\N
DQG .QLFNHO +RZHYHU LW LV QRW FOHDU ZKHWKHU
RUJDQLF DJULFXOWXUH FRXOG EH HFRQRPLFDOO\ DWWUDFWLYH
HQRXJKWRWULJJHULWVZLGHVSUHDGDGRSWLRQ,IRUJDQLF
IDUPLQJ RIIHUV EHWWHU HQYLURQPHQWDO TXDOLW\ DQG
KHDOWKLHU IRRGV EXW QRW VXIÀFLHQW HFRQRPLF UHWXUQV
WR WKH PDMRULW\ RI IDUPHUV LW ZLOO REYLRXVO\ UHPDLQ D
OX[XU\ IRUP RI IRRG SURGXFWLRQ YLDEOH IRU RQO\ D YHU\
VPDOO IUDFWLRQ RI IDUPHUV +RZHYHU WKH FRQWLQXHG
JURZWK RI RUJDQLFDOO\ PDQDJHG ODQGV ZRUOGZLGH
HVSHFLDOO\LQGHYHORSLQJFRXQWULHVGRHVQRWVXSSRUW
WKLVK\SRWKHVLV
$&RPSDULQJWKHHFRQRPLFVRIRUJDQLF
YHUVXVQRQRUJDQLFIDUPLQJ
7KHUH DUH ZHOO RYHU VWXGLHV WKDW FRPSDUH WKH
UHODWLYH SURÀWDELOLW\ RI RUJDQLF YHUVXV QRQRUJDQLF
DJULFXOWXUH +RZHYHU WKHUH DUH IHZHU ORQJWHUP
FRPSDUDWLYH VWXGLHV WKDW DQDO\VH WKH GHYHORSPHQW
RI SURÀWV IURP HDFK RI WKHVH V\VWHPV 5HJUHWWDEO\
WKHJHRJUDSKLFDOGLVWULEXWLRQRIWKHVHVWXGLHVWHQGV
WR FRQFHQWUDWH RQ GHYHORSHG FRXQWULHV PDLQO\ WKH
8QLWHG6WDWHVDQGRQFHUWDLQFDVKFURSVHJFRUQ
VR\ ZKHDW )RU WKH SXUSRVH RI WKLV DQDO\VLV RQO\
VWXGLHVXVLQJGDWDIURPFHUWLÀHGRUJDQLFIDUPVZHUH
FRQVLGHUHG FRYHULQJ D PLQLPXP SHULRG RI WKUHH
\HDUVIRUGHYHORSHGFRXQWULHVDIWHUFRQYHUVLRQDQG
XQGHUWDNHQDIWHU'XHWRWKHODFNRIORQJWHUP
HFRQRPLF VWXGLHV LQ GHYHORSLQJ FRXQWULHV VWXGLHV
FRYHULQJ RQH DQG WZR \HDUV ZHUH LQFOXGHG IURP
WKHVH FRXQWULHV 6WXGLHV WKDW HYDOXDWHG \LHOGV DQG
FHUWDLQ SURGXFWLRQ FRVWV EXW QRW SURÀWV ZHUH QRW
FRQVLGHUHG
6HYHUDO IDFWRUV FRPSOLFDWH WKH WDVN RI FRPSDULQJ
HFRQRPLF VWXGLHV DFURVV VSDFH DQG WLPH VXFK
DV GLIIHUHQW FRVWV RI OLYLQJ DQG SXUFKDVLQJ SRZHU
GLIIHUHQW LQWHUSUHWDWLRQV RI ODERXU FRVWV DQG WKH
FKDQJLQJ HFRQRPLF DQG SROLWLFDO HQYLURQPHQW
0RUHRYHU PHWKRGRORJLFDO FKRLFH WKH WLPH SHULRG
DQDO\VHGDQGWKHVHOHFWLRQSURFHGXUHIRUFRPSDUDEOH
FRQYHQWLRQDO IDUPV KDYH D FRQVLGHUDEOH EHDULQJ
RQ SURÀWDELOLW\ 6LPLODUO\ WKH H[WHQW RI WKH HFRQRPLF
DVVHVVPHQW FDQ YDU\ DFURVV VWXGLHV ZLWK VRPH
VWXGLHV IRFXVLQJ PHUHO\ RQ WKH IDUP OHYHO ZKLOH
RWKHUVEURDGHQWKHSLFWXUHWRWKHOHYHORIVRFLHW\DQG
WKLV FDQ OHDG WR GLIIHUHQW RXWFRPHV 'HSHQGLQJ RQ
WKLV FKRLFH RSSRUWXQLW\ FRVWV DQG H[WHUQDOLWLHV DUH
HLWKHU LQFOXGHG VRFLHW\ OHYHO RU DV LQ PRVW FDVHV
H[FOXGHG IDUP OHYHO :KHQ ORRNLQJ DW SURÀWDELOLW\
VWXGLHVDFRUUHFWLQWHUSUHWDWLRQRIWKHGDWDLVFUXFLDO
RYHUDOO FRPSDULVRQV FDQQRW EH PDGH IRU H[DPSOH
EHWZHHQFDVHVWXGLHVDQGÀHOGH[SHULPHQWVEHWZHHQ
GHYHORSHG DQG GHYHORSLQJFRXQWU\ UHVXOWV DQG
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
EHWZHHQ VWXGLHV ZLWK D YHU\ JRRG GDWD EDVH DQG
VWXGLHVEDVHGRQIDUPHUV·RSLQLRQV
%<LHOGV
(YLGHQFH IURP WKH PRUH WKDQ VWXGLHV DQDO\VHG
VKRZHGWKDW\LHOGVLQZHOOHVWDEOLVKHGRUJDQLFIDUPV
LQ GHYHORSHG FRXQWULHV DUH XVXDOO\ ORZHU WKDQ WKRVH
IURP FRQYHQWLRQDO IDUPV WR YDU\LQJ GHJUHHV 0RVW
(XURSHDQ VWXGLHV LQFOXGLQJ WKRVH RI RUJDQLF FHUHDO
YHJHWDEOH DQG PL[HG IDUPLQJ V\VWHPV VKRZHG
WKDW WKH\ SURGXFHG VRPHZKDW ORZHU \LHOGV %0(/)
² )$7 2IIHUPDQQ DQG 1LHEHUJ
ZKHUHDVPLON\LHOGVPRVWRIWHQVKRZHGVLPLODU
UHVXOWV ZKHQ PHDVXUHG LQ OLWUHV SHU FRZ <RXQLH HW
DO)$72IIHUPDQQDQG1LHEHUJ
2QWKHRWKHUKDQGWKHPDMRULW\RIORQJWHUPVWXGLHV
LQYROYLQJ VR\FRUQ URWDWLRQ LQ WKH 8QLWHG 6WDWHV
VKRZHG WKDW RUJDQLF \LHOGV RQ DYHUDJH ZHUH QRW
VLJQLÀFDQWO\GLIIHUHQW&KDVHDQG'XII\+DQVRQ
/LFKWHQEHUJ DQG 3HWHUV 'ULQNZDWHU :DJRQHU
DQG6DUUDQWRQLR'HODWHHWDO3LPHQWHOHW
DO'HVSLWHORZHUVR\\LHOGVIURPRUJDQLFIDUPV
LQVRPHRWKHU8QLWHG6WDWHVVWXGLHV0DKRQH\HWDO
&KDVH 0F%ULGH DQG *UHHQH KLJKSUHPLXPV0F%ULGHDQG*UHHQHRUORZHU
SURGXFWLRQFRVWV0DKRQH\HWDO&KDVH
UHQGHUHGDOORUJDQLFV\VWHPVPRUHSURÀWDEOH
6HYHUDORIWKH8QLWHG6WDWHVVWXGLHVLQYHVWLJDWHGGULHU
DUHDVDVZHOODQGIRXQGKLJKHU\LHOGVLQWKHRUJDQLF
V\VWHPV6WDQKLOO'LHEHO:LOOLDPVDQG/OHZHO\Q
'REEVDQG6PROLN+DQVRQ/LFKWHQEHUJ
DQG 3HWHUV 3LPHQWHO HW DO VXJJHVWLQJ
WKDW WKRVH V\VWHPV DUH PRUH UHVLVWDQW WR GURXJKW
6LPLODUO\VWXGLHVLQGHYHORSLQJFRXQWULHVVKRZHGWKDW
RUJDQLF\LHOGVZHUHJHQHUDOO\KLJKHUXQGHUQRUPDORU
IDYRXUDEOH FRQGLWLRQV ,)$' 5DM HW DO *LEERQ DQG %ROZLJ 6HWERRQVDUQJ <HXQJ
DQG &DL DQG VLJQLÀFDQWO\ KLJKHU XQGHU OHVV
IDYRUDEOH FRQGLWLRQV 0HQGR]D 2YHUDOO WKH
PDMRULW\RIHFRQRPLFVWXGLHVLQGHYHORSLQJFRXQWULHV
VKRZHG KLJKHU \LHOGV IURP RUJDQLF SURGXFWLRQ
ZKHUHDV QRW RQH VWXG\ RQ GHYHORSHG FRXQWULHV
VKRZHG KLJKHU \LHOGV IURP RUJDQLF FRPSDUHG ZLWK
FRQYHQWLRQDO
:KHQ FRQYHUWLQJ WR RUJDQLF DJULFXOWXUH D SDUDGLJP
VKLIW PXVW WDNH SODFH IURP WKH KLJK H[WHUQDO LQSXW
SDFNDJHV IRU WUHDWLQJ SUREOHPV WR WKH XVH RI
SUHYHQWLYH PDQDJHPHQW DQG LQWHQVLYH NQRZOHGJH
LQSXWV<LHOGVDUHQRWDFKDUDFWHULVWLFRIDSURGXFWLRQ
V\VWHP SHU VH WKH\ GHSHQG YHU\ PXFK RQ IDUP
PDQDJHPHQW $OWKRXJK RUJDQLF SURGXFH JHQHUDOO\
\LHOGVOHVV\LHOGORVVHVFDQEHPLWLJDWHGWRDFHUWDLQ
%R['LIÀFXOWLHVLQDQDO\VLQJ\LHOGVIURPFRPSDUDWLYHVWXGLHV
‡ 2EMHFWRIFRPSDULVRQFRPPRGLW\RUZKROHIDUPEDVHG6RPHDXWKRUVRQO\ORRNDW\LHOGVRIRQHRUWZRFDVK
FURSVVHSDUDWHO\&KDVHDQG'XII\'REEVDQG6PROLNVWXGLHVIURPGHYHORSLQJFRXQWULHVZKHUHDV
RWKHUVDOVRHYDOXDWHDYHUDJH\LHOGVRIWKHZKROHURWDWLRQ+DQVRQHWDO&KDVHDQGRILQWHUFURSV(\
KRUQ5DPDNULVKQDQDQG0lGHU7KHODWWHULVPRUHUHOHYDQWDOWKRXJKPRUHFRPSOH[IRUREWDLQLQJPHDQLQJIXO
UHVXOWV
‡ 8QLWRIFRPSDULVRQSHUKDRUSURGXFW6RPHVWXGLHVHYDOXDWHFRZ\LHOGSHUKHFWDUHZKLFKLVXVXDOO\ORZHULQ
RUJDQLFGXHWRORZHUVWRFNLQJGHQVLWLHVZKHUHDVRWKHUVHYDOXDWHFRZ\LHOGSHUDQLPDOZKLFKRIWHQSURYLGHVVLPLODU
UHVXOWVDQGWKLVPDNHVFRPSDULVRQVGLIÀFXOW
‡ 'LIIHUHQWYDULHWLHV9DULHWLHVEUHGIRULQWHQVLYHH[WHUQDOLQSXWFRQGLWLRQVDUHVHOGRPVXLWDEOHIRUORZH[WHUQDOLQSXW
V\VWHPV2UJDQLFV\VWHPVHVSHFLDOO\LQGHYHORSLQJFRXQWULHVRIWHQXVHORFDOEUHHGVDQGYDULHWLHVZKLFKKDYHORZHU
\LHOGVEXWZKLFKDUHPRUHDGDSWHGWRORZH[WHUQDOLQSXWFRQGLWLRQVLQWKDWWKH\UHTXLUHOHVVQXWULHQWVDQGZDWHULQSXWV
RUKDYHKLJKHUSHVWGLVHDVHUHVLVWDQFH+RZHYHUDXWKRUVJHQHUDOO\GRQRWVSHFLI\WKDWGLIIHUHQFHVLQ\LHOGVPD\EH
GXHWRGLIIHUHQWYDULHWLHV
‡ 'LIIHUHQWJURZWKSHULRGV8VLQJGLIIHUHQWYDULHWLHVDOVRLQÁXHQFHVWKHHFRQRPLFVRIWKHZKROHURWDWLRQV\VWHPIRU
H[DPSOHPDQ\RUJDQLFIDUPHUVLQ,QGLDXVHGHVLFRWWRQZKLFKLVDZKROHVHDVRQFURSWKXVDIWHUKDUYHVWIDUPHUV
FDQQRWJURZDQ\WKLQJHOVHLQWKHURWDWLRQ0RVWFRQYHQWLRQDOIDUPHUVJURZK\EULGYDULHWLHVXQGHULUULJDWLRQLQWKH
VWXGLHVDQDO\VHGZKLFKHQDEOHVWKHFXOWLYDWLRQRIWZRRUWKUHHFURSVSHU\HDU-DFNVRQ
‡ 0DQDJHULDOEDFNJURXQG7KHLQWHQVLW\RISUHYLRXVO\PDQDJHGFRQYHQWLRQDOIDUPVLVDVLJQLÀFDQWIDFWRUFRQWULEXWLQJ
WRWKH\LHOGGHFUHDVHVGXULQJDQGDIWHUFRQYHUVLRQWRRUJDQLF<HWRIWHQWKHEDFNJURXQGRIRUJDQLFIDUPVLVQRWFOHDU
IURPWKHVWXGLHVHYHQWKRXJKLWLQÁXHQFHVWKHFRPSDUDWLYHEDVHOLQH
H[WHQWE\SURSHUVRLOPDQDJHPHQWVKDGHWUHHVVXFK
DV LQ FRIIHH FXOWLYDWLRQ WLPHO\ UHPRYDO RI GLVHDVHG
SODQWV DQG D KHDOWK\ EDODQFH EHWZHHQ SHVWV DQG
QDWXUDO HQHPLHV DV ELRORJLFDO FRQWUROV 9DQ GHU
9RVVHQ 1HYHUWKHOHVV DOWKRXJK DQ LPSRUWDQW
HOHPHQWRISURÀWDELOLW\\LHOGVDORQHGRQRWQHFHVVDULO\
LQGLFDWHSURÀWDELOLW\
&3URGXFWLRQFRVWV
,QIDUPHFRQRPLFVWKHUHLVQRDEVROXWHGHÀQLWLRQRI
ZKDW KDV WR EH FRQVLGHUHG DV YDULDEOH FRVWV RU DV
À[HG FRVWV LW GHSHQGV RQ WKH DLP RI WKH UHVHDUFK
6RPHVWXGLHVFRQVLGHURQO\YDULDEOHFRVWVWRFDOFXODWH
JURVVPDUJLQV<RXQLH+DPLOWRQDQG1HYLVRQ
ZKHUHDV RWKHUV LQFOXGH À[HG FRVWV :\QHQ *LEERQ DQG %ROZLJ DQG \HW RWKHUV GR QRW
GLIIHUHQWLDWH EHWZHHQ WKH WZR W\SHV RI FRVWV 2OVRQ
DQG0DKRQH\'HODWHHWDO%\GHÀQLWLRQ
À[HGFRVWVDUHSDUWRIWKHWRWDOIDUPFRVWVWKDWGRQRW
YDU\ VLJQLÀFDQWO\ ZLWK WKH YROXPH RI RXWSXW DQG FDQ
RQO\ EH FKDQJHG LQ WKH ORQJ UXQ ZKHUHDV YDULDEOH
FRVWV DUH WKRVH WKDW YDU\ GLUHFWO\ ZLWK WKH YROXPH
RI RXWSXW 7KH GLIIHUHQWLDWLRQ EHWZHHQ YDULDEOH DQG
À[HG FRVWV LV RQO\ LPSRUWDQW ZKHQ JURVV PDUJLQV
DUH FDOFXODWHG DV À[HG FRVWV DUH QRW DFFRXQWHG IRU
LQ WKRVH PDUJLQV +RZHYHU À[HG FRVWV DUH FUXFLDO
IRU IDUPSURÀWDELOLW\'XULQJFRQYHUVLRQIRU LQVWDQFH
VHYHUDOVXEVWDQWLDOLQYHVWPHQWVKDYHWREHPDGHHJ
QHZ DQLPDOIULHQGO\ KRXVLQJ V\VWHP QHZ RUFKDUG
YDULHWLHVWKDWFDQEHWWHUZLWKVWDQGELRSK\VLFDOVWUHVV
WKDW DUH RIWHQ FRXQWHG DV À[HG FRVWV DQG IRU PDQ\
IDUPHUVWKHVHFRVWVDUHWKHGHWHUPLQLQJIDFWRUDVWR
ZKHWKHU FRQYHUWLQJ WR RUJDQLF PD\ EH SURÀWDEOH RU
QRW (YHQ WKRXJK PRVW VWXGLHV PDNH WKH GLVWLQFWLRQ
EHWZHHQWKHWZRW\SHVRIFRVWVWKH\PD\QRWVSHFLI\
ZKLFKFRVWVDUHFRYHUHGE\HDFKRIWKHP0HQWLRQLQJ
PHUHO\ YDULDEOH DQG À[HG FRVWV GRHV QRW DOORZ IRU
WKH DSSUHFLDWLRQ RI WKH YDULDEOHV XVHG DQG WKXV IRU
SURSHUFRPSDULVRQV
$Q HYHQ PRUH FRPSOLFDWHG LVVXH LV WKH LQFOXVLRQ RI
ODERXU FRVWV VRPH FRPSDULVRQV RPLW ODERXU FRVWV
IURPWKHWRWDOFDOFXODWLRQRIQHWUHYHQXHVHJ+DQVRQ
/LFKWHQEHUJ DQG 3HWHUV 'HODWH HW DO ZKLOHPRVWLQFOXGHKLUHGODERXULQWKHYDULDEOHFRVWV
:\QHQ (\KRUQ 5DPDNULVKQDQ DQG 0lGHU
*LEERQ DQG %ROZLJ &KDVH VRPH FRXQW KLUHG ODERXU FRVWV DV À[HG FRVWV WKXV
RPLWWLQJ WKHP IURP JURVV PDUJLQ UHVXOWV )$7 %0(/)DQG\HWRWKHUVFRXQWIDPLO\ODERXUDV
DQ RSSRUWXQLW\ FRVW RU OHDYH WKLV RXW FRPSOHWHO\ DV
75$'($1'(19,5210(175(9,(:
LQ PRVW VWXGLHV RI GHYHORSLQJ FRXQWULHV $QRWKHU
DSSURDFKXVHGE\:\QHQIRULQVWDQFHFRXQWV
KLUHG ODERXU DV D YDULDEOH FRVW DQG IDPLO\ ODERXU DV
DÀ[HGFRVW9HU\RIWHQLQGHYHORSLQJFRXQWULHVRQO\
FDVK FRVWV DUH LQFOXGHG DQG QRQFDVK FRVWV HJ
RZQ ODERXU DQG VHHGV DUH H[FOXGHG 5HJDUGOHVV RI
ZKHWKHU ODERXU FRVWV DUH WUHDWHG XQGHU À[HG DQGRU
YDULDEOHFRVWVWKHPRVWLPSRUWDQWDVSHFWLVWKDWWKH\
DUHWUHDWHGFRQVLVWHQWO\ZLWKLQWKHFDVHVWXG\DQGDUH
QRWRYHUORRNHG
)URP WKH DQDO\VLV RI VWXGLHV LW IROORZV WKDW HYHQ
LI WKH GLIIHUHQW FRVW HOHPHQWV ZHUH VWDQGDUGL]HG
YDULDWLRQVDPRQJSURGXFWLRQFRVWVZRXOGRFFXUGXH
WRWKHXQLTXHFKDUDFWHURIWKHRSHUDWLRQVDQGIDFWRUV
EH\RQG WKH FRQWURO RI WKH IDUPHUV IRU H[DPSOH
PDFKLQHU\FRVWVGHSHQGDOVRRQDJHVL]HDQGXVH
LUULJDWLRQ FRVWV DUH VXEMHFW WR YDULDWLRQV LQ UDLQIDOO
WHPSHUDWXUH DQG HIÀFLHQF\ RI LUULJDWLRQ V\VWHPV
DQG ODERXU FRVWV GHSHQG RQ ZDJH UDWHV ZRUNLQJ
FRQGLWLRQV DQG HIÀFLHQF\ RI WKH ZRUNHUV 7KLV EHLQJ
VDLGSURGXFWLRQFRVWVWHQGWREHORZHULQHVWDEOLVKHG
RUJDQLF V\VWHPV HJ +HOPHUV /DQJHPHLHU DQG
$WZRRG +DQVRQ /LFKWHQEHUJ DQG 3HWHUV
2OVRQDQG0DKRQH\'HODWHHWDO
0HQGR]D (\KRUQ 5DPDNULVKQDQ DQG 0lGHU
,Q PRVW RI WKH(XURSHDQ VWXGLHV DQDO\VHG E\
2IIHUPDQQDQG1LHEHUJLQWRWDOFRVWVLQFXUUHG
E\RUJDQLFIDUPVZHUHRQDYHUDJHVOLJKWO\ORZHUWKDQ
WKRVH LQFXUUHG E\ FRPSDUDEOH FRQYHQWLRQDO IDUPV
:KLOHYDULDEOHFRVWVZHUHJHQHUDOO\VLJQLÀFDQWO\ORZHU
² SHU FHQW LQ WKH RUJDQLF V\VWHPV WKHLU À[HG
FRVWVZHUHXSWRSHUFHQWKLJKHUWKDQWKRVHRIWKH
FRQYHQWLRQDOUHIHUHQFHJURXSLQVHYHUDOFRXQWULHV7KH
IHZFDVHVZLWKVLJQLÀFDQWO\KLJKHUSURGXFWLRQFRVWVLQ
RUJDQLF IDUPV ZHUH WKH RQHV IRFXVLQJ RQ YHJHWDEOH
SURGXFWLRQRUWKRVHLQGHYHORSLQJFRXQWULHV
$OO DQDO\VHG VWXGLHV UHOLHG RQ UHODWLYHO\ FKHDS LQSXW
FRVWV EDVHG RQ FKHDS IRVVLO IXHO WKDW KDYH EHHQ
YDU\LQJ WUHPHQGRXVO\ RYHU WKH SDVW IHZ \HDUV
,QSXW FRVWV DUH ERXQG WR LQFUHDVH LQ WKH ORQJ UXQ
JOREDO QLWURJHQ IHUWLOL]HU SULFHV VXUJHG E\ SHU
FHQW GXULQJ WKH ÀUVW TXDUWHU RI DQG IRVVLOIXHO
EDVHG DJULFXOWXUDO LQSXWV D VXEVWDQWLDO SURSRUWLRQ
RISURGXFWLRQFRVWVZLOOVRRQHURUODWHUVXEVWDQWLDOO\
DIIHFWIDUPLQJV\VWHPVWKDWUHO\RQWKHLQWHQVLYHXVH
RI V\QWKHWLF IHUWLOL]HUV DQG SHVWLFLGHV ,Q WKH FDVH RI
RUJDQLFDJULFXOWXUHRLOEDVHGLQSXWVQHJDWLYHO\DIIHFW
SURGXFWLRQ FRVWV ZKHUH SODVWLF PXOFK LV XVHG DQG
PRUHJHQHUDOO\ZKHQWKHV\VWHPLVPHFKDQL]HG
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
'2YHUDOOSURÀWDELOLW\
2YHUVWXGLHVZHUHDQDO\VHGLQWHUPVRIWKHLUUHVHDUFK
RQ IDUP SURÀWDELOLW\ DQG DOWKRXJK PHWKRGRORJLFDO
GLIIHUHQFHV SUHYHQWHG XV IURP FRPSDULQJ WKHP
V\VWHPDWLFDOO\WKHVLPLODULWLHVEHWZHHQWKHVWXGLHVIURP
PDQ\FRXQWULHVDQGFRQWH[WVDOORZHGXVWRGUDZVRPH
JHQHUDO FRQFOXVLRQV 3URÀWDELOLW\ FHUWDLQO\ GHSHQGV
RQWKHFKRLFHRIFURSZKLFKRIFRXUVHLVGHWHUPLQHG
SDUWO\ E\ HQYLURQPHQWDO FRQGLWLRQV DQG SDUWO\ E\
WKH GHPDQG IRU SURGXFWV DQG E\ WKH DYDLODELOLW\ RI
JRYHUQPHQWSURJUDPPHVWKDWVXSSRUWWKHFXOWLYDWLRQ
RISDUWLFXODUFURSV$FRPSDULVRQRIUHODWLYHSURÀWDELOLW\
GHSHQGV ODUJHO\ RQ WKH NLQG RI FRPSDULVRQ JURXS
VHOHFWHG7KXVIDUPVL]HIDUPW\SHDQGORFDWLRQDUH
LPSRUWDQW IDFWRUV LQ VHOHFWLQJ WKH VXLWDEOH FDQGLGDWH
IDUPVIRUFRPSDULVRQ3ULFHSUHPLXPVDOVRVHHPWR
EHDFUXFLDOIDFWRUFRQWULEXWLQJWRWKHJRRGHFRQRPLF
SHUIRUPDQFHRIRUJDQLFV\VWHPVDQGLQPRVWFDVHV
WKH\PDNHRUJDQLFIDUPVPRUHSURÀWDEOH+RZHYHUDW
OHDVWDGR]HQVWXGLHVVKRZHGWKDWSULFHSUHPLXPVDUH
QRWDOZD\VQHFHVVDU\IRURUJDQLFV\VWHPVWREHPRUH
SURÀWDEOHWKDQFRQYHQWLRQDOV\VWHPV,IKLJKHUSULFHV
DUH QRW DYDLODEOH WR FRPSHQVDWH IRU SRVVLEOH ORVVHV
RI RUJDQLF \LHOGV ÀQDQFLDO SURÀWDELOLW\ ZLOO GHSHQG
HQWLUHO\RQDFKLHYLQJFRVWUHGXFWLRQV
2YHUDOO WKH FRPSLOHG GDWD VXJJHVW WKDW RUJDQLF
DJULFXOWXUH LV HFRQRPLFDOO\ PRUH SURÀWDEOH QHW
UHWXUQV WDNLQJ WRWDO FRVWV LQWR DFFRXQW PRVW RIWHQ
SURYHG WR EH KLJKHU LQ RUJDQLF V\VWHPV 7KHUH ZHUH
ZLGH YDULDWLRQV DPRQJ \LHOGV DQG SURGXFWLRQ FRVWV
EXW HLWKHU KLJKHU PDUNHW SULFHV DQG SUHPLXPV RU
ORZHU SURGXFWLRQ FRVWV RU D FRPELQDWLRQ RI WKHVH
WZR JHQHUDOO\ UHVXOWHG LQ KLJKHU UHODWLYH SURÀWV IURP
RUJDQLFDJULFXOWXUHLQGHYHORSHGFRXQWULHV7KHVDPH
FRQFOXVLRQFDQEHGUDZQIURPVWXGLHVLQGHYHORSLQJ
FRXQWULHVEXWWKHUHKLJKHU\LHOGVFRPELQHGZLWKKLJK
SUHPLXPV VHHPHG WR EH WKH XQGHUO\LQJ UHDVRQV IRU
KLJKHUUHODWLYHSURÀWDELOLW\
(VWDEOLVKLQJ RUJDQLF PDUNHWV IRU VWDSOH FURSV HJ
RUJDQLF VR\EHDQV ZKHDW FKLOOLHV WKDW DUH SDUW RI
D URWDWLRQ RIIHUV FRQVLGHUDEOH SRWHQWLDO WR IXUWKHU
LPSURYHWKHSURÀWDELOLW\RIRUJDQLFIDUPVLQGHYHORSLQJ
FRXQWULHV,IWKHVHFURSVFRXOGEHVROGDWDSUHPLXP
SULFH WKH UHYHQXHV RI RUJDQLF IDUPV ZRXOG IXUWKHU
LQFUHDVH,QGHYHORSHGFRXQWULHVDIXUWKHUUHGXFWLRQ
LQSURGXFWLRQFRVWVHQHUJ\IXHOIHHGDQGWKHXVHRI
EHWWHUYDULHWLHVHJLQWHUPVRIUHVLVWDQFHDQG\LHOG
FRXOGUHVXOWLQDQLQFUHDVHLQWKHUHODWLYHSURÀWDELOLW\RI
RUJDQLFIDUPV
(7KHQHHGIRUIDLUHFRQRPLF
FRPSDULVRQV
2UJDQLFV\VWHPVDUHJHQHUDOO\PRUHSURÀWDEOHGHVSLWH
XQIDLU FRPSHWLWLRQ LQ WKH PDUNHWSODFH GXH WR FXUUHQW
JRYHUQPHQW VXEVLG\ VFKHPHV IRU FRQYHQWLRQDO
SURGXFWLRQ XQHTXDO DYDLODELOLW\ RI UHVHDUFK DQG
H[WHQVLRQVHUYLFHVDQGWKHIDLOXUHRIPDUNHWSULFHVRI
FRQYHQWLRQDOIRRGVWRFDSWXUHWKHUHDOHQYLURQPHQWDO
VRFLDO DQG KHDOWK H[WHUQDOLWLHV ([LVWLQJ HFRQRPLF
FRPSDULVRQV DUH WKHUHIRUH KHDYLO\ ELDVHG LQ IDYRXU
RI FRQYHQWLRQDO IDUPLQJ 7KHUH LV DQ XUJHQW QHHG
WR GLUHFW PXFK PRUH UHVHDUFK DQG LQYHVWPHQWV LQWR
H[WHQVLRQVHUYLFHVWRVXSSRUWRUJDQLFDJULFXOWXUHDQG
VKLIWWKHEXONRISXEOLFVXSSRUWIURPSROOXWLQJDFWLYLWLHV
WR VXVWDLQDEOH SUDFWLFHV WR JLYH DQ HTXDO IRRWLQJ WR
RUJDQLF IDUPLQJ V\VWHPV ,Q DGGLWLRQ FRPSDUDWLYH
VWXGLHV QHHG WR WDNH LQWR DFFRXQW WKH GLIIHUHQFHV
LQ H[WHUQDO FRVWV DQG EHQHÀWV VR DV WR FDSWXUH WKH
%R[3URÀWDELOLW\RIRUJDQLFFRWWRQSURGXFWLRQ
$Q,QGR6ZLVVUHVHDUFKWHDPFRPSDUHGDJURQRPLFGDWDRIRUJDQLFDQGFRQYHQWLRQDOIDUPVRYHUWZR\HDUV(\
KRUQ5DPDNULVKQDQDQG0lGHUDQGFDPHWRWKHFRQFOXVLRQWKDWRUJDQLFIDUPLQJRIFRWWRQZDVPRUHSURÀWDEOH
YDULDEOHSURGXFWLRQFRVWVZHUH²SHUFHQWORZHUDQGFRVWVRILQSXWVZHUHSHUFHQWORZHU\HW\LHOGVZHUH²SHU
FHQWKLJKHULQWKHWZR\HDUVDQGDVDUHVXOWJURVVPDUJLQVIRUFRWWRQZHUHSHUFHQWKLJKHU$OWKRXJKWKHUHZDV
QRSULFHSUHPLXPIRUWKHFURSVJURZQLQURWDWLRQZLWKFRWWRQRUJDQLFIDUPVHDUQHG²SHUFHQWKLJKHULQFRPHVWKDQ
FRQYHQWLRQDOIDUPV
,QDQ,QGLDQVXUYH\RIRUJDQLFFRWWRQIDUPHUVSHUFHQWRIUHVSRQGHQWVVDZWKHLUDJULFXOWXUDOLQFRPHLQFUHDVHE\
SHUFHQWRQDYHUDJHDIWHUDGRSWLQJRUJDQLFDJULFXOWXUDOSUDFWLFHVZKLFKPRVWRIWKHPDWWULEXWHGPDLQO\WRUHGXFHG
FRVWVRISURGXFWLRQDQGKLJKHUVDOHVSULFHV0DF'RQDOG6LPLODUO\LQWKH,QGLDQVWDWHRI$QGKUD3UDGHVK5DMHW
DOIRXQGWKDWJURZLQJRUJDQLFFRWWRQZDVPXFKPRUHSURÀWDEOHWKDQJURZLQJFRQYHQWLRQDOFRWWRQLQFRPHZDV
SHUDFUHRQRUJDQLFFRPSDUHGZLWKSHUDFUHRQFRQYHQWLRQDOIDUPV,QFRQFOXVLRQDOOVWXGLHVIRXQGRUJDQLF
FRWWRQIDUPLQJWREHPRUHSURÀWDEOHWKDQFRQYHQWLRQDO
75$'($1'(19,5210(175(9,(:
%R[([DPSOHVRIHQYLURQPHQWDOFRVWV
$VWXG\E\3UHWW\HWDOHVWLPDWHGWKHDQQXDOH[WHUQDOFRVWVRIDJULFXOWXUHLQWKH8QLWHG.LQJGRPLQDW
ELOOLRQELOOLRQHTXLYDOHQWWR…KDKDRIDUDEOHDQGSHUPDQHQWSDVWXUH7KLVZDVSHUFHQWRIWKHDYHU
DJHQHWIDUPLQFRPHIRU6LJQLÀFDQWFRVWVDURVHIURPWKHFRQWDPLQDWLRQRIGULQNLQJZDWHUZLWKSHVWLFLGHVQLWUDWH
DQGSKRVSKDWHIURPGDPDJHWRZLOGOLIHKDELWDWVKHGJHURZVIURP*+*HPLVVLRQVIURPVRLOHURVLRQDQGRUJDQLFFDU
ERQORVVHVIURPIRRGSRLVRQLQJDQGIURP%6($QRWKHUVWXG\ZKLFKFDOFXODWHGWKHH[WHUQDOFRVWVRIDJULFXOWXUHLQWKH
8QLWHG6WDWHVLQFOXGLQJGDPDJHWRZDWHUVRXUFHVWRVRLODQGDLUWRZLOGOLIHDQGHFRV\VWHPELRGLYHUVLW\DQGWRKXPDQ
KHDOWKHVWLPDWHGWKHFRVWVWRUDQJHEHWZHHQELOOLRQDQGELOOLRQDQQXDOO\RU²KDRIFURSODQG7HJW
PHLHUDQG'XII\7KHVHVWXGLHVRQO\HVWLPDWHGH[WHUQDOLWLHVWKDWJDYHULVHWRÀQDQFLDOFRVWVWKXVWKH\DUHOLNHO\WR
KDYHXQGHUHVWLPDWHGWKHWRWDOQHJDWLYHLPSDFWVDULVLQJIURPWKHLQWHQVLYHXVHRIDJURFKHPLFDOV
UHDODQGPXOWLSOHSURÀWVRIWKHUHVSHFWLYHV\VWHPVRI
DJULFXOWXUH
*RYHUQPHQWVXSSRUW
1DWLRQDO RU UHJLRQDO DJULFXOWXUDO SURJUDPPHV DQG
VXEVLGLHV DUH PRVWO\ JHDUHG WRZDUGV VXSSRUWLQJ
ODUJHVFDOH DJULFXOWXUH WKDW PDNHV LQWHQVLYH XVH RI
FKHPLFDO LQSXWV ZKLFK DUWLÀFLDOO\ ORZHUV WKH SULFH RI
FRQYHQWLRQDO SURGXFWV 3DLQWHU FRPSDUHG QHW
UHWXUQVRIRUJDQLFDQGFRQYHQWLRQDOIDUPVDWWKHHQG
RIWKHVDQGIRXQGWKDWWKHDYHUDJHJRYHUQPHQWDO
VXEVLG\ SHU KHFWDUH ZDV SHU FHQW KLJKHU IRU
FRQYHQWLRQDO SURGXFWLRQ 5HVHDUFKHUV LQ WKH V
DOVRIRXQGWKDWFRQYHQWLRQDOV\VWHPVEHQHÀWHGPRUH
IURPJRYHUQPHQWVXEVLGLHVWKDQRUJDQLFRQHV'LHEHO
:LOOLDPV DQG /OHZHO\Q 6PROLN 'REEV DQG
5LFNHUO,IVXEVLGLHVZHUHH[SDQGHGWRVXSSRUW
ORQJWHUPDVSHFWVRIDJULFXOWXUDOSURGXFWLYLW\VXFKDV
VRLOEXLOGLQJJUDVVDQGOHJXPHFURSVWKHSURÀWDELOLW\
RIRUJDQLFIDUPLQJZRXOGEHHYHQKLJKHU
:KLOH RUJDQLF IDUPV LQ (XURSH UHFHLYH FRQVLGHUDEOH
VXSSRUW IURP WKH (8·V DJULHQYLURQPHQWDO SURJ
UDPPHVWKHGHVLJQRIWKHÀUVWSLOODURIWKH&RPPRQ
$JULFXOWXUDO 3ROLF\ &$3 SXW RUJDQLF IDUPLQJ DW D
GLVDGYDQWDJH LQ WKH SDVW 7KH &$3 UHIRUP
FKDQJHGWKLVVLWXDWLRQSDUWLFXODUO\E\GHFRXSOLQJGLUHFW
SD\PHQWV +RZHYHU WKH UHVXOWV RI D VXUYH\ VKRZHG
WKDWRQO\SHUFHQWRIRUJDQLFIDUPHUVWKRXJKWWKDW
GHFRXSOLQJKDGKDGDSRVLWLYHLPSDFWRQWKHLUSURÀWV
6DQGHUV 2IIHUPDQQ DQG 1LHEHUJ 7KHUH LV
PXFKGHEDWHRQZKHWKHUWKHFXUUHQWOHYHOVRIRUJDQLF
VXSSRUWDUHDSSURSULDWH1HYHUWKHOHVVLWLVFOHDUWKDW
D VKDUS UHGLUHFWLRQ RI SXEOLF VXSSRUW IURP SROOXWLQJ
DFWLYLWLHV WR VXVWDLQDEOH SUDFWLFHV LV QHFHVVDU\ ERWK
LQ GHYHORSHG DQG GHYHORSLQJ FRXQWULHV 6XEVLGLHV
VKRXOGHQFRXUDJHSRVLWLYHH[WHUQDOLWLHVZKLOHDGYLVRU\
DQG LQVWLWXWLRQDO PHFKDQLVPV OHJDO PHDVXUHV DQG
HFRQRPLF LQVWUXPHQWV VKRXOG FRUUHFW QHJDWLYH
H[WHUQDOLWLHV
5HVHDUFKDQGH[WHQVLRQ
7KH DFKLHYHPHQWV RI FRQYHQWLRQDO IDUPLQJ V\VWHPV
DUH EDVHG RQ VHYHUDO GHFDGHV RI LQWHQVLYH UHVHDUFK
DQG VXSSRUW ZKHUHDV RUJDQLF UHVHDUFK LV VWLOO LQ LWV
LQIDQF\&RQYHQWLRQDOIDUPHUVRIWHQKDYHEHWWHUDFFHVV
WRLQIRUPDWLRQIURPH[WHQVLRQVHUYLFHVDQGXQLYHUVLW\
UHVHDUFKHUV2UJDQLFIDUPHUVRQWKHRWKHUKDQGQHHG
PRUHWLPHDQGJUHDWHUPDQDJHULDOHIIRUWVDQGVNLOOVWR
DFTXLUHWKHQHFHVVDU\NQRZOHGJHRQVXFKPDWWHUVDV
RUJDQLFSUDFWLFHVSULFHVDQGPDUNHWLQJRSSRUWXQLWLHV
%RWK\LHOGOHYHOVDQGJURVVPDUJLQVRIURWDWLRQFURSV
ZRXOG SUREDEO\ LQFUHDVH LI H[WHQVLRQ VHUYLFHV DOVR
SURYLGHG WUDLQLQJ DQG DGYLFH RQ PDQDJLQJ WKHVH
FURSV RUJDQLFDOO\ (\KRUQ 5DPDNULVKQDQ DQG
0lGHU 7KXV FRPSDULVRQV RI \LHOG DQG IDUP
HFRQRPLFVEHWZHHQFRQYHQWLRQDODQGRUJDQLFFDQEH
FRQVLGHUHGXQIDLUDVORQJDVWKHODWWHUGRQRWEHQHÀW
IURP VLPLODU UHVHDUFK DQG H[WHQVLRQ VHUYLFH VXSSRUW
WKDWDUHGLUHFWHGWRFRQYHQWLRQDODJULFXOWXUH
([WHUQDOLWLHV
7KH SURÀWDELOLW\ RI D IDUPLQJ V\VWHP PXVW EDODQFH
HFRQRPLF FRVWV DJDLQVW HQYLURQPHQWDO VRFLDO DQG
KHDOWK FRVWV DV WKHVH FRVWV KDYH GHOD\HG LPSDFWV
DQG LQGLUHFW HIIHFWV RQ IDUP HFRQRPLFV $W SUHVHQW
FRPSDUDWLYH HFRQRPLF VWXGLHV RI WKH WZR IDUPLQJ
V\VWHPV RQO\ FRQVLGHU GLUHFW HFRQRPLF LQSXWV DQG
RXWSXWV LQ WKH HTXDWLRQ DQG EURDGO\ RYHUORRN WKH
HQYLURQPHQWDO VRFLDO DQG KHDOWK FRVWV $FFRXQWLQJ
IRU H[WHUQDOLWLHV VXFK DV FRVWV DVVRFLDWHG ZLWK UXQ
RII VSLOOV GHSOHWLRQ RI QDWXUDO UHVRXUFHV DQG KHDOWK
FRVWV WR IDUPHUV H[SRVHG WR SHVWLFLGHV DUH ODFNLQJ
<HW JHQHUDOO\ RUJDQLF GHOLYHUV PRUH SXEOLF JRRGV
VXFKDVHQYLURQPHQWDODQGKHDOWKEHQHÀWV7DNLQJWKH
GLIIHUHQFHVLQH[WHUQDOFRVWVDQGEHQHÀWVLQWRDFFRXQW
ZRXOGJLYHDPRUHDFFXUDWHSURÀWDELOLW\SLFWXUHRIWKH
GLIIHUHQWV\VWHPV
,Q WKHVH FRPSOHWHO\ GLVWRUWHG PDUNHWV WKDW IDLO
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
WR SURYLGH D OHYHO SOD\LQJ ÀHOG EHWZHHQ RUJDQLF
DQG FRQYHQWLRQDO DJULFXOWXUH VXEVLGLHV DUH RQH
ZD\ RI KHOSLQJ RUJDQLF IDUPHUV WR FRQWLQXH ZLWK
HQYLURQPHQWDOO\ IULHQGO\ IDUPLQJ SUDFWLFHV 3ULFH
VXSSRUWV FRXOG WDNH WKH IRUP RI FRPSHQVDWLRQ WKDW
UHZDUGV IDUPHUV IRU WKH HFRV\VWHP DQG VRFLHWDO
VHUYLFHV HJ ODQGVFDSH WKH\ DUH SHUIRUPLQJ IRU
WKHFRPPRQJRRG%RWKH[WHUQDOFRVWVDQGEHQHÀWV
FRXOGEHTXDQWLÀHGLQHFRQRPLFWHUPVHJSROOXWLRQ
DEDWHPHQW FRVWV DQG WKXV FRXOG EH WDNHQ LQWR
DFFRXQW LQ FRPSDUDWLYH VWXGLHV 7KLV ZRXOG PHDQ
D UHGLUHFWLRQ RI HFRQRPLF WKLQNLQJ ZKLFK ZRXOG
EHWWHU UHÁHFW WKH WUXH FRVW RI IDUPLQJ SUDFWLFHV DQG
KRSHIXOO\OHDGWRWKHUHIRUPXODWLRQRISROLFLHVVRWKDW
WKH\QRORQJHUVXSSRUWSROOXWLQJDFWLYLWLHVEXWLQVWHDG
FRUUHFWQHJDWLYHH[WHUQDOLWLHVDVIDUDVSRVVLEOH
75$'($1'(19,5210(175(9,(:
1//'06#4;U 64'0)6*'0+0)'5+.+'0%'1(
#4/+0);56'/5U
4'4'37+5+6'(14756#+0#$.')4+%7.674#.
41&7%6+10
0LJXHO$$OWLHUL8QLYHUVLW\RI&DOLIRUQLD%HUNHOH\DQG
3DUYL].RRKDINDQ)$2
$EVWUDFW
7UDGLWLRQDOIDUPLQJV\VWHPVKDYHHQDEOHGIDUPHUVWRJHQHUDWHVXVWDLQHG\LHOGVWRPHHWWKHLUVXEVLVWHQFH
QHHGVLQWKHFRQWH[WRIFOLPDWLFYDULDELOLW\3DUWRIWKLVSHUIRUPDQFHLVOLQNHGWRWKHKLJKOHYHOVRIDJURELRGLYHU
VLW\H[KLELWHGE\WUDGLWLRQDODJURHFRV\VWHPV6WUDWHJLHVWRHQKDQFHGLYHUVLW\LQDJURHFRV\VWHPVLQFOXGH
VXSSRUWWRIDPLO\DJULFXOWXUHDQGWRVPDOOKROGHUVDQGG\QDPLFFRQVHUYDWLRQRIJOREDOO\LPSRUWDQWDJULFXOWXUDO
KHULWDJH V\VWHPV 'LYHUVLÀFDWLRQ LV WKHUHIRUH DQ LPSRUWDQW IDUP VWUDWHJ\ IRU PDQDJLQJ SURGXFWLRQ ULVN
LQ IDUPLQJ V\VWHPV 6WUDWHJLHV WR UHVWRUH GLYHUVLW\ LQ PRGHUQ IDUPLQJ V\VWHPV LQFOXGH SURPRWLQJ VHHG
GLYHUVLW\FURSURWDWLRQVFRYHUFURSVLQWHUFURSSLQJDQGFURSOLYHVWRFNPL[LQJ'LYHUVLÀHGIDUPLQJV\VWHPV
PDQDJHGZLWKPRGHUQHTXLSPHQWDOORZFRPSOHPHQWDU\LQWHUDFWLRQVWKDWERRVW\LHOGVZLWKORZLQSXWVWKXV
LQFUHDVLQJSURÀWVDQGJLYHQWKHGLYHUVLW\RIFURSVPLQLPL]LQJSURGXFWLRQULVNV
7RGD\ D PDMRU FKDOOHQJH IDFLQJ KXPDQLW\ LV KRZ
WR DFKLHYH D VXVWDLQDEOH DJULFXOWXUH WKDW SURYLGHV
VXIÀFLHQW IRRG DQG HFRV\VWHP VHUYLFHV IRU SUHVHQW
DQG IXWXUH JHQHUDWLRQV LQ DQ HUD RI FOLPDWH FKDQJH
ULVLQJ IXHO FRVWV VRFLDO WHQVLRQV FDXVHG E\ IRRG
SULFH KLNHV ÀQDQFLDO LQVWDELOLW\ DQG DFFHOHUDWLQJ
HQYLURQPHQWDO GHJUDGDWLRQ 7KH FKDOOHQJH LV
FRPSRXQGHG E\ WKH IDFW WKDW WKH PDMRULW\ RI WKH
ZRUOG·V DUDEOH ODQG LV XQGHU ´PRGHUQµ PRQRFXOWXUH
V\VWHPV RI PDL]H VR\EHDQ ULFH FRWWRQ DQG RWKHUV
ZKLFK GXH WR WKHLU HFRORJLFDO KRPRJHQHLW\ DUH
SDUWLFXODUO\ YXOQHUDEOH WR FOLPDWH FKDQJH DV ZHOO DV
ELRWLFVWUHVVHV/LWWOHKDVEHHQGRQHWRHQKDQFHWKH
DGDSWDELOLW\RILQGXVWULDODJURHFRV\VWHPVWRFKDQJLQJ
SDWWHUQV RI SUHFLSLWDWLRQ WHPSHUDWXUHV DQG H[WUHPH
ZHDWKHU HYHQWV 5RVHQ]ZHLJ DQG +LOOHO 7KLV
UHDOL]DWLRQ KDV OHG PDQ\ H[SHUWV WR VXJJHVWWKDWWKH
XVH RI HFRORJLFDOO\ EDVHG PDQDJHPHQW VWUDWHJLHV
PD\ UHSUHVHQW D UREXVW PHDQV RI LQFUHDVLQJ WKH
SURGXFWLYLW\VXVWDLQDELOLW\DQGUHVLOLHQFHRIDJULFXOWXUDO
SURGXFWLRQ ZKLOH UHGXFLQJ LWV XQGHVLUDEOH VRFLR
HQYLURQPHQWDO LPSDFWV $OWLHUL GH 6FKXWWHU
E
2EVHUYDWLRQV RI DJULFXOWXUDO SHUIRUPDQFH DIWHU
H[WUHPHFOLPDWLFHYHQWVGXULQJWKHSDVWWZRGHFDGHV
KDYH UHYHDOHG WKDW UHVLOLHQFH WR WKRVH HYHQWV LV
FORVHO\OLQNHGWRWKHOHYHORIRQIDUPELRGLYHUVLW\/LQ
0RVW VFLHQWLVWV DJUHH WKDW D EDVLF DWWULEXWH
RI DJULFXOWXUDO VXVWDLQDELOLW\ LV WKH PDLQWHQDQFH RI
DJURHFRV\VWHP GLYHUVLW\ LQ WKH IRUP RI VSDWLDO DQG
WHPSRUDO DUUDQJHPHQWV RI FURSV WUHHV DQLPDOV DQG
DVVRFLDWHG ELRWD ,QFUHDVLQJO\ UHVHDUFK VXJJHVWV
WKDW DJURHFRV\VWHP SHUIRUPDQFH DQG VWDELOLW\ LV
ODUJHO\ GHSHQGHQW RQ WKH OHYHO RI SODQW DQG DQLPDO
ELRGLYHUVLW\SUHVHQWLQWKHV\VWHPDQGLWVVXUURXQGLQJ
HQYLURQPHQW $OWLHUL DQG 1LFKROOV %LRGLYHUVLW\
SHUIRUPV D YDULHW\ RI HFRORJLFDO VHUYLFHV EH\RQG
WKH SURGXFWLRQ RI IRRG LQFOXGLQJ UHF\FOLQJ RI
QXWULHQWV UHJXODWLRQ RI PLFURFOLPDWH DQG RI ORFDO
K\GURORJLFDO SURFHVVHV VXSSUHVVLRQ RI XQGHVLUDEOH
RUJDQLVPV DQG GHWR[LÀFDWLRQ RI QR[LRXV FKHPLFDOV
%HFDXVH ELRGLYHUVLW\PHGLDWHG UHQHZDO SURFHVVHV
DQG HFRORJLFDO VHUYLFHV DUH ODUJHO\ ELRORJLFDO WKHLU
FRQWLQXHGIXQFWLRQLQJGHSHQGVXSRQWKHPDLQWHQDQFH
RIELRORJLFDOLQWHJULW\DQGGLYHUVLW\LQDJURHFRV\VWHPV
,Q JHQHUDO QDWXUDO HFRV\VWHPV DSSHDU WR EH PRUH
VWDEOH DQG OHVV VXEMHFW WR ÁXFWXDWLRQV LQ \LHOG DQG
LQ WKH SRSXODWLRQV RI RUJDQLVPV PDNLQJ XS WKH
FRPPXQLW\ (FRV\VWHPV ZLWK KLJKHU GLYHUVLW\ DUH
PRUHVWDEOHEHFDXVHWKH\H[KLELWJUHDWHUUHVLVWDQFH
RUWKHDELOLW\WRDYRLGRUZLWKVWDQGGLVWXUEDQFHVDQG
JUHDWHU UHVLOLHQFH RU WKH DELOLW\ WR UHFRYHU IROORZLQJ
GLVWXUEDQFHV
%LRGLYHUVLW\ HQKDQFHV HFRV\VWHP IXQFWLRQV EHFDXVH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
WKRVH FRPSRQHQWV WKDW DSSHDU UHGXQGDQW DW RQH
SRLQW LQ WLPH PD\ EHFRPH LPSRUWDQW ZKHQ VRPH
HQYLURQPHQWDO FKDQJH RFFXUV :KDW LV LPSRUWDQW
LV WKDW ZKHQ HQYLURQPHQWDO FKDQJH RFFXUV WKH
UHGXQGDQFLHV RI WKH V\VWHP HQDEOH FRQWLQXHG
HFRV\VWHP IXQFWLRQLQJ DQG SURYLVLRQLQJ RI VHUYLFHV
9DQGHUPHHUHWDO
7UDGLWLRQDO IDUPLQJ V\VWHPV ZKLFK VWLOO SHUVLVW LQ
PDQ\ GHYHORSLQJ FRXQWULHV RIIHU D ZLGH DUUD\ RI
PDQDJHPHQW RSWLRQV DQG GHVLJQV WKDW HQKDQFH
IXQFWLRQDOELRGLYHUVLW\LQFURSÀHOGVDQGFRQVHTXHQWO\
VXSSRUW WKH UHVLOLHQFH RI DJURHFRV\VWHPV 8SKRII
E 7ROHGR DQG %DUUHUD%DVVDOV 7KH
P\ULDGRIWUDGLWLRQDOV\VWHPVDUHDJOREDOO\LPSRUWDQW
LQJHQLRXV DJULFXOWXUDO KHULWDJH ZKLFK UHÁHFWV WKH
YDOXH RI WKH GLYHUVLW\ RI DJULFXOWXUDO V\VWHPV WKDW
DUH DGDSWHG WR GLIIHUHQW HQYLURQPHQWV 7KH\ WHOO
D IDVFLQDWLQJ VWRU\ RI WKH DELOLW\ DQG LQJHQXLW\ RI
KXPDQV WR DGMXVW DQG DGDSW WR WKH YDJDULHV RI D
FKDQJLQJ SK\VLFDO DQG PDWHULDO HQYLURQPHQW IURP
JHQHUDWLRQWRJHQHUDWLRQ:KHWKHUUHFRJQL]HGRUQRW
E\WKHVFLHQWLÀFFRPPXQLW\WKLVDQFHVWUDONQRZOHGJH
FRQVWLWXWHV WKH IRXQGDWLRQ IRU DFWXDO DQG IXWXUH
DJULFXOWXUDO LQQRYDWLRQV DQG WHFKQRORJLHV 7KH QHZ
PRGHOV RI DJULFXOWXUH WKDW KXPDQLW\ ZLOO QHHG LQ WKH
LPPHGLDWHIXWXUHVKRXOGLQFOXGHIRUPVRIIDUPLQJWKDW
DUH PRUH HFRORJLFDO ELRGLYHUVH ORFDO VXVWDLQDEOH
DQG VRFLDOO\ MXVW 7KHUHIRUH WKH\ ZLOO QHFHVVDULO\
KDYH WR EH URRWHG LQ WKH HFRORJLFDO UDWLRQDOH RI
WUDGLWLRQDO VPDOOVFDOH DJULFXOWXUH ZKLFK UHSUHVHQWV
ORQJHVWDEOLVKHG VXFFHVVIXO DQG DGDSWLYH IRUPV RI
DJULFXOWXUH.RRKDINDQDQG$OWLHUL
$6PDOOIDUPVDVPRGHOVRIUHVLOLHQFH
,Q FRQWLQXRXVO\ FRSLQJ ZLWK H[WUHPH ZHDWKHU HYHQWV
DQG FOLPDWLF YDULDELOLW\ WKURXJK FHQWXULHV IDUPHUV
OLYLQJLQKDUVKHQYLURQPHQWVLQ$IULFD$VLDDQG/DWLQ
$PHULFD KDYH GHYHORSHG DQGRU LQKHULWHG FRPSOH[
IDUPLQJV\VWHPVPDQDJHGLQLQJHQLRXVZD\V7KHVH
KDYH DOORZHG VPDOO IDUPLQJ IDPLOLHV WR PHHW WKHLU
VXEVLVWHQFH QHHGV LQ WKH PLGVW RI HQYLURQPHQWDO
YDULDELOLW\ ZLWKRXW GHSHQGLQJ PXFK RQ PRGHUQ
DJULFXOWXUDO WHFKQRORJLHV 'HQHYDQ 7KH
FRQWLQXHG H[LVWHQFH RI PLOOLRQV RI KHFWDUHV XQGHU
WUDGLWLRQDO IDUPLQJ LV OLYLQJ SURRI RI D VXFFHVVIXO
LQGLJHQRXV DJULFXOWXUDO VWUDWHJ\ ZKLFK LV D WULEXWH
WR WKH ´FUHDWLYLW\µ RI VPDOO IDUPHUV WKURXJKRXW WKH
GHYHORSLQJZRUOG:LONHQ7RGD\ZHOOLQWRWKH
ÀUVW GHFDGH RI WKH WZHQW\ÀUVW FHQWXU\ PLOOLRQV RI
VPDOOKROGHUV IDPLO\ IDUPHUV DQG LQGLJHQRXV SHRSOH
DUH FRQWLQXLQJ WR SUDFWLFH UHVRXUFHFRQVHUYLQJ
IDUPLQJ 6XFK WUDGLWLRQDO V\VWHPV DUH WHVWDPHQW
WR WKH UHPDUNDEOH UHVLOLHQFH RI DJURHFRV\VWHPV WR
FRQWLQXRXV HQYLURQPHQWDO DQG HFRQRPLF FKDQJH
ZKLFK GHVSLWH FKDQJHV FRQWLQXH WR FRQWULEXWH
VXEVWDQWLDOO\ WR DJURELRGLYHUVLW\ FRQVHUYDWLRQ DQG
IRRG VHFXULW\ DW ORFDO UHJLRQDO DQG QDWLRQDO OHYHOV
1HWWLQJ
+RZHYHUFOLPDWHFKDQJHFDQSRVHVHULRXVSUREOHPV
IRU WKH PDMRULW\ RI WKH PLOOLRQ RI WKH ZRUOG·V
SRRUHVWZKROLYHLQDUHDVRIWHQORFDWHGLQDULGRUVHPL
DULG]RQHVDQGLQHFRORJLFDOO\YXOQHUDEOHPRXQWDLQV
DQG KLOOV &RQZD\ ,Q PDQ\ FRXQWULHV PRUH
DQGPRUHSHRSOHSDUWLFXODUO\WKRVHDWORZHULQFRPH
OHYHOV DUH QRZ IRUFHG WR OLYH LQ PDUJLQDO DUHDV LH
ÁRRGSODLQVH[SRVHGKLOOVLGHVDULGRUVHPLDULGODQGV
ZKHUH WKH\ DUH DW ULVN IURP WKH QHJDWLYH LPSDFWV RI
FOLPDWHYDULDELOLW\(YHQPLQRUFKDQJHVLQFOLPDWHFDQ
KDYHGLVDVWURXVLPSDFWVRQWKHOLYHVDQGOLYHOLKRRGV
RI WKHVH YXOQHUDEOH JURXSV 7KH LPSOLFDWLRQV IRU
IRRG VHFXULW\ FRXOG EH YHU\ SURIRXQG HVSHFLDOO\
IRU VXEVLVWHQFH IDUPHUV OLYLQJ LQ UHPRWH DQG IUDJLOH
HQYLURQPHQWVWKDWDUHOLNHO\WRSURGXFHYHU\ORZ\LHOGV
7KHVHIDUPHUVGHSHQGRQFURSVWKDWFRXOGEHEDGO\
DIIHFWHG VXFK DV PDL]H EHDQV SRWDWRHV DQG ULFH
'HVSLWH WKH VHULRXV LPSOLFDWLRQV RI SUHGLFWLRQV GDWD
UHSUHVHQW RQO\ D EURDG EUXVK DSSUR[LPDWLRQ RI WKH
HIIHFWVRIFOLPDWHFKDQJHRQVPDOOVFDOHDJULFXOWXUH,Q
PDQ\FDVHVWKRVHGDWDLJQRUHWKHDGDSWLYHFDSDFLW\
RI VPDOO IDUPHUV ZKR XVH VHYHUDO DJURHFRORJLFDO
VWUDWHJLHV DQG VRFLDOO\ PHGLDWHG VROLGDULW\ QHWZRUNV
WR FRSH ZLWK DQG HYHQ SUHSDUH IRU H[WUHPH FOLPDWLF
YDULDELOLW\$OWLHULDQG.RRKDINDQ
7KUHHVWXGLHVDVVHVVLQJDJULFXOWXUDOSHUIRUPDQFHDIWHU
H[WUHPHFOLPDWLFHYHQWVUHYHDOWKHFORVHOLQNEHWZHHQ
HQKDQFHGDJURELRGLYHUVLW\DQGUHVLOLHQFHWRH[WUHPH
ZHDWKHU HYHQWV $ VXUYH\ FRQGXFWHG LQ &HQWUDO
$PHULFDQKLOOVLGHVDIWHU+XUULFDQH0LWFKVKRZHGWKDW
IDUPHUVHQJDJHGLQGLYHUVLÀFDWLRQSUDFWLFHVVXFKDV
FRYHUFURSVLQWHUFURSSLQJDQGDJURIRUHVWU\VXIIHUHG
OHVV GDPDJH WKDQ WKHLU QHLJKERXUV ZKR SUDFWLFHG
FRQYHQWLRQDO PRQRFXOWXUH 7KH VXUYH\ VSHDUKHDGHG
E\ WKH &DPSHVLQR D &DPSHVLQR PRYHPHQW
PRELOL]HG IDUPHUWHFKQLFLDQ WHDPV WR FDUU\
RXW SDLUHG REVHUYDWLRQV RI VSHFLÀF DJURHFRORJLFDO
LQGLFDWRUV RQ QHLJKERXULQJ VXVWDLQDEOH
DQG FRQYHQWLRQDO IDUPV 7KH VWXG\ VSDQQHG FRPPXQLWLHV DQG GHSDUWPHQWV LQ *XDWHPDOD
+RQGXUDV DQG 1LFDUDJXD ,W IRXQG WKDW SORWV ZKHUH
IDUPHUV DGRSWHG VXVWDLQDEOH IDUPLQJ SUDFWLFHV KDG
WRSHUFHQWPRUHWRSVRLOJUHDWHUVRLOPRLVWXUH
DQGOHVVHURVLRQDQGH[SHULHQFHGVPDOOHUHFRQRPLF
ORVVHV WKDQ WKHLU FRQYHQWLRQDO QHLJKERXUV +ROW
*LPpQH] 6LPLODUO\ LQ 6RWRQXVFR &KLDSDV
FRIIHH V\VWHPV H[KLELWLQJ KLJK OHYHOV RI YHJHWDWLRQ
FRPSOH[LW\ DQG SODQW GLYHUVLW\ VXIIHUHG OHVV GDPDJH
IURP +XUULFDQH 6WDQ WKDQ PRUH VLPSOLÀHG FRIIHH
V\VWHPV3KLOSRWWHWDO$QGLQ&XEDGD\V
DIWHU+XUULFDQH,NHKLWWKHFRXQWU\LQUHVHDUFKHUV
FRQGXFWLQJDIDUPVXUYH\LQWKHSURYLQFHVRI+ROJXLQ
DQG/DV7XQDVIRXQGWKDWGLYHUVLÀHGIDUPVH[KLELWHG
ORVVHV RI SHU FHQW FRPSDUHG WR RU SHU
FHQW LQ QHLJKERXULQJ PRQRFXOWXUH IDUPV /LNHZLVH
DJURHFRORJLFDOO\ PDQDJHG IDUPV VKRZHG D IDVWHU
UHFRYHU\RISURGXFWLYLW\²SHUFHQWGD\VDIWHU
WKHKXUULFDQHWKDQPRQRFXOWXUHIDUPV5RVVHWHWDO
$OOWKUHHVWXGLHVHPSKDVL]HWKHLPSRUWDQFHRI
HQKDQFLQJ SODQW GLYHUVLW\ DQG FRPSOH[LW\ LQ IDUPLQJ
V\VWHPV WR UHGXFH YXOQHUDELOLW\ WR H[WUHPH FOLPDWLF
HYHQWV 6LQFH PDQ\ SHDVDQWV FRPPRQO\ PDQDJH
SRO\FXOWXUHV DQGRU DJURIRUHVWU\ V\VWHPV WKHLU
NQRZOHGJHDQGSUDFWLFHVFRXOGSURYLGHDNH\VRXUFH
RI LQIRUPDWLRQ RQ DGDSWLYH FDSDFLW\ FHQWUHG RQ WKH
VHOHFWLYH H[SHULPHQWDO DQG UHVLOLHQW FDSDELOLWLHV RI
WKRVHIDUPHUVLQGHDOLQJZLWKFOLPDWLFFKDQJH
*LYHQ WKH UHVLOLHQFH RI GLYHUVLÀHG VPDOO IDUPLQJ
V\VWHPV XQGHUVWDQGLQJ WKH DJURHFRORJLFDO IHDWXUHV
RI WUDGLWLRQDO DJURHFRV\VWHPV LV DQ XUJHQW PDWWHU
DV WKLV FDQ VHUYH DV WKH IRXQGDWLRQ IRU WKH GHVLJQ
RI DJULFXOWXUDO V\VWHPV WKDW DUH UHVLOLHQW WR FOLPDWH
FKDQJH$OWLHULDQG.RRKDINDQ
%5HVWRULQJDJURELRGLYHUVLW\LQPRGHUQ
DJURHFRV\VWHPV
6LQFH WKH PRGHUQL]DWLRQ RI DJULFXOWXUH IDUPHUV
DQG UHVHDUFKHUV KDYH EHHQ IDFHG ZLWK D PDMRU
HFRORJLFDOGLOHPPDDULVLQJIURPWKHKRPRJHQL]DWLRQ
RI DJULFXOWXUDO V\VWHPV QDPHO\ WKH LQFUHDVHG
YXOQHUDELOLW\RIFURSVWRSHVWVDQGGLVHDVHVDQGQRZ
WR FOLPDWLF YDULDELOLW\ %RWK WKHVH SKHQRPHQD FDQ
EH GHYDVWDWLQJ LQ JHQHWLFDOO\ XQLIRUP ODUJHVFDOH
PRQRFXOWXUH FRQGLWLRQV 0RQRFXOWXUHV PD\ RIIHU
VKRUWWHUP HFRQRPLF DGYDQWDJHV WR IDUPHUV EXW LQ
WKH ORQJ WHUP WKH\ GR QRW UHSUHVHQW DQ HFRORJLFDO
RSWLPXP 5DWKHU WKH GUDVWLF QDUURZLQJ RI FXOWLYDWHG
SODQWGLYHUVLW\KDVSXWWKHZRUOG·VIRRGSURGXFWLRQLQ
JUHDWHUSHULO3HUIHFWR9DQGHUPHHUDQG:ULJKW
*LYHQ WKH QHZ FOLPDWH FKDQJH VFHQDULRV SUHGLFWHG
RYHU WKH QH[W WZR GHFDGHV RU VR E\ VRPH VFLHQWLVWV
75$'($1'(19,5210(175(9,(:
HJ 5RVHQ]ZHLJ DQG +LOOHO WKH VHDUFK IRU
SUDFWLFDO VWHSV WR EUHDN WKH PRQRFXOWXUH QDWXUH RI
PRGHUQ DJURHFRV\VWHPV DQG WKXV UHGXFH WKHLU
HFRORJLFDO YXOQHUDELOLW\ LV LPSHUDWLYH $V WUDGLWLRQDO
IDUPHUV KDYH GHPRQVWUDWHG ZLWK IDUPLQJ V\VWHPV
WKDW VWRRG WKH WHVW RI WLPH UHVWRULQJ DJULFXOWXUDO
ELRGLYHUVLW\ DW WKH ÀHOG DQG ODQGVFDSH OHYHO LV NH\
WR HQKDQFLQJ UHVLOLHQFH *UHDWHU GLYHUVLW\ RI VSHFLHV
LV SUREDEO\ QHHGHG WR UHGXFH WHPSRUDO YDULDELOLW\ RI
HFRV\VWHP SURFHVVHV LQ FKDQJLQJ HQYLURQPHQWV
7KH PRVW REYLRXV DGYDQWDJH RI GLYHUVLÀFDWLRQ LV
UHGXFHG ULVN RI WRWDO FURS IDLOXUH GXH WR LQYDVLRQV RI
XQZDQWHGVSHFLHVDQGRUFOLPDWLFYDULDELOLW\DVODUJHU
QXPEHUV RI VSHFLHV UHGXFH WHPSRUDO YDULDELOLW\ LQ
HFRV\VWHP SURFHVVHV LQ FKDQJLQJ HQYLURQPHQWV
/RUHDXHWDO6WXGLHVFRQGXFWHGLQJUDVVODQG
V\VWHPV VXJJHVW WKDW WKHUH DUH QR VLPSOH OLQNV
EHWZHHQ VSHFLHV GLYHUVLW\ DQG HFRV\VWHP VWDELOLW\
([SHULPHQWV FRQGXFWHG LQ JUDVVODQG SORWV FRQFOXGH
WKDWIXQFWLRQDOO\GLIIHUHQWUROHVUHSUHVHQWHGE\SODQWV
DUHDWOHDVWDVLPSRUWDQWDVWKHWRWDOQXPEHURIVSHFLHV
LQGHWHUPLQLQJSURFHVVHVDQGVHUYLFHVLQHFRV\VWHPV
7LOPDQHWDOD7KLVODWHVWÀQGLQJKDVSUDFWLFDO
LPSOLFDWLRQV IRU DJURHFRV\VWHP PDQDJHPHQW ,I LW
LV HDVLHU WR PLPLF VSHFLÀF HFRV\VWHP SURFHVVHV
UDWKHUWKDQDWWHPSWLQJWRGXSOLFDWHDOOWKHFRPSOH[LW\
RI QDWXUH WKHQ WKH IRFXV VKRXOG EH SODFHG RQ
LQFRUSRUDWLQJDSDUWLFXODUELRGLYHUVLW\FRPSRQHQWWKDW
SOD\VDVSHFLÀFUROHVXFKDVSODQWVWKDWÀ[QLWURJHQ
SURYLGHFRYHUIRUVRLOSURWHFWLRQRUKDUERXUUHVRXUFHV
IRUQDWXUDOHQHPLHVRILQVHFWSHVWV
&RQWHPSRUDU\QRWLRQVRIPRGHUQPHFKDQL]HGIDUPLQJ
HPSKDVL]H WKH QHFHVVLW\ RI PRQRFXOWXUHV 7KHUH LV
OLWWOHTXHVWLRQKRZHYHUWKDWJLYHQVXIÀFLHQWPRWLYDWLRQ
DSSURSULDWH WHFKQRORJ\ FRXOG EH GHYHORSHG WR
PHFKDQL]H PXOWLSOH FURSSLQJ V\VWHPV +RUZLWK
6LPSOHU GLYHUVLÀFDWLRQ VFKHPHV EDVHG RQ RU SODQW VSHFLHV PD\ EH PRUH DPHQDEOH WR ODUJH
VFDOH IDUPHUV DQG FDQ EH PDQDJHG XVLQJ PRGHUQ
HTXLSPHQW 2QH VXFK VFKHPH LV VWULS LQWHUFURSSLQJ
ZKLFKLQYROYHVWKHSURGXFWLRQRIPRUHWKDQRQHFURSLQ
VWULSVWKDWDUHQDUURZHQRXJKIRUWKHFURSVWRLQWHUDFW
\HW ZLGH HQRXJK WR SHUPLW LQGHSHQGHQW FXOWLYDWLRQ
$JURQRPLFDOO\ EHQHÀFLDO VWULS LQWHUFURSSLQJ V\VWHPV
KDYHXVXDOO\LQFOXGHGFRUQRUVRUJKXPZKLFKUHDGLO\
UHVSRQGWRKLJKHUOLJKWLQWHQVLWLHV)UDQFLVHWDO
6WXGLHV ZLWK FRUQ DQG VR\EHDQ VWULSV WR URZV
ZLGHGHPRQVWUDWHGLQFUHDVHGFRUQ\LHOGVWRSHU
FHQWKLJKHUDQGGHFUHDVHGVR\EHDQ\LHOGVWR
SHUFHQWORZHUDVVWULSVJRWQDUURZHU$OWHUQDWLQJFRUQ
DQGDOIDOIDVWULSVSURYLGHGJUHDWHUJURVVUHWXUQVWKDQ
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
VLQJOHFURSV6WULSVRIIWDSSUR[LPDWHO\PHWHUV
ZLGWKZHUHWKHPRVWDGYDQWDJHRXVZLWKVXEVWDQWLDOO\
KLJKHUHFRQRPLFUHWXUQVWKDQWKHVLQJOHFURSV:HVW
DQG *ULIÀWK 7KLV DGYDQWDJH LV FULWLFDO IRU
IDUPHUVZKRKDYHGHEWWRDVVHWUDWLRVRISHUFHQW
RUKLJKHURIGHEWIRUHYHU\RIDVVHWV6XFK
DOHYHOKDVDOUHDG\EHHQUHDFKHGE\PRUHWKDQ²
SHUFHQWRIIDUPHUVLQWKHPLGZHVWHUQ8QLWHG6WDWHV
ZKR GHVSHUDWHO\ QHHG WR FXW FRVWV RI SURGXFWLRQ E\
DGRSWLQJGLYHUVLÀFDWLRQVWUDWHJLHV
/HJXPHV LQWHUFURSSHG ZLWK FHUHDOV LV D NH\
GLYHUVLÀFDWLRQ VWUDWHJ\ QRW RQO\ EHFDXVH RI WKHLU
SURYLVLRQ RI QLWURJHQ EXW DOVR EHFDXVH WKH PL[WXUHV
HQKDQFH VRLO FRYHU VPRWKHU ZHHGV DQG LQFUHDVH
QXWULHQWVHJSRWDVVLXPFDOFLXPDQGPDJQHVLXPLQ
WKHVRLOWKURXJKWKHDGGLWLRQRIELRPDVVDQGUHVLGXHV
WRWKHVRLO6XFKLQWHUFURSSLQJV\VWHPVDOVRLQFUHDVH
VRLO PLFURELDO GLYHUVLW\ VXFK DV YHVLFXODU DUEXVFXODU
P\FRUUKL]DH9$0IXQJLZKLFKIDFLOLWDWHSKRVSKRURXV
WUDQVIHUWRWKHFURSV0DFKDGR,QWKHFDVHRI
DGYHUVH ZHDWKHU FRQGLWLRQV VXFK DV D GHOD\ LQ WKH
RQVHW RI UDLQV DQGRU IDLOXUH RI UDLQV IRU D IHZ GD\V
ZHHNVRUGXULQJWKHFURSSLQJSHULRGDQLQWHUFURSSLQJ
V\VWHPSURYLGHVWKHDGYDQWDJHWKDWDWOHDVWRQHFURS
ZLOO VXUYLYH WR JLYH HFRQRPLF \LHOGV WKHUHE\ VHUYLQJ
DV WKH QHFHVVDU\ LQVXUDQFH DJDLQVW XQSUHGLFWDEOH
ZHDWKHU 3RO\FXOWXUHV H[KLELW JUHDWHU \LHOG VWDELOLW\
DQG ORZHU SURGXFWLYLW\ GHFOLQHV GXULQJ D GURXJKW
WKDQ PRQRFXOWXUHV 7KLV ZDV ZHOO GHPRQVWUDWHG E\
1DWDUDMDQDQG:LOOH\ZKRH[DPLQHGWKHHIIHFWV
RI GURXJKW RQ SRO\FXOWXUHV E\ PDQLSXODWLQJ ZDWHU
VWUHVV RQ LQWHUFURSV RI VRUJKXP 6RUJKXP ELFRORU
DQGSHDQXW$UDFKLVVSSPLOOHW3DQLFXPVSSDQG
SHDQXW DQG VRUJKXP DQG PLOOHW $OO WKH LQWHUFURSV
FRQVLVWHQWO\ SURYLGHG JUHDWHU \LHOGV DW ÀYH OHYHOV RI
PRLVWXUHDYDLODELOLW\UDQJLQJIURPWRPPRI
ZDWHUDSSOLHGRYHUWKHFURSSLQJVHDVRQ,QWHUHVWLQJO\
WKHUDWHRIRYHU\LHOGLQJDFWXDOO\LQFUHDVHGZLWKZDWHU
VWUHVVVXFKWKDWWKHUHODWLYHGLIIHUHQFHVLQSURGXFWLYLW\
EHWZHHQ PRQRFXOWXUHV DQG SRO\FXOWXUHV EHFDPH
PRUHDFFHQWXDWHGDVVWUHVVLQFUHDVHG
1RWLOOURZFURSSURGXFWLRQLVDOVRSURPLVLQJJLYHQLWV
VRLOFRQVHUYDWLRQDQGLPSURYHPHQWSRWHQWLDOEXWLWLV
KLJKO\ GHSHQGHQW RQ KHUELFLGHV +RZHYHU WKHUH DUH
VRPHRUJDQLFIDUPHUVZKRSUDFWLFHLWZLWKRXWV\QWKHWLF
KHUELFLGHV$EUHDNWKURXJKRFFXUUHGZLWKWKHGLVFRYHU\
WKDWFHUWDLQZLQWHUDQQXDOFRYHUFURSVQRWDEO\FHUHDO
U\H DQG KDLU\ YHWFK FDQ EH NLOOHG E\ PRZLQJ DW D
VXIÀFLHQWO\ODWHVWDJHLQWKHLUGHYHORSPHQWDQGFXWWLQJ
FORVH WR WKH JURXQG 7KHVH SODQWV JHQHUDOO\ GR QRW
UHJURZVLJQLÀFDQWO\DQGWKHFOLSSLQJVIRUPDQLQVLWX
PXOFKWKURXJKZKLFKYHJHWDEOHVFDQEHWUDQVSODQWHG
ZLWK QR RU PLQLPDO WLOODJH 7KH PXOFK KLQGHUV ZHHG
VHHGJHUPLQDWLRQDQGVHHGOLQJHPHUJHQFHRIWHQIRU
VHYHUDOZHHNV$VWKH\GHFRPSRVHPDQ\FRYHUFURS
UHVLGXHV FDQ UHOHDVH DOOHORSDWKLF FRPSRXQGV WKDW
PD\VXSSUHVVZHHGJURZWK0R\HUE\PHDQV
RISK\WRWR[LFVXEVWDQFHVWKDWDUHSDVVLYHO\OLEHUDWHG
WKURXJK GHFRPSRVLWLRQ RI SODQW UHVLGXHV 7KHUH DUH
VHYHUDOJUHHQPDQXUHVSHFLHVWKDWKDYHDSK\WRWR[LF
HIIHFWZKLFKLVXVXDOO\VXIÀFLHQWWRGHOD\WKHRQVHWRI
ZHHGJURZWKXQWLODIWHUWKHFURS·VPLQLPXPZHHGIUHH
SHULRG 7KLV PDNHV SRVWSODQW FXOWLYDWLRQ KHUELFLGHV
RUKDQGZHHGLQJXQQHFHVVDU\\HWH[KLELWVDFFHSWDEOH
FURS\LHOGV7RPDWRHVDQGVRPHODWHVSULQJEUDVVLFD
SODQWLQJV SHUIRUP HVSHFLDOO\ ZHOO DQG VRPH ODUJH
VHHGHG FURSV VXFK DV PDL]H DQG EHDQV FDQ EH
VXFFHVVIXOO\ GLUHFWVRZQ LQWR FRYHU FURS UHVLGXHV
1RW RQO\ FDQ FRYHU FURSV SODQWHG LQ QRWLOO ÀHOGV À[
QLWURJHQ LQ WKH VKRUW WHUP WKH\ FDQ DOVR UHGXFH VRLO
HURVLRQDQGPLWLJDWHWKHHIIHFWVRIGURXJKWLQWKHORQJ
WHUP DV WKH PXOFK FRQVHUYHV VRLO PRLVWXUH &RYHU
FURSV EXLOG YHUWLFDO VRLO VWUXFWXUH DV WKH\ SURPRWH
GHHSPDFURSRUHVLQWKHVRLOZKLFKDOORZPRUHZDWHU
WR SHQHWUDWH GXULQJ WKH ZLQWHU PRQWKV DQG WKXV
LPSURYHVRLOZDWHUVWRUDJH
&&RQFOXVLRQV
7KHUH LV JHQHUDO DJUHHPHQW DW WKH LQWHUQDWLRQDO OHYHO
RQ WKH XUJHQW QHHG WR SURPRWH D QHZ DJULFXOWXUDO
SURGXFWLRQ SDUDGLJP LQ RUGHU WR HQVXUH WKH
SURGXFWLRQRIDEXQGDQWKHDOWK\DQGDIIRUGDEOHIRRG
IRU DQ LQFUHDVLQJ KXPDQ SRSXODWLRQ 7KLV FKDOOHQJH
ZLOOQHHGWREHPHWZLWKDVKULQNLQJDUDEOHODQGEDVH
ZLWKOHVVDQGPRUHH[SHQVLYHSHWUROHXPLQFUHDVLQJO\
OLPLWHGVXSSOLHVRIZDWHUDQGQLWURJHQDQGDWDWLPH
RI UDSLGO\ FKDQJLQJ FOLPDWH VRFLDO WHQVLRQV DQG
HFRQRPLF XQFHUWDLQW\ ,$$67' D 7KH RQO\
DJULFXOWXUDOV\VWHPWKDWZLOOEHDEOHWRFRSHZLWKIXWXUH
FKDOOHQJHVLVRQHWKDWZLOOH[KLELWKLJKOHYHOVRIGLYHUVLW\
DQGUHVLOLHQFHZKLOHGHOLYHULQJUHDVRQDEOH\LHOGVDQG
HFRV\VWHPVHUYLFHV0DQ\WUDGLWLRQDOIDUPLQJV\VWHPV
VWLOO SUHYDOHQW LQ GHYHORSLQJ FRXQWULHV FDQ VHUYH DV
PRGHOVRIVXVWDLQDELOLW\DQGUHVLOLHQFH
5HVLOLHQFHLQDJULFXOWXUDOV\VWHPVLVDIXQFWLRQRIWKH
OHYHO RI GLYHUVLW\ ZLWKLQ WKH DJULFXOWXUDO HFRV\VWHP ,W
LV WKHUHIRUH HVVHQWLDO WKDW VWUDWHJLHV IRU DQ DGDSWLYH
UHVSRQVH WR FOLPDWH FKDQJH IRFXV RQ EUHDNLQJ
DZD\ IURP WKH PRQRFXOWXUH QDWXUH RI PRGHUQ
DJURHFRV\VWHPV6PDOOFKDQJHVLQWKHPDQDJHPHQW
RI LQGXVWULDO V\VWHPV VXFK DV LQWHUFURSSLQJ DQGRU
XVH RI URWDWLRQDO FRYHU FURSSLQJ LQ QRWLOO V\VWHPV
FDQ VXEVWDQWLDOO\ HQKDQFH WKH DGDSWLYH FDSDFLW\
RI FURSSLQJ V\VWHPV :HDWKHU H[WUHPHV LQFOXGLQJ
ORFDOGURXJKWDQGÁRRGLQJDUHSUHGLFWHGWREHFRPH
PRUH FRPPRQ DV D UHVXOW RI UDSLG FOLPDWH FKDQJH
75$'($1'(19,5210(175(9,(:
(QYLURQPHQWDOO\ UHVSRQVLEOH ZDWHU PDQDJHPHQW ZLOO
WKHUHIRUH KDYH WR EH D FULWLFDO SDUW RI VXVWDLQDEOH
DJULFXOWXUH LQ WKH IXWXUH $JURHFRORJLFDO VWUDWHJLHV
IRUFRQVHUYLQJZDWHULQFOXGHFKRRVLQJZDWHUHIÀFLHQW
FURSVUHVRXUFHFRQVHUYLQJFURSURWDWLRQVHQKDQFLQJ
VRLORUJDQLFPDWWHUDQGLQWHUFURSSLQJV\VWHPV
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
1//'06#4;U '/1%4#6+<+0)10641.1()4+%7.674'61''6
6*'''&51(6*'9'06;g(+456'0674;
0DUFLD,VKLL(LWHPDQ
3HVWLFLGH$FWLRQ1HWZRUN1RUWK$PHULFD
$EVWUDFW
3RZHUIXOFRPPHUFLDOLQWHUHVWVDQGODFNRISROLWLFDOUHVROYHKDPSHUWKHHVWDEOLVKPHQWDQGLPSOHPHQWDWLRQ
RISROLFLHVWRDGYDQFHVXVWDLQDEOHDQGHTXLWDEOHGHYHORSPHQW7RDFFRPSOLVKWKHGHHSVHDWHGFKDQJH
UHTXLUHG WR RYHUFRPH WKHVH LPSHGLPHQWV GHFLVLYH DQG FRRUGLQDWHG DFWLRQ DPRQJ SXEOLF DQG SULYDWH
VHFWRUDFWRUVDQGFLYLOVRFLHW\LVQHHGHG3ULRULWLHVIRUDFWLRQVKRXOGLQFOXGH
‡ &XUWDLOLQJ FRUSRUDWH FRQFHQWUDWLRQ LQ WKH IRRG V\VWHP DQG LQFUHDVLQJ PDUNHW DFFHVV DQG
FRPSHWLWLYHQHVVRIVPDOODQGPHGLXPVFDOHIDUPHUVWRLPSURYHIRRGDQGOLYHOLKRRGVHFXULW\
‡ 5HGXFLQJWKHXQGXHLQÁXHQFHRIODUJHWUDQVQDWLRQDOFRUSRUDWLRQVRYHUSXEOLFSROLF\UHVHDUFKDQG
WUDGHDJHQGDVDQG
‡ 6WUHQJWKHQLQJ WKH UROH RI FLYLO VRFLHW\ ² LQFOXGLQJ IDUPHUV· RUJDQL]DWLRQV ² LQ GHVLJQLQJ DQG
LPSOHPHQWLQJSROLFLHVDQGLQJXLGLQJSDUWQHUVKLSVGHGLFDWHGWRSXEOLFLQWHUHVWRXWFRPHV
3ROLFLHV DQG SUDFWLFHV WKDW PHHW JOREDO IRRG QHHGV
VXVWDLQDEO\DQGHTXLWDEO\DQGVXSSRUWDVKLIWWRZDUGV
HFRORJLFDOIDUPLQJV\VWHPVFDQFRQVHUYHELRGLYHUVLW\
ZDWHUDQGHQHUJ\DQGUHGXFHJUHHQKRXVHJDV*+*
HPLVVLRQV ,$$67' D DQG E 'H 6FKXWWHU
81(3 3ROLF\ RSWLRQV WR GULYH WKLV
WUDQVIRUPDWLRQ RI DJULFXOWXUH KDYH EHHQ GHVFULEHG
E\ WKH 8QLWHG 1DWLRQVVSRQVRUHG ,QWHUQDWLRQDO
$VVHVVPHQWRI$JULFXOWXUDO.QRZOHGJH6FLHQFHDQG
7HFKQRORJ\IRU'HYHORSPHQW,$$67'DDQGE
ER[$/LNHZLVHWKHHFRQRPLFYLDELOLW\HQYLURQPHQWDO
XUJHQF\DQGKXPDQULJKWVLPSHUDWLYHRILPSOHPHQWLQJ
VXFKDWUDQVIRUPDWLRQKDYHEHHQZHOOHVWDEOLVKHG'H
6FKXWWHU 81&7$'81(3 )$2 F
81(3
'HVSLWH WKH DYDLODELOLW\ RI UREXVW SROLF\ RSWLRQV
SRZHUIXO FRPPHUFLDO LQWHUHVWV ZHDN RU FDSWXUHG
SXEOLFVHFWRUDFWRUVDQGODFNRISROLWLFDOZLOOFRQWLQXH
WR KDPSHU WKH HVWDEOLVKPHQW DQG PHDQLQJIXO
LPSOHPHQWDWLRQ RI WKHVH SURJUHVVLYH RSWLRQV 7KH
FRQVWUDLQWV ² RXWOLQHG EHORZ ² DUH V\VWHPLF D IHZ
VXSHUÀFLDOFKDQJHVZLOOQRWPDNHDVLJQLÀFDQWHQRXJK
GLIIHUHQFH WR DFKLHYH FRQFUHWH RXWFRPHV 5DWKHU
KLJKO\WDUJHWHGDQGVWUDWHJLFLQWHUYHQWLRQVDUHQHHGHG
WKDWWDFNOHWKHFRUHRIWKHSUREOHPDQGGHPRFUDWL]H
FRQWURORYHUDJULFXOWXUH
$&RQVWUDLQWVRQWKHWUDQVIRUPDWLRQRI
DJULFXOWXUH
0DUNHWIDLOXUHVDQGWKHQHHGIRUIXOOFRVW
DFFRXQWLQJ
$ IXQGDPHQWDO IDLOXUH RI JOREDO PDUNHWV WRGD\ LV WKH
ODFNRISULFHVLJQDOVWKDWLQFRUSRUDWHWKHIXOODUUD\RI
KHDOWK HQHUJ\ DQG HQYLURQPHQWDO FRVWV DVVRFLDWHG
ZLWK DJULFXOWXUH &RQVHTXHQWO\ SROLF\PDNHUV EDVH
WKHLUGHFLVLRQVRQLQDFFXUDWHIRUHFDVWVRIWKHSRWHQWLDO
DQG DFWXDO FRVWV )XOO FRVW DFFRXQWLQJ PHDVXUHV
VXFK DV QDWLRQDO ´JUHHQ DFFRXQWVµ RU ´WRWDO PDWHULDO
ÁRZ HVWLPDWHVµ DUH JRRG HFRQRPLF SUDFWLFHV WKDW
PRUH DFFXUDWHO\ UHÁHFW WKH WUXH FRVWV RI IRRG DQG
DJULFXOWXUDO LQGXVWULHV DQG FDQ FRQVHTXHQWO\ EHWWHU
LQIRUP SROLF\ GHFLVLRQV 6ZHGHQ IRU H[DPSOH
HVWDEOLVKHG D QDWLRQDO SROLF\ WR WUDQVLWLRQ WRZDUGV
RUJDQLF IDUPLQJ EDVHG ODUJHO\ RQ WKH ÀQGLQJV RI D
IXOOFRVWDQDO\VLVRIWKHFOLPDWHUHODWHGHQHUJ\ZDWHU
HQYLURQPHQWDO DQG RWKHU HFRV\VWHP VHUYLFH FRVWV
HPEHGGHGLQLWV´IRRGVKHGµ-RKDQVVRQ
&RUSRUDWHFRQFHQWUDWLRQLQIRRGDQGDJULFXOWXUH
,Q 1RUWK $PHULFD JURZLQJ PDUNHW FRQFHQWUDWLRQ
LQ PXOWLSOH DJULFXOWXUDO DFWLYLWLHV FRXSOHG ZLWK
VXFFHVVLYH URXQGV RI GHUHJXODWLRQ KDYH OHG WR
75$'($1'(19,5210(175(9,(:
%R[3ROLF\RSWLRQVWRVXSSRUWDWUDQVLWLRQWRVXVWDLQDEOHDJULFXOWXUH
$VLGHQWLÀHGE\WKH,$$67'DDQGESURPLVLQJSROLF\RSWLRQVWRDGYDQFHVXVWDLQDEOHDQGHTXLWDEOHGHYHORSPHQW
JRDOVLQFOXGH
‡ 6WUHQJWKHQLQJWKHVPDOOVFDOHIDUPVHFWRULQSDUWLFXODUIDUPHUV·ZRPHQ·VLQGLJHQRXVDQGRWKHUFRPPXQLW\EDVHG
RUJDQL]DWLRQVDQGLQFUHDVLQJSXEOLFLQYHVWPHQWLQUXUDODUHDV
‡ %XLOGLQJORFDODQGQDWLRQDOFDSDFLW\LQELRGLYHUVHHFRORJLFDOO\UHVLOLHQWIDUPLQJWRFRSHZLWKLQFUHDVLQJHQYLURQPHQWDO
VWUHVVHV
‡ ,QFUHDVLQJORFDOSDUWLFLSDWLRQDQGOHDGHUVKLSLQDJULFXOWXUDOUHVHDUFKGLUHFWLRQVHWWLQJSROLF\IRUPDWLRQDQGGHFLVLRQ
PDNLQJSURFHVVHV
‡ 5HYLWDOL]LQJ ORFDO DQG UHJLRQDO UXUDO HFRQRPLHV DQG IRRG V\VWHPV DQG PRUH FORVHO\ UHJXODWLQJ JOREDOL]HG IRRG
V\VWHPVWRHQVXUHJRRGSXEOLFRXWFRPHV
‡ 0RELOL]LQJSXEOLFDQGSULYDWHVHFWRULQYHVWPHQWVDQGSURYLGLQJPDUNHWEDVHGLQFHQWLYHVWRDGYDQFHHTXLWDEOHDQG
VXVWDLQDEOHGHYHORSPHQWJRDOV
‡ (VWDEOLVKLQJHTXLWDEOHUHJLRQDODQGJOREDOWUDGHDUUDQJHPHQWVWRVXSSRUWGHYHORSLQJFRXQWULHV·IRRGDQGOLYHOLKRRG
VHFXULW\JRDOVDQGUHYLVLQJRZQHUVKLSODZVWRHQVXUHSRRUDQGRUYXOQHUDEOHFRPPXQLWLHV·HTXLWDEOHXVHDFFHVVWR
DQGFRQWURORYHUODQGZDWHUVHHGVDQGJHUPSODVPDQG
‡ (VWDEOLVKLQJQHZWUDQVSDUHQWGHPRFUDWLFDOO\JRYHUQHGLQVWLWXWLRQDODUUDQJHPHQWVWRDFFRPSOLVKWKHVHJRDOV
6RXUFH,$$67'DDQGEVHHDOVR,VKLL(LWHPDQDQG+RIIPDQQ
XQSUHFHGHQWHG OHYHOV RI FRUSRUDWH FRQWURO RI WKH
UHJLRQ·V IRRG DQG DJULFXOWXUDO V\VWHP +HQGULFNVRQ
HW DO $V WKHVH FRUSRUDWLRQV KDYH H[WHQGHG
WKHLURSHUDWLRQVLQWR/DWLQ$PHULFD$VLDDQG(DVWHUQ
(XURSH WKHLU JOREDO LQÁXHQFH KDV H[SDQGHG ZLWK
DGYHUVH FRQVHTXHQFHV IRU VPDOOVFDOH IDUPHUV
DURXQGWKHZRUOG0F,QW\UHHWDODE7KH
UHVXOW KDV EHHQ D GUDPDWLF UHGXFWLRQ LQ FRPSHWLWLRQ
DQG IDLU DFFHVV WR PDUNHWV IRU VPDOO DQG PHGLXP
VFDOH SURGXFHUV ODERXU LQGHSHQGHQW UHWDLOHUV DQG
FRQVXPHUV$VFRQVROLGDWLRQKDVLQFUHDVHGDKDQGIXO
RIWUDQVQDWLRQDODJULEXVLQHVVHVKDYHJDLQHGJURZLQJ
LQÁXHQFHRYHUWKHSURGXFWLRQDQGGLVWULEXWLRQRIIRRG
ERWK GRPHVWLFDOO\ DQG LQWHUQDWLRQDOO\ +HQGULFNVRQ
HWDO+XEEDUG'H6FKXWWHUFVHH
DOVRÀJXUHEHORZ7KLVLQWXUQKDVHQDEOHGWKHP
WRH[HUWVLJQLÀFDQWSROLWLFDOLQÁXHQFHRYHUSXEOLFSROLF\
DQGUHVHDUFK
&RUSRUDWHLQÁXHQFHRYHUSXEOLFSROLF\
$JULEXVLQHVVHV VSHQG ELOOLRQV RI GROODUV OREE\LQJ
%R[&RUSRUDWHLQÁXHQFHRYHUSXEOLFSROLF\
7UDQVQDWLRQDOFRUSRUDWLRQVH[HUFLVHVLJQLÀFDQWLQÁXHQFHRYHUWKHIRUPDWLRQRIQDWLRQDODQGLQWHUQDWLRQDOSXEOLFSROLF\
%HORZDUHVRPHLOOXVWUDWLYHH[DPSOHV
‡ 6RRQDIWHUIRUHVWÀUHVLQWKH5XVVLDQ)HGHUDWLRQGHYDVWDWHGLWVZKHDWFURSVLQWKHPXOWLQDWLRQDOJUDLQWUDGHU
*OHQFRUH VSHFXODWLQJ RQ D SURÀWDEOH VSLNH LQ ZKHDW SULFHV XUJHG WKH 5XVVLDQ )HGHUDWLRQ WR EDQ ZKHDW H[SRUWV
WKHUHE\SURYRNLQJWKHGHVLUHGSULFHVXUJHWKDWKDGJOREDOUHSHUFXVVLRQV3DWHO
‡ ,Q%UD]LOD&RQJUHVVLRQDOELOOFRDXWKRUHGE\DODZ\HUIRUWKH&RXQFLOIRU%LRWHFKQRORJ\,QIRUPDWLRQOLQNHGWR
0RQVDQWR%$6)%D\HU&DUJLOO'XSRQWDQGRWKHUVSURSRVHGUHSHDORID%LRVDIHW\/DZSURKLELWLRQRQ´JHQHWLFXVH
UHVWULFWLRQWHFKQRORJLHVµDOVRNQRZQDV´WHUPLQDWRUWHFKQRORJLHVµ&DPDUJR
‡ 0RQVDQWRDQGLWVDIÀOLDWHVOREELHG,QGRQHVLDQOHJLVODWRUVLQWKHVWRVXSSRUWJHQHWLFDOO\HQJLQHHUHG*(FURSV
,QWKHÀUPZDVÀQHGPLOOLRQE\WKH8QLWHG6WDWHV'HSDUWPHQWRI-XVWLFHIRUYLRODWLQJWKH)RUHLJQ&RUUXSW
3UDFWLFHV$FWE\EULELQJDVHQLRU,QGRQHVLDQ(QYLURQPHQW0LQLVWU\RIÀFLDO%LUFKDOO
‡ &KHPLFDOFRPSDQLHVFRPPRQO\VLWRQSDQHOVDQGFRPPLWWHHVWKDWDGYLVHUHJXODWRUV)RUH[DPSOHDUHSUHVHQWDWLYH
IURP'RZ&KHPLFDOLVVHUYLQJRQWKH(QGRFULQH'LVUXSWRU6FUHHQLQJDQG7HVWLQJ$GYLVRU\&RPPLWWHHRIWKH8QLWHG
6WDWHV(QYLURQPHQWDO3URWHFWLRQ$JHQF\
‡ ,Q0DOD\VLDEDQQHGWKHKLJKO\WR[LFFKHPLFDOKHUELFLGH3DUDTXDW,WVPDQXIDFWXUHU6\QJHQWDMRLQHG0DOD\
VLD·VLQÁXHQWLDOSDOPRLOLQGXVWU\LQSUHVVXULQJWKH*RYHUQPHQWWRUHYHUVHWKHEDQZKLFKLWGLGLQ0DOD\VLD·V
3HVWLFLGH%RDUGVXEVHTXHQWO\UXOHGWKDW3DUDTXDWXVHFRXOGFRQWLQXHSHQGLQJUHVXOWVIURPDVWXG\RQDOWHUQDWLYHV
7KHVWXG\KDVQRWEHHQUHOHDVHGDQG3DUDTXDWFRQWLQXHVWREHXVHG:DWWV
DeKalbAyala
Paras
Novartis
Zeneca
SturdyGrow
Sandoz
NorthrupKing
Mogen
AstraZeneca
Fischer
ResourceSeeds
Goldsmith
SPS
Astra
Sanbei
ISG
Western
Calgene
FirstLine
HubnerSeed
REA
ZeraimGedera
AgriPro
AWB
Pioneer
DoisMarcos
Verdia
ProteinTech. Int./
Solae
DunhuangPioneer
CurrySeed
Dunhuang
OptimumQualityGrains
DuPont
Hybrinova
CargillNorthAmerica
JGBoswell
Wensman
AgrEvo
GeneXSorghum
DairylandSeed
DuoMaize
RenzeHybrids
EmpresaBrasileira
HarvestStates
AdvancedAgriTraits
IllinoisFoundation
Pharmaceutical/Chemical Companies
Partial Ownership
Full Ownership
Other Companies
Cenex
CenexHarvest
FarmlandIndustries
CooperativeBusinessIntl
SpecialtyGrains
Agriliance
CPBTwyford
LochowPetkus
(1967)
SementesRibeiral
KWS
Brodbeck
Seed Companies
BioPlantResearch
MTI
Dow
Sudwestsaat
Land
O'Lakes
ABIAlfalfa
(1995)
CottonSeedIntl
AgrEvoCotton
Granja4Irmaos
PlanTecBiotech
PGS
RioColorado
Proagro
Nunza
(1986)
Sunseeds
Triumph
Agromen
FFRCoop
SOYGENETICS
Hytest
ProducersHybrids
DinamilhoCarol
Mycogen
Phytogen
Morgan
Schering
Hoechst
SementesFartura
AgReliant
HibridosColorado
NickersonVerneuil
BiogeneticaDeMilho
UnitedAgriseeds
Westhove
YuanLongping
Avesthagen
Swaghat
HarrisMoran
Clause
RhoBio
Roussel
-Uclaf
Paragon
Nunhems
(1995)
LeenDeMos
SeedEx
MitlaPesquisa
Aventis
RhonePoulenc
HollandCottonseed
Bayer
RelianceGenetics
Stoneville
Biogemma
Limagrain
-Vilmorin
Bunge
VandenBerg
Innoseeds
Kyowa
Hazera
CarlSperling
PauEuralis
eldSeedDelinting
Phil Howard, Assistant Professor, Michigan State University
http://www.msu.edu/~howardp
Denghai
ShandongDenghaiPioneer
Sunseeds
PSAGenetics
BASF
CeeKay
SvalofWeibull
BioSeeds
AdvantaEUVegetable
AustralianGrainTech
HybriTechEurope
Cargill
HelenaCotton
GermainsCotton
CaliforniaPlantingCotton
AssocFarmersDelinting
Gustafson
Nidera
NideraSemillas
6RXUFH5HSURGXFHGZLWKWKHNLQGSHUPLVVLRQRI+RZDUGIURPKWWSZZZPVXHGXaKRZDUGSVHHGLQGXVWU\KWPO
1RWH&RQVROLGDWLRQKDVLQFUHDVHGLQWKHLQWHUQDWLRQDOVHHGLQGXVWU\LQUHFHQWGHFDGHV7KHFKDUWGHSLFWVUHODWLRQVKLSVEHWZHHQPDMRUVHHGFRPSDQLHVDQG
WKHLUVXEVLGLDULHVLQDIWHU\HDUVRIFRQVROLGDWLRQ7KHODUJHVWÀUPVDUHUHSUHVHQWHGDVFLUFOHVZLWKWKHVL]HSURSRUWLRQDOWRWKHLUVKDUHLQWKH
JOREDOFRPPHUFLDOVHHGPDUNHW
GreenLeafGenetics
GoldenHarvest
LongReach
DiaEngei
AdvantaNACornSoybeans
Gutwein
CropDesign
Thurston
HybriTech
(1995)
JacobHartz
(1995)
ExSeed
AgriProWheat
CottonStates
LimagrainCanada
iCORN
Renessen
Cargill Intl.SeedDivision
Terrazawa
Ciagro
SyngentaGlobalCottonDivision
Seed Industry Structure
1996 - 2008
CDMMandiyu
EIDParryRallis
Garst
HeartlandHybrids
FieldersChoice
InterstatePayco
Jung
BoCa
Agracetus
DeltaPineLand
Marmot
SpecialtyHybrids
MoweaquaSeeds
GoldCountry
Peotec
AlyParticipacoes
SementesAgroceres
Mahyco
CornBelt
Sieben
Syngenta
ConradFafard
Size proportional to global seed market share
Zimmerman
Agritrading
Maisadour
CibaGeigy
KoipesolAgrosemAgra
Hawkeye
ASI
Kruger
StoneSeeds
LewisHybrids
CampbellSeed
HeritageSeeds
NebraskaIrrigated
StewartSeeds
NCPlusHybrids
Trisler
Diener
CornStatesHybrid
CNDK
Monsanto
Carnia
AdvantaCanola
CornStatesIntl
Sensako
Agroeste
TrelaySeeds
ChannelBio
Mahendra
Poloni
DeKalb
(1995)
Ecogen
EmergentGenetics
Fontanelle
Crows
WilsonSeeds
Indusem
PBIC
Holdens
Asgrow
DeRuiter
Monsoy
Horticeres
Barham
Genecorp
(1994)
Agroceres
CustomFarmSeed
Daehnfeldt
EridaniaBeghinSay/
Koipe
RoyalSluis
(1995)
Seminis
Bruinsma
(1994)
InterstateCanola
MidwestSeedGenetics
Unilever
Ayala
ChoongAng
Hungnong
Petoseed
(1995)
FTSementes
ChinaSeed
)LJXUH6WUXFWXUHRIWKHJOREDOVHHGLQGXVWU\RYHUWKHSHULRG²
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
75$'($1'(19,5210(175(9,(:
%R[5HYROYLQJGRRU
&RUSRUDWHH[HFXWLYHVIURPPDMRUDJULEXVLQHVVHVDSSRLQWHGWRSXEOLFDJHQFLHVKDYHIUHTXHQWO\SDUWLFLSDWHGLQWKHGUDIW
LQJRIUHJXODWRU\UXOHVWKDWDUHIDYRXUDEOHWRWKHLULQGXVWU\·VLQWHUHVWVD%HORZDUHVRPHH[DPSOHVIURPYDULRXVUHSRUWV
‡ $%UD]LOLDQDWWRUQH\UHSUHVHQWHG0RQVDQWRDQGLWV%UD]LOLDQVXEVLGLDU\0RQVR\LQYDULRXVFRXUWFDVHVEHWZHHQ
DQG0RYLQJWRJRYHUQPHQWVHUYLFHLQKHFRRUGLQDWHGWKHKLJKOHYHOLQWHUPLQLVWHULDOZRUNLQJJURXSWKDW
HVWDEOLVKHGWKHGHFUHHWRLPSOHPHQW%UD]LO·VSUR*(%LRVDIHW\/DZ7KHODZ²DSSODXGHGE\0RQVDQWRE²HVWDEOLVKHG
D 1DWLRQDO %LRVDIHW\ &RXQFLO RQ ZKLFK WKH IRUPHU 0RQVDQWR DWWRUQH\ VHUYHG DV H[HFXWLYH VHFUHWDU\ IURP WR
‡ $6\QJHQWDOREE\LVWWKDWUHSUHVHQWHGWKHELRWHFKFRPSDQ\DWDQ(8KHDULQJLQKDGSUHYLRXVO\ZRUNHGIRUWKH
(XURSHDQ8QLRQ)RRG6DIHW\$XWKRULW\()6$ZKHUHVKHKDGGHYHORSHG*(JXLGDQFHGRFXPHQWV+HUPRYHYLR
ODWHGWKH()6$·VUHTXLUHGWZR\HDUZDLWLQJSHULRG7KHOREE\LVWLVFXUUHQWO\6\QJHQWD·V+HDGRI%LRWHFK5HJXODWRU\
$IIDLUVIRU(XURSH$IULFDDQGWKH0LGGOH(DVW7HVWELRWHFKDQG63,QWHUQDWLRQDO
‡ $ODZ\HUIRU0RQVDQWRPRYHGWRWKH8QLWHG6WDWHV)RRGDQG'UXJ$GPLQLVWUDWLRQ)'$DQGWKH8QLWHG6WDWHV'H
SDUWPHQWRI$JULFXOWXUH86'$LQWKHVGXULQJZKLFKWLPHKHDSSURYHG0RQVDQWR·VFRQWURYHUVLDO*(ERYLQH
JURZWKKRUPRQHDQGGHYHORSHGSURDJULFXOWXUDOELRWHFKQRORJ\SROLFLHVEDVHGRQWKHFRQFHSWRI´VXEVWDQWLDOHTXLYD
OHQFHµ+HUHWXUQHGWR0RQVDQWRDVYLFHSUHVLGHQWIRUSXEOLFSROLF\LQEHIRUHUHMRLQLQJWKH)'$LQ1HVWOH
86)'$
‡ $IRUPHUFRUSRUDWHFRXQVHOIRUWKHSHVWLFLGHDQGELRWHFKQRORJ\FRPSDQ\'X3RQWZDVDSSRLQWHGLQ-DQXDU\WR
VHUYHDVJHQHUDOFRXQVHOIRUWKH86'$6RRQDIWHUWKH86'$SURSRVHGDGUDPDWLFUHGXFWLRQLQDJHQF\UHVSRQVLELOLW\
IRUUHJXODWLQJ*(FURSV$WZR\HDUSLORWSURJUDPODXQFKHGLQ$SULOQRZDOORZVELRWHFKQRORJ\ÀUPVWRFRQGXFW
HQYLURQPHQWDOUHYLHZVRIWKHLURZQ*(SURGXFWVDVSDUWRIWKH8QLWHG6WDWHV·UHJXODWRU\SURFHVVF,Q1RYHPEHU
86'$DQQRXQFHGDGGLWLRQDOSODQVWRVWUHDPOLQHLWV*(UHJXODWRU\DSSURYDOSURFHVVLQRUGHUWR´UHGXFHWKHOHQJWKRI
WKHSHWLWLRQSURFHVVµG
1RWH D 6HH DOVR &HQWHU IRU 5HVSRQVLYH 3ROLWLFV $JULEXVLQHVV OREE\LQJ DW ZZZRSHQVHFUHWVRUJOREE\
LQGXVSKS"LG $\HDU DQG5HYROYLQJGRRUDWZZZRSHQVHFUHWVRUJUHYROYLQJLQGH[SKS
E6HH0RQVDQWR0RQVDQWRHQFRXUDJHGE\HQDFWPHQWRI%UD]LOLDQELRVDIHW\ODZ1HZVUHOHDVH0DUFK
DWKWWSPRQVDQWRPHGLDURRPFRPLQGH[SKS"V LWHP F 86'$ 6ROLFLWDWLRQ RI /HWWHUV RI ,QWHUHVW WR 3DUWLFLSDWH LQ 1DWLRQDO (QYLURQPHQWDO 3ROLF\ $FW 3LORW
3URMHFW$QLPDODQG3ODQW+HDOWK,QVSHFWLRQ6HUYLFH>'RFNHW1R$3+,6²²@)HGHUDO5HJLVWHU9RO
1R7KXUVGD\$SULO1RWLFHV²:DVKLQJWRQ'&86'$·VSLORWSURJUDPPHLV
GHVFULEHGDWZZZDSKLVXVGDJRYELRWHFKQRORJ\QHSDBSLORWVKWPO
G86'$·V1RYHPEHUSODQVWRVSHHGXSWKH*(DSSURYDOSURFHVVDUHGHVFULEHGDWZZZDSKLVXVGD
JRYQHZVURRPJHBSHWLWLRQBSURFHVVVKWPO 7KH FROODERUDWLRQ EHWZHHQ 0RQVDQWR DQG 86'$ LQ
SUHSDUDWLRQRIHQYLURQPHQWDOUHYLHZVRI0RQVDQWR·V*(SURGXFWVLVDQDO\VHGDWZZZWUXWKRXWRUJXQGHU
LQGXVWU\SUHVVXUHXVGDZRUNVVSHHGDSSURYDOPRQVDQWRVJHQHWLFDOO\HQJLQHHUHGFURSV
*RYHUQPHQWGRFXPHQWVREWDLQHGXQGHUD)UHHGRPRI,QIRUPDWLRQ$FWUHTXHVWDUHDYDLODEOHDWZZZWUXWK
RXWRUJZK\PRQVDQWRDOZD\VZLQV
SXEOLF DJHQFLHV DQG RIÀFLDOV LQ ERWK QDWLRQDO DQG
LQWHUQDWLRQDOSROLF\PDNLQJDUHQDVDQGKDYHLQPDQ\
LQVWDQFHVLQÁXHQFHGSROLF\GHFLVLRQVWRWKHLUEHQHÀW
ER[HVDQG7KLVLQÁXHQFHZHDNHQVJRYHUQPHQW
FRPPLWPHQW WR PRUH VWULFWO\ UHJXODWH FRPPHUFLDO
DFWRUV UHPRYH SHUYHUVH LQFHQWLYHV WKDW IDYRXU
FRUSRUDWHSURÀWRYHUSXEOLFLQWHUHVWUHYLVHRZQHUVKLS
ODZV DQG UHVWRUH SXEOLF DFFHVV WR DQG FRQWURO RYHU
SURGXFWLYHUHVRXUFHVWKDWKDYHEHHQSULYDWL]HG
/HJDOLPSHGLPHQWVWRVXVWDLQDEOHDJULFXOWXUDO
UHVHDUFKDQGSUDFWLFH
6HFXULW\RIWHQXUHDQGDFFHVVWRODQGDUHYLWDOWRHQDEOH
IDUPHUVWRLQYHVWLQORQJHUWHUPUHVRXUFHFRQVHUYLQJ
VWUDWHJLHVDQGPHHWOLYHOLKRRGDQGIRRGVHFXULW\JRDOV
DWKRXVHKROGDQGQDWLRQDOOHYHOV7KHODFNRIQDWLRQDO
ODZVWRVHFXUHVPDOOVFDOHIDUPHUV·WHQXUHDQGDFFHVV
WRSURGXFWLYHUHVRXUFHVHJVHHGVJHUPSODVPODQG
ZDWHUXQGHUPLQHVHIIRUWVWRSURPRWHDFRQYHUVLRQWR
VXVWDLQDEOH SUDFWLFHV ,QVWHDG LQWHOOHFWXDO SURSHUW\
,3ODZVKDYHSULYDWL]HGWKRVHUHVRXUFHVWUDQVIHUULQJ
RZQHUVKLSWRFRPPHUFLDOLQWHUHVWV,$$67'D
,3 ODZV DUH DOVR GULYLQJ DJULFXOWXUDO UHVHDUFK LQ
VXSSRUW RI SULYDWH VHFWRU JRDOV DVVRFLDWHG ZLWK
SURGXFWGHYHORSPHQWUDWKHUWKDQHFRORJLFDOUHVLOLHQFH
RUSRYHUW\UHGXFWLRQ7KH%D\K'ROH$FWRIIRU
6RXUFH3HVWLFLGH$FWLRQ1HWZRUN1RUWK$PHULFD*UDSKLFGHYHORSHGE\$0XQLPXVIURPSURMHFWLQIRUPDWLRQ
SURYLGHGDWKWWSZZZDEVSFRUQHOOHGX
)LJXUH86$,'IXQGHG$JULFXOWXUDO%LRWHFKQRORJ\6XSSRUW3URMHFW$%633KDVH,,WDUJHWFRXQWULHV*(FURSVLQGHYHORSPHQWDQGSURMHFWSDUWQHUV
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
H[DPSOHUDGLFDOO\DOWHUHGWKHSROLWLFDODQGHFRQRPLF
ODQGVFDSH RI SXEOLF VHFWRU UHVHDUFK LQ WKH 8QLWHG
6WDWHV PDQGDWLQJ SDWHQWV RQ UHVHDUFK RXWFRPHV
:KHQ XQLYHUVLWLHV DVVLJQ H[FOXVLYH OLFHQVLQJ ULJKWV
WR FRUSRUDWLRQV FRUH UHVHDUFK EHQHÀWV DUH UHPRYHG
IURPWKHSXEOLFGRPDLQ
6FLHQWLVWV LQ GHYHORSLQJ FRXQWULHV DUH HQFRXUDJHG
E\ LQFHQWLYHV DQG WHFKQLFDO VXSSRUW IURP XQLYHUVLW\
SDWHQW RIÀFHV WR XQGHUWDNH UHVHDUFK WKDW LV OLNHO\ WR
HDUQ UR\DOW\ UHYHQXHV IRU WKH XQLYHUVLW\ DV REVHUYHG
LQ 8JDQGD /RXZDDUV HW DO ,QFUHDVLQJO\
XQLYHUVLWLHVDUHUHGLUHFWLQJWKHLUUHVHDUFKWRPHHWWKH
VKRUWWHUPÀQDQFLDOJRDOVRIVSRQVRULQJFRUSRUDWLRQV
UDWKHUWKDQEURDGHUSXEOLFLQWHUHVWJRDOVDVUHÁHFWHG
LQWKHHPHUJHQFHRID´XQLYHUVLW\LQGXVWULDOFRPSOH[µ
3UHVVDQG:DVKEXUQ:DVKEXUQ
6FLHQWLVWV· DELOLW\ WR FRQGXFW LQGHSHQGHQW
DVVHVVPHQWVRISDWHQWHG*(VHHGVLVDOVRLPSHGHG
E\,3UXOHVWKDWUHTXLUHWKHPWRÀUVWVHFXUHDSSURYDOIRU
WKHLUUHVHDUFKSODQIURPWKHSDWHQWKROGHU+XEEDUG
,QGHHGLQLQDOHWWHUWRWKH8QLWHG6WDWHV
(QYLURQPHQWDO 3URWHFWLRQ $JHQF\ RYHU WZR GR]HQ
XQLYHUVLW\VFLHQWLVWVFRPSODLQHGRIWKHVWLÁLQJHIIHFWV
RI ,3 ODZV RQ LQGHSHQGHQW UHVHDUFK DQG LQQRYDWLRQ
3ROODFN
&RUSRUDWH RZQHUVKLS RI ERWK SURGXFWLYH UHVRXUFHV
DQG ,3 KDV FRQVWUDLQHG DJULFXOWXUDO WUDQVIRUPDWLRQ
LQ RWKHU ZD\V DV ZHOO %UHQQDQ HW DO 3UD\
2HKPNHDQG1DVHHP7KHVHRZQHUVKLSUXOHV
KDYH FRQWULEXWHG WR WKH HURVLRQ RI JHQHWLF GLYHUVLW\
ORFDO NQRZOHGJH VRFLDO HTXLW\ DQG IRRG VRYHUHLJQW\
'UH\IXVHWDO
)LQDOO\WKHODFNRIDGHTXDWHDQWLWUXVWDQGFRPSHWLWLRQ
ODZV DW QDWLRQDO DQG LQWHUQDWLRQDO OHYHOV DQG ZHDN
MXGLFLDO V\VWHPV WKDW DUH XQDEOH WR SURSHUO\ HQIRUFH
H[LVWLQJ ODZV KDYH VXSSRUWHG WKH XQSUHFHGHQWHG
SDFHRIFRUSRUDWHFRQVROLGDWLRQDQGDGYHUVHHIIHFWV
RQ IDPLO\ IDUPLQJ RYHU WKH SDVW WZR GHFDGHV 'H
6FKXWWHUE+HQGULFNVRQHWDO
,QVWLWXWLRQDOELDVHV
%LDVZLWKLQLQVWLWXWLRQDODUUDQJHPHQWV²VKDSHGE\SUH
DQDO\WLF DVVXPSWLRQV SURIHVVLRQDO LQHUWLD DQG ´SDWK
GHSHQGHQF\µ DQG XSKHOG E\ JHRSROLWLFDO FRQFHUQV
DQG WKH LQÁXHQFH RI YHVWHG LQWHUHVWV ² FDQ VWURQJO\
SULYLOHJHRQHGHYHORSPHQWPRGHORYHURWKHUV'UH\IXV
HWDO,QWKHFDVHRIDJULFXOWXUHSROLWLFDOO\DQG
HFRQRPLFDOO\ GRPLQDQW DFWRUV VXFK DV WKH :RUOG
%DQNLQWHUQDWLRQDOUHVHDUFKFHQWUHVDQGGHYHORSHG
75$'($1'(19,5210(175(9,(:
FRXQWU\DLGDQGWUDGHDJHQFLHVDOOSOD\HGDIRUPDWLYH
UROHLQHVWDEOLVKLQJWKH´*UHHQ5HYROXWLRQµPRGHODV
RQH WR EH UHSOLFDWHG DQG HPXODWHG DW WKH H[SHQVH
RIDOWHUQDWLYHPRGHOVWKDWHPSKDVL]HGPRUHKROLVWLF
HFRORJLFDODQGIDUPHUOHGDSSURDFKHV%URRNVHWDO
'UH\IXV HW DO &XOODWKHU %URRNV
DQG
7KH SHUVLVWHQFH RI WKHVH ELDVHV WRGD\ LV UHÁHFWHG
LQ WKH QXPEHU RI VWUDWHJLF LQLWLDWLYHV RI PDMRU
LQWHUQDWLRQDO GRQRUV WKDW VHHN WR SURPRWH KLJK
H[WHUQDOLQSXW FRPPHUFLDO RU LQGXVWULDO DJULFXOWXUH
HYHQ DPRQJ VPDOOVFDOH IDUPHUV GHVSLWH HYLGHQFH
WKDW UHYHDOV WKH GDPDJLQJ HIIHFWV RI WKLV DSSURDFK
DQG WKH QHHG WR VWUHQJWKHQ VLWHVSHFLÀF HFRORJLFDO
DSSURDFKHV WKDW SURYLGH PXOWLIXQFWLRQDO EHQHÀWV
)RU H[DPSOH HPSKDVLV RQ LQFUHDVLQJ SURGXFWLYLW\
WKURXJKWKHUHVHDUFKGHYHORSPHQWDQGH[SRUWRIQHZ
SURGXFWV DQG ELRWHFKQRORJLHV XQGHUSLQV WKH 8QLWHG
6WDWHV )HHG WKH )XWXUH ,QLWLDWLYH WKH $JULFXOWXUDO
%LRWHFKQRORJ\ 6XSSRUW 3URJUDP RI WKH 8QLWHG
6WDWHV $JHQF\ IRU ,QWHUQDWLRQDO 'HYHORSPHQW WKH
DJULFXOWXUH SURJUDPPH RI WKH ZRUOG·V ODUJHVW SULYDWH
IRXQGDWLRQ %LOO DQG 0HOLQGD *DWHV )RXQGDWLRQ
DQG WKH &RQVXOWDWLYH *URXS RQ ,QWHUQDWLRQDO
$JULFXOWXUDO5HVHDUFK(GZDUGV%URRNV
DQG)HHGWKH)XWXUH7XFNH\0DQ\
RIWKHVHGHYHORSPHQWLQLWLDWLYHVDUHFORVHO\LQWHUZRYHQ
DQGVKDUHWKHVDPHFRUSRUDWHSDUWQHUVÀJXUH,Q
VXFKFDVHVELODWHUDODQGPXOWLODWHUDOGHYHORSPHQWDLG
SURYLGHVDQHIIHFWLYHYHKLFOHIRUPDUNHWHQWU\
*OREDOWUDGHGULYHURUFRQVWUDLQW"
*OREDOWUDGHKDVVLJQLÀFDQWSRWHQWLDOWRVXSSRUWUREXVW
QDWLRQDODQGUHJLRQDOHFRQRPLHVDQGGULYHDWUDQVLWLRQ
WRZDUGV HFRORJLFDO DJULFXOWXUH +RZHYHU WUDGH
OLEHUDOL]DWLRQ WKDW KDV RSHQHG GHYHORSLQJFRXQWU\
PDUNHWV WR LQWHUQDWLRQDO FRPSHWLWLRQ WRR TXLFNO\ RU
WRR H[WHQVLYHO\ KDV XQGHUPLQHG WKH UXUDO VHFWRU DQG
GHJUDGHG WKH HQYLURQPHQW ,$$67' D DQG E
$VDUHVXOWGHYHORSLQJFRXQWULHVKDYHEHHQOHIWZLWK
GLPLQLVKHG FDSDFLW\ IRU IRRG SURGXFWLRQ PDNLQJ
WKHPPRUHYXOQHUDEOHWRLQWHUQDWLRQDOIRRGSULFHDQG
VXSSO\YRODWLOLW\DQGUHGXFLQJWKHLUIRRGDQGOLYHOLKRRG
VHFXULW\.KRU
$ IXQGDPHQWDO UHIRUP RI JOREDO WUDGH UXOHV WRZDUGV
IDLU DQG HFRORJLFDO DJULFXOWXUH KDV EHHQ SURSRVHG
DQG GHVFULEHG E\ D QXPEHU RI H[SHUWV HJ ,]DF HW
DODOVRVHH.KRUDQG/LPLQFKDSWHURIWKLV
5HYLHZ<HWSURJUHVVWRZDUGVHVWDEOLVKLQJDQHZDQG
IDLUWUDGHUHJLPHUHPDLQVFRQVWUDLQHGE\WKHLQÁXHQFH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
RIDIHZSRZHUIXOFRXQWULHVDQGFRPPHUFLDOLQWHUHVWV
RSHUDWLQJ LQ JOREDO SROLF\ DUHQDV VXFK DV WKH :RUOG
7UDGH2UJDQL]DWLRQ:72$QWLGHPRFUDWLFSURFHVVHV
DQGDV\PPHWULFDOSRZHUUHODWLRQVKLSVZLWKLQWKH:72
SUHYHQW FLYLO VRFLHW\ DQG JRYHUQPHQWV RI GHYHORSLQJ
FRXQWULHV IURP VHFXULQJ UHIRUP RI WKH JOREDO WUDGH
UHJLPH UHFRPPHQGHG E\ IRU H[DPSOH WKH ,$$67'
DQG 81&7$' .KRU DQG 6RXWK &HQWUH
%&XUWDLOLQJFRQFHQWUDWLRQRISRZHUDQG
H[FHVVRILQÁXHQFHLQWKHJOREDOL]HG
V\VWHP
7KH GHPRFUDWL]LQJ RI LQVWLWXWLRQV WKDW VKDSH JOREDO
IRRG DQG DJULFXOWXUH UHTXLUHV ERWK FRXUDJH DQG
VXVWDLQHGHQJDJHPHQWE\YLVLRQDU\SROLWLFDOOHDGHUV
UHVHDUFKHUV SULYDWH VHFWRU DFWRUV DQG DOO VHFWRUV
RI FLYLO VRFLHW\ 7KH SDUWLFLSDWLRQ RI DOO VWDNHKROGHUV
SDUWLFXODUO\KLVWRULFDOO\PDUJLQDOL]HGUXUDOFRPPXQLWLHV
LQGHYHORSLQJFRXQWULHVDVHTXDOSDUWQHUV²DQGQRW
VLPSO\DVVWHSSLQJVWRQHVLQD´FRQVXOWDWLYHµSURFHVV
² LV DQ HVVHQWLDO LQJUHGLHQW IRU UHYLWDOL]LQJ ORFDO DQG
UHJLRQDOIRRGV\VWHPVGULYLQJLQQRYDWLRQWKDWPHHWV
JOREDOIRRGDQGOLYHOLKRRGQHHGVDQGEXLOGLQJUREXVW
ORFDOHFRQRPLHV
$SURJUHVVLYHDSSURDFKWRRYHUFRPLQJWKHLQVWLWXWLRQDO
DQGPDUNHWSRZHUFRQVWUDLQWVLGHQWLÀHGDERYHVKRXOG
LQFOXGHFRPPLWPHQWWR
‡ 8QGHUWDNHDIXOOFRVWDQDO\VLVRIQDWLRQDODQGJOREDO
IRRGDQGDJULFXOWXUDOV\VWHPV
‡ 3URYLGH LQVWLWXWLRQDO VXSSRUW IRU VPDOOVFDOH
IDUPHUVDQGZRPHQ·VDQGZRUNHUV·RUJDQL]DWLRQV
WKDWVWUHQJWKHQVWKHLUQHJRWLDWLQJSRZHULQPDUNHWV
GRPLQDWHGE\WUDQVQDWLRQDOEX\HUV
‡ 6WUHQJWKHQ DQG EURDGHQ WKH VFRSH RI QDWLRQDO
DQG LQWHUQDWLRQDO FRPSHWLWLRQ SROLFLHV WR UHYHUVH
WUHQGVLQIDUPDQGDJULEXVLQHVVFRQFHQWUDWLRQHQG
‡
‡
‡
‡
‡
‡
‡
XQIDLU EXVLQHVV SUDFWLFHV DFURVV WKH JOREDO IRRG
SURGXFWLRQDQGVXSSO\FKDLQDQGFXUWDLOGRPLQDQW
EX\HUSRZHUZKLFKWKUHDWHQVVPDOOVFDOHIDUPHUV·
IRRG DQG OLYHOLKRRG VHFXULW\ VHH 'H 6FKXWWHU
F
(VWDEOLVK DQG HQIRUFH VWURQJ FRGHV RI FRQGXFW
WR JRYHUQ SULYDWHSXEOLF SDUWQHUVKLSV DQG SXEOLF
SROLF\PDNLQJ SURFHVVHV LQ RUGHU WR PLQLPL]H
SRWHQWLDO FRQÁLFWV RI LQWHUHVW ZKLFK XQIDLUO\ RU
LQDSSURSULDWHO\EHQHÀWSULYDWHVHFWRUDFWRUV
(VWDEOLVK DQ LQWHUQDWLRQDO UHYLHZ PHFKDQLVP WR
LQYHVWLJDWH DJULIRRG VHFWRU FRQFHQWUDWLRQ DQWL
FRPSHWLWLYHSUDFWLFHVDQGLPSDFWVDFURVVQDWLRQDO
ERUGHUVGHYHORSVWDQGDUGVRIFRUSRUDWHEHKDYLRXU
DQGUHFRPPHQGSROLF\RSWLRQV
5HYLVH,3DQGRWKHURZQHUVKLSUXOHVDQGLQFHQWLYHV
LQ RUGHU WR UHRULHQW SXEOLF SROLF\ DQG UHVHDUFK
WRZDUGV HTXLWDEOH DQG VXVWDLQDEOH GHYHORSPHQW
JRDOV
(VWDEOLVK PHDQV RI SUHYHQWLQJ FRQÁLFW RI LQWHUHVW
LQ SDUWQHUVKLSV LQYHVWPHQWV DQG SROLF\PDNLQJ
SURFHVVHV
%XLOG GHYHORSLQJ FRXQWULHV· FDSDFLWLHV IRU WUDGH
DQDO\VLVDQGQHJRWLDWLRQOHDGLQJWRPRUHHTXLWDEOH
WUDGH UXOHV 6WUDWHJLF LPSDFW DVVHVVPHQWV FRXOG
SURYLGH XVHIXO HPSLULFDO HYLGHQFH RI WKH VRFLDO
HQYLURQPHQWDODQGHFRQRPLFWUDGHRIIVRIYDULRXV
WUDGHLQVWUXPHQWV
5HVWUDLQ ÀQDQFLDO VSHFXODWLRQ RYHU IRRG
FRPPRGLWLHV WKDW GLVWRUWV PDUNHWV DQG SULFH
VLJQDOVDQG
(VWDEOLVK DQG VWUHQJWKHQ GHPRFUDWLF GHFLVLRQ
PDNLQJ SURFHVVHV DQG LQFUHDVH FLYLO VRFLHW\
SDUWLFLSDWLRQ LQ SROLF\PDNLQJ SURFHVVHV 7KH
VXFFHVVRIWKH7DPLO1DGX:RPHQ·V&ROOHFWLYHLQ
WUDQVIRUPLQJUHJLRQDOIRRGDQGDJULFXOWXUDOV\VWHPV
E\VXSSRUWLQJUXUDOZRPHQDVFRGHFLVLRQPDNHUV
LQWKHFRPPXQLW\DQGLQSROLWLFDORIÀFHLVLQVWUXFWLYH
LQWKLVUHVSHFW,$73
75$'($1'(19,5210(175(9,(:
1//'06#4;U )4+%7.674'X
11&#0&0'4);
*XQQDU5XQGJUHQ
*UROLQN$%&RQVXOWDQF\6ZHGHQ
$EVWUDFW
,QDZRUOGZLWKDUDSLGO\LQFUHDVLQJKXPDQSRSXODWLRQDQGWKHVLPXOWDQHRXVGHSOHWLRQRIQDWXUDOUHVRXUFHV
WKHLQGXVWULDOORJLFRIUHSODFLQJKXPDQODERXUZLWKRLODQGRWKHUQDWXUDOUHVRXUFHVPDNHVOHVVDQGOHVV
VHQVH,QFUHDVLQJHQHUJ\SULFHVZLOOUHYHUVHVRPHRIWKHGHYHORSPHQWVWKDWZHUHPDGHSRVVLEOHE\FKHDS
IRVVLO IXHO 7KLV SRVHV D FKDOOHQJH IRU VRFLHW\ EXW DOVR DQ RSSRUWXQLW\ WR VWHHU WRZDUGV D SDWK RI WUXH
VXVWDLQDELOLW\LQFOXGLQJWKHDGRSWLRQRIPRUHVXVWDLQDEOHDJULFXOWXUDOPHWKRGVVXFKDVRUJDQLFIDUPLQJ
DQG PRUH ORFDOL]HG IRRG SURGXFWLRQ QHWZRUNV 7KDW WKRVH FKDQJHV ZLOO DOVR VHUYH WR PLWLJDWH FOLPDWH
FKDQJHLVDQRWKHUVWURQJDUJXPHQWLQIDYRXURIVXFKDVKLIW
$,QWURGXFWLRQ
$ FRPELQDWLRQ RI FKHDS IRVVLO IXHO DQG PDUNHW
RULHQWDWLRQOHGWRWKHLQGXVWULDOL]DWLRQRIIDUPLQJ:KLOH
ODERXU SURGXFWLYLW\ LQ DJULFXOWXUH KDV VN\URFNHWHG
HQHUJ\ SURGXFWLYLW\ KDV SOXPPHWHG 7KH ZLQQHUV
KDYHEHHQDJULEXVLQHVVHVDQGWKHORVHUVKDYHEHHQ
VPDOOIDUPVHVSHFLDOO\LQGHYHORSLQJFRXQWULHV:LWK
LQFUHDVLQJ VKRUWDJHV RI IRVVLOIXHOEDVHG HQHUJ\
DQG QDWXUDO UHVRXUFHV DQG WKH UDSLG JURZWK RI
WKH ZRUOG·V SRSXODWLRQ ZH QHHG WR IXQGDPHQWDOO\
WUDQVIRUP DJULFXOWXUH LQWR D QHW HQHUJ\ SURGXFHU DV
LW ZDV WKURXJKRXW KLVWRU\ 7KH VLPSOH HTXDWLRQ KDV
DOZD\V EHHQ WKDW LW LV QHFHVVDU\ WR JHW VXEVWDQWLDOO\
PRUH HQHUJ\ RXW RI WKH IRRG WKDQ LV SXW LQWR LWV
SURGXFWLRQ$VORQJDVHQHUJ\LQSXWLVKXPDQODERXU
LWLVDQLURQODZWKDWFDQRQO\EHVNLSSHGIRUVKRUWHU
SHULRGV$JULFXOWXUDOZRUNHUVVKRXOGQRWRQO\EHDEOH
WR IHHG WKHPVHOYHV EXW DOVR RWKHU IDPLO\ PHPEHUV
ZKR DUH WRR \RXQJ WRR ROG RU WRR VLFN WR ZRUN DV
ZHOO DV D IHZ RWKHUV WKDW VXSSO\ VHUYLFHV )LQDOO\ LQ
DOPRVWDOOVRFLHWLHVWKHUHKDYHEHHQUXOHUVZKRKDYH
DSSURSULDWHGDODUJHSURSRUWLRQRIWKHSURGXFWLRQ
WKHIRRGFRQVXPSWLRQRISHRSOH7KDWUHSUHVHQW
WKH´HQHUJ\VODYHVµLQWKHIRUPRIIRVVLOIXHOZRUNLQJ
IRU KLP RU KHU $QRWKHU ZD\ RI ORRNLQJ DW LW IURP DQ
HFRQRPLFSHUVSHFWLYHLVWKDWDEDUUHORIRLOUHSUHVHQWV
WKH HQHUJ\ RI KRXUV RI KXPDQ WRLO LH SHUVRQV ZRUNLQJ IRU D \HDU XQGHU QRUPDO ODERXU
VWDQGDUGV(YHQZLWKDQRLOSULFHRIVHYHUDOKXQGUHG
GROODUV SHU EDUUHO WKLV LV YHU\ FKHDS FRPSDUHG ZLWK
KXPDQODERXU5XQGJUHQ
%ELOOLRQHQHUJ\VODYHV
$FFRUGLQJWRWKH)$2PHJDMRXOHV0-
RI IRVVLO HQHUJ\ FRUUHVSRQGLQJ WR RQH EDUUHO RI RLO
LV XVHG WR SURGXFH RQH WRQ RI PDL]H LQ LQGXVWULDO
IDUPLQJ ZKLOH IRU WKH SURGXFWLRQ RI PDL]H XVLQJ
WUDGLWLRQDOPHWKRGVLQ0H[LFRIRUH[DPSOHRQO\
0- FRUUHVSRQGLQJ WR OLWUHV RI RLO LV XVHG 7KLV
FDOFXODWLRQ LQFOXGHV HQHUJ\ IRU V\QWKHWLF IHUWLOL]HUV
LUULJDWLRQ DQG PDFKLQHU\ EXW QRW WKH HQHUJ\ XVHG
IRU PDNLQJ PDFKLQHU\ WUDQVSRUWLQJ SURGXFWV WR DQG
IURPWKHIDUPDQGIRUFRQVWUXFWLRQRIIDUPEXLOGLQJV
,QPRGHUQULFHIDUPLQJWKHHQHUJ\UHWXUQRQHQHUJ\
LQYHVWHG(52,LVOHVVWKDQLHWKHUHLVPRUHHQHUJ\
FRQVXPHG WKDQ SURGXFHG DQG LQ PRGHUQ PDL]H
IDUPLQJ LW LV VOLJKWO\ PRUH WKDQ ZKLOH WUDGLWLRQDO
SURGXFWLRQRIULFHDQGPDL]HJLYHVDUHWXUQRIWR
WLPHVRQHQHUJ\XVHG)$2
7RKDYHDQLGHDRIKRZLPSRUWDQWWKHGHSOR\PHQWRI
H[WHUQDO HQHUJ\ VRXUFHV KDV EHHQ IRU RXU PRGHUQ
VRFLHWLHVRQHFDQFRQWUDVWWKHHQHUJ\HPEHGGHGLQ
KXPDQ ODERXU ZLWK WKH H[WHUQDO HQHUJ\ VRXUFHV WKDW
DUHH[SORLWHG$URXJKFDOFXODWLRQVKRZVWKDWWKH
WRQVRIRLOHTXLYDOHQWVWRHVRIHQHUJ\XVHGDQQXDOO\
E\ WKH DYHUDJH $PHULFDQ FRPSDUHG ZLWK WRHV
XVHG E\ WKH DYHUDJH 6HQHJDOHVH FRUUHVSRQGV WR
7KHWRWDOHQHUJ\KDUYHVWHGSHUKHFWDUHFDQLQFUHDVH
VXEVWDQWLDOO\ ZLWK LQFUHDVHG XVH RI DQFLOODU\ HQHUJ\
ZKLFK FDQ WDNH WKH IRUP RI EHWWHU DQG WLPHOLHU
VRLO SUHSDUDWLRQ LUULJDWLRQ DQG WKH DSSOLFDWLRQ RI
FKHPLFDOIHUWLOL]HUVWKDWDUHYHU\HQHUJ\GHPDQGLQJ
WRQDPHDIHZ7KHUDWLREHWZHHQHQHUJ\UHWXUQDQG
HQHUJ\ LQSXW LH HIÀFLHQF\ LQ XVH RI HQHUJ\ VHHPV
WREHIDLUO\FRQVWDQWXSWRDFHUWDLQOHYHODIWHUZKLFK
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
LWGHWHULRUDWHVUDSLGO\,QGXVWULDOIDUPLQJV\VWHPVKDYH
ORQJ SDVVHG WKLV OHYHO +DUYHVWHG HQHUJ\ SHU ODERXU
XQLW LQFUHDVHV GUDPDWLFDOO\ ZLWK LQFUHDVHG LQSXW RI
HQHUJ\ E\ D IDFWRU RI EHWZHHQ DQG DOORZLQJ
WKHPRVWDGYDQFHGDJULFXOWXUDOV\VWHPVWRKDYHRQH
IDUPHU IRU PRUH WKDQ SHUVRQV %D\OLVV6PLWK
&:K\RLODQGJUDLQSULFHVPRYHLQ
WDQGHP
)DUPLQJXVHVHQHUJ\LQPDQ\GLIIHUHQWIRUPVGLHVHO
IRU WUDFWRUV DQG SXPSV DQG HOHFWULFLW\ IRU SXPSV
IDQVDQGLQGRRUPDFKLQHU\VXFKDVPLONLQJPDFKLQHV
)HUWLOL]HUV DFFRXQW IRU D ODUJH SURSRUWLRQ RI HQHUJ\
XVH(QHUJ\UHSUHVHQWVSHUFHQWRIWKHSURGXFWLRQ
FRVWV RI QLWURJHQ IHUWLOL]HUV SHU FHQW RI WKRVH RI
SKRVSKRUXV IHUWLOL]HUV DQG SHU FHQW RI WKRVH RI
SRWDVVLXP IHUWLOL]HUV $FFRUGLQJ WR WKH 8QLWHG 6WDWHV
&RQJUHVVLRQDO 5HVHDUFK 6HUYLFHV 86 &56 HQHUJ\FRVWVLQWKH8QLWHG6WDWHVUHSUHVHQWEHWZHHQ
SHUFHQWDQGSHUFHQWRIWKHSURGXFWLRQFRVWV
RI ZKHDW PDL]H DQG FRWWRQ DQG SHU FHQW RI
WKRVH RI VR\EHDQV 7KHVH ÀJXUHV GR QRW LQFOXGH
HPEHGGHG HQHUJ\ FRVWV LQ LWHPV VXFK DV EXLOGLQJV
DQG PDFKLQHU\ ZKLFK PHDQV WKDW WKH DFWXDO VKDUH
RI HQHUJ\ FRVWV LV VXEVWDQWLDOO\ KLJKHU ,Q $UJHQWLQD
HQHUJ\FRVWVZHUHFDOFXODWHGDVDFFRXQWLQJIRUSHU
FHQWRIWKHSURGXFWLRQFRVWVRIJUDLQLQ%DOW]HU
+DQVHQ DQG /LQG :KHQ HQHUJ\ SULFHV ULVH
DJULFXOWXUDOFRPPRGLW\SULFHVIROORZVXLWDVZDVVHHQ
LQWKHIRRGDQGRLOSULFHKLNHVLQ²+LJKHU
HQHUJ\ SULFHV LQÁXHQFH IRRG SULFHV LQ IRXU GLIIHUHQW
ZD\V
L %\PDNLQJIRRGSURGXFWLRQPRUHH[SHQVLYH
LL %\PDNLQJWKHSURGXFWLRQRIFURSVIRUELRIXHOPRUH
UHPXQHUDWLYHDQGWKHUHIRUHUHGXFLQJWKHSURGXFWLRQ
RIIRRGWKHUHE\OHDGLQJWRKLJKHUIRRGSULFHV
LLL,QFUHDVLQJWUDQVSRUWDWLRQFRVWVZKLFKKDYHDGLUHFW
LPSDFWRQIRRGSULFHV
LY5HGXFLQJ FRPSHWLWLRQ LQ WKH IRRG VHFWRU LH
LQFUHDVHG WUDQVSRUWDWLRQ FRVWV DOOHYLDWH WKH
SUHVVXUH RI JOREDO FRPSHWLWLRQ 5XQGJUHQ
',WWDNHVPRUHHQHUJ\WRHDWWKDQWRIDUP
7KH LQFUHDVH RI HQHUJ\ XVH LQ DJULFXOWXUH ZDV
SDUWLFXODUO\ UDSLG GXULQJ WKH SHULRG EHWZHHQ WKH
6HFRQG :RUOG :DU DQG WKH ÀUVW RLO SULFH VKRFN LQ
)RUH[DPSOHLQWKH8QLWHG.LQJGRPZKLOHWKH
DJULFXOWXUDOODERXUIRUFHZDVUHGXFHGWRKDOIEHWZHHQ
DQG HQHUJ\ XVH WULSOHG %D\OLVV6PLWK
,Q WKH 8QLWHG 6WDWHV HQHUJ\ XVH IHOO IURP WKH
PLGVWRWKHPLGVDVDUHVSRQVHWRKLJKHURLO
SULFHVEXWLWVWDELOL]HGWKHUHDIWHU+HQGULFNVRQ
+RZHYHUORRNLQJDWWKHHQWLUHIRRGFKDLQHQHUJ\XVH
KDV FRQVWDQWO\ LQFUHDVHG 8VH RI HQHUJ\ DORQJ WKH
IRRGFKDLQIRUIRRGSXUFKDVHVE\RUIRUKRXVHKROGVLQ
WKH8QLWHG6WDWHVLQFUHDVHGEHWZHHQDQG
DW PRUH WKDQ VL[ WLPHV WKH UDWH RI LQFUHDVH LQ WRWDO
GRPHVWLFHQHUJ\XVH$VDVKDUHRIWKHQDWLRQDOHQHUJ\
EXGJHWIRRGUHODWHGHQHUJ\XVHJUHZIURPSHU
FHQWLQWRSHUFHQWLQ86&56
VHHDOVRWKHFRPPHQWRI*5$,1LQWKLVFKDSWHU,Q
SUHLQGXVWULDODQGVHPLLQGXVWULDODJULFXOWXUDOV\VWHPV
PRVW RI WKH IRRG LV VROG HDWHQ DQG SUHSDUHG FORVH
WRZKHUHLWLVSURGXFHGEXWPRGHUQIRRGFKDLQVDUH
KLJKO\ FHQWUDOL]HG DQG JOREDOL]HG ,Q LQGXVWULDOL]HG
FRXQWULHV EHWZHHQ DQG WLPHV PRUH HQHUJ\ LV
XVHGLQWKHIRRGV\VWHPWKDQLVFRQWDLQHGLQWKHIRRG
ZHHDW+HQGULFNVRQ
$ODUJHSURSRUWLRQRIWKHHQHUJ\LQWKHIRRGV\VWHPLV
XVHGE\FRQVXPHUVIRUEX\LQJVWRULQJDQGSUHSDULQJ
IRRG )RU H[DPSOH LQ 6ZHGHQ LQ RI WKH WRWDO
HQHUJ\XVHLQWKHIRRGFKDLQDJULFXOWXUDOSURGXFWLRQ
DFFRXQWHGIRU²SHUFHQWSURFHVVLQJIRU²
SHUFHQWGLVWULEXWLRQDQGUHWDLOIRU²SHUFHQWDQG
FRQVXPSWLRQIRU²SHUFHQW$QRWKHU²SHUFHQW
RIWKHWRWDOHQHUJ\LVFRQVXPHGE\PXFKGLVFXVVHG
WUDQVSRUW SDUWLFXODUO\ LQ WKH ÀQDO VWUHWFK WR WKH SRLQW
RISXUFKDVHE\WKHFRQVXPHU)RULQVWDQFHDSHUVRQ
GULYLQJDFDUDGLVWDQFHRIÀYHNLORPHWUHVIRUVKRSSLQJ
XVHV D ORW PRUH HQHUJ\ SHU IRRG XQLW WKDQ D VKLS
WUDQVSRUWLQJPHDWRUVR\IURPDQRWKHUFRQWLQHQW$OVR
LQVRPHGHYHORSLQJFRXQWULHVFRQVXPSWLRQWDNHVWKH
OLRQ·VVKDUHRIHQHUJ\XVHIRUIRRGLQWKLVFDVHPDLQO\
IURP FRRNLQJ RYHU DQ RSHQ ÀUH 7KH HQHUJ\ XVHG
E\ WKLV WUDGLWLRQDO PHWKRG RI FRRNLQJ LV HTXLYDOHQW
WR DERXW N:K SHU FDSLWD FRUUHVSRQGLQJ WR
VOLJKWO\ PRUH WKDQ D FXELF PHWUHRI ÀUHZRRGZKLFK
LV VRPHZKHUHEHWZHHQKDOI DQG RQHWKLUG RIZKDW LV
XVHGSHUFDSLWDIRUFRRNLQJLQ6ZHGHQRUWKH8QLWHG
6WDWHV 8KOLQ &RRNLQJ UHSUHVHQWV PRUH WKDQ
D ÀIWK RI WKH WRWDO HQHUJ\ FRQVXPSWLRQ LQ $IULFD DQG
$VLD DQG LQ VRPH FRXQWULHV LW UHSUHVHQWV XS WR RU
RYHU SHU FHQW RI KRXVHKROG HQHUJ\ FRQVXPSWLRQ
,($ &RRNLQJ FRQVXPHV PRUH HQHUJ\ WKDQ
WKHIRRGFRQWDLQV7KXVZKLOHIDUPLQJLQGHYHORSLQJ
FRXQWULHV DQG WUDGLWLRQDO V\VWHPV LV HQHUJ\ HIÀFLHQW
FRRNLQJLVQRW
75$'($1'(19,5210(175(9,(:
7DEOH$JULFXOWXUDOODERXUSURGXFWLYLW\SHUSHUVRQ\HDU
/RZLQFRPHFRXQWULHV
0LGGOHLQFRPHFRXQWULHV
+LJKLQFRPHFRXQWULHV
)UDQFH
8QLWHG.LQJGRP
8QLWHG6WDWHV
%UD]LO
,QGLD
&KLQD
0DODZL
²
²
$JULFXOWXUH
DVDVKDUHRI*'3
6RXUFH:RUOG%DQN
,QDZRUOGZLWKDUDSLGO\LQFUHDVLQJKXPDQSRSXODWLRQ
DQGWKHVLPXOWDQHRXVGHSOHWLRQRIQDWXUDOUHVRXUFHV
WKH LQGXVWULDO ORJLF RI UHSODFLQJ KXPDQ ODERXU ZLWK
RLO DQG RWKHU QDWXUDO UHVRXUFHV PDNHV OHVV DQG OHVV
VHQVH ,QFUHDVLQJ HQHUJ\ SULFHV ZLOO UHYHUVH VRPH
RI WKH GHYHORSPHQWV WKDW ZHUH PDGH SRVVLEOH E\
FKHDSIRVVLOIXHO7KLVSRVHVDFKDOOHQJHIRUVRFLHW\
EXW DOVR DQ RSSRUWXQLW\ WR VWHHU WRZDUGV D SDWK RI
WUXH VXVWDLQDELOLW\ LQFOXGLQJ WKH DGRSWLRQ RI PRUH
VXVWDLQDEOH DJULFXOWXUDO PHWKRGV VXFK DV RUJDQLF
IDUPLQJDQGPRUHORFDOL]HGIRRGSURGXFWLRQQHWZRUNV
7KDWWKRVHFKDQJHVZLOODOVRVHUYHWRPLWLJDWHFOLPDWH
FKDQJHLVDQRWKHUVWURQJDUJXPHQWLQIDYRXURIVXFKD
VKLIWLQWKLVUHJDUGDOVRVHHWKHOHDGDUWLFOHRIFKDSWHU
DQGWKHFRPPHQWRI/HX
7KHGHVLUHGREMHFWLYHVKRXOGQRWEHWRDEROLVKWKHXVH
RIH[WHUQDOHQHUJ\DQGUHO\VROHO\RQPDQXDOODERXU
UDWKHU LW VKRXOG EH DERXW ÀQGLQJ D QHZ EDODQFH
WKDW ZRUNV RQ D JOREDO VFDOH DQG LV VXVWDLQDEOH
5HQHZDEOHHQHUJ\VXFKDVELRHQHUJ\ZLQGPLOOVDQG
ZDWHUPLOOVKDYHEHHQXVHGLQIDUPLQJIRUWKRXVDQGV
RI\HDUV7KHVHFRXOGEHLPSURYHGDQGPRUHZLGHO\
DGRSWHGDQGVRODUHQHUJ\DQGELRJDVFRXOGDOVREH
DGGHGWRWKHPL[,WLVQRWOLNHO\WKDWUHQHZDEOHHQHUJ\
ZLOO DOORZ VXFK ZDVWHIXO V\VWHPV DV H[LVW WRGD\ )RU
H[DPSOHYHU\FKHDSHQHUJ\PDNHVLWSURÀWDEOHWRXVH
WKDW HQHUJ\ WR ELQG DWPRVSKHULF QLWURJHQ LQVWHDG RI
XVLQJQDWXUDOQLWURJHQÀ[DWLRQ
(8QHTXDOHQHUJ\DFFHVVDQGXQHTXDO
WHUPVRIWUDGH
&RPPHUFLDOL]DWLRQ LV SURPRWHG DV WKH UHFLSH IRU
GHYHORSPHQW IRU WKH DOPRVW KDOI D ELOOLRQ VPDOOKROGHU
IDUPHUVLQWKHZRUOG7KHLUWUDGLWLRQDOPRGHVRIIDUPLQJ
DUH EXLOW RQ D UDWKHU KLJK GHJUHH RI DXWRQRP\ DQG
WKHVH UHJHQHUDWH PRVW RI WKH QHHGHG UHVRXUFHV
VXFK DV ODERXU FDSLWDO VRLO IHUWLOLW\ DQG SHVW FRQWURO
ZLWKLQWKHIDUPLQJV\VWHP%\QDWXUHSHDVDQWVUHVLVW
FRPPHUFLDOL]DWLRQEHFDXVHWKH\ZLVKWRPLQLPL]HULVN
DQGGHSHQGHQFH9DQGHU3ORHJ,IWKH\ZHUH
WR EH FRHUFHG LQWR FRPPHUFLDOL]LQJ WKHLU SURGXFWLRQ
PRVWRIWKHPZRXOGVLPSO\QRWVXUYLYHLQWKHVWUXJJOH
IRU´PRGHUQL]DWLRQµDQGLIWKH\VXUYLYHGWKHUHZRXOG
EH HQRUPRXV RYHUSURGXFWLRQ (XURSHDQ IDUPV
H[SHULHQFHG GLIÀFXOWLHV FRSLQJ ZLWK FRPSHWLWLRQ IURP
1RUWK $PHULFD HVSHFLDOO\ DIWHU WKH LQWURGXFWLRQ RI
VWHDPVKLS WUDQVSRUW 7KH UHVSRQVH ZDV WR LQWURGXFH
SURWHFWLRQLVW PHDVXUHV HYHQ WKRXJK WKH\ IDFHG
PXFK OHVV FRPSHWLWLYH SUHVVXUH WKDQ WRGD\·V SRRU
IDUPHUVLQGHYHORSLQJFRXQWULHV,QDGGLWLRQEHFDXVH
RI SURGXFWLYLW\ JDLQV LQ GHYHORSHG FRXQWULHV JOREDO
DJULFXOWXUDOFRPPRGLW\SULFHVIHOOE\DERXWSHUFHQW
GXULQJ WKH SHULRG ² 'RUZDUG HW DO 2YHUWKHSDVWIHZGHFDGHVDVSURGXFWLYLW\DQGHQHUJ\
XVHE\WKHSRRUHVWIDUPHUVKDYHUHPDLQHGPXFKWKH
VDPHWKHSURGXFWLYLW\JDSKDVZLGHQHGERWKUHODWLYHO\
DQGLQDEVROXWHQXPEHUVWDEOH$VDUHVXOWLWLVFOHDU
WKDWVPDOOKROGHUIDUPHUVLQGHYHORSLQJFRXQWULHVKDYH
EHHQORVLQJRXW$WFXUUHQWSULFHVLWZRXOGUHTXLUHRQH
OLIHWLPHRIODERXUE\DIDUPHURQDQRQPHFKDQL]HG
IDUPWRDFTXLUHDSDLURIR[HQDQGVPDOODQLPDOGUDZQ
HTXLSPHQW DQG WHQ JHQHUDWLRQV RI ODERXU WR EX\ D
VPDOOWUDFWRU0D]R\HUDQG5RXGDUW
,W LV HQWLUHO\ XQUHDOLVWLF WR EHOLHYH WKDW VPDOOKROGHU
IDUPHUV LQ GHYHORSLQJ FRXQWULHV ZLWK WKHLU OLPLWHG
UHVRXUFHV ZRXOG EH DEOH WR FRPSHWH LQ ZRUOG
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
PDUNHWV IRU VWDSOH IRRGV ZKHUH HQHUJ\ DFFHVV LV
WKH PDLQ IDFWRU RI FRPSHWLWLYH DGYDQWDJH ,Q UHDOLW\
DQ LQFUHDVLQJ QXPEHU RI GHYHORSLQJ FRXQWULHV DUH
EHFRPLQJ QHW IRRG LPSRUWHUV &KHDS HQHUJ\ PD\
KDYHEHHQFRQVLGHUHGDZD\RXWRIWKLVVLWXDWLRQEXW
WKLVKDVQRWEHHQWKHFDVH,QGHHGLWLVFKHDSHQHUJ\
WKDWKDVNHSWGRZQWKHSULFHVRIDJULFXOWXUDOSURGXFWV
DQGWKHUHE\WKHPDUNHWYDOXHRIVPDOOKROGHUIDUPHUV·
ODERXUWRDGROODUSHUGD\$QGLWLVFKHDSHQHUJ\WKDW
KDVDOORZHGLQFRPHJDSVWRZLGHQWRXQSUHFHGHQWHG
OHYHOVEHFDXVHWKHULFKSURGXFHUVKDYHDOZD\VEHHQ
DEOH WR XVH PRUH FKHDS HQHUJ\ WKDQ WKH SRRU 7KXV
WKHJDSEHWZHHQWKRVHUHO\LQJRQWKHLURZQODERXUDQG
WKRVHUHO\LQJRQWKHXVHRIIRVVLOIXHOKDVLQFUHDVHG
(QHUJ\VFDUFLW\DQGULVLQJHQHUJ\SULFHVZLOOUHVXOWLQ
OHVVJOREDOFRPSHWLWLRQDQGKLJKHUIRRGSULFHV6XFKD
GHYHORSPHQWZKLOHSDLQIXOIRUPDQ\VRFLHWLHVDQGIRU
QHWIRRGLPSRUWHUVLQWKHVKRUWUXQZLOOQHYHUWKHOHVV
EH EHWWHU IRU WKH VPDOOKROGHU IDUPHUV LQ GHYHORSLQJ
FRXQWULHV LQ WKH ORQJ UXQ EHFDXVH LW ZLOO HQFRXUDJH
HQHUJ\HIÀFLHQWORZH[WHUQDOLQSXWGHSHQGHQWFORVHG
ORRSUHJHQHUDWLYHIRUPVRIDJULFXOWXUHZLWKDJUHDWHU
IRFXVRQUHJLRQDOPDUNHWV3ROLF\PDNHUVVKRXOGVHL]H
WKLVRSSRUWXQLW\WRSURPRWHDSDUDGLJPVKLIWWRZDUGV
WKLVIRUPRIDJULFXOWXUHLQVWHDGRISURPRWLQJFRQWLQXHG
RU LQFUHDVHG GHSHQGHQFH RI DJULFXOWXUH RQ H[WHUQDO
LQSXWVHJIHUWLOL]HUVJHQHWLFDOO\PRGLÀHGRUJDQLVPV
DQG FUHGLWV DQG FRQWLQXHG JOREDO FRPSHWLWLRQ LQ D
PDUNHWZKHUHWKHELJSOD\HUVKDYHXQOLPLWHGDFFHVV
WRFKHDSHQHUJ\
75$'($1'(19,5210(175(9,(:
1//'06#4;U 756#+0#$.')4+%7.674'#0&((g4+&
'0'9#$.'0'4);
0DH:DQ+R
,QVWLWXWHRI6FLHQFHLQ6RFLHW\/RQGRQ
$EVWUDFW
6PDOOLQWHJUDWHGIDUPVZLWKRIIJULGUHQHZDEOHHQHUJ\PD\EHWKHSHUIHFWVROXWLRQWRWKHIRRGDQGÀQDQFLDO
FULVHVZKLOHPLWLJDWLQJDQGDGDSWLQJWRFOLPDWHFKDQJH
$)RRGFULVLVJOREDOHFRQRPLFLQVWDELOLW\
DQGSROLWLFDOXQUHVW
6RDULQJIRRGSULFHVZHUHDPDMRUWULJJHUIRUWKHULRWV
WKDWGHVWDELOL]HG1RUWK$IULFDDQG:HVW$VLDDQGKDYH
VLQFHVSUHDGWRPDQ\RWKHU$IULFDQFRXQWULHV+DUYH\
+RG7KH)$2)RRG3ULFH,QGH[KLWDQDOO
WLPHKLJKLQ)HEUXDU\DQGUHDFKHGSRLQWV
LQ1RYHPEHUVRPHSRLQWVORZHUWKDQDWLWV
SHDNEXWSRLQWVKLJKHUWKDQWKHDYHUDJHIRU
7KLV KDV EHHQ KDSSHQLQJ DV WKH JOREDO HFRQRP\ LV
VWLOO VWDJJHULQJ IURP WKH ÀQDQFLDO DQG IRRG
FULVLVZLWKSXEOLFGHEWH[SDQGLQJDQGXQHPSOR\PHQW
VN\KLJK)LOJHU
/HVWHU %URZQ YHWHUDQ ZRUOGZDWFKHU QRWHV
WKDW IRRG KDV TXLFNO\ EHFRPH WKH KLGGHQ GULYHU RI
ZRUOG SROLWLFV DQG IRRG FULVHV DUH JRLQJ WR EHFRPH
LQFUHDVLQJO\ FRPPRQ +H VD\V ´6FDUFLW\ LV WKH QHZ
QRUPµ7KHZRUOGLVIDFLQJJURZLQJGHPDQGIRUIRRG
DVSRSXODWLRQLQFUHDVHV\HWIRRGFURSVDQGODQGDUH
EHLQJGLYHUWHGWRSURGXFHELRIXHOV,QWKH8QLWHG
6WDWHVDORQHWXUQHGPLOOLRQWRQVRILWVPLOOLRQ
WRQVRIFRUQKDUYHVWLQWRHWKDQRO$WWKHVDPHWLPHWKH
ZRUOG·VDELOLW\WRSURGXFHIRRGLVGLPLQLVKLQJ$TXLIHUV
DUHUXQQLQJGU\LQWKHPDMRUIRRGSURGXFLQJFRXQWULHV
ZKHUH KDOI RI WKH ZRUOG·V SRSXODWLRQ OLYHV 7KHUH LV
ZLGHVSUHDGVRLOHURVLRQDQGGHVHUWLÀFDWLRQDQGJOREDO
ZDUPLQJDQGZHDWKHUH[WUHPHVDUHDOUHDG\UHGXFLQJ
FURS \LHOGV 3HQJ HW DO /REHOO 6FKOHQNHU DQG
&RVW5REHUWV -RQHV 6FLHQFH 'DLO\
KLWWLQJ WKH PRVW YXOQHUDEOH SHRSOH LQ VXE
6DKDUDQ$IULFDDQG6RXWK$VLDWKHKDUGHVW
%URZQ ZDUQV ´:H DUH QRZ VR FORVH WR WKH
HGJH WKDW D EUHDNGRZQ LQ WKH IRRG V\VWHP FRXOG
FRPHDWDQ\WLPHµ+HDGGV´$WLVVXHQRZLVZKHWKHU
WKHZRUOGFDQJREH\RQGIRFXVLQJRQWKHV\PSWRPV
RIWKHGHWHULRUDWLQJIRRGVLWXDWLRQDQGLQVWHDGDWWDFN
WKH XQGHUO\LQJ FDXVHV ,I ZH FDQQRW SURGXFH KLJKHU
FURS\LHOGVZLWKOHVVZDWHUDQGFRQVHUYHIHUWLOHVRLOV
PDQ\DJULFXOWXUDODUHDVZLOOFHDVHWREHYLDEOH«,IZH
FDQQRWPRYHDWZDUWLPHVSHHGWRVWDELOL]HWKHFOLPDWH
ZHPD\QRWEHDEOHWRDYRLGUXQDZD\IRRGSULFHV«
7KHWLPHWRDFWLVQRZ²EHIRUHWKHIRRGFULVLVRI
EHFRPHVWKHQHZQRUPDOµ
%7KHLPSRUWDQFHRIVPDOOIDPLO\IDUPV
7KHUH LV DQ HPHUJLQJ VFLHQWLÀF FRQVHQVXV WKDW
D VKLIW WR VPDOOVFDOH VXVWDLQDEOH DJULFXOWXUH DQG
ORFDOL]HG IRRG V\VWHPV ZLOO DGGUHVV PRVW LI QRW DOO
RI WKH XQGHUO\LQJ FDXVHV RI GHWHULRUDWLQJ DJULFXOWXUDO
SURGXFWLYLW\DVZHOODVWKHFRQVHUYDWLRQRIQDWXUDOVRLO
DQGZDWHUUHVRXUFHVZKLOHVDYLQJWKHFOLPDWH+RHW
DO ,$$67' XQGDWHG +RIIPDQQ 'H
6FKXWWHU
6PDOOIDPLO\IDUPLQJLVWKHGRPLQDQWIRUPRIDJULFXOWXUH
LQWKHZRUOGHVSHFLDOO\LQWKHGHYHORSLQJFRXQWULHVRI
$IULFDDQG$VLD$SSUR[LPDWHO\ELOOLRQSHRSOHOLYHLQ
UXUDODUHDVLQGHYHORSLQJFRXQWULHVZKLFKDOVRLQFOXGH
SHUFHQWRIWKHSRRU$URXQGELOOLRQSHRSOHDUH
LQYROYHGLQDJULFXOWXUHDVIDUPHUVRUZRUNHUVDQGDW
OHDVWSHUFHQWRIIDUPVLQWKHPDMRULW\RI$VLDQDQG
$IULFDQFRXQWULHVDUHKDRUVPDOOHU4XDQ$V
+RIIPDQQSRLQWVRXW0LOOHQQLXP'HYHORSPHQW
*RDO 0'* DLPV DW HUDGLFDWLQJ H[WUHPH KXQJHU
DQG SRYHUW\ DQG RQH RI WKH PRVW HIIHFWLYH ZD\V RI
KDOYLQJERWKWKHQXPEHURIKXQJU\DQGSRRUE\
LV WR PDNH WKH WUDQVLWLRQ WRZDUGV PRUH VXVWDLQDEOH
IRUPVRIDJULFXOWXUH´WKDWQRXULVKWKHODQGDQGSHRSOH
DQG SURYLGH DQ RSSRUWXQLW\ IRU GHFHQW ÀQDQFLDOO\
UHZDUGLQJDQGJHQGHUHTXDOMREVµ$WWKHVDPHWLPH
WKLV ZRXOG KHOS PHHW WKH KHDOWK WDUJHWV RI 0'*V DQGLQSURYLGLQJDPRUHGLYHUVHVDIHQXWULWLRXVDQG
DIIRUGDEOHGLHWVHHDOVR+RHWDO
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
6PDOOIDUPVJHQHUDOO\SURGXFHPRUHSHUKHFWDUHWKDQ
ODUJH RQHV VR PXFK VR WKDW HFRQRPLVWV KDYH ORQJ
REVHUYHG DQG GHEDWHG WKLV DSSDUHQWO\ SDUDGR[LFDO
LQYHUVHUHODWLRQVKLSEHWZHHQIDUPVL]HDQGSURGXFWLYLW\
4XDQ 6PDOO IDUPV DUH WR WLPHV DV
SURGXFWLYH DQG PXFK PRUH SURÀWDEOH DQG QRW MXVW
LQ GHYHORSLQJ FRXQWULHV 5RVVHW 7KH 8QLWHG
6WDWHV $JULFXOWXUDO &HQVXV RI IRXQG D VKDUS
GHFOLQH LQ QHW LQFRPH IURP DFUH WR DFUH
DV IDUP VL]H LQFUHDVHG IURP DFUHV WR DFUHV
5RVVHW6PDOOIDUPVDUHDOVRDVVRFLDWHGZLWK
´LQWHQVLYH XVH RI KRXVHKROG DQG FRPPXQLW\ ODERXU
KLJKOHYHOVRIPRWLYDWLRQDQGPXFKORZHUVXSHUYLVLRQ
DQGWUDQVDFWLRQFRVWVµ4XDQZKLFKPD\ZHOO
H[SODLQ WKHLU HFRQRPLF DGYDQWDJHV EXW QRW WKHLU
DFWXDOSURGXFWLYLW\7KHVHIDUPVDUHKLJKO\SURGXFWLYH
EHFDXVH WKH\ DUH W\SLFDOO\ ELRGLYHUVH V\VWHPV WKDW
LQWHJUDWHPXOWLSOHFURSVDQGOLYHVWRFNZKLFKHQDEOHV
WKHP WR PD[LPL]H V\QHUJHWLF UHODWLRQVKLSV ZKLOH
PLQLPL]LQJ ZDVWHV DV WKH\ WXUQ ZDVWHV VXFK DV
IDUP\DUGPDQXUHLQWRIHUWLOL]HU,QHIIHFWWKH\HPERG\
WKH FLUFXODU HFRQRP\ RI QDWXUH +R HW DO ZKHUHLQHQHUJ\DQGQXWULHQWVDUHUHF\FOHGZLWKLQWKH
HFRV\VWHP IRU PD[LPXP SURGXFWLYLW\ DQG FDUERQ
VHTXHVWUDWLRQ ERWK DERYH DQG EHORZ JURXQG VHH
IRU H[DPSOH +R IRU D GHWDLOHG GHVFULSWLRQ RI
WKLV ´WKHUPRG\QDPLFV RI RUJDQLVPV DQG VXVWDLQDEOH
V\VWHPVµ
&7KHLPSRUWDQFHRIUHQHZDEOHHQHUJ\
7RVXEVWDQWLDOO\LPSURYHOLYLQJVWDQGDUGVVXVWDLQDEOH
IDUPLQJ LV QRW HQRXJK DFFHVV WR PRGHUQ HQHUJ\
LV DOVR FUXFLDO ,QGHHG ODFN RI DFFHVV WR PRGHUQ
HQHUJ\ LV JHQHUDOO\ UHFRJQL]HG DV WKH ELJJHVW
REVWDFOH WR VXVWDLQDEOH GHYHORSPHQW $FFRUGLQJ WR
WKH ,QWHUQDWLRQDO (QHUJ\ $JHQF\ ,($ ´/DFN
RI DFFHVV WR PRGHUQ HQHUJ\ VHUYLFHV LV D VHULRXV
KLQGUDQFHWRHFRQRPLFDQGVRFLDOGHYHORSPHQWDQG
PXVWEHRYHUFRPHLIWKH810LOOHQQLXP'HYHORSPHQW
*RDOV 0'*V DUH WR EH DFKLHYHGµ 7KLV YLHZ LV
HFKRHG E\ WKH $FDGHP\ RI 6FLHQFH RI 6RXWK $IULFD
ZKLFK VWDWHV ´$FFHVV WR PRGHUQ HQHUJ\
VHUYLFHV GHÀQHG DV HOHFWULFLW\ DQG FOHDQ FRRNLQJ
IXHOVLVFHQWUDOWRDFRXQWU\·VGHYHORSPHQWµ
:RUOGZLGHELOOLRQSHRSOHODFNDFFHVVWRHOHFWULFLW\
SHUFHQWRIZKRPOLYHLQUXUDODUHDVDQGELOOLRQ
SHRSOHVWLOOUHO\RQWUDGLWLRQDOELRPDVVIXHOVIRUFRRNLQJ
DQGKHDWLQJ,($7KHJUHDWHVWFKDOOHQJHLVLQ
VXE6DKDUDQ $IULFD ZKHUH RQO\ SHU FHQW RI WKH
SRSXODWLRQKDVDFFHVVWRHOHFWULFLW\WKHORZHVWOHYHOLQ
WKHZRUOGDQGLI6RXWK$IULFDLVH[FOXGHGRQO\SHU
FHQWKDYHVXFKDFFHVV
7KHUH LV D FORVH FRUUHODWLRQ EHWZHHQ LQFRPH OHYHOV
DQGDFFHVVWRPRGHUQHQHUJ\&RXQWULHVZLWKDODUJH
SURSRUWLRQRIWKHSRSXODWLRQOLYLQJRQDQLQFRPHRIOHVV
WKDQSHUGD\WHQGWRKDYHORZHOHFWULÀFDWLRQUDWHV
DQG D KLJK SHUFHQWDJH RI WKH SRSXODWLRQ WKDW UHOLHV
RQWUDGLWLRQDOELRPDVV7KH:RUOG+HDOWK2UJDQL]DWLRQ
:+2 HVWLPDWHV WKDW PLOOLRQ SHRSOH GLH
SUHPDWXUHO\ HDFK \HDU IURP KRXVHKROG DLU SROOXWLRQ
GXH WR LQHIÀFLHQW ELRPDVV FRPEXVWLRQ D VLJQLÀFDQW
SURSRUWLRQEHLQJ\RXQJFKLOGUHQ7KLVLVJUHDWHUWKDQ
SUHPDWXUHGHDWKVIURPPDODULDRUWXEHUFXORVLV
6PDOODJURHFRORJLFDOIDUPVDUHLGHDOO\VHUYHGE\QHZ
UHQHZDEOHHQHUJLHVWKDWFDQEHJHQHUDWHGDQGXVHG
RQVLWHDQGLQRIIJULGVLWXDWLRQVPRVWRIWHQIRXQGLQ
GHYHORSLQJFRXQWULHV+RHWDO+RD7KH
UHQHZDEOH HQHUJLHV JHQHUDWHG FDQ DOVR VHUYH ORFDO
EXVLQHVVHV VWLPXODWH ORFDO HFRQRPLHV DQG FUHDWH
QXPHURXVHPSOR\PHQWRSSRUWXQLWLHV
'2IIJULGUHQHZDEOHSRZHUV\VWHPVDUH
HQWHULQJWKHPDLQVWUHDPZRUOGZLGH
:LWKLQ WKH SDVW IHZ \HDUV RIIJULG SRZHU V\VWHPV
KDYH HQWHUHG WKH PDLQVWUHDP GULYHQ E\ WKH UHDG\
DYDLODELOLW\RIUHQHZDEOHHQHUJ\RSWLRQVWKDWFDQFRVW
OHVVWKDQJULGFRQQHFWLRQV
$ 8QLWHG .LQJGRP FRPSDQ\ (QHUJ\ 6ROXWLRQV
DGYHUWLVHV RQ LWV ZHEVLWH WKDW KRPHV LQ (XURSH
LQFOXGLQJ WKH 8QLWHG .LQJGRP ´DUH ORRNLQJ DW WKH
SRWHQWLDO EHQHÀWV RI VXSSO\LQJ VRPH LI QRW DOO WKHLU
GRPHVWLF SRZHU UHTXLUHPHQW IURP RIIJULG VRXUFHVµ
7KLV FRXOG EH IRU D YDULHW\ RI UHDVRQV VXFK DV
FRQQHFWLRQ WR WKH JULG EHLQJ WRR H[SHQVLYH DQG WKH
GHVLUH WR UHGXFH HQHUJ\ ELOOV SURWHFWLRQ IURP SRZHU
FXWVDQGUHGXFWLRQRI*+*HPLVVLRQV6RODUSDQHOV
ZLQG WXUELQHV DQG VPDOO JHQHUDWRUV DUH VXLWDEOH IRU
PRVWKRPHVDQGDV\VWHPZLWKDEDWWHU\FRQQHFWHG
WRDEDWWHU\FKDUJHULQYHUWHULVWKHPRVWFRQYHQLHQW
([DPSOHV RI VPDOOVFDOH RIIJULG HQHUJ\ SURYLVLRQ
EDVHGRQUHQHZDEOHVFDQEHIRXQGDFURVV6FRWODQG
&RPPXQLW\ (QHUJ\ 6FRWODQG VXFK DV LQ
UHPRWH IHUU\ ZDLWLQJ URRPV RQ WKH :HVWHUQ ,OHV DQG
WKH &KDUOHV ,QJOLV &ODUN 0HPRULDO KXW RQ %HQ 1HYLV
WKDW XVHV VPDOO ZLQG WXUELQHV 3KRWRYROWDLF 39
LQVWDOODWLRQV LQWHJUDWHG ZLWK EDWWHULHV DUH RIWHQ XVHG
ZKHUHRQO\DVPDOODPRXQWRISRZHULVUHTXLUHGDVIRU
OLJKWLQJPDLQWDLQLQJSRZHUIRUPRQLWRULQJHTXLSPHQW
75$'($1'(19,5210(175(9,(:
RUPDLQWDLQLQJZDWHUWUHDWPHQWIDFLOLWLHV+RZHYHULWLV
LQGHYHORSLQJFRXQWULHVWKDWRIIJULGUHQHZDEOHHQHUJ\
LV UDSLGO\ JDLQLQJ JURXQG ,Q WKHVH FRXQWULHV SRZHU
UHTXLUHPHQWVDUHJHQHUDOO\ORZDQGHOHFWURQLFOLJKWLQJ
DQG WHOHFRPPXQLFDWLRQ HTXLSPHQW DUH LPSURYLQJ
UDSLGO\ ZLWK ORZ SRZHU UHTXLUHPHQWV DQG UHOLDEOH
SHUIRUPDQFH DQG UHTXLULQJ OLWWOH RU QR PDLQWHQDQFH
+R D 7KUHH H[DPSOHV RI ODUJHVFDOH RII
JULG UHQHZDEOH HQHUJ\ XVH ZLWK YDU\LQJ GHJUHHV RI
VXFFHVVDUHWKH*UDPHHQ6KDNWLLQ%DQJODGHVK+R
D /LJKWLQJ $IULFD +R E DQG %LRJDV IRU
&KLQD·V6RFLDOLVW&RXQWU\VLGH+RF
JURZLQJ UHQHZDEOH HQHUJ\ RUJDQL]DWLRQV WKURXJK
D V\VWHP RI PLFURÀQDQFLQJ WUDLQLQJ RI WHFKQLFLDQV
PDLQO\ ZRPHQ IRU LQVWDOODWLRQ PDLQWHQDQFH DQG
UHSDLUDQGSURYLVLRQRIVHUYLFHVLQFOXGLQJEX\EDFN
,WUXQVWHFKQRORJ\FHQWUHVIRUWUDLQLQJWKURXJKRXWWKH
FRXQWU\VHH+RDIRUGHWDLOV$WWKHHQGRI0D\
*UDPHHQ 6KDNWL KDG LQVWDOOHG VRODU
KRPH V\VWHPV ELRJDV SODQWV DQG LPSURYHG FRRNLQJ VWRYHV ,W KDG DOVR WUDLQHG D WRWDO
RI WHFKQLFLDQV LQ WHFKQRORJ\ FHQWUHV
QDWLRQZLGHFRYHULQJDOOWKHGLVWULFWV,WVEHQHÀFLDULHV
DUH YLOODJHV ZLWK D WRWDO RI DERXW PLOOLRQ
SHRSOH *UDPHHQ 6KDNWL :KDW EHJDQ DV D
JUDVVURRWV HQGHDYRXU WR SURYLGH VRODU OLJKW IRU WKH
UXUDOSRSXODWLRQKDVQRZDWWUDFWHGWKHEDFNLQJRIWKH
:RUOG%DQN
*UDPHHQ6KDNWLLVDQRQSURÀWRUJDQL]DWLRQIRXQGHG
LQ WR SURPRWH GHYHORS DQG VXSSO\ UHQHZDEOH
HQHUJ\WRWKHUXUDOSRRURI%DQJODGHVK,WVWDUWHGE\
WUDLQLQJ ´EDUHIRRW ZRPHQ HQJLQHHUVµ IRU LQVWDOOLQJ
PDLQWDLQLQJ DQG UHSDLULQJ VRODU SDQHOV OLJKWV
WHOHSKRQHFKDUJLQJEDWWHULHVDQGRWKHUDFFHVVRULHV,W
KDVQRZEHFRPHRQHRIWKHZRUOG·VODUJHVWDQGIDVWHVW
/LJKWLQJ $IULFD LV QRZ D MRLQW :RUOG %DQN DQG
,QWHUQDWLRQDO )LQDQFH &RUSRUDWLRQ SURJUDPPH WKDW
DLPV WR KHOS GHYHORS FRPPHUFLDO RIIJULG OLJKWLQJ
)LJXUH'UHDP)DUPDQLQWHJUDWHGIRRGDQGHQHUJ\V\VWHP
&DUERQFUHGLWV
7KHUPRHOFWULF
ZDVWHKHDW
KDUYHVWLQJ
FRROLQJ
([SHULPHQWVLQQHZ
WHFKQRORJLHV
5HVWDXUDQW
/DWULQH
6PDOOZLQGWXUELQHV
6XQ
6RODUSDQHOV
&RPELQHGKHDWDQGSRZHUJHQHUDWLRQ
&RPELQHGKHDWDQGSRZHUJHQHUDWLRQV\VWHP
)RRGSURFHVVLQJ
0HWKDQHSXULILFDWLRQDQGFRPSUHVVLRQIRUPRELOHXVHV
&RQQHFWLRQWRSRZHUJULG
0LFURK\GURHOHFWULF
&DUER
FDSWXUH
%LRJDV
:DVWH
ZDWHU
%LRJDVGLJHVWHU
$OJDHEDVLQV
0HDW 0DQXUHFURSVUHVLGXHV
GDLU\ IRRGUHPDLQVSDSHUHWF
XVHGZDWHU
SURGXFH
&RZV
6KHHS
3LJV
*RDWV
0XVKURRP
KDUYHVWV
)LVKSRQGV
$TXDFXOWXUH
5LFKIHUWLOLVHU
0XVKURRPV
)HUWLJDWLRQ
'LYHUVHFURSV
*UDVVSDVWXUH
6DYLQJVRQ
IXHOELOOV
%LRGLHVHO
3XULILHGZDWHU
%LRJDVGLJHVWHU
6XUSOXVHOHFWULFLW\
FUHGLWV
:RRGODQGV
2UFKDUGV
&RPSRVW
&KLFNHQV
'XFNV
*HHVH
&RQVHUYDWRU\
$TXDFXOWXUH
:DUPZDWHUILVKSRQGV
:DWHUFRQVHUYDWLRQ
)LVK
KDUYHVWV
3RXOWU\
KDUYHVWV
:RUPV
&URSIRRG
UHVLGXHV
9HJHWDEOHV
)ORZHUV
+HDOWK
EHQHILWV
6DYLQJVRQIHUWLOLVHUV
SHVWLFLGHV
&URSKDUYHVWV
&DUERQFUHGLWV
6RXUFH+RHWDO
5DLQZDWHU
KDUYHVWLQJ
3XUHZDWHU
$QDO\WLFDOODE
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
7DEOH*UHHQSRWHQWLDORIRUJDQLFDJULFXOWXUHDQGDQDHURELFGLJHVWLRQLQ&KLQD
&2HVDYLQJV
0W
QDWLRQDO
(QHUJ\VDYLQJV
(-
2UJDQLFDJULFXOWXUH
1IHUWLOL]HUVVDYLQJ
12SUHYHQWHG
&DUERQVHTXHVWUDWLRQ
7RWDOIRURUJDQLFDJULFXOWXUH
$QDHURELFGLJHVWLRQ
/LYHVWRFNPDQXUH*+*VDYLQJ
0HWKDQHSURGXFHG
+XPXVPDQXUHPHWKDQH
6WUDZPHWKDQH
7RWDOIRUDQDHURELFGLJHVWLRQ
&2HVDYLQJV
0W
QDWLRQDO
QDWLRQDO
(QHUJ\VDYLQJV
(-
7RWDORYHUDOO
QDWLRQDO
6RXUFH+RE
1RWH0W PHJDWRQV(- ([DMRXOH
7DEOH*UHHQSRWHQWLDORI'UHDP)DUP
2UJDQLFDJULFXOWXUH
$QDHURELFGLJHVWLRQ
(QHU\VDYLQJVORFDOJHQ
7RWDO
6RXUFH+RE
PDUNHWV LQ VXE6DKDUDQ $IULFD DV SDUW RI WKH :RUOG
%DQN *URXS·V ZLGHU HIIRUWV WR LPSURYH DFFHVV WR
HQHUJ\ ,W DLPV WR SURYLGH VDIH DIIRUGDEOH DQG
PRGHUQRIIJULGOLJKWLQJWRPLOOLRQSHRSOHLQ$IULFD
E\ DQG WR PLOOLRQ E\ 7KH PDUNHW IRU
RIIJULG OLJKWLQJ SURGXFWV LV SURMHFWHG WR JURZ DW WRSHUFHQWDQQXDOO\,QDORQHVDOHVRIVRODU
SRUWDEOH ODQWHUQV WKDW KDG SDVVHG /LJKWLQJ $IULFD·V
TXDOLW\ FRQWURO WHVWV JUHZ E\ SHU FHQW LQ $IULFD
UHVXOWLQJLQPRUHWKDQSHRSOHKDYLQJDFFHVV
WRFOHDQHUVDIHUUHOLDEOHOLJKWLQJDQGLPSURYHGHQHUJ\
VHH+REIRUGHWDLOV
,Q &KLQD SURYLVLRQ RI ELRJDV LV DQ LPSRUWDQW SDUW RI
WKH FRXQWU\·V 1HZ 6RFLDOLVW &RXQWU\VLGH SURJUDPPH
ODXQFKHGLQWRLPSURYHWKHZHOIDUHRIWKRVHOLYLQJ
RXWVLGH ERRPLQJ FLWLHV ZKLFK LQFOXGH WKH FRXQWU\·V
PLOOLRQ PLJUDQW ZRUNHUV DQG UXUDO SRRU &KLQD LV
RQH RI WKH ÀUVW FRXQWULHV LQ WKH ZRUOG WR XVH ELRJDV
WHFKQRORJ\ DQG LW KDV EHHQ UHYLYHG LQ VXFFHVVLYH
FDPSDLJQV E\ WKH SUHVHQW JRYHUQPHQW WR SURYLGH
GRPHVWLF VDQLWDWLRQ DQG RIIJULG HQHUJ\ DQG WR
PRGHUQL]H DJULFXOWXUH IRU GHWDLOV VHH +R F
/L DQG +R $Q DQDHURELF GLJHVWHU SURGXFLQJ
ELRJDV LV W\SLFDOO\ FRPELQHG ZLWK D JUHHQKRXVH IRU
JURZLQJ YHJHWDEOHV DQG RWKHU FURSV DORQJ ZLWK D
SLJVW\VRWKDWSLJDQGKXPDQPDQXUHFDQEHGLJHVWHG
ZKLOH&2JHQHUDWHGE\WKHSLJVERRVWVSODQWJURZWK
LQWKHJUHHQKRXVH7KHELRJDVSURGXFHGW\SLFDOO\
SHU FHQW RI PHWKDQH DQG SHU FHQW RI &2 DORQJ
ZLWK WUDFHV RI RWKHU JDVHV FDQ EH XVHG DV FRRNLQJ
IXHO DQG WR JHQHUDWH HOHFWULFLW\ ZKLOH WKH UHVLGXH
SURYLGHV D ULFK IHUWLOL]HU IRU FURSV ,W LV DQ H[DPSOH
RI WKH FLUFXODU HFRQRP\ WKDW KDV VHUYHG &KLQHVH
SHDVDQWV ZHOO LQ WUDGLWLRQDO &KLQHVH DJULFXOWXUH +R
0RUH HODERUDWH PRGHOV LQFOXGH RUFKDUGV
DQGVRODUSDQHOV$FFRUGLQJWRDUHFHQWVXUYH\IURP
&KLQD·V 0LQLVWU\ RI $JULFXOWXUH :DQJ PLOOLRQKRXVHKROGELRJDVWDQNVKDGEHHQLQVWDOOHGE\
WKHHQGRIWKURXJKELRJDVSURMHFWV7KLV
H[SRQHQWLDOJURZWKSKDVHWKDWVWDUWHGDURXQGLV
VHWWRFRQWLQXHDORQJZLWKPHGLXPDQGELJGLJHVWHUV
IRUFRPPXQLW\DQGLQGXVWULDOXVH$QDHURELFGLJHVWLRQ
RIRUJDQLFZDVWHVLVDNH\RIIJULGUHQHZDEOHHQHUJ\
WHFKQRORJ\ IRU D WUXO\ JUHHQ FLUFXODU HFRQRP\ WKDW
FRXOGPDNHDUHDOGLIIHUHQFHIRULPSURYLQJWKHOLYHVRI
WKHUXUDOSRRU
(,QWHJUDWLQJVXVWDLQDEOHIDUPLQJDQG
UHQHZDEOHHQHUJLHVLQDFLUFXODU
HFRQRP\
$PRGHOWKDWH[SOLFLWO\LQWHJUDWHVVXVWDLQDEOHIDUPLQJ
DQG UHQHZDEOH HQHUJLHV LV 'UHDP )DUP ZKLFK
RSWLPL]HV WKH VXVWDLQDEOH XVH RI UHVRXUFHV DQG
PLQLPL]HV ZDVWH LQ DFFRUGDQFH ZLWK WKH FLUFXODU
HFRQRP\ SULQFLSOHV ÀJXUH VHH DOVR +R HW DO
,W LV SDWWHUQHG RQ D GHVLJQ GHYHORSHG E\
HQYLURQPHQWDO HQJLQHHU *HRUJH &KDQ DQG WKH G\NH
SRQG V\VWHP RI WKH 3HDUO 5LYHU 'HOWD WKDW &KLQHVH
SHDVDQWVKDYHSHUIHFWHGRYHUWKRXVDQGVRI\HDUV²D
V\VWHPVRSURGXFWLYHWKDWLWVXSSRUWHGSHRSOHSHU
KHFWDUHLQLWVKH\GD\+R
,QWKHGLDJUDPDJUH\EDFNJURXQGZLWKGRWWHGERUGHUV
LVIRUHQHUJ\JUHHQIRUDJULFXOWXUDOSURGXFHJUH\WH[W
IRU ZDWHU FRQVHUYDWLRQ DQG ÁRRG FRQWURO DQG EODFN
LVIRUZDVWHLQWKHRUGLQDU\VHQVHRIWKHZRUGZKLFK
VRRQJHWVFRQYHUWHGLQWRIRRGDQGHQHUJ\UHVRXUFHV
$ URXQGHG UHFWDQJOH LV IRU HGXFDWLRQ DQG UHVHDUFK
LQWRQHZVFLHQFHDQGWHFKQRORJLHV
7KLV LGHDO 'UHDP )DUP LV FRPSOHWH ZLWK ODERUDWRU\
IDFLOLWLHVIRUHGXFDWLRQDVZHOODVDUHVWDXUDQWWRWDNH
DGYDQWDJH RI DOO WKH IUHVK SURGXFH ,W LV D SHUIHFW
VHWWLQJ IRU GHYHORSLQJ FRWWDJH LQGXVWULHV VXFK DV
IRRG SUHVHUYDWLRQ SURFHVVLQJ ZLQH DQG FKHHVH
PDNLQJDQGEUHDGPDNLQJQRWWRPHQWLRQHOHFWURQLF
ZRUNVKRSV EDWWHU\ FKDUJLQJ DQG UHWDLOLQJ RI
UHQHZDEOHHQHUJ\FRPSRQHQWVDQGHOHFWURQLFGHYLFHV
7KHV\QHUJLHVEHWZHHQDJULFXOWXUHDQGLQGXVWULHVDUH
REYLRXVHVSHFLDOO\LQWKHFDVHRIIRRGLQGXVWULHVDV
WKH\DUHFORVHWRWKHVRXUFHRISURGXFWLRQ0RUHRYHU
WKHRUJDQLFZDVWHVIURPWKHVHLQGXVWULHVFDQJRULJKW
EDFN LQWR DQDHURELF GLJHVWLRQ WR EH FRQYHUWHG LQWR
75$'($1'(19,5210(175(9,(:
HQHUJ\DQGQXWULHQWVIRUDJULFXOWXUH
6RPH SUHOLPLQDU\ HVWLPDWHV EDVHG RQ GDWD DQG
VWDWLVWLFVPDGHDYDLODEOHE\WKH&KLQHVH*RYHUQPHQW
DQG DFDGHPLFV RQ WKH HQHUJ\ DQG FDUERQ VDYLQJV
LQYROYHGDUHSUHVHQWHGLQWDEOHVDQG
$V FDQ EH VHHQ IURP WDEOH WKH FRPELQDWLRQ RI
RUJDQLF DJULFXOWXUH DQG DQDHURELF GLJHVWLRQ KDV WKH
SRWHQWLDO WR PLWLJDWH DW OHDVW SHU FHQW RI QDWLRQDO
*+* HPLVVLRQV DQG VDYH SHU FHQW RI HQHUJ\
FRQVXPSWLRQ LQ &KLQD ,I 'UHDP )DUP ZHUH WR EH
DSSOLHGWKURXJKRXWWKHFRXQWU\&KLQDZRXOGPLWLJDWH
SHU FHQW RI LWV *+* HPLVVLRQV DQG VDYH SHU
FHQWRIHQHUJ\FRQVXPSWLRQRQO\FRXQWLQJDQDHURELF
GLJHVWLRQ EDVLFDOO\ DV D UHVXOW RI HIÀFLHQF\ VDYLQJV
IURPXVLQJ´ZDVWHµKHDWLQFRPELQHGKHDWDQGSRZHU
JHQHUDWLRQ DQG DYRLGLQJ ORVV IURP ORQJ GLVWDQFH
WUDQVPLVVLRQ RI HOHFWULFLW\ $ FRQVHUYDWLYH DOORZDQFH
RISHUFHQWHIÀFLHQF\VDYLQJRXWRIDPD[LPXPRI
DERXWSHUFHQWJLYHVWKHQHWFDUERQDQGHQHUJ\
VDYLQJVVKRZQLQWDEOH$JDLQWKLVLVIURPDQDHURELF
GLJHVWLRQRQO\7KHVDYLQJVFRXOGEHIDUJUHDWHULIORZ
SRZHU FRQVXPLQJ /(' OLJKWLQJ DQG RWKHU HOHFWURQLF
GHYLFHV ZHUH WR UHSODFH FRQYHQWLRQDO KLJK SRZHU
FRQVXPLQJPRGHOV
:LWKWKHDGGLWLRQRIVRODUZLQGRUPLFURK\GURHOHFWULF
DVDSSURSULDWHDQGEDWWHULHVWRVWRUHDQGPDLQWDLQD
VWHDG\SRZHUVXSSO\VXFKIDUPVFRXOGFRPSHQVDWH
LQ WKH EHVW FDVH VFHQDULR IRU WKH FDUERQ HPLVVLRQV
DQGHQHUJ\FRQVXPSWLRQRIWKHHQWLUHFRXQWU\6XUSOXV
HQHUJ\IURPWKHIDUPFRXOGEHXVHGWRVXSSO\KRPHV
DQG EXVLQHVVHV LQ WKH YLFLQLW\ WKURXJK D PLQLJULG
WKDW FRXOG HYHQWXDOO\ OLQN XS WR WKH QDWLRQDO JULG LI
QHFHVVDU\RUGHVLUDEOH7KLVFRXOGEHDPRGHOIRUWKH
QDWXUDOHYROXWLRQRIFRQQHFWLYLW\DQGSRZHUVKDULQJ$W
WKHYHU\OHDVWVXFKLQWHJUDWHGIRRGDQGHQHUJ\IDUPV
ZRXOG FRQWULEXWH WR IRRG VHFXULW\ ZKLOH SOD\LQJ WKHLU
SDUWDORQJZLWKRWKHUVHFWRUVRIWKHFLUFXODUHFRQRP\
LQ FXWWLQJ WKHLU RZQ FDUERQ IRRWSULQW )XUWKHUPRUH
VXFK VPDOOVFDOH DJURHFRORJLFDO IDUPLQJ DQG ORFDO
UHQHZDEOHSRZHUJHQHUDWLRQDUHPXFKPRUHUHVLVWDQW
DQG UHVLOLHQW WR ZHDWKHU H[WUHPHV DQG LQGHHG WR
HDUWKTXDNHVDQGVDERWDJH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
1//'06#4;U 1+.415+10U*4'#661
11&'%74+6;#0&
.+/#6'*#0)'
'DYLG3LPHQWHODQG0LFKDHO%XUJHVV
&ROOHJHRI$JULFXOWXUHDQG/LIH6FLHQFHV&RUQHOO8QLYHUVLW\,WKDFD1HZ<RUN
$EVWUDFW
6RLOLVWKHPRVWYDOXDEOHUHVRXUFHIRUZRUOGIRRGSURGXFWLRQ+XPDQVZRUOGZLGHREWDLQPRUHWKDQ
SHUFHQWRIWKHLUIRRGFDORULHVIURPODQGDQGOHVVWKDQSHUFHQWIURPWKHRFHDQVDQGRWKHUDTXDWLF
HFRV\VWHPV(DFK\HDUDERXWPLOOLRQKHFWDUHVKDRUDERXWSHUFHQWRIFURSODQGDUHORVWGXHWR
VRLOHURVLRQWKXVUHGXFLQJWKHFURSODQGDYDLODEOHIRUZRUOGIRRGSURGXFWLRQ7KLVORVVLVDVHULRXVSUREOHP
EHFDXVHDVWKH:RUOG+HDOWK2UJDQL]DWLRQDQGWKH)RRGDQG$JULFXOWXUH2UJDQL]DWLRQRIWKH8QLWHG1DWLRQV
UHSRUWDWSUHVHQWSHUFHQWRIWKHZRUOGSRSXODWLRQLHELOOLRQSHRSOHLVPDOQRXULVKHG0HDQZKLOH
JOREDOZDUPLQJLVZRUVHQLQJDQGFDQEHWUDFHGEDFNWRDQRWLQVLJQLÀFDQWH[WHQWWRLQFUHDVHGVRLOHURVLRQ
IRVVLOIXHOXVHDQGWKHFOHDULQJRIIRUHVWVZRUOGZLGH
$,QWURGXFWLRQ
7KH ORVV RI VRLO IURP ODQG VXUIDFHV E\ HURVLRQ LV
ZLGHVSUHDGDQGUHGXFHVWKHSURGXFWLYLW\RIDOOQDWXUDO
HFRV\VWHPVDVZHOODVWKDWRIDJULFXOWXUDOIRUHVWDQG
SDVWXUHHFRV\VWHPV/DODQG6WHZDUW3LPHQWHO
HW DO 7URHK +REEV DQG 'RQDKXH &RQFXUUHQWO\ ZLWK WKH HVFDODWLQJ KXPDQ SRSXODWLRQ
VRLO HURVLRQ ZDWHU DYDLODELOLW\ IRVVLO HQHUJ\ XVH
DQG FOLPDWH FKDQJH DUH HPHUJLQJ DV WKH SULPH
HQYLURQPHQWDOSUREOHPVWKURXJKRXWWKHZRUOG
&XUUHQWO\SHUFHQWRIWKHZRUOGSRSXODWLRQLH
ELOOLRQ SHRSOH LV PDOQRXULVKHG :+2 )$2
E 7KLV LV WKH ODUJHVW QXPEHU RI PDOQRXULVKHG
SHRSOHHYHULQKLVWRU\:LWKWKHZRUOGSRSXODWLRQQRZ
DWELOOLRQDQGH[SHFWHGWRUHDFKELOOLRQE\
PRUHIRRGVXSSOLHVZLOOEHQHHGHG&RQVLGHULQJWKDW
DW SUHVHQW PRUH WKDQ SHU FHQW RI KXPDQ IRRG
FDORULHVFRPHVIURPWKHODQG)$2FZKLOHOHVV
WKDQSHUFHQWGHULYHVIURPWKHRFHDQVDQGRWKHU
DTXDWLF HFRV\VWHPV PDLQWDLQLQJ DQG DXJPHQWLQJ
WKH ZRUOG·V IRRG VXSSO\ EDVLFDOO\ GHSHQGV RQ WKH
SURGXFWLYLW\DQGTXDOLW\RIDOOVRLOV
+XPDQLQGXFHG VRLO HURVLRQ DQG WKH DVVRFLDWHG
GHWHULRUDWLRQ LQ VRLO TXDOLW\ RYHU PDQ\ \HDUV KDYH
UHVXOWHG LQ WKH ORVV RI YDOXDEOH VRLOV DQG UHGXFHG
SURGXFWLYLW\ RI WKH ODQG ZLWK VRPH FURSODQG EHLQJ
DEDQGRQHG HDFK\HDU3LPHQWHOHWDO<RXQJ
3LPHQWHO &OHDUO\ ZKHQ VRLO HURVLRQ
GLPLQLVKHV VRLO TXDOLW\ LW UHGXFHV WKH SURGXFWLYLW\
RI QDWXUDO DJULFXOWXUDO DQG IRUHVW HFRV\VWHPV ,Q
DGGLWLRQWKHLPSRUWDQWGLYHUVLW\RISODQWVDQLPDOVDQG
PLFUREHVLVUHGXFHG
,QWKLVSDSHUWKHGLYHUVHIDFWRUVWKDWFDXVHVRLOHURVLRQ
DUH DVVHVVHG DQG WKH H[WHQW RI GDPDJH DVVRFLDWHG
ZLWKVXFKHURVLRQLVDQDO\VHGZLWKHPSKDVLVRQWKH
LPSDFWWKLVPD\KDYHRQIXWXUHKXPDQIRRGVHFXULW\
DQGFOLPDWHFKDQJH
%&DXVHVRIHURVLRQ
(URVLRQ RFFXUV ZKHQ VRLO LV OHIW H[SRVHG WR UDLQ RU
ZLQG HQHUJ\ )RU H[DPSOH DERXW PP RI UDLQ
IDOOLQJRQRQHKHFWDUHKDRIODQGLQ1HZ<RUN6WDWH
SURYLGHV WKH HQHUJ\ HTXLYDOHQW RI NFDO SHU
\HDU 7KLV LV DERXW WKH HTXLYDOHQW RI WKH HQHUJ\ LQ OLWUHVRIJDVROLQH5DLQGURSVKLWWLQJVRLOORRVHQLWDQG
HYHQ LI WKHUH LV D JUDGLHQW RI RQO\ SHU FHQW LW ZLOO
FDXVHWKHVRLOWRÁRZGRZQKLOO7KLVVRFDOOHGVKHHW
HURVLRQLVWKHGRPLQDQWW\SHRIHURVLRQ7URHK+REEV
DQG 'RQRKXH 7KH LPSDFW RI VRLO HURVLRQ LV
LQWHQVLÀHGRQDOOVORSLQJODQGZKHUHPRUHWKDQKDOIRI
WKHVXUIDFHVRLOLVFDUULHGDZD\DVWKHZDWHUVSODVKHV
GRZQKLOOLQWRYDOOH\VDQGVWUHDPV
:LQGHQHUJ\DOVRKDVFRQVLGHUDEOHSRZHUWRGLVORGJH
VXUIDFH VRLO SDUWLFOHV DQG WUDQVSRUW WKHP RYHU ORQJ
GLVWDQFHV $ GUDPDWLF H[DPSOH RI WKLV ZDV WKH ZLQG
HURVLRQLQ.DQVDVGXULQJWKHUHODWLYHO\GU\DQGZLQG\
ZLQWHURI²'XULQJMXVWWKLVRQHZLQWHUSHULRG
DSSUR[LPDWHO\WRQVKDRIVRLOZHUHHURGHGIURPWKLV
YDOXDEOH FURSODQG :LQG HQHUJ\ LV VXIÀFLHQWO\VWURQJ
WR SURSHO VRLO SDUWLFOHV WKRXVDQGV RI NLORPHWUHV DV
LOOXVWUDWHG E\ 1$6$·V UHSRUW RI D FORXG RI VRLO EHLQJ
EORZQ IURP WKH $IULFDQ FRQWLQHQW WR WKH 6RXWK DQG
1RUWK$PHULFDQFRQWLQHQWV
75$'($1'(19,5210(175(9,(:
RIDGMDFHQWPRYLQJZDWHU,QFUHDVHGVRLOORVVRFFXUV
RQ VWHHS VORSHV ZLWK JUDGLHQWV RI SHU FHQW RU
PRUH ZKHQ D VWUHDP FXWV WKURXJK DGMDFHQW ODQG
EXWHYHQRQUHODWLYHO\ÁDWODQGZLWKRQO\DSHUFHQW
JUDGLHQWVWUHDPEDQNVDUHHURGHGGXULQJKHDY\UDLQV
DQGÁRRGLQJ
7KHUROHRIYHJHWDWLYHFRYHU
/DQGDUHDVFRYHUHGE\SODQWELRPDVVOLYLQJRUGHDG
DUH PRUH UHVLVWDQW DQG H[SHULHQFH UHODWLYHO\ OLWWOH
VRLO HURVLRQ EHFDXVH UDLQGURS DQG ZLQG HQHUJ\ DUH
GLVVLSDWHGE\WKHELRPDVVOD\HUDQGWKHWRSVRLOLVKHOG
WRJHWKHU E\ WKH ELRPDVV )RU H[DPSOH LQ 8WDK DQG
0RQWDQDLWZDVIRXQGWKDWDVWKHDPRXQWRIJURXQG
FRYHU GHFUHDVHG IURP SHU FHQW WR OHVV WKDQ SHUFHQWHURVLRQUDWHVLQFUHDVHGDSSUR[LPDWHO\
IROG7ULPEHODQG0HQGHO,QIRUHVWHGDUHDVD
PLQLPXPRISHUFHQWRIIRUHVWFRYHULVQHFHVVDU\
WRSUHYHQWVHULRXVVRLOHURVLRQDQGODQGVOLGHV8QLWHG
6WDWHV)RUHVW&RQVHUYDWLRQ$FW7KHUHIRUHWKH
H[WHQVLYHUHPRYDORIIRUHVWVIRUFURSVDQGSDVWXUHLV
IROORZHGE\LQWHQVLYHVRLOHURVLRQ
&$VVHVVLQJVRLOHURVLRQ
/RVV RI YHJHWDWLRQ WKDW SURYLGHV VRLO FRYHU LV
HVSHFLDOO\ZLGHVSUHDGLQGHYHORSLQJFRXQWULHVZKHUH
SRSXODWLRQV DUH ODUJH DQG DJULFXOWXUDO SUDFWLFHV DUH
RIWHQ LQDGHTXDWH WR SURWHFW WRSVRLOV ,Q DGGLWLRQ
FRRNLQJ DQG KHDWLQJ LQ WKHVH FRXQWULHV IUHTXHQWO\
GHSHQGRQWKHXVHRIFURSUHVLGXHVIRUIXHO3LPHQWHO
DQG3LPHQWHO)RUH[DPSOHDERXWSHUFHQWRI
FURSUHVLGXHVLQ&KLQDDQGSHUFHQWLQ%DQJODGHVK
DUH UHPRYHG URXWLQHO\ IURP WKH ODQG DQG EXUQHG DV
IXHO:HQ,QDUHDVZKHUHIXHOZRRGDQGRWKHU
ELRPDVV DUH VFDUFH HYHQ WKH URRWV RI JUDVVHV DQG
VKUXEV DUH FROOHFWHG DQG EXUQHG -XR DQG 7KXURZ
$OO WKHVH SUDFWLFHV OHDYH WKH VRLO EDUUHQ DQG
IXOO\H[SRVHGWRWKHIRUFHVRIUDLQDQGZLQGHURVLRQ
6RLOHURVLRQRQFURSODQGZRUOGZLGH
2WKHUVRLOGLVWXUEDQFHV
:KLOH DJULFXOWXUH DFFRXQWV IRU DERXW SHU FHQW RI
VRLOHURVLRQZRUOGZLGHVXFKHURVLRQRFFXUVZKHQHYHU
KXPDQV UHPRYH YHJHWDWLYH FRYHU /DO DQG 6WHZDUW
&RQVWUXFWLRQ RI URDGV SDUNLQJ ORWV DQG
EXLOGLQJV LV DQ H[DPSOH RI WKLV SUREOHP +RZHYHU
DOWKRXJK WKH UDWH RI HURVLRQ IURP FRQVWUXFWLRQ VLWHV
PD\EHH[FHHGLQJO\KLJKLWODVWVIRUDUHODWLYHO\EULHI
SHULRGDIWHUZKLFKRQFHWKHODQGVXUIDFHLVVHHGHG
WRJUDVVRUFRYHUHGZLWKRWKHUYHJHWDWLRQWKHHURVLRQ
GHFOLQHV,(&$
1DWXUDO HFRV\VWHPV DOVR VXIIHU ORVVHV IURP HURVLRQ
7KLVLVHVSHFLDOO\HYLGHQWDORQJVWUHDPEDQNVZKHUH
HURVLRQWDNHVSODFHQDWXUDOO\IURPWKHSRZHUIXODFWLRQ
,W LV HVWLPDWHG WKDW DSSUR[LPDWHO\ ELOOLRQ WRQV
RI IHUWLOH VRLOV ZRUOGZLGH DUH ORVW IURP DJULFXOWXUDO
V\VWHPVHDFK\HDU0\HUVZKHUHDVUHODWLYHO\
OLWWOH HURVLRQ RFFXUV LQ QDWXUDO HFRV\VWHPV 6RLO
VFLHQWLVWV /DO DQG 6WHZDUW DQG :HQ UHSRUWWKDWDQQXDOO\ELOOLRQWRQVRIVRLODUHORVWLQ
,QGLDDQGELOOLRQWRQVLQ&KLQD&RQVLGHULQJWKHVH
WZRFRXQWULHVWRJHWKHURFFXS\RQO\SHUFHQWRIWKH
ZRUOG·V WRWDO ODQG DUHD WKH HVWLPDWHG ELOOLRQ WRQV
RIVRLOORVWHDFK\HDUZRUOGZLGHLVFRQVHUYDWLYH7KH
DPRXQW RI VRLO ORVW DQQXDOO\ LQ WKH 8QLWHG 6WDWHV LV
HVWLPDWHGWREHDERXWELOOLRQWRQV1$6
&XUUHQWO\DERXWSHUFHQWRIWKHZRUOG·VDJULFXOWXUDO
ODQG VXIIHUV PRGHUDWH WR VHYHUH HURVLRQ ZKLOH SHU FHQW H[SHULHQFHV VOLJKW HURVLRQ 6SHWK :RUOGZLGHHURVLRQRQFURSODQGDYHUDJHVDERXWW
KD\UDQGUDQJHVIURPWRWKD\U3LPHQWHOHW
DO$VDUHVXOWRIVRLOHURVLRQRYHUWKHSDVW
\HDUVDERXWSHUFHQWRIWKHZRUOG·VFURSODQGKDV
EHFRPH XQSURGXFWLYH DQG PXFK RI WKDW KDV EHHQ
DEDQGRQHGIRUFURSXVH.HQGDOODQG3LPHQWHO
:5,
:RUOGZLGHWKHQHDUO\ELOOLRQKDRIODQGQRZXQGHU
FXOWLYDWLRQIRUFURSSURGXFWLRQDUHDOPRVWHTXDOLQDUHD
WRWKHDPRXQWRIFURSODQGELOOLRQKDWKDWKDVEHHQ
DEDQGRQHG E\ KXPDQV VLQFH IDUPLQJ EHJDQ 6XFK
DEDQGRQHGODQGRQFHELRORJLFDOO\DQGHFRQRPLFDOO\
SURGXFWLYH QRZ SURGXFHV OLWWOH ELRPDVV EXW DOVR LW
KDVORVWWKHFRQVLGHUDEOHGLYHUVLW\RISODQWVDQLPDOV
DQG PLFUREHV LW RQFH VXSSRUWHG +H\ZRRG 3LPHQWHO HW DO 0RUHRYHU EHFDXVH RI WKH
GHFOLQH LQ ELRPDVV LQ VRPH DJULFXOWXUDO SURGXFWLRQ
OHVV FDUERQ LV WDNHQ XS DQG VHTXHVWHUHG VHH WKH
FRPPHQWDU\RI*5$,1LQWKLVFKDSWHU
(DFK \HDU DQ HVWLPDWHG PLOOLRQ KD RI FURSODQG
ZRUOGZLGH DUH DEDQGRQHG GXH WR WKHLU ODFN RI
SURGXFWLYLW\ FDXVHG E\ VRLO HURVLRQ )DHWK DQG
&URVVRQ/RVVHVIURPVRLOHURVLRQDUHKLJKHVW
LQ WKH DJURHFRV\VWHPV RI $VLD $IULFD DQG 6RXWK
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
$PHULFDDYHUDJLQJWRWKD\U3LPHQWHO
,Q GHYHORSLQJ FRXQWULHV VRLO HURVLRQ LV SDUWLFXODUO\
VHYHUH RQ VPDOO IDUPV WKDW DUH RIWHQ ORFDWHG RQ
PDUJLQDO ODQGV ZKHUH WKH VRLO TXDOLW\ LV SRRU DQG
WKH WRSRJUDSK\ IUHTXHQWO\ VWHHS ,Q DGGLWLRQ WKH
SRRU IDUPHUV WHQG WR UDLVH URZ FURSV VXFK DV FRUQ
DQG EHDQV ZKLFK DUH KLJKO\ VXVFHSWLEOH WR HURVLRQ
EHFDXVH WKH FURS YHJHWDWLRQ GRHV QRW FRYHU WKH
HQWLUHWLOOHGVRLOVXUIDFH6WRQHDQG0RRUH)RU
H[DPSOHLQWKH6LHUUDUHJLRQRI(FXDGRUDERXWSHU
FHQWRIWKHFURSODQGKDVEHHQDEDQGRQHGEHFDXVHRI
WKH GHYDVWDWLRQ FDXVHG E\ UDLQIDOO DQG ZLQG HURVLRQ
DQG LQDSSURSULDWH DJULFXOWXUDO SUDFWLFHV 6RXWKJDWH
DQG:KLWDNHU6LPLODUSUREOHPVDUHHYLGHQWLQ
WKH $PD]RQLDQ UHJLRQ RI 6RXWK $PHULFD ZKHUH YDVW
IRUHVWHG DUHDV KDYH EHHQ FOHDUHG IRU FXOWLYDWLRQ RI
VXJDUFDQH DQG RWKHU FURSV DV ZHOO DV IRU OLYHVWRFN
SURGXFWLRQ
(URVLRQUDWHVRQSDVWXUHVDQGUDQJHODQGV
,QWKH8QLWHG6WDWHVLQFRQWUDVWWRWKHDYHUDJHVRLOORVV
RIWKD\UIURPFURSODQGSDVWXUHVORVHVRLODWWKH
UDWHRIDERXWWKD\U1$6+RZHYHUHURVLRQ
UDWHV RQ SDVWXUHV LQWHQVLI\ ZKHUHYHU RYHUJUD]LQJ LV
DOORZHGWRRFFXU(YHQLQWKH8QLWHG6WDWHVDERXW
SHU FHQW RI QRQ)HGHUDO ODQGV UHTXLUH FRQVHUYDWLRQ
WUHDWPHQWV WR UHGXFH JUD]LQJ SUHVVXUH -RKQVRQ
0RUHWKDQKDOIRIDOOUDQJHODQGVLQWKHFRXQWU\
²ERWKQRQ)HGHUDODQG)HGHUDO²DUHRYHUJUD]HGDQG
KDYH EHFRPH VXEMHFW WR KLJK HURVLRQ UDWHV %DLOH\
$OWKRXJK HURVLRQ UDWHV RQ FURSODQG LQ WKH 8QLWHG
6WDWHVKDYHGHFUHDVHGGXULQJWKHSDVWWZRGHFDGHV
WKRVHRQSDVWXUHVDQGUDQJHODQGVUHPDLQKLJKWKD
\U1$6,QGHHGKLJKHURVLRQUDWHVDUHW\SLFDO
RQPRVWRIWKHZRUOG·VSDVWXUHVDQGUDQJHODQGV:5,
,Q PDQ\ GHYHORSLQJ FRXQWULHV KHDY\ JUD]LQJ
E\ FDWWOH VKHHS DQG JRDWV KDV UHPRYHG PRVW RI
WKHYHJHWDWLYHFRYHUH[SRVLQJWKHVRLOWRVHYHUHVRLO
HURVLRQ ,Q $IULFD DERXW SHU FHQW RI WKH SDVWXUH
DQG UDQJHODQG LV VHULRXVO\ HURGHG DQG GHJUDGHG
811$'$)7KHSULPHFDXVHVRIWKLVH[SRVHG
VRLODUHRYHUJUD]LQJDQGWKHUHPRYDORIFURSUHVLGXHV
IRUXVHDVFRRNLQJIXHO
6RLOHURVLRQLQIRUHVWODQG
,Q VWDEOH IRUHVW HFRV\VWHPV ZKHUH VRLO LV SURWHFWHG
E\YHJHWDWLRQHURVLRQUDWHVDUHUHODWLYHO\ORZUDQJLQJ
IURP RQO\ WR WKD\U 5RRVH 7UHH
OHDYHVDQGEUDQFKHVQRWRQO\LQWHUFHSWDQGGLPLQLVK
UDLQGURS DQG ZLQG HQHUJ\ EXW DOVR FRYHU WKH VRLO
XQGHU WKH WUHHV ZKLFK IXUWKHU SURWHFWV LW +RZHYHU
WKH VLWXDWLRQ FKDQJHV GUDPDWLFDOO\ ZKHQ IRUHVWV DUH
FOHDUHG IRU FURS SURGXFWLRQ RU ZKHQ SDVWXUHV DUH
GHYHORSHG IRU OLYHVWRFN SURGXFWLRQ 6RXWKJDWH DQG
:KLWDNHU
'(IIHFWVRIVRLOHURVLRQ
:DWHUDYDLODELOLW\
:DWHU LV D PDMRU OLPLWLQJ IDFWRU RI FURS SURGXFWLYLW\
LQ DOO WHUUHVWULDO HFRV\VWHPV EHFDXVH DOO YHJHWDWLRQ
UHTXLUHV HQRUPRXV TXDQWLWLHV RI ZDWHU IRU LWV JURZWK
DQG IRU WKH SURGXFWLRQ RI IUXLW )RU H[DPSOH KD RI
FRUQZLOOWUDQVSLUHDERXWPLOOLRQOLWUHVRIZDWHUGXULQJ
WKHJURZLQJVHDVRQRIDERXWWKUHHPRQWKV3LPHQWHO
HWDODQGORVHDQDGGLWLRQDOPLOOLRQOLWUHVRI
ZDWHU E\ HYDSRUDWLRQ IURP WKH VRLO 'XULQJ HURVLRQ
E\ UDLQIDOO WKH DPRXQW RI ZDWHU UXQRII VLJQLÀFDQWO\
LQFUHDVHV ZLWK OHVV ZDWHU HQWHULQJ WKH VRLO DQG
WKHUHIRUHOHVVZDWHUDYDLODEOHWRVXSSRUWWKHJURZLQJ
YHJHWDWLRQ2QDYHUDJHDFRUQFURSRINJUHTXLUHV
DERXW OLWUHV RI ZDWHU IRU SURGXFWLRQ ZKLOH ULFH
UHTXLUHVDERXWOLWUHV
1XWULHQWORVV
(URGHG VRLO FDUULHV DZD\ YLWDO SODQW QXWULHQWV VXFK
DV QLWURJHQ SKRVSKRUXV SRWDVVLXP DQG FDOFLXP
7\SLFDOO\ HURGHG VRLO FRQWDLQV DERXW WKUHH WLPHV
PRUH QXWULHQWV WKDQ WKRVH OHIW LQ WKH UHPDLQLQJ VRLO
/DQJGDOH HW DO 2QH WRQ RI IHUWLOH WRSVRLO RU
HURGHGIHUWLOHVRLOFRQWDLQVDQDYHUDJHRIWRNJRI
QLWURJHQWRNJRISKRVSKRUXVDQGWRNJRI
SRWDVVLXP ZKHUHDV WKH WRSVRLO RQ HURGHG ODQG KDV
DQDYHUDJHQLWURJHQFRQWHQWRIRQO\WRNJSHU
WRQ/DQJGDOHHWDO
7R FRPSHQVDWH IRU WKH QXWULHQW ORVVHV LQÁLFWHG RQ
FURS SURGXFWLRQ ODUJH TXDQWLWLHV RI IHUWLOL]HUV DUH
RIWHQ DSSOLHG 7URHK HW DO SRLQW RXW WKDW WKH
ORVWVRLOQXWULHQWVFRVWDJULFXOWXUHLQWKH8QLWHG6WDWHV
VHYHUDO ELOOLRQV RI GROODUV DQQXDOO\ ,I WKH VRLO EDVH LV
UHODWLYHO\GHHSDERXWPPDQGLIRQO\²WRQV
RI VRLO LV ORVW SHU KHFWDUH SHU \HDU WKH ORVW QXWULHQWV
FDQ EH UHSODFHG ZLWK WKH DSSOLFDWLRQ RI FRPPHUFLDO
IHUWLOL]HUV DQGRU OLYHVWRFN PDQXUH +RZHYHU VXFK D
UHSODFHPHQWVWUDWHJ\LVH[SHQVLYHIRUIDUPHUVDQGWKH
FRXQWU\ DQG XVXDOO\ LV QRW DIIRUGDEOH E\ WKH SRRUHU
IDUPHUV1RWRQO\DUHWKHIHUWLOL]HULQSXWVGHSHQGHQWRQ
IRVVLOHQHUJ\EXWDOVRWKHFKHPLFDOVFDQKDUPKXPDQ
KHDOWKDQGSROOXWHWKHHQYLURQPHQW1$6
6RLORUJDQLFPDWWHU
6RLORUJDQLFPDWWHULVDYDOXDEOHUHVRXUFHEHFDXVHLW
IDFLOLWDWHVWKHIRUPDWLRQRIVRLODJJUHJDWHVDQGWKHUHE\
LQFUHDVHV VRLO SRURVLW\ 7KH LPSURYHG VRLO VWUXFWXUH
LQ WXUQ IDFLOLWDWHV ZDWHU LQÀOWUDWLRQ DQG XOWLPDWHO\ WKH
RYHUDOOSURGXFWLYLW\RIWKHVRLO/DQJGDOHHWDO
,Q DGGLWLRQ RUJDQLF PDWWHU DLGV FDWLRQ H[FKDQJH
HQKDQFHV SODQW URRW JURZWK DQG VWLPXODWHV DQ
LQFUHDVH LQ LPSRUWDQW VRLO PLFUREHV :DUGOH HW DO
:KHQWKHOD\HURIRUJDQLFPDWWHULVGHSOHWHG
WKH SURGXFWLYLW\ RI WKH HFRV\VWHP DV PHDVXUHG E\
SODQWELRPDVVGHFOLQHVERWKEHFDXVHRIWKHGHJUDGHG
VRLOVWUXFWXUHDQGWKHGHSOHWLRQRIQXWULHQWVFRQWDLQHG
LQWKHRUJDQLFPDWWHU,QDGGLWLRQWRORZ\LHOGVWKHWRWDO
ELRPDVV RI WKH ELRWD DQG WKH RYHUDOO ELRGLYHUVLW\ RI
WKRVHHFRV\VWHPVDUHVXEVWDQWLDOO\UHGXFHG/D]DURII
:DOVKDQG5RZH
)HUWLOH VRLOV W\SLFDOO\ FRQWDLQ WRQVKD RI RUJDQLF
PDWWHU LH ² SHU FHQW RI WKHLU WRWDO VRLO ZHLJKW
3LPHQWHOHWDOZKLFKKDVDERXWSHUFHQWRI
QLWURJHQDQG²SHUFHQWRISKRVSKRUXV%HFDXVH
PRVW RI WKH VRLO RUJDQLF PDWWHU LV IRXQG FORVH WR
WKH VRLO VXUIDFH DV GHFD\LQJ OHDYHV DQG VWHPV LW LV
VLJQLÀFDQWO\UHGXFHGE\HURVLRQ%RWKZLQGDQGZDWHU
HURVLRQ VHOHFWLYHO\ UHPRYH WKH ÀQH RUJDQLF SDUWLFOHV
LQ WKH VRLO OHDYLQJ EHKLQG ODUJH VRLO SDUWLFOHV DQG
VWRQHV 6HYHUDO VWXGLHV KDYH GHPRQVWUDWHG WKDW WKH
VRLOUHPRYHGE\HLWKHUZDWHURUZLQGHURVLRQLVWR
WLPHV ULFKHU LQ RUJDQLF PDWWHU WKDQ WKH UHPDLQLQJ
VRLOV UHVXOWLQJ LQ ORZHU FURS \LHOG )RU H[DPSOH WKH
UHGXFWLRQRIVRLORUJDQLFPDWWHUUDQJLQJIURPWR
SHUFHQWZDVIRXQGWRORZHUWKHFURS\LHOGSRWHQWLDOIRU
JUDLQE\SHUFHQW/LEHUW
&ROOHFWLYHO\ DQG LQGHSHQGHQWO\ WKH GLYHUVH LPSDFWV
RI HURVLRQ UHGXFH FURS ELRPDVV ERWK EHFDXVH RI
GHJUDGHGVRLOVWUXFWXUHDQGQXWULHQWGHSOHWLRQ
6RLOGHSWK
*URZLQJ SODQWV UHTXLUH VRLOV RI DGHTXDWH GHSWK LQ
ZKLFK WR H[WHQG WKHLU URRWV 9DULRXV VRLO ELRWD VXFK
DV HDUWKZRUPV DOVR UHTXLUH D VXLWDEOH VRLO GHSWK
3LPHQWHOHWDO:DUGOHHWDO7KXVZKHQ
HURVLRQUHGXFHVVRLOGHSWKVXEVWDQWLDOO\IURPFP
WR OHVV WKDQ FP WKHUH LV PLQLPDO VSDFH IRU SODQW
URRWV VR WKDW SODQW JURZWK ZLOO EH VWXQWHG DQG \LHOG
UHGXFHG
%LRPDVVDQGELRGLYHUVLW\
7KH ELRORJLFDO GLYHUVLW\ H[LVWLQJ LQ DQ\ HFRV\VWHP LV
75$'($1'(19,5210(175(9,(:
UHODWHGGLUHFWO\WRWKHDPRXQWRIOLYLQJDQGQRQOLYLQJ
RUJDQLF PDWWHU SUHVHQW LQ WKDW HFRV\VWHP :ULJKW
+H\ZRRG /D]DURII :DOVK DQG
5RZH :DUGOH HW DO 7KHUHIRUH E\
GLPLQLVKLQJ VRLO RUJDQLF PDWWHU DQG VRLO TXDOLW\
HURVLRQUHGXFHVWKHRYHUDOOELRPDVVDQGSURGXFWLYLW\
ZKLFK XOWLPDWHO\ KDV D SURIRXQGO\ DGYHUVH HIIHFW RQ
WKHGLYHUVLW\RISODQWVDQLPDOVDQGPLFUREHVSUHVHQW
LQ WKH HFRV\VWHP 1XPHURXV SRVLWLYH DVVRFLDWLRQV
KDYHEHHQHVWDEOLVKHGEHWZHHQELRPDVVDEXQGDQFH
DQG VSHFLHV GLYHUVLW\ (OWRQ 2GXP 6XJGHQ DQG 5DQGV 9HJHWDWLRQ LV WKH PDLQ
FRPSRQHQWRIHFRV\VWHPELRPDVVDQGSURYLGHVWKH
YLWDOUHVRXUFHVUHTXLUHGERWKE\DQLPDOVDQGPLFUREHV
IRUWKHLUVXUYLYDO
$ORQJ ZLWK SODQWV DQG DQLPDOV PLFUREHV DUH D
YLWDO FRPSRQHQW RI WKH VRLO DQG FRQVWLWXWH D ODUJH
SHUFHQWDJH RI WKH VRLO ELRPDVV 2QH FXELF PHWUH RI
VRLO PD\ VXSSRUW DERXW DUWKURSRGV HDUWKZRUPVSOXVELOOLRQVRIPLFUREHV/HHDQG)RVWHU
3LPHQWHOHWDO$KHFWDUHRISURGXFWLYH
VRLO PD\ KDYH D ELRPDVV RI LQYHUWHEUDWHV DQG
PLFUREHV ZHLJKLQJ XS WR NJKD ,Q DGGLWLRQ
VRLO EDFWHULD DQG IXQJL DGG WR VSHFLHV
WKHUHE\ FRQWULEXWLQJ VLJQLÀFDQWO\ WR ELRGLYHUVLW\
HVSHFLDOO\ LQ PRLVW RUJDQLF VRLOV +H\ZRRG 3LPHQWHOHWDO
(URVLRQ UDWHV WKDW DUH WR WLPHV DERYH WKH
VXVWDLQDELOLW\ UDWH RU VRLO IRUPDWLRQ UDWHV RI ²
WRQKD\U UHGXFH WKH GLYHUVLW\ DQG DEXQGDQFH RI
VRLO RUJDQLVPV 3LPHQWHO HW DO ,Q FRQWUDVW
DJULFXOWXUDO SUDFWLFHV WKDW FRQWURO HURVLRQ DQG
PDLQWDLQ DGHTXDWH VRLO RUJDQLF PDWWHU IDYRXU WKH
SUROLIHUDWLRQRIVRLOELRWD5HLG3LPHQWHOHWDO
7KH DSSOLFDWLRQ RI RUJDQLF PDWWHU RU PDQXUH
DOVR HQKDQFHV ELRGLYHUVLW\ LQ WKH VRLO 3LPHQWHO HW
DO 6SHFLHV GLYHUVLW\ RI PDFURIDXQD PRVWO\
DUWKURSRGV LQFUHDVHG SHU FHQW ZKHQ RUJDQLF
PDWWHU RU PDQXUH ZDV DSSOLHG WR H[SHULPHQWDO
ZKHDW SORWV LQ WKH IRUPHU 6RYLHW 8QLRQ %RKDF DQG
3RNDU]KHYVN\ 6LPLODUO\ VSHFLHV GLYHUVLW\ RI
PDFURIDXQD PRVWO\ DUWKURSRGV PRUH WKDQ GRXEOHG
ZKHQRUJDQLFPDQXUHZDVDGGHGWRJUDVVODQGSORWVLQ
-DSDQDQGLQFUHDVHGIROGLQ+XQJDULDQIDUPODQG
2ODK=VXSRVDQG+HOPHF]L
7KHUHODWLRQVKLSEHWZHHQELRPDVVDQGELRGLYHUVLW\ZDV
FRQÀUPHG LQ ÀHOG H[SHULPHQWV ZLWK FROODUGV LQ ZKLFK
DUWKURSRGVSHFLHVGLYHUVLW\URVHIRXUIROGLQH[SHULPHQWDO
SORWV ZLWK WKH KLJKHVW FROODUG ELRPDVV FRPSDUHG ZLWK
WKDWLQFRQWUROFROODUGSORWV5HSRUWVVXJJHVWWKDWZKHQ
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
WKHELRPDVVLQFUHDVHGWKUHHIROGWKHQXPEHURIVSHFLHV
LQFUHDVHG IROG ,Q D VWXG\ RI ELUG SRSXODWLRQV D
VWURQJ FRUUHODWLRQ EHWZHHQ SODQW ELRPDVV SURGXFWLYLW\
DQGELUGVSHFLHVGLYHUVLW\ZDVUHSRUWHGZKHQDIROG
LQFUHDVHLQSODQWELRPDVV\LHOGHGDIROGLQFUHDVHLQ
ELUGGLYHUVLW\:ULJKW
WRQV RI FDUERQ WR WKH DWPRVSKHUH $ IHHGEDFN
PHFKDQLVPH[LVWVZKHUHLQLQFUHDVHGJOREDOZDUPLQJ
LQWHQVLÀHVUDLQIDOOZKLFKLQWXUQLQFUHDVHVHURVLRQDQG
FRQWLQXHVWKHF\FOH/DO
6RLO ELRWD SHUIRUP PDQ\ EHQHÀFLDO DFWLYLWLHV WKDW
LPSURYH VRLO TXDOLW\ DQG XOWLPDWHO\ LWV SURGXFWLYLW\
:LWW6XJGHQ6WRQHDQG$VK3LPHQWHO
HW DO )RU H[DPSOH VRLO ELRWD UHF\FOH EDVLF
QXWULHQWVUHTXLUHGE\SODQWVIRUWKHLUJURZWK3LPHQWHO
HWDO,QDGGLWLRQWKHWXQQHOLQJDQGEXUURZLQJ
DFWLYLWLHVRIHDUWKZRUPVDQGRWKHUVRLOELRWDHQKDQFH
FURSSURGXFWLYLW\E\LQFUHDVLQJZDWHULQÀOWUDWLRQ:LWW
(DUWKZRUPVIRULQVWDQFHPD\FRQVWUXFWXSWR
WXQQHORSHQLQJVSHUVTXDUHPHWUHZKLFKHQDEOH
WKH ZDWHU WR LQÀOWUDWH UDSLGO\ LQWR WKH VRLO 2WKHU VRLO
ELRWDDOVRFRQWULEXWHWRVRLOIRUPDWLRQDQGSURGXFWLYLW\
E\PL[LQJWKHVRLOFRPSRQHQWVHQKDQFLQJDJJUHJDWH
VWDELOLW\ DQG SUHYHQWLQJ VRLO FUXVWLQJ 7KLV FKXUQLQJ
DQG PL[LQJ RI WKH XSSHU VRLO UHGLVWULEXWHV QXWULHQWV
DHUDWHV WKH VRLO H[SRVHV LW WR WKH FOLPDWH IRU VRLO
IRUPDWLRQDQGLQFUHDVHVLQÀOWUDWLRQUDWHVWKXVPDNLQJ
VRLOFRQGLWLRQVIDYRXUDEOHIRULQFUHDVHGVRLOIRUPDWLRQ
DQG SODQW SURGXFWLYLW\ (DUWKZRUPV EULQJ IURP WR WKD\U RI VRLO IURP XQGHUJURXQG WR WKH VRLO
VXUIDFHZKLOHVRPHLQVHFWVVXFKDVDQWVPD\EULQJ
DVPXFKDVWKD\URIVRLOWRWKHVXUIDFH/RFNDE\
DQG $GDPV 6QDLOV DUH UHSRUWHG WR KHOS WKH
IRUPDWLRQRIWKD\URIVRLO
([WHQVLYHEXUQLQJRIIRVVLOIXHOVDQGIRUHVWVDSSHDUVWR
EHLQFUHDVLQJWKHOHYHORI&2DQGRWKHUJUHHQKRXVH
JDVHV *+*V LQ WKH DWPRVSKHUH ZKLFK UDLVHV
VHYHUDO HWKLFDO LVVXHV DQG FKRLFHV &OHDUO\ WKHUH LV
DQ XUJHQW QHHG WR UHGXFH IRVVLO IXHO FRQVXPSWLRQ
DQG GHIRUHVWDWLRQ WR VORZ GRZQ WKH UDWH RI JOREDO
FOLPDWHFKDQJH5HGXFLQJIRVVLOIXHOFRQVXPSWLRQZLOO
DOVR FRQVHUYH IRUHVWV DQG FRQWUROOLQJ GHIRUHVWDWLRQ
KDV RWKHU EHQHÀWV LQFOXGLQJ FRQVHUYLQJ ELRORJLFDO
GLYHUVLW\
6RLOVHGLPHQWV
7KH ORQJUDQJH WUDQVSRUW RI GXVW E\ ZLQG KDV
LPSOLFDWLRQV IRU KXPDQ KHDOWK ZRUOGZLGH *ULIÀQ
.HOORJJDQG6KLQQUHSRUWWKDWDERXWKXPDQ
LQIHFWLRXV GLVHDVHFDUU\LQJ RUJDQLVPV VXFK DV
DQWKUD[ DQG WXEHUFXORVLV DUH HDVLO\ WUDQVSRUWHG E\
WKHZLQGLQVRLOSDUWLFOHV
6RLO HURVLRQ DOVR FRQWULEXWHV WR JOREDO ZDUPLQJ
EHFDXVH FDUERQ GLR[LGH &2 LV DGGHG WR WKH
DWPRVSKHUHZKHQHQRUPRXVDPRXQWVRIELRPDVVDUH
H[SRVHG DQG R[LGL]HG 3KLOOLSV DQG +HOPHF]L /DO :DOVK DQG 5RZH 2QH KHFWDUH RI
VRLOPD\FRQWDLQDERXWWRQVRIRUJDQLFPDWWHURU
ELRPDVV ZKLFK LI HURGHG ZRXOG FRQWULEXWH DERXW
*OREDOFOLPDWHFKDQJH
$ ODUJH QXPEHU RI PHWHRURORJLVWV DQG SK\VLFDO
VFLHQWLVWV HVWLPDWH WKDW WKH FRQWLQXHG LQFUHDVH LQ
&2 DQG RWKHU *+*V ZLOO ZDUP WKH HDUWK IURP GHJUHHV &HOVLXV WR GHJUHHV &HOVLXV E\ WKH HQG
RIWKLVFHQWXU\7KHSUHFLVHUDWHH[WHQWDQGUHJLRQDO
YDULDWLRQVDUHGLIÀFXOWWRSUHGLFWEXWQHJDWLYHLPSDFWV
DUHJHQHUDOO\SURMHFWHGHVSHFLDOO\RQFURSSURGXFWLRQ
$GGLWLRQDO QHJDWLYH LPSDFWV RQ VRPH FURSV FRXOG
UHVXOW IURP DOWHUDWLRQV LQ WKH R]RQH OD\HU 7KXV WKH
RYHUDOOFKDQJHVLQWHPSHUDWXUHPRLVWXUH&2LQVHFW
SHVWV SODQW SDWKRJHQV DQG ZHHGV DVVRFLDWHG ZLWK
JOREDO FOLPDWH FKDQJH DUH SURMHFWHG WR UHGXFH IRRG
SURGXFWLRQZRUOGZLGH3LPHQWHO7KHH[WHQWRI
DOWHUDWLRQVRIFURS\LHOGVZLOOGHSHQGRQVSHFLÀFFURSV
DQG WKHLU SDUWLFXODU HQYLURQPHQWDO UHTXLUHPHQWV
+RSHIXOO\ LPSOHPHQWDWLRQ RI LPSURYHG DJULFXOWXUDO
WHFKQRORJLHV FRXOG SDUWLDOO\ RIIVHW VRPH RI WKLV
GHFUHDVHLQ\LHOGV,QDGGLWLRQSURGXFWLYHDJULFXOWXUH
DQG DQ LQFUHDVH LQ VRLO FDUERQ FRXOG KHOS PLWLJDWH
FOLPDWH FKDQJH DOVR VHH WKH FRPPHQWDU\ RI /HX LQ
WKLVFKDSWHU
,Q$IULFDWKHSURMHFWHGULVHLQUDLQIDOODVVRFLDWHGZLWK
JOREDOFOLPDWHFKDQJHFRXOGKHOSLPSURYHFURS\LHOGV
WR VRPH H[WHQW EXW LW ZLOO QRW HQWLUHO\ VROYH $IULFD·V
IRRGVKRUWDJHVJLYHQWKHUDSLGUDWHRILQFUHDVHRILWV
SRSXODWLRQ:DWHUVKRUWDJHVDUHSURMHFWHGWRSHUVLVW
DQGSHVWVDUHH[SHFWHGWRFRQWLQXHWRUHVXOWLQVHULRXV
FURSORVVHV3LPHQWHO7KHVHIDFWRUVDVZHOODV
VHULRXV HFRQRPLF DQG SROLWLFDO SUREOHPV LPSO\ WKDW
IRRGSURGXFWLRQLQ$IULFDLVOLNHO\WRUHPDLQVORZ
75$'($1'(19,5210(175(9,(:
1//'06#4;U 1/2'6+6+10(14#6'4(14)4+%7.674'
6*417)*FNINIG
%UHQW%RHKOHUW,QGXVWULDO(FRQRPLFV,QFDQG
.HQQHWK6WU]HSHN0DVVDFKXVHWWV,QVWLWXWHRI7HFKQRORJ\
$EVWUDFW
2ZLQJWRULVLQJSRSXODWLRQVLQFUHDVLQJSHUFDSLWDZDWHUXVHHQYLURQPHQWDOÁRZUHTXLUHPHQWVDQGFOLPDWH
FKDQJHRXUUHVXOWVVXJJHVWWKDWE\WKHUHZLOOEHVLJQLÀFDQWWKUHDWVWRZDWHUDYDLODELOLW\IRUDJULFXOWXUH
LQPDQ\UHJLRQVRIWKHZRUOG,IULVLQJDJULFXOWXUDOGHPDQGVDQGWKHIXOOVSHFWUXPRIFOLPDWHFKDQJHHIIHFWV
DUHWDNHQLQWRDFFRXQWWKUHDWVWRZDWHUDYDLODELOLW\ZLOOEHFRQVLGHUDEO\PRUHSURQRXQFHG,WLVWKHUHIRUH
OLNHO\WKDWXQOHVVEURDGFKDQJHVDUHPDGHWRWKHZD\HQYLURQPHQWDODQGZDWHUUHVRXUFHVDUHJRYHUQHG
FRQÁLFWVRYHUZDWHUIRUDJULFXOWXUHZLOOLQFUHDVHPDUNHGO\E\WKHPLGGOHRIWKHWZHQW\ÀUVWFHQWXU\&KDQJHV
LQJRYHUQDQFHPD\LQFOXGHUHIRUPLQJWKHSROLFLHVDQGLQVWLWXWLRQVWKDWPDQDJHDQGDOORFDWHZDWHULPSURYLQJ
DFFHVVWRZDWHULQWKHSRRUHVWUHJLRQVRIWKHZRUOGHQKDQFLQJHFRV\VWHPVHUYLFHVUHFRJQL]LQJZDWHUDV
DQHFRQRPLFJRRGLQRUGHUWRSURPRWHHIÀFLHQF\RIXVHLPSURYLQJUDLQIHGDQGLUULJDWLRQLQIUDVWUXFWXUHWR
LQFUHDVH´FURSSHUGURSµDQGPDNLQJDJULFXOWXUHPRUHUHVLOLHQWWRFKDQJHVLQFOLPDWH,QWKHOLJKWRIWKHVH
WKUHDWVWRZDWHUIRUDJULFXOWXUHDQGWKHUHIRUHWRJOREDOIRRGDYDLODELOLW\LWLVLPSRUWDQW²DQGXUJHQW²WKDW
ZDWHUSODQQLQJHIIRUWVEHFRRUGLQDWHGDQGLQWHJUDWHGDFURVVVHFWRUVSDUWLFXODUO\LQWKHPRVWYXOQHUDEOH
UHJLRQV
)LJXUH7RWDOSURMHFWHGPXQLFLSDOZDWHUXVHLQ2(&'
YHUVXVQRQ2(&'FRXQWULHV²
600 non-OECD
500 Billion m3
400 300 200 -
OECD
2050 -
2040 -
2030 -
2020 -
0-
2010 -
100 2000 -
*OREDOO\NPRIZDWHUDUHZLWKGUDZQHDFK\HDU
WR LUULJDWH FURSV UHSUHVHQWLQJ RYHU WZR WKLUGV RI DOO
ZLWKGUDZDOV E\ SHRSOH $V ZDWHU VFDUFLW\ LQWHQVLÀHV
DQGPDQ\RIWKHZRUOG·VULYHUEDVLQVDSSURDFKFORVXUH
LHDOOZDWHUVXSSOLHVKDYHEHHQSXWWRXVHIRUDWOHDVW
SDUWRIWKH\HDUZDWHULVLQFUHDVLQJO\WUDQVIHUUHGRXW
RI DJULFXOWXUH WR SURYLGH IRU RWKHU GHPDQGV VXFK
DV HQHUJ\ JHQHUDWLRQ RU JURZLQJ XUEDQ SRSXODWLRQV
*LYHQ WKDW DW FXUUHQW SRSXODWLRQ OHYHOV WKH IRRG
V\VWHP LV DOUHDG\ ZDWHUVWUHVVHG DQG JOREDO ZDWHU
UHVRXUFHV DUH XQGHU FRQVLGHUDEOH SUHVVXUH WKLV
ZLOO RQO\ LQWHQVLI\ DV SRSXODWLRQV LQFUHDVH IXUWKHU
$GGLWLRQDOO\DQGSHUKDSVHYHQPRUHSUREOHPDWLFDOO\
ULVLQJ LQFRPHV LQ GHYHORSLQJ FRXQWULHV DUH FDXVLQJ
GLHWV WR VKLIW WR PRUH ZDWHULQWHQVLYH DJULFXOWXUDO
SURGXFWVWKDWUHTXLUHJUHDWHUOHYHOVRIZDWHUVHUYLFH
IRUH[DPSOHIURPFRPPXQLW\VWDQGSLSHVWRSOXPELQJ
V\VWHPV7RJHWKHUWKHVHVKLIWVDUHUDSLGO\LQFUHDVLQJ
SHU FDSLWD ZDWHU GHPDQG LQ GHYHORSLQJ FRXQWULHV
)LJXUHSUHVHQWVWKHVHSURMHFWHGZDWHUXVHWUHQGV
IRU 2(&' DQG QRQ2(&' FRXQWULHV WKURXJK ,PSRUWDQWO\ ZDWHU XVH LV SURMHFWHG WR PRUH WKDQ
GRXEOH LQ WKH PXQLFLSDO VHFWRU ZLWKLQ QRQ2(&'
FRXQWULHV ZKHUH DJULFXOWXUH WHQGV WR EH WKH PRVW
YXOQHUDEOHWRFOLPDWHFKDQJH
6RXUFH+XJKHV&KLQRZVN\DQG6WU]HSHN
1RWH6TXDUHVZLWKVROLGOLQHVQRQ2(&'
GLDPRQGVZLWKVROLGOLQHV2(&'
6LPXOWDQHRXVO\ WR PHHW KLJKHU IRRG GHPDQGV IRU
JURZLQJ SRSXODWLRQV DJULFXOWXUH LV H[SDQGLQJ WR
QHZ UHJLRQV DQG EHFRPLQJ PRUH SURGXFWLYH ZKLFK
UDSLGO\ LQFUHDVHV WKH GHPDQG IRU ZDWHU $V D UHVXOW
JURXQGZDWHU VXSSOLHV RQ ZKLFK PXFK RI DJULFXOWXUH
UHOLHV DUH GHFOLQLQJ JOREDOO\ .RQLNRZ DQG .HQG\
$W WKH VDPH WLPH HQHUJ\ FRQVXPSWLRQ DQG
RWKHU LQGXVWULDO DFWLYLWLHV LQ PDQ\ FRXQWULHV DUH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
FRQWLQXLQJ WR LQFUHDVH FDXVLQJ LQGXVWULDO ZDWHU
FRQVXPSWLRQWRULVH3HUKDSVPRVWLPSRUWDQWO\²DQG
PRVW RYHUORRNHG ² HQYLURQPHQWDO ÁRZ UHTXLUHPHQWV
()5V DUH LQFUHDVLQJO\ EHLQJ UHFRJQL]HG DV D
FUXFLDO HOHPHQW RI D IXQFWLRQLQJ ULSDULDQ HFRV\VWHP
DQG DFFRUGLQJO\ DUH SURJUHVVLYHO\ EHLQJ LQVWDWHG
DV SDUW RI HQYLURQPHQWDO PDQDJHPHQW )DONHQPDUN
DQG5RFNVWU|P6PDNKWLQ$V()5VDUH
HVWDEOLVKHG UHPDLQLQJ ZDWHU IRU DJULFXOWXUH ZLOO EH
IXUWKHUGLPLQLVKHG,QDGGLWLRQWRWKHJURZLQJGHPDQG
RQ ZDWHU UHVRXUFHV FOLPDWH FKDQJH ZLOO VLJQLÀFDQWO\
DIIHFWWKHWLPLQJGLVWULEXWLRQDQGPDJQLWXGHRIZDWHU
DYDLODELOLW\ $UQHOO 0LOO\ 'XQQH DQG 9HFFKLD
,3&& :KHUH VKLIWV LQ ZDWHU DYDLODELOLW\
UHGXFH UHJLRQDO ZDWHU VXSSOLHV DJULFXOWXUH ZLOO EH
IXUWKHUWKUHDWHQHG
,Q WKLV SDSHU ZH FRQVLGHU WKH IUDFWLRQ RI FXUUHQW
ZLWKGUDZDOV IURP VXUIDFH ZDWHU V\VWHPV IRU
DJULFXOWXUHWKDWPD\EHWKUHDWHQHGGXHWRLQFUHDVLQJ
ZDWHU GHPDQGV LQ RWKHU VHFWRUV OLPLWV LPSRVHG RQ
ZLWKGUDZDOV WR PHHW ()5V DQG D UDQJH RI SRWHQWLDO
FOLPDWHFKDQJHHIIHFWV:HFRPPHQWRQWKHUHODWLYH
LPSRUWDQFHRIHDFKFRPSHWLQJSUHVVXUHDQGLGHQWLI\
JHRJUDSKLF ´KRWVSRWVµ ZKHUH ZDWHU IRU DJULFXOWXUH
FRXOGEHVXEVWDQWLDOO\UHGXFHG
$0HWKRGVPRGHOOHGWKUHDWVWRZDWHU
IRUDJULFXOWXUH
&RQVLGHULQJWKHGHPDQGDQGVXSSO\VLGHIDFWRUVWKDW
ZLOODIIHFWWKHDPRXQWRIZDWHUDYDLODEOHIRUDJULFXOWXUH
ZH PRGHO WKH SRVVLEOH LPSOLFDWLRQV IRU DJULFXOWXUDO
ZDWHUDYDLODELOLW\WKURXJKXQGHUFOLPDWHFKDQJH
6SHFLÀFDOO\ IRU D QXPEHU RI JHRSROLWLFDO UHJLRQV
FRXQWULHVDQGXQGHUWKUHHFOLPDWHFKDQJHVFHQDULRV
ZH HVWLPDWH WKH IUDFWLRQ RI FXUUHQW DJULFXOWXUDO
ZLWKGUDZDOVWKDWZRXOGEHWKUHDWHQHGDVVXPLQJWKDW
()5V DQG LQFUHDVHG PXQLFLSDO DQG LQGXVWULDO 0,
GHPDQGV FDXVH WRWDO EDVLQ ZLWKGUDZDOV WR H[FHHG
PHDQDQQXDOUXQRII0$5LQWKHEDVLQ
:HFRQVLGHUDWRWDORIWKUHHFOLPDWHFKDQJHDQGWKUHH
GHPDQGVFHQDULRV2QWKHGHPDQGVLGHZHFRQVLGHU
WKHHIIHFWVRI0,GHPDQGVDORQH()5VDORQH
DQG 0, DQG ()5 GHPDQGV WRJHWKHU 0,
GHPDQGSURMHFWLRQVWRDUHWDNHQIURP:RUOG%DQN
SURMHFWLRQVIRUFRXQWULHV+XJKHV&KLQRZVN\DQG
6WU]HSHN()5VDUHDVVXPHGWREHWKHEDVLQ
ÁRZV QHFHVVDU\ WR PDLQWDLQ ULSDULDQ HFRV\VWHPV LQ
´IDLUµ FRQGLWLRQ IRU GHWDLOV VHH 6PDNKWLQ 5HYHQJD
DQG'|OO)RUWKHFOLPDWHFKDQJHDQDO\VLVZH
HYDOXDWHDEDVHOLQHLHQRFOLPDWHFKDQJHVFHQDULR
DQGWZRFOLPDWHFKDQJHVFHQDULRVEDVHGRQWKHUDQJH
RI DYDLODEOH JHQHUDO FLUFXODWLRQ PRGHOV *&0V :H
IROORZWKH:RUOG%DQN·V(FRQRPLFVRI$GDSWDWLRQWR
&OLPDWH&KDQJH($&&DQDO\VLV:RUOG%DQN
DQGPRGHOWKHFOLPDWHFKDQJHVFHQDULRVXQGHUWKH$
65(6HPLVVLRQVVFHQDULRVHH,3&&XVLQJWKH
JOREDO FOLPDWH PRGHOV *&0V RI WKH 8QLWHG 6WDWHV·
1DWLRQDO &HQWHU IRU $WPRVSKHULF 5HVHDUFK 1&$5
DQG RI WKH &RPPRQZHDOWK 6FLHQWLÀF DQG ,QGXVWULDO
)LJXUH:DWHUZLWKGUDZDOVIRUDJULFXOWXUHDVDSHUFHQWDJHRIPHDQDQQXDOUXQRII0$5LQ
6RXUFH$XWKRUV·FDOFXODWLRQV
75$'($1'(19,5210(175(9,(:
IRU HFRQRPLF UHJLRQV RI WKH ZRUOG ZH LQWHUVHFW
WKH ULYHU EDVLQV ZLWK WKHVH HFRQRPLF UHJLRQV WR
IRUPIRRGSURGXFWLRQXQLWV)38VVHH6WU]HSHN
DQG 0F&OXVNH\ DQG 5RVHJUDQW HW DO D
DQG E ZKLFK IRUP WKH JHRJUDSKLF XQLW RI RXU
DQDO\VLV )RU HDFK )38 RXU EDVHOLQH GDWD LQFOXGH
FXUUHQW0$5YDOXHVDJULFXOWXUDOZLWKGUDZDOVDQG
0,ZLWKGUDZDOV,QURXJKO\SHUFHQWRI
ZRUOGZLGH0$5ZDVZLWKGUDZQIRUDJULFXOWXUHDQG
SHUFHQWZDVZLWKGUDZQIRU0,XVHÀJXUH
5HVHDUFK2UJDQLVDWLRQRI$XVWUDOLDZKLFKWKH:RUOG
%DQNFRQVLGHUVWRUHSUHVHQWJHQHUDOO\ZHWWHUDQGGULHU
FOLPDWH PRGHOV UHVSHFWLYHO\ ,Q WRWDO ZH FRQVLGHU
QLQHVFHQDULRVHDFKZLWKDGLIIHUHQWFOLPDWHGHPDQG
FRPELQDWLRQDQGWKHQFRPSDUHHDFKWRWKH\HDU
EDVHOLQH
7R PRGHO FKDQJHV LQ 0$5 ZH XVH WKH &/,581 ,,
K\GURORJLF PRGHO 6WU]HSHN HW DO IRUWKFRPLQJ
ZKLFKLVWKHODWHVWPRGHOLQWKH´.DF]PDUHNVFKRROµ
RI K\GURORJLF PRGHOV <DWHV GHYHORSHG
VSHFLÀFDOO\ IRU DQDO\VLQJ WKH LPSDFW RI FOLPDWH
FKDQJH RQ UXQRII DQG H[WUHPH HYHQWV RQ DQ DQQXDO
EDVLV &/,581 ,, PRGHOV UXQRII LQ ZRUOG ULYHU
EDVLQV ZLWK FOLPDWH LQSXWV DQG VRLO FKDUDFWHULVWLFV
DYHUDJHG RYHU HDFK ULYHU EDVLQ %HFDXVH GDWD RQ
DJULFXOWXUDO DQG 0, ZLWKGUDZDOV DUH DYDLODEOH
%)LQGLQJVWKUHDWVWRZDWHU
IRUDJULFXOWXUH
:HÀQGWKDW()5VDQGLQFUHDVHG0,ZDWHUGHPDQGV
WRJHWKHU ZLOO FDXVH DQ SHU FHQW UHGXFWLRQ LQ WKH
7DEOH3HUFHQWDJHRIDJULFXOWXUDOZDWHUWKUHDWHQHGLQWKHJHRSROLWLFDOUHJLRQVQLQHVFHQDULRVD
1RFOLPDWHFKDQJH
5HJLRQFRXQWU\
:RUOG
(XURSH
(XURSHDQ8QLRQ
1RUWK:HVWHUQ
(XURSH
8QLWHG.LQJGRP
)RUPHU6RYLHW8QLRQ
$IULFD
6XE6DKDUDQ$IULFD
1LOH5LYHU%DVLQ
1RUWK$PHULFD
$VLD
&KLQD
,QGLD
/DWLQ$PHULFDDQG
WKH&DULEEHDQ
%UD]LO
2FHDQLD
$JULFXOWXUDO
0,
ZLWKGUDZDOV
0,
()5V
DQG
ELOOLRQP
()5V
1&$5ZHW
&6,52GU\FOLPDWHFKDQJH
FOLPDWHFKDQJH
0,
0,
0,
0,
()5V
()5V DQG
DQG
()5V
()5V
1RWHD$JULFXOWXUDOZDWHUDYDLODELOLW\LQ1RUWK$PHULFDLQFUHDVHVE\SHUFHQWXQGHUWKH0,VFHQDULRV
7KLVRFFXUVEHFDXVH0,DQGDJULFXOWXUDOZLWKGUDZDOVLQ1RUWK$PHULFDH[FHHG0$5LQWKH
&RORUDGRDQG5LR*UDQGHEDVLQVEXW0,GHFOLQHVLQ$VDUHVXOWDGGLWLRQDOZDWHULVPDGH
DYDLODEOHWRWKHVHFRQVWUDLQHGEDVLQV
()5VHQYLURQPHQWDOÁRZUHTXLUHPHQWV
0,PXQLFLSDODQGLQGXVWULDOGHPDQG
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
DYDLODELOLW\ RI ZRUOGZLGH ZDWHU IRU DJULFXOWXUH E\
0HHWLQJ ()5V ZKLFK FDQ QHFHVVLWDWH PRUH
WKDQ SHU FHQW RI WKH PHDQ DQQXDO UXQRII LQ D
EDVLQ GHSHQGLQJ RQ LWV K\GURJUDSK SUHVHQWV WKH
VLQJOH ELJJHVW WKUHDW WR WKH DYDLODELOLW\ RI ZDWHU IRU
DJULFXOWXUH 1H[W DUH LQFUHDVHV LQ 0, GHPDQGV
ZKLFK DUH SURMHFWHG WR JURZ XSZDUGV RI SHU
FHQW E\ LQ GHYHORSLQJ FRXQWULHV ZLWK UDSLGO\
LQFUHDVLQJ SRSXODWLRQV DQG LQFRPHV 7KH FRPELQHG
HIIHFWRIWKHVHKLJKHUGHPDQGVFRXOGEHGUDPDWLFLQ
VHYHUDOKRWVSRWVZKLFKLQFOXGHQRUWKHUQ$IULFD&KLQD
,QGLDSDUWVRI(XURSHWKHZHVWHUQ8QLWHG6WDWHVDQG
HDVWHUQ$XVWUDOLDDPRQJRWKHUV7KHVHDUHDVWHQGWR
EHDOUHDG\ZDWHUVWUHVVHGGXHWRORZZDWHUVXSSOLHV
FXUUHQW ODUJHVFDOH DJULFXOWXUDO RU 0, GHPDQGV RU
ERWK
7DEOHGLVSOD\VWKHIUDFWLRQRIDJULFXOWXUDOZDWHU
ZLWKGUDZDOVWKDWPD\EHWKUHDWHQHGE\LQFUHDVLQJ0,
GHPDQGV DQG ()5V XQGHU WKH WZR FOLPDWH FKDQJH
VFHQDULRV 8QGHU WKH QR FOLPDWH FKDQJH VFHQDULR
RXUPRGHOVLQGLFDWHWKDWLQFUHDVHVLQ0,GHPDQGV
()5V DQG FRPELQHG 0, GHPDQGV DQG ()5V ZLOO
UHTXLUH SHU FHQW SHU FHQW DQG SHU FHQW
UHVSHFWLYHO\ RI ZRUOGZLGH DJULFXOWXUDO ZDWHU LQ %\YROXPHDJULFXOWXUDOZDWHULQ$VLDDFFRXQWVIRURYHU
WZRWKLUGVRIWKHJOREDOWRWDORIWKUHDWHQHGDJULFXOWXUDO
ZDWHU E\ YROXPH 0RGHOOLQJ UHVXOWV LQGLFDWH WKDW
LQFUHDVHV LQ ()5V DQG 0, GHPDQG WRJHWKHU ZLOO
WKUHDWHQ QHDUO\ SHU FHQW RI DJULFXOWXUDO ZDWHU LQ
FRXQWULHV RI WKH (XURSHDQ 8QLRQ DQG WKH IRUPHU
6RYLHW8QLRQ,QVXE6DKDUDQ$IULFDUDSLGO\ULVLQJ0,
GHPDQGVDOVRWKUHDWHQZDWHUIRUDJULFXOWXUH
&OLPDWH FKDQJH ZLOO DIIHFW WKH VSDWLDO DQG WHPSRUDO
GLVWULEXWLRQ RI UXQRII DQG WKXV FKDQJH DYDLODELOLW\
IURPWKHVXSSO\VLGH%DVHGRQZHWDQGGU\FOLPDWH
VFHQDULRVZHÀQGWKDWZDWHUDYDLODELOLW\IRUDJULFXOWXUH
ZLOOLQFUHDVHLQ1RUWK$PHULFDDQG$VLDDQGGHFUHDVH
LQ $IULFD DQG /DWLQ $PHULFD DQG WKH &DULEEHDQ ,Q
(XURSHZDWHUDYDLODELOLW\ZLOOLQFUHDVHXQGHUWKHZHW
PRGHO DQG GHFUHDVH XQGHU WKH GU\ PRGHO 2YHUDOO
WKHVH UHVXOWV VXJJHVW WKDW E\ DOWKRXJK WKH
HIIHFWV RI FOLPDWH FKDQJH RQ DQQXDO DJULFXOWXUDO
ZDWHU DYDLODELOLW\ ZLOO EH VLJQLÀFDQW WKH HIIHFWV RI
JURZLQJ0,GHPDQGVDQG()5VPD\EHHYHQPRUH
SURQRXQFHG ,PSRUWDQWO\ WKHVH FOLPDWH FKDQJH
UHVXOWV FRQVLGHU FKDQJHV LQ 0$5 RQO\ DQG WKXV GR
QRW DFFRXQW IRU SRWHQWLDO FKDQJHV LQ VHDVRQDO ZDWHU
DYDLODELOLW\ LQFUHDVHV LQ FURS ZDWHU GHPDQG FDXVHG
E\ KLJKHU WHPSHUDWXUHV FKDQJHV LQ WKH IUHTXHQF\
DQGVHYHULW\RIH[WUHPHHYHQWVFKDQJHVLQ\LHOGIURP
VWRUDJH UHVHUYRLUV DQG D YDULHW\ RI RWKHU LPSRUWDQW
FOLPDWHFKDQJHHIIHFWV
75$'($1'(19,5210(175(9,(:
1//'06#4;U *'/2#%61()4+(11&722.;*#+0510
4''0*175'#5/+55+105U*'#5'1(#
1((''#.7'*#+0$'69''0#0<#0+##0&
'4/#0;
(.UDLQ./LQQHDQG0*DHEOHU
*,=*HUPDQ\
$EVWUDFW
$JULFXOWXUHLVDPDMRUVRXUFHRIJUHHQKRXVHJDV*+*HPLVVLRQVDQGWKXVFRQWULEXWHVVLJQLÀFDQWO\WR
FOLPDWHFKDQJH$WWKHVDPHWLPHLWKDVKXJHSRWHQWLDOWRUHGXFHHPLVVLRQVDQGFRXOGHYHQFRQWULEXWHWR
FDSWXULQJVHTXHVWHULQJFDUERQGLR[LGH&2IURPWKHDWPRVSKHUHWKURXJKWKHFXOWLYDWLRQRIWUHHFURSV
,WLVGLIÀFXOWWRDVVHVVZKHUHWRPDNHHIIHFWLYHFKDQJHVZLWKRXWNQRZLQJIDFWVRQHPLVVLRQVRXUFHVDQG
TXDQWLWLHV²\RXFDQRQO\PDQDJHZKDW\RXFDQPHDVXUH7KHUHIRUHPHWKRGVWRHVWLPDWHVHTXHVWUDWLRQ
DQG HPLVVLRQV DUH FXUUHQWO\ EHLQJ GHYHORSHG DQG WKHLU UHVXOWV LQGLFDWHG LQ ´SURGXFW FDUERQ IRRWSULQWVµ
LH*+*HPLVVLRQVSHUXQLWRISURGXFW:KLOHPHWKRGVYDU\ZLGHO\WKH\VHHPWRFRQYHUJHDURXQGWKH
HPHUJLQJ,62VWDQGDUG
7KHUHDUHRQO\DIHZSUDFWLFDOH[DPSOHVRIFDUERQIRRWSULQWHVWLPDWHVDORQJHQWLUHDJULIRRGFKDLQVEXW
WKH\ VHUYH DV YDOXDEOH FDVH VWXGLHV IURP ZKLFK WR GUDZ VRPH FRQFOXVLRQV )LUVWO\ &2 VHTXHVWUDWLRQ
HVWLPDWLRQV KDYH JHQHUDOO\ EHHQ H[FOXGHG IURP WKH HTXDWLRQ ZKLFK GLVFULPLQDWHV DJDLQVW WUHH FURS
DJULFXOWXUDO SURGXFWLRQ V\VWHPV 6HFRQGO\ HPLVVLRQV IURP SULPDU\ SURGXFWLRQ KDYH XVXDOO\ EHHQ ZHOO
UHÁHFWHG 7KLUGO\ UHVXOWV IURP SURFHVVLQJ DQG WUDQVSRUW KDYH WHQGHG WR EH VPDOOHU WKDQ ZDV DVVXPHG
SULRUWRWKHDQDO\VHV)LQDOO\*+*HPLVVLRQVLQFRQQHFWLRQZLWKIRRGSUHSDUDWLRQHVSHFLDOO\IRUOLIHVW\OH
DQGFRQYHQLHQFHIRRGVWHQGWREHPXFKKLJKHUWKDQZDVDVVXPHGEHIRUHWKHVWXGLHVZHUHXQGHUWDNHQ
&XUUHQW*+*DFFRXQWLQJV\VWHPVGLIIHUFRQVLGHUDEO\LQLPSRUWDQWDVSHFWVVXFKDVLQWHUPVRIZKHWKHU
WKH\LQFOXGHRURPLWVHTXHVWUDWLRQ,IDSSURSULDWHPLWLJDWLRQVWUDWHJLHVDUHWREHGHYHORSHGKDUPRQL]HG
PHWKRGV DUH QHHGHG WKDW VKRXOG PRUH DFFXUDWHO\ SRUWUD\ WKH RYHUDOO SLFWXUH DQG DSDUW IURP WKH PDLQ
VRXUFHVRIHPLVVLRQVDOVRUHSRUWDGHTXDWHO\RQVHTXHVWUDWLRQ
$,QWURGXFWLRQ
7KH TXHVWLRQ RI KRZ WR FRSH ZLWK FOLPDWH FKDQJH
DQG UHGXFH *+* HPLVVLRQV LV FXUUHQWO\ KLJK RQ WKH
LQWHUQDWLRQDODJHQGD6LQFHDJULFXOWXUHLVFRQVLGHUHG
RQHRIWKHNH\VHFWRUVFRQWULEXWLQJWRVXFKHPLVVLRQV
LWLVQHFHVVDU\WRFRQVLGHUZD\VDQGPHDQVE\ZKLFK
DJULFXOWXUDO SUDFWLFHV FRXOG ORZHU HPLVVLRQV RU HYHQ
FDSWXUH WKHP HJ WKURXJK VHTXHVWUDWLRQ /RZHULQJ
HPLVVLRQVLVSRVVLEOHE\UHGXFLQJYDULRXVDJULFXOWXUDO
LQSXWVZKLOHPDLQWDLQLQJRXWSXWDWWKHVDPHOHYHO7KLV
LVJHQHUDOO\XQGHUVWRRGDVLQFUHDVLQJWKHHIÀFLHQF\RI
DSURFHVV$VHFRQGLQWHUYHQWLRQLVWRUHPRYH*+*V
IURPWKHDWPRVSKHUHE\IRUH[DPSOH´VHTXHVWUDWLRQµ
ZKLFKFDSWXUHV&2LQELRPDVVIURPWKHDWPRVSKHUH
7KLV LV DQ RSWLRQ SDUWLFXODUO\ VXLWHG WR WKH FXOWLYDWLRQ
RI SHUHQQLDOV LH WUHH FURSV 7KHVH SODQWV VWRUH D
ODUJH SURSRUWLRQ RI WKH FDSWXUHG &2 DV FDUERQ LQ
WKHLU VWDQGLQJ DQG URRW ELRPDVV DQG HYHQ LQ WKHLU
OHDYHV DQG IUXLW EXW WKH ODWWHU DUH XVXDOO\ TXLFNO\
FRQVXPHGRUGLVSRVHGRIWKHUHE\UHWXUQLQJWKH&2
WR WKH DWPRVSKHUH +RZHYHU WKH RYHUDOO EDODQFH RI
&2VWRUHGLQELRPDVVDQGRYHUVHYHUDO\HDUVPD\
EHTXLWHVXEVWDQWLDODQGZRUWKFRQVLGHULQJLQWHUPVRI
FOLPDWHFKDQJHPLWLJDWLRQ
7KHJHQHULF*+*IRRWSULQWRIDWUHHFURS
YDOXHFKDLQ
:KHQORRNLQJJHQHULFDOO\DWDWUHHFURSEDVHGYDOXH
FKDLQ ² IURP LQSXW VXSSO\ WR SULPDU\ SURGXFWLRQ
WUDQVSRUW SURFHVVLQJ WUDGH UHWDLO DQG FRQVXPSWLRQ
² WKHUH DUH PDQ\ VWDJHV LQYROYLQJ *+* HPLVVLRQV
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
)LJXUH2YHUYLHZRI&2VHTXHVWUDWLRQDQG*+*HPLVVLRQVLQDFURSEDVHGYDOXHFKDLQ
6RXUFH$GDSWHGIURP.UDLQHWDO
XVXDOO\ FDOFXODWHG LQ &2 HTXLYDOHQWV ² &2H DQG
RQHORFDWLRQZKHUHVHTXHVWUDWLRQWDNHVSODFHÀJXUH
‡ )LQDOO\ HPLVVLRQV UHVXOWLQJ IURP HQHUJ\
FRQVXPSWLRQLQIRRGSUHSDUDWLRQDWWKHKRXVHKROG
OHYHO
7KH OLJKW SDUWV RI WKH IRRWSULQWV LQ WKH DERYH ÀJXUH
GHQRWH WKDW &2 LV VHTXHVWHUHG ZKLOH WKH UHGGDUN
SDUWV UHSUHVHQW HPLVVLRQV 7KH VL]H RI WKH IRRWSULQW
LQGLFDWHV WKH YROXPH RI HPLWWHG RU FDSWXUHG &2H
XVXDOO\H[SUHVVHGLQWRQVRI&2HSHURXWSXWXQLW,Q
WKHDERYHH[DPSOHLWLVDVVXPHGWKDWPRUH&2HLV
FDSWXUHGWKDQHPLWWHGGXULQJWKHSULPDU\SURGXFWLRQ
SURFHVV ZKHUHDV KLJK DPRXQWV RI HPLVVLRQV RFFXU
ZKHQ WKH SURGXFW LV SUHSDUHG IRU FRQVXPSWLRQ
DQG FRQVXPHG ,Q EHWZHHQ WKHUH DUH HPLVVLRQV
FRQQHFWHGZLWKWKHRWKHUVWDJHVRIWKHYDOXHFKDLQ
,QRUGHUWREHDEOHWRGHFLGHZKHUHWRUHGXFHHPLVVLRQV
ZLWKLQDYDOXHFKDLQLWLVQHFHVVDU\WRGHWHUPLQHKRZ
PXFK*+*LVEHLQJHPLWWHGRUVHTXHVWHUHGDWHDFK
VWDJH RI WKH YDOXH FKDLQ DV D EDVLV IRU LGHQWLI\LQJ
WKH KRWVSRWV ² \RX FDQ RQO\ PDQDJH ZKDW \RX FDQ
PHDVXUH )RU WKLV FXUUHQWO\ WKHUH DUH PRUH WKDQ LQLWLDWLYHV ZRUNLQJ RQ YDULRXV IRRWSULQWLQJ PHWKRGV
DQGVWDQGDUGVVXFKDV,62WKH*UHHQKRXVH
*DV 3URWRFRO 3URGXFW $FFRXQWLQJ DQG 5HSRUWLQJ
6WDQGDUGDQG3$6+RZHYHUVRIDUWKHUHLVQR
VLQJOH FRPPRQ FDOFXODWLRQ PHWKRG DOWKRXJK WKHUH
VHHPVWREHFRQYHUJHQFHDURXQGWKHHPHUJLQJ,62
VWDQGDUGZKLFKDSSHDUHGDVGUDIWLQ%XW
QRQH RI WKH VWDQGDUGV DUH SURGXFWVSHFLÀF DQG ZLOO
VWLOOQHHGWREHEURNHQGRZQWRVHFWRUSURGXFWJURXS
VSHFLÀFUXOHV$QRWKHUPDMRUWDVNVWLOOWREHWDFNOHGLV
WRGHYHORSDPHWKRGWKDWUHÁHFWVWKHDFWXDOVLWXDWLRQ
RQ WKH IDUP VXIÀFLHQWO\ DFFXUDWHO\ ZKLOH UHPDLQLQJ
UHDVRQDEOHZLWKUHVSHFWWRHIIRUWVDQGFRVWV
,QWKHIROORZLQJWKHYDULRXVVWDJHVIURPLQSXWVXSSO\
WRFRQVXPSWLRQDUHGLVFXVVHGEULHÁ\
0DLQHPLVVLRQKRWVSRWV
‡ /DQGXVH FKDQJH HVSHFLDOO\ ZKHQ SULPDU\ IRUHVW
LVFRQYHUWHGLQWRODQGIRUDQQXDOFURSSURGXFWLRQ
‡ $SSOLFDWLRQ RI DJURFKHPLFDOV HVSHFLDOO\ QLWURJHQ
IHUWLOL]HU SURGXFHG WKURXJK DQ LQWHQVLYH HQHUJ\
FRQVXPLQJ LQGXVWULDO SURFHVV DQG QLWURJHQ ÀHOG
HPLVVLRQVLQWKHIRUPRIQLWURXVR[LGH
‡ )RVVLO IXHO DQG HQHUJ\FRQVXPLQJ SURFHVVHV
GXULQJ ODQG SUHSDUDWLRQ FURS PDLQWHQDQFH
KDUYHVWLQJDQGFRQVHUYLQJRIKDUYHVWV
‡ (PLVVLRQVIURPZDVWHZDWHUPHWKDQH
‡ )RVVLOIXHODQGHQHUJ\FRQVXPLQJSURFHVVHVVXFK
DV LQGXVWULDO SURFHVVLQJ DQG LQWHUQDO GRPHVWLF
DQGWUDQVQDWLRQDOWUDQVSRUWDWLRQ
%6RPHH[SHULHQFHVZLWKFDUERQ
IRRWSULQWLQJLQDJULFXOWXUDO
YDOXHFKDLQV
6R IDU IRU DJULFXOWXUH WKHUH DUH RQO\ YHU\ IHZ FDVHV
SXEOLVKHGWKDWVSDQDQHQWLUHYDOXHFKDLQ2QHVXFK
H[DPSOHLVH[DPLQHGEHORZLQPRUHGHWDLO
75$'($1'(19,5210(175(9,(:
)LJXUH&DUERQIRRWSULQWDORQJWKHYDOXHFKDLQIRURQHEUHZHGFXSRI7FKLER5DULW\0DFKDUH3ULYDWH&RIIHH
6RXUFH$GDSWHGIURP7FKLER*PE+3&)3LORW3URMHFW*HUPDQ\
8QGHU WKH 3URGXFW &DUERQ )RRWSULQW 3&) SURMHFW
*HUPDQ\ YDULRXV FRPPRGLWLHV ZHUH H[DPLQHG ZLWK
UHVSHFWWRWKHLU*+*HPLVVLRQVRQHRIWKHPEHLQJD
UDULW\FRIIHHIURP0DFKDUHIDUPLQWKH8QLWHG5HSXEOLF
RI 7DQ]DQLD 7KH DVVHVVPHQWV ZHUH EDVHG RQ ,62
DQG 3$6 D SLRQHHULQJ PHWKRG
GHYHORSHGE\WKH%ULWLVK6WDQGDUGV,QVWLWXWLRQ%6,WR
DVVHVV*+*HPLVVLRQVLQWKHOLIHF\FOHVRIJRRGVDQG
VHUYLFHV
$OOHPLVVLRQVPHDVXUHGLQÀJXUHZHUHFDOFXODWHG
ZLWKUHIHUHQFHWRRQHEUHZHGFXSRIFRIIHHFRQWDLQLQJ
PO RI ZDWHU DQG J RI FRIIHH ,W VKRZV WKDW WKH
PDMRU HPLVVLRQV RFFXU GXULQJ SULPDU\ SURGXFWLRQ
SHU FHQW IROORZHG E\ FRQVXPSWLRQ SHUFHQW6XUSULVLQJO\HPLVVLRQVIURPURDVWLQJ
SHUFHQWDQGHYHQIURPLQWHUQDWLRQDOWUDQVSRUW
SHU FHQW ZHUH UDWKHU ORZ 7KH VWXG\ PHQWLRQV WKDW
0DFKDUHIDUPLVDQROGFRIIHHIDUPDQGWKDWFKDQJHV
LQODQGXVHZHUHQRWFRQVLGHUHG1RUPDOO\HPLVVLRQV
IURPODQGXVHFKDQJHVDUHWDNHQLQWRDFFRXQWLIWKH\
KDYH WDNHQ SODFH ZLWKLQ WKH ODVW \HDUV LH DIWHU
0RVW RI WKH HPLVVLRQV ZHUH UHODWHG WR WKH
DSSOLFDWLRQRIDJURFKHPLFDOV+RZHYHURQHLPSRUWDQW
IDFWRU QDPHO\ WKH VHTXHVWUDWLRQ RI &2 WKURXJK WKH
FRIIHHSODQWVVKDGHWUHHVRURWKHUWUHHVLQWKHFRIIHH
ÀHOGZDVRPLWWHG,IWKDWKDGEHHQWDNHQLQWRDFFRXQW
WKH ÀJXUHV IRU HPLVVLRQV GXULQJ SULPDU\ SURGXFWLRQ
ZRXOGKDYHEHHQVLJQLÀFDQWO\ORZHU)RUH[DPSOHWKH
HPLVVLRQ EDODQFH IRU WKH .HQ\DQ %DUDJZL )DUPHUV·
&RRSHUDWLYH6RFLHW\LQÀJXUHVKRZVWKDWWRWDO*+*
HPLVVLRQVDWSURGXFWLRQVWDJHZHUHHYHQQHJDWLYH
7KH LGHQWLÀFDWLRQ RI FRQVXPSWLRQ DV D KRWVSRW
DSDUW IURP SULPDU\ SURGXFWLRQ EHFRPHV HYHQ
PRUHLQWHUHVWLQJZKHQORRNLQJDWWKHYDULRXVZD\VRI
SUHSDULQJFRIIHH
&RIIHHLVXVXDOO\SUHSDUHGIRUFRQVXPSWLRQLQGLIIHUHQW
ZD\V DQG WKHVH FDQ KDYH YHU\ GLIIHUHQW FDUERQ
IRRWSULQWVDVÀJXUHVKRZV7KHVWXG\DVVXPHGD
PL[RISUHSDUDWLRQPHWKRGVZLWKDQDYHUDJHRI
JRI&2HSHUFXS7KHQRUPDOÀOWHUGULSPHWKRGKDV
D IRRWSULQW RI RQO\ J RI &2 ZKLOH D PRGHUQ
DXWRPDWLF FRIIHH PDFKLQH ² ZKLFK QHHGV D ORW RI
HQHUJ\WRSUHVVWKHZDWHUYDSRXUWKURXJKWKHFRIIHH
SRZGHU ² HPLWV DQ HQRUPRXV TXDQWLW\ RI J
RI &2H ,I DOO WKH 0DFKDUH FRIIHH ZRXOG KDYH EHHQ
SUHSDUHG XVLQJ RQO\ DXWRPDWLF FRIIHH PDFKLQHV
WKLV ZRXOG KDYH FKDQJHG WKH WRWDO FDUERQ IRRWSULQW
RIWKHYDOXHFKDLQWRJRI&2H²
ZLWK WKH FRIIHH PDFKLQH DFFRXQWLQJ IRU
FORVH WR SHU FHQW RI DOO *+* HPLVVLRQV RI WKH
YDOXHFKDLQ/RRNLQJEH\RQGWKHVHÀJXUHVLWPXVWEH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
)LJXUH&DUERQIRRWSULQWLQSUHSDULQJDFXSRIFRIIHH
Carbon footprint in the use phase
Mix of preparation methods
17.90
Automatic coffee machine
60.27
Filter drip
10.04
French press
10.04
0
10
20
30
40
50
60
70
g CO2 e / cup of coffee
6RXUFH$GDSWHGIURP7FKLER*PE+3&)3LORW3URMHFW*HUPDQ\
UHFRJQL]HGWKDWEHFDXVHWKHVHHPLVVLRQVDULVHIURP
HQHUJ\ FRQVXPSWLRQ WKH DVVXPHG HOHFWULFLW\ PL[ LV
DQRWKHULPSRUWDQWIDFWRULQWKHFDOFXODWLRQV,IFDUERQ
QHXWUDO HOHFWULFLW\ ZHUH WR EH XVHG LW ZRXOG UHGXFH
RU HYHQ QHXWUDOL]H WKH FDUERQ HPLVVLRQV IURP VXFK
SURFHVVHV
7KLVGHPRQVWUDWHVYHU\LPSUHVVLYHO\KRZRXUPRGHUQ
OLIHVW\OH KDV EHFRPH D SULPDU\ VRXUFH RI *+*
HPLVVLRQV ,W VKRZV WKDW FKDQJHV DUH QHHGHG QRW
RQO\LQSULPDU\SURGXFWLRQEXWDOVRLQFRQVXPSWLRQ
,W DOVR VKRZV ZKHUH ZH DV FRQVXPHUV FDQ PDNH D
GLIIHUHQFHGRZHUHDOO\QHHGWRGULQNFRIIHHSUHSDUHG
E\ DQ DXWRPDWLF FRIIHH PDFKLQH" $QG FDQ LQYHQWLYH
FRPSDQLHVQRWSURGXFHFRIIHHPDFKLQHVWKDWUHTXLUH
IDUOHVVHQHUJ\"$WWKHVDPHWLPHJRYHUQPHQWVDQG
SROLF\PDNHUV FRXOG GLUHFW WKH HQHUJ\ VHFWRU LQWR
SURYLGLQJPRUHFDUERQQHXWUDOHOHFWULFLW\7KHSRLQWLV
WKDW WKH IDFWV QHHG WR EH HVWDEOLVKHG VR WKDW EHWWHU
DOWHUQDWLYHV FDQ EH LGHQWLÀHG DQG HIIHFWLYH FKDQJHV
PDGH
&5HGXFLQJWKHFDUERQIRRWSULQWE\
LQFUHDVLQJWUHHFURSELRPDVVDQG
FKDQJLQJFURSSLQJV\VWHPV
,W LV XQIRUWXQDWH WKDW PRVW RI WKH FDUERQ IRRWSULQW
DVVHVVPHQW PHWKRGV RPLW RU GR QRW FRQVLGHU
ELRPDVV FUHDWLRQ DQG WKXV VHTXHVWUDWLRQ WKURXJK
WUHH FURS V\VWHPV 7KH XQGHUO\LQJ DUJXPHQW JRHV
WKDW RQ WKH RQH KDQG WKH DPRXQW RI WUHHV LQ VXFK
V\VWHPVLVXVXDOO\VPDOODQGWKDWRQWKHRWKHUKDQG
WKH\ZLOOVRRQHURUODWHUEHFXWDQGUHWXUQWKHLUVWRUHG
*+*WRWKHDWPRVSKHUH
)LUVW RI DOO KRZ PXFK &2 FDQ EH FDSWXUHG LQ
DJULFXOWXUDO WUHH FURSV" 7KHUH DUH YHU\ GLIIHUHQW
VLWXDWLRQVDQGWKXVGDWDYDU\DORW$PDQJRWUHHFDQ
EHJURZQZLWKDKXJHFDQRS\²DVLVRIWHQWKHFDVHLQ
VPDOOKROGHUIDUPV²DQGFDQWKHUHIRUHEHYHU\VLPLODU
WR D IRUHVW WUHH RU LW FDQ EH NHSW VKRUW DQG SUXQHG
DV LQ LQWHQVLYH RUFKDUG V\VWHPV )ROORZLQJ D UHYLHZ
RI D QXPEHU RI UHSRUWV D JHQHUDO FRQFOXVLRQ LV WKDW
WKHDPRXQWRI&2FDSWXUHGLQELRPDVVLVURXJKO\LQ
WKH RUGHU RI D IDFWRU RI IURP DQQXDO FURSV ²
WRQVRI&2KDWRRUFKDUGWUHHV²WRQVRI&2
KDDQGIRUHVWV²WRQVRI&2KD7KXVLIWUHH
FURSVLQWKHH[LVWLQJIDUPLQJV\VWHPVZHUHLQFUHDVHG
DV PXFK DV SRVVLEOH RYHU PLOOLRQV RI KHFWDUHV WKLV
ZRXOGVXUHO\FRQVLGHUDEO\LQFUHDVHELRPDVVDQGWKXV
VHTXHVWHUHG&2 DFFXPXODWLRQ7KH)$2([$FWWRRO
IRUDVVHVVLQJ&2HHPLVVLRQVDORQJWKHOLIHF\FOHRI
D FRPPRGLW\ WDNHV DFFRXQW RI VHTXHVWHUHG FDUERQ
E\WUHHVDQGKDVEHHQHPSOR\HGVXFFHVVIXOO\E\*,=
LQFDVKHZWUHHFURSV\VWHPVLQ%XUNLQD)DVR7LQORW
/DQGXVH SODQQLQJ DQG DJULFXOWXUDO VWUDWHJLHV
VKRXOGPDNHXVHRIVXFKDWRRODVLWKHOSVGHWHUPLQH
WKHULJKWVWUDWHJLHVDQGLQFHQWLYHV
,W VKRXOG DOVR EH QRWHG WKDW RQFH D WUHH GLHV DQG
GHFD\V WKLV GRHV QRW DXWRPDWLFDOO\ PHDQ WKDW DOO
WKHFDUERQJRHVEDFNLQWRWKHDWPRVSKHUH7KHVRLO
XVXDOO\KDUERXUVVLJQLÀFDQWDPRXQWVRIFDUERQDQG
DSDUW IURP HPLWWLQJ *+* LW LV DOVR DEOH WR ELQG DQG
VWRUH FDUERQ )URP RXU RZQ H[SHULHQFH LQ .HQ\D
.UDLQHWDOVRLOVZLWKDGHSWKRIFP²FP
FRQWDLQDURXQGWRQVRI&2KD²RIWHQXSWR WLPHVPRUHWKDQWKHWUHHELRPDVV7KXVIDUPLQJDQG
FURSSLQJV\VWHPVDVZHOODVWKHLUZD\VDQGPHWKRGV
RIFXOWLYDWLRQGLIIHUZLGHO\ZLWKUHVSHFWWRWKHLUDELOLW\
WR VHTXHVWHU DQG VWRUH RU HPLW &2 )RU H[DPSOH
75$'($1'(19,5210(175(9,(:
)LJXUH2QIDUPHPLVVLRQVE\FDWHJRU\RIIDUPVLQ%DUDJZL.HQ\DNJRI&2HSHUNJRIFRIIHHFKHUU\
1.5 1.0 Carbon
stock
change
0.5 -
Kg. of CO2-e
0-0.5 -
Fertilizer
production
Fertilizer
induced
emissions
Pesticides
Total
emissions
Crop
residue
management
-1.0 -1.5 -2.0 -
Weighted average
Average
-2.5 -3.0 6RXUFH/LQQHHWDO
V\VWHPVLQYROYLQJ]HURRUPLQLPXPWLOODJHHPLWPXFK
OHVV&2WKDQSORXJKLQJE\WUDFWRURUKRH
$UHFHQWVWXG\5LN[RRUWFRQGXFWHGZLWKLQWKH
IUDPHZRUNRID*,=SXEOLFSULYDWHSDUWQHUVKLSSURMHFW
RQ &OLPDWH &KDQJH $GDSWDWLRQ DQG 0LWLJDWLRQ
VKRZHG WKDW D FRIIHH FXOWLYDWLRQ V\VWHP DGKHULQJ
WR D VXVWDLQDELOLW\ VWDQGDUG VXFK DV WKH 6XVWDLQDEOH
$JULFXOWXUH 1HWZRUN 6$1 VWDQGDUG HPLWV OHVV
&2H WKDQ RQH WKDW XVHV FRQYHQWLRQDO PHWKRGV
,Q DQRWKHU VWXG\ ZLWKLQ WKLV IUDPHZRUN FRQGXFWHG
WKURXJK WKH GHYHORSPHQW SDUWQHUVKLS EHWZHHQ *,=
DQG 6DQJDQD &RPPRGLWLHV /WG LQ .HQ\D FRIIHH
IDUPVDW%DUDJZL)DUPHUV·&RRSHUDWLYH6RFLHW\ZHUH
VDPSOHG LQ 'HFHPEHU WR GHWHUPLQH HPLVVLRQV
DQGVHTXHVWHUHGDPRXQWVRI&2HZLWKWKHKHOSRIWKH
&RRO)DUP7RRO/LQQHHWDO,WIRXQGWKDWRQ
IDUPQHWHPLVVLRQVZHUHRQDYHUDJHNJRI&2H
SHU NJ RI FRIIHH FKHUULHV ÀJXUH 7KH ZHLJKWHG
DYHUDJH DFFRUGLQJ WR HDFK IDUP·V SURGXFWLRQ
YROXPHZDVNJRI&2HNJRIFRIIHHFKHUULHV
(PLVVLRQV IURP IHUWLOL]HU SURGXFWLRQ DQG LQGXFHG
HPLVVLRQVIURPIHUWLOL]HUXVHDORQJZLWKFURSUHVLGXH
PDQDJHPHQW ZHUH WKH SULPDU\ HPLVVLRQ VRXUFHV
² HPLVVLRQ KRWVSRWV &DUERQ VHTXHVWUDWLRQ IURP
DERYH JURXQG ELRPDVV DQG PDQDJHPHQW SUDFWLFHV
VXFK DV LQFRUSRUDWLRQ RI UHVLGXHV FRPSRVW DQG
PDQXUH DFFRXQWHG IRU WKH PRVW VLJQLÀFDQW FDUERQ
VWRFNFKDQJHVLQWKHV\VWHPZKLFKODUJHO\RIIVHWWKH
HPLVVLRQV
'&RQFOXVLRQV
&XUUHQW*+*DFFRXQWLQJV\VWHPVGLIIHUFRQVLGHUDEO\
LQLPSRUWDQWDVSHFWVVXFKDVLQWHUPVRIZKHWKHUWKH\
LQFOXGHRURPLWVHTXHVWUDWLRQ,IDSSURSULDWHPLWLJDWLRQ
VWUDWHJLHVDUHWREHGHYHORSHGKDUPRQL]HGPHWKRGV
DUH QHHGHG WKDW VKRXOG PRUH DFFXUDWHO\ SRUWUD\ WKH
RYHUDOO SLFWXUH DQG DSDUW IURP WKH PDLQ VRXUFHV RI
HPLVVLRQVDOVRUHSRUWDGHTXDWHO\RQVHTXHVWUDWLRQ
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
1//'06#4;U 11&#56''&7%6+10U.1$#./2'4#6+8'
-XOLDQ3DUÀWW3ULQFLSDO5HVRXUFH$QDO\VW2DNGHQH+ROOLQV$\OHVEXU\8QLWHG.LQJGRPDQG
0DUN%DUWKHO6SHFLDO$GYLVRU:DVWHDQG5HVRXUFHV$FWLRQ3URJUDPPH%DQEXU\8QLWHG.LQJGRP
$EVWUDFW
‡ )RRGZDVWHLVDQLVVXHRILPSRUWDQFHWRJOREDOIRRGVHFXULW\DQGJRRGHQYLURQPHQWDOJRYHUQDQFH
<HWWKHUHLVLQVXIÀFLHQWUHOLDEOHGDWDIURPZKLFKWRHVWLPDWHWKHSURSRUWLRQRIJOREDOIRRGSURGXFWLRQ
WKDWLVZDVWHG
‡ $YRLGDEOH ORVVHV DUH UHJDUGHG DV JOREDOO\ VLJQLÀFDQW DQG WKHUHIRUH FRQVWLWXWH D PDMRU VRFLDO DQG
HQYLURQPHQWDOEXUGHQ+RZHYHUOHVVWKDQSHUFHQWRIDOOIXQGLQJIRUDJULFXOWXUDOUHVHDUFKLVDOORFDWHG
WRSRVWKDUYHVWV\VWHPV.DGHU
7KHUHDUHWKUHHSDUWLFXODUUHDVRQVZK\WKLVLVVXHQHHGVWREHDGGUHVVHGZLWKXUJHQF\
‡ 6RPHHVWLPDWHVVXJJHVWWKDWZDVWHFRXOGDFFRXQWIRUEHWZHHQDWKLUG)$2HDQGRQHKDOI
/XQGTYLVWGH)UDLWXUHDQG0ROGHQRIDOOFXUUHQWIRRGSURGXFWLRQ5HGXFWLRQRISRVWKDUYHVW
ZDVWH LQ GHYHORSLQJ FRXQWULHV DQG FRQVXPHU ZDVWH LQ KLJKLQFRPH FRXQWULHV DSSHDU WR RIIHU WKH
JUHDWHVWSRWHQWLDOVRFLDODQGHQYLURQPHQWDOJDLQV
‡ 7KHDEVROXWHTXDQWLW\RIIRRGZDVWHDOWKRXJKODUJHO\XQTXDQWLÀHGZLOOLQHYLWDEO\JURZRYHUWKHFRPLQJ
GHFDGHV DV SURGXFWLRQ LQFUHDVHV WR PHHW IXWXUH GHPDQG DQG DV LQFRPHV ULVH DPRQJVW JURZLQJ
SRSXODWLRQVLQQHZPHJDFLWLHVQRWDEO\LQWKH%5,&FRXQWULHVLH%UD]LOWKH5XVVLDQ)HGHUDWLRQ,QGLD
DQG&KLQDDQGDVGLHWVEHFRPHPRUHGLYHUVLÀHGDZD\IURPVWDUFK\VWDSOHIRRGVWRZDUGVIUHVKIUXLW
DQGYHJHWDEOHVGDLU\PHDWDQGÀVK
‡ 5HGXFWLRQRIIRRGZDVWHZRXOGFRQWULEXWHWRZLGHUSROLF\DJHQGDVWKDWDUHFULWLFDOWRWKHIXWXUHQDPHO\
LQFUHDVLQJSURGXFWLRQUHGXFLQJIRRGLQVHFXULW\DQGIRRGSULFHLQFUHDVHVLPSURYLQJVXVWDLQDELOLW\RI
WKHJOREDOIRRGVXSSO\FKDLQ)6&UHGXFLQJSUHVVXUHVRQODQGXVHDQGIUHVKZDWHUUHVRXUFHVDQG
UHGXFLQJJUHHQKRXVHJDVHV
$UHFHQWUHYLHZRIJOREDOIRRGZDVWHDQGSRWHQWLDOIRU
ZDVWHUHGXFWLRQFDUULHGRXWE\WKHDXWKRUVRIWKLVDUWLFOH
IRUWKH*RYHUQPHQWRIWKH8QLWHG.LQJGRP·V)RUHVLJKW
3URJUDPPH7KH)XWXUHRI)RRGDQG)DUPLQJ)RUHVLJKW
D SURYLGHV DQ RYHUYLHZ RI WKH FKDOOHQJHV DQG
SRVVLEOHVROXWLRQVIRUGHYHORSLQJFRXQWULHV
$:KDWFRXQWVDVIRRGZDVWH"
'LIIHUHQWZD\VRIGHÀQLQJIRRGZDVWHUHÁHFWGLIIHUHQW
UHVHDUFK REMHFWLYHV )URP D KXPDQ IRRG VXSSO\
SHUVSHFWLYH LW FDQ EH GHÀQHG DV HGLEOH PDWHULDO
LQWHQGHG IRU KXPDQ FRQVXPSWLRQ WKDW LV GLVFDUGHG
ORVW GHJUDGHG RU FRQVXPHG E\ SHVWV IURP KDUYHVW
WR FRQVXPHU )$2 )URP D JOREDO UHVRXUFH
HIÀFLHQF\ SHUVSHFWLYH WKH GHÀQLWLRQ PLJKW EH
H[WHQGHGWR LQFOXGH IRRG ÀW IRU KXPDQ FRQVXPSWLRQ
EXW LQWHQWLRQDOO\ XVHG DV DQLPDO IHHG 6WXDUW &XUUHQWO\ SHU FHQW RI JOREDO JUDLQ LV IHG WR FDWWOH
81(3
7KHWHUP´SRVWKDUYHVWORVVµLVRIWHQXVHGWRGHVFULEH
ORVVHV EHWZHHQ KDUYHVW DQG WKH RQZDUG VXSSO\ RI
SURGXFHWRPDUNHWVDQGHTXDWHVEURDGO\ZLWKZDVWH
LQ WKH )6& 7KH ODWWHU WHUP LV JHQHUDOO\ DSSOLHG WR
SRVWKDUYHVW SURFHVVLQJ GLVWULEXWLRQ DQG UHWDLOLQJ LQ
KLJKLQFRPHFRXQWULHVDQGLQFUHDVLQJO\LQHPHUJLQJ
HFRQRPLHV7KH)6&WKHUHIRUHHQFRPSDVVHVDZLGH
UDQJH RI DFWLYLWLHV WKDW LQFOXGH SURFHVVLQJ VWRUDJH
WUDQVSRUW DQG GLVWULEXWLRQ PDQXIDFWXULQJ ZKROHVDOH
DQG UHWDLO )XUWKHU XSVWUHDP WKHUH DUH IDFWRUV DW WKH
LQLWLDO ´SUHKDUYHVWµ VWDJHV WKDW DOVR FRQWULEXWH WR
ORVVHV )RU H[DPSOH WKH FDSWXUH DQG GLVFDUGLQJ RI
ÀVK VWRFNV EHIRUH WKH\ DUH ODQGHG XVXDOO\ UHVXOWLQJ
LQ WKHLU GHPLVH 6XFK ÀVK E\FDWFK UHSUHVHQWV D
VLJQLÀFDQWSURSRUWLRQRIÀVKFDXJKWLQJOREDOÀVKHULHV
)$2 7KH SDUDOOHO VLWXDWLRQ LQ DJULFXOWXUDO
V\VWHPV LQYROYHV ORVVHV WKDW RFFXU ZKHQ FURSV DUH
QRW KDUYHVWHG EXW DUH SORXJKHG EDFN LQWR WKH VRLO
6XFKIURQWHQGORVVHVDUHE\WKHLUYHU\QDWXUHGLIÀFXOW
WRPHDVXUHDFFXUDWHO\
/RVVHV DW WKH FRQVXPHU VWDJH LQYROYH D FRPSOH[LW\
RI KXPDQ DFWLYLWLHV DQG SURFHVVHV DQG HQFRPSDVV
IRRG ZDVWHG LQ WKH KRPH DV D UHVXOW RI SXUFKDVLQJ
EHKDYLRXU IRRG VWRUDJH PHDO SODQQLQJ DQG
SUHSDUDWLRQ RYHUSRUWLRQLQJ DQG QRW XVLQJ OHIWRYHUV
DQG RXW RI KRPH ZLWKLQ WKH IRRG KRVSLWDOLW\ VHFWRU
VXFKDVSODWHVFUDSLQJVDQGNLWFKHQZDVWH
7KH EHVW HQYLURQPHQWDO DQG VRFLRHFRQRPLF
RXWFRPHVFRQFHUQLQJIRRGZDVWHOLHLQLWVSUHYHQWLRQ
EXWIDLOLQJWKDWRSWLRQVIRUUHFRYHULQJYDOXHIURPIRRG
ZDVWH QHHG WR EH FRQVLGHUHG 7KHVH RSWLRQV PD\
LQFOXGHVXSSO\RIIHHGVWRFNWRORZHUJUDGHPDUNHWVIRU
KXPDQFRQVXPSWLRQRUGLYHUVLRQLQWRDQLPDOIHHGRU
LQWRQXWULHQWDQGHQHUJ\UHFRYHU\RSWLRQVDQDHURELF
GLJHVWLRQ DQG FRPSRVWLQJ 7KHVH URXWHV DUH VWLOO
FRQVLGHUHG ´IRRG ZDVWHµ DV WKH UHVXOWLQJ EHQHÀWV
DUHVPDOOFRPSDUHGZLWKWKHYDOXHRIWKHRULJLQDOIRRG
SURGXFWDQGWKHHQYLURQPHQWDOVDYLQJVDUHJHQHUDOO\
PRGHVW YLVjYLV WKH FXPXODWLYH HQYLURQPHQWDO
LPSDFWV DVVRFLDWHG ZLWK WKH DJULFXOWXUDO DQG )6&
VWDJHVRIWKHIRRGSURGXFWOLIHF\FOHV
%3RVWKDUYHVWORVVHVLQWKHIRRG
VXSSO\FKDLQ
,QPDQ\GHYHORSLQJFRXQWULHVDJULFXOWXUHUHPDLQVWKH
GRPLQDQWHFRQRPLFVHFWRU)$2F\HWPRVWRI
WKH UXUDO SRRU UHO\ RQ VKRUW IRRG VXSSO\ FKDLQV ZLWK
OLPLWHG SRVWKDUYHVW LQIUDVWUXFWXUH DQG WHFKQRORJLHV
ZKLFK FRQWULEXWH WR VXEVWDQWLDO SRVWKDUYHVW ORVVHV
&HUHDOV WKH PRVW VWXGLHG IRRG FRPPRGLW\ JURXS LQ
UHODWLRQ WR SRVWKDUYHVW ORVVHV 3DUÀWW %DUWKHO DQG
0DFQDXJKWRQ W\SLFDOO\ LQFXU SHU FHQW
ORVVHV EHWZHHQ SRVWKDUYHVW DQG SURFHVVLQJ VWDJHV
LQ GHYHORSLQJ FRXQWULHV 7KH FRPSDUDEOH GDWD IRU
LQGXVWULDOL]HGFRXQWULHVVXJJHVWVLPLODUSURSRUWLRQDWH
ORVVHV EXW WKHVH DUH DVVRFLDWHG ZLWK WKH FRQVXPHU
VWDJH )$2 H 3RVWKDUYHVW ORVVHV UHVXOW IURP
VSLOODJH SRRU VHSDUDWLRQ DQG GU\LQJ FRQWDPLQDWLRQ
DQGFRQVXPSWLRQE\URGHQWVDQGLQVHFWVDQGIXQJDO
DQGEDFWHULDOGLVHDVHV$WDPRUHIXQGDPHQWDOOHYHO
SRRUFKRLFHRIFURSLQUHODWLRQWRFOLPDWLFFRQGLWLRQV
DQG LQDGHTXDWH LQSXWV LQ DJULFXOWXUH DUH RIWHQ
XQGHUO\LQJ IDFWRUV FRQWULEXWLQJ WR ORVV )RUHVLJKW
E7KHORVVHVRISHULVKDEOHFURSVE\WKHLUYHU\
75$'($1'(19,5210(175(9,(:
QDWXUH DUH KLJKHU WKDQ WKRVH RI FHUHDOV DQG YDU\
FRQVLGHUDEO\E\UHJLRQDQGE\FRPPRGLW\W\SH'DWD
DYDLODEOH IURP ORZLQFRPH FRXQWULHV IRU D OLPLWHG
UDQJHRIIUHVKIUXLWDQGYHJHWDEOHVVXJJHVWORVVHVRI
RYHUSHUFHQW)$2H$OWKRXJKLWKDVEHHQ
VXJJHVWHG WKDW SRVWKDUYHVW ORVVHV DUH VRPHWLPHV
RYHUHVWLPDWHG 3DUÀWW %DUWKHO DQG 0DFQDXJKWRQ
WKLV SDUWO\ UHODWHV WR WKH GLIÀFXOW\ RI GHULYLQJ
´W\SLFDOµ ORVV HVWLPDWHV IRU D FURS DQG UHJLRQ ZKHQ
WKHOLPLWHGGDWDIURPÀHOGPHDVXUHPHQWVPD\UHODWHWR
VSHFLÀFORFDOUHVHDUFKREMHFWLYHVDQGH[WUHPHYDOXHV
PD\ PLVWDNHQO\ EH H[WUDSRODWHG WR HVWLPDWH ORVVHV
IURPDQHQWLUHFRXQWU\RUUHJLRQ7\OHU+RGJHV
%X]E\ DQG %HQQHWW ([WHQGHG IRRG VXSSO\
FKDLQV LQ GHYHORSLQJ FRXQWULHV WKDW SURYLGH IRRG IRU
JURZLQJXUEDQSRSXODWLRQVDUHOLNHO\WRLQYROYHPDQ\
LQWHUPHGLDULHV EHWZHHQ JURZHUV DQG FRQVXPHUV
ZKLFK PD\ OLPLW WKH SRWHQWLDO IRU JURZHUV WR UHFHLYH
KLJKHUSULFHVIRUTXDOLW\SURGXFHRUHYHQWRXQGHUVWDQG
ZKDWVRUWVRISURGXFHWKHPDUNHWUHTXLUHV7KHODFNRI
SULFHGLIIHUHQWLDOVDQGDJUHHGTXDOLW\FULWHULDEHWZHHQ
GLIIHUHQW SOD\HUV LQ WKH PDUNHW UHGXFHV WKH LQFHQWLYH
IRUVPDOOSURGXFHUVWRJUDGHSURGXFHRUWRLQYHVWLQ
VXLWDEOHVWRUDJHLQIUDVWUXFWXUHDQGWUDQVLWSDFNDJLQJ
,QWHUYHQWLRQV ZLWKLQ WKHVH V\VWHPV WHQG WR IRFXV
RQ LPSURYLQJ WHFKQLFDO FDSDFLW\ WR UHGXFH ORVVHV
LQFUHDVH HIÀFLHQF\ DQG UHGXFH WKH ODERXU LQWHQVLW\
RI WKH WHFKQRORJLHV WKDW DUH XVHG )RUHVLJKW F
+RGJHV %X]E\ DQG %HQQHWW $WWHPSWV WR
UHGXFHSRVWKDUYHVWORVVHVQHHGWRWDNHLQWRDFFRXQW
FXOWXUDO DQG ÀQDQFLDO LPSOLFDWLRQV RI DQ\ LQQRYDWLRQV
LQ SRVWKDUYHVW WHFKQRORJLHV ,Q \HDUV ZLWK IRRG
VXUSOXVHV WKH SULFHV UHFHLYHG IRU JRRGV WHQG WR EH
ORZ2QHRSWLRQWKHUHIRUHLVWRVWRUHJUDLQVXUSOXVHV
IRU OHDQ \HDUV EXW VXLWDEOH VWRUDJH IDFLOLWLHV PD\ EH
ODFNLQJ RU H[SHQVLYH ,QYHVWPHQW DQG HQJLQHHULQJ
VNLOOV DUH QHHGHG WR SURYLGH VROXWLRQV ,QGHHG WKHUH
DUHPDQ\H[DPSOHVRIUHODWLYHO\VLPSOHWHFKQRORJLHV
ZKLFKFDQSURYLGHHIIHFWLYHVROXWLRQVDQGGUDPDWLFDOO\
UHGXFHORVVHV8QLWHG1DWLRQV
/RRNLQJ WR WKH IXWXUH WKH SUHGLFWHG LQFUHDVH LQ WKH
JOREDOXUEDQSRSXODWLRQIURPSHUFHQWLQWKHSDVW
IHZ \HDUV WR SHU FHQW LQ ZKLFK LV H[SHFWHG
WR EH FRQFHQWUDWHG LQ ORZLQFRPH DQG HPHUJLQJ
HFRQRPLHV LV OLNHO\ WR OHDG WR DQ H[WHQVLRQ RI
)6&V DQG FRQVHTXHQWO\ LQFUHDVH SRVWKDUYHVW IRRG
ORVVHVVLJQLÀFDQWO\8QLWHG1DWLRQV+RZHYHU
LQIUDVWUXFWXUDO LPSURYHPHQWV SDUWLFXODUO\ GU\ DQG
FROGVWRUDJH IDFLOLWLHV SDFN KRXVHV URDGV SRUWV
WHOHFRPPXQLFDWLRQV DQG SRZHU VXSSOLHV KDYH WKH
SRWHQWLDO WR FRXQWHUDFW VXFK GHYHORSPHQWV ,Q VRPH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
%5,& FRXQWULHV SXEOLF VHFWRU LQYHVWPHQW LV EHLQJ
FRQVLGHUHGIRUDFFHOHUDWLQJWKLVSURFHVV)RUH[DPSOH
LQ,QGLDWKH*RYHUQPHQWLVGLVFXVVLQJDQ´HYHUJUHHQ
UHYROXWLRQµZKLFKZLOOLQYROYHWKHGHYHORSPHQWRIIRRG
SURFHVVLQJXQLWV)RUHVLJKWF
&(PHUJLQJHFRQRPLHVDQGKLJK
LQFRPHFRXQWULHV
,Q HPHUJLQJ HFRQRPLHV DQG KLJKLQFRPH FRXQWULHV
)6&VLQYROYHFORVHUOLQNVEHWZHHQJURZHUVVXSSOLHUV
SURFHVVRUVGLVWULEXWLRQV\VWHPVDQGPDUNHWVWKHUHE\
HQVXULQJJUHDWHUHFRQRPLHVRIVFDOHFRPSHWLWLYHQHVV
DQG HIÀFLHQF\ 'HYHORSPHQW RI PRUH LQGXVWULDOL]HG
)6&VFRXOGDOVRIRVWHUJURZWKLQWKHIRRGSURFHVVLQJ
VHFWRU,QPHGLXPDQGKLJKLQFRPHFRXQWULHVLWKDV
RIWHQ EHHQ DUJXHG WKDW WKH FHQWUDOL]HG SURFHVVLQJ
RI IRRG OHDGV WR EHWWHU UHVRXUFH HIÀFLHQF\ DQG OHVV
ZDVWH RYHUDOO +RZHYHU UHVHDUFK RQ FRQVXPHU IRRG
ZDVWHVXJJHVWVWKDWWKLVLVQRWWKHFDVH:5$3
FRQVXPHUV ZDVWH VLJQLÀFDQW TXDQWLWLHV RI IRRG
WKXV SRWHQWLDOO\ QHJDWLQJ WKH EHQHÀWV RI FHQWUDOL]HG
IRRG SURFHVVLQJ )XUWKHU ORVVHV DUH DVVRFLDWHG ZLWK
FRVPHWLFTXDOLW\VWDQGDUGVDSSOLHGE\UHWDLOHUVWRIUHVK
IUXLWDQGYHJHWDEOHVZKLFKFDQUHGXFHWKHYROXPHRI
PDUNHWDEOHDQGHGLEOHIRRGUHDFKLQJFRQVXPHUV7KLV
WUHQG LV LQFUHDVLQJO\ EHLQJ FRXQWHUEDODQFHG E\ WKH
JURZLQJ LQÁXHQFH RI UHWDLOHUV DQG PDQXIDFWXUHUV LQ
DJULFXOWXUDO GHYHORSPHQW JURXSV FURS VXVWDLQDELOLW\
JURXSV DQG VXVWDLQDEOH DJULFXOWXUH LQLWLDWLYHV DOO RI
ZKLFK DUH EULQJLQJ DERXW LPSURYHPHQWV LQ JURZLQJ
SUDFWLFHV DQG IXUWKHU UHGXFWLRQV LQ SRVWKDUYHVW
ORVVHV
,Q HPHUJLQJ HFRQRPLHV VXSHUPDUNHWV DUH WKH
PDLQ YHKLFOH IRU SURYLGLQJ GLYHUVLÀHG GLHWV IRU WKH
H[SDQGLQJ PLGGOH FODVVHV DQG WKH XUEDQ SRRU
7KHVH GHYHORSPHQWV DUH DOPRVW HQWLUHO\ GHSHQGHQW
RQ IRUHLJQ GLUHFW LQYHVWPHQW DQG VKRZ KLJK JURZWK
UDWHV LQ (DVWHUQ (XURSH SDUWV RI $VLD DQG /DWLQ
$PHULFD 5HDUGRQ 7LPPHU DQG %HUGHJXp 7KH QDWXUH DQG SDFH RI WKHVH GHYHORSPHQWV DUH
LQÁXHQFHG E\ WKH H[WHQW WR ZKLFK UHWDLOHUV E\SDVV
H[LVWLQJPDUNHWVDQGWUDGLWLRQDOZKROHVDOHUVWRVHFXUH
SURGXFHRIWKHUHTXLUHGVWDQGDUGDQGYROXPH0DQ\
RIWKHIDFWRUVWKDWPD\LQFUHDVHZDVWHLGHQWLÀHGLQWKH
)6&VRIHPHUJLQJHFRQRPLHVDUHVLPLODUWRWKRVHLQ
KLJKLQFRPH FRXQWULHV VXFK DV SD\PHQW WHUPV WKDW
GLVFRXUDJHVPDOOJURZHUVDQGV\VWHPVIRUGHPDQG
IRUHFDVWLQJ RUGHU SODQQLQJ DQG UHSOHQLVKPHQW WKDW
VRPHWLPHV OHDG WR RYHUSURGXFWLRQ +RZHYHU WKHUH
DUH OHVVRQV WKDW PLJKW EH OHDUQW IURP LQGXVWULDOL]HG
FRXQWULHV )RU LQVWDQFH WKH FRPELQHG HIIHFWV RI
FRQWUDFWXDO SHQDOWLHV IRU QRQGHOLYHU\ RI RUGHU
YROXPHVUHVLGXDOVKHOIOLIHSURGXFWWDNHEDFNFODXVHV
DQGSRRUGHPDQGIRUHFDVWLQJZHUHHVWLPDWHGWRGULYH
XSRYHUSURGXFWLRQDQGKLJKHUOHYHOVRIZDVWDJHE\
SHUFHQWLQWKH8QLWHG.LQJGRP)6&'HIUD
')RRGZDVWHE\FRQVXPHUVLQORZ
LQFRPHFRXQWULHV
7RGDWHWKHUHDUHOLWWOHSXEOLVKHGUREXVWGDWDRQWKH
VFDOHRIFRQVXPHUIRRGZDVWHLQORZLQFRPHFRXQWULHV
DQG HPHUJLQJ HFRQRPLHV +RZHYHU D FRQFOXVLRQ
IURP D UHFHQW ZRUNVKRS RQ JOREDO IRRG ZDVWH
SUHYHQWLRQ )RUHVLJKW F ZDV WKDW RYHUDOO WKH
VFDOHRIFRQVXPHUZDVWHDSSHDUVWREHORZHULQWKHVH
FRXQWULHV EXW LQ VRPH RI WKH HPHUJLQJ HFRQRPLHV
SDUWLFXODUO\ %UD]LO DQG XUEDQ &KLQD LW VHHPV WR EH
DSSURDFKLQJ WKDW RI WKH 2(&' FRXQWULHV ,Q PXFK
SRRUHU FRPPXQLWLHV WKHUH LV W\SLFDOO\ D ZLGHU UDQJH
RI RXWOHWV IRU GLVFDUGHG IRRG DQG WKHVH FXOWXUHV
FRPPRQO\DUUDQJHIRUWKHPRVWKXQJU\DQGGHVWLWXWH
SHRSOHWRREWDLQOHIWRYHUIRRGVFUDSV7KHQHWORVVWR
KXPDQ FRQVXPSWLRQ FDQ WKHUHIRUH EH ORZHU DOEHLW
ZLWKKLJKHUVDIHW\ULVNVSDUWLFXODUO\LIWKHZDWHUXVHG
IRUIRRGSUHSDUDWLRQLVLQVDQLWDU\
(&RQFOXVLRQVORZLQFRPHFRXQWULHV
VKRZWKHJUHDWHVWSRWHQWLDOIRUIRRG
ZDVWHUHGXFWLRQ
$VLJQLÀFDQWUHGXFWLRQLQJOREDOIRRGZDVWHLVDQLP
SRUWDQW VWHS WRZDUGV VHFXULQJ IRRG IRU WKH JURZLQJ
JOREDOSRSXODWLRQZKLFKLVHVWLPDWHGWRH[FHHGQLQH
ELOOLRQ SHRSOH E\ 7KH SRWHQWLDO WR PHHW WKH
UHVXOWLQJLQFUHDVHLQGHPDQGFDQQRWEHPHWWKURXJK
IXUWKHU SURGXFWLYLW\ JDLQV DORQH RU E\ H[WHQGLQJ WKH
DUHDRIODQGIRUDJULFXOWXUDOSURGXFWLRQ,WLVWKHUHIRUH
HVVHQWLDOWRREWDLQPRUHIURPJOREDOIRRGSURGXFWLRQ
E\ZDVWLQJOHVV7KLVZLOOUHTXLUHDFWLRQRQPDQ\IURQWV
DFURVVKLJKLQFRPHDQGORZHULQFRPHFRXQWULHVDOLNH
7KH)RUHVLJKW5HYLHZ)RUHVLJKWGLGHQWLÀHGWKH
PDLQDFWLRQVQHHGHGLQRUGHUWREULQJWKHPD[LPXP
EHQHÀW WR GHYHORSLQJ FRXQWULHV 7KHVH DUH EULHÁ\
GLVFXVVHGEHORZ
*UHDWHU LQYHVWPHQW LQ VWRUDJH SDFNDJLQJ DQG
WUDQVSRUW LQIUDVWUXFWXUH LQ ORZLQFRPH FRXQWULHV E\
QDWLRQDO JRYHUQPHQWV DQG WKH GRQRU FRPPXQLW\
5HODWLYHO\ ORZFRVW LQWHUYHQWLRQV WKDW FRXOG DFKLHYH
VL]HDEOH IRRG ZDVWH UHGXFWLRQ LQFOXGH EDVLF
SDFNDJLQJIRUWUDQVSRUWRIIUHVKSURGXFHLQQRYDWLRQ
LQORZWHFKQRORJ\VWRUDJHWRUHGXFHJUDLQORVVHVRQ
VPDOO IDUPV DQG VLPSOH FRRO FKDLQ RSWLRQV WKDW DUH
QRWIXHOLQWHQVLYH7KHVHLQYHVWPHQWVFRXOGSRWHQWLDOO\
LQFUHDVHWKHLQFRPHRISDUWLFLSDQWVLQWKHIRRGFKDLQ
LQFOXGLQJJURZHUVSDUWLFXODUO\LIWKH\HQDEOHDFFHVVWR
PRUHUHPXQHUDWLYHPDUNHWV,QDGGLWLRQWKHHYLGHQFH
VKRZV WKDW GRPHVWLF RU LQWHUQDWLRQDO PDUNHWV DQG
HIIHFWLYH ORFDO SROLFLHV DLPHG DW XSJUDGLQJ DFWLYLWLHV
DQGIRRGVWDQGDUGVDUHFUXFLDOWRDFKLHYLQJVXFFHVV
)$2.DGHU
&RQQHFWLQJ VPDOOKROGHU JURZHUV LQ ORZLQFRPH
FRXQWULHV WR XUEDQUHJLRQDO DQG LQWHUQDWLRQDO IRRG
FKDLQV WKURXJK EHWWHU LQIUDVWUXFWXUH DQG SRVVLEO\
OLQNHG DOVR ZLWK YDULRXV IRUPV RI HWKLFDO WUDGLQJ
6XEVWDQWLDO LQYHVWPHQW LQ LQIUDVWUXFWXUH LV QHHGHG
WR UHGXFH SRVWKDUYHVW ORVVHV DQG WR SURYLGH
VPDOOKROGHU IDUPHUV ZLWK EHWWHU DFFHVV WR PDUNHWV
ZLWK ORZHU WUDQVDFWLRQ FRVWV DQG EHWWHU UHWXUQV 7KH
XVHRIFRPPXQLFDWLRQWHFKQRORJLHVPRELOHSKRQHV
LQ SDUWLFXODU IRU LPSURYLQJ PDUNHW LQIRUPDWLRQ DQG
DFFHVV WR RWKHU LPSRUWDQW VHUYLFHV HJ ZHDWKHU
IRUHFDVWV ORFDOO\ DSSURSULDWH FURS YDULHWLHV JRRG
DJULFXOWXUDO SUDFWLFHV ZRXOG HQDEOH SURGXFHUV
WR PDNH EHWWHU SODQWLQJ KDUYHVWLQJ DQG VXSSO\
GHFLVLRQV PHHW PDUNHW UHTXLUHPHQWV DQG DYRLG RU
DW OHDVW UHGXFH VHDVRQDO JOXWV DQG KLJKHU ZDVWDJH
UDWHV)RUHVLJKWF
7DUJHWLQJRIDLGEXGJHWVWRHQFRXUDJHVPDOOJURZHUV
WR SURGXFH LPSURYHG TXDOLW\ SURGXFH IRU ORFDO
DQG UHJLRQDO PDUNHWV LQ D VLPLODU ZD\ WR WKH 8QLWHG
1DWLRQV :RUOG )RRG 3URJUDPPH·V 3XUFKDVH IRU
3URJUHVV LQLWLDWLYH ZKLFK LQFOXGHV WKH SURYLVLRQ RI
JXDUDQWHHGFRQWUDFWVDJULFXOWXUDOH[WHQVLRQVHUYLFHV
75$'($1'(19,5210(175(9,(:
DQG FURS LQVXUDQFH IRU ORFDO FRPPXQLWLHV DQG D
VRFLDOVDIHW\QHWDVZHOODVIRRGDLGIURPORFDOUDWKHU
WKDQ LQWHUQDWLRQDO VRXUFHV 6XFK PHDVXUHV KHOS
WR UHGXFH SRVWKDUYHVW ORVVHV DV WKH\ HQFRXUDJH
LQYHVWPHQW LQ SRVWKDUYHVW LQIUDVWUXFWXUH DQG UHGXFH
SULFHÁXFWXDWLRQV
(QFRXUDJH WUDLQLQJ LQ WKH VFLHQFHV UHOHYDQW WR IRRG
VWRUDJH DQG GLVWULEXWLRQ LQ ORZLQFRPH FRXQWULHV
WKURXJK GHGLFDWHG SURJUDPPHV DQG EXUVDU\
VFKHPHV 7KLV VKRXOG LQFOXGH WKH WUDLQLQJ RI SHRSOH
WRVXSSRUWWKHSODQQLQJDQGPDLQWHQDQFHRIWKHPRUH
DGYDQFHGSRVWKDUYHVWDQG)6&WHFKQRORJLHVQHHGHG
WRIHHGJURZLQJXUEDQSRSXODWLRQV
'HYHORSPHQW RI D JOREDO EHQFKPDUNLQJ QHWZRUN WR
HVWLPDWH IRRG ORVVHV ZLWK SULRULW\ JLYHQ WR HPHUJLQJ
HFRQRPLHV 0XFK RI WKH GDWD DYDLODEOH RQ ORVVHV
KDYHQRWEHHQFROOHFWHGV\VWHPDWLFDOO\DQGWKHUHDUH
IHZXSWRGDWHGLUHFWÀHOGPHDVXUHPHQWV,ISURJUHVV
LVWREHPDGHWRZDUGVDJOREDOEHQFKPDUNIRUIRRG
ZDVWH PRUH HPSLULFDOO\ EDVHG ORVV HVWLPDWHV DUH
QHFHVVDU\6XFKDQXQGHUWDNLQJZRXOGUHTXLUHVWURQJ
OHDGHUVKLSLQLQWHUQDWLRQDODJHQFLHVZLWKDQLQWHUHVWLQ
IRRGVHFXULW\DQGGHYHORSPHQWLVVXHV*LYHQWKHZLGH
YDULDELOLW\ RI )6&V LW ZRXOG EH XQUHDOLVWLF WR JDWKHU
GDWDIURPDUHSUHVHQWDWLYHVDPSOHRIWKHJOREDO)6&V
$ PRUH WDUJHWHG DSSURDFK KDV JUHDWHU FKDQFH RI
VXFFHVVZLWKSULRULW\DVVLJQHGWRWKRVHV\VWHPVOLNHO\
WRH[SHULHQFHKLJKHUZDVWDJHUDWHVDQGIRFXVLQJRQ
WKH PRVW FULWLFDO )6& VWDJHV VXFK DV IURP IDUPV WR
GLVWULEXWLRQ FHQWUHV IRU IUHVK SURGXFH LQ HPHUJLQJ
HFRQRPLHV6HOHFWHGVXSSO\FKDLQVHJPHQWVVKRXOG
EHPRQLWRUHGWRHVWDEOLVKKRZFKDQJHVLQWHFKQRORJ\
DQGLQIUDVWUXFWXUHKDYHLQÁXHQFHGORVVHV
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
1//'06#4;U *'1.'1(756#+0#$.'1057/26+10+0
156'4+0)#
70&#/'06#.4#05(14/#6+101(
)4+%7.674'
/XFLD5HLVFK
&RSHQKDJHQ%XVLQHVV6FKRRO'HQPDUN
$EVWUDFW
‡ 0DMRUFKDQJHVLQIRRGEHKDYLRXUWRZDUGVPRUHVXVWDLQDEOHFRQVXPSWLRQV\VWHPVPXVWKDSSHQLQ
SDUWLFXODULQWKHLQGXVWULDOL]HGFRXQWULHV
‡ .H\LVVXHVRIFRQFHUQDUHH[FHVVLYHPHDWDQGGDLU\VXJDUDQGIDWFRQVXPSWLRQLQ´PRGHUQGLHWVµ
RYHUFRQVXPSWLRQLQVRPHSDUWVRIWKHZRUOGDQGXQGHUFRQVXPSWLRQLQRWKHUVDVZHOODVIRRGZDVWH
‡ ,QRUGHUWRIRVWHUVXVWDLQDEOHIRRGFRQVXPSWLRQLWLVQHFHVVDU\WRFRRUGLQDWHSROLFLHVUHODWLQJWRIRRG
WKHHQYLURQPHQWKHDOWKDQGVRFLDOFRKHVLRQ
$'HÀQLWLRQRIVXVWDLQDEOHIRRG
FRQVXPSWLRQ
7KH2VOR5RXQGWDEOHRQ6XVWDLQDEOH3URGXFWLRQDQG
&RQVXPSWLRQ KDV GHÀQHG VXVWDLQDEOH FRQVXPSWLRQ
LQ JHQHUDO DV ´WKH XVH RI JRRGV DQG VHUYLFHV WKDW
UHVSRQG WR EDVLF QHHGV DQG EULQJ D EHWWHU TXDOLW\
RIOLIHZKLOHPLQLPL]LQJWKHXVHRIQDWXUDOUHVRXUFHV
WR[LFPDWHULDOVDQGHPLVVLRQVRIZDVWHDQGSROOXWDQWV
RYHUWKHOLIHF\FOHVRDVQRWWRMHRSDUGL]HWKHQHHGV
RI IXWXUH JHQHUDWLRQVµ 1RUZHJLDQ 0LQLVWU\ RI WKH
(QYLURQPHQW $V UHJDUGV FRQVXPSWLRQ LQ WKH
IRRGGRPDLQWKHUHLVQREURDGO\DFFHSWHGGHÀQLWLRQ
WR GDWH EXW VHYHUDO DWWHPSWV WR FODULI\ DQG VKDUSHQ
WKH FRQFHSW KDYH EHHQ PDGH 'HÀQLWLRQV GLIIHU
GHSHQGLQJ RQ WKH WKHPDWLF IRFXV ² HQYLURQPHQW
DQG FOLPDWH SXEOLF KHDOWK DQG OLIH RSSRUWXQLWLHV
PDOQXWULWLRQ DQG FULWLFDO DFFHVV WR IRRG 6WLOO D FRUH
VHW RI FULWHULD FDQ EH GLVWLOOHG 3HUKDSV WKH PRVW
HQFRPSDVVLQJ DSSURDFK KDV EHHQ LQWURGXFHG E\
WKH 6XVWDLQDEOH 'HYHORSPHQW &RPPLVVLRQ RI
WKH8QLWHG.LQJGRP7KHFRPPLVVLRQFRQVLGHUVIRRG
DQGGULQNVVXVWDLQDEOHLIWKH\
‡ $UH VDIH KHDOWK\ DQG QXWULWLRXV IRU FRQVXPHUV LQ
SODFHV VXFK DV VKRSV UHVWDXUDQWV VFKRROV DQG
KRVSLWDOV
‡ &DQPHHWWKHQHHGVRIOHVVZHOORIISHRSOH
‡ 3URYLGHDYLDEOHOLYHOLKRRGIRUIDUPHUVSURFHVVRUV
DQG UHWDLOHUV ZKRVH HPSOR\HHV HQMR\ D VDIH DQG
K\JLHQLF ZRUNLQJ HQYLURQPHQW ZKHWKHU QDWLRQDOO\
RUDEURDG
‡ 5HVSHFW ELRSK\VLFDO DQG HQYLURQPHQWDO OLPLWV LQ
WKHLU SURGXFWLRQ DQG SURFHVVLQJ ZKLOH UHGXFLQJ
HQHUJ\ FRQVXPSWLRQ DQG LPSURYLQJ WKH ZLGHU
HQYLURQPHQW
‡ 0HHW WKH KLJKHVW VWDQGDUGV RI DQLPDO KHDOWK
DQG ZHOIDUH FRPSDWLEOH ZLWK WKH SURGXFWLRQ RI
DIIRUGDEOHIRRGIRUDOOVHFWRUVRIVRFLHW\DQG
‡ 6XSSRUWUXUDOHFRQRPLHVDQGWKHGLYHUVLW\RIUXUDO
FXOWXUHVLQSDUWLFXODUWKURXJKDQHPSKDVLVRQORFDO
SURGXFWVWKDWNHHSIRRGPLOHVWRDPLQLPXP
'HÀQLWLRQVIURPDVRFLDOVFLHQFHSHUVSHFWLYHKLJKOLJKW
WKHLPSRUWDQFHRIWKHVRFLRFXOWXUDOGLPHQVLRQ²WKH
QHFHVVDU\´ÀWµRIIRRGSDWWHUQVZLWKSHRSOH·VHYHU\GD\
OLYHV²IRUGHYHORSLQJHIIHFWLYHSROLFLHVHJ+D\QHW
DO +HUH IRRG FRQVXPSWLRQ LV FRQVLGHUHG
VXVWDLQDEOHRQO\LILW
‡ ,VHQYLURQPHQWDOO\VRXQGZLWKUHJDUGWRZDWHUVRLO
FOLPDWH ELRGLYHUVLW\ DYRLGDQFH RI XQQHFHVVDU\
ULVNV
‡ ,VKHDOWKSURPRWLQJ
‡ $OORZVIRUVRFLRFXOWXUDOGLYHUVLW\DQG
‡ ,VDSSOLFDEOHLQHYHU\GD\OLIHVW\OHV
)URP D ZRUOGZLGH SHUVSHFWLYH WKH TXHVWLRQ RI IDLU
GLVWULEXWLRQ DQG DFFHVV WR KHDOWK\ DQG VDIH IRRG ²
GLVFXVVHGXQGHUWKHNH\WHUP´IRRGVHFXULW\µ²FRPHV
WR WKH IRUH $FKLHYLQJ VXVWDLQDEOH FRQVXPSWLRQ
RI IRRG UHTXLUHV FRQIURQWLQJ SUREOHPV RI ERWK
XQGHUFRQVXPSWLRQDQGRYHUFRQVXPSWLRQ$VUHJDUGV
WKHIRUPHUELOOLRQSHRSOHH[LVWRQLQFRPHVRID
GD\RUOHVVDQGRYHUPLOOLRQSHRSOHDUHKXQJU\RU
VWDUYLQJ<HWWKHSUREOHPRIIRRGVHFXULW\JRHVEH\RQG
75$'($1'(19,5210(175(9,(:
)LJXUH*URZWKUDWHRIPHDWFRQVXPSWLRQRYHUWKHSDVW\HDUVNJSHUVRQ\U
6RXUFH&RPSDVVLRQLQ:RUOG)DUPLQJ7UXVWEDVHGRQGDWDIURP)$2VWDW
WKDWRIKXQJHUDQGDFFHVVLWDOVRFRYHUVWKHSUREOHP
RI´KLGGHQKXQJHUµLHGHÀFLWVLQYLWDOPLFURQXWULHQWV
ZKLFK DFFRUGLQJ WR D :+2 HVWLPDWH DIIHFWV DERXW
ELOOLRQSHRSOHZRUOGZLGH$WWKHVDPHWLPHWKHUHLV
DZRUOGZLGHLQFUHDVHLQWKHQXPEHURISHRSOHZKRDUH
RYHUZHLJKWRUREHVHERWKLQGHYHORSLQJDQGDIÁXHQW
LQGXVWULDOFRXQWULHV
:KLOHWKHHQYLURQPHQWDOLPSDFWVRIIRRGFRQVXPSWLRQ
DQG SURGXFWLRQ KDYH EHHQ GHEDWHG VLQFH WKHV
²ZLWKDIRFXVRQJUHHQKRXVHJDV*+*HPLVVLRQV
² WKH FRQQHFWLRQV EHWZHHQ FOLPDWHHQYLURQPHQW
DQG KHDOWK KDYH RQO\ UHFHQWO\ EHFRPH D FRQFHUQ
LQ SROLWLFDO GRFXPHQWV HJ +HDOWK &RXQFLO RI WKH
1HWKHUODQGV $FFRUGLQJ WR WKLV DSSURDFK D
V\VWHPVSHUVSHFWLYHRIVXVWDLQDEOHIRRGFRQVXPSWLRQ
VHHPVWRUHSODFHWKHWUDGLWLRQDO´VLORSHUVSHFWLYHµRI
VHSDUDWHVXVWDLQDELOLW\GLPHQVLRQVSURPLQHQWLQPDQ\
QDWLRQDOSROLFLHV,QWKH(XURSHDQ&RPPLVVLRQ
OLVWHGWKHIROORZLQJFULWHULDIRUGLHWVWREHFRQVLGHUHG
DVKDYLQJD´KHDOWKYDOXHµ
‡ 1XWULHQWDQGHQHUJ\FRQWHQWQXWULWLRQDOYDOXH
‡ 1DWXUDOIRRGSURSHUWLHV´DHVWKHWLFJXVWDWRU\µDQG
´GLJHVWLYHµ
‡ (FRORJLFDO QDWXUH RI IRRG SURGXFWLRQ VXVWDLQDEOH
DJULFXOWXUH
‡ +HDOWKDQGWR[LFRORJLFDOFULWHULDIRRGVDIHW\
$V UHJDUGV WKH ODWWHU FRQVXPHUV· SHUFHSWLRQ RI
IRRG VDIHW\ LV FORXGHG E\ XQKHDOWK\ IRRG DGGLWLYHV
WR[LF UHVLGXHV DQG RWKHU E\SURGXFWV DV ZHOO DV
SRWHQWLDO ULVNV IURP JHQHWLFDOO\ PRGLÀHG DQG QDQR
WHFKQRORJLFDOO\ HQKDQFHG IRRGV 7KLV SURYLGHV D
PDMRULPSHWXVIRUWKHJURZWKRIRUJDQLFIRRGVDOHV
%DVHG RQ D EURDG XQGHUVWDQGLQJ RI VXVWDLQDEOH
FRQVXPSWLRQ DV UHÁHFWHG LQ WKH GHÀQLWLRQV FLWHG
DERYH ZH GHÀQH VXVWDLQDEOH IRRG FRQVXPSWLRQ
DV D FKRLFH RI IRRG ZKLFK LV EHQHÀFLDO DQG OLIH
HQKDQFLQJ IRU LQGLYLGXDOV VRFLHW\ DQG WKH SODQHW
+RZHYHU VXVWDLQDEOH IRRG FRQVXPSWLRQ LQ VXFK D
FRPSUHKHQVLYHVHQVHLVVHOGRPFRQVLGHUHGLQSROLF\
PDNLQJ 7KH IROORZLQJ VHFWLRQ LOOXVWUDWHV ZK\ PDMRU
FKDQJHVLQIRRGEHKDYLRXUWRZDUGVPRUHVXVWDLQDEOH
FRQVXPSWLRQV\VWHPVPXVWWDNHSODFHSDUWLFXODUO\LQ
LQGXVWULDOL]HGFRXQWULHV
%0DLQSUREOHPDWLFWUHQGVDQG
QHHGHGFKDQJHV
*LYHQWKHJURZLQJZRUOGSRSXODWLRQDQGGHPRJUDSKLF
FKDQJH SUREOHPV DUH SUHGLFWHG WR EHFRPH PRUH
VHULRXV LQ WKH IXWXUH IRU H[DPSOH DJULFXOWXUDO
SURGXFWLRQPXVWIDFHWKHLPSDFWVRIFOLPDWHFKDQJH
FRQÁLFWV RYHU ODQG XVH DUH SUHGLFWHG WR LQFUHDVH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
DQG KHDOWK DQG VRFLDO FRVWV ² ERWK DW WKH LQGLYLGXDO
DQG VRFLDO OHYHO ² ZLOO ULVH EHFDXVH RI IRRGUHODWHG
KHDOWK WKUHDWV $ NH\ HWKLFDO LVVXH LV HQVXULQJ IRRG
VHFXULW\ IRU WKH ZRUOGV· JURZLQJ SRSXODWLRQ ² D JRDO
WKDW ZLOO QRW HDVLO\ EH DFKLHYHG ,Q PDQ\ GHYHORSLQJ
FRXQWULHV VKRUWDJH RI GULQNLQJ ZDWHU ZLOO DOVR EH D
PDMRUSUREOHP7RPHHWWKHQHHGVRIDJURZLQJZRUOG
SRSXODWLRQ DQG WKH LQFUHDVLQJ GHPDQG IRU PHDW LQ
GHYHORSLQJ FRXQWULHV SDUWLFXODUO\ LQ &KLQD DQG ,QGLD
ÀJXUH WKHUH ZRXOG KDYH WR EH DQ H[SRQHQWLDO
JURZWKLQODQGXVHIRUDJULFXOWXUHZKLOHDWWKHVDPH
WLPH WKH PRVW SURGXFWLYH FHUHDO SURGXFLQJ DUHDV LQ
&KLQD ,QGLD DQG 1RUWK $PHULFD ZLOO EH DSSURDFKLQJ
WKHLUELRSK\VLFDOOLPLWV7HPSHOPDQ
7KH UHDVRQV IRU WKLV XQVXVWDLQDEOH GHYHORSPHQW
SDWWHUQLQFOXGHWKHLQGXVWULDOL]DWLRQDQGJOREDOL]DWLRQ
RI DJULFXOWXUH DQG IRRG SURFHVVLQJ FRQVXPSWLRQ
SDWWHUQVWKDWDUHVKLIWLQJWRZDUGVPRUHPHDWDQGGDLU\
LQGLHWVPRGHUQIRRGVW\OHVDQDEXQGDQFHRIIRRGRQ
WKHRQHKDQGDQGDODFNRIIRRGVHFXULW\RQWKHRWKHU
DQGWKHFRQWLQXRXVO\JURZLQJJDSEHWZHHQULFKDQG
SRRURQERWKDZRUOGZLGHVFDOHDQGZLWKLQLQGLYLGXDO
VRFLHWLHV 7KHVH IDFWRUV DUH WKH UHVXOW RI QDWLRQDO
DQG LQWHUQDWLRQDO SROLFLHV DQG UHJXODWLRQV EXVLQHVV
SUDFWLFHVDQGSDUWLFXODUYDOXHV7KHPDLQSUREOHPDWLF
WUHQGVDQGQHHGHGFKDQJHVDUHGLVFXVVHGEHORZ
,Q LQGXVWULDOL]HG FRXQWULHV WKHUH LV D ZLGH UDQJH RI
DYDLODEOHIRRGSURGXFWV%HFDXVHPRVWIRRGSURGXFWV
DUH DYDLODEOH DW DIIRUGDEOH SULFHV \HDU URXQG IRRG
VHDVRQDOLW\KDVORVWLWVPHDQLQJ%HVLGHVDQDEXQGDQW
FKRLFH RI KHDOWK\ IUXLW DQG YHJHWDEOHV WKURXJKRXW
WKH \HDU FRQVXPHUV LQ PRVW (8 FRXQWULHV EHQHÀW
IURP FRPSDUDWLYHO\ ORZ SULFHV DQG FRQVLGHUDEOH
FRQYHQLHQFH ZKLFK KDYH DFFRPSDQLHG FKDQJHV LQ
IRRGSURGXFWLRQDQGJOREDOL]DWLRQ$PDMRUGUDZEDFN
LQ WKLV SURJUHVV KRZHYHU LV WKDW FRQVXPHUV KDYH
EHFRPHLQFUHDVLQJO\HVWUDQJHGIURPWKHSURGXFWLRQRI
WKHLUIRRGVWXIIVDQGGHVSLWHWKHUHFHQWUHFXUUHQFHRI
LQWHUHVWLQUHJLRQDOIRRGVDQGQHZWUHQGVVXFKDVVORZ
IRRG DQG RUJDQLF SURGXFH FRQVXPHU NQRZOHGJH RI
VHDVRQDOLW\RUUHJLRQDOVXSSO\KDVEHHQORVWVHHIRU
H[DPSOH 7LVFKQHU DQG .MDHUQHV %OD\3DOPHU
$W WKH OHYHO RI WKH LQGLYLGXDO IRRG KDELWV DQG
SUHIHUHQFHVDUHVKDSHGE\FXOWXUDOWUDGLWLRQVQRUPV
IDVKLRQ DQG SK\VLRORJLFDO QHHGV DV ZHOO DV E\
SHUVRQDO H[SHULHQFH ZLWK DQG H[SRVXUH WR VSHFLÀF
IRRGVDQGWKHLUVXSSO\LHDYDLODELOLW\DQGDFFHVVLELOLW\
RIIRRGVWXIIV6XFKSUHIHUHQFHVDQGWDVWHVWRJHWKHU
ZLWK ÀQDQFHV WLPH DQG RWKHU FRQVWUDLQWV HJ ZRUN
SDWWHUQV KRXVHKROG GHFLVLRQPDNLQJ LQÁXHQFH
IRRG FRQVXPSWLRQ 3ULFH LQ SDUWLFXODU LV D PDMRU
GHWHUPLQDQW)RRGSUHIHUHQFHVDOVRGLIIHUVLJQLÀFDQWO\
E\ KRXVHKROGVSHFLÀF FKDUDFWHULVWLFV VXFK DV DJH
LQFRPHHGXFDWLRQIDPLO\W\SHDQGVWDWXVLQWKHODERXU
IRUFH DV ZHOO DV QDWLRQDOLW\ (XURSHDQ &RPPLVVLRQ
5HVHDUFKHUV KDYH WKHUHIRUH PDGH DQ HIIRUW
WR FOXVWHU FRQVXPHUV LQWR JURXSV WKDW UHSUHVHQW
GLIIHUHQW´QXWULWLRQVW\OHVµRU´IRRGVW\OHVµVRWKDWWKH\
FDQEHWDUJHWHGZLWKPHVVDJHVDERXW´SURSHUIRRGµ
0LFKDHOLVDQG/RUHN)ULHGOHWDO6FKXOW]
DQG6WLH‰
7KH IROORZLQJ REVHUYDEOH GHYHORSPHQWV DQG WUHQGV
LQ IRRG FRQVXPSWLRQ LQ PDQ\ 2(&' DQG PRVW (8
FRXQWULHV DUH SUREOHPDWLF ZLWK UHJDUG WR VXVWDLQDEOH
IRRGFRQVXPSWLRQ5HLVFK6FKROODQG(EHUOH
‡ &KDQJHV LQ GLHW 3DUWLFXODUO\ LQ 2(&' DQG
(8 FRXQWULHV WKHUH LV D WUHQG WRZDUGV KLJKHU
FRQVXPSWLRQRIPHDWHVSHFLDOO\SRUNDQGSRXOWU\
FKHHVH DQG ERWWOHG GULQNV DQG D GHFOLQLQJ
FRQVXPSWLRQ RI PLON DQG SRWDWRHV 2(&' (XURSHDQ(QYLURQPHQW$JHQF\
‡ :HDNHQLQJ RI QXWULWLRQDO FRPSHWHQFLHV GHVSLWH
LQFUHDVLQJ NQRZOHGJH RI KHDOWK\ QXWULWLRQ
&RPSHWHQFLHV LQ QXWULWLRQ DQG KRPH HFRQRPLFV
LH FRRNLQJ DQG IRRG VWRULQJ DQG ÀQDQFLDO
FRPSHWHQFLHV KDYH GHFOLQHG $W WKH VDPH WLPH
NQRZOHGJH RI KHDOWK\ IRRGV DQG KHDOWK\ QXWULWLRQ
KDVLQFUHDVHG
‡ $GHFOLQHLQWLPHVSHQWRQQXWULWLRQ7LPHVSHQWRQ
IRRGSXUFKDVLQJDQGFRRNLQJDVZHOODVRQHDWLQJ
KDV GHFUHDVHG VLJQLÀFDQWO\ RYHU WKH SDVW IHZ
\HDUV,QJHQHUDOKRZHYHUZRPHQVWLOOVSHQGPRUH
WLPH WKDQ PHQ RQ IRRG SXUFKDVLQJ DQG FRRNLQJ
+DPHUPHVK
‡ $ GHFOLQH LQ UHODWLYH FRQVXPHU VSHQGLQJ RQ IRRG
$OWKRXJKDEVROXWHKRXVHKROGH[SHQGLWXUHVRQIRRG
LQFUHDVHGGXULQJWKHVLQPDQ\(8FRXQWULHV
WKH DYHUDJH VKDUH RI H[SHQGLWXUH RQ IRRG LQ WRWDO
KRXVHKROG H[SHQGLWXUH LQ (XURSHDQ KRXVHKROGV
KDVGHFOLQHGVWHDGLO\ZLWKULVLQJLQFRPHV0LFKDHOLV
DQG /RUHN (XURSHDQ (QYLURQPHQW $JHQF\
)RUPDQ\FRQVXPHUVSULFHLVWKHGRPLQDQW
FULWHULRQ LQ IRRG SXUFKDVH IROORZHG E\ TXDOLW\
IUHVKQHVVORQJVKHOIOLIHDQGWDVWH
‡ $Q LQFUHDVH LQ FRQYHQLHQFH UHDG\PDGH DQG IDVW
IRRGVDQG RXWRIKRPH FRQVXPSWLRQ,QDGGLWLRQ
WRDWHQGHQF\WRZDUGVFRQVXPLQJKLJKO\SURFHVVHG
IRRGVIDVWDQGFRQYHQLHQFHIRRGFRQVXPSWLRQRI
UHDG\PDGH PHDOV LV FRQWLQXLQJ WR ULVH ZLWKLQ WKH
(8 576 2XWRIKRPH FRQVXPSWLRQ DOVR
DFFRXQWV IRU D VLJQLÀFDQW DQG JURZLQJ SURSRUWLRQ
RI (XURSHDQ IRRG LQWDNH IRU H[DPSOH LQ RQH IRXUWK RI PHDOV DQG VQDFNV ZHUH HDWHQ RXW
0LFKDHOLVDQG/RUHN
‡ ,QFUHDVLQJ GLHWUHODWHG XQFHUWDLQW\ RQ WKH SDUW RI
FRQVXPHUV$GHFDGHRIIRRGVFDUHVWRJHWKHUZLWK
GLIIHULQJ H[SHUW HYDOXDWLRQV RI ULVN FRQWUDGLFWRU\
DQG VKRUWOLYHG QXWULWLRQUHODWHG LQIRUPDWLRQ LQ WKH
PHGLDDJUHDWHUYDULHW\RIDYDLODEOHIRRGVWXIIVDQG
WKHJOREDOL]DWLRQDQGGLVWDQFLQJRIIRRGSURGXFWLRQ
KDYH SURGXFHG JURZLQJ FRQVXPHU XQFHUWDLQW\
DERXW IRRG %HUJPDQQ ,QGHHG UDWKHU
WKDQKHOSLQJFRQVXPHUVQDYLJDWHWKHYDVWDUUD\RI
LQIRUPDWLRQDERXWIRRGWKHPXOWLWXGHRIIRRGODEHOV
KDV OHG WR FRQVXPHU FRQIXVLRQ DQG LQIRUPDWLRQ
RYHUORDG WKDW SUHYHQWV WKHP IURP TXLFNO\ ÀQGLQJ
UHOHYDQW NH\ LQIRUPDWLRQ 'HUE\ DQG /HY\ +DZNHV$VDUHVXOWUHEXLOGLQJFRQVXPHU
WUXVW LQ WKH LQIRUPDWLRQ DERXW IRRG SURYLGHG E\
ERWKWKH6WDWHDQGWKHPDUNHWLVDPDMRUFKDOOHQJH
.MDHUQHV+DUYH\DQG:DUGH
‡ 3UREOHPV RI RYHUZHLJKW DQG REHVLW\ LQ VSLWH RI
LQFUHDVLQJKHDOWKDZDUHQHVV,QPRVWLQGXVWULDOL]HG
FRXQWULHV WKH ZHDOWK RI DYDLODEOH IRRG FRPELQHG
ZLWK LQFUHDVLQJO\ VHGHQWDU\ OLIHVW\OHV DQG PRGHUQ
GLHWV LV OHDGLQJ WR ULVLQJ REHVLW\ OHYHOV ,Q WKHVH
FRXQWULHVWKHULVHLQDGLSRVLW\LHIDWVWRULQJERG\
WLVVXH LV RFFXUULQJ SDUWLFXODUO\ DPRQJ FKLOGUHQ
DQG WHHQDJHUV EXW LV DOVR HYLGHQW DPRQJ ORZHU
VRFLRHFRQRPLF JURXSV :+2 5HLVFK DQG
*ZR]G],QGHYHORSLQJFRXQWULHVREHVLW\LV
PRVWO\ D SUREOHP DPRQJ WKH ZHOORII :LWNRZVNL
‡ &RPSOH[LW\ RI IRRG FKRLFHV 7KH DERYH
GHYHORSPHQWVLQIRRGVXSSO\KDYHJUHDWO\LQFUHDVHG
WKH FRPSOH[LW\ RI IRRG FKRLFH WKH PRUH RSWLRQV
DQG QRYHOWLHV RQ RIIHU WKH PRUH FRPSOLFDWHG LW
EHFRPHVWRÀQGWKHULJKWLQIRUPDWLRQDQGWKHPRUH
FRPSOH[ WKH GHFLVLRQPDNLQJ SURFHVV $OWKRXJK
LQIRUPDWLRQEURNHUV²IURPWHVWLQJRUJDQL]DWLRQVWR
IRRGPDJD]LQHVWR:HE6ORZ)RRGFRPPXQLWLHV
²PD\EHDEOHWRUHGXFHVXFKFRPSOH[LW\IRUDIHZ
SHRSOH PDQ\ FRQVXPHUV UHPDLQ RYHUZKHOPHG
DQGSUHIHUWRVWLFNWRWKHLUKDELWXDOFKRLFHV0LFN
%URQLDUF]\NDQG+DLGW7KHVXFFHVVRIIRRG
GLVFRXQWHUV VXFK DV 7UDGHU -RH·V LQ WKH 8QLWHG
6WDWHVZKLFKRIIHUVDYHU\QDUURZIRRGDVVRUWPHQW
LV GXH WR DQ DWWUDFWLYH PL[ RI IHZ FKRLFHV DQG
KHQFH ORZ VHDUFK FRVWV DQG WKHLU SURYLVLRQ RI
VWDQGDUGTXDOLW\RUJDQLFSURGXFWVVROGDWIDLUDQG
ORZSULFHV7KLVLVLQFRQWUDVWZLWKZKDWHVWDEOLVKHG
75$'($1'(19,5210(175(9,(:
VXSHUDQGK\SHUPDUNHWVRIIHU
‡ ,QFUHDVLQJ IRRG ZDVWH 7RGD\ ODUJH TXDQWLWLHV RI
IRRG DUH ZDVWHG SDUWLFXODUO\ E\ IRRG UHWDLO ÀUPV
DQG FRQVXPHUV )RU LQVWDQFH DFFRUGLQJ WR RQH
UHFHQW VWXG\ KRXVHKROGV LQ WKH 8QLWHG .LQJGRP
ZDVWHRQHWKLUGRIWKHIRRGWKH\EX\SHUFHQWRI
ZKLFKFRXOGKDYHEHHQHDWHQLILWKDGEHHQEHWWHU
PDQDJHG
0XFK KRSH LV SLQQHG RQ WKH LQFUHDVLQJ FRQVXPHU
LQWHUHVWLQRUJDQLFDQGIDLUWUDGHIRRGV7KHPDUNHWV
IRU RUJDQLFDOO\ JURZQ SURGXFWV DQG IRU IDLU WUDGHG
IRRGSURGXFWVKDYHJURZQVWHDGLO\.ULHU:LOOHU
<XVVHÀ0HQ]OHUDQG6RUHQVVHQ1HYHUWKHOHVV
WKH PDUNHW VKDUH UHPDLQV ORZ ZLWK RUJDQLF IRRG
DFFRXQWLQJIRU²SHUFHQW:LOOHU<XVVHÀ0HQ]OHU
DQG6RUHQVHQDQGIDLUWUDGHGIRRGIRUOHVVWKDQ
SHUFHQWRIWKHWRWDOIRRGPDUNHW.ULHU$OVR
WXUQRYHULVVWDJQDWLQJLQPDQ\PDUNHWVEHFDXVHRID
IDOOLQWKHSULFHVRIQRQRUJDQLFIRRGVDQGDQLQFUHDVH
LQSULFHFRPSHWLWLRQ
&7RZDUGVDSROLF\RIVXVWDLQDEOH
IRRGFRQVXPSWLRQ
2QWKHGHPDQGVLGHQDWLRQDOJRYHUQPHQWVJHQHUDOO\
SOD\ D UHODWLYHO\ ZHDN UROH 7R GDWH WKH PDLQ GULYHU
EHKLQGUHJXODWRU\FRPPDQGDQGFRQWUROLQVWUXPHQWV
UHODWLQJ WR IRRG FRQVXPSWLRQ DQG SURGXFWLRQ LV
WKH QHHG WR UHVSRQG WR DFXWH WKUHDWV WR WKH OLIH DQG
KHDOWK RI FLWL]HQV ,W LV RQO\ IRU WKH SDVW IHZ \HDUV
WKDW JRYHUQPHQW FRQFHUQV DERXW IRRG LQWDNH KDYH
EURDGHQHG WR FRQVLGHU HYHU\GD\ GLHW DQG KHDOWK
LVVXHV 7KHVH FRQFHUQV HVSHFLDOO\ DV WKH\ UHODWH WR
REHVLW\DQGLWVKHDOWKLPSDFWVDUHVORZO\UHVXOWLQJLQ
SROLF\DFWLRQVEXWPRVWRIWKHVHPHDVXUHVDUHRQO\
GHVLJQHG WR SURYLGH LQIRUPDWLRQ DQG UDUHO\ WDNH WKH
IRUP RI UHJXODWLRQ &RPPDQG DQG FRQWURO LV XVXDOO\
DSSOLHGLQFDVHVWKDWFDQEHOHIWQHLWKHUWRYROXQWDU\
DJUHHPHQWV QRU WR WKH PDUNHW EHFDXVH RI WKH KLJK
ULVNVLQYROYHGRUEHFDXVHRIWLPHSUHVVXUHDQGGRXEWV
DERXW WKH HIIHFWLYHQHVV RI YROXQWDU\ DJUHHPHQWV
7KXVUHJXODWLRQFRQFHQWUDWHVRQIRRGVDIHW\LVVXHV
DQGDLPVWRSURWHFWFRQVXPHUV·KHDOWKWKHLUOLYHVHJ
VWDQGDUGV RI K\JLHQH DQG WKHLU HFRQRPLF LQWHUHVWV
HJFRPSHWLWLRQSROLFLHV
:LWK UHJDUG WR VXVWDLQDELOLW\ LQ WKH IRRG VHFWRU
JRYHUQPHQWV DQG WKHLU DGPLQLVWUDWLRQV JHQHUDOO\
EHFRPH LQYROYHG RQO\ DV RUJDQL]HUV RI SXEOLF
FHUWLÀFDWLRQVWDQGDUGL]DWLRQDQGLQVSHFWLRQVFKHPHV
2QH H[DPSOH RI WKLV UROH LV HYLGHQW LQ WKH 6WDWHUXQ
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
ODEHOOLQJ RI RUJDQLF DQG UHJLRQDO IRRGV REVHUYDEOH
LQ DERXW KDOI RI DOO (8 FRXQWULHV 2UJDQLF (XURSH
6XFK ODEHOV FRQVWLWXWH DQ LPSRUWDQW WRRO IRU
UDLVLQJ FRQVXPHU DZDUHQHVV DERXW WKH KHDOWK DQG
HQYLURQPHQWDODVSHFWVRIWKHLUIRRGDQGIRUIDFLOLWDWLQJ
LQIRUPHGGHFLVLRQPDNLQJ
$QRWKHU UHODWLYHO\ UHFHQW DSSURDFK WR SURPRWLQJ
VXVWDLQDEOH IRRG FRQVXPSWLRQ LV VHOIUHJXODWLRQ LQ
WKH IRUP RI SXEOLF SURFXUHPHQW RI VXVWDLQDEOH IRRG
RUJXLGHOLQHVIRUSURFXUHPHQWIRUSXEOLFLQVLWXWLRQV
VXFK DV NLQGHUJDUWHQV DQG VFKRROV VWDII FDQWHHQV
LQWKHSXEOLFVHFWRUSULVRQVDQGKRVSLWDOV+RZHYHU
H[DPSOHVIURPYDULRXV(8PHPEHU6WDWHV²HVSHFLDOO\
WKH8QLWHG.LQJGRPDQG6ZHGHQ²GHPRQVWUDWHWKDW
VXFK VHOIUHJXODWLRQ UHTXLUHV WLPH DQG HIIRUW DQG
VHHPV WR EH HIIHFWLYH DQG LPSURYH WKH TXDOLW\ RI
WKH IRRG VHUYHG RQO\ ZKHQ WKH LQLWLDWLYHV DUH FORVHO\
PRQLWRUHG E\ WKH JRYHUQPHQWV 6XVWDLQ $
UHFHQWUHSRUWFRQFOXGHVXQDPELJLRXVO\WKDW´WKHRQO\
ZD\WRDFKLHYHDUDGLFDOLPSURYHPHQWLQSXEOLFVHFWRU
IRRG²IRUH[DPSOHLQRXUVFKRROVKRVSLWDOVDQGFDUH
KRPHV ² LV IRU JRYHUQPHQW WR LQWURGXFH D QHZ ODZ
ZKLFK VHWV KLJK DQG ULVLQJ VWDQGDUGV IRU WKH IRRG
VHUYHGµ6XVWDLQ
0DUNHWEDVHG LQVWUXPHQWV WDUJHWLQJ KRXVHKROGV DQG
LQGLYLGXDOV VHHP WR EH OHVV SUHYDOHQW LQ WKH IRRG
GRPDLQWKRXJKWKH\DUHDSSOLHGXSVWUHDPLQWKHIRRG
VXSSO\FKDLQHJVXEVLGLHVWRRUJDQLFIDUPHUV9HU\
UHFHQWO\LQLWLDWLYHVKDYHEHHQODXQFKHGWRWD[FHUWDLQ
IRRG W\SHV VXFK DV ´MXQN IRRGµ LQ +XQJDU\ RU WKHLU
LQJUHGLHQWVVXFKDVDWD[RQVSHFLÀFW\SHVRIIDWLQ
'HQPDUN
7KHGRPLQDQWSROLF\LQVWUXPHQWLQWKHIRRGGRPDLQLV
DQLQIRUPDWLRQEDVHGDQGHGXFDWLYHIRFXVRQUDLVLQJ
DZDUHQHVV 7KLV LV RIWHQ DFFRPSDQLHG E\ YROXQWDU\
LQVWUXPHQWV RI VHOIFRPPLWPHQW FRRSHUDWLRQ DQG
QHWZRUNLQJ :KLOH HIIRUWV WR HGXFDWH FRQVXPHUV
HVSHFLDOO\\RXQJFRQVXPHUVLQJURZLQJSURFHVVLQJ
FRRNLQJ DQG VWRULQJ IRRG DUH GHFOLQLQJ LQ PRVW
VRFLHWLHV ² GXH WR WKH LQFUHDVH LQ RXWRIKRPH
DQG UHDG\PDGH IRRG FRQVXPSWLRQ DQG LQ RWKHU
SULRULWLHVLQIRUPDOVFKRROFXUULFXOD²WKHUHDUHVRPH
RQJRLQJ HIIRUWV WR GHYHORS ´IRRG OLWHUDF\µ DPRQJ
\RXQJ FRQVXPHUV ZLWK UHJDUG WR FKRRVLQJ DQG
SUHSDULQJKHDOWK\HJPRUHIUXLWDQGYHJHWDEOHVDQG
VXVWDLQDEOHLHRUJDQLFUHJLRQDOIDLUWUDGHIRRG$V
RQH HOHPHQW RI D QDWLRQDO IRRG VWUDWHJ\ )UDQFH KDV
UHFHQWO\VWDUWHGWRV\VWHPDWLFDOO\WUDLQWKHVHQVRU\DQG
WDVWHFRPSHWHQFHVRIVFKRROFKLOGUHQ
7KH DFKLHYHPHQW RI EHKDYLRXUDO FKDQJH LQ IDYRXU
RI PRUH VXVWDLQDEOH IRRG FRQVXPSWLRQ LV D ORQJ
WHUP JRDO WKDW UHTXLUHV FRQVWDQW DQG FRQWLQXLQJ
HIIRUWVRIDOOWKHDFWRUVLQYROYHG%DUULHUVDUHHYLGHQW
DW WKH LQVWLWXWLRQDO LQIRUPDWLRQDO LQIUDVWUXFWXUDO LH
WKH DYDLODELOLW\ DIIRUGDELOLW\ DQG DFFHVVLELOLW\ RI D
VXVWDLQDEOHVXSSO\DQGSHUVRQDOOHYHOV*RYHUQPHQW
VXSSRUW IRU VXVWDLQDEOH IRRG HQWUHSUHQHXUV DQG
FRPPXQLW\EDVHG IRRG LQLWLDWLYHV FRXOG KHOS PDNH
WKHVXVWDLQDEOHFKRLFHHDVLHUDQGPRUHDIIRUGDEOH
$ VXEVWDQWLDO EDUULHU WR HIIHFWLYH FRQVXPHU
LQIRUPDWLRQ DQG HGXFDWLRQ LV WKH GLVWXUELQJ IDFW
WKDW VFLHQWLÀF HYLGHQFH LV QRW FRQFOXVLYH DQG WKDW
VRPH UHFRPPHQGDWLRQV WR FRQVXPHUV VXFK DV
WKH UHFRPPHQGDWLRQ WKDW RUJDQLF RU ORFDO SURGXFWV
VKRXOG DOZD\V EH SUHIHUUHG WR FRQYHQWLRQDO RU
LPSRUWHG SURGXFWV PLJKW QRW EH ZHOOIRXQGHG
´2UJDQLFµ DQG ´ORFDOµ DUH WZR SLOODUV RI VXVWDLQDEOH
IRRGFRQVXPSWLRQWKDWKDYHUHFHQWO\EHHQFKDOOHQJHG
E\VFLHQWLÀFUHSRUWVHJ5HLQKDUGWHWDO
$YDLODEOH UHVHDUFK JHQHUDOO\ DJUHHV RQ WKH LVVXHV
JLYLQJ ULVH WR WKH ODFN RI VXVWDLQDELOLW\ RI WKH FXUUHQW
IRRG GRPDLQ 5HLVFK 6FKROO DQG (EHUOH WKH
GLVWDQFHEHWZHHQIRRGFRQVXPHUVDQGSURGXFHUVLQ
PLOHVDVZHOODVPLQGVWKHVLJQLÀFDQWORVVRIELRPDVV
IURPWKHÀHOGWRWKHWDEOHLQFOXGLQJJHQHUDWHGZDVWH
DQGWKHKLJKOHYHORIFRQVXPSWLRQRIDQLPDOSURGXFWV
LQWKHIRUPRIPHDWDQGGDLU\SURGXFWV&RQVHTXHQWO\
WKHVHDUHWKHFULWLFDODVSHFWVRIQRQVXVWDLQDELOLW\WKDW
JRYHUQPHQWVQHHGWRDGGUHVVDVDSULRULW\
'HVSLWHWKHJURZLQJDWWHQWLRQSDLGWRIRRGLVVXHVDW
WKHSROLF\OHYHODSSURDFKHVWKDWLQWHJUDWHWKHGLIIHUHQW
VXVWDLQDELOLW\LVVXHVLQWRFRKHUHQWSROLF\DSSURDFKHV
RUDFWLRQSODQV²RUDWOHDVWLQWRSROLF\WRROVWKDWGR
QRW FRQWUDGLFW HDFK RWKHU ² DUH KDUG WR ÀQG 7KH
VDPH LV WUXH IRU H[SOLFLW VWUDWHJLHV IRU VXVWDLQDEOH
FRQVXPSWLRQ 3ROLFLHV UHODWLQJ WR QXWULWLRQ DQG IRRG
WKH HQYLURQPHQW KHDOWK DQG VRFLDO FRKHVLRQ DUH
VHOGRP FRRUGLQDWHG )XUWKHUPRUH H[SOLFLW SROLFLHV
IRUVXVWDLQDEOHFRQVXPSWLRQLQJHQHUDODQGIRUIRRG
FRQVXPSWLRQ LQ SDUWLFXODU DUH UDUH 3ROLF\ WRROV DUH
XVXDOO\GHVLJQHGRQHGLPHQVLRQDOO\IRUVSHFLÀFSROLF\
GRPDLQV DQG DGRSWHG SROLF\ WRROV SULPDULO\ WDUJHW
LQGLYLGXDOFRQVXPHUV
$V D UHVXOW RI WKH FXUUHQW SRZHU VWUXFWXUH LQ WKH
(XURSHDQ IRRG GRPDLQ ZKLFK LV FKDUDFWHUL]HG E\
D GRPLQDQW KLJKO\ FRQFHQWUDWHG SRZHUIXO UHWDLO
LQGXVWU\ JRYHUQPHQWV WHQG WR OLPLW WKHPVHOYHV WR D
PDUJLQDO UROH DQG WR QRQLQYDVLYH LQVWUXPHQWV VXFK
DV FRQVXPHU LQIRUPDWLRQ DQG HGXFDWLRQ $QRWKHU
UHDVRQIRUWKHUHOXFWDQFHWRLPSOHPHQWVWULFWQDWLRQDO
IRRGSROLFLHVLVWKDWVXVWDLQDELOLW\JRDOVDQGSROLFLHV
ULVNFRQÁLFWLQJZLWK(XURSHDQODZV)RULQVWDQFHWKH
(8 KDV UHFHQWO\ UHTXHVWHG WKDW 6ZHGHQ ZLWKGUDZV
LWV1DWLRQDO)RRG$GPLQLVWUDWLRQ·V1)$SURSRVDOWR
WKH(8RQJXLGHOLQHVIRUFOLPDWHIULHQGO\IRRGFKRLFHV
EHFDXVHWKH\PD\FRQÁLFWZLWK(XURSHDQWUDGHJRDOV
7KH(8&RPPLVVLRQIRXQGWKDWWKHUHFRPPHQGDWLRQ
WR HDW PRUH ORFDOO\ SURGXFHG IRRG FRQWUDYHQHV WKH
(8·VSULQFLSOHVRIIUHHPRYHPHQWRIJRRGV
*RYHUQPHQWV DOVR VWUXJJOH WR XQGHUVWDQG WKH
GHÀQLWLRQ RI VXVWDLQDEOH IRRG DQG VXVWDLQDEOH GLHWV
DQGWKH\RIWHQKDYHQRUHDOYLVLRQDERXWWKHSRVVLEOH
IRUPV WKDW VXVWDLQDEOH IRRG V\VWHPV PLJKW WDNH $V
D VWDUWLQJ SRLQW DQ XQGHUVWDQGLQJ RI WKH GLIIHUHQFH
EHWZHHQ VXVWDLQDEOH IRRG DQG VXVWDLQDEOH GLHW
VHHPV WR EH FUXFLDO )RU LQVWDQFH RQH FDQ HDW YHU\
KHDOWK\VXVWDLQDEO\SURGXFHGIRRGEXWVLPSO\HDWWRR
PXFKRUWRROLWWOHRILW$OWHUQDWLYHO\IRRGFRXOGFRPH
IURP VXVWDLQDEOH IDUPLQJ EXW LW FRXOG VWLOO EH KLJKO\
SURFHVVHGDQGRYHUSDFNDJHG+HQFHDSULRULW\IRU
JRYHUQPHQWVVKRXOGEHWRGHYHORSLQWHJUDWHGFURVV
VHFWRUDOSRSXODWLRQZLGHIRRGSROLFLHVRQVXFKLVVXHV
DVDJULFXOWXUHDQGIRRGVXSSO\DYDLODELOLW\DQGDFFHVV
WRIRRGSK\VLFDODFWLYLW\ZHOIDUHDQGVRFLDOEHQHÀWV
ÀVFDO SROLFLHV DQLPDO ZHOIDUH DQG LQIRUPDWLRQ DQG
VRFLDO PDUNHWLQJ 5REHUWVRQ /REVWHLQ DQG .QDL
$UHYLHZRIFXUUHQW(XURSHDQVXVWDLQDEOHGHYHORSPHQW
VWUDWHJLHV DQG DFWLRQ SODQV KLJKOLJKWV WKH IROORZLQJ
PDMRUJRDOVUHJDUGLQJVXVWDLQDEOHIRRGFRQVXPSWLRQ
LQRUGHURISULRULW\
‡ /RZHULQJREHVLW\OHYHOVDQGLQFUHDVLQJKHDOWK
‡ ,QFUHDVLQJ RUJDQLF IRRG FRQVXPSWLRQ DQG
SURGXFWLRQ
‡ 5HGXFLQJ*+*HPLVVLRQVDQG
‡ 5HGXFLQJIRRGZDVWH
$VVXVWDLQDEOHGHYHORSPHQWVWUDWHJLHVDUHDUHVXOWRI
VRFLHWDOGHEDWHVLQWKHYDULRXVFRXQWULHVWKH\UHÁHFW
PDLQVWUHDPWKLQNLQJDERXWWKHDUHDVLQZKLFKSROLF\
LQVWUXPHQWVDUHDSSURSULDWHDQGQHFHVVDU\+RZHYHU
WKHVHH[SOLFLWJRDOVQHJOHFWRWKHUUHOHYDQWDVSHFWVRI
IRRGDQGGULQNVXVWDLQDELOLW\WKHVRFLDODQGHFRQRPLF
GLPHQVLRQV LQ ERWK WKH JOREDO DQG ORFDO VHQVH
7KH 8QLWHG .LQJGRP·V 6XVWDLQDEOH 'HYHORSPHQW
&RPPLVVLRQ HPSKDVL]HV WKH QHHG WR PRYH
EH\RQG UHÁHFWLRQV RQ ´VDIH KHDOWK\ DQG QXWULWLRXV
IRRGµWRLQFOXGHFRQVLGHUDWLRQRI´WKHQHHGVRIWKHOHVV
ZHOO RIIµ 7KDW LV LW LV QHFHVVDU\ WR FRQVLGHU GHFHQW
75$'($1'(19,5210(175(9,(:
HFRQRPLF OLYLQJ DQG ZRUNLQJ FRQGLWLRQV RI WKRVH
ZRUNLQJ DORQJ WKH IRRG FKDLQ UHVSHFW IRU DQLPDOV
VXSSRUWIRUUXUDOHFRQRPLHVDQGFXOWXUDODVSHFWV
$QRWKHU LVVXH LV UHÁHFWHG LQ UHFHQW GLVFXVVLRQV LQ
DFDGHPLF FLUFOHV WKDW KDV QRW \HW UHFHLYHG VXIÀFLHQW
DWWHQWLRQ IURP SROLF\PDNHUV VHOIVXIÀFLHQF\ RI
FRXQWULHV LQ WHUPV RI IRRG VXSSOLHV DQG WKH XQHYHQ
LPSDFWV RI IRRG SURGXFWLRQ RQ WKH VRLO 7KLV LV D
UDWKHU FRPSOH[ LVVXH ZKLFK LV PDGH DOO WKH PRUH
FKDOOHQJLQJ E\ :72 UXOHV DQG (8 SROLFLHV WKDW
SURPRWH LQWHUQDWLRQDO WUDGH DERYH DOO HOVH +RZHYHU
LW LV DQ DUHD WKDW QHHGV WR EH FDUHIXOO\ DQDO\VHG IRU
DPRUHHODERUDWHGLVFXVVLRQVHHWKHOHDGDUWLFOHDQG
WKHFRPPHQWDU\RI&KHPQLW]DQG6DQWDULXVLQFKDSWHU
RIWKLV5HYLHZ
7KH DERYHRXWOLQHG UHTXLUHPHQWV DSSHDU WR EH
UHOHYDQWIRUEXLOGLQJDIUDPHZRUNIRUVXVWDLQDEOHIRRG
FRQVXPSWLRQ DQG SURGXFWLRQ VKRUWWHUP DFWLRQ RQ
WKHDJUHHGSUREOHPVDQGPHGLXPWHUPVSHFLÀFDWLRQ
RI KRZ WR UHGHVLJQ IRRG V\VWHPV 5HLVFK /RUHN
DQG %LHW] $ SDUDOOHO GHEDWH RQ D ´(XURSHDQ
IRRG PRGHOµ DQG LWV FRPPRQ YDOXHV IRU H[DPSOH
DV UHJDUGV JHQHWLFDOO\ PRGLÀHG RUJDQLVPV DQG
QDQRWHFKQRORJLHVLVDOVRQHFHVVDU\6XFKDGHEDWH
VKRXOG LQFOXGH WKH SRVVLELOLW\ RI D ´JUHHQ HFRQRP\µ
VWUDWHJ\IRUWKHIRRGVHFWRU
+RZHYHU GHYHORSLQJ VXFK LQWHJUDWLYH VWUDWHJLHV
DQG LGHQWLI\LQJ WKH PRVW VXVWDLQDEOH ZD\ WR HQVXUH
WKH QXWULWLRQ RI WKH ZRUOG·V FXUUHQW DQG IXWXUH
SRSXODWLRQVUHTXLUHVIXUWKHUUHVHDUFK0RUHUHVHDUFK
LVDOVRQHHGHGRQZD\VWRDFKLHYHVXVWDLQDEOHIRRG
FRQVXPSWLRQSDWWHUQV7KHRYHUZKHOPLQJYLHZLQWKH
VFLHQWLÀFOLWHUDWXUHLVWKDWWKHPRVWHIIHFWLYHZD\VIRU
DIÁXHQWVRFLHWLHVWRUHGXFHWKHHQYLURQPHQWDOLPSDFW
RIWKHLUGLHWVDUHWRFXWGRZQRQWKHDPRXQWRIPHDW
DQG GDLU\ SURGXFWV FRQVXPHG HVSHFLDOO\ EHHI EX\
RUJDQLFVHDVRQDODQGORFDOO\DYDLODEOHIRRGSURGXFWV
DQGDYRLGSURGXFWVWUDQVSRUWHGE\DHURSODQH
2YHUDQGDERYHWKHVHFRQFHUQVJRYHUQPHQWVVKRXOG
GHYHORSFURVVVHFWRUDOSRSXODWLRQZLGHSROLFLHVRQD
YDULHW\RILVVXHVLQFOXGLQJWKRVHUHODWLQJWRDJULFXOWXUH
DQG IRRG VXSSO\ DYDLODELOLW\ RI DQG DFFHVV WR IRRG
SK\VLFDO DFWLYLW\ ZHOIDUH DQG VRFLDO EHQHÀWV VRXQG
HQYLURQPHQWDO SURGXFWLRQ DQG FRQVXPSWLRQ ÀVFDO
SROLFLHV WKH UROH RI LQGLYLGXDO FRQVXPHU GHFLVLRQ
PDNLQJ SXEOLF SURFXUHPHQW DQG SXEOLF SURYLVLRQ
RI IRRG %DVHG RQ WKHVH SROLFLHV JRYHUQPHQWV
VKRXOG GHYHORS DFWLRQ SODQV RQ VXVWDLQDEOH IRRG
FRQVXPSWLRQ
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
&XUUHQWIRRGFRQVXPSWLRQSDWWHUQVQRWRQO\WKUHDWHQ
WKHTXDOLW\RIOLIHRILQGLYLGXDOVWKH\DOVRKDYHQHJDWLYH
HQYLURQPHQWDO VRFLDO DQG HFRQRPLF LPSDFWV
3ROLFLHV DQG SURJUDPPHV WR FRXQWHUDFW WKHVH
LPSDFWV DUH FRPSOLFDWHG EHFDXVH RI WKH PXOWLSOH
LQWHUGHSHQGHQFLHV EHWZHHQ WKH DFWRUV DQG LVVXHV
LQYROYHGLQWKHIRRGV\VWHP:KLOHXVHIXODQGXVHDEOH
FRQVXPHU LQIRUPDWLRQ RQ WKH FRQVHTXHQFHV RI IRRG
FRQVXPSWLRQ HDUO\ FRQVXPHU HGXFDWLRQ DQG FDVH
EDVHG FRQVXPHU DGYLFH FDQ HPSRZHU FRQVXPHUV
EHWWHU NQRZOHGJH ZLOO QRW DXWRPDWLFDOO\ FKDQJH
SUHIHUHQFHV DQG EHKDYLRXU 5DWKHU DYDLODELOLW\
DIIRUGDELOLW\DQGVRFLDODWWUDFWLRQRIVXVWDLQDEOHIRRG
FKRLFHVDVZHOODVHDV\DFFHVVWRWKHPVHHPWREH
WKHNH\OHYHUVWRIRVWHUVXVWDLQDEOHIRRGFRQVXPSWLRQ
E\ LQGLYLGXDO FRQVXPHUV ´0DNLQJ WKH VXVWDLQDEOH
FKRLFH WKH HDV\ FKRLFHµ SURPRWLQJ KHDOWK\ IRRGV
UHWKLQNLQJ PHQXV LQ FDQWHHQV DQG VLPSOLI\LQJ IRRG
ODEHOOLQJ DUH ZRUWKZKLOH SROLF\ LQLWLDWLYHV WR H[SORUH
NHHSLQJ LQ PLQG WKH GLYHUVLW\ RI VRFLDO VHWWLQJV DQG
ZHOFRPLQJFXOWXUDOGLYHUVLW\LQIRRGFRQVXPSWLRQ
75$'($1'(19,5210(175(9,(:
1//'06#4;U
11&#('6;#0&;56'/+%*#0)'U+/+6#6+105
1(
11&10641.5(14#(')7#4&+0)
11&#('6;
-XWWD-DNVFKH3ROLF\2IÀFHU)RRG
)HGHUDWLRQRI*HUPDQ&RQVXPHU2UJDQLVDWLRQV9HUEUDXFKHU]HQWUDOH%XQGHVYHUEDQG9=%9
$EVWUDFW
,QFUHDVLQJJOREDOL]DWLRQKDVDFFHOHUDWHGWKHLQGXVWULDOL]DWLRQRIDJULFXOWXUDOSUDFWLFHVDQGFRVWSUHVVXUHV
DPRQJSURGXFHUV7KLVKDVOHGWRODUJHUVFDOHVRISURGXFWLRQRIDYHU\OLPLWHGQXPEHURIFRPPHUFLDOO\
OXFUDWLYH DJULFXOWXUDO JRRGV LQ D GHFUHDVLQJ QXPEHU RI SURGXFWLRQ XQLWV ZLWK VHYHUDO XQUHVROYHG IRRG
VDIHW\ULVNVWKDWDUHGLIÀFXOWWRPDQDJH
,QWKHDEVHQFHRIHIIHFWLYHUHJXODWLRQSURGXFWLRQVWDQGDUGVLQJOREDOL]HGPDUNHWVZLOOIROORZD´UDFHWRWKH
ERWWRPµZLWKWKHUHVXOWWKDWLQWHUPVRIHQYLURQPHQWDOVRFLDODQGHWKLFDOFULWHULDWKHFKHDSHVWDQGORZHVW
VWDQGDUGVPLJKWEHDSSOLHG
$OWKRXJK WKHUH DUH FRPSUHKHQVLYH FRQWURO PHFKDQLVPV WR HQVXUH IRRG VDIHW\ WKH\ DUH LQVXIÀFLHQW WR
JXDUDQWHH IRRG VDIHW\ IRU DOO LQWHUQDWLRQDOO\ WUDGHG SURGXFWV :KDW LV ODFNLQJ LV D SURDFWLYH SUHYHQWLYH
DSSURDFK
7KHFXUUHQWDSSURDFKHVWRDVVXULQJIRRGVDIHW\DUHFRPSOLFDWHGDQGH[SHQVLYHHVSHFLDOO\IRUVPDOOVFDOH
SURGXFHUVDQGLQWKHHQGSURGXFHUVDQGFRQVXPHUVSD\WKHDGGLWLRQDOFRVWV7KHQRWLRQWKDWPRUHFRQWUROV
DUH VXIÀFLHQW WR JXDUDQWHH DGHTXDWH IRRG VDIHW\ KDV SURYHG ZURQJ DGGLWLRQDO FRQWUROV KDYH QRW EHHQ
DEOHWRKDOWRUUHYHUVHWKHWUHQGRILQFUHDVLQJFRQWDPLQDQWVLQIRRGSURGXFWVDQGJUHDWHUHQYLURQPHQWDO
SROOXWLRQ$V\VWHPLFFKDQJHWRZDUGVORZULVNVXVWDLQDEOHSURGXFWLRQWHFKQLTXHVZLOOHDVHWKHSUREOHPV
RIIRRGVDIHW\DQGPD\DOVRLPSURYHWKHOHYHORIWUXVWRIFRQVXPHUVLQDJULFXOWXUDOSURGXFWV
$&KDQJHVLQFRQVXPSWLRQKDELWVLQD
JOREDOL]HGZRUOG
&RQVXPHUV LQ WKH (XURSHDQ 8QLRQ (8 DUH DEOH WR
FRQVXPHIRRGVIURPDOORYHUWKHZRUOGGXULQJYLUWXDOO\
DQ\ VHDVRQ RI WKH \HDU 7KLV LV SRVVLEOH EHFDXVH
RI ZRUOG WUDGH ZKLFK KDV EHFRPH PRUH DQG PRUH
LQWHUFRQQHFWHGLQWKHJOREDOL]DWLRQSURFHVVRIWKHSDVW
IHZGHFDGHV%XWJOREDOL]DWLRQLVSDUWO\EOLQGWRPDQ\
VRFLDO DQG HQYLURQPHQWDO LPSDFWV RI SURGXFWLRQ
EHFDXVH RI FRVW SUHVVXUHV DQG UHVXOWLQJ VFDOH
UHTXLUHPHQWV
5DFHWRWKHERWWRPWDNHVSODFHEHFDXVHJRRGVRFLDO
DQGHQYLURQPHQWDOFRQGLWLRQVOHDGWRKLJKHUFRVWV,I
WKHUH LV QR WUDQVSDUHQF\ IRU FRQVXPHUV RU QR RWKHU
OLPLWDWLRQ ´D UDFH WR WKH ERWWRP´ LV JRLQJ WR EH WKH
RYHUZKHOPLQJPRGHOIRULQYHVWPHQW
)RU H[DPSOH :HVWHUQ GHPDQG IRU LPSRUWHG DQLPDO
IHHG GULYHV WKH SURGXFWLRQ RI VR\EHDQV FRUQ DQG
ZKHDW RYHUVHDV DQG OHDGV WR QRQVLWHVSHFLÀF
SURGXFWLRQ VFKHPHV 7KH (XURSHDQ DJULFXOWXUDO DQG
IRRG VHFWRU LV KLJKO\ GHSHQGHQW RQ IHHG LPSRUWV
ZKLFKHQDEOHLWWREHWKHZRUOG·VELJJHVWH[SRUWHURI
IRRGSURGXFWV
$FFRUGLQJ WR HVWLPDWHV RI D *HUPDQ JURXS RI
DVVRFLDWLRQVFRRUGLQDWHGE\WKH$UEHLWVJHPHLQVFKDIW
ElXHUOLFKH /DQGZLUWVFKDIW $E/ DQG WKH (XUR1DWXU
6WLIWXQJ ´WKH (8·V QHHG IRU DJULFXOWXUDO
ODQGV RXWVLGH RI WKH &RPPXQLW\ LQFOXGLQJ
VRPH PLOOLRQ KHFWDUHV IRU WKH SURGXFWLRQ RI
LPSRUWHG VR\ DQG SURWHLQ IHHGV LV HVWLPDWHG
WR EH LQ WKH RUGHU RI PLOOLRQ KHFWDUHV ² WKLV LV
WZLFH WKH XWLOL]HG DJULFXOWXUDO DUHD RI *HUPDQ\µ
7KH UHODWLRQVKLS EHWZHHQ IHHG OLYHVWRFN DQG DQLPDO
PDQXUHKDVEHHQQHJOHFWHGZLWKQHJDWLYHHIIHFWVRQ
WKH HQYLURQPHQW JURXQG ZDWHU RFHDQV ELRGLYHUVLW\
DQLPDOZHOIDUHDQGSXEOLFKHDOWK/LYHVWRFNSURGXFWLRQ
QRZ QHHGV WR EH UHOLQNHG WR ORFDOO\ DYDLODEOH
DJULFXOWXUDO ODQG DQG GHOLQNHG IURP EHLQJ D GLUHFW
FRPSHWLWRURIKXPDQIRRGVXSSO\
$QRWKHU WUHQG FRQFHUQV WKH GHJOREDOL]DWLRQ RI IRRG
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
FKDLQV,QDVXUYH\RIFRQVXPHUVZKLFKDVNHGWKHP
WRZKDWH[WHQWWKH\ZHUHFRQFHUQHGDERXWIRRGVDIHW\
LQJOREDOVXSSO\FKDLQVSHUFHQWUHSOLHGWKDWWKH\
ZHUHYHU\FRQFHUQHGZKLOHSHUFHQWUHVSRQGHGWKDW
WKH\ZHUHVRPHZKDWZRUULHG(XURSHDQ&RPPLVVLRQ
7KHUH LV JURZLQJ FRQVXPHU SUHIHUHQFH IRU UHJLRQDO
SURGXFWV RYHU SURGXFWV IURP YHU\ GLVWDQW FRXQWULHV
RIRULJLQ$FFRUGLQJWRDVXUYH\E\1HVWOpWKH
DWWUDFWLYHQHVV RI UHJLRQDO SURGXFWV KDV H[FHHGHG
WKDW RI RUJDQLF IDUPLQJ SHU FHQW RI UHVSRQGHQWV
FODLPHGWKH\ERXJKWUHJLRQDOIRRGDQGRIWKHVH
SHU FHQW UHSRUWHG EX\LQJ UHJLRQDO IRRG RQ D UHJXODU
EDVLV ZKHUHDV SHU FHQW UHSRUWHG EX\LQJ LW IURP
WLPH WR WLPH 7KH PRWLYDWLRQV IRU VXFK FRQVXPHU
SUHIHUHQFHDUHWKHLUEHOLHIWKDWWKHVHSURGXFWVDUHRI
EHWWHU TXDOLW\ WKH\ IHHO PRUH VHFXUH ZKHQ NQRZLQJ
DERXW WKH RULJLQ RI WKH SURGXFWV DQG WKHLU GHVLUH WR
SURPRWH VXVWDLQDELOLW\ DQG WKH ORFDO HFRQRP\ 7KLV
LVDOVRZK\FRQVXPHUVOLNHWRVHHWKHSODFHRIRULJLQ
PDUNHGFOHDUO\RQIRRGSURGXFWV
LQ DJULFXOWXUDO SURGXFWLRQ V\VWHPV QRW HQRXJK LV
EHLQJ GRQH WR SUHYHQW WKHP 7KLV OHDGV WR QHJDWLYH
DQG XQVXVWDLQDEOH LQWHUGHSHQGHQFLHV EHWZHHQ
DJULFXOWXUDOSURGXFWLRQDQGSXEOLFKHDOWKDVLOOXVWUDWHG
E\WKHH[DPSOHRIDQWLELRWLFUHVLVWDQFH7KH(XURSHDQ
)RRG 6DIHW\ $XWKRULW\ ()6$ HYDOXDWHG WKH SXEOLF
KHDOWK ULVN RI EDFWHULDO VWUDLQV UHVLVWDQW WR FHUWDLQ
DQWLPLFURELDOV LQ IRRG DQG IRRGSURGXFLQJ DQLPDOV
,W GUHZ WKH FRQFOXVLRQ WKDW WKH XVH RI DQWLPLFURELDOV
LQ IRRGSURGXFLQJ DQLPDOV ZDV D ULVN IDFWRU IRU WKH
VSUHDG RI WKRVH EDFWHULDO VWUDLQV DQG IRU SXEOLF
KHDOWK$VDUHVXOWRIWKLVVWXG\H[SHUWVUHFRPPHQGHG
LPSRVLQJ UHVWULFWLRQV DQG EDQQLQJ FHUWDLQ DQWLELRWLFV
()6$ 7KH H[SHUWV DOVR FRQFOXGHG WKDW WKH
H[WHQVLYHLQWUD(8WUDGHLQDQLPDOVZDVDQDGGLWLRQDO
ULVNIDFWRUIRUDQWLELRWLFUHVLVWDQFH
2IWHQ IRRG VDIHW\ PHDVXUHV VXFK DV LQVSHFWLRQ RI
IRRG DQG UHFDOOV RI WDLQWHG IRRG WDNH SODFH DW WKH
HQG RI WKH IRRG FKDLQ :KLOH WKHVH PHDVXUHV DUH
LQGLVSHQVDEOHPRUHLPSRUWDQWVKRXOGEHSUHYHQWLRQ
ERWK IRU UHGXFLQJ UHODWHG WUDQVDFWLRQ FRVWV DQG IRU
JDLQLQJ WKH WUXVW RI FRQVXPHUV 3UHYHQWLRQ LQ WKH
FRQWH[W RI IRRG VDIHW\ PHDQV VWDUWLQJ DW WKH LQLWLDO
VWDJHVRISURGXFWLRQORRNLQJLQWRWKHXVHRIUHVRXUFHV
DQGWKHPRGHRIDJULFXOWXUDOSURGXFWLRQ,WLVQRZZHOO
NQRZQWKDWLQWHQVLYHXVHRIIRVVLOIXHOVLQDJULFXOWXUH
ZLOO QRW EH VXVWDLQDEOH LQ WKH IXWXUH QHLWKHU ZLOO WKH
XVH RI RWKHU UHVRXUFHV VXFK DV SKRVSKDWH DQG
SKRVSKRURXV %XW V\VWHPDWLF FKDQJH LV QHFHVVDU\
QRW RQO\ EHFDXVH RI WKH HYHQWXDO VFDUFLW\ RI WKHVH
H[WHUQDO LQSXWV EXW DOVR EHFDXVH RI SUREOHPV ZLWK
DVVXULQJ IRRG VDIHW\ LQ KLJKO\ LQWHQVLYH FRQYHQWLRQDO
DJULFXOWXUDOSURGXFWLRQV\VWHPV
7KHUHQHHGVWREHJUHDWHUDWWHQWLRQWRFRPEDWLQJDQG
DYRLGLQJ JOREDO HSLGHPLFV ² VRFDOOHG SDQGHPLFV
PDQ\RIZKLFKDUH]RRQRVHVLHGLVHDVHVZKLFKFDQ
EHWUDQVPLWWHGIURPDQLPDOVWRKXPDQV$SDSHUE\
WKH (XURSHDQ &RPPLVVLRQ·V 'LUHFWRUDWH *HQHUDO IRU
+HDOWKDQG&RQVXPHU$IIDLUV6$1&2GHÀQHV
SUHYHQWLRQ DV FRQVLVWLQJ RI PHDVXUHV WR GHFUHDVH
RFFXUUHQFH DQG WUDQVPLVVLRQ RI DQLPDO GLVHDVHV E\
IDUPLQJDQGIRRGFKDLQSUDFWLFHVDQGDQLPDOWUDQVSRUW
LQRUGHUWRHQVXUHDKLJKOHYHORIDQLPDOKHDOWKSXEOLF
KHDOWK DQG IRRG VDIHW\ 7KLV LQFOXGHV OLPLWLQJ WKH
LQFLGHQFHRI]RRQRVHVLQKXPDQVDQGRWKHUELRORJLFDO
ULVNV6$1&2HVWLPDWHVWKDWWKHFRVWIRUDYDFFLQDWLRQ
EDQNDW(8OHYHOPDLQWDLQLQJRQO\WKHYDFFLQHVIRUIRRW
DQGPRXWKGLVHDVHLVDERXWĄPLOOLRQSHU\HDU7KH
WRWDOYDOXHRIWKHDQWLJHQVWRUHGLQDYDFFLQHEDQNLV
HVWLPDWHGDWĄPLOOLRQIURPRQZDUGVDQGWKH
VWRFNKDVWREHUHQHZHGHYHU\ÀYH\HDUV$FFRUGLQJ
WRWKH6$1&2VWXG\WKHPDLQWRROVDQGLQVWUXPHQWVRI
SUHYHQWLRQDUHPRQLWRULQJDQGVXUYHLOODQFHLQPHPEHU
6WDWHV DQG ELRVDIHW\ PHDVXUHV VXFK DV GLVLQIHFWLRQ
VHJUHJDWLRQ DQG FOHDQLQJ )RU D FULWLFDO GLVFXVVLRQ
RIELRVDIHW\VHH,GHODQG5HLFKHUWLQFKDSWHURIWKLV
5HYLHZ ,Q WKH HYHQW RI DQ DQLPDO GLVHDVH EUHDNLQJ
RXW SUHYHQWLRQ DQG FRQWURO VWUDWHJLHV LQFOXGH LPSRUW
UHVWULFWLRQVVXFKDVOHJLVODWLRQDQGFRQWURORIDQLPDO
PRYHPHQWV DFURVV QDWLRQDO ERUGHUV +RZHYHU ZKDW
LV PLVVLQJ LV D GLVFXVVLRQ RI WKH OLPLWV RI DQLPDO
WUDQVSRUW DQG WKH GHQVLW\ RI DQLPDO SURGXFWLRQ WR
DYRLGRXWEUHDNVDQGWRPDLQWDLQSURGXFWLRQDWDOHYHO
FRPPHQVXUDWHZLWKUHJLRQDOPDUNHWUHTXLUHPHQWVDQG
HQYLURQPHQWDOFDUU\LQJFDSDFLW\
,W LV FOHDU WKDW ZKLOH HIIRUWV DUH EHLQJ PDGH WR
FRPEDW DQLPDO GLVHDVHV DQG SURGXFW FRQWDPLQDWLRQ
)LUVW RI DOO ZH QHHG D FRQFHSW IRU VXVWDLQDEOH
DJULFXOWXUDO SURGXFWLRQ DQG QRW RQO\ IRU (XURSH
7KH SDVW IHZ GHFDGHV KDYH ZLWQHVVHG D PDVVLYH
FKDQJH LQ SURGXFWLRQ DV ZHOO DV LQ SURFHVVLQJ DQG
FRQVXPSWLRQ KDELWV .QRZOHGJH RQ KRZ WR SUHSDUH
IRRG KDV EHHQ ORVW DQG FRQYHQLHQFH IRRGV DQG
HDWLQJRXWDVDUHVXOWRIWLPHSUHVVXUHKDYHEHFRPH
LQFUHDVLQJO\ SRSXODU &RVWV RI IRRG SDFNDJLQJ RIWHQ
H[FHHGWKHFRVWVRIWKHIRRGVWKHPVHOYHV
%6XVWDLQDEOHDJULFXOWXUH
7KLV KDV WR EH GHÀQHG DFFRUGLQJ WR VLWHVSHFLÀF
FRQGLWLRQV 5HVHDUFKHUV KDYH GHÀQHG FULWLFDO
´SODQHWDU\ ERXQGDULHVµ WR HQVXUH KXPDQ VDIHW\
WKH WUDQVJUHVVLQJ RI ZKLFK FRXOG EH FDWDVWURSKLF
5RFNVWU|P HW DO 1LQH RI WKH ERXQGDULHV
LGHQWLÀHG DUH FOLPDWH FKDQJH VWUDWRVSKHULF R]RQH
ODQGXVHFKDQJHIUHVKZDWHUXVHELRORJLFDOGLYHUVLW\
RFHDQ DFLGLÀFDWLRQ QLWURJHQ DQG SKRVSKRUXV
HPLVVLRQVLQWRWRWKHELRVSKHUHDQGRFHDQVDHURVRO
ORDGLQJ DQG FKHPLFDO SROOXWLRQ $FFRUGLQJ WR D
UHSRUW E\ 5RFNVWU|P HW DO WKUHH RI WKH QLQH
ERXQGDULHV KDYH DOUHDG\ EHHQ WUDQVJUHVVHG DOO RI
WKHPFRQQHFWHGZLWKDJULFXOWXUDOSURGXFWLRQ
7KH *HUPDQ &RXQFLO IRU 6XVWDLQDEOH 'HYHORSPHQW
UHFRPPHQGV WKDW WKH RUJDQLF IDUPLQJ
FRQFHSW EH PDGH WKH JROG VWDQGDUG IRU DJULFXOWXUDO
SURGXFWLRQWREHXVHGDVDJXLGHOLQHWKRXJKLWQHHGV
WREHFRQWLQXRXVO\GHYHORSHG'XVVHOGRUSDQG6DXWHU
DOVR QRWH WKDW ORZH[WHUQDOLQSXW DJULFXOWXUDO
SUDFWLFHV LQ GHYHORSLQJ FRXQWULHV KDYH UHVXOWHG LQ
KLJKHU \LHOGV RQ DYHUDJH KLJKHU UHODWLYH WR
FRQYHQWLRQDO SURGXFWLRQ V\VWHPV 7KH\ DVVXPH WKDW
H[WHUQDO LQSXWV RIWHQ DUH QRW DYDLODEOH WR IDUPHUV
LQ GHYHORSLQJ FRXQWULHV WKDW WKH XVH RI PLQHUDO
IHUWLOL]HUV RQ JURXQGV ZLWK ORZ UHWHQWLRQ RI QXWULHQWV
UHGXFHV\LHOGVDQGWKDWKLJK\LHOGLQJYDULHWLHVDUHQRW
DSSURSULDWHIRUVLWHVZLWKVXERSWLPDOFRQGLWLRQV
2UJDQLF IDUPLQJ LV UHJDUGHG DV VLWHVSHFLÀF DQG
VXVWDLQDEOHEHFDXVHRILWVFLUFXODUÁRZRILQSXWV$V
GHPDQG IRU RUJDQLF SURGXFWV LV KLJKHU WKDQ VXSSO\
LQ*HUPDQ\WKHUHLVXSZDUGSUHVVXUHRQSULFHVDQG
PRUHDQGPRUHRUJDQLFSURGXFWVDUHEHLQJLPSRUWHG
7KXV JURZLQJ RUJDQLF IRRGV IRU H[SRUW FRXOG ZHOO
EH DQ RSWLRQ IRU VPDOOVFDOH SURGXFHUV DV QRWHG
E\ DQ HYDOXDWLRQ RI &KXUFK 'HYHORSPHQW 6HUYLFH
(YDQJHOLVFKHU(QWZLFNOXQJVGLHQVWDQG%UHDGIRUWKH
:RUOG%URWIUGLH:HOW+RZHYHUPDUNHWVLQ
WKLV VHJPHQW DUH GHYHORSLQJ QHDUO\ DORQJ WKH VDPH
OLQHV DV FRQYHQWLRQDO PDUNHWV UHVXOWLQJ LQ XQIDLU
FRPSHWLWLRQ EHWZHHQ SURGXFHUV ZLWKLQ WKH (8 DQG
WKRVHDEURDG
0DQ\ZHOOLQIRUPHGFRQVXPHUVDUHDSSDOOHGDWWKHZD\
*HUPDQIDUPLQJV\VWHPVRSHUDWH6RPHDJULFXOWXUHLQ
(XURSHPD\QHYHUEHHFRQRPLFDOZLWKRXWVXEVLGLHV
3XEOLFPRQH\VKRXOGQRWEHVSHQWIRUSUHVHUYLQJWKLV
NLQG RI DJULFXOWXUH 6XEVLGLHV VKRXOG EH VSHQW IRU D
V\VWHPRIDJULFXOWXUDOSURGXFWLRQWKDWLVÀWDQGYLDEOH
IRUWKHIXWXUHLQDPDQQHUWKDWLVDGDSWHGWRWKHVRLOV
DQGOLYLQJFRQGLWLRQVRIDQLPDOVDQGSHRSOH7KHUHLV
DQXUJHQWQHHGIRUFKDQJHWRSURWHFWSXEOLFJRRGV
75$'($1'(19,5210(175(9,(:
&)RRGFRQWURO
7KH RXWEUHDN RI WKH %6( FULVLV VRPH \HDUV DJR
FUHDWHGDPDVVLYHFULVLVRIFRQÀGHQFHZKLFKSURPSW
HG WKH &RPPLVVLRQ RI WKH (XURSHDQ &RPPXQLWLHV
WR XQGHUWDNH D VWXG\ WKDW UHVXOWHG LQ WKH VR
FDOOHG :KLWH 3DSHU RQ )RRG 6DIHW\ ,W ZDV DQG VWLOO
LV WKH FUXFLDO VWUDWHJLF GRFXPHQW IRU IRRG VDIHW\ LQ
WKH (8 :H DW WKH )HGHUDWLRQ RI *HUPDQ &RQVXPHU
2UJDQLVDWLRQV ZRQGHUHG ZKHWKHU WKDW VWUDWHJ\ KDV
EHHQ VXFFHVVIXO ,V WKH SULQFLSOH RI WUDFHDELOLW\ IXOO\
RSHUDWLRQDO VR WKDW ZH EHFRPH DZDUH RI H[LVWLQJ
ULVNV DV HDUO\ DV SRVVLEOH" 'R RQO\ VDIH JOREDOO\
WUDGHGJRRGVUHDFKRXUSODWHV",VWKHSUHFDXWLRQDU\
SULQFLSOH RI WKH (8 UHJXODWLRQ RQ IRRG VDIHW\ EHLQJ
LPSOHPHQWHG" $QG ZK\ GR FRQVXPHUV VWLOO KDYH
GLVWUXVWLQWKHSUHFDXWLRQDU\SULQFLSOHDVDSSOLHG"
$FFRUGLQJ WR D (XUREDURPHWHU VXUYH\ RQ ULVN
SHUFHSWLRQ LQ WKH (8 (XURSHDQ &RPPLVVLRQ
SHU FHQW RI WKRVH VXUYH\HG EHOLHYHG WKDW
WKH SUREDELOLW\ RI HDWLQJ IRRGV ZKLFK KDYH QHJDWLYH
HIIHFWV RQ KHDOWK ZDV YHU\ KLJK DQG SHU FHQW
EHOLHYHGWKDWLWZDVIDLUO\SUREDEOH7KHUHZHUHVLPLODU
GDWD IRU *HUPDQ\ )XUWKHUPRUH PDQ\ FRQVXPHUV
DUH VWLOO DVNLQJ IRU D V\VWHPLF FKDQJH LQ DJULFXOWXUDO
SURGXFWLRQPHWKRGV7KH(XUREDURPHWHUVXUYH\DOVR
UHYHDOV WKDW SHRSOH DUH LQFUHDVLQJO\ ZRUULHG DERXW
FKHPLFDO UHVLGXHV IURP SHVWLFLGHV LQ IUXLW YHJHWDEOH
DQG FHUHDOV ZLWK DQ DYHUDJH RI SHU FHQW RI
UHVSRQGHQWVLQWKH(8H[SUHVVLQJVXFKFRQFHUQV
SHUFHQWLQ*UHHFHSHUFHQWLQ)UDQFHDQGSHU
FHQW LQ *HUPDQ\ &RQFHUQLQJ WKH XVH RI DQWLELRWLFV
RU KRUPRQHV LQ PHDW DQ DYHUDJH RI SHU FHQW RI
UHVSRQGHQWV WKURXJKRXW (XURSH UHSRUWHG EHLQJ YHU\
ZRUULHG SHU FHQW LQ &\SUXV DQG SHU FHQW LQ
WKH 1HWKHUODQGV 7KH (8 DYHUDJH IRU UHVSRQGHQWV
H[SUHVVLQJ FRQFHUQ DERXW WKH FORQLQJ RI DQLPDOV
IRU IRRG SURGXFWV ZDV SHU FHQW DQG SHU FHQW
ZHUHFRQFHUQHGDERXWSROOXWDQWVVXFKDVPHUFXU\LQ
ÀVK DQG GLR[LQV LQ SRUN )RUW\WZR SHU FHQW RI WKRVH
VXUYH\HGGLGQRWEHOLHYHWKDWWKHSXEOLFDXWKRULWLHVLQ
WKH(8YLHZHGWKHKHDOWKRIFLWL]HQVDVPRUHLPSRUWDQW
WKDQ WKH SURÀWV RI SURGXFHUV DQG PRUH WKDQ SHU
FHQW IHOW WKDW SXEOLF DXWKRULWLHV VKRXOG GR PRUH WR
HQVXUHWKDWIRRGLVKHDOWK\DQGLQIRUPSHRSOHDERXW
KHDOWK\GLHWVDQGOLIHVW\OHV
7KH:KLWH3DSHURQ)RRG6DIHW\PDNHVPDQXIDFWXUHUV
LPSRUWHUV FDUULHUV DQG UHWDLOHUV UHVSRQVLEOH IRU WKH
IRRG VDIHW\ RI SURGXFWV 7KH\ KDYH WR HQVXUH DQG
GRFXPHQW WKH VDIHW\ RI WKHLU JRRGV $GGLWLRQDOO\ D
V\VWHPRIIRRGFRQWUROVLVEHLQJLPSOHPHQWHGWKURXJK
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
RIÀFLDOPRQLWRULQJRIIRRGDQGYHWHULQDU\PDWWHUV7KH
FRPSHWHQW DXWKRULWLHV WU\ WR GHWHFW SUREOHPV ZLWK
IRRGVDIHW\DVHDUO\DVSRVVLEOHDQGWDNHDSSURSULDWH
PHDVXUHV7KH)HGHUDO2IÀFHRI&RQVXPHUDQG)RRG
6DIHW\ %9/ LQ *HUPDQ\ WULHG WR GHYHORS HPHUJLQJ
ULVN LGHQWLÀFDWLRQ V\VWHPV %XW LW LV QRW FOHDU KRZ
HIIHFWLYH WKHVH FDQ EH 2QH RI WKH REOLJDWLRQV RI
EXVLQHVVHV LV WR WUDFH WKH RULJLQ RI SURGXFWV ZKHQ
WKH\DUHREVHUYHGWRSRVHDKHDOWKKD]DUGDQGKHOS
UHPRYHWKRVHSURGXFWVIURPWKHPDUNHWDVTXLFNO\DV
SRVVLEOH7KHLGHDLVWRWUDFHWKHFRPSOHWHIRRGDQG
IHHGSURGXFWLRQFKDLQIURPWKHVRXUFHRISURGXFWLRQ
WRWKHUHWDLOHU
'/LPLWVRIIRRGVDIHW\
)RRG VDIHW\ LV FORVHO\ OLQNHG WR TXHVWLRQV RI DQLPDO
DQG SODQW KHDOWK DQG DQLPDO ZHOIDUH ,Q WKH (8 WKH
)RRG DQG 9HWHULQDU\ 2IÀFH )92 LV UHVSRQVLEOH IRU
YHULI\LQJ FRPSOLDQFH ZLWK (8 VWDQGDUGV FRQFHUQLQJ
WKHVH WKUHH DUHDV $FFRUGLQJ WR 6$1&2 LW
FDUULHV RXW LQVSHFWLRQV DQQXDOO\ RI ZKLFK RQH
WKLUGDUHXQGHUWDNHQLQGHYHORSLQJFRXQWULHV7KH)92
ORRNV DW WKH OHJDO IUDPHZRUN DQG ZKHWKHU UHJXODWRU\
PHDVXUHVDUHLQSODFHWRHQVXUHWKDWSURGXFHUVDSSO\
WKH VWDQGDUGV VWLSXODWHG DQG HQIRUFH WKHP ,W DOVR
FKHFNV WKH ZRUN RI WKH FRPSHWHQW DXWKRULWLHV DQG
WKHLUVXUYHLOODQFHDQGFRQWUROPHDVXUHVHJZKHWKHU
WKH\ KDYH DGHTXDWH IDFLOLWLHV VXFK DV ODERUDWRULHV
LQGHSHQGHQFHRIZRUNLQIRUPDWLRQSROLF\FHUWLÀFDWLRQ
SUDFWLFHVFRQWUROV\VWHPVDQGUHFRUGV,WDOVRORRNV
DW SURGXFWLRQ HVWDEOLVKPHQWV KDQGOLQJ DQG VWRUDJH
VLWHVDQGODERUDWRULHV
$FFRUGLQJ WR 6$1&2 ZH NQRZ IURP WKH ZRUN RI
)92 WKDW WKH PDLQ IRRG VDIHW\ SUREOHPV FRQFHUQ
WKH IROORZLQJ DUHDV WKH OHJDO DQG DGPLQLVWUDWLYH
LQIUDVWUXFWXUH D ODFN RI XQGHUVWDQGLQJ RI FRQWURO
V\VWHPUHTXLUHPHQWVHVSHFLDOO\RI(8UHTXLUHPHQWV
LQDGHTXDWH FRQWURO DQG HQIRUFHPHQW PHFKDQLVPV
DQG ODFN RI RU LQDGHTXDWH IDFLOLWLHV IRU FRQWURO DQG
FHUWLÀFDWLRQSXUSRVHV6$1&2$OWKRXJKWKHUH
LVQRGRXEWWKDWWKHUHLVJUHDWHUFRRSHUDWLRQEHWZHHQ
WKHFRPSHWHQWRXWKRULWLHVLQWKHGLIIHUHQWFRXQWULHVLQ
WHFKQLFDODVVLVWDQFHDQGFDSDFLW\EXLOGLQJZLWKUHJDUG
WR(XURSHDQIRRGVDIHW\WKHUHDUHSUREOHPVVXFKDV
LQDGHTXDWH LQIUDVWUXFWXUH LQ H[SRUWLQJ FRXQWULHV ,Q
DGGLWLRQWRWKDWVRPHRIÀFLDOIRRGDQGIHHGDXWKRULWLHV
UHÁHFWPRUHWKHLQWHUHVWVRIWKHEXVLQHVVFRPPXQLW\
WKDQFRQVXPHULQWHUHVWV)RRGVDIHW\LVDOVRLQGDQJHU
EHFDXVH RI D JURZLQJ DPRXQW RI XQVDIH SURGXFWV
VXFKDVGLHWDU\VXSSOHPHQWVRIIHUHGYLDWKH,QWHUQHW
7KH JURZLQJ PDUNHW IRU HQULFKHG IRRG HJ
FRQWDLQLQJ YLWDPLQV DQG PLQHUDOV SUHVHQWV IRRG
VDIHW\ ULVNV EHFDXVH RI WKH ULVN RI RYHUFRQVXPSWLRQ
RI WKRVH DGGLWLYHV $QRWKHU SUREOHP DULVHV IURP
SKDUPDFHXWLFDOO\ DFWLYH VXEVWDQFHV QRW DSSURYHG LQ
(XURSHDQGVROGDVIRRGRQWKH,QWHUQHW
,PSRUWHG SURGXFWV DUH VWLOO ODUJHO\ D ´EODFN ER[µ LQ
WKHVHQVHWKDWODERUDWRULHVLQ(XURSHDUHRQO\DEOHWR
ÀQGUHVLGXHVWKH\DUHORRNLQJIRU:LWKRXWLQIRUPDWLRQ
DERXWWKHDJULFXOWXUDOSURGXFWLRQPHWKRGVDQGUHODWHG
LQSXWVIRULQVWDQFHWKHXVHRIYHWHULQDU\GUXJVLQDQLPDO
KXVEDQGU\WKRVHODERUDWRULHVDUHXQOLNHO\WRÀQGWKH
UHVLGXHV 7KH FRQWURO V\VWHP LQ WKH (8 QHHGV WR EH
FRQWLQXRXVO\ LPSURYHG ,Q FRQWUDVW ZLWK WKH LQGXVWU\
WKHDXWKRULWLHVDUHQRWVXIÀFLHQWO\LQWHUFRQQHFWHGDQG
DUH DOZD\V RQH VWHS EHKLQG QHZ WHFKQRORJLHV QHZ
DFWLYHSKDUPDFHXWLFDOLQJUHGLHQWVDQGQHZSURGXFWV
WKDWSRVHQHZULVNV)URPQRWLÀFDWLRQVDERXWXQVDIH
IRRGV LQ WKH (8·V 5DSLG $OHUW 6\VWHP RI )RRG
DQG )HHG 5$6)) LW LV HYLGHQW WKDW IRRG DQG IHHG
SURGXFWV LPSRUWHG LQWR WKH (8 DUH QRW DXWRPDWLFDOO\
VDIH 3DWKRJHQLF PLFURRUJDQLVPV DOOHUJHQV
JHQHWLFDOO\ PRGLÀHG RUJDQLVPV *02V P\FRWR[LQV
DQGUHVLGXHVLQIRRGUHOHDVHGIURPSDFNDJLQJDUHWKH
SULQFLSDO FDXVHV RI XQVDIH IRRGV )RRG VDIHW\ DQG
IRRGTXDOLW\UHTXLUHJOREDOHIIRUWVE\WKHLQGXVWU\DQG
WKHRIÀFLDOUHJXODWRU\DQGFRQWUROOLQJDXWKRULWLHV)LYH
SHUFHQWRIIRRGVWXIIFRQVXPHGLQWKH(8RULJLQDWHV
IURP WKLUG FRXQWULHV 6$1&2 7KH TXHVWLRQ
WKHUHIRUHDULVHVDVWRKRZDJOREDODOHUWV\VWHPFRXOG
EH RUJDQL]HG DQG ZKHWKHU WKH (XURSHDQ V\VWHP LV
VXLWDEOH IRU RWKHU FRXQWULHV SDUWLFXODUO\ GHYHORSLQJ
FRXQWULHV
-RKQ 'DOOL WKH IRUPHU &RPPLVVLRQHU IRU +HDOWK DQG
&RQVXPHU 3ROLF\ QRWHG WKDW ´PRUH WKDQ
VL[W\FRXQWULHVRXWVLGHWKH(8ZHUHFRQQHFWHGWRWKH
5$6)):LQGRZDQHZRQOLQHSODWIRUPZKLFKDOORZ>V@
WKHP WR GRZQORDG 5$6)) QRWLÀFDWLRQV WKDW PLJKW
FRQFHUQ WKHP 7KH &RPPLVVLRQ ZRXOG FRQWLQXH LWV
HIIRUWV WR VXSSRUW WKRVH FRXQWULHV LQ VHWWLQJ XS WKHLU
DOHUW V\VWHPV WKURXJK WKH %HWWHU 7UDLQLQJ IRU 6DIHU
)RRG SURJUDPPH WR HQDEOH WKHP WR WDFNOH IRRG
VDIHW\LQFLGHQWVWKDWJUDGXDOO\EHFRPHPRUHJOREDOLQ
QDWXUHµ&RRSHUDWLRQEHWZHHQFRXQWULHVDQGEHWZHHQ
SXEOLF KHDOWK DQG IRRG VDIHW\ DXWKRULWLHV LV HVVHQWLDO
WR PDQDJH KD]DUGV LQ IRRG 7KLV KDV EHHQ VWDUNO\
LOOXVWUDWHG E\ WKH FDVH RI (+(& 2 + D GHDGO\
(FROL EDFWHULXP VWUDLQ FDXVHG E\ FRQWDPLQDWHG
VSURXWV WKDW NLOOHG DW OHDVW SHRSOH DQG FDXVHG D
PDMRUIRRGFULVLVLQ*HUPDQ\LQ
(,QWHUQDWLRQDOIRRGVWDQGDUGV
&ROOHFWLYH VWDQGDUGV VXFK DV *OREDO*$3 6DIH
4XDOLW\)RRG4XDOLW\DQG6DIHW\RU/DEHO5RXJHIRU
PRUH LQIRUPDWLRQ VHH *XHQWKHU DQG :LOO DUH
LQFUHDVLQJO\VHUYLQJDVTXDOLW\DVVXUDQFHVFKHPHVIRU
FRUSRUDWLRQV LQYROYHG LQ WKH JOREDO IRRG FKDLQ 7KH\
VHUYHDVDJXDUDQWHHIRUVWDEOHIRRGTXDOLW\LQDZRUOG
RIKRUL]RQWDOO\DQGYHUWLFDOO\LQWHJUDWHGSURGXFHUV
$V FRQVXPHU RUJDQL]DWLRQV VKRZ LQ UHFHQW PDUNHW
VXUYH\V SURFHVVHG IRRG LV FRQVLGHUDEO\ PRUH
H[SHQVLYHDQGYHU\RIWHQHQULFKHGZLWKXQQHFHVVDU\
IRRG DGGLWLYHV WKDW SRVH WKH ULVN RI RYHUGRVDJH
0DQ\RIWKHVHSURFHVVHGIRRGSURGXFWVDOVRFRQWDLQ
DURPDV DGGLWLYHV IRU FRQVHUYDWLRQ DQGRU WDVWH
HQKDQFLQJVXEVWDQFHVDLPHGDWNHHSLQJWKHPIUHVK
DSSHDOLQJ DQG QRQSHULVKDEOH ZKLOH EHLQJ VKLSSHG
ZRUOGZLGH,QWKLVUHVSHFWSURGXFWVRIELJFRPSDQLHV
HYHU\ZKHUHLQWKHZRUOGDGKHUHWRWKHVDPHVWDQGDUGV
+RZHYHUWKHZD\IRRGVWDQGDUGVDUHVHWDQGZKRVHWV
WKHPLVQRWWUDQVSDUHQWWRFRQVXPHUV,QGHHGPDQ\
FRQVXPHUV UHDOL]H WKDW WKHLU XQGHUVWDQGLQJ RI IRRG
VDIHW\DQGWKHLUHWKLFDOFRQFHUQVDUHQRWDXWRPDWLFDOO\
EHLQJ FRQVLGHUHG LQ WKH LQWHUQDWLRQDO PDUNHW DQG
WKDWVWDQGDUGVRIWHQZRUNDJDLQVWFRQVXPHULQWHUHVWV
0KOHLE )RU LQVWDQFH WKHUH DUH FRQÁLFWV
EHWZHHQFRQVXPHUVLQWKH(8DQGH[SRUWLQJEXVLQHVV
LQ WKH 8QLWHG 6WDWHV RYHU *02V FKORULQDWHG SRXOWU\
DQG KRUPRQHV LQ PHDW DQG GDLU\ SURGXFWLRQ 7KH
PDMRULW\RI(XURSHDQFRQVXPHUVDUHZDU\RISURGXFWV
RI FORQHG DQLPDOV RU JHQHWLFDOO\ PRGLÀHG ÀVK EXW
FRPPHUFLDO SUHVVXUH JURXSV RIWHQ WU\ WR LQÁXHQFH
SXEOLFGHEDWHDQGVHQWLPHQWRQWKLVLVVXH
$FFRUGLQJ WR 7DQ]PDQQ WKH &KXUFK
'HYHORSPHQW 6HUYLFH DQG %UHDG IRU WKH :RUOG ZDQW
IRRGVWDQGDUGVWREHQHJRWLDWHGDWWKHPXOWLQDWLRQDO
OHYHO%XWWKHVROXWLRQLVQRWWKDWVWDQGDUGVVKRXOGEH
ORZHUHGWRDOHYHOWKDWZRXOGHQDEOHFRPSOLDQFHE\DOO
SURGXFHUV &RQVXPHUV· GHVLUH IRU IRRG VDIHW\ YDULHV
GHSHQGLQJRQWKHFXOWXUDOEDFNJURXQGRIWKHFRXQWU\
ZKHUHSURGXFWVDUHFRQVXPHG,IWKH)HGHUDO,QVWLWXWH
IRU 5LVN $VVHVVPHQW %I5 LQ *HUPDQ\ IRU LQVWDQFH
GHÀQHV WKH OLPLW YDOXHV IRU UHVLGXHV WKHVH UHIHU WR
WKH PLQLPDO TXDOLW\ SURGXFHUV KDYH WR FRPSO\ ZLWK
7KLV LV ZK\ WKHUH ZLOO DOZD\V EH D FRQÁLFW EHWZHHQ
WKH LQWHUHVWV RI FRQVXPHUV LQ GHYHORSHG FRXQWULHV
DQG SURGXFHUV LQ GHYHORSLQJ FRXQWULHV +RUWRQ DQG
:ULJKW KDYH VKRZQ WKDW GHYHORSLQJ FRXQWULHV
ZRXOG VWDQG WR EHQHÀW LI WKH 8QLWHG 6WDWHV DQG
(XURSH DGRSWHG WKH VDPH VWDQGDUGV %XW IURP WKH
SHUVSHFWLYH RI (XURSHDQ FRQVXPHUV KDUPRQL]DWLRQ
75$'($1'(19,5210(175(9,(:
RI 8QLWHG 6WDWHV DQG (XURSHDQ VWDQGDUGV ZRXOG LQ
PRVW LQVWDQFHV KDYH QHJDWLYH HIIHFWV DV LOOXVWUDWHG
E\WKHH[DPSOHRIFKORULQDWHGSRXOWU\
)(TXLYDOHQFHRISURGXFWLRQDQGRITXDOLW\
PDQDJHPHQWLQVWUXPHQWV
&RQVXPHUV PD\ GLVFULPLQDWH DJDLQVW SURGXFWV
IURP GHYHORSLQJ FRXQWULHV LI WKH VWDQGDUGV RI WKRVH
FRXQWULHVDUHQRWDFFHSWHGDVHTXLYDOHQWWR(XURSHDQ
VWDQGDUGV (TXLYDOHQFH LQ WKLV FRQWH[W GRHV QRW
PHDQ WKDW SURGXFWV VKRXOG EH SURGXFHG XVLQJ WKH
VDPHSURFHVVHVEXWLQDFRPSDUDEOHZD\3URGXFWV
SURFHVVLQJWHFKQLTXHVDQGZD\VRIFRQIRUPLQJZLWK
IRRGVDIHW\UHTXLUHPHQWVPD\GLIIHU
$OWKRXJK WKHUH LV D FRPSUHKHQVLYH VHW RI FRQWURO
LQVWUXPHQWVIRUIRRGVDIHW\LWZLOOQRWEHVXIÀFLHQWWR
VDIHJXDUG IRRG VDIHW\ IRU DOO LQWHUQDWLRQDOO\ WUDGHG
SURGXFWV,QVXPDV\VWHPDWLFDSSURDFKWRZDUGVWKH
FRQWUROV\VWHPLVPLVVLQJ,QVWHDGRIKDUPRQL]LQJWKH
HOHPHQWV RI VWDQGDUGV WKHLU QXPEHU LV VWLOO JURZLQJ
0DQ\UHTXLUHPHQWVDQGVWDQGDUGVRIIRRGVDIHW\KDYH
EHHQLQWURGXFHGE\PXOWLQDWLRQDODJULEXVLQHVVWRWKHLU
DGYDQWDJHEXWUDUHO\LQFRRSHUDWLRQZLWKWKHIDUPHUV
ZKR KDYH WR PDQDJH WKH UHTXLUHPHQWV (TXLYDOHQFH
RISURGXFWLRQDQGRITXDOLW\PDQDJHPHQWLQVWUXPHQWV
VKRXOGEHMXGJHGE\ERGLHVWKDWDUHLQGHSHQGHQWRI
LQGXVWU\DQGLQDFFRUGDQFHZLWKFRQVXPHUGHPDQG
*&RQFOXVLRQV
,QFUHDVLQJ JOREDOL]DWLRQ KDV DFFHOHUDWHG WKH
LQGXVWULDOL]DWLRQ RI DJULFXOWXUDO SUDFWLFHV DQG FRVW
SUHVVXUHV DPRQJ SURGXFHUV 7KLV KDV OHG WR ODUJHU
VFDOHV RI SURGXFWLRQ RI KRPRJHQHRXV DJULFXOWXUDO
JRRGV LQ D GHFUHDVLQJ QXPEHU RI SURGXFWLRQ XQLWV
ZLWK VHYHUDO XQUHVROYHG IRRGVDIHW\ ULVNV WKDW DUH
GLIÀFXOWWRPDQDJH
0DQ\ IRRG VDIHW\ LVVXHV DUH UHODWHG WR GLVHDVHV RI
SODQWVDQGDQLPDOVDQGWRWKHXVHRIH[WHUQDOLQSXWV
VXFK DV DJURFKHPLFDOV DQG DQWLELRWLFV ,QWHQVLÀHG
DJULFXOWXUDO SURGXFWLRQ KDV D QHJDWLYH LPSDFW RQ
SXEOLFKHDOWKDQGZHOOEHLQJDQGWKDWSURFHVVVHHPV
WRKDYHUHDFKHGLWVOLPLWV%HFDXVHRIWKHSUHVVXUHV
RI FRPSHWLWLRQ SURGXFHUV DUH FRQVWDQWO\ VHHNLQJ WR
UHGXFHWKHLUSURGXFWLRQFRVWV7KLVPHDQVWKDWLQWKH
DEVHQFHRIHIIHFWLYHUHJXODWLRQSURGXFWLRQVWDQGDUGV
ZLOOIROORZD´UDFHWRWKHERWWRPµZLWKWKHUHVXOWWKDWLQ
WHUPVRIHQYLURQPHQWDOVRFLDODQGHWKLFDOFULWHULDWKH
FKHDSHVWDQGORZHVWVWDQGDUGVPLJKWEHDSSOLHG
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
$OWKRXJK WKHUH DUH FRPSUHKHQVLYH FRQWURO PHFKDQ
LVPV WR HQVXUH IRRG VDIHW\ WKH\ DUH LQVXIÀFLHQW WR
JXDUDQWHH IRRG VDIHW\ IRU DOO LQWHUQDWLRQDOO\ WUDGHG
SURGXFWV :KDW LV ODFNLQJ LV D SURDFWLYH SUHYHQWLYH
DSSURDFK ,QVWHDG RI GLIIHUHQW VDIHW\ VWDQGDUGV
DQG UHTXLUHPHQWV EHLQJ KDUPRQL]HG WKH QXPEHU
RI GLYHUJHQW UHTXLUHPHQWV LV VWLOO JURZLQJ 0DQ\
VWDQGDUGV DQG UHTXLUHPHQWV KDYH EHHQ LQWURGXFHG
WRWKHDGYDQWDJHRIPXOWLQDWLRQDODJULEXVLQHVVHVEXW
RIWHQQRWLQFRRSHUDWLRQZLWKWKHIDUPHUVZKRKDYHWR
FRQIRUPZLWKWKRVHUHTXLUHPHQWV
&RQWUROV WR VDIHJXDUG (XURSHDQ IRRG VDIHW\ KDYH
FHUWDLQOLPLWDWLRQV7KHFXUUHQWDSSURDFKHVWRDVVXULQJ
IRRGVDIHW\DUHFRPSOLFDWHGDQGH[SHQVLYHHVSHFLDOO\
IRUVPDOOVFDOHSURGXFHUVDQGLQWKHHQGSURGXFHUV
DQGFRQVXPHUVSD\WKHDGGLWLRQDOFRVWV7KHQRWLRQ
WKDWPRUHFRQWUROVDUHVXIÀFLHQWWRJXDUDQWHHDGHTXDWH
IRRG VDIHW\ KDV SURYHG ZURQJ DGGLWLRQDO FRQWUROV
KDYH QRW EHHQ DEOH WR KDOW RU UHYHUVH WKH WUHQG RI
LQFUHDVLQJFRQWDPLQDQWVLQIRRGSURGXFWVDQGJUHDWHU
HQYLURQPHQWDO SROOXWLRQ $ V\VWHPLF FKDQJH WRZDUGV
ORZULVNVXVWDLQDEOHSURGXFWLRQWHFKQLTXHVZLOOHDVH
WKHSUREOHPVRIIRRGVDIHW\UHODWHGWRWKHSURGXFWLRQ
DQGSURFHVVLQJRIIRRG,WPD\DOVRLPSURYHWKHOHYHO
RIWUXVWRIFRQVXPHUVLQDJULFXOWXUDOSURGXFWV
7KH IRRG LQGXVWU\ VKRXOG KHOS LPSURYH WKH EDVLV
IRU KHDOWK\ QXWULWLRQ E\ HQVXULQJ WKH TXDOLW\ RI UDZ
PDWHULDOVDQGLQSXWVLQSURFHVVHGIRRG7KHLQGXVWU\
VKRXOGDOVRHQVXUHWKDWSURGXFWLRQLVHQYLURQPHQWDOO\
IULHQGO\DQGDSSOLHGWRWKHORFDWLRQVZKHUHSURGXFWLRQ
WDNHVSODFH
*RYHUQPHQWV QHHG WR FRRSHUDWH QDWLRQDOO\ DQG
LQWHUQDWLRQDOO\ WR LQFRUSRUDWH WKH SUHYHQWLRQ RI ULVN
IDFWRUV LQWR RWKHU SROLF\PDNLQJ DUHDV 0HDVXUHV
UHODWLQJWRDUHDVVXFKDVIRRGVHFXULW\DQGIRRGVDIHW\
IRRG SURGXFWLRQ DJULFXOWXUH KHDOWK HQYLURQPHQW
WUDGH WD[DWLRQ HGXFDWLRQ DQG XUEDQ GHYHORSPHQW
QHHG WR EH FRKHUHQW DQG VKRXOG DGKHUH WR WKH
SUHFDXWLRQDU\SULQFLSOH
75$'($1'(19,5210(175(9,(:
5HIHUHQFHV
$FDGHP\RI6FLHQFHRI6RXWK$IULFD7XUQLQJVFLHQFHRQ,PSURYLQJDFFHVVWRHQHUJ\LQVXE6DKDUDQ$IULFDQ
6L[WKDQQXDOPHHWLQJRIWKH$IULFDQ6FLHQFH$FDGHP\'HYHORSPHQW,QLWLDWLYH²1RYHPEHU$YDLODEOHDWKWWS
ZZZQDWLRQDODFDGHPLHVRUJDVDGLB&RQIHUHQFH3')V7XUQLQJ6FLHQFH2QSGI
$GHOPDQ,%H\RQGH[SRUWOHGJURZWK:RUOG'HYHORSPHQW²
$MD\L&2$NLQQLIHVL).6LOHVKL*DQG.DQMLSLWH:/DERXULQSXWVDQGÀQDQFLDOSURÀWDELOLW\RIFRQYHQWLRQDODQG
DJURIRUHVWU\EDVHGVRLOIHUWLOLW\PDQDJHPHQWSUDFWLFHVLQ=DPELD$JUHNRQ6HSWHPEHU²
$NHU-&DQG0ELWL,00RELOHSKRQHVDQGHFRQRPLFGHYHORSPHQWLQ$IULFD&*':RUNLQJ3DSHU&HQWHUIRU
*OREDO'HYHORSPHQW:DVKLQJWRQ'&$YDLODEOHDWKWWSZZZPHPSRZHUPHQWRUJZSFRQWHQWXSORDGV
0RELOH3KRQHVDQG(FRQRPLF'HYHORSPHQWLQ$IULFDSGI
$OOHQ0)UDPH'-+XQWLQJIRUG&-RQHV&'-DVRQ$/RZH-$0HLQVKDXVHQ0DQG0HLQVKDXVHQ1:DUPLQJ
FDXVHGE\FXPXODWLYHFDUERQHPLVVLRQVWRZDUGVWKHWULOOLRQWKWRQQH1DWXUH²
$OORZD\%-HG0LFURQXWULHQW'HÀFLHQFLHVLQ*OREDO&URS3URGXFWLRQ1HZ<RUNDQG+HLGHOEHUJ6SULQJHU9HUODJ
$OWLHUL0$DQG1LFKROOV&$JURHFRORJ\DQGWKHVHDUFKIRUDWUXO\VXVWDLQDEOHDJULFXOWXUH%HUNHOH\&$8QLYHUVLW\
RI&DOLIRUQLD
$OWLHUL 0$ 3RQWL / DQG 1LFKROOV & (QKDQFHG SHVW PDQDJHPHQW WKURXJK VRLO KHDOWK WRZDUG D EHORZJURXQG
KDELWDWPDQDJHPHQWVWUDWHJ\%LRG\QDPLFV6XPPHU²
$OWLHUL 0$ $JURHFRORJ\ 7KH 6FLHQFH RI 6XVWDLQDEOH $JULFXOWXUH 6HFRQG HGLWLRQ %RXOGHU &2 :HVWYLHZ
3UHVV
$OWLHUL0$$JURHFRORJ\WKHVFLHQFHRIQDWXUDOUHVRXUFHPDQDJHPHQWIRUSRRUIDUPHUVLQPDUJLQDOHQYLURQPHQWV
$JULFXOWXUH(FRV\VWHPVDQG(QYLURQPHQW²
$OWLHUL0$DQG.RRKDINDQ3(QGXULQJIDUPV&OLPDWHFKDQJHVPDOOKROGHUVDQGWUDGLWLRQDOIDUPLQJFRPPXQLWLHV
(QYLURQPHQWDQG'HYHORSPHQW6HULHV3HQDQJ7KLUG:RUOG1HWZRUN
$OWLHUL0$DQG1LFKROOV&%LRGLYHUVLW\DQG3HVW0DQDJHPHQWLQ$JURHFRV\VWHPV6HFRQGHGLWLRQ%RFD5DWRQ
)/&5&3UHVV
$QGHUVRQ,)RRWDQG0RXWK'LVHDVH$5HYLHZDQG/HVVRQV/HDUQHG/RQGRQ
$QGHUVRQ6+*DQW]HU&-DQG%URZQ-5&6RLOSK\VLFDOSURSHUWLHVDIWHU\HDUVRIFRQWLQXRXVFXOWLYDWLRQ
-RLQW6RLO:DWHU&RQVHUYDWLRQ
$QGHUVRQ,$JULFXOWXUDOGHYHORSPHQWIRRGVHFXULW\DQGFOLPDWHFKDQJH,QWHUVHFWLQJDWDJOREDOFURVVURDGV
$YDLODEOHDWKWWSZHEZRUOGEDQNRUJ:%6,7((;7(51$/723,&6(;76'1(7FRQWHQW0'.aSDJH
3.aSL3.aWKH6LWH3.KWPO
$UEHLWVJHPHLQVFKDIW ElXHUOLFKH /DQGZLUWVFKDIW $E/ (XUR1DWXU 6WLIWXQJ &RQVLVWHQW 5HIRUP RI WKH (8
$JULFXOWXUDO 3ROLF\ 1RZ 3DSHU MRLQWO\ SURGXFHG E\ DVVRFLDWLRQV HQJDJHG LQ HQYLURQPHQWDO SURWHFWLRQ QDWXUH
FRQVHUYDWLRQ DJULFXOWXUH GHYHORSPHQW SROLF\ FRQVXPHU DIIDLUV DQG DQLPDO ZHOIDUH 5KHLQEDFK+DPP -XQH
$YDLODEOH DW KWWSZZZGLHEHVVHUHDJUDUSROLWLNGHXSORDGVW[BJDSGRF*HUPDQB3ODWIRUP3DSHUB(8*$3
HQJOBSGI
$UHQGV7DQG&DVWK37KHFRPSDUDWLYHHIIHFWRIHTXLYDOHQWDPRXQWVRI13.DSSOLHGLQIDUP\DUGPDQXUHRULQ
IHUWLOL]HUVDVDIXQFWLRQRIVRLOSURSHUWLHV$JURNPDV7DODMWDQ
$UQHOO1&OLPDWHFKDQJHDQGZDWHUUHVRXUFHVLQ%ULWDLQ&OLPDWH&KDQJH²
$]HH]*6RLOFDUERQDQGRUJDQLFIDUPLQJ%ULVWRO6RLO$VVRFLDWLRQKWWSZZZVRLODVVRFLDWLRQRUJ:K\RUJDQLF
&OLPDWHIULHQGO\IRRGDQGIDUPLQJ6RLOFDUERQWDELG'HIDXOWDVS[
%DGJOH\ & 0RJKWDGHU - 4XLQWHUR ( =DNHP ( &KDSSHOO 0- $YLOpV9i]TXH] . 6DPXORQ $ 3HUIHFWR , 2UJDQLFDJULFXOWXUHDQGWKHJOREDOIRRGVXSSO\5HQHZDEOH$JULFXOWXUHDQG)RRG6\VWHPV²
%DLOH\$:0DQDJLQJ&DQDGLDQUDQJHODQGVDVDVXVWDLQDEOHUHVRXUFH3ROLF\,VVXHVUDQJHODQGVLQDVXVWDLQDEOH
ELRVSKHUH,Q3URFHHGLQJVRIWKH)LIWK,QWHUQDWLRQDO5DQJHODQG&RQJUHVVYROXPH²
%DNDV,)RRGDQGJUHHQKRXVHJDV*+*HPLVVLRQV&RSHQKDJHQ5HVRXUFH,QVWLWXWH&5,$YDLODEOHDWKWWS
ZZZVFSNQRZOHGJHHXVLWHVGHIDXOWÀOHV.8B)RRGB*+*BHPLVVLRQVSGI
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
%DOW]HU.+DQVHQ+/LQG.0$QRWHRQWKHFDXVHVDQGFRQVHTXHQFHVRIWKHUDSLGO\LQFUHDVLQJLQWHUQDWLRQDO
IRRGSULFHV&RSHQKDJHQ,QVWLWXWHRI)RRGDQG5HVRXUFH(FRQRPLFV8QLYHUVLW\RI&RSHQKDJHQ
%DWWLVWL '6 DQG 1D\ORU 5/ +LVWRULFDO ZDUQLQJV RI IXWXUH IRRG LQVHFXULW\ ZLWK XQSUHFHGHQWHG VHDVRQDO KHDW
6FLHQFH²
%D\OLVV6PLWK737KH(FRORJ\RI$JULFXOWXUDO6\VWHPV&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV
%HOODUE\-)RHUHLG%+DVWLQJV$DQG6PLWK3&RRO)DUPLQJ&OLPDWHLPSDFWVRIDJULFXOWXUHDQGPLWLJDWLRQ
SRWHQWLDO $PVWHUGDP *UHHQSHDFH ,QWHUQDWLRQDO $YDLODEOH DW KWWSZZZJUHHQSHDFHRUJLQWHUQDWLRQDO*OREDO
LQWHUQDWLRQDOSODQHWUHSRUWFRROIDUPLQJIXOOUHSRUWSGI
%HUJPDQQ.'HDOLQJZLWK&RQVXPHU8QFHUWDLQW\3XEOLF5HODWLRQVLQWKH)RRG6HFWRU+HLGHOEHUJ6SULQJHU
%HUWKHORW-3RXUXQPRGqOHDJULFROHGDQVOHVSD\VGX6XG0RQGH'LSORPDWLTXH1RYHPEHU
%LOO0HOLQGD*DWHV)RXQGDWLRQ$JULFXOWXUDOGHYHORSPHQWVWUDWHJ\RYHUYLHZ6HDWWOH$YDLODEOHDWKWWSZZZ
JDWHVIRXQGDWLRQRUJ
%LQVZDQJHU0NKL]H+3&KDOOHQJHVDQG2SSRUWXQLWLHVIRU$IULFDQ$JULFXOWXUHDQG)RRG6HFXULW\+LJK)RRG
3ULFHV&OLPDWH&KDQJH3RSXODWLRQ*URZWKDQG+,9$,'63DSHUSUHVHQWHGDWWKH)$2([SHUW0HHWLQJRQ+RZ
WRIHHGWKH:RUOGLQ5RPH
%LUFKDOO-0RQVDQWRDJUHHVWRPFURSEULEHSHQDOW\)LQDQFLDO7LPHV-DQXDU\$YDLODEOHDWKWWSZZZ
IWFRPLQWOFPVVGDFGEGIHFKWPOD[]]7]8,-UI/
%OD\3DOPHU$)RRG)HDUV)URP,QGXVWULDOWR6XVWDLQDEOH)RRG6\VWHPV$OGHUVKRW$VKJDWH
%ORRP$-%XUJHU0$VHQVLR-65DQG&RXVLQV$%&DUERQGLR[LGHHQULFKPHQWLQKLELWVQLWUDWHDVVLPLODWLRQLQ
$UDELGRSVLVDQGZKHDW6FLHQFH²
%0(/)²$JUDUEHULFKW%XQGHVPLQLVWHULXPIU(UQlKUXQJ/DQGXQG)RUVWZLUWVFKDIW%RQQ
%0(/) $JUDUEHULFKWH GHU %XQGHVUHJLHUXQJ %RQQ %XQGHVPLQLVWHULXP IU (UQlKUXQJ /DQGZLUWVFKDIW XQG
)RUVWHQ&LWHGE\3DGHO6DQG=HUJHU8(FRQRPLFVRIRUJDQLFIDUPLQJLQ*HUPDQ\,Q/DPSNLQ1DQG3DGHO6
HGV7KH(FRQRPLFVRI2UJDQLF)DUPLQJ$Q,QWHUQDWLRQDO3HUVSHFWLYH:DOOLQJIRUG&$%,QWHUQDWLRQDO
%RJQHU-3LSDWWL5+DVKLPRWR6'LD]&0DUHFNRYD.'LD]/.MHOGVHQ30RQQL6)DDLM$*DR4=KDQJ7$KPHG
0$ 6XWDPLKDUGMD 570 DQG *UHJRU\ 5 0LWLJDWLRQ RI JOREDO JUHHQKRXVH JDV HPLVVLRQV IURP ZDVWH
&RQFOXVLRQVDQGVWUDWHJLHVIURPWKH,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH)RXUWK$VVHVVPHQW5HSRUWRI
:RUNLQJ*URXS,,,0LWLJDWLRQ$YDLODEOHDWKWWSZPUVDJHSXEFRPFRQWHQWVKRUW"UVV VVRXUFH PIF
%RKDF-DQG3RNDU]KHYVN\$(IIHFWRIPDQXUHDQG13.RQVRLOPDFURIDXQDLQFKHUQR]HPVRLO,Q6]HJL-HG
6RLO %LRORJ\ DQG &RQVHUYDWLRQ RI %LRVSKHUH 3URFHHGLQJV RI WKH WK ,QWHUQDWLRQDO 6\PSRVLXP ² %XGDSHVW
$NDGHPLDL.LDGR
%ROOD9DQG3HQGRORYVND9'ULYLQJIRUFHVEHKLQG(8JUHHQKRXVHJDVHPLVVLRQVRYHUWKHGHFDGH
6WDWLVWLFVLQIRFXV$YDLODEOHDWKWWSWLQ\XUOFRPEKHVRJ
%RUURQ6%XLOGLQJUHVLOLHQFHIRUDQXQSUHGLFWDEOHIXWXUH+RZRUJDQLFDJULFXOWXUHFDQKHOSIDUPHUVDGDSWWR
FOLPDWHFKDQJH5RPH)$2
%UHQQDQ03UD\&1DVHHP$DQG2HKPNH-$QLQQRYDWLRQPDUNHWDSSURDFKWRDQDO\]LQJLPSDFWVRIPHUJHUV
DQGDFTXLVLWLRQVLQWKHSODQWELRWHFKQRORJ\LQGXVWU\$J%LR)RUXP²
%URRNV65LFH%LRIRUWLÀFDWLRQ/HVVRQVIRU*OREDO6FLHQFHDQG'HYHORSPHQW/RQGRQ(DUWKVFDQ
%URRNV6,VLQWHUQDWLRQDODJULFXOWXUDOUHVHDUFKDJOREDOSXEOLFJRRG"7KHFDVHRIULFHELRIRUWLÀFDWLRQ-RXUQDORI
3HDVDQW6WXGLHV²$YDLODEOHDWKWWSG[GRLRUJ
%URRNV6/HDFK0/XFDV+DQG0LOOVWRQH(6LOYHUEXOOHWVJUDQGFKDOOHQJHVDQGWKHQHZSKLODQWKURS\67(36
:RUNLQJ3DSHU67(36&HQWUH%ULJKWRQ
%URZQ / 7KH QHZ JHRSROLWLFV RI IRRG )RUHLJQ 3ROLF\ -XQH $YDLODEOH DW KWWSZZZIRUHLJQSROLF\FRP
DUWLFOHVWKHBQHZBJHRSROLWLFVBRIBIRRG"SDJH %UXLQVPD-7KH5HVRXUFH2XWORRNWR%\KRZPXFKGR/DQG:DWHUDQG&URS<LHOGV1HHGWR,QFUHDVHE\
"3DSHUSUHVHQWHGDWWKH)$2([SHUW0HHWLQJRQ+RZWR)HHGWKH:RUOGLQ5RPH
%XFN/(DQG6FKHUU6-0RYLQJHFRDJULFXOWXUHLQWRWKHPDLQVWUHDP,Q:RUOGZDWFK,QVWLWXWH6WDWHRIWKH:RUOG
75$'($1'(19,5210(175(9,(:
,QQRYDWLRQVWKDW1RXULVKWKH3ODQHW:DVKLQJWRQ'&::1RUWRQ&RPSDQ\²
%XUQH\-$'DYLV6-DQG/REHOO'%*UHHQKRXVHJDVPLWLJDWLRQE\DJULFXOWXUDOLQWHQVLÀFDWLRQ3URFHHGLQJVRI
WKH1DWLRQDO$FDGHP\RI6FLHQFHV²
%X\DQRVNL+$DQG:DJQHU*+&DUERQF\FOLQJLQFXOWLYDWHGODQGDQGLWVJOREDOVLJQLÀFDQFH*OREDO&KDQJH
%LRO
%X\DQRVNL +$ %URZQ -5 :DJQHU *+ 6DQKRUQ ÀHOG (IIHFWV RI \HDUV RI FURSSLQJ RQ VRLO SDUDPHWHUV
LQÁXHQFLQJ FURS SURGXFWLYLW\ ,Q 6RLO RUJDQLF PDWWHU LQ WHPSHUDWH HFRV\VWHPV LQ 1RUWK $PHULFD HGV 3DXO ($
3DXVWLDQ((OOLRW7&ROH&9-SS%RFD5DWRQ)/&5&3UHVV
&DNPDN,3IHLIIHU:+DQG0F&ODIIHUW\%%LRIRUWLÀFDWLRQRIGXUXPZKHDWZLWK]LQFDQGLURQ&HUHDO&KHPLVWU\
²
&DPDUJR53URMHWRGHOtGHUGRJRYHUQRpUHGLJLGRSRUOREE\&RQJUHVVRHP)RFR'HFHPEHU$YDLODEOHDW
KWWSFRQJUHVVRHPIRFRXROFRPEUQRWLFLDVPDQFKHWHVDQWHULRUHVSURMHWRGHOLGHUGRJRYHUQRHUHGLJLGRSRU
OREE\
&DPSEHOO$.DSRV96FKDUOHPDQQ-3:%XEE3&KHQHU\$&RDG/'LFNVRQ%'RVZDOG1.KDQ06,.HUVKDZ
)DQG5DVKLG05HYLHZRIWKHOLWHUDWXUHRQWKHOLQNVEHWZHHQELRGLYHUVLW\DQGFOLPDWHFKDQJH,PSDFWV
DGDSWDWLRQDQGPLWLJDWLRQ7HFKQLFDO6HULHV1R0RQWUHDO6HFUHWDULDWRIWKH&RQYHQWLRQRQ%LRORJLFDO'LYHUVLW\
&DXOÀHOG /( DQG %ODFN 5( =LQF GHÀFLHQF\ ,Q 0 (]]DWL HW DO HGV &RPSDUDWLYH 4XDQWLÀFDWLRQ RI +HDOWK
5LVNV*OREDODQG5HJLRQDO%XUGHQRI'LVHDVH$WWULEXWDEOHWR6HOHFWHG0DMRU5LVN)DFWRUV*HQHYD:RUOG+HDOWK
2UJDQL]DWLRQ²
&KDOOLQRU$:KHHOHU7*DUIRUWK&&UDXIXUG3.DVVDP$$VVHVVLQJWKHYXOQHUDELOLW\RIIRRGFURSV\VWHPVLQ
$IULFDWRFOLPDWHFKDQJH&OLPDWLF&KDQJH²
&KDVH&3ULFLQJIRUSURÀW$PHV,$,RZD6WDWH8QLYHUVLW\$YDLODEOHDWKWWSZZZH[WHQVLRQLDVWDWHHGXDJGP
ZKROHIDUPKWPOFKWPO
&KDVH&$DQG'XII\0'$QHFRQRPLFDQDO\VLVRIWKH1DVKXDWLOODJHVWXG\²-RXUQDORI3URGXFWLRQ
$JULFXOWXUH²
&KLEZDQD&)LVKHU0DQG6KLYHO\*&URSODQG$OORFDWLRQ(IIHFWVRI$JULFXOWXUDO,QSXW6XEVLGLHVLQ0DODZL
:RUOG'HYHORSPHQW
&KULVWHQVHQ%77KH$VNRYORQJWHUPH[SHULPHQWVRQDQLPDOPDQXUHDQGPLQHUDOIHUWLOL]HUV,Q(YDOXDWLRQRI
VRLORUJDQLFPDWWHUVPRGHOVXVLQJH[LVWLQJGDWDVHWVHGV3RZOVRQ'66PLWK3DQG6PLWK-81$72$6,
+HLGHOEHUJ*HUPDQ\6SULQJHU
&KULVWRSKHU6)/DO50LVKUD8/RQJWHUPQRWLOOHIIHFWVRQFDUERQVHTXHVWUDWLRQLQWKH0LGZHVWHUQ866RLO
6FLHQFH6RFLHW\RI$PHULFD-RXUQDO
&KXUFK'HYHORSPHQW6HUYLFH(YDQJHOLVFKHU(QWZLFNOXQJVGLHQVW(('DQG%UHDGIRUWKH:RUOG%URWIUGLH:HOW
/REE\EULHI/HEHQVPLWWHOVWDQGDUGVXQGGLH5HIRUPGHU(8$JUDUSROLWLN$YDLODEOHDWKWWSZZZHHGGH
À[ÀOHVGRFB$NWXHOOBB*$3B/REE\%ULHIHSGI
&,00<7 ,,7$ '70$ 3URMHFW SODWIRUP -DQXDU\ $SULO $YDLODEOH DW KWWSGWPDFLPP\WRUJLQGH[SKS
FRPSRQHQWGRFPDQGRFBGRZQORDGGWPDSURMHFWSODWIRUPMDQXDU\DSULO
&OLQH : *OREDO ZDUPLQJ DQG DJULFXOWXUH ,PSDFW HVWLPDWHV E\ FRXQWU\ &HQWUH IRU *OREDO 'HYHORSPHQW
:DVKLQJWRQ'&$YDLODEOHDWZZZFJGHYRUJFRQWHQWSXEOLFDWLRQVGHWDLO
&RPPXQLW\ (QHUJ\ 6FRWODQG &RPPXQLW\ 5HQHZDEOH (QHUJ\ 7RRONLW $YDLODEOH DW KWWSZZZ
FRPPXQLW\HQHUJ\VFRWODQGRUJXNFRPPXQLW\UHQHZDEOHHQHUJ\WRRONLWDVS
&RPSDVVLRQLQ:RUOG)DUPLQJ7UXVW5HGXFLQJPHDWFRQVXPSWLRQ²WKHFDVHIRUXUJHQWUHIRUP3HWHUVÀHOG
8QLWHG.LQJGRP$YDLODEOHDWZZZFLZIRUJXNLQFOXGHVGRFXPHQWVFPBGRFVJJOREDOBEHQHÀWVBVXPPDU\
SGI
&RQQRU'-2UJDQLFDJULFXOWXUHFDQQRWIHHGWKHZRUOG)LHOG&URSV5HVHDUFK²
&RQUR\ -3 6HQHZHHUD 6 %DVUD $6 5RJHUV * DQG 1LVVHQ:RROOHU % ,QÁXHQFH RI ULVLQJ DWPRVSKHULF &2
FRQFHQWUDWLRQV DQG WHPSHUDWXUH RQ JURZWK \LHOG DQG JUDLQ TXDOLW\ RI FHUHDO FURSV $XVWUDOLDQ -RXUQDO RI 3ODQW
3K\VLRORJ\²
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
&RQZD\*57KH'RXEO\*UHHQ5HYROXWLRQ/RQGRQ3HQJXLQ
&RUEHOOLQL00D]]D/&LDIÀ0/DÀDQGUD'DQG%RUJKL%(IIHFWRIKHDWVKRFNGXULQJJUDLQÀOOLQJRQSURWHLQ
FRPSRVLWLRQDQGWHFKQRORJLFDOTXDOLW\RIZKHDWV(XSK\WLFD
&XOODWKHU17KH+XQJU\:RUOG$PHULFD·V&ROG:DU%DWWOHDJDLQVW3RYHUW\LQ$VLD&DPEULGJH0$DQG/RQGRQ
+DUYDUG8QLYHUVLW\3UHVV
'DOOL-)RUHZRUG,Q$QQXDO5HSRUW5DSLG$OHUW6\VWHPIRU)RRGDQG)HHG5$6))%UXVVHOV(XURSHDQ
8QLRQ$YDLODEOHDWKWWSHFHXURSDHXIRRGIRRGUDSLGDOHUWGRFVUHSRUWBHQSGI
'D0DWWD)0*UDQGLV$$UHQTXH%&DQG%XFNHULGJH06,PSDFWVRIFOLPDWHFKDQJHVRQFURSSK\VLRORJ\DQG
IRRGTXDOLW\)RRG5HVHDUFK,QWHUQDWLRQDO²
'H6FKXWWHU2%XLOGLQJ5HVLOLHQFH$+XPDQ5LJKWV)UDPHZRUNIRU:RUOG)RRGDQG1XWULWLRQ6HFXULW\5HSRUWRI
WKH6SHFLDO5DSSRUWHXURQWKH5LJKWWR)RRGWRWKH8QLWHG1DWLRQV+XPDQ5LJKWV&RXQFLO$+5&*HQHYD
6HSWHPEHU$YDLODEOHDWKWWSZZZVUIRRGRUJLPDJHVVWRULHVSGIRIÀFLDOUHSRUWVRUDKUFÀQDOHQJSGI
'H6FKXWWHU2D6HHG3ROLFLHVDQGWKH5LJKWWR)RRG(QKDQFLQJ$JURELRGLYHUVLW\5HZDUGLQJ,QQRYDWLRQ5HSRUW
RIWKH816SHFLDO5DSSRUWHXURQWKHULJKWWRIRRGWRWKH*HQHUDO$VVHPEO\GRFXPHQWQR$2FWREHU1HZ
<RUN8QLWHG1DWLRQV
'H6FKXWWHU2E$JULEXVLQHVVDQGWKH5LJKWWR)RRG5HSRUWRIWKH6SHFLDO5DSSRUWHXURQWKH5LJKWWR)RRGWR
WKH8QLWHG1DWLRQV+XPDQ5LJKWV&RXQFLO$+5&*HQHYD'HFHPEHU$YDLODEOHDWKWWSZZZVUIRRG
RUJ
'H6FKXWWHU2D$JURHFRORJ\DQGWKH5LJKWWR)RRG5HSRUWRIWKH8QLWHG1DWLRQV6SHFLDO5DSSRUWHXURQWKH
5LJKWWR)RRGWRWKH+XPDQ5LJKWV&RXQFLO'RFXPHQWQR$+5&'HFHPEHU1HZ<RUN8QLWHG1DWLRQV
'H 6FKXWWHU 2 E 5HSRUW VXEPLWWHG E\ WKH 6SHFLDO 5DSSRUWHXU RQ WKH ULJKW WR IRRG 8QLWHG 1DWLRQV *HQHUDO
$VVHPEO\+XPDQ5LJKWV&RXQFLO6L[WHHQWKVHVVLRQ$JHQGDLWHP$+5&
'H6FKXWWHU2F$GGUHVVLQJFRQFHQWUDWLRQLQIRRGVXSSO\FKDLQV%ULHÀQJQRWH8QLWHG1DWLRQV+XPDQ5LJKWV
&RXQFLO*HQHYD'HFHPEHU$YDLODEOHDWKWWSZZZVUIRRGRUJLPDJHVVWRULHVSGIRWKHUGRFXPHQWVB
EULHÀQJQRWHBHQSGI
'H6FKXWWHU2$JURHFRORJ\DQGWKH5LJKWWR)RRG5HSRUWSUHVHQWHGDWWKH6L[WHHQWK6HVVLRQRIWKH8QLWHG
1DWLRQV +XPDQ 5LJKWV &RXQFLO $JHQGD LWHP $+5& *HQHYD 'HFHPEHU $YDLODEOH DW KWWSZZZ
VUIRRGRUJLPDJHVVWRULHVSGIRIÀFLDOUHSRUWVBDKUFBDJURHFRORJ\BHQSGI
'H6FKXWWHU2DQG9DQORTXHUHQ*7KHQHZ*UHHQ5HYROXWLRQ+RZWZHQW\ÀUVWFHQWXU\VFLHQFHFDQIHHGWKH
ZRUOG7KH6ROXWLRQV-RXUQDO9RO,VVXH$YDLODEOHDWZZZWKHVROXWLRQVMRXUQDORUJ
'H&OHUFN)$-)DQ]R-3DOP&DQG5HPDQV5(FRORJLFDODSSURDFKHVWRKXPDQQXWULWLRQ)RRGDQG1XWULWLRQ
%XOOHWLQVXSSO6²6
'HIUD5HSRUWRIWKH)RRG,QGXVWU\6XVWDLQDELOLW\6WUDWHJ\·V&KDPSLRQV·*URXSRQ:DVWH/RQGRQ'HSDUWPHQW
IRU (QYLURQPHQW )RRG DQG 5XUDO $IIDLUV $YDLODEOH DW KWWSDUFKLYHGHIUDJRYXNIRRGIDUPSROLF\IRRGLQGXVWU\
GRFXPHQWVUHSRUWZDVWHPD\SGI
'HJUDQGH $ .DQPHJQH - 7FKRXQGMHX = 0SHFN 0/ 6DGR 7 DQG 7VREHQJ $ 0HFKDQLVPV IRU VFDOLQJXS
WUHH GRPHVWLFDWLRQ +RZ JUDVVURRWV RUJDQLVDWLRQV EHFRPH DJHQWV RI FKDQJH 1DLUREL ,QWHUQDWLRQDO &HQWUH IRU
5HVHDUFKLQ$JURIRUHVWU\,&5$)
'H -DQYU\ $ DQG 6DGRXOHW ( $JULFXOWXUDO JURZWK DQG SRYHUW\ UHGXFWLRQ $GGLWLRQDO HYLGHQFH :RUOG %DQN
5HVHDUFK2EVHUYHU9RO1R:DVKLQJWRQ'&$YDLODEOHDWKWWSHFRQSDSHUVUHSHFRUJDUWLFOHRXSZEUREV
YBDBD\BDBDLBDBDSBDKWP
'HODWH.'XII\0&KDVH&+ROVWH$)ULHGULFK+DQG:DQWDWH1$QHFRQRPLFFRPSDULVRQRIRUJDQLFDQG
FRQYHQWLRQDOJUDLQFURSVLQDORQJWHUPDJURHFRORJLFDOUHVHDUFK/7$5VLWHLQ,RZD$PHULFDQ-RXUQDORI$OWHUQDWLYH
$JULFXOWXUH²
'HOJDGR-$6SDUNV57)ROOHW5)6KDUNRII-/5LJJHQEDFK558VHRIZLQWHUFRYHUFURSVWRFRQVHUYHVRLODQG
ZDWHUTXDOLW\LQWKH6DQ/RLV9DOOH\RI6RXWK&HQWUDO&RORUDGR,Q(URVLRQLPSDFWRQVRLOTXDOLW\HG/DO5SS
%RFD5DWRQ)/&5&
'HPPHQW0:<RXQJ00DQG6HQVHQLJ5/3URYLGLQJPLFURQXWULHQWVWKURXJKIRRGEDVHGVROXWLRQV$NH\WR
KXPDQDQGQDWLRQDOGHYHORSPHQW-RXUQDORI1XWULWLRQ²
75$'($1'(19,5210(175(9,(:
'HQHYDQ:03UHKLVWRULFDJULFXOWXUDOPHWKRGVDVPRGHOVIRUVXVWDLQDELOLW\$GYDQFHG3ODQW3DWKRORJ\²
'HUE\%0DQG/HY\$6'RIRRGODEHOVZRUN",Q%OXP31DQG*XQGODFK*7HGV+DQGERRNRI0DUNHWLQJDQG
6RFLHW\7KRXVDQG2DNV6DJH²
'LFN:$9DQ'RUHQ-U'07ULSOHWW-U&%+HQU\-(,QÁXHQFHRIORQJWHUPWLOODJHDQGURWDWLRQFRPELQDWLRQVRQ
FURS\LHOGVDQGVHOHFWHGVRLOSDUDPHWHUV5HVXOWVREWDLQHGIRUD0ROOLF2FKUDTXDOIVRLO2$5'&5HV%XOO
:RRVWHU2+
'LHEHO3/:LOOLDPV-5DQG/OHZHO\Q59$QHFRQRPLFFRPSDULVRQRIFRQYHQWLRQDODQGDOWHUQDWLYHFURSSLQJ
V\VWHPVIRUDUHSUHVHQWDWLYHQRUWKHDVW.DQVDVIDUP5HYLHZRI$JULFXOWXUDO(FRQRPLFV²
'REEV7/DQG6PROLN-'3URGXFWLYLW\DQGSURÀWDELOLW\RIFRQYHQWLRQDODQGDOWHUQDWLYHIDUPLQJV\VWHPV$ORQJ
WHUPRQIDUPSDLUHGFRPSDULVRQ-RXUQDORI6XVWDLQDEOH$JULFXOWXUH²
'RUZDUG$.\GG-0RUULVRQ-DQG8UH\,$SROLF\DJHQGDIRUSURSRRUDJULFXOWXUDOJURZWK,PSHULDO&ROOHJHDW
:\H$YDLODEOHDWKWWSZZZVDUSQRUJ]DZVVGDJULFXOWXUHSROLF\BDJHQGD3ROLF\B$JHQGDBORQJSGI
'UH\IXV)3OHQFRYLFK&3HWLW0$NFD+'RJKHLP6,VKLL(LWHPDQ0-LJJLQV-.LHUV7DQG.LQJDPNRQR5
+LVWRULFDO DQDO\VLV RI WKH HIIHFWLYHQHVV RI $.67 V\VWHPV LQ SURPRWLQJ LQQRYDWLRQ ,Q 0F,QW\UH % HW DO HGV
*OREDO 5HSRUW :DVKLQJWRQ '& ,$$67' $YDLODEOH DW KWWSZZZDJDVVHVVPHQWRUJLQGH[FIP"3DJH ,$$67'
5HSRUWV,WHP,' 'ULQNZDWHU/(:DJRQHU3DQG6DUUDQWRQLR0/HJXPHEDVHGFURSSLQJV\VWHPVKDYHUHGXFHGFDUERQDQG
QLWURJHQORVVHV1DWXUH²
'ULQNZDWHU/(:DJRQHU3DQG6DUUDQWRQLR0/HJXPHEDVHGFURSSLQJV\VWHPVKDYHUHGXFHGFDUERQDQG
QLWURJHQORVVHV1DWXUH²
'XVVHOGRUS0DQG6DXWHU$)RUVFKXQJ]XU/|VXQJGHV:HOWHUQlKUXQJVSUREOHPV²$QVDW]SXQNWH6WUDWHJLHQ
8PVHW]XQJ %UR IU 7HFKQLNIROJHQ$EVFKlW]XQJ EHLP 'HXWVFKHQ %XQGHVWDJ (QGEHULFKW ]XP 7$3URMHNW
$UEHLWVEHULFKW1U)HEUXDU\
(DVWHUOLQJ :( $JJDUZDO 3. %DWLPD 3 %UDQGHU .0 (UGD / +RZGHQ 60 .LULOHQNR $ 0RUWRQ - 6RXVVDQD -)
6FKPLGKXEHU-DQG7XELHOOR)1)RRGÀEUHDQGIRUHVWSURGXFWV,Q,3&&3DUU\0/HWDOHGV&OLPDWH
&KDQJH,PSDFWV$GDSWDWLRQDQG9XOQHUDELOLW\&RQWULEXWLRQRI:RUNLQJ*URXS,,WRWKH)RXUWK$VVHVVPHQW
5HSRUWRIWKH,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV²
(GZDUGV0-XVWDQRWKHUHPSHURU"7KHP\WKVDQGUHDOLWLHVRISKLODQWKURFDSLWDOLVP1HZ<RUN'HPRVDQG7KH
<RXQJ)RXQGDWLRQ
()6$ ()6$ HYDOXDWHV WKH SXEOLF KHDOWK ULVN RI EDFWHULDO VWUDLQV UHVLVWDQW WR FHUWDLQ DQWLPLFURELDOV LQ IRRG
DQG IRRGSURGXFLQJ DQLPDOV 3UHVV UHOHDVH $XJXVW $YDLODEOH DW KWWSZZZHIVDHXURSDHXHQSUHVV
QHZVDKWP
(O+DJH6FLDODEED1+DWWDP&HGV2UJDQLF$JULFXOWXUH(QYLURQPHQWDQG)RRG6HFXULW\5RPH)$2$YDLODEOH
DWZZZIDRRUJGRFUHS\H\HKWP
(O+DJH6FLDODEED10OOHU/LQGHQODXI02UJDQLFDJULFXOWXUHDQGFOLPDWHFKDQJH5HQHZDEOH$JULFXOWXUHDQG
)RRG6\VWHPV²
(OOLV)DQG)UHHPDQ+$5XUDO/LYHOLKRRGVDQG3RYHUW\5HGXFWLRQ6WUDWHJLHVLQ)RXU$IULFDQ&RXQWULHV-RXUQDO
RI'HYHORSPHQW6WXGLHV²
(OWRQ&6$QLPDO(FRORJ\/RQGRQ6LGJZLFNDQG-DFNVRQ
(VTXLQDV$OFi]DU - 3URWHFWLRQ RI FURS JHQHWLF GLYHUVLW\ IRU IRRG VHFXULW\ 3ROLWLFDO HWKLFDO DQG WHFKQLFDO
FKDOOHQJHV1DWXUH'HFHPEHU²
(XURSHDQ&RPPLVVLRQ:KLWH3DSHURQ)RRG6DIHW\%UXVVHOV-DQXDU\'RFXPHQW&20ÀQDO
$YDLODEOHDWKWWSHFHXURSDHXGJVKHDOWKBFRQVXPHUOLEUDU\SXESXEBHQSGI
(XURSHDQ&RPPLVVLRQ6SHFLDO(XUREDURPHWHU+HDOWKDQG)RRG%UXVVHOV
(XURSHDQ &RPPLVVLRQ (XUREDURPHWHU 6XUYH\ 5HSRUW RQ 5LVN 3HUFHSWLRQ LQ WKH (8 (XUREDURPHWHU 6SHFLDO
%UXVVHOV
(XURSHDQ (QYLURQPHQW $JHQF\ +RXVHKROG FRQVXPSWLRQ DQG WKH HQYLURQPHQW (($ 5HSRUW 1R &RSHQKDJHQ$YDLODEOHDWKWWSZZZHHDHXURSDHXSXEOLFDWLRQVHHDBUHSRUWBBDWBGRZQORDGÀOH
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
(XURVWDW)URPIDUPWRIRUNDVWDWLVWLFDOMRXUQH\DORQJWKH(8·VIRRGFKDLQ,VVXHQXPEHU$YDLODEOHDW
KWWSWLQ\XUOFRPWFKPDQGKWWSWLQ\XUOFRPNMVF
(\KRUQ)2UJDQLF)DUPLQJIRU6XVWDLQDEOH/LYHOLKRRGVLQ'HYHORSLQJ&RXQWULHV"7KH&DVHRI&RWWRQLQ,QGLD
=ULFK YGI+RFKVFKXOYHUODJ $YDLODEOH DW KWWSZZZYGIHWK]FKORDG$OO)UDPHVDVS"VKRZ$UW'HWDLO 6HH
DOVR(\KRUQ$VVHVVLQJWKHSRWHQWLDORIRUJDQLFIDUPLQJIRUVXVWDLQDEOHOLYHOLKRRGVLQGHYHORSLQJFRXQWULHVWKH
FDVHRIFRWWRQLQ,QGLD$YDLODEOHDWKWWSZZZ]EXQLEHFKGRZQORDGHOGLVVH\KRUQBISGI
(\KRUQ ) 5DPDNULVKQDQ 0 DQG 0lGHU 3 7KH YLDELOLW\ RI FRWWRQEDVHG RUJDQLF IDUPLQJ V\VWHPV LQ ,QGLD
,QWHUQDWLRQDO-RXUQDORI$JULFXOWXUDO6XVWDLQDELOLW\²
)DHWK3DQG&URVVRQ3%XLOGLQJWKHFDVHIRUVXVWDLQDEOHDJULFXOWXUH(QYLURQPHQW²
)DONHQPDUN0DQG5RFNVWU|P-7KHQHZEOXHDQGJUHHQZDWHUSDUDGLJP%UHDNLQJQHZJURXQGIRUZDWHU
UHVRXUFHVSODQQLQJDQGPDQDJHPHQW-RXUQDORI:DWHU5HVRXUFHV3ODQQLQJDQG0DQDJHPHQW0D\-XQH²
)$2)RRGORVVSUHYHQWLRQLQSHULVKDEOHFURSV)$2$JULFXOWXUDO6HUYLFH%XOOHWLQ)$26WDWLVWLFV'LYLVLRQ5RPH
)$2&KDSWHUVDQG,Q)$2)XWXUH(QHUJ\5HTXLUHPHQWVIRU$IULFD·V$JULFXOWXUH3UHSDUHGIRUWKH$IULFDQ
(QHUJ\ 3URJUDPPH RI WKH $IULFDQ 'HYHORSPHQW %DQN 5RPH )$2 $YDLODEOH DW KWWSZZZIDRRUJGRFUHS
9(YHKWP&RQWHQWV
)$27KH(QHUJ\DQG$JULFXOWXUH1H[XV5RPH
)$20LQLVWHULDO5RXQG7DEOHRQWKH5ROHRI:DWHUDQG,QIUDVWUXFWXUHLQ(QVXULQJ6XVWDLQDEOH)RRG6HFXULW\
5RPH1RYHPEHU²'HFHPEHU$YDLODEOHDWZZZIDRRUJ'2&5(30((7,1*-(+70
)$2'LVFDUGVLQWKHZRUOG·VPDULQHÀVKHULHV²DQXSGDWH)$2)LVKHULHVWHFKQLFDOSDSHU5RPH$YDLODEOH
DWZZZIDRRUJGRFUHS\H\HKWP
)$2:RUOG$JULFXOWXUH7RZDUGV,QWHULPUHSRUW5RPH
)$27KH6WDWHRI)RRGDQG$JULFXOWXUH5RPH
)$2$GYLVRU\&RPPLWWHHRQ3DSHUDQG:RRG3URGXFWV)RUW\1LQWK6HVVLRQ%DNXEXQJ6RXWK$IULFD-XQH
)$2D(QDEOLQJDJULFXOWXUHWRFRQWULEXWHWRFOLPDWHFKDQJHPLWLJDWLRQ6XEPLVVLRQE\)$2WR81)&&&5RPH
$YDLODEOHDWKWWSXQIFFFLQWUHVRXUFHGRFVVPVQLJRSGI
)$2 E 7KH 6WDWH RI )RRG ,QVHFXULW\ LQ WKH :RUOG (FRQRPLF &ULVLV ,PSDFWV DQG /HVVRQV /HDUQHG 5RPH
$YDLODEOHDWKWWSZZZIDRRUJGRFUHSLHLHKWP
)$2 F 6WDWLVWLFDO <HDUERRN 5RPH $YDLODEOH DW ZZZIDRRUJHFRQRPLFWKHVWDWLVWLFVGLYLVLRQHVV
SXEOLFDWLRQVVWXGLHVVWDWLVWLFDO\HDUERRNIDRVWDWLVWLFDO\HDUERRNHQ
)$2 <HDUERRN 5RPH $YDLODEOH DW KWWSZZZIDRRUJHFRQRPLFHVVHVVSXEOLFDWLRQVHVV\HDUERRN
HVV\HDUERRN\HDUERRNUHRXUFHVHQ
)$2D+LJKOHYHO3DQHORI([SHUWVRQ)RRG6HFXULW\DQG1XWULWLRQWRWKH&RPPLWWHHRQ:RUOG)RRG6HFXULW\
3ULFH9RODWLOLW\DQG)RRG6HFXULW\5RPH$YDLODEOHDWZZZIDRRUJÀOHDGPLQXVHUBXSORDGKOSHKOSHBGRFXPHQWV
+/3(SULFHYRODWLOLW\DQGIRRGVHFXULW\UHSRUW-XO\SGI
)$2E2UJDQLFDJULFXOWXUHDQGFOLPDWHFKDQJHPLWLJDWLRQ$UHSRUWRIWKH5RXQG7DEOHRQ2UJDQLF$JULFXOWXUH
DQG&OLPDWH&KDQJH'HFHPEHU5RPH,WDO\
)$2F/DQGWHQXUHDQG,QWHUQDWLRQDO,QYHVWPHQWVLQ$JULFXOWXUH$UHSRUWE\WKH+LJK/HYHO3DQHORI([SHUWVRQ
)RRG6HFXULW\DQG1XWULWLRQRIWKH&RPPLWWHHRQ:RUOG)RRG6HFXULW\5RPH)$26WDW5RPHKWWSIDRVWDWIDRRUJ
)$2 G 7KH 6WDWH RI )RRG DQG $JULFXOWXUH 5RPH $YDLODEOH DW ZZZIDRRUJGRFUHSLH
LHSGI
)$2 H *OREDO )RRG /RVVHV DQG )RRG :DVWH 5RPH $YDLODEOH DW ZZZIDRRUJÀOHDGPLQXVHUBXSORDGDJV
SXEOLFDWLRQV*)/BZHESGI
)$2 D )RRG VHFXULW\ DQG FOLPDWH FKDQJH 5HSRUW RI WKH +LJKOHYHO 3DQHO RI ([SHUWV RQ )RRG 6HFXULW\ DQG
1XWULWLRQWRWKH&RPPLWWHHRQ:RUOG)RRG6HFXULW\5HSRUW1R5RPH-XQH$YDLODEOHDWZZZIDRRUJ
)$2E&OLPDWHVPDUWDJULFXOWXUHIRUGHYHORSPHQW$YDLODEOHDWKWWSZZZIDRRUJFOLPDWHFKDQJHFOLPDWHVPDUW
HQ
75$'($1'(19,5210(175(9,(:
)$2F&OLPDWH6PDUW$JULFXOWXUH5RPH$YDLODEOHDWKWWSZZZIDRRUJFOLPDWHFKDQJHFOLPDWHVPDUWHQ
)$2DQG%LRYHUVLW\,QWHUQDWLRQDO6XVWDLQDEOHDJULFXOWXUHDQGUXUDOGHYHORSPHQW6$5'3ROLF\%ULHI5RPH
)$2DQG,,(',QWHUQDWLRQDO,QVWLWXWHIRU(QYLURQPHQWDQG'HYHORSPHQW7KHULJKWWRIRRGDQGDFFHVVWRQDWXUDO
UHVRXUFHV8VLQJKXPDQULJKWVDUJXPHQWVDQGPHFKDQLVPVWRLPSURYHUHVRXUFHDFFHVVIRUWKHUXUDOSRRU5LJKW
WR)RRG6WXG\)$25RPH
)$7%HULFKWEHUELRORJLVFKEHZLUWVFKDIWHWH%HWULHEH(LGJ)RUVFKXQJVDQVWDOWIU%HWULHEVZLUWVFKDIWXQG
/DQGWHFKQLN 7lQLNRQ 6ZLW]HUODQG &LWHG E\ 0KOHEDFK , DQG 0KOHEDFK - (FRQRPLFV RI RUJDQLF IDUPLQJ LQ
6ZLW]HUODQG,Q/DPSNLQ1+DQG3DGHO6HGV7KH(FRQRPLFVRI2UJDQLF)DUPLQJ$Q,QWHUQDWLRQDO3HUVSHFWLYH
:DOOLQJIRUG&$%,QWHUQDWLRQDO
)$7 %HULFKW EHU ELRORJLVFK EHZLUWVFKDIWHWH %HWULHEH (UJHEQLVVH GHU =HQWUDOHQ $XVZHUWXQJ YRQ
%XFKKDOWXQJVGDWHQ7lQLNRQ(LGJHQ|VVLVFKH)RUVFKXQJVDQVWDOWIU$JUDUZLUWVFKDIWXQG/DQGWHFKQLN
)HHGWKH)XWXUH*XLGH$YDLODEOHDWZZZIHHGWKHIXWXUHJRY
)H\GHU-0RUGVKXQJHU²:HUSURÀWLHUWYRP(OHQGGHUDUPHQ/lQGHU"+XQJHUNLOOV:KRSURÀWVIURPWKHPLVHU\
RISRRUFRXQWULHV")UDQNIXUW:HVWHQG$OVRLQ)UHQFK/D)DLPWXHO·+DUPDWWDQ
)LOJHU6*OREDOÀQDQFLDOFULVLVYHUVXV,VKLVWRU\DERXWWRUHSHDWLWVHOI"-XQH$YDLODEOHDWKWWS
ZZZJOREDOHFRQRPLFFULVLVFRPEORJDUFKLYHVWDJÀQDQFLDOFULVLV
)LQDQFLDO7LPHV6SHFLDOUHSRUWRQPDQDJLQJFOLPDWHFKDQJH/RQGRQ1RYHPEHU$YDLODEOHDWZZZIWFRP
FOLPDWHFKDQJH
)LVFKHU*6KDK07XELHOOR)1YDQ9HOKXL]HQ+6RFLRHFRQRPLFDQGFOLPDWHFKDQJHLPSDFWVRQDJULFXOWXUH
$QLQWHJUDWHGDVVHVVPHQW²3KLORVRSKLFDO7UDQVDFWLRQVRIWKH5R\DO6RFLHW\%²
)OLHVVEDFK $ ,PKRI ' %UXQQHU 7 DQG :WKULFK & 7LHIHQYHUWHLOXQJ XQG ]HLWOLFKH '\QDPLN GHU PLNURELHOOHQ
%LRPDVVHLQELRORJLVFKXQGNRQYHQWLRQHOOEHZLUWVFKDIWHWHQ%|GHQ5HJLR%DVLOLHQVLV²
)OLHVVEDFK$2EHUKRO]HU+5*XQVW/DQG0lGHU36RLORUJDQLFPDWWHUDQGELRORJLFDOVRLOTXDOLW\LQGLFDWRUV
DIWHU\HDUVRIRUJDQLFDQGFRQYHQWLRQDOIDUPLQJ$JULFXOWXUH(FRV\VWHPV(QYLURQPHQW²
)RUHVLJKW D 7KH )XWXUH RI )RRG DQG )DUPLQJ )LQDO SURMHFW UHSRUW /RQGRQ *RYHUQPHQW 2IÀFH IRU 6FLHQFH
$YDLODEOH DW ZZZELVJRYXNDVVHWVELVSDUWQHUVIRUHVLJKWGRFVIRRGDQGIDUPLQJIXWXUHRIIRRGDQG
IDUPLQJUHSRUWSGI
)RUHVLJKWE6FLHQFH5HYLHZ65*OREDO)RRG:DVWH5HGXFWLRQ3ULRULWLHVIRUD:RUOGLQ7UDQVLWLRQ$YDLODEOH
DW
ZZZELVJRYXNIRUHVLJKWRXUZRUNSURMHFWVSXEOLVKHGSURMHFWVJOREDOIRRGDQGIDUPLQJIXWXUHVaPHGLD
%,63DUWQHUV)RUHVLJKWGRFVIRRGDQGIDUPLQJVFLHQFHVUJOREDOIRRGZDVWHUHGXFWLRQSULRULWLHVDVK[
)RUHVLJKWF([SHUW)RUXPRQWKH5HGXFWLRQRI)RRG:DVWH8.6FLHQFHDQG,QQRYDWLRQ1HWZRUNDQG)RUHVLJKW
/RQGRQ²)HEUXDU\$YDLODEOHDWZZZELVJRYXNDVVHWVELVSDUWQHUVIRUHVLJKWGRFVIRRGDQGIDUPLQJ
ZRUNVKRSVZH[SHUWIRUXPUHGXFWLRQRIIRRGZDVWHSGI
)RUHVLJKWG7KH)XWXUHRI)RRGDQG)DUPLQJ6\QWKHVLV5HSRUW&5HGXFLQJZDVWH$YDLODEOHDWZZZELVJRY
XNDVVHWVELVSDUWQHUVIRUHVLJKWGRFVIRRGDQGIDUPLQJV\QWKHVLVFUHGXFLQJZDVWHSGI
)UDQFLV&$-RQHV$&URRNVWRQ.:LWWOHU.DQG*RRGPDQ66WULSFURSSLQJFRUQDQGJUDLQOHJXPHV$UHYLHZ
$PHULFDQ-RXUQDORI$OWHUQDWLYH$JULFXOWXUH²
)ULHGO%+DPPHU0-lJHU-/RUHN62PDQQ,DQG3DFN$68)275236XVWDLQDEOH)RRG&RQVXPSWLRQ
7UHQGVDQG2SSRUWXQLWLHV)LQDOUHSRUW\HDU9LHQQD$XVWULDQ$FDGHP\RI6FLHQFHV3UHVV
)ULVRQ($6PLWK,)-RKQV7&KHUIDV-(\]DJXLUUH3%$JULFXOWXUDOELRGLYHUVLW\QXWULWLRQDQGKHDOWK0DNLQJD
GLIIHUHQFHWRKXQJHUDQGQXWULWLRQLQWKHGHYHORSLQJZRUOG)RRGDQG1XWULWLRQ%XOOHWLQ²
)XOOHQ0$DQG$Y.(IIHFWVRIJUDVVOH\VHWDVLGHRQUXQRIIHURVLRQDQGRUJDQLFPDWWHUOHYHOVLQVDQG\VRLOLQ
(DVW6KURSVKLUH8.6RLO7LOO5HV
)XX0LQJ.DL7\OHU6&5DQGHUVRQ-7DQG%ODNH'55HGXFHGPHWKDQHJURZWKUDWHH[SODLQHGE\GHFUHDVHG
1RUWKHUQ+HPLVSKHUHPLFURELDOVRXUFHV1DWXUH²
*DUQHWW7DQG-DFNVRQ7)URVW%LWWHQ$QH[SORUDWLRQRIUHIULJHUDWLRQGHSHQGHQFHLQWKH8.IRRGFKDLQDQGLWV
LPSOLFDWLRQVIRUFOLPDWHSROLF\3DSHUSUHVHQWHGDWWKHWK(XURSHDQ5RXQG7DEOHRQ6XVWDLQDEOH&RQVXPSWLRQ
DQG3URGXFWLRQ%DVHO-XQH)RRG&OLPDWH5HVHDUFK1HWZRUN&HQWUHIRU(QYLURQPHQWDO6WUDWHJ\8QLYHUVLW\RI
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
6XUUH\ $YDLODEOH DW ZZZIFUQRUJXNUHVHDUFKOLEUDU\UHIULJHUDWLRQJHQHUDOIURVWELWWHQUHIULJHUDWLRQGHSHQGHQFH
XNIRRGFKDLQ
*DWWLQJHU$0OOHU$+lQL02HKHQ%6WRO]H0DQG1LJJOL86RLOFDUERQVHTXHVWUDWLRQRIRUJDQLFFURSDQG
OLYHVWRFN V\VWHPV DQG SRWHQWLDO IRU DFFUHGLWDWLRQ E\ FDUERQ PDUNHWV ,Q )$2 2UJDQLF $JULFXOWXUH DQG &OLPDWH
&KDQJH0LWLJDWLRQ$UHSRUWRIWKH5RXQG7DEOHRQ2UJDQLF$JULFXOWXUHDQG&OLPDWH&KDQJH5RPH'HFHPEHU
²
*HUPDQ$FDGHP\RI6FLHQFHV/HRSROGLQD6WDWHPHQW%LRHQHUJ\&KDQFHVDQG/LPLWV%HUOLQ$YDLODEOHDW
ZZZOHRSROGLQDRUJXSORDGVW[BOHRSXEOLFDWLRQB6WHOOXQJQDKPHB%LRHQHUJLHB/$<BHQBÀQDOSGI
*HUPDQ &RXQFLO IRU 6XVWDLQDEOH 'HYHORSPHQW 5DW IU 1DFKKDOWLJH (QWZLFNOXQJ 51( *ROG6WDQGDUG
gNRODQGEDX )U HLQH QDFKKDOWLJH *HVWDOWXQJ GHU $JUDUZHQGH (PSIHKOXQJHQ GHV 5DWHV IU 1DFKKDOWLJH
(QWZLFNOXQJYRP-XOL7H[WH1U
*LDQHVVL / 7KH SRWHQWLDO IRU RUJDQLF DJULFXOWXUH WR IHHG WKH ZRUOG LV EHLQJ RYHUVROG 2XWORRNV RQ 3HVW
0DQDJHPHQW²
*LEERQ3DQG%ROZLJ67KHHFRQRPLFVRIFHUWLÀHGRUJDQLFIDUPLQJLQWURSLFDO$IULFD$SUHOLPLQDU\DVVHVVPHQW
',,6:RUNLQJ3DSHUQR'DQLVK,QVWLWXWHIRU,QWHUQDWLRQDO6WXGLHV&RSHQKDJHQ
*LRYDQQXFFL'6FKHUU61LHUHQEHUJ'+HGHEUDQG&6KDSLUR-0LOGHU-DQG:KHHOHU.)RRGDQGDJULFXOWXUH
7KHIXWXUHRIVXVWDLQDELOLW\6WXG\IRUWKH81'HSDUWPHQWRI(FRQRPLFDQG6RFLDO$IIDLUV81'(6$XQGHUWKH
SURMHFW6XVWDLQDEOH'HYHORSPHQWLQWKHVW&HQWXU\1HZ<RUN$YDLODEOHDWZZZXQRUJHVDGVGGVGBVGVWB
SGIDJULFXOWXUHBDQGBIRRGBWKHBIXWXUHBRIBVXVWDLQDELOLW\BZHESGI
*OHLFN3+%DVLFZDWHUUHTXLUHPHQWVIRUKXPDQDFWLYLWLHV0HHWLQJEDVLFQHHGV:DWHU,QWHUQDWLRQDO²
*OLHVVPDQ6$JURHFRORJ\7KH(FRORJ\RI6XVWDLQDEOH)RRG6\VWHPV%RFD5DWRQ)/&5&3UHVV
*OREDO&DUERQ3URMHFW&DUERQ%XGJHW$YDLODEOHDWKWWSZZZJOREDOFDUERQSURMHFWRUJFDUERQEXGJHW
*RGIUD\ + %HGGLQJWRQ - &UXWH , +DGGDG / /DZUHQFH ' 0XLU - 3UHWW\ - 5RELQVRQ 6 7KRPDV 6 DQG 7RXOPLQ &
)RRGVHFXULW\7KHFKDOOHQJHRIIHHGLQJELOOLRQSHRSOH6FLHQFH
*UDFH 3 DQG 2DGHV -0 /RQJWHUP ÀHOG WULDOV LQ $XVWUDOLD ,Q /RQJWHUP H[SHULPHQWV LQ DJULFXOWXUDO DQG
HFRORJLFDOVFLHQFHVHGV/HLJK5$DQG-RKQVWRQ$(SS:DOOLQJIRUG8.&$%,QWHUQDWLRQDO
*5$,1(DUWKPDWWHUV7DFNOLQJWKHFOLPDWHFULVLVIURPWKHJURXQGXS6HHGOLQJ2FWREHU$YDLODEOHDWKWWS
ZZZJUDLQRUJH
*5$,1*OREDODJULEXVLQHVV7ZRGHFDGHVRISOXQGHU6HHGOLQJ-XO\$YDLODEOHDWKWWSZZZJUDLQRUJDUWLFOH
HQWULHVJOREDODJULEXVLQHVVWZRGHFDGHVRISOXQGHU
*UDPHHQ6KDNWL3URJUDPVDWDJODQFH0D\$YDLODEOHDWKWWSJVKDNWLRUJLQGH[SKS"RSWLRQ FRPBFRQWHQW
YLHZ FDWHJRU\OD\RXW EORJLG ,WHPLG *ULIÀQ':.HOORJJ&$DQG6KLQQ($'XVWLQWKHZLQG/RQJUDQJHWUDQVSRUWRIGXVWLQWKHDWPRVSKHUHDQGLWV
LPSOLFDWLRQVIRUJOREDOSXEOLFDQGHFRV\VWHPKHDOWK*OREDO&KDQJH+XPDQ+HDOWK²
*XHQWKHU'DQG:LOO0)RRG4XDOLW\DQG6DIHW\6WDQGDUGVDV5HTXLUHGE\(8/DZDQGWKH3ULYDWH,QGXVWU\
$3UDFWLWLRQHUV·5HIHUHQFH%RRN6HFRQGHGLWLRQ(VFKERUQ*7=$YDLODEOHDWZZZJW]GHGRNXPHQWHELE
SGI
+DPHUPHVK'67LPHWRHDW+RXVHKROGSURGXFWLRQXQGHULQFUHDVLQJLQFRPHLQHTXDOLW\$PHULFDQ-RXUQDORI
$JULFXOWXUDO(FRQRPLFV²$PHULFDQ$JULFXOWXUDO(FRQRPLFV$VVRFLDWLRQ
+DQGUHN.2UJDQLF0DWWHUDQG6RLOV0HOERXUQH&6,523XEOLVKLQJUHSULQWHG
+DQGUHN.DQG%ODFN1*URZLQJ0HGLDIRU2UQDPHQWDO3ODQWVDQG7XUI6\GQH\816:3UHVV
+DQVRQ-/LFKWHQEHUJ(DQG3HWHUV6(2UJDQLFYHUVXVFRQYHQWLRQDOJUDLQSURGXFWLRQLQWKHPLG$WODQWLF$Q
HFRQRPLFDQGIDUPLQJV\VWHPRYHUYLHZ$PHULFDQ-RXUQDORI$OWHUQDWLYH$JULFXOWXUH²
+DUWÀHOG-/%RRWH.-.LPEDOO%$=LVND/$,]DXUUDOGH5&2UW'7KRPVRQ$0DQG:ROIH':&OLPDWHLPSDFWV
RQDJULFXOWXUH,PSOLFDWLRQVIRUFURSSURGXFWLRQ$JURQRP\-RXUQDO²
+DUYH\))DLOXUHWRDFWRQFURSVKRUWDJHVIXHOOLQJSROLWLFDOLQVWDELOLW\H[SHUWVZDUQ7KH*XDUGLDQ)HEUXDU\
$YDLODEOHDWKWWSZZZJXDUGLDQFRXNHQYLURQPHQWIHEFURSVKRUWDJHVSROLWLFDOLQVWDELOLW\
75$'($1'(19,5210(175(9,(:
+DZNHV & 1XWULWLRQ /DEHOV DQG +HDOWK &ODLPV 7KH *OREDO 5HJXODWRU\ (QYLURQPHQW *HQHYD :RUOG +HDOWK
2UJDQL]DWLRQ
+D\Q'(EHUOH86WLH‰,DQG+QHFNH.(UQlKUXQJLP$OOWDJ,Q(EHUOH8HWDOHGV(UQlKUXQJVZHQGH(LQH
+HUDXVIRUGHUXQJIU3ROLWLN8QWHUQHKPHQXQG*HVHOOVFKDIW0XQLFK2HNRP²
+D]HOO33RXOWRQ&:LJJLQV6'RUZDUG$7KHIXWXUHRIVPDOOIDUPVIRUSRYHUW\UHGXFWLRQDQGJURZWK
'LVFXVVLRQ3DSHU1R,QWHUQDWLRQDO)RRG3ROLF\5HVHDUFK,QVWLWXWH:DVKLQJWRQ'&
+HDOWK&RXQFLORIWKH1HWKHUODQGV*XLGHOLQHVIRUD+HDOWK\'LHW7KH(FRORJLFDO3HUVSHFWLYH3XEOLFDWLRQQR
(7KH+DJXH
+HLPDQQ0$WPRVSKHULFVFLHQFH(QLJPDRIWKHUHFHQWPHWKDQHEXGJHW1DWXUH
+HOOHEUDQG+-DQG+HUSSLFK:0HWKDQHGHJUDGDWLRQLQVRLOV,QÁXHQFHRISODQWVDQGIHUWLOLVDWLRQ-DKUHVWDJXQJ
GHU*HVHOOVFKDIWIUgNRORJLH$QQXDO6HVVLRQRIWKH(FRORJLFDO6RFLHW\.LHO6HSWHPEHU3RVWHU3RWVGDP
,QVWLWXWHRI$JULFXOWXUDO(QJLQHHULQJ
+HOPHUV*$/DQJHPHLHU05DQG$WZRRG-$QHFRQRPLFDQDO\VLVRIDOWHUQDWLYHFURSSLQJV\VWHPVIRUHDVW
FHQWUDO1HEUDVND$PHULFDQ-RXUQDORI$OWHUQDWLYH$JULFXOWXUH
+HQGULFNVRQ-(QHUJ\XVHLQWKH86IRRGV\VWHP$VXPPDU\RIH[LVWLQJUHVHDUFKDQGDQDO\VLV0DGLVRQ:,
&HQWHUIRU,QWHJUDWHG$JULFXOWXUDO6\VWHPV8QLYHUVLW\RI:LVFRQVLQ
+HQGULFNVRQ00LHOH0%XUW5&KDWDZD\-&RWWHU-'DUF\9ULOORQ%'HEDLOOHXO**UXQG\$+LQJD.-RKQVRQ%5
.DKLOXRWR+/XWPDQ30DGGHQ8DQG1DYUiWLORYi0&KDQJHVLQDJULFXOWXUHDQGIRRGSURGXFWLRQLQ1$(
VLQFH,Q0F,QW\UHHWDOHGV1RUWK$PHULFDDQG(XURSH5HJLRQDO5HSRUW:DVKLQJWRQ'&,$$67'
+HUUHQ+55LR:KDWDUHWKHRSWLRQVZKHQ´EXVLQHVVDVXVXDOµLVQRWDQRSWLRQ"3UHVHQWDWLRQDWWKH%LR)DFK
ZRUNVKRSRQ5LRDQGWKH*UHHQ(FRQRP\²3XWWLQJ2UJDQLF)RRG)DUPLQJ&HQWUH6WDJH1XUHPEHUJ
)HEUXDU\
+HUUHQ+5%LQQV31DMDP$.KDQV+DOEHUJ1&LP/L&KLQJ7UH\HU6/DO5$WDSDWWX6.RGLWXZDNNX'7DPR
01HXHQVFKZDQGHU3)HUQDQGH]0%DVVL$.DVVDP$'H)UDLWXUH&.LQJDPNRQR53HUIHFWR<.KDQ
=581(3*UHHQ(FRQRP\5HSRUW$JULFXOWXUH1DLUREL$YDLODEOHDWZZZXQHSRUJJUHHQHFRQRP\
+H\ZRRG9+*OREDO%LRGLYHUVLW\$VVHVVPHQW&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV
+R0:&LUFXODUHFRQRP\RIWKHG\NHSRQGV\VWHP6FLHQFHLQ6RFLHW\²
+R0:7KH5DLQERZDQGWKH:RUPWKH3K\VLFVRI2UJDQLVPV7KLUGHGLWLRQ6LQJDSRUHDQG/RQGRQ:RUOG
6FLHQWLÀF$YDLODEOHDWKWWSZZZLVLVRUJXNUQEZZUPSKS
+R0:D*UHHQJURZWKIRUGHYHORSLQJQDWLRQV6FLHQFHLQ6RFLHW\²
+R 0: E 6XVWDLQDEOH DJULFXOWXUH HVVHQWLDO IRU JUHHQ FLUFXODU HFRQRP\ ,6,6 OHFWXUH DW WKH 7HQ2QH
&RQIHUHQFH %UDGIRUG 8QLYHUVLW\ 1RYHPEHU² 'HFHPEHU $YDLODEOH DW KWWSZZZLVLVRUJXN
VXVWDLQDEOH$JULFXOWXUH(VVHQWLDO*UHHQ&LUFXODU(FRQRP\SKS
+R0:D*UDPHHQ6KDNWLIRUUHQHZDEOHHQHUJLHV6FLHQFHLQ6RFLHW\²
+R0:E/LJKWLQJ$IULFD6FLHQFHLQ6RFLHW\²
+R0:F%LRJDVIRU&KLQD·V1HZ6RFLDOLVWFRXQWU\VLGH6FLHQFHLQ6RFLHW\²
+R0:G7KHQHZSROLWLFVRIIRRGVFDUFLW\6FLHQFHLQ6RFLHW\$YDLODEOHDWZZZLVLVRUJXN7KHB1HZB
3ROLWLFVBRIB)RRGB6FDUFLW\SKS
+R0:%XUFKHU6DQG/LP/&HWDO)RRGIXWXUHVQRZRUJDQLFVXVWDLQDEOHIRVVLOIXHOIUHH,6,67:15HSRUW
/RQGRQDQG3HQDQJ$YDLODEOHDWZZZLVLVRUJXNIRRG)XWXUHVSKS
+R 0: &KHUU\ % %XUFKHU 6 DQG 6DXQGHUV 37 *UHHQ HQHUJLHV UHQHZDEOHV E\ /RQGRQ DQG
3HQDQJ,6,67:1$YDLODEOHDWKWWSZZZLVLVRUJXN*UHHQ(QHUJLHVSKS
+RGJHV5-%X]E\-&DQG%HQQHWW%3RVWKDUYHVWORVVHVDQGZDVWHLQGHYHORSHGDQGOHVVGHYHORSHGFRXQWULHV
2SSRUWXQLWLHVWRLPSURYHUHVRXUFHXVH-RXUQDORI$JULFXOWXUDO6FLHQFH6$YDLODEOHDWZZZELVJRY
XNDVVHWVELVSDUWQHUVIRUHVLJKWGRFVIRRGDQGIDUPLQJVFLHQFHVUSRVWKDUYHVWORVVHVDQGZDVWHSGI
+RHJK*XOGEHUJ20XPE\3-+RRWHQ$-6WHQHFN56*UHHQÀHOG3*RPH](+DUYHOO('6DOH3)(GZDUGV$-
&DOGHLUD..QRZOWRQ1(DNLQ&0,JOHVLDV3ULHWR50XWKLJD1%UDGEXU\5+'XEL$DQG+DW]LRORV0(
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
&RUDOUHHIVXQGHUUDSLGFOLPDWHFKDQJHDQGRFHDQDFLGLÀFDWLRQ6FLHQFH²
+RIIPDQQ8$VVXULQJIRRGVHFXULW\LQGHYHORSLQJFRXQWULHVXQGHUWKHFKDOOHQJHVRIFOLPDWHFKDQJH.H\WUDGH
DQG GHYHORSPHQW LVVXHV RI D IXQGDPHQWDO WUDQVIRUPDWLRQ RI DJULFXOWXUH 81&7$' 'LVFXVVLRQ 3DSHU 1R *HQHYD0DUFK$YDLODEOHDWZZZXQFWDGRUJHQ'RFVRVJGSBHQSGI
+|J\ 3 DQG )DQJPHLHU $ (IIHFWV RI HOHYDWHG DWPRVSKHULF &2 RQ JUDLQ TXDOLW\ RI ZKHDW -RXUQDO RI &HUHDO
6FLHQFH²
+|J\3:LHVHU+.|KOHU36FKZDGRUI.%UHXHU-)UDQ]DULQJ-0XQWLIHULQJ5DQG)DQJPHLHU$(IIHFWVRI
HOHYDWHG&2RQJUDLQ\LHOGDQGTXDOLW\RIZKHDW5HVXOWVIURPDWKUHH\HDU)$&(H[SHULPHQW3ODQW%LRORJ\
²
+ROW*LPpQH](0HDVXULQJIDUPHUV·DJURHFRORJLFDOUHVLVWDQFHDIWHU+XUULFDQH0LWFKLQ1LFDUDJXD$FDVHVWXG\
LQSDUWLFLSDWRU\VXVWDLQDEOHODQGPDQDJHPHQWLPSDFWPRQLWRULQJ$JULFXOWXUH(FRV\VWHPVDQG(QYLURQPHQW
²
+ROW*LPpQH] ( &DPSHVLQR D &DPSHVLQR 9RLFHV IURP /DWLQ $PHULFD·V )DUPHU WR )DUPHU 0RYHPHQW IRU
6XVWDLQDEOH$JULFXOWXUH2DNODQG)RRG)LUVW%RRNV
+RUWRQ /5 DQG :ULJKW ( 5HFRQFLOLQJ IRRG VDIHW\ ZLWK LPSRUW IDFLOLWDWLRQ REMHFWLYHV +HOSLQJ GHYHORSLQJ
FRXQWU\SURGXFHUVPHHW86DQG(8)RRGUHTXLUHPHQWVWKURXJKWUDQVDWODQWLFFRRSHUDWLRQ3RVLWLRQSDSHURIWKH
,QWHUQDWLRQDO )RRG DQG $JULFXOWXUDO 7UDGH 3ROLF\ &RXQFLO 6WDQGDUG 6HULHV -XQH :DVKLQJWRQ '& $YDLODEOH DW
KWWSZZZDJULWUDGHRUJ3XEOLFDWLRQVGRFXPHQWV,3&6WDQGDUGV3RVLWLRQ3DSHUSGI
+RUZLWK%$UROHIRULQWHUFURSSLQJLQPRGHUQDJULFXOWXUH%LR6FLHQFH²
+RZDUG3+9LVXDOL]LQJFRQVROLGDWLRQLQWKHJOREDOVHHGLQGXVWU\²6XVWDLQDELOLW\'HFHPEHU
$YDLODEOHDWKWWSZZZPGSLFRP
+XEEDUG.2XWRIKDQG)DUPHUVIDFHWKHFRQVHTXHQFHVRIDFRQVROLGDWHGVHHGLQGXVWU\)DUPHUWR)DUPHU
&DPSDLJQ$YDLODEOHDWKWWSIDUPHUWRIDUPHUFDPSDLJQFRP
+XJKHV*&KLQRZVN\3DQG6WU]HSHN.7KHFRVWVRIDGDSWDWLRQWRFOLPDWHFKDQJHIRUZDWHULQIUDVWUXFWXUHLQ
2(&'FRXQWULHV8WLOLWLHV3ROLF\²
,$$67' D ,QWHUQDWLRQDO DVVHVVPHQW RI DJULFXOWXUDO NQRZOHGJH VFLHQFH DQG WHFKQRORJ\ IRU GHYHORSPHQW
:DVKLQJWRQ'&,VODQG3UHVV$FFHVVLEOHDWZZZDJDVVHVVPHQWRUJ
,$$67'E6XPPDU\IRUGHFLVLRQPDNHUV:DVKLQJWRQ'&$YDLODEOHDWZZZDJDVVHVVPHQWRUJ
,$$67' XQGDWHG :KDW LV WKH ,QWHUQDWLRQDO $VVHVVPHQW RI $JULFXOWXUDO .QRZOHGJH 6FLHQFH 7HFKQRORJ\" $
FRPSLODWLRQIURPLWVSOHQDU\GHFLVLRQVDQGRIÀFLDOGRFXPHQWV$YDLODEOHDWKWWSZZZDJDVVHVVPHQWZDWFKRUJ
GRFV,$$67'BRQBWKUHHBSDJHVSGI
,$73,QVWLWXWHIRU$JULFXOWXUHDQG7UDGH3ROLF\:RPHQDWWKHFHQWHURIFOLPDWHIULHQGO\DSSURDFKHVWRDJULFXOWXUH
DQG ZDWHU 0LQQHDSROLV $YDLODEOH DW KWWSZZZLDWSRUJGRFXPHQWVZRPHQDWWKHFHQWHURIFOLPDWHIULHQGO\
DSSURDFKHVWRDJULFXOWXUHDQGZDWHUXVH
,&5,6$7,QWHUQDWLRQDO&URSV5HVHDUFK,QVWLWXWHIRUWKH6HPL$ULG7URSLFV&OLPDWHFKDQJHDGDSWDWLRQ0RYLQJ
IRUZDUG ZLWK KRSH IRU WKH ´SRRUHVW RI WKH SRRUµ LQ WKH VHPLDULG WURSLFV $YDLODEOH DW KWWSXQIFFFLQWÀOHV
DGDSWDWLRQVEVWDBDJHQGDBLWHPBDGDSWDWLRQDSSOLFDWLRQSGILFULVDWBPD\SGI
,GVR6%DQG,GVR.((IIHFWVRIDWPRVSKHULF&2HQULFKPHQWRQSODQWFRQVWLWXHQWVUHODWHGWRDQLPDODQGKXPDQ
KHDOWK(QYLURQPHQWDODQG([SHULPHQWDO%RWDQ\²
,($:RUOG(QHUJ\2XWORRN3DULV2(&',($
,($(QHUJ\3RYHUW\+RZWRPDNH0RGHUQ(QHUJ\$FFHVV8QLYHUVDO6SHFLDOHDUO\H[FHUSWRIWKH:RUOG(QHUJ\
2XWORRNIRUWKH8QLWHG1DWLRQV*HQHUDO$VVHPEO\RQWKH0LOOHQQLXP'HYHORSPHQW*RDOV3DULV
,($ D ,QWHUQDWLRQDO (QHUJ\ $JHQF\ &2 HPLVVLRQV IURP IXHO FRPEXVWLRQ +LJKOLJKWV (GLWLRQ 3DULV
$YDLODEOHDWZZZLHDRUJFRKLJKOLJKWV
,($ E 3URVSHFW RI OLPLWLQJ WKH JOREDO LQFUHDVH LQ WHPSHUDWXUH WR ž& JHWWLQJ EOHDNHU 3UHVV UHOHDVH 0D\
$YDLODEOHDWZZZLHDRUJQHZVURRPDQGHYHQWVQHZVPD\QDPHHQKWPO
,(&$(URVLRQ&RQWURO²$*OREDO3HUVSHFWLYH3URFHHGLQJVRI&RQIHUHQFH;;,,,QWHUQDWLRQDO(URVLRQ&RQWURO
$VVRFLDWLRQ6WHDPERDW6SULQJV&2²)HEUXDU\
75$'($1'(19,5210(175(9,(:
,)$'7KHDGRSWLRQRIRUJDQLFDJULFXOWXUHDPRQJVPDOOIDUPHUVLQ/DWLQ$PHULFDDQGWKH&DUULEEHDQ5HSRUW
QR5RPH
,IHMLND6SHUDQ]D&5HVLOLHQW$GDSWDWLRQWR&OLPDWH&KDQJHLQ$IULFDQ$JULFXOWXUH',(6WXGLHV'HXWVFKHV
,QVWLWXWIU(QWZLFNOXQJVSROLWLN%RQQ
,3&&&RQVHTXHQFHVRIODQGXVHFKDQJH,Q&OLPDWH&KDQJH:RUNLQJ*URXS,$YDLODEOHDWKWWS
WLQ\XUOFRPOGX[T\
,3&&D,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH5HSRUWRI:RUNLQJ*URXS,,,WRWKHWK$VVHVVPHQW5HSRUW
&OLPDWH&KDQJH0LWLJDWLRQRI&OLPDWH&KDQJH&DPEULGJH8QLWHG.LQJGRP$YDLODEOHDWZZZLSFFFK
LSFFUHSRUWVDUZJKWP
,3&&E*ORVVDU\,Q,3&&3DUU\0/HWDOHGV&OLPDWH&KDQJH,PSDFWV$GDSWDWLRQDQG9XOQHUDELOLW\
&RQWULEXWLRQ RI :RUNLQJ *URXS ,, WR WKH )RXUWK $VVHVVPHQW 5HSRUW RI WKH ,QWHUJRYHUQPHQWDO 3DQHO RQ &OLPDWH
&KDQJH&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV
,3&& F &OLPDWH &KDQJH 6\QWKHVLV 5HSRUW &RQWULEXWLRQ RI :RUNLQJ *URXSV , ,, DQG ,,, WR WKH )RXUWK
$VVHVVPHQW 5HSRUW RI WKH ,QWHUJRYHUQPHQWDO 3DQHO RQ &OLPDWH &KDQJH 3DFKDXUL 5. DQG 5HLVLQJHU $ HGV
$YDLODEOHDWKWWSZZZLSFFFKSXEOLFDWLRQVBDQGBGDWDDUV\UHQFRQWHQWVKWPO
,3&& G &OLPDWH &KDQJH 7KH 3K\VLFDO 6FLHQFH %DVLV &RQWULEXWLRQ RI :RUNLQJ *URXS , WR WKH )RXUWK
$VVHVVPHQW5HSRUWRIWKH,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV
,3&&&OLPDWHFKDQJHDQGZDWHU7HFKQLFDOSDSHU%DWHV%&HWDOHGV*HQHYD,3&&6HFUHWDULDW
,3&&,3&&VSHFLDOUHSRUWRQHPLVVLRQVVFHQDULRV$URDGPDSWRWKH65(6VFHQDULRV$YDLODEOHDWKWWS
ZZZLSFFFKLSFFUHSRUWVVUHVHPLVVLRQKWP
,VKLL(LWHPDQ0)RRG6RYHUHLJQW\DQGWKH,QWHUQDWLRQDO$VVHVVPHQWRI$JULFXOWXUDO.QRZOHGJH6FLHQFHDQG
7HFKQRORJ\ IRU 'HYHORSPHQW ,Q 3DWHO 5 HG *UDVVURRWV 9RLFHV 6SHFLDO 6HFWLRQ )RRG VRYHUHLJQW\ -RXUQDO RI
3HDVDQW6WXGLHV-XO\²
,:0,,QWHUQDWLRQDO:DWHU0DQDJHPHQW,QVWLWXWH:DWHUIRU)RRG:DWHUIRU/LIH$YDLODEOHDWKWWSZZZLZPL
FJLDURUJDVVHVVPHQW3XEOLFDWLRQVERRNVKWP
,]DF $0 (JHO\QJ + )HUUHLUD * 'XWKLH ' +XEHUW % DQG /RXZDDUV 1 2SWLRQV IRU HQDEOLQJ SROLFLHV DQG
UHJXODWRU\ HQYLURQPHQWV ,Q 0F,QW\UH HW DO HGV $JULFXOWXUH DW D &URVVURDGV *OREDO 5HSRUW :DVKLQJWRQ '&
,$$67'$YDLODEOHDWZZZDJDVVHVVPHQWRUJ
-DFN : DQG 6XUL 7 0RELOH 0RQH\ 7KH (FRQRPLFV RI 03(6$ $YDLODEOH DW KWWSZZZJHRUJHWRZQHGX
IDFXOW\ZJMSDSHUV-DFNB6XUL(FRQRPLFVRI03(6$SGI
-DFNVRQ*-2UJDQLF&RWWRQ)DUPLQJLQ.XWFK*XMDUDW,QGLD2XWORRNVRQ3HVW0DQDJHPHQW)HEUXDU\
-D\QH760DWKHU'DQG0JKHQ\L(3ULQFLSDOFKDOOHQJHVFRQIURQWLQJVPDOOKROGHUDJULFXOWXUHLQVXE6DKDUDQ
$IULFD:RUOG'HYHORSPHQW²
-HQNLQVRQ '6 7KH WXUQRYHU RI RUJDQLF FDUERQ DQG QLWURJHQ LQ VRLO 3KLORVRSKLFDO 7UDQVDFWLRQV RI WKH 5R\DO
6RFLHW\%%LRORJLFDO6FLHQFHV
-RKDQVVRQ67KH6ZHGLVKIRRGVKHG5HLPDJLQLQJRXUVXSSRUWDUHD,Q)DUQZRUWK&-LJJLQV-DQG7KRPDV
(9HGV&UHDWLQJ)RRG)XWXUHV7UDGH(WKLFVDQGWKH(QYLURQPHQW$OGHUVKRW*RZHU²
-RKQVRQ3:$JULFXOWXUH)RRGDQG'UXJ$GPLQLVWUDWLRQ5XUDO'HYHORSPHQW:DVKLQJWRQ'&*RYHUQPHQW
3ULQWLQJ2IÀFH
-RKQVWRQ$(7KHHIIHFWVRIOH\DQGDUDEOHFURSSLQJV\VWHPVRQWKHDPRXQWRIRUJDQLFPDWWHULQWKH5RWKDPVWHDG
DQG:REXUQOH\DUDEOHH[SHULPHQWV5RWKDPVWHDG5HSRUWIRU3DUWSS
-RQHV&(&DUERQWKDWFRXQWV6RLO&DUERQ&RDOLWLRQ$YDLODEOHDWKWWSVRLOFDUERQFRDOLWLRQRUJÀOHV-21(6
&DUERQWKDWFRXQWV0DUSGI
-RQHV 1 &OLPDWH FKDQJH FXUEV FURSV 1DWXUH 1HZV 0D\ $YDLODEOH DW KWWSZZZQDWXUHFRP
QHZVIXOOQHZVKWPO
-XR$65DQG7KXURZ7/6XVWDLQDEOHWHFKQRORJLHVIRUXVHDQGFRQVHUYDWLRQRI6WHHSODQGV%XOOHWLQ)RRG
)HUWLOL]HU7HFKQRORJ\&HQWHUIRUWKH$VLDQDQG3DFLÀF5HJLRQ7DLSHL$YDLODEOHDWZZZIIWFDJQHWRUJOLEUDU\SKS
"IXQF YLHZLG W\SHBLG .H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
.DGHU$$$SHUVSHFWLYHRQSRVWKDUYHVWKRUWLFXOWXUH+RUWLFXOWXUDO6FLHQFH²
.DGHU$$,QFUHDVLQJIRRGDYDLODELOLW\E\UHGXFLQJSRVWKDUYHVWORVVHVRIIUHVKSURGXFH$FWD+RUWLFXOWXUDH
²
.DQQLQHQ0HWDO'RWUHHVJURZRQPRQH\")RUHVW3HUVSHFWLYH-DNDUWD&HQWHUIRU,QWHUQDWLRQDO)RUHVWU\
5HVHDUFK&,)25
.DUHNH]L6DQG/D]DUXV0)XWXUH(QHUJ\5HTXLUHPHQWVIRU$IULFD·V$JULFXOWXUH&KDSWHUVDQG$YDLODEOH
DWKWWSZZZIDRRUJGRFUHS9(YHKWP&RQWHQWV
.DVSHUF]\N1DQG.QLFNHO.(QYLURQPHQWDOLPSDFWVRIRUJDQLFIDUPLQJ,Q.ULVWLDQVHQ35HJDQROG-DQG7DML
$HGV2UJDQLF$JULFXOWXUH$*OREDO3HUVSHFWLYH&ROOLQJZRRG&6,52²$YDLODEOHDWKWWSZZZSXEOLVK
FVLURDXSLGKWP
.HDQH-3DJH6.HUJQD$DQG.HQQDQ-&OLPDWHFKDQJHDQGGHYHORSLQJFRXQWU\DJULFXOWXUHDQRYHUYLHZRI
H[SHFWHGLPSDFWVDGDSWDWLRQDQGPLWLJDWLRQFKDOOHQJHVDQGIXQGLQJUHTXLUHPHQWV,&76',QWHUQDWLRQDO)RRG
$JULFXOWXUDO7UDGH3ROLF\&RXQFLO,VVXH%ULHI1R$YDLODEOHDWZZZLFWVGRUJ
.HQGDOO+:DQG3LPHQWHO'&RQVWUDLQWVRQWKHH[SDQVLRQRIWKHJOREDOIRRGVXSSO\$PELR²
.KDQ6$0XOYDQH\5/(OOVZRUWK75DQG%RDVW&:7KHP\WKRIQLWURJHQIHUWLOL]DWLRQIRUVRLOFDUERQVHTXHVWUDWLRQ
-RXUQDORI(QYLURQPHQWDO4XDOLW\2FWREHU²
.KRU 0 7KHLPSDFWRIWUDGHOLEHUDOL]DWLRQRQDJULFXOWXUHLQGHYHORSLQJFRXQWULHV7KHH[SHULHQFHRI*KDQD
3HQDQJ7KLUG:RUOG1HWZRUN
.KRU 0 7KH IRRG FULVLV FOLPDWH FKDQJH DQG WKH LPSRUWDQFH RI VXVWDLQDEOH DJULFXOWXUH (QYLURQPHQW 'HYHORSPHQW6HULHV3HQDQJ7KLUG:RUOG1HWZRUN3DSHUSUHVHQWHGDWWKH+LJK/HYHO&RQIHUHQFHRQ:RUOG
)RRG6HFXULW\7KH&KDOOHQJHVRI&OLPDWH&KDQJHDQG%LRHQHUJ\5RPH²-XQH
.LMLPD<1HZWHFKQRORJ\DQGHPHUJHQFHRIPDUNHWV(YLGHQFHIURP1(5,&$ULFHLQ8JDQGD$YDLODEOHDW
KWWSZZZFVDHR[DFXNFRQIHUHQFHV('L$SDSHUV.LMLPDSGI
.LPEDOO%$.RED\DVKL.DQG%LQGL05HVSRQVHVRIDJULFXOWXUDOFURSVWRIUHHDLU&2HQULFKPHQW$GYDQFHVLQ
$JURQRP\²
.LPEDOO %$ 0RUULV &) 3LQWHU -U 3- :DOO *: +XQVDNHU '- $GDPVHQ )- /D0RUWH 5/ /HDYLWW 6: 7KRPSVRQ 7/
0DWWKLDV$'DQG%URRNV7-(OHYDWHG&2GURXJKWDQGVRLOQLWURJHQHIIHFWVRQZKHDWJUDLQTXDOLW\1HZ
3K\WRORJLVW²
.M UQHV8+DUYH\0DQG:DUGH$7UXVWLQ)RRG$&RPSDUDWLYHDQG,QVWLWXWLRQDO$QDO\VLV1HZ<RUN3DOJUDYH
.RQLNRZ/)DQG.HQG\(*URXQGZDWHUGHSOHWLRQ$JOREDOSUREOHP+\GURJHRORJ\-RXUQDO²
.RRKDINDQ3DQG$OWLHUL0$*OREDOO\LPSRUWDQWDJULFXOWXUDOKHULWDJHV\VWHPV$OHJDF\IRUWKHIXWXUH5RPH
)$2
.RRSPDQV&-%RV00DQG/XVNH%5HVLOLHQFHWRDFKDQJLQJFOLPDWH&DUERQVWRFNVLQWZRRUJDQLFIDUPLQJ
V\VWHPV LQ $IULFD ,Q 1HXKRII ' +DOEHUJ 1 5DVPXVVHQ , +HUPDQVHQ / 6VHN\HZD & DQG 0RN 6RKQ 6 HGV
2UJDQLF LV /LIH ² .QRZOHGJH IRU 7RPRUURZ 3URFHHGLQJV RI WKH 7KLUG 6FLHQWLÀF &RQIHUHQFH RI WKH ,QWHUQDWLRQDO
6RFLHW\RI2UJDQLF$JULFXOWXUH5HVHDUFK,62)$56HSWHPEHU²2FWREHU9RO6RFLR(FRQRP\/LYHVWRFN
)RRG4XDOLW\$JURHFRORJ\DQG.QRZOHGJH'LVVHPLQDWLRQ1DP\DQJMX5HSRI.RUHD²
.RUFKHQV0DQG0OOHU$7KHVWDWLFH[SHULPHQW%DG/DXFKVW*HUPDQ\,Q(YDOXDWLRQRIVRLORUJDQLFPDWWHU
PRGHOVXVLQJH[LVWLQJGDWDVHWVHGV3RZOVRQ'66PLWK3DQG6PLWK-81$72$6,+HLGHOEHUJ
*HUPDQ\6SULQJHU
.UDLQ ( 0DYUDNLV ( 0RKDPXG 0 :DQMRKL 3 DQG ,QJZH $ &OLPDWH &KDQJH DQG GLYHUVLÀFDWLRQ RI FRIIHH
SURGXFWLRQ3URVSHFWVRIFXOWLYDWLQJSDVVLRQIUXLWDVDQDOWHUQDWLYHWRFRIIHHLQ.HQ\D1DLUREL3URPRWLRQRI3ULYDWH
6HFWRU'HYHORSPHQWLQ$JULFXOWXUH36'$'HXWVFKH*HVHOOVFKDIWIU,QWHUQDWLRQDOH=XVDPPHQDUEHLW*,=
.UDLQ(1J·HQGR0'LHW]-1GHJZD'11MHUX-DQG&KHJH3&OLPDWHFKDQJHLQYDOXHFKDLQGHYHORSPHQW
&RQFHSWXDO LGHDV EDVHG RQ H[SHULHQFHV ZLWK WKH WHD SDVVLRQ IUXLW DQG HQHUJ\ VDYLQJ VWRYHV YDOXH FKDLQV LQ
.HQ\D1DLUREL3URPRWLRQRI3ULYDWH6HFWRU'HYHORSPHQWLQ$JULFXOWXUH36'$*HUPDQ7HFKQLFDO&RRSHUDWLRQ
$JHQF\*7=
.ULHU-0)DLU7UDGHLQ(XURSH%UXVVHOV(XURSHDQ3DUOLDPHQW$YDLODEOHDWKWWSIDLUWUDGHQHWVLWHVQHZV
)DLU7UDGHLQ(XURSHSGI
75$'($1'(19,5210(175(9,(:
/DO52QHDQVZHUIRUFOHDQHUDLUZDWHU%HWWHUDJULFXOWXUDOSUDFWLFHV2KLR6WDWH5HVHDUFK1HZV$YDLODEOH
DWKWWSUHVHDUFKQHZVRVXHGXDUFKLYHVHTXHVWKWP
/DO5&DUERQVHTXHVWUDWLRQ3KLORVRSKLFDO7UDQVFULSWLRQVRIWKH5R\DO6RFLHW\%²%LRORJLFDO6FLHQFHV
)HEUXDU\²
/DO56HTXHVWUDWLRQRIDWPRVSKHULF&2LQJOREDOFDUERQSRROV(QHUJ\DQG(QYLURQPHQWDO6FLHQFH²
/DO 5 .LPEOH -0 )ROOHWW 5) &ROH &9 7KH SRWHQWLDO RI 86 FURSODQG WR VHTXHVWHU FDUERQ DQG PLWLJDWH WKH
JUHHQKRXVHHIIHFW&KHOVHD0,$QQ$UERU3UHVV
/DO5DQG6WHZDUW%$6RLO'HJUDGDWLRQ1HZ<RUN6SULQJHU
/DQJGDOH*::HVW/7%UXFH550LOOHU:3DQG7KRPDV$:5HVWRUDWLRQRIHURGHGVRLOZLWKFRQVHUYDWLRQ
WLOODJH6RLO7HFKQRORJ\²
/D6DOOH 7- DQG +HSSHUO\ 3 5HJHQHUDWLYH RUJDQLF IDUPLQJ $ VROXWLRQ WR JOREDO ZDUPLQJ .XW]WRZQ 3$ 7KH
5RGDOH,QVWLWXWH
/D]DURII&%LRGLYHUVLW\JLYHVFDUERQVLQNVDERRVW(QYLURQPHQW1HZV6HUYLFH$SULO
/HH.(DQG)RVWHU5&6RLOIDXQDDQGVRLOVWUXFWXUH$XVWUDOLDQ-RXUQDORI6RLO5HVHDUFK²
/HJJ:DQG+XDQJ+&OLPDWHFKDQJHDQGDJULFXOWXUH2(&'2EVHUYHUQR0DUFK7UDGHDQG$JULFXOWXUH
'LUHFWRUDWH2(&'3DULV$YDLODEOHDWKWWSWLQ\XUOFRPXKIN
/HYLQH8<7HDO7.5REHUWVRQ*3DQG6FKPLGW70$JULFXOWXUH·VLPSDFWRQPLFURELDOGLYHUVLW\DQGDVVRFLDWHG
ÁX[HVRIFDUERQGLR[LGHDQGPHWKDQH,60(-RXUQDO²
/L.0DQG+R0:%LRJDV&KLQD6FLHQFHLQ6RFLHW\²
/LEHUW%7KH(QYLURQPHQWDO+HULWDJHRI6RYLHW$JULFXOWXUH2[IRUG&$%,QWHUQDWLRQDO
/LP/L&KLQJ&OLPDWHFKDQJHLPSOLFDWLRQVIRUDJULFXOWXUHLQ6XE6DKDUDQ$IULFD)$2,QVWLWXWHIRU6XVWDLQDEOH
'HYHORSPHQW7KLUG:RUOG1HWZRUNUHVHDUFKSDSHU5RPH$YDLODEOHDWZZZIDRRUJ
/LQ%%5HVLOLHQFHLQDJULFXOWXUHWKURXJKFURSGLYHUVLÀFDWLRQDGDSWLYHPDQDJHPHQWIRUHQYLURQPHQWDOFKDQJH
%LR6FLHQFH²
/LQ&-/L&</LQ6.<DQJ)++XDQJ--/LX<+/XU+6,QÁXHQFHRIKLJKWHPSHUDWXUHGXULQJJUDLQÀOOLQJRQ
WKHDFFXPXODWLRQRIVWRUDJHSURWHLQVDQGJUDLQTXDOLW\LQULFH2U\]DVDWLYD/-RXUQDORI$JULFXOWXUDODQG)RRG
&KHPLVWU\²$YDLODEOHDWKWWSSXEVDFVRUJGRLDEVMIM
/LQQH . $UFKHU - 6FKPLGW * DQG .XKUW & &OLPDWH &KDQJH $GDSWDWLRQ DQG 0LWLJDWLRQ LQ WKH .HQ\DQ &RIIHH
6HFWRU *XLGH ERRN &OLPDWH 0RGXOH 6DQJDQD 333 'HXWVFKH *HVHOOVFKDIW IU ,QWHUQDWLRQDOH =XVDPPHQDUEHLW
*,=(FRP$JURLQGXVWULDO*URXS$YDLODEOHDWKWWSZZZFFRIIHHDVVRFLDWLRQRUJLQGH[SKS"LG /LX-)ULW]6YDQ:HVHQEHHN&)$)XFKV0<RX/2EHUVWHLQHU0<DQJ+$VSDWLDOO\H[SOLFLWDVVHVVPHQWRI
FXUUHQWDQGIXWXUHKRWVSRWVRIKXQJHULQVXE6DKDUDQ$IULFDLQWKHFRQWH[WRIJOREDOFKDQJH*OREDODQG3ODQHWDU\
&KDQJH²
/REHOO'%&KDQJHVLQGLXUQDOWHPSHUDWXUHDQGQDWLRQDOFHUHDO\LHOGV$JULFXOWXUDODQG)RUHVW0HWHRURORJ\²
/REHOO '% /REHOO % %XUNH 0% 7HEDOGL & 0DVWUDQGUHD 0' )DOFRQ :3 DQG 1D\ORU 5/ 3ULRULWL]LQJ FOLPDWH
FKDQJHDGDSWDWLRQQHHGVIRUIRRGVHFXULW\LQ6FLHQFH²
/REHOO'%6FKOHQNHU:DQG&RVW5REHUWV-&OLPDWHWUHQGVDQGJOREDOFURSSURGXFWLRQVLQFH6FLHQFH
²$YDLODEOHDWKWWSZZZVFLHQFHPDJRUJFRQWHQW
/RFNDE\ %* DQG $GDPV -& 3HGRWXUEDWLRQ RI D IRUHVW VRLO E\ ÀUH DQWV -RXUQDO RI 6RLO 6FLHQFH 6RFLHW\ RI
$PHULFD²
/RODG]H , 5LVLQJ DWPRVSKHULF &2 DQG KXPDQ QXWULWLRQ 7RZDUG JOREDOO\ LPEDODQFHG SODQW VWRLFKLRPHWU\"
7UHQGVLQ(FRORJ\(YROXWLRQ²
/RUHDX01DHHP6,QFKDXVWL3%HQJWVVRQ-*ULPH-3+HFWRU$+RRSHU'8+XVWRQ0$5DIIDHOOL'6FKPLG%
7LOPDQ'DQG:DUGOH'$%LRGLYHUVLW\DQGHFRV\VWHPIXQFWLRQLQJ&XUUHQWNQRZOHGJHDQGIXWXUHFKDOOHQJHV
6FLHQFH²
/RWWHU ': 6HLGHO 5 DQG /LHEKDUW : 7KH SHUIRUPDQFH RI RUJDQLF DQG FRQYHQWLRQDO FURSSLQJ V\VWHPV LQ DQ
H[WUHPHFOLPDWH\HDU$PHULFDQ-RXUQDORI$OWHUQDWLYH$JULFXOWXUH²
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
/RXZDDUV17ULSS5(DWRQ'+HQVRQ$SROORQLR9+X50HQGR]D00XKKXNX)3DO6DQG:HNXQGDK-
,PSDFWVRIVWUHQJWKHQHGLQWHOOHFWXDOSURSHUW\ULJKWVUHJLPHVRQWKHSODQWEUHHGLQJLQGXVWU\LQGHYHORSLQJFRXQWULHV
$V\QWKHVLVRIÀYHFDVHVWXGLHV:DJHQLQJHQ&HQWUHIRU*HQHWLF5HVRXUFHV
/XQGTYLVW-GH)UDLWXUH&DQG0ROGHQ'6DYLQJZDWHU)URPÀHOGWRIRUN²&XUELQJORVVHVDQGZDVWDJHLQ
WKHIRRGFKDLQ6,:,3ROLF\%ULHI6WRFNKROP6WRFNKROP,QWHUQDWLRQDO:DWHU,QVWLWXWH$YDLODEOHDWZZZVLZLRUJ
GRFXPHQWV5HVRXUFHV3ROLF\B%ULHIV3%B)URPB)LOHGBWRB)RUNBSGI
/XVNH%DQGYDQGHU.DPS-&DUERQVHTXHVWUDWLRQSRWHQWLDORIUHFODLPHGGHVHUWVRLOVLQ(J\SW'ULHEHUJHQ
7KH1HWKHUODQGV6RLODQG0RUH,QWHUQDWLRQDODQGWKH+HOLRSROLV$FDGHP\DQGWKH/RXLV%RON,QVWLWXWH'HSDUWPHQW
RI$JULFXOWXUH
0DF'RQDOG 0 $JULLPSDFW DVVHVVPHQW ² ,, 0RUH IURP WKH FRWWRQ ÀHOGV $JURFHO ,QGXVWULHV /WG -DQXDU\
$YDLODEOH DW KWWSZZZWUDLGFUDIWFRXN2QH6WRS&06&RUH&UDZOHU5HVRXUFH6HUYHUDVS["UHVRXUFH ($'
)'%)$&&&('PRGH OLQNJXLG DHIGIEHHEIEHFIG
0DFKDGR6'RHVLQWHUFURSSLQJKDYHDUROHLQPRGHUQDJULFXOWXUH"-RXUQDORI6RLODQG:DWHU&RQVHUYDWLRQ
$$²$
0DGHU3)OLH‰EDFK$'XERLV'*XQVW/)ULHG3DQG1LJJOL86RLOIHUWLOLW\DQGELRGLYHUVLW\LQRUJDQLFIDUPLQJ
6FLHQFH
0DKRQH\32OVRQ.'3RUWHU0+XJJLQV'53HULOOR&$DQG&URRNVWRQ5.3URÀWDELOLW\RIRUJDQLFFURSSLQJ
V\VWHPVLQVRXWKZHVWHUQ0LQQHVRWD-RXUQDORI5HQHZDEOH$JULFXOWXUHDQG)RRG6\VWHPV²
0D]R\HU0DQG5RXGDUW/$+LVWRU\RI:RUOG$JULFXOWXUH)URPWKH1HROLWKLF$JHWRWKH&XUUHQW&ULVLV7UDQVODWLRQ
E\-DPHV+0HPEUH]/RQGRQ(DUWKVFDQ
0F%ULGH:'DQG*UHHQH&57KHSURÀWDELOLW\RIRUJDQLFVR\EHDQSURGXFWLRQ5HQHZDEOH$JULFXOWXUHDQG)RRG
6\VWHPV²
0F,QW\UH % +HUUHQ +5 :DNKXQJX - :DWVRQ 57 D $JULFXOWXUH DW D &URVVURDGV 6XE6DKDUDQ $IULFD
9RO 9 :DVKLQJWRQ '& ,QWHUQDWLRQDO $VVHVVPHQW RI $JULFXOWXUDO .QRZOHGJH 6FLHQFH DQG 7HFKQRORJ\ IRU
'HYHORSPHQW
0F,QW\UH%+HUUHQ+5:DNKXQJX-DQG:DWVRQ57E1RUWK$PHULFDDQG(XURSH5HJLRQDO5HSRUW9RO,9RI
$JULFXOWXUHDWD&URVVURDGV,$$67',VODQG3UHVV:DVKLQJWRQ'&$YDLODEOHDWZZZDJDVVHVVPHQWRUJ
0HHKO*$6WRFNHU7)&ROOLQV:')ULHGOLQJVWHLQ3*D\H$7*UHJRU\-0.LWRK$.QXWWL50XUSK\-01RGD$5DSHU
6&%:DWWHUVRQ,*:HDYHU$-DQG=KDR=&*OREDOFOLPDWHSURMHFWLRQV,Q,3&&6RORPRQ6HWDOHGV
&OLPDWH &KDQJH 7KH3K\VLFDO6FLHQFH%DVLV&RQWULEXWLRQRI:RUNLQJ*URXS,WRWKH)RXUWK$VVHVVPHQW
5HSRUWRIWKH,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH&DPEULGJHDQG1HZ<RUN&DPEULGJH8QLYHUVLW\3UHVV
0HLQKDXVHQ00HLQVKDXVHQ1+DUH:5DSHU6&%)ULHOHU..QXWWL.)UDPH'-DQG$OOHQ05*UHHQKRXVH
JDVHPLVVLRQWDUJHWVIRUOLPLWLQJJOREDOZDUPLQJWRƒ&1DWXUH²
0HQGR]D7&&RPSDUDWLYHSURGXFWLYLW\SURÀWDELOLW\DQGHQHUJ\XVHLQRUJDQLF/(,6$DQGFRQYHQWLRQDOULFH
SURGXFWLRQ LQ WKH 3KLOLSSLQHV 3DSHU SUHVHQWHG DW WKH WK :RUOG &RQJUHVV ,)2$0 9LFWRULD &DQDGD ²
$XJXVW
0LFKDHOLV / DQG /RUHN 6 &RQVXPSWLRQ DQG WKH (QYLURQPHQW LQ (XURSH 7UHQGV DQG )XWXUHV &RSHQKDJHQ
'DQLVK(3$
0LFN'*%URQLDUF]\N0DQG+DLGW-&KRRVHFKRRVHFKRRVHFKRRVHFKRRVHFKRRVHFKRRVH(PHUJLQJ
DQGSURVSHFWLYHUHVHDUFKRQWKHGHOHWHULRXVHIIHFWVRIOLYLQJLQFRQVXPHUK\SHUFKRLFH-RXUQDORI%XVLQHVV(WKLFV
²
0LOHVWDG5DQG'DUQKRIHU,%XLOGLQJIDUPUHVLOLHQFHWKHSURVSHFWVDQGFKDOOHQJHVRIRUJDQLFIDUPLQJ-RXUQDO
RI6XVWDLQDEOH$JULFXOWXUH²
0LOOHQQLXP (FRV\VWHP $VVHVVPHQW (FRV\VWHPV DQG +XPDQ :HOOEHLQJ 6\QWKHVLV :DVKLQJWRQ '& ,VODQG
3UHVV²
0LOO\3&''XQQH.$DQG9HFFKLD$9*OREDOSDWWHUQRIWUHQGVLQVWUHDPÁRZDQGZDWHUDYDLODELOLW\LQDFKDQJLQJ
FOLPDWH1DWXUH²
0LQRW 1 6PDOH 0 (LFKHU & -D\QH 7 .OLQJ - +RUQD ' DQG 0\HUV 5 6HHG GHYHORSPHQW SURJUDPV LQ
VXE6DKDUDQ$IULFD$UHYLHZRIH[SHULHQFHV$YDLODEOHDWKWWSZZZDHFPVXHGXIVUHVSRQVHVMD\QHBP\HUVB
75$'($1'(19,5210(175(9,(:
DIULFDQBVHHGBUHYLHZSGI
0RUHWWL &/ 0DWWRV /0 &DOER $* DQG 6DUJHQW 6$ &OLPDWH FKDQJHV DQG SRWHQWLDO LPSDFWV RQ SRVWKDUYHVW
TXDOLW\RIIUXLWDQGYHJHWDEOHFURSV$UHYLHZ)RRG5HVHDUFK,QWHUQDWLRQDO²
0R\HU-2UJDQLF1R7LOO)DUPLQJ(PPDXV3$5RGDOH3UHVV
0R\HU-2UJDQLF1RWLOO)DUPLQJ$FUHV86$$XVWLQ7;
0KOHLE ) /HEHQVPLWWHOVLFKHUKHLW XQG 3UR]HVVTXDOLWlW YRQ /HEHQVPLWWHOQ LQ (XURSD :DV VLQG XQVHUH
$QVSUFKH":LHN|QQHQVLHJHVLFKHUWZHUGHQ"$YDLODEOHDWKWWSZZZY]EYGHPHGLDSLFVOHEHQVPLWWHOVLFKHUKHLWB
HXURSDBGRVVLHUBLJZBSGI
0OOHU $ DQG $XEHUW & 7KH SRWHQWLDO RI RUJDQLF DJULFXOWXUH WR PLWLJDWH WKH LPSDFW RI DJULFXOWXUH RQ JOREDO
ZDUPLQJ$UHYLHZ,Q3HQYHUQ6HG2UJDQLF)DUPLQJ3URWRW\SHIRU6XVWDLQDEOH$JULFXOWXUHV"%HUOLQ6SULQJHU
IRUWKFRPLQJ
0OOHU$-DZWXVFK-DQG*DWWLQJHU$D0LWLJDWLQJJUHHQKRXVHJDVHVLQDJULFXOWXUH$FKDOOHQJHDQGRSSRUWXQLW\
IRUDJULFXOWXUDOSROLFLHV6WXG\RI)L%/IRU$FW$OOLDQFH%UHDGIRU$OO&KUXFKRI6ZHGHQDQG'DQ&KXUFK$LG6WXWWJDUW
$YDLODEOHDWZZZEURWIXHUGLHZHOWGHGRZQORDGVIDFKLQIRUPDWLRQHQJUHHQKRXVHJDVHVSGI
0OOHU $ 2VPDQ(ODVKD % DQG $QGUHDVHQ / 7KH SRWHQWLDO RI RUJDQLF DJULFXOWXUH IRU FRQWULEXWLQJ WR FOLPDWH
FKDQJH DGDSWDWLRQ ,Q +DOEHUJ 1 DQG 0OOHU $ HGV 2UJDQLF $JULFXOWXUH IRU 6XVWDLQDEOH /LYHOLKRRGV /RQGRQ
5RXWOHGJH
0OOHU&&OLPDWHFKDQJHLPSDFWRQVXE6DKDUDQ$IULFD$QRYHUYLHZDQGDQDO\VLVRIVFHQDULRVDQGPRGHOV
'LVFXVVLRQSDSHU'HXWVFKHV,QVWLWXWIU(QWZLFNOXQJVSROLWLN%RQQ
0OOHU&&UDPHU:+DUH://RW]H&DPSHQ+E&OLPDWHFKDQJHULVNVIRU$IULFDQDJULFXOWXUH31$6
²
0XOYDQH\5/.KDQ6$DQG(OOVZRUWK756\QWKHWLFQLWURJHQIHUWLOL]HUVGHSOHWHVRLOQLWURJHQ$JOREDOGLOHPPD
IRUVXVWDLQDEOHFHUHDOSURGXFWLRQ-RXUQDORI(QYLURQPHQWDO4XDOLW\²
0XUDW $ 9HUKXOVW .5 6DOW]PDQ (6 %DWWOH 02 0RQW]ND 6$ %ODNH '5 7DQJ 4 DQG 3UDWKHU 0- 5HFHQW
GHFUHDVHVLQIRVVLOIXHOHPLVVLRQVRIHWKDQHDQGPHWKDQHGHULYHGIURPÀUQDLU1DWXUH²
0XUSK\ 6 DQG :LVH 7 $ 5HVROYLQJ WKH IRRG FULVLV $VVHVVLQJ JOREDO SROLF\ UHIRUPV VLQFH *OREDO
'HYHORSPHQWDQG(QYLURQPHQW,QVWLWXWHDW7XIWV8QLYHUVLW\DQG,QVWLWXWHIRU$JULFXOWXUHDQG7UDGH3ROLF\$YDLODEOH
DWKWWSLDWSRUJÀOHVBBB5HVROYLQJ)RRG&ULVLVB60B7:SGI
0\HUV1*DLD$Q$WODVRI3ODQHW0DQDJHPHQW*DUGHQ&LW\1<$QFKRU'RXEOHGD\
1DHUVWDG $ $ YLDEOH IRRG IXWXUH SDUW , DQG ,, 7KH 'HYHORSPHQW )XQG 1RUZD\ 2VOR $YDLODEOH DW KWWS
ZZZXWYLNOXQJVIRQGHWQRÀOHVXIGRFXPHQWV$B9LDEOHB)RRGB)XWXUHBXSGDWHGBZHESGI
DQG
KWWSZZZ
XWYLNOXQJVIRQGHWQRÀOHVXIGRFXPHQWV5DSSRUWHU$9LDEOHB)RRGB)XWXUHBSDUWBHQBZHESGI
1$6 1DWLRQDO $FDGHP\ RI 6FLHQFHV )URQWLHUV LQ $JULFXOWXUDO 5HVHDUFK )RRG +HDOWK (QYLURQPHQW DQG
&RPPXQLWLHV:DVKLQJWRQ'&
1DWDUDMDQ0DQG:LOOH\5:7KHHIIHFWVRIZDWHUVWUHVVRQ\LHOGDGYDQWDJHVRILQWHUFURSSLQJV\VWHPV)LHOG
&URSV5HVHDUFK²
1HVWOp'LH1HVWOp6WXGLH²6RLVVW'HXWVFKODQG:DQGHOGHV$OOWDJV:DQGHOGHU(UQlKUXQJ$YDLODEOH
DWKWWSZZZQHVWOHGH8QWHUQHKPHQ1HVWOH6WXGLH1HVWOH6WXGLH3DJHVGHIDXOWDVS[
1HVWOH 0 )RRG 3ROLWLFV +RZ WKH )RRG ,QGXVWU\ ,QÁXHQFHV 1XWULWLRQ DQG +HDOWK %HUNHOH\ /RV $QJHOHV DQG
/RQGRQ8QLYHUVLW\RI&DOLIRUQLD3UHVV
1HWWLQJ50F&6PDOOKROGHUV+RXVHKROGHUV)DUP)DPLOLHVDQGWKH(FRORJ\RI,QWHQVLYH6XVWDLQDEOH$JULFXOWXUH
3DOR$OWR&$6WDQIRUG8QLYHUVLW\3UHVV
1LJJOL 8 2UJDQLF DJULFXOWXUH $ SURGXFWLYH PHDQV RI ORZFDUERQ DQG KLJK ELRGLYHUVLW\ IRRG SURGXFWLRQ ,Q
81&7$'7UDGHDQG(QYLURQPHQW5HYLHZ*HQHYD81&7$'²
1LOVVRQ /* 'DWD RI \LHOG DQG VRLO DQDO\VLV LQ WKH ORQJWHUP VRLO IHUWLOLW\ H[SHULPHQWV -5 6ZHG $FDG $JU
)RUHVWU\VXSSO
1RUZHJLDQ0LQLVWU\RIWKH(QYLURQPHQW2VOR5RXQGWDEOHRQ6XVWDLQDEOH3URGXFWLRQDQG&RQVXPSWLRQ$YDLODEOH
DWKWWSZZZLLVGFDFRQVXPHRVORKWPO
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
1XUL$218'URLWVSRXUWRXVRXORLGXSOXVIRUW"*HQHYD&HQWUH(XURSH²7LHUV0RQGH&(7,0
2GXP(3)XQGDPHQWDOVRI(FRORJ\1HZ<RUN6DXQGHUV
2(&' +RXVHKROG IRRG FRQVXPSWLRQ 7UHQGV HQYLURQPHQWDO LPSDFWV DQG SROLF\ UHVSRQVHV 3DULV 2(&'
$YDLODEOH DW ZZZRHFGRUJRIÀFLDOGRFXPHQWVGLVSOD\GRFXPHQWSGI"FRWH (19(32&:31(3
),1$/GRFODQJXDJH HQ
2HUNH (& &URS ORVVHV WR SHVWV -RXUQDO RI $JULFXOWXUDO 6FLHQFH 9RO ,VVXH )HEUXDU\ SS $YDLODEOHDWKWWSMRXUQDOVFDPEULGJHRUJDFWLRQGLVSOD\$EVWUDFW"IURP3DJH RQOLQHDLG 2IIHUPDQQ)DQG1LHEHUJ+(FRQRPLFSHUIRUPDQFHRIRUJDQLFIDUPVLQ(XURSH,Q2UJDQLF)DUPLQJLQ(XURSH
(FRQRPLFVDQG3ROLF\9RO6WXWWJDUW8QLYHUVLW\RI+RKHQKHLP
2NWHP$(IIHFWRIZDWHUVKRUWDJHRQ\LHOGDQGSURWHLQDQGPLQHUDOFRPSRVLWLRQVRIGULSLUULJDWHGVZHHWFRUQLQ
VXVWDLQDEOHDJULFXOWXUDOV\VWHPV$JULFXOWXUDO:DWHU0DQDJHPHQW²
2ODK=VXSRV$DQG+HOPHF]L%7KHHIIHFWRIVRLOFRQGLWLRQHUVRQVRLOPLFURRUJDQLVPV,Q6]HJL-HG6RLO
%LRORJ\DQG&RQVHUYDWLRQRIWKH%LRVSKHUH3URFHHGLQJVRIWKHWK,QWHUQDWLRQDO6\PSRVLXP%XGDSHVW$NDGHPLDL
.LDGR²
2OVRQ .' DQG 0DKRQH\ 35 /RQJWHUP FURSSLQJ VWXGLHV DW WKH 8QLYHUVLW\ RI 0LQQHVRWD 7KH YDULDEOH LQSXW
FURSSLQJPDQDJHPHQWV\VWHPVWXG\:DVKLQJWRQ'&8QLWHG6WDWHV'HSWRI$JULFXOWXUH(FRQRPLF5HVHDUFK
6HUYLFH
2UJDQLF(XURSH&RXQWU\UHSRUWV$YDLODEOHDWKWWSZZZRUJDQLFHXURSHQHWFRXQWU\BUHSRUWVGHIDXOWDVS
2VERUQH&3%HHUOLQJ'-1DWXUH·VJUHHQUHYROXWLRQWKHUHPDUNDEOHHYROXWLRQDU\ULVHRI&SODQWV3KLORVRSKLFDO
7UDQVDFWLRQVRIWKH5R\DO6RFLHW\%%LRORJLFDO6FLHQFHV²
3DLQWHU.'RHVVXVWDLQDEOHIDUPLQJSD\"$FDVHVWXG\-RXUQDORI6XVWDLQDEOH$JULFXOWXUH²
3DUÀWW-%DUWKHO0DQG0DFQDXJKWRQ6)RRGZDVWHZLWKLQIRRGVXSSO\FKDLQV4XDQWLÀFDWLRQDQGSRWHQWLDOIRU
FKDQJHWR3KLORVRSKLFDO7UDQVDFWLRQVRIWKH5R\DO6RFLHW\%²$YDLODEOHDWZZZELVJRYXN
DVVHWVELVSDUWQHUVIRUHVLJKWGRFVIRRGDQGIDUPLQJGULYHUVGUIRRGZDVWHZLWKLQVXSSO\FKDLQVSGI
3DWHO5$W*OHQFRUH·VSLQQDFOHRIFDSLWDOLVPHYHQKXQJHULVDFRPPRGLW\7KH*XDUGLDQ0D\$YDLODEOHDW
KWWSZZZJXDUGLDQFRXNFRPPHQWLVIUHHPD\JOHQFRUHKXQJHFRPPRGLW\IRRGSULFHV
3HQJ6+XDQJ-6KHHK\-(/D]$D5&9LVSHUDV50=KRQJ;&HQWHQR*6.KXVK*6DQG&DVVPDQ.*
5LFH\LHOGVGHFOLQHZLWKKLJKHUQLJKWWHPSHUDWXUHVIURPJOREDOZDUPLQJ3URFHHGLQJVRIWKH1DWLRQDO$FDGHP\RI
6FLHQFHV²
3HUIHFWR,9DQGHUPHHU-DQG:ULJKW$1DWXUH·V0DWUL[/LQNLQJ$JULFXOWXUH&RQVHUYDWLRQDQG)RRG6RYHUHLJQW\
/RQGRQ(DUWKVFDQ
3KLOOLSV$DQG+HOPHF]L%7KHHIIHFWRIVRLOFRQGLWLRQHUVRQVRLOPLFURRUJDQLVPV,Q6]HJL-HG6RLO%LRORJ\
DQG&RQVHUYDWLRQRIWKH%LRVSKHUH3URFHHGLQJVRIWKHWK,QWHUQDWLRQDO6\PSRVLXP%XGDSHVW$NDGHPLDL.LDGR
²
3KLOSRWW 60 /LQ %% -KD 6 DQG %ULQHV 6- $ PXOWLVFDOH DVVHVVPHQW RI KXUULFDQH LPSDFWV RQ DJULFXOWXUDO
ODQGVFDSHVEDVHGRQODQGXVHDQGWRSRJUDSKLFIHDWXUHV$JULFXOWXUH(FRV\VWHPVDQG(QYLURQPHQW²
3LPHQWHO ' 6RLO HURVLRQ D IRRG DQG HQYLURQPHQWDO WKUHDW (QYLURQPHQW 'HYHORSPHQW DQG 6XVWDLQDELOLW\ ²
3LPHQWHO'*OREDO&OLPDWH&KDQJH,WV,PSOLFDWLRQVRQ)RRGDQGWKH(QYLURQPHQW5DFKHO&DUVRQ&RXQFLO,QF
6LOYHU6SULQJ0'
3LPHQWHO'DQG3LPHQWHO0)RRG(QHUJ\DQG6RFLHW\%RFD5DWRQ)/7D\ORUDQG)UDQFLV
3LPHQWHO'%HUJHU%)LOLEHUWR'1HZWRQ0:ROIH%.DUDELQDNLV%&ODUN63RRQ($EEHWW(DQG1DQGDJRSDO6
:DWHUUHVRXUFHV$JULFXOWXUDODQGHQYLURQPHQWDOLVVXHV%LRVFLHQFH²
3LPHQWHO'+DUYH\&5HVRVXGDUPR36LQFODLU..XUW]'0F1DLU0&ULVW66SULW]/)LWWRQ/6DIIRXUL5DQG%ODLU5
(QYLURQPHQWDODQGHFRQRPLFFRVWVRIVRLOHURVLRQDQGFRQVHUYDWLRQEHQHÀWV6FLHQFH²
3LPHQWHO'+HSSHUO\3+DQVRQ-'RXGV'DQG6HLGHO5(QYLURQPHQWDOHQHUJHWLFDQGHFRQRPLFFRPSDULVRQV
RIRUJDQLFDQGFRQYHQWLRQDOIDUPLQJV\VWHPV%LRVFLHQFH²
75$'($1'(19,5210(175(9,(:
3LPHQWHO'+XDQJ;&RUGRYD$DQG3LPHQWHO0,PSDFWRISRSXODWLRQJURZWKRQIRRGVXSSOLHVDQGHQYLURQPHQW
3RSXODWLRQDQG(QYLURQPHQW²
3LPHQWHO'3HWURYD75LOH\0-DFTXHW-1J9+RQLJPDQ-DQG9DOHUR(&RQVHUYDWLRQRIELRORJLFDOGLYHUVLW\LQ
DJULFXOWXUDOIRUHVWU\DQGPDULQHV\VWHPV,Q%XUN$5HG)RFXVRQ(FRORJ\5HVHDUFK1HZ<RUN1RYD6FLHQFH
3XEOLVKHUV²$OVRLQ6FKZDUW]-HG)RFXVRQ%LRGLYHUVLW\5HVHDUFK1HZ<RUN1RYD6FLHQFH
3XEOLVKHUV²
3LPHQWHO'7RUW0'·$QQD/.UDZLF$%HUJHU-5RVVPDQ-0XJR)'RRQ16KULEHUJ0+RZDUG(/HH6DQG7DOERW
-(FRORJ\RILQFUHDVLQJGLVHDVH%LRVFLHQFH2FWREHU$YDLODEOHDWKWWSGLHRIIRUJSDJHKWP
3ODWIRUPIRU$JURELRGLYHUVLW\5HVHDUFK7KHXVHRIDJURELRGLYHUVLW\E\LQGLJHQRXVDQGWUDGLWLRQDODJULFXOWXUDO
FRPPXQLWLHVLQDGDSWLQJWRFOLPDWHFKDQJH6\QWKHVLVSDSHU&OLPDWH&KDQJHSURMHFW%LRYHUVLW\,QWHUQDWLRQDODQG
WKH&KULVWHQVHQ)XQG
3ROODFN $ &URS VFLHQWLVWV VD\ ELRWHFKQRORJ\ VHHG FRPSDQLHV DUH WKZDUWLQJ UHVHDUFK 1HZ <RUN 7LPHV )HEUXDU\$YDLODEOHDWKWWSZZZQ\WLPHVFRPEXVLQHVVFURSKWPO"BU 3RVQHU -/ %DOGRFN -2 DQG +HGWFNH -/ 2UJDQLF DQG FRQYHQWLRQDO SURGXFWLRQ V\VWHPV LQ WKH :LVFRQVLQ
LQWHJUDWHGFURSSLQJV\VWHPV7ULDOV²$JURQRP\-RXUQDO9ROXPHLVVXHSS
3RVWHO6/:DWHUIRUIRRGSURGXFWLRQ:LOOWKHUHEHHQRXJKLQ"%LR6FLHQFH²
3UD\&2HKPNH-DQG1DVHHP$,QQRYDWLRQDQGG\QDPLFHIÀFLHQF\LQSODQWELRWHFKQRORJ\$QLQWURGXFWLRQWR
WKHUHVHDUFKDEOHLVVXHV$J%LR)RUXP²
3UHVV(DQG:DVKEXUQ-7KHNHSWXQLYHUVLW\7KH$WODQWLF0RQWKO\0DUFK$YDLODEOHDWKWWSZZZWKHDWODQWLF
FRPGRFXQLYHUVLW\IRUSURÀW
3UHWW\-$JULFXOWXUDOVXVWDLQDELOLW\&RQFHSWVSULQFLSOHVDQGHYLGHQFH3KLORVRSKLFDO7UDQVDFWLRQVRIWKH5R\DO
6RFLHW\%%LRORJLFDO6FLHQFHV²
3UHWW\ - %UHWW & *HH ' +LQH 5( 0DVRQ &) 0RULVRQ -,/ 5DYHQ + 5D\PHQW 0' DQG YDQ GHU %LMO * $Q
DVVHVVPHQWRIWKHWRWDOH[WHUQDOFRVWVRI8.DJULFXOWXUH$JULFXOWXUDO6\VWHPV²
3UHWW\-11REOH$'%RVVLR''L[RQ-+LQH5(3HQQLQJGH9ULHV):7DQG0RULVRQ-,/5HVRXUFHFRQVHUYLQJ
DJULFXOWXUHLQFUHDVHV\LHOGVLQGHYHORSLQJFRXQWULHV(QYLURQPHQWDO6FLHQFHDQG7HFKQRORJ\ï
3ULWFKDUG6*DQG$PWKRU-6&URSVDQG(QYLURQPHQWDO&KDQJH1HZ<RUN)RRG3URGXFWLRQ3UHVV
4XDQ-$IXWXUHIRUVPDOOVFDOHIDUPLQJ6FLHQFH5HYLHZ65)RUHVLJKW3URMHFWRQ*OREDO)RRGDQG)DUPLQJ
)XWXUHV*RYHUQPHQW2IÀFHIRU6FLHQFH)RUHVLJKW
5DM'$6ULGKDU.$PEDWLSXGL$/DQWLQJ+DQG%UHQFKDQGUDQ6&DVHVWXG\RQRUJDQLFYHUVXVFRQYHQWLRQDO
FRWWRQLQ.DULPQDJDU$QGKUD3UDGHVK,QGLD6HFRQG,QWHUQDWLRQDO6\PSRVLXPRQ%LRORJLFDO&RQWURORI$UWKURSRGV
DYDLODEOHDWKWWSZZZEXJZRRGRUJDUWKURSRGYROFSGI
5DVPXVVHQ3($OEUHFKHW6/6PLOH\5:6RLO&DQG1FKDQJHVXQGHUWLOODJHDQGFURSSLQJV\VWHPVLQVHPLDULG
3DFLÀF1RUWKZHVWDJULFXOWXUH6RLO7LOO5HV
5HDUGRQ77LPPHU & DQG %HUGHJXp - 6XSHUPDUNHW H[SDQVLRQ LQ /DWLQ $PHULFD DQG $VLD :DVKLQJWRQ '&
8QLWHG6WDWHV'HSDUWPHQWRI$JULFXOWXUH
5HJDQROG -3 (OOLRWW / DQG 8QJHU < /RQJWHUP HIIHFWV RI RUJDQLF DQG FRQYHQWLRQDO IDUPLQJ RQ VRLO HURVLRQ
1DWXUH1RYHPEHU²
5HJDQROG-3*ORYHU-'$QGUHZV3.DQG+LQPDQ+56XVWDLQDELOLW\RIWKUHHDSSOHSURGXFWLRQV\VWHPV1DWXUH
²
5HLG:65HJLRQDOHIIHFWVRIVRLOHURVLRQRQFURSSURGXFWLYLW\QRUWKHDVW,Q)ROOHWW5)DQG6WHZDUW%$HGV6RLO
(URVLRQDQG&URS3URGXFWLYLW\0DGLVRQ:,$PHULFDQ6RFLHW\RI$JURQRP\²
5HLQKDUGW * *lUWQHU 6 0QFK - DQG +lIHOH 6 gNRORJLVFKH 2SWLPLHUXQJ UHJLRQDO HU]HXJWHU /HEHQVPLWWHO
(QHUJLHXQG.OLPDELODQ]HQ+HLGHOEHUJ,QVWLWXWIU(QHUJLHXQG8PZHOW,I(8
5HLVFK/$DQG*ZR]G]:&KXEE\FKHHNVDQGFOLPDWHFKDQJH&KLOGKRRGREHVLW\DVDVXVWDLQDEOHGHYHORSPHQW
LVVXH,QWHUQDWLRQDO-RXUQDORI&RQVXPHU6WXGLHV²
5HLVFK/$/RUHN6DQG%LHW]63ROLF\LQVWUXPHQWVIRUVXVWDLQDEOHIRRGFRQVXPSWLRQ&25386'LVFXVVLRQ3DSHU
)XQGHGE\WKH(XURSHDQ&RPPLVVLRQ)3_3URMHFW1R$YDLODEOHDWKWWSZZZVFSNQRZOHGJHHX
VLWHVGHIDXOWÀOHV)RRGB3ROLF\B3DSHUSGI
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
5HLVFK/$6FKROO*DQG(EHUOH86XVWDLQDEOHIRRGFRQVXPSWLRQ&25386'LVFXVVLRQ3DSHU)XQGHGE\WKH
(XURSHDQ&RPPLVVLRQ)3_3URMHFW1R$YDLODEOHDWKWWSZZZVFSNQRZOHGJHHXVLWHVGHIDXOWÀOHV
)RRGB'LVFXVVLRQB3DSHUBSGI
5HWKHPH\HU-.UDPHU&*OHL[QHU*-RKQ%<DPDVKLWD7)OHVVD+$QGHUVHQ11DGHDX0DQG*URRWHV3
7UDQVIRUPDWLRQRIRUJDQLFPDWWHULQDJULFXOWXUDOVRLOV5DGLRFDUERQFRQFHQWUDWLRQYHUVXVVRLOGHSWK*HRGHUPD
²
5LFKDUGVRQ.6WHIIHQ:6FKHOOQKXEHU+-$OFDPR-%DUNHU7.DPPHQ'0/HHPDQV5/LYHUPDQ'0XQDVLQJKH0
2VPDQ(ODVKD%6WHUQ1DQG:DHYHU26\QWKHVLV5HSRUW²&OLPDWH&KDQJH*OREDO5LVNV&KDOOHQJHV
DQG'HFLVLRQV,QWHUQDWLRQDO6FLHQWLÀF&RQJUHVVRQ&OLPDWH&KDQJH&RSHQKDJHQ²0DUFK
5LN[RRUWY+&DUERQIRRWSULQWLQJ,Q*,=HG&OLPDWH0RGXOH6DQJDQD333.RPSHWHQ]IHOG$JUDUKDQGHOXQG
6WDQGDUGV'HXWVFKH*HVHOOVFKDIWIU7HFKQLVFKH=XVDPPHQDUEHLW*,=-XQH
5REHUWVRQ $ /REVWHLQ 7 DQG .QDL & 2EHVLW\ DQG VRFLRHFRQRPLF JURXSV LQ (XURSH (YLGHQFH UHYLHZ DQG
LPSOLFDWLRQV IRU DFWLRQ 6$1&2&1875,7,21 )XQGHG E\ WKH (XURSHDQ &RPPLVVLRQ %UXVVHOV
(XURSHDQ &RPPLVVLRQ $YDLODEOH DW KWWSHFHXURSDHXKHDOWKSKBGHWHUPLQDQWVOLIHBVW\OHQXWULWLRQGRFXPHQWV
HYBUHSBHQSGI
5RFNVWU|P-6WHIIHQ:1RRQH.3HUVVRQc6WXDUW,,,&KDSLQ)/DPELQ(/HQWRQ76FKHIIHU0)RONH&6FKHOOQKXEHU
+-1\NYLVW%GH:LW&+XJKHV7YDQGHU/HHXZ65RGKH+6|UOLQ66Q\GHU3&RVWDQ]D56YHGLQ8)DONHQPDUN
0.DUOEHUJ/&RUHOO5:)DEU\9-+DQVHQ-:DONHU%/LYHUPDQ'5LFKDUGVRQ.&UXW]HQ3DQG)ROH\-
3ODQHWDU\ERXQGDULHV([SORULQJWKHVDIHRSHUDWLQJVSDFHIRUKXPDQLW\(FRORJ\DQG6RFLHW\$YDLODEOH
DWKWWSZZZHFRORJ\DQGVRFLHW\RUJYROLVVDUW
5RGDOH,QVWLWXWH)DUP6\VWHPV7ULDO.XW]WRZQ3$
5RGDOH,QVWLWXWH1RWLOOUHYROXWLRQ.XW]WRZQ3$$YDLODEOHDWKWWSZZZURGDOHLQVWLWXWHRUJQRWLOOBUHYROXWLRQ
5RRVH(6RLODQGZDWHUFRQVHUYDWLRQOHVVRQVIURPVWHHSVORSHIDUPLQJLQ)UHQFKVSHDNLQJFRXQWULHVRI$IULFD
,Q0ROGHQKDXHU:&DQG+XGVRQ1HGV&RQVHUYDWLRQ)DUPLQJRQ6WHHS/DQGV6FKHUW]$QNHQ\,RZD6RLODQG
:DWHU&RQVHUYDWLRQ6RFLHW\DQG:RUOG$VVRFLDWLRQRI6RLODQG:DWHU&RQVHUYDWLRQ²
5RVHJUDQW0:3DLVQHU060HLMHU6:LWFRYHU-*OREDO)RRG2XWORRN7UHQGV$OWHUQDWLYHVDQG&KRLFHV
:DVKLQJWRQ'&,QWHUQDWLRQDO)RRG3ROLF\5HVHDUFK,QVWLWXWH
5RVHJUDQW 0: 5LQJOHU & 0VDQJL 6 6XOVHU 7 =KX 7 DQG &OLQH 6 D ,QWHUQDWLRQDO PRGHO IRU SROLF\ DQDO\VLV
RI DJULFXOWXUDO FRPPRGLWLHV DQG WUDGH ,03$&7 0RGHO GHVFULSWLRQ ,Q ,)35, ,QWHUQDWLRQDO )RRG 3ROLF\
5HVHDUFK,QVWLWXWH5HSRUW:DVKLQJWRQ'&
5RVHJUDQW0:5LQJOHU&DQG=KX7E:DWHUIRUDJULFXOWXUH0DLQWDLQLQJIRRGVHFXULW\XQGHUJURZLQJVFDUFLW\
$QQXDO5HYLHZRI(QYLURQPHQWDQG5HVRXUFHV²
5RVHQ]ZHLJ&DQG+LOOHO'&OLPDWH&KDQJHDQGWKH*OREDO+DUYHVW,PSDFWVRI(O1LQRDQG2WKHU2VFLOODWLRQV
RQ$JURHFRV\VWHPV1HZ<RUN2[IRUG8QLYHUVLW\3UHVV
5RVHQ]ZHLJ & DQG 7XELHOOR ) $GDSWDWLRQ DQG PLWLJDWLRQ VWUDWHJLHV LQ DJULFXOWXUH $Q DQDO\VLV RI SRWHQWLDO
V\QHUJLHV0LWLJDWLRQDQG$GDSWDWLRQ6WUDWHJLHVWR*OREDO&KDQJH²
5RVVHW 30 7KH 0XOWLSOH )XQFWLRQV DQG %HQHÀWV RI 6PDOO )DUP $JULFXOWXUH LQ WKH &RQWH[W RI *OREDO 7UDGH
1HJRWLDWLRQV3ROLF\%ULHI)RRG)LUVW6HSWHPEHU
5RVVHW 30 7KH 0XOWLSOH )XQFWLRQV DQG %HQHÀWV RI 6PDOO )DUP $JULFXOWXUH LQ WKH &RQWH[W RI *OREDO 7UDGH
1HJRWLDWLRQV/RQGRQ7KRXVDQG2DNV&$DQG1HZ'HOKL:RUOG)RRG3URJUDPPH7KH6RFLHW\IRU,QWHUQDWLRQDO
'HYHORSPHQWDQG6$*(3XEOLFDWLRQV
5RVVHW306RVD%0-DLPH$05DQGÉYLOD/R]DQR'57KH&DPSHVLQRWR&DPSHVLQRDJURHFRORJ\PRYHPHQW
RI$1$3LQ&XED6RFLDOSURFHVVPHWKRGRORJ\LQWKHFRQVWUXFWLRQRIVXVWDLQDEOHSHDVDQWDJULFXOWXUHDQGIRRG
VRYHUHLJQW\-RXUQDORI3HDVDQW6WXGLHV²
576 5HVRXUFH /WG :HVWHUQ (XURSH UHDG\ PHDOV :ROYHUKDPSWRQ 576 5HVRXUFH /WG 7KH &UHDWLYH
,QGXVWULHV&HQWUH$YDLODEOHDWKWWSZZZUHDG\PHDOVLQIRFRPUHSRUWV:HVWHUQ(XURSH5HDG\0HDOVSGI
5XQGJUHQ**DUGHQ(DUWK)URPKXQWHUDQGJDWKHUHUWRFDSLWDOLVPDQGWKHUHDIWHU5HJHQHUDWLRQ8SSVDOD6ZHGHQ
6DIDULFRP )RXQGDWLRQ 6DIDULFRP )RXQGDWLRQ /LIHOLQH UDGLR SURMHFW XQYHLOHG $YDLODEOH DW KWWSZZZ
OLIHOLQHHQHUJ\RUJGRFXPHQWV6DIDULFRPB)RXQGDWLRQBSGI
75$'($1'(19,5210(175(9,(:
6$1&2)RRGDQGYHWHULQDU\RIÀFHFRQWUROVLQGHYHORSLQJFRXQWULHV1RYHPEHU$YDLODEOHDWKWWSZZZEYO
EXQGGH6KDUHG'RFV'RZQORDGVB%XQGHVDPW9HUDQVWDOWXQJHQV\PSRVLXPBBYRUWUDJB)UDQN$QGULHVVHQB
)92SGI"BBEORE SXEOLFDWLRQ)LOHY 6$1&23ROLF\LPSDFWLQWKH&RPPRQ$JULFXOWXUH3ROLF\&DVHVWXG\RIDQLPDOKHDOWK6$1&2:RUNLQJSDSHU
SUHVHQWHGDWWKHPHHWLQJRIWKH:RUNLQJ*URXSRQWKH$VVHVVPHQWRI6$1&23ROLF\,PSDFWRQWKH&RPPRQ
$JULFXOWXUH3ROLF\RIWKH$GYLVRU\*URXSRQWKH)RRG&KDLQ$QLPDODQG3ODQW+HDOWK)HEUXDU\
6DQGHUPDQ - )DUTXKDUVRQ 5 DQG %DOGRFN -$ 6RLO FDUERQ VHTXHVWUDWLRQ SRWHQWLDO $ UHYLHZ IRU $XVWUDOLDQ
DJULFXOWXUH$UHSRUWSUHSDUHGIRUWKH'HSDUWPHQWRI&OLPDWH&KDQJHDQG(QHUJ\(IÀFLHQF\&6,52$YDLODEOHDW
KWWSZZZFVLURDXÀOHVÀOHVSZLYSGI
6DQGHUV - 2IIHUPDQQ ) DQG 1LHEHUJ + ,PSDFW RI WKH &$3 UHIRUP RQ RUJDQLF IDUPLQJ LQ *HUPDQ\ 3DSHU
SUHSDUHGIRUWKHWK($$(6HPLQDURQWKH&$3DIWHUWKH)LVFKOHU5HIRUP1DWLRQDO,PSOHPHQWDWLRQV,PSDFW
$VVHVVPHQWDQGWKH$JHQGDIRU)XWXUH5HIRUPVLQ9LWHUER,WDO\²1RYHPEHU
6FKHUU 6- DQG 6WKDSLW 6 0LWLJDWLQJ FOLPDWH FKDQJH WKURXJK IRRG DQG ODQG XVH :RUOGZDWFK 5HSRUW :DVKLQJWRQ'&:RUOGZDWFK,QVWLWXWH
6FKXOW] , DQG 6WLH‰ , /LQNLQJ VXVWDLQDEOH FRQVXPSWLRQ WR HYHU\GD\ OLIH D VRFLRHFRORJLFDO DSSURDFK WR
FRQVXPSWLRQ UHVHDUFK ,Q 7XNNHU $ &KDUWHU 0 DQG 9H]]ROL & HGV 6\VWHP ,QQRYDWLRQ IRU 6XVWDLQDELOLW\ 9RO 3HUVSHFWLYHVRQ5DGLFDO&KDQJHVWR6XVWDLQDEOH&RQVXPSWLRQDQG3URGXFWLRQ6KHIÀHOG*UHHQOHDI3XEOLVKLQJ
²
6FLHQFH'DLO\6WXG\PDSVJOREDO¶KRWVSRWV·RIFOLPDWHLQGXFHGIRRGLQVHFXULW\-XQH$YDLODEOHDWKWWSZZZ
VFLHQFHGDLO\FRPUHOHDVHVKWP
6HQHZHHUD6DQG&RQUR\-3*URZWKJUDLQ\LHOGDQGTXDOLW\RIULFH2U\]DVDWLYD/LQUHVSRQVHWRHOHYDWHG&2
DQGSKRVSKRUXVQXWULWLRQ6RLO6FLHQFHDQG3ODQW1XWULWLRQ²
6HWERRQVDUQJ6/HXQJ36DQG&DL-&RQWUDFWIDUPLQJDQGSRYHUW\UHGXFWLRQ7KHFDVHRIRUJDQLFULFHFRQWUDFW
IDUPLQJLQ7KDLODQG$'%,QVWLWXWHGLVFXVVLRQSDSHUQR7RN\R$VLDQ'HYHORSPHQW%DQN,QVWLWXWH
6LHJULVW66WDXE'3ÀIIQHU/DQG0lGHU3'RHVRUJDQLFDJULFXOWXUHUHGXFHVRLOHURGLELOLW\"7KHUHVXOWVRID
ORQJWHUPÀHOGVWXG\RQORHVVLQ6ZLW]HUODQG$JULFXOWXUH(FRV\VWHPVDQG(QYLURQPHQW²
6PDNKWLQ9%DVLQFORVXUHDQGHQYLURQPHQWDOÁRZUHTXLUHPHQWV:DWHU5HVRXUFHV'HYHORSPHQW²
6PDNKWLQ 9 5HYHQJD & DQG '|OO 3 $ 3LORW *OREDO $VVHVVPHQW RI (QYLURQPHQWDO :DWHU 5HTXLUHPHQWV DQG
6FDUFLW\:DWHU,QWHUQDWLRQDO²
6PLW%DQG:DQGHO-$GDSWDWLRQDGDSWLYHFDSDFLW\DQGYXOQHUDELOLW\*OREDO(QYLURQPHQWDO&KDQJH²
6PLWK ' 3RZOVRQ 6'6 *OHQGLQLQJ 0- 6PLWK -8 3RWHQWLDO IRU FDUERQ VHTXHVWUDWLRQ LQ (XURSHDQ VRLOV
SUHOLPLQDU\HVWLPDWHVIRUÀYHVFHQDULRVXVLQJUHVXOWVIURPORQJWHUPH[SHULPHQWV*OREDO&KDQJH%LRORJ\
6PLWK-:ROIH0:RRGZDUG/3HDUFH%DQG/DPSNLQ12UJDQLFIDUPLQJDQGELRGLYHUVLW\$UHYLHZRIWKH
OLWHUDWXUH$EHU\VWZ\WK2UJDQLF&HQWUH:DOHV
6PLWK30DUWLQR'&DL=*ZDU\'-DQ]HQ+.XPDU30F&DUO%2JOH62·0DUD)5LFH&6FKROHV%6LURWHQNR2
+RZGHQ00F$OOLVWHU73DQ*5RPDQHQNRY96FKQHLGHU8DQG7RZSUD\RRQ6D3ROLF\DQG7HFKQRORJLFDO
&RQVWUDLQWVWR,PSOHPHQWDWLRQRI*UHHQKRXVH*DV0LWLJDWLRQ2SWLRQVLQ$JULFXOWXUH$JULFXOWXUH(FRV\VWHPVDQG
(QYLURQPHQW²$YDLODEOHDWZZZHOVHYLHUFRPORDFDWHDJUHH
6PLWK30DUWLQR'&DL=*ZDU\'-DQ]HQ+.XPDU30F&DUO%2JOH62·0DUD)5LFH&6FKROHV%DQG6LURWHQNR
2E$JULFXOWXUH,Q,3&&&OLPDWH&KDQJH0LWLJDWLRQ&RQWULEXWLRQRI:RUNLQJ*URXS,,,WRWKH)RXUWK
$VVHVVPHQW5HSRUWRIWKH,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV
6PROLN -' 'REEV7/ DQG 5LFNHUO '+ 7KH UHODWLYH VXVWDLQDELOLW\ RI DOWHUQDWLYH FRQYHQWLRQDO DQG UHGXFHGWLOO
IDUPLQJV\VWHPV$PHULFDQ-RXUQDORI$OWHUQDWLYH$JULFXOWXUH²
6RXWK&HQWUH$WUDGHIUDPHZRUNVXSSRUWLYHRIDWUDQVLWLRQWRZDUGVDJUHHQHFRQRP\LQWKHIRRGDQGDJULFXOWXUH
VHFWRURIGHYHORSLQJFRXQWULHV3DSHUSUHSDUHGIRUWKH)$2IRUWKFRPLQJ*HQHYD
6RXWKJDWH ' DQG :KLWDNHU 0 3URPRWLQJ UHVRXUFH GHJUDGDWLRQ LQ /DWLQ $PHULFD 7URSLFDO GHIRUHVWDWLRQ VRLO
HURVLRQ DQG FRDVWDO HFRV\VWHP GLVWXUEDQFH LQ (FXDGRU (FRQRPLF 'HYHORSPHQW DQG &XOWXUDO &KDQJH .H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
²
63,QWHUQDWLRQDO([SODQDWLRQGHPDQGHGRYHUOREE\LQJE\ELRWHFKÀUP63,QWHUQDWLRQDO5RWWHUGDP-DQXDU\
$YDLODEOH DW KWWSLQWHUQDWLRQDOVSQOEHULFKWH[SODQDWLRQBGHPDQGHGBRYHUBOREE\LQJBE\BELRWHFKB
ÀUPKWPO
6SHWK-*7RZDUGVDQ(IIHFWLYHDQG2SHUDWLRQDO,QWHUQDWLRQDO&RQYHQWLRQRQ'HVHUWLÀFDWLRQ3DSHUSUHSDUHGIRU
WKH,QWHUQDWLRQDO&RQYHQWLRQRQ'HVHUWLÀFDWLRQ,QWHUQDWLRQDO1HJRWLDWLQJ&RPPLWWHH8QLWHG1DWLRQV1HZ<RUN
6WDQKLOO*7KHFRPSDUDWLYHSURGXFWLYLW\RIRUJDQLFDJULFXOWXUH$JULFXOWXUH(FRV\VWHPVDQG(QYLURQPHQW
²
6WDYHU&*XKDUD\)0RQWHUURVR'DQG0XVFKOHU5*'HVLJQLQJSHVWVXSSUHVVLYHPXOWLVWUDWDSHUHQQLDOFURS
V\VWHPV6KDGHJURZQFRIIHHLQ&HQWUDO$PHULFD$JURIRUHVWU\6\VWHPV²
6WHHU $ $JULFXOWXUH IRRG VHFXULW\ DQG FOLPDWH FKDQJH $ WULSOH ZLQ" $YDLODEOH DW KWWSZHEZRUOGEDQNRUJ
:%6,7((;7(51$/1(:6FRQWHQW0'.aSDJH3.aSL3.aWKH6LWH3.KWPO
6WHUQ17KH(FRQRPLFVRI&OLPDWH&KDQJH7KH6WHUQ5HYLHZ&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV
6WHYHQVRQ-+XPXVFKHPLVWU\,Q6RLO&KHPLVWU\1HZ<RUN-RKQ:LOH\6RQV,QF
6WROW]IXV5-0XOODQ\/DQG%ODFN5(,URQGHÀFLHQF\DQHPLD,Q0(]]DWLHWDOHGV&RPSDUDWLYH4XDQWLÀFDWLRQ
RI+HDOWK5LVNV*OREDODQG5HJLRQDO%XUGHQRI'LVHDVH$WWULEXWDEOHWR6HOHFWHG0DMRU5LVN)DFWRUV*HQHYD:RUOG
+HDOWK2UJDQL]DWLRQ
6WRQH 53 DQG 0RRUH 1 &RQWURO RI 6RLO (URVLRQ )DFWVKHHW 2QWDULR 0LQLVWU\ RI $JULFXOWXUH )RRG DQG 5XUDO
$IIDLUV
6WU]HSHN.DQG0F&OXVNH\$7KHLPSDFWRIFOLPDWHFKDQJHRQUHJLRQDOZDWHUUHVRXUFHVDQGDJULFXOWXUHLQ
$IULFD:DVKLQJWRQ'&:RUOG%DQN'HYHORSPHQW5HVHDUFK*URXS
6WU]HSHN.%DODML55DMDUDP+DQG6WU]HSHN-$ZDWHUEDODQFHPRGHOIRUFOLPDWHLPSDFWDQDO\VLVRIUXQRIIZLWK
HPSKDVLVRQH[WUHPHHYHQWVIRUWKFRPLQJ
6WXDUW7:DVWH8QFRYHULQJWKH*OREDO)RRG6FDQGDO1HZ<RUN::1RUWRQDQG&R,QF$YDLODEOHDWKWWS
WLQ\XUOFRPPG[F
6XJGHQ$0DQG5DQGV*)7KHHFRORJ\RIWHPSHUDWHDQGFHUHDOÀHOGV7UHQGVLQ(FRORJ\DQG(YROXWLRQ
²
6XJGHQ$06WRQH5DQG$VK&(FRORJ\LQWKHXQGHUZRUOG6FLHQFH
6XVWDLQ<HWPRUHKRVSLWDOIRRGIDLOXUH*RRG)RRGIRU2XU0RQH\FDPSDLJQ$YDLODEOHDWKWWSZZZVXVWDLQZHE
RUJSGI*))20B+RVSLWDOB)RRGB6HFRQGB5HSRUWSGI
6XVWDLQDEOH 'HYHORSPHQW &RPPLVVLRQ 6XVWDLQDELOLW\ LPSOLFDWLRQV RI WKH /LWWOH 5HG 7UDFWRU 6FKHPH 5HSRUW
/RQGRQ
6XVWDLQDEOH'HYHORSPHQW&RPPLVVLRQ*UHHQKHDOWK\DQGIDLU5HSRUW/RQGRQ
6ZDQVRQ7*OREDO$FWLRQIRU%LRGLYHUVLW\/RQGRQ-DPHV-DPHV6FLHQFH3XEOLVKHUV2ULJLQDOO\SXEOLVKHGLQ
(DUWKVFDQ3XEOLFDWLRQV/RQGRQ
7DQ]PDQQ 6 /HEHQVPLWWHOVWDQGDUGV GLVNULPLQLHUHQ .OHLQEDXHUQ LQ 'LH $JUDUSROLWLN HQGHW QLFKW DQ
(XURSDV *UHQ]HQ 'LH (8 $JUDUUHIRUP XQG LKUH LQWHUQDWLRQDOH 9HUDQWZRUWXQJ (LQ 'RVVLHU YRP (YDQJHOLVFKHQ
(QWZLFNOXQJVGLHQVWXQG´%URWIUGLH:HOWµ,Q=XVDPPHQDUEHLWPLWGHU5HGDNWLRQ:HOW6LFKWHQ²
7DVVRX 6$ *H < +DGDZH\ $ 0DUULRWW ' (QHUJ\ FRQVXPSWLRQ DQG FRQVHUYDWLRQ LQ IRRG UHWDLOLQJ $SSOLHG
7KHUPDO(QJLQHHULQJ²
7DXE'50LOOHU%DQG$OOHQ+(IIHFWVRIHOHYDWHG&2RQWKHSURWHLQFRQFHQWUDWLRQRIIRRGFURSV$PHWD
DQDO\VLV*OREDO&KDQJH%LRORJ\²
7FKLER *PE+ 3&) SLORW SURMHFW *HUPDQ\ &DVH VWXG\ RI 7FKLER 3ULYDW .DIIHH 5DULW\ 0DFKDUH +DPEXUJ
1RYHPEHU
7HDVGDOH-5&RIIPDQ&%DQG0DQJXP5:3RWHQWLDOORQJWHUPEHQHÀWVRIQRWLOODJHDQGRUJDQLFFURSSLQJ
V\VWHPVIRUJUDLQSURGXFWLRQDQGVRLOLPSURYHPHQW$JURQRP\-RXUQDO6HSW²2FW
7HJWPHLHU(0DQG'XII\0([WHUQDOFRVWVRIDJULFXOWXUDOSURGXFWLRQLQWKH8QLWHG6WDWHV,QWHUQDWLRQDO-RXUQDO
75$'($1'(19,5210(175(9,(:
RI$JULFXOWXUDO6XVWDLQDELOLW\²
7HPSHOPDQ ( 3URGXFW VHUYLFH V\VWHPV IRU QHHG DUHD IRRG $Q RYHUYLHZ LQ 1HZ %XVLQHVV IRU 2OG (XURSH
7LVFKQHU8DQG7XNNHU$HGLWRUV*UHHQOHDI3XEOLVKLQJ/WG6KHIÀHOG8QLWHG.LQJGRP
7HVWELRWHFK,QVWLWXWH IRU ,QGHSHQGHQW ,PSDFW $VVHVVPHQW LQ %LRWHFKQRORJ\ /HDGLQJ (XURSHDQ )RRG 6DIHW\
$XWKRULW\ VWDII PHPEHU PRYHV LQWR LQGXVWU\ 0XQLFK 1RYHPEHU $YDLODEOH DW KWWSZZZWHVWELRWHFKRUJHQ
QRGH
7HVWELRWHFK,QVWLWXWHIRU,QGHSHQGHQW,PSDFW$VVHVVPHQWLQ%LRWHFKQRORJ\()6$·VUHYROYLQJGRRUWRELRWHFK
LQGXVWU\XQDFFHSWDEOH0XQLFK0DUFK$YDLODEOHDWKWWSZZZWHVWELRWHFKRUJHQQRGH
7KH&OLPDWH*URXS%UHDNLQJWKHFOLPDWHGHDGORFN$JOREDOGHDOIRURXUORZFDUERQIXWXUH5HSRUWVXEPLWWHG
WR WKH * +RNNDLGR 7R\DNR 6XPPLW /RQGRQ $YDLDODEOH DW ZZZ KWWSZZZWKHFOLPDWHJURXSRUJZKDWZHGR
SURJUDPV%UHDNLQJWKH&OLPDWH'HDGORFN
7KH*XDUGLDQ/RQGRQ0D\$YDLODEOHDWZZZJXDUGLDQFRXN
7LOPDQ')DUJLRQH-:ROII%'·$QWRQLR&'REVRQ$+RZDUWK56FKLQGOHU'6FKOHVLQJHU:+6LPEHUORII'DQG
6ZDFNKDPHU')RUHFDVWLQJDJULFXOWXUDOO\GULYHQJOREDOHQYLURQPHQWDOFKDQJH6FLHQFH²
7LOPDQ ' 5HLFK 3% .QRSV - :HGLQ ' 0LHONH 7 DQG /HKPDQ & 'LYHUVLW\ DQG SURGXFWLYLW\ LQ D ORQJWHUP
JUDVVODQGH[SHULPHQW6FLHQFH²
7LQORW0,QWpJUDWLRQGHÀOLqUHVjODPLWLJDWLRQDXFKDQJHPHQWFOLPDWLTXH&DVGHODÀOLqUHDQDFDUGHDX%XUNLQD
)DVR0LVVLRQUHSRUW*,=)$25RPH
7LUDGR5DQG&RWWHU-(FRORJLFDOIDUPLQJGURXJKWUHVLVWDQWDJULFXOWXUH*UHHQSHDFH5HVHDUFK/DERUDWRULHV
8QLYHUVLW\ RI ([HWHU 8QLWHG .LQJGRP $YDLODEOH DW ZZZJUHHQSHDFHRUJLQWHUQDWLRQDOHQSXEOLFDWLRQVUHSRUWV
(FRORJLFDOIDUPLQJ'URXJKWUHVLVWDQWDJULFXOWXUH
7LVFKQHU 8 DQG .MDHUQHV 8 6XVWDLQDEOH FRQVXPSWLRQ DQG SURGXFWLRQ LQ WKH DJULFXOWXUH DQG IRRG GRPDLQ
,Q/DKORX6DQG(PPHUW6HGV6&25(3URFHHGLQJV6&3&DVHVLQWKH)LHOGRI)RRG0RELOLW\DQG+RXVLQJ
:RUNVKRSRIWKH6XVWDLQDEOH&RQVXPSWLRQ5HVHDUFK([FKDQJH6&25(1HWZRUN3DULV-XQH²
$YDLODEOHDWKWWSZZZVFRUHQHWZRUNRUJÀOHVB3URFHHGLQJVBZRUVKRSSGI
7ROHGR 90 DQG %DUUHUD%DVVDOV 1 /D 0HPRULD %LRFXOWXUDO /D ,PSRUWDQFLD (FRORJLD GH ODV 6DELGXULDV
7UDGLFLRQDOHV%DUFHORQD,&$5,$(GLWRULDO
7ULPEHO6:DQG0HQGHO$&7KHFRZDVDJHRPRUSKLFDJHQW$FULWLFDODUWLFOH*HRPRUSKRORJ\
7URHK)5+REEV$+DQG'RQDKXH5/6RLODQG:DWHU&RQVHUYDWLRQ8SSHU6DGGOH5LYHU1-3UHQWLFH+DOO
7VFKDUQWNH7&ORXJK<:DQJHU7&-DFNVRQ/0RW]NH,3HUIHFWR,9DQGHUPHHU-DQG:KLWEUHDG$*OREDO
IRRGVHFXULW\ELRGLYHUVLW\FRQVHUYDWLRQDQGWKHIXWXUHRIDJULFXOWXUDOLQWHQVLÀFDWLRQ%LRORJLFDO&RQVHUYDWLRQ9RO
,VVXH-XO\SS²$YDLODEOHDWZZZVFLHQFHGLUHFWFRPVFLHQFHDUWLFOHSLL6
7XFNH\ % 6WDUYLQJ $IULFD·V IXWXUH" )RUHLJQ 3ROLF\ LQ )RFXV $XJXVW :DVKLQJWRQ '& ,QVWLWXWH IRU 3ROLF\
6WXGLHV$YDLODEOHDWKWWSZZZISLIRUJDUWLFOHVVWDUYLQJBDIULFDVBIXWXUH
7\OHU360LVFRQFHSWLRQRI)RRG/RVVHV7RN\R8QLWHG1DWLRQV8QLYHUVLW\3UHVV
8KOLQ+((QHUJLÁ|GHQLOLYVPHGHOVNHGMDQ(QHUJ\ÁRZLQWKHIRRGFKDLQ6WRFNKROP1DWXUYnUGVYHUNHW
8KOHQ*/RQJWHUPHIIHFWVRIORQJWHUPFURSURWDWLRQIHUWLOL]HUVPDQXUHVVWUDZDQGFURSURWDWLRQRQWRWDO&LQ
VRLO$FWD$JU6FDQG
8KOHQ*DQG7UHLWQHV6(IIHFWVRIORQJWHUPFURSURWDWLRQIHUWLOL]HUVIDUPPDQXUHDQGVWUDZRQVRLOSURGXFWLYLW\
1RU-$JU6FL
81'(6$:RUOG3RSXODWLRQ3URVSHFWV5HYLVLRQ$YDLODEOHDWKWWSHVDXQRUJXQSGZSSXQSSSDQHOB
SRSXODWLRQKWP
81&7$' 7UDGH DQG 'HYHORSPHQW 5HSRUW 5HVSRQGLQJ WR WKH *OREDO &ULVLV &OLPDWH &KDQJH
0LWLJDWLRQ DQG 'HYHORSPHQW 1HZ <RUN DQG *HQHYD $YDLODEOH DW ZZZXQFWDGRUJ7HPSODWHV:HE)O\HU
DVS"LQW,WHP,' ODQJ 81&7$'/HDVW'HYHORSHG&RXQWULHV5HSRUW7RZDUGVD1HZ,QWHUQDWLRQDO'HYHORSPHQW$UFKLWHFWXUHIRU
/'&V*HQHYD$YDLODEOHDWZZZXQFWDGRUJ7HPSODWHV3DJHDVS"LQW,WHP,' ODQJ .H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
81&7$' DQG &KDPEHU RI /DERXU 9LHQQD 3ULFH IRUPDWLRQ LQ ÀQDQFLDOL]HG FRPPRGLW\ PDUNHWV 7KH UROH RI
LQIRUPDWLRQ*HQHYD$YDLODEOHDWZZZXQFWDGRUJHQGRFVJGVBHQSGI
81(3$JURHFRORJ\DQGWKH6HDUFKIRUD7UXO\6XVWDLQDEOH$JULFXOWXUH0H[LFR
81(37KH(QYLURQPHQWDO)RRG&ULVLV7KH(QYLURQPHQW·V5ROHLQ$YHUWLQJ)XWXUH)RRG&ULVHV1DLUREL$YDLODEOH
DWZZZXQHSRUJSGI)RRG&ULVLVBORUHVSGI
81(3 %LODWHUDO )LQDQFH ,QVWLWXWLRQV DQG &OLPDWH &KDQJH $ 0DSSLQJ RI &OLPDWH )LQDQFLDO )ORZV WR
'HYHORSLQJ&RXQWULHV$YDLODEOHDWKWWSZZZXQHSRUJSGIGWLH%LODWHUDO)LQDQFH,QVWLWXWLRQV&&SGI
81(37RZDUGVD*UHHQ(FRQRP\3DWKZD\VWR6XVWDLQDEOH'HYHORSPHQWDQG3RYHUW\(UDGLFDWLRQ²$6\QWKHVLV
IRU3ROLF\0DNHUV$YDLODEOHDWZZZXQHSRUJJUHHQHFRQRP\
81(381&7$'2UJDQLF$JULFXOWXUHDQG)RRG6HFXULW\LQ$IULFD81(381&7$'&DSDFLW\EXLOGLQJ7DVN)RUFH
RQ7UDGH(QYLURQPHQWDQG'HYHORSPHQW*HQHYD$YDLODEOHDWZZZXQFDWGRUJWUDGHBHQY
81)&&&&KDOOHQJHVDQGRSSRUWXQLWLHVIRUPLWLJDWLRQLQWKHDJULFXOWXUDOVHFWRU%RQQ
81)&&&7KH&DQFXQ$JUHHPHQWV$Q$VVHVVPHQWE\WKH([HFXWLYH6HFUHWDU\RIWKH8QLWHG1DWLRQV)UDPHZRUN
&RQYHQWLRQRQ&OLPDWH&KDQJH$YDLODEOHDWKWWSFDQFXQXQIFFFLQW
8QLWHG 1DWLRQV 5HGXFLQJ SRVWKDUYHVW ORVVHV WR LPSURYH IRRG VHFXULW\ 7LPRU /HVWH 3URMHFWV IXQGHG E\
WKH 8QLWHG 1DWLRQV 7UXVW )XQG IRU +XPDQ 6HFXULW\ 8QLWHG 1DWLRQV $YDLODEOH DW RFKDRQOLQHXQRUJ7UXVW)XQG
3URMHFW3URÀOHV5HGXFLQJSRVWKDUYHVWORVVHVWDELGODQJXDJHHQ86'HIDXOWDVS[
8QLWHG1DWLRQV:RUOG8UEDQL]DWLRQ3URVSHFWV7KH5HYLVLRQ3RSXODWLRQ'DWDEDVH1HZ<RUN8QLWHG1DWLRQV
3RSXODWLRQ'LYLVLRQ
8QLWHG1DWLRQV:RUOG3RSXODWLRQ3URVSHFWV7KH5HYLVLRQ'HSDUWPHQWRI(FRQRPLFDQG6RFLDO$IIDLUV
3RSXODWLRQ'LYLVLRQ$YDLODEOHDWKWWSHVDXQRUJXQSGZSSLQGH[KWP
8QLWHG6WDWHV)RUHVW&RQVHUYDWLRQ$FW5LSDULDQIRUHVWEXIIHUSDQHO%D\$UHDUHJXODWRU\SURJUDPV$YDLODEOH
DWKWWSZZZULSDULDQEXIIHUVXPGHGXPDQXDOVUHJXODWRU\KWPO
811$'$)8QLWHG1DWLRQV1HZ$JHQGDIRUWKH'HYHORSPHQWRI$IULFD811$'$)PLGWHUPUHYLHZ)RFXVRQ
NH\VHFWRUV²(QYLURQPHQW$IULFD5HFRYHU\
8SKRII1D,QVWLWXWLRQDOFKDQJHDQGSROLF\UHIRUPV,Q8SKRII1HG$JURHFRORJLFDO,QQRYDWLRQV,QFUHDVLQJ
)RRG3URGXFWLRQZLWK3DUWLFLSDWRU\'HYHORSPHQW/RQGRQ(DUWKVFDQ3XEOLFDWLRQV
8SKRII1E$JURHFRORJLFDO,QQRYDWLRQV,QFUHDVLQJ)RRG3URGXFWLRQZLWK3DUWLFLSDWRU\'HYHORSPHQW/RQGRQ
(DUWKVFDQ
86 &56 (QHUJ\ XVH LQ DJULFXOWXUH %DFNJURXQG DQG LVVXHV :DVKLQJWRQ '& 8QLWHG 6WDWHV &RQJUHVVLRQDO
5HVHDUFK6HUYLFHV1RYHPEHU
86)'$ 0HHW0LFKDHO 5 7D\ORU -' 'HSXW\&RPPLVVLRQHUIRU )RRGV 86 )RRG DQG 'UXJ $GPLQLVWUDWLRQ
:DVKLQJWRQ'&$YDLODEOHDWZZZIGDJRY$ERXW)'$&HQWHUV2IÀFHV2IÀFHRI)RRGVXFPKWP
9DQGHU3ORHJ-'7KH1HZ3HDVDQWULHV6WUXJJOHVIRU$XWRQRP\DQG6XVWDLQDELOLW\LQWKH(UDRI(PSLUHDQG
*OREDOL]DWLRQ/RQGRQDQG6WHUOLQJ9$(DUWKVFDQ
9DQGHU9RVVHQ+$06WDWHRIWKHDUWRIGHYHORSLQJGXUDEOHUHVLVWDQFHWRELRWURSKLFSDWKRJHQVLQFURSSODQWV
VXFKDVFRIIHHOHDIUXVW,Q=DPEROLP/=DPEROLP(0DQG9iU]HD903HGV'XUDEOH5HVLVWDQFHWR&RIIHH/HDI
5XVW9LVFRQGHGR5LR%UDQFR%UD]LO6XSUHPD*UiÀFDH(GLWRUD²
9DQ 'LMN 6XUYH\ RI 'XWFK VRLO RUJDQLF UHVHDUFK ZLWK UHJDUG WR KXPLÀFDWLRQ DQG GHJUDGDWLRQ UDWHV LQ DUDEOH
ODQG,Q8VHVHPLQDURQODQGGHJUDGDWLRQHGV%RHOV'''DYLV%-RKQVWRQ$(SS5RWWHUGDP7KH
1HWKHUODQGV%DONHPD
9DQ*URHQLJHQ.2VHQEHUJ&DQG+XQJDWH%,QFUHDVHGVRLOHPLVVLRQVRISRWHQWJUHHQKRXVHJDVHVXQGHU
LQFUHDVHGDWPRVSKHULF&21DWXUH²
9DQGHUPHHU - YDQ 1RRUGZLMN 0 $QGHUVRQ - 2QJ & DQG 3HUIHFWR , *OREDO FKDQJH DQG PXOWLVSHFLHV
DJURHFRV\VWHPV&RQFHSWVDQGLVVXHV$JULFXOWXUH(FRV\VWHPVDQG(QYLURQPHQW²
9HQNDW.7KHFOLPDWHFKDQJHLPSDFWRI86IRRGZDVWHXSGDWHG&OHDQ0HWULFV7HFKQLFDO%ULHI&OHDQ0HWULFV
&RUS$YDLODEOHDWZZZFOHDQPHWULFVFRPSDJHV&OLPDWH&KDQJH,PSDFWRI86)RRG:DVWHSGI
75$'($1'(19,5210(175(9,(:
9OHN3/*/H4%DQG7DPHQH//DQG'HFOLQHLQ/DQGULFK$IULFD$&UHHSLQJ'LVDVWHULQWKH0DNLQJ5RPH
&*,$56FLHQFH&RXQFLO6HFUHWDULDW
9|U|VPDUW\ &- *UHHQ 3 6DOLVEXU\ - DQG /DPPHUV 5% *OREDO ZDWHU UHVRXUFHV 9XOQHUDELOLW\ IURP FOLPDWH
FKDQJHDQGSRSXODWLRQJURZWK6FLHQFH²
:DOVK.1DQG5RZH06%LRGLYHUVLW\LQFUHDVHVHFRV\VWHPV·DELOLW\WRDEVRUE&2DQGQLWURJHQ%URRNKDYHQ
1DWLRQDO/DERUDWRU\$YDLODEOHDWKWWSZZZEQOJRYEQOZHESXEDISUEQOSUKWP
:DQJ)3UHVHQWVWDWXVRIUXUDOELRJDVGHYHORSPHQWLQ&KLQD&HQWHUIRU(QHUJ\DQG(QYLURQPHQWDO3URWHFWLRQ
0LQLVWU\RI$JULFXOWXUH&KLQD$YDLODEOHDWKWWSZZZHQSZXUQO15UGRQO\UHV%)))'&
$':DQJ([SHULHQFHVRI+RXVHKROG%LRJDV8VHLQ&KLQDSG
:$5'$ $IULFD 5LFH &HQWHU 1(5,&$ WKH QHZ ULFH IRU $IULFD $ FRPSHQGLXP &RWRQRX $IULFD 5LFH &HQWHU
:$5'$ 5RPH )$2 7RN\R 6DVDNDZD $IULFD $VVRFLDWLRQ $YDLODEOH DW KWWSZZZZDUGDRUJSXEOLFDWLRQV
QHULFDFRPS1HULFD&RPSHGLXPSGI
:DUGOH'$%DUGJHWW5'.OLURQRPRV-16HWDOD+YDQGHU3XWWHQ:+DQG:DOO'+(FRORJLFDOOLQNDJHVEHWZHHQ
DERYHJURXQGDQGEHORZJURXQGELRWD6FLHQFH²
:DUQHU .' DQG .LUVFKHQPDQQ ) $JURHFRORJ\ LQ $FWLRQ ([WHQGLQJ $OWHUQDWLYH $JULFXOWXUH WKURXJK 6RFLDO
1HWZRUNV&DPEULGJH0$0,73UHVV
:DVKEXUQ-8QLYHUVLW\,QF7KH&RUSRUDWH&RUUXSWLRQRI$PHULFDQ+LJKHU(GXFDWLRQ1HZ<RUN%DVLF%RRNV
:DWWV03DUDTXDWPRQRJUDSK3HQDQJ3HVWLFLGH$FWLRQ1HWZRUN$VLDDQGWKH3DFLÀF$YDLODEOHDWKWWSZZZ
SDQDSQHWVLWHVGHIDXOWÀOHVPRQRJUDSKBSDUDTXDWSGI
:HOVK 5 7KH HFRQRPLFV RI RUJDQLF JUDLQ DQG VR\EHDQ SURGXFWLRQ LQ WKH PLGZHVWHUQ 8QLWHG 6WDWHV 3ROLF\
6WXGLHV5HSRUW1R+HQU\$:DOODFH,QVWLWXWHIRU$OWHUQDWLYH$JULFXOWXUH*UHHQEHOW0$
:HQ'6RLOHURVLRQDQGFRQVHUYDWLRQLQ&KLQD,Q3LPHQWHO'HG6RLO(URVLRQDQG&RQVHUYDWLRQ1HZ<RUN
&DPEULGJH8QLYHUVLW\3UHVV²
:HQ'$JULFXOWXUHLQ&KLQD:DWHUDQGHQHUJ\UHVRXUFHV,Q7VR77XDQ)DQG)DXVW0HGV$JULFXOWXUHLQ
&KLQD%HOWVYLOOH0','($/6²$YDLODEOHDWKWWSFRQVHUYDQF\XPQHGXKDQGOH
:HVW7'DQG*ULIÀWK'5(IIHFWRIVWULSLQWHUFURSSLQJFRUQDQGVR\EHDQRQ\LHOGDQGSURÀW-RXUQDORI3URGXFWLRQ
$JULFXOWXUH²
:H]HO$DQG6ROGDW9$TXDQWLWDWLYHDQGTXDOLWDWLYHKLVWRULFDODQDO\VLVRIWKHVFLHQWLÀFGLVFLSOLQHRIDJURHFRORJ\
,QWHUQDWLRQDO-RXUQDORI$JULFXOWXUDO6XVWDLQDELOLW\²
:H]HO$%HOORQ6'RUp7)UDQFLV&9DOORG'DQG'DYLG&$JURHFRORJ\DVDVFLHQFHDPRYHPHQWDQGD
SUDFWLFH$UHYLHZ$JURQRP\IRU6XVWDLQDEOH'HYHORSPHQW²
:+2 1XWULWLRQ IRU +HDOWK DQG 'HYHORSPHQW $ *OREDO $JHQGD IRU &RPEDWLQJ 0DOQXWULWLRQ 3URJUHVV UHSRUW
*HQHYD
:+27KH:RUOG+HDOWK5HSRUW5HGXFLQJ5LVNV3URPRWLQJ+HDOWK\/LIH*HQHYD
:+2)XHOIRU/LIH+RXVHKROG(QHUJ\DQG+HDOWK*HQHYD:RUOG+HDOWK2UJDQL]DWLRQ
:+2,QGRRUDLUSROOXWLRQDQGKHDOWK)DFWVKHHW1ƒ6HSWHPEHU$YDLODEOHDWZZZZKRLQWPHGLDFHQWUH
IDFWVKHHWVIVHQ
:LONHQ*&*RRG)DUPHUV7UDGLWLRQDO$JULFXOWXUDO5HVRXUFH0DQDJHPHQWLQ0H[LFRDQG*XDWHPDOD%HUNHOH\
&$8QLYHUVLW\RI&DOLIRUQLD3UHVV
:LOOHU+<XVVHÀ0HQ]OHU0DQG6RUHQVHQ1HGV7KH:RUOGRI2UJDQLF$JULFXOWXUH6WDWLVWLFVDQG(PHUJLQJ
7UHQGV%RQQ,QWHUQDWLRQDO)HGHUDWLRQRI2UJDQLF$JULFXOWXUH0RYHPHQWV,)2$0H9
:LQWHU 7& +DUYH\ - )UDQNH 2/ DQG $OOH\ :0 *URXQG ZDWHU DQG VXUIDFH ZDWHU $ VLQJOH UHVRXUFH 86*6
&LUFXODU8QLWHG6WDWHV*HRORJLFDO6XUYH\
:LVH7$7KHWUXHFRVWRIFKHDSIRRG7KHJOREDOLVDWLRQRIWKHIRRGPDUNHWKDVPDGHIRRGFKHDSEXWZKRLV
EHQHÀWLQJ"5HVXUJHQFH1R0DUFK$SULO
:LWNRZVNL7+)RRGPDUNHWLQJDQGREHVLW\LQGHYHORSLQJFRXQWULHV$QDO\VLVHWKLFVDQGSXEOLFSROLF\-RXUQDO
RI0DFURPDUNHWLQJ²
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
:LWW%8VLQJVRLOIDXQDWRLPSURYHVRLOKHDOWK8QLYHUVLW\RI0LQQHVRWDGLJLWDO&RQVHUYDQF\$YDLODEOHDWKWWS
FRQVHUYDQF\XPQHGXELWVWUHDP:LWWSGI
:LWWHU(0RUWHQVVRQ$0*DUFLD)96L]HRIWKHPLFURELDOPDVVLQDORQJWHUPÀHOGH[SHULPPHQWDVHIIHFWHGE\
GLIIHUHQW1IHUWLOL]HUV6RLO%LRORJ\%LRFKHPLVWU\
:02:RUOG0HWHRURORJLFDO2UJDQL]DWLRQSUHVVUHOHDVH1RRQWKHJOREDOFOLPDWHLQ&DQFXQ*HQHYD
'HFHPEHU$YDLODEOHDWZZZZPRLQWSDJHVPHGLDFHQWUHSUHVVBUHOHDVHVSUBBHQKWPO
:027KHVWDWHRIJUHHQKRXVHJDVHVLQWKHDWPRVSKHUHEDVHGRQJOREDOREVHUYDWLRQVWKURXJK:02
*UHHQKRXVH*DV%XOOHWLQ1R1RYHPEHU*HQHYD:RUOG0HWHRURORJLFDO2UJDQL]DWLRQ$YDLODEOHDWKWWS
ZZZZPRLQWSDJHVSURJDUHSJDZJKJGRFXPHQWV*+*EXOOHWLQBBHQSGI
:RUOG $JURIRUHVWU\ &HQWUH &UHDWLQJ DQ HYHUJUHHQ DJULFXOWXUH LQ $IULFD IRU IRRG VHFXULW\ DQG HQYLURQPHQWDO
UHVLOLHQFH1DLUREL
:RUOG%DQN5HSRVLWLWLRQLQJQXWULWLRQDVFHQWUDOWRGHYHORSPHQW$VWUDWHJ\IRUODUJHVFDOHDFWLRQ:DVKLQJWRQ
'&
:RUOG %DQN :RUOG 'HYHORSPHQW 5HSRUW $JULFXOWXUH IRU 'HYHORSPHQW :DVKLQJWRQ '& $YDLODEOH DW
KWWSZHEZRUOGEDQNRUJ:%6,7((;7(51$/(;7'(&(;75(6($5&+(;7:'56FRQWHQW0'.aS
DJH3.aSL3.aWKH6LWH3.KWPO
:RUOG %DQN (FRQRPLFV RI DGDSWDWLRQ WR FOLPDWH FKDQJH ($&& $YDLODEOH DW KWWSEHWDZRUOGEDQNRUJ
FRQWHQWHFRQRPLFVDGDSWDWLRQFOLPDWHFKDQJHVWXG\KRPHSDJH
:+2 7KH (XURSHDQ +HDOWK 5HSRUW $YDLODEOH DW KWWSZZZHXURZKRLQWBBGDWDDVVHWVSGIB
ÀOH(SGI
:5$3+RXVHKROGIRRGDQGGULQNZDVWHLQWKH8.%DQEXU\:DVWHDQG5HVRXUFHV$FWLRQ3URJUDPPH$YDLODEOH
DWZZZZUDSRUJXNUHWDLOBVXSSO\BFKDLQUHVHDUFKBWRROVUHVHDUFKUHSRUWBKRXVHKROGKWPO
:5,XQGDWHG:RUOG*+*HPLVVLRQVÁRZFKDUWDWKWWSWLQ\XUOFRPIPHEH
:5,:RUOG5HVRXUFHV,QVWLWXWH:RUOG5HVRXUFHV1HZ<RUN2[IRUG8QLYHUVLW\3UHVV
:ULJKW '+ +XPDQ LPSDFWV RQ HQHUJ\ ÁRZ WKURXJK QDWXUDO HFRV\VWHPV DQG UHSOLFDWLRQV IRU VSHFLHV
HQGDQJHUPHQW$PELR²
:\QHQ(7KHHFRQRPLFVRIRUJDQLFFHUHDOOLYHVWRFNIDUPLQJLQ$XVWUDOLDUHYLVLWHG,Q3URFHHGLQJVRIWKH5,5'&
,QDXJXUDO&RQIHUHQFHRQ2UJDQLF$JULFXOWXUH6\GQH\²$XJXVW
<DWHV ' :DW%DO $Q LQWHJUDWHG ZDWHU EDODQFH PRGHO IRU FOLPDWH LPSDFW DVVHVVPHQW RI ULYHU EDVLQ UXQRII
,QWHUQDWLRQDO-RXUQDORI:DWHU5HVRXUFHV'HYHORSPHQW²
<RKH *: /DVFR 5' $KPDG 4. $UQHOO 1: &RKHQ 6- +RSH & -DQHWRV $& 3HUH] 57 3HUVSHFWLYHV RQ
FOLPDWHFKDQJHDQGVXVWDLQDELOLW\&OLPDWHFKDQJH,PSDFWV$GDSWDWLRQDQG9XOQHUDELOLW\&RQWULEXWLRQRI
:RUNLQJ*URXS,,WRWKH)RXUWK$VVHVVPHQW5HSRUWRIWKH,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH&DPEULGJH
8QLYHUVLW\ 3UHVV &DPEULGJH 8QLWHG .LQJGRP $YDLODEOH DW ZZZLSFFFKSGIDVVHVVPHQWUHSRUWDU
ZJDUZJFKDSWHUSGI
<RXQJ$/DQG5HVRXUFHV1RZDQGIRUWKH)XWXUH&DPEULGJH&DPEULGJH
<RXQLH'+DPLOWRQ0DQG1HYLVRQ,6HQVRU\DWWULEXWHVRIRUJDQLFDQGFRQYHQWLRQDOEHHI$QLPDO3URGXFWLRQ
²
75$'($1'(19,5210(175(9,(:
1RWHV
)RRGVHFXULW\LVJHQHUDOO\GHÀQHGDVFRQVLVWLQJRIIRXUSLOODUVLDYDLODELOLW\LHWKHVXSSO\VLGHRIIRRGVHFXULW\
UHVXOWLQJIURPSURGXFWLRQVWRFNVDQGWUDGHLLDFFHVVLQÁXHQFHGE\LQFRPHPDUNHWVDQGSULFHVLLLXWLOL]DWLRQ
UHODWHGWRGLHWVIRRGSUHSDUDWLRQDQGFRQVHUYDWLRQSUDFWLFHVDQGLYVWDELOLW\LHSHULRGLFVKRUWIDOOVÁXFWXDWLRQ
RIVXSSO\)RUPRUHLQIRUPDWLRQVHHLQWHUDOLD)$2D
2QWKHEDVLVRIFXUUHQWWUHQGVFDUERQHPLVVLRQVZLOONHHSJURZLQJE\DERXWSHUFHQWSHUDQQXPDQGDWWKLVUDWH
ZLOOUHDFKWKHUHPDLQLQJHPLVVLRQOLPLWRIJLJDWRQVWRNHHSJOREDOZDUPLQJEHORZGHJUHHVZLWKLQQRPRUH
WKDQ\HDUVZZZUROOLQJVWRQHFRPSROLWLFVQHZVJOREDOZDUPLQJVWHUULI\LQJQHZPDWK
)RUPRUHLQIRUPDWLRQVHHLELG
$FFRUGLQJ WR )DWLK %LURO WKH ,($·V FKLHI HFRQRPLVW WKH FXUUHQW WUHQGV DUH SHUIHFWO\ LQ OLQH ZLWK D WHPSHUDWXUH
LQFUHDVHRIDERXWGHJUHHVODWHUWKLVFHQWXU\,ELG
*OREDO FHUHDO SURGXFWLRQ YROXPH JUHZ E\ SHU FHQW DQG FHUHDO \LHOGV LQFUHDVHG E\ SHU FHQW LQ WKH SHULRG
WRDXWKRU·VFDOFXODWLRQEDVHGRQ)$267$7
)RUPRUHLQIRUPDWLRQVHH.HDQHHWDO
,W LV RIWHQ RYHUORRNHG WKDW SURGXFWLYLW\ RI RXWGRRU ZRUNHUV LV ERXQG WR FRQVLGHUDEO\ GHFOLQH EHFDXVH RI JOREDO
ZDUPLQJ,Q,QGLDIRULQVWDQFHLWLVHVWLPDWHGWKDWSURGXFWLYLW\RIRXWGRRUZRUNHUVKDVDOUHDG\GURSSHGE\SHU
FHQWVLQFHWKHHDUO\VDQGWKDWDQRWKHUGHJUHHVWHPSHUDWXUHLQFUHDVHPLJKWUHVXOWLQDQDGGLWLRQDOUHGXFWLRQ
RISHUFHQW5XQGJUHQ
)RUDQRYHUYLHZRIUHFHQWVLJQLÀFDQWFOLPDWHDQRPDOLHVVHH7LUDGRDQG&RWWHU²
7KH UHFHQW FDWDVWURSKLF ÁRRGV LQ 3DNLVWDQ DQG WKH PDVVLYH IRUHVW DQG SHDWVRLO ÀUHV LQ 5XVVLD DUH EXW WZR
LOOXVWUDWLYHH[DPSOHVRIWKHLPSDFWWKDWFDQEHH[SHFWHG$VWKHFDVHRI3DNLVWDQGHPRQVWUDWHVERWKWKHFRXQWU\
DQGWKHLQWHUQDWLRQDOFRPPXQLW\DUHSRRUO\SUHSDUHGWRHIIHFWLYHO\FRSHZLWKVXFKH[WUHPHV$SDUWIURPWKHGLUH
FRQVHTXHQFHVIRUIXWXUHDJULFXOWXUDOSURGXFWLRQWKHUHLVDOVRWKHULVNRIVHULRXVGHVWDELOL]DWLRQRIVRFLHW\DQGWKH
SROLWLFDOV\VWHP(VWLPDWHVRIWKHÁRRGFDXVHGHFRQRPLFGDPDJHDUHDVKLJKDVSHUFHQWRI3DNLVWDQ·V*'3
,WLVHVWLPDWHGWKDWHOHYDWHGDWPRVSKHULF&2FRQFHQWUDWLRQDORQHPD\LQFUHDVHFURS\LHOGVE\VRPH²SHU
FHQW&URSVWKDWWHQGWREHQHÀWIURPWKHHIIHFWRIFDUERQIHUWLOL]DWLRQLQFOXGHULFHZKHDWVR\EHDQVÀQHJUDLQV
OHJXPHV DQG PRVW WUHHV %HQHÀWV IRU RWKHU FURSV LQFOXGLQJ PDL]H PLOOHW VRUJKXP DQG VXJDUFDQH DUH PRUH
OLPLWHG+RZHYHUWKHVHHVWLPDWHVQHHGWREHFRQVLGHUHGZLWKXWPRVWFDUHDVRWKHUFKDQJHVVXFKDVGLVWULEXWLRQ
RI SUHFLSLWDWLRQ HOHYDWLRQ RI DWPRVSKHULF 2 FRQFHQWUDWLRQ HQKDQFHG GHPDQG IRU QLWURJHQ DQG LQFUHDVHV LQ
WHPSHUDWXUHFDQPDNHWKH\LHOGLQFUHDVHVKLJKO\XQFHUWDLQ6PLWKHWDOD6HHDOVRWKHFRPPHQWRI
+|J\DQG)DQJPHLHULQWKLV&KDSWHU
7KH TXDOLW\ RI IRRG LV GHWHUPLQHG E\ WKUHH HOHPHQWV L FDORULHV LH WKH HQHUJ\ FRQWHQW LL SURWHLQV DQG LLL
PLFURQXWULHQWV
)UXLW DQG YHJHWDEOHV DUH YHU\ YDOXDEOH IRU GHDOLQJ ZLWK PLFURQXWULHQW GHÀFLHQFLHV WKH YDOXH RI JOREDO WUDGH LQ
YHJHWDEOHVIRULQVWDQFHH[FHHGVWKDWRIFHUHDOV<HWWKHUHLVLQVXIÀFLHQWNQRZOHGJHDQGUHVHDUFKRQWKHHIIHFWV
RIFOLPDWHFKDQJHRQIUXLWDQGYHJHWDEOH\LHOGVDQGTXDOLW\)$2D
,WLVHVWLPDWHGWKDWFXUUHQWO\DERXWSHUFHQWRIWKHSRWHQWLDOJOREDOFURS\LHOGLVGHVWUR\HGE\SDWKRJHQVDQG
SHVWV2HUNH
5HVLOLHQFHLVWKHFDSDFLW\WRDEVRUERUFRSHZLWKVKRFNVDQGVWUHVVHV$GDSWLYHFDSDFLW\LVGHÀQHGE\RYHUODSSLQJ
UHVRXUFHVDQGDELOLWLHVWKDWFDQEHHPSOR\HGWRUHVSRQGWRDQGFUHDWHFKDQJHV1DHUVWDGSDUWLLS
:KDW PDNHV WKH VLWXDWLRQ LQ $IULFD 6RXWK $VLD DQG &HQWUDO $PHULFD SDUWLFXODUO\ SUHFDULRXV LV WKH IDFW WKDW WKH
SRSXODWLRQRI$IULFDLVSURMHFWHGWRGRXEOHLQWKHSHULRGWKDWRI6RXWK$VLDDQG&HQWUDO$PHULFDWR
LQFUHDVHE\PRUHRUVRPHZKDWOHVVWKDQSHUFHQW81'(6$
&OLPDWHFKDQJHLVDOUHDG\FOHDUO\YLVLEOH$FFRUGLQJWRWKH:RUOG0HWHRURORJLFDO2UJDQL]DWLRQWKHGHFDGHIURP
WRKDGDJOREDOWHPSHUDWXUHWKDWZDV&DERYHWKHDYHUDJHWKHKLJKHVWYDOXHHYHU
UHFRUGHGIRUD\HDUSHULRG:DUPLQJZDVHVSHFLDOO\VWURQJLQ$IULFDSDUWVRI$VLDDQGWKH$UFWLF&HQWUDO$VLD
DQG *UHHQODQG$UFWLF &DQDGD :02 $FFRUGLQJ WR WKH JOREDO &OLPDWH 5LVN ,QGH[ &5, GHYHORSHG E\
*HUPDQZDWFKDQG0XQLFK5H1DW&DW6(59,&(WKHPRVWFOLPDWHULVNH[SRVHGFRXQWULHVLQWKHSHULRG
ZHUH %DQJODGHVK 0\DQPDU +RQGXUDV 1LFDUDJXD 9LHW 1DP +DLWL 3KLOLSSLQHV 'RPLQLFDQ 5HSXEOLF
0RQJROLDDQG7DMLNLVWDQWKH&5,UHÁHFWVERWKUHODWLYHDQGDEVROXWHFOLPDWHLPSDFWSHUFRXQWU\IRUPRUHLQIRVHH
ZZZJHUPDQZDWFKRUJNOLPDFULKWP
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
,WLVHVWLPDWHGWKDWDOUHDG\E\FRQWLQXLQJSRSXODWLRQJURZWKDQGFXUUHQWDJULFXOWXUDOSUDFWLFHVZLOOMDFNXS
WKHQXPEHURIFRXQWULHVWKDWVXIIHUIURPDQDFXWHVFDUFLW\RIHLWKHUJRRGFURSODQGRUIUHVKZDWHUIURPDWWKH
PRPHQWWRVRPHZLWKDWRWDOSRSXODWLRQRIELOOLRQ:DWHUVFDUFLW\PD\EHRQHRIWKHPRVWSRZHUIXOFURS\LHOG
UHGXFHUVLQWKHFRPLQJGHFDGHV*LRYDQQXFFLHWDO
7KH HFRQRPLF VLJQLÀFDQFH RI DJULFXOWXUH LQ GHYHORSLQJ FRXQWULHV LV XVXDOO\ XQGHUHVWLPDWHG ZKHQ OLPLWLQJ LW WR
DJULFXOWXUH·VFRQWULEXWLRQWR*'3EHFDXVHODUJHSDUWVRIDJULFXOWXUDOSURGXFWLRQDUHLQIRUPDODQGQRWSDUWRIWKH
PRQHWDU\HFRQRP\
,WLVDOVRZRUWKQRWLQJWKDWIRUWKHÀUVWWLPHLQKLVWRU\WKHUHDUHDVPDQ\RYHUZHLJKWSHRSOHDVXQGHUQRXULVKHG
7KHFRQVHTXHQFHVRIWKHHPHUJLQJGLHWDU\KDELWVDUHRQDGLVDVWURXVWUDMHFWRU\IRUKXPDQDQGHFRV\VWHPKHDOWK
7KHUHIRUHRQHDOVRQHHGVWRWDUJHWWKHTXDOLW\RIQXWULWLRQUDWKHUWKDQVLPSO\´PRUHSURGXFWLRQµ*LRYDQQXFFLHW
DOLYDQGYL
$FFRUGLQJWR)$26XE6DKDUDQ$IULFDKDVWKHKLJKHVWVKDUHRIXQGHUQRXULVKHGSHRSOHVRPHSHUFHQWLQ
ZKHUHDVWKH$VLD3DFLÀFUHJLRQKDVWKHPRVWXQGHUQRXULVKHGSHRSOHDERXWPLOOLRQ7ZRWKLUGVRIWKHZRUOG·V
XQGHUQRXULVKHGOLYHLQMXVWFRXQWULHV%DQJODGHVK&KLQDWKH'HPRFUDWLF5HSXEOLFRI&RQJR(WKLRSLD,QGLD
,QGRQHVLDDQG3DNLVWDQFLWHGLQ*LRYDQQXFFLHWDO
$V KLJKOLJKWHG E\ 'H 6FKXWWHU DQG 9DQORTXHUHQ ´ODUJH PHFKDQL]HG PRQRFURSSLQJ RSHUDWLRQV
DUHPRUHFRPSHWLWLYHWKDQVPDOOIDUPV«EXWFRPSHWLWLYHQHVVDQGSURGXFWLYLW\DUHGLIIHUHQWWKLQJV%LJIDUPV
RXWSHUIRUPVPDOOIDUPVDFFRUGLQJWRRQO\RQHPHDVXUHRIHFRQRPLFHIÀFLHQF\SURGXFWLYLW\SHUXQLWRIODERXUµ
$FFRUGLQJWR7VFKDUQWNHHWDO´LWLVZHOOHVWDEOLVKHGWKDWVPDOODQGGLYHUVLÀHGIDUPVUDWKHUWKDQODUJH
PRQRFXOWXUHVVKRZJUHDWHUSURGXFWLYLW\SHUDUHDDSKHQRPHQRQUHIHUUHGWRDVWKH¶SDUDGR[RIWKHVFDOH·RUWKH
¶LQYHUVHIDUPVL]HSURGXFWLYLW\UHODWLRQVKLS·µ
6HHDOVR,$$67'D
$VHPSKDVL]HGE\1DHUVWDGSDUW,,S´VRLORUJDQLFPDWWHUDVKXPXVFDQRQO\EHSURGXFHGE\WKH
GLYHUVLW\RIOLIHWKDWH[LVWVLQVRLOVLWFDQQRWEHKXPDQPDGH:KHQWKHVRLORUJDQLFPDWWHUUHF\FOLQJDQGIHUWLOLW\
VHUYLFHLVLPSDLUHGDOOOLIHRQHDUWKLVWKUHDWHQHGDVDOOOLIHLVHLWKHUGLUHFWO\RULQGLUHFWO\UHOLDQWRQSODQWVDQGWKHLU
SURGXFWVLQFOXGLQJWKHVXSSO\RIIRRGHQHUJ\QXWULHQWVFRQVWUXFWLRQPDWHULDOVDQGJHQHWLFUHVRXUFHVµ
,QFUHDVLQJ VRLO RUJDQLF PDWWHU E\ JRRG PDQDJHPHQW SUDFWLFHV LV JHQHUDOO\ V\QHUJLVWLF EHFDXVH LW FDSWXUHV
DWPRVSKHULF&2LQFUHDVHVVRLOIHUWLOLW\DQGLPSURYHVWKHVRLOVWUXFWXUHIRUPRUHUHVLOLHQFHDQGEHWWHUDGDSWDWLRQ
WRFOLPDWHFKDQJH)$2D
7KLVVHFWLRQGUDZVRQÀQGLQJVRI0XUSK\DQG:LVH
2QH UHVSRQVH ZDV WKH YROXQWDU\ 3ULQFLSOHV IRU 5HVSRQVLEOH $JULFXOWXUDO ,QYHVWPHQW 35$, GHYHORSHG E\ WKH
VHFUHWDULDWVQRWWKHPHPEHUFRXQWULHVRIWKH:RUOG%DQN)$2DQG81&7$'ZKLFKKDYHEHHQZLGHO\FULWLFL]HG
DVIDUWRRZHDN0XUSK\DQG:LVH,Q0D\WKH)$2·V&RPPLWWHHRQ:RUOG)RRG6HFXULW\&)6
HQGRUVHG 7KH 9ROXQWDU\ *XLGHOLQHV RQ WKH 5HVSRQVLEOH *RYHUQDQFH RI 7HQXUH RI /DQG )LVKHULHV DQG )RUHVWV
LQ WKH &RQWH[W RI 1DWLRQDO )RRG 6HFXULW\ ZKLFK RXWOLQH SULQFLSOHV DQG SUDFWLFHV WKDW JRYHUQPHQWV FDQ UHIHU WR
ZKHQPDNLQJODZVDQGDGPLQLVWHULQJODQGÀVKHULHVDQGIRUHVWVULJKWV7KHJXLGHOLQHVDUHEDVHGRQDQLQFOXVLYH
FRQVXOWDWLRQSURFHVVVWDUWHGE\)$2LQDQGWKHQÀQDOL]HGWKURXJK&)6OHGLQWHUJRYHUQPHQWDOQHJRWLDWLRQV
WKDW LQFOXGHG SDUWLFLSDWLRQ RI JRYHUQPHQW RIÀFLDOV FLYLO VRFLHW\ RUJDQL]DWLRQV SULYDWH VHFWRU UHSUHVHQWDWLYHV
LQWHUQDWLRQDORUJDQL]DWLRQVDQGDFDGHPLFV7KHDLPRIWKHJXLGHOLQHVLVWRSURPRWHIRRGVHFXULW\DQGVXVWDLQDEOH
GHYHORSPHQWE\LPSURYLQJVHFXUHDFFHVVWRODQGÀVKHULHVDQGIRUHVWVDQGSURWHFWLQJWKHULJKWVRIPLOOLRQVRI
RIWHQYHU\SRRUSHRSOH:KLOHWKHJXLGHOLQHVDFNQRZOHGJHWKDWUHVSRQVLEOHLQYHVWPHQWVE\WKHSXEOLFDQGSULYDWH
VHFWRUVDUHHVVHQWLDOIRULPSURYLQJIRRGVHFXULW\WKH\DOVRUHFRPPHQGWKDWVDIHJXDUGVEHSXWLQSODFHWRSURWHFW
WHQXUHULJKWVRIORFDOSHRSOHIURPULVNVWKDWFRXOGDULVHIURP ODUJHVFDOHODQGDFTXLVLWLRQVDQGDOVRWRSURWHFW
KXPDQULJKWVOLYHOLKRRGVIRRGVHFXULW\DQGWKHHQYLURQPHQWIRUPRUHLQIRUPDWLRQVHHKWWSZZZIDRRUJQHZV
VWRU\HQLWHPLFRGH $V WKH JXLGHOLQHV ZHUH RQO\ DGRSWHG LQ PLG LW LV DV \HW WRR HDUO\ WR MXGJH
ZKHWKHUWKH\ZLOOKDYHDUHDOLPSDFWRQHIIHFWLYHO\JRYHUQLQJH[LVWLQJDQGQHZIRUHLJQODQGDFTXLVLWLRQV
)RUDQHODERUDWHGLVFXVVLRQVHH1DHUVWDG
)RUDUHFHQWLQGHSWKUHYLHZVHH*HUPDQ1DWLRQDO$FDGHP\RI6FLHQFHV/HRSROGLQD
)RUDQHODERUDWHGLVFXVVLRQVHH)$2D
7KH,3&&DVXJJHVWV²SHUFHQWWKH2(&'VXJJHVWVSHUFHQW/HJJDQG+XDQJDQGWKH
:RUOG5HVRXUFHV,QVWLWXWH:5,XQGDWHGVXJJHVWVSHUFHQW
)LJXUHVXVHGIRUWKHFDOFXODWLRQVZHUHDDQDYHUDJHORVVRI²NJRI620PRIDUDEOHODQGDQG²NJRI
75$'($1'(19,5210(175(9,(:
620PRIDJULFXOWXUDOODQGXQGHUSUDLULHVDQGQRWFXOWLYDWHGEDQDYHUDJHVRLOGHSWKRIFPZLWKDQDYHUDJH
VRLO GHQVLW\ RI JUFP F PLOOLRQ KD RI DJULFXOWXUDO ODQG ZRUOGZLGH DQG PLOOLRQ KD RI DUDEOH ODQG
)$267$7DQGGDUDWLRRINJRI&2IRUHDFKNJRIGHVWUR\HG620
7KLVFRQFOXVLRQLVEDVHGRQWKHDVVXPSWLRQWKDWRUJDQLFPDWWHUZRXOGEHLQFRUSRUDWHGDWDJOREDODQQXDODYHUDJH
UDWHRIWRWRQVSHUKHFWDUHRIDJULFXOWXUDOODQG)RUPRUHGHWDLOHGFDOFXODWLRQVVHH*5$,1WDEOH
$JURHFRORJLFDOUHVHDUFKFRPELQHVPRGHUQVFLHQFHZLWKORFDONQRZOHGJH,Q&HQWUDO$PHULFDIRULQVWDQFHWKH
FRIIHHJURYHVWKDWJURZXQGHUKLJKFDQRS\WUHHVZHUHLPSURYHGE\LGHQWLI\LQJWKHRSWLPDOVKDGHFRQGLWLRQVIRU
PLQLPL]LQJ WKH HQWLUH SHVW FRPSOH[ DQG PD[LPL]LQJ WKH EHQHÀFLDO PLFURÁRUD DQG IDXQD ZKLFK LPSURYHG \LHOG
DQGFRIIHHTXDOLW\6XFKJRRGSUDFWLFHVDUHGHYHORSHGWKURXJKDWULDODQGHUURUSURFHVVE\FRIIHHJURZHUVEXW
LGHQWLI\LQJ FRQGLWLRQV IRU VXFFHVV LQ RUGHU WR SURPRWH WKHLU GLVVHPLQDWLRQ PD\ EHQHÀW IURP WKH NQRZOHGJH RI
H[SHUWV6WDYHUHWDO
7KHSHUFHQWÀJXUHUHODWHVWRWKHUHOLDEOH\LHOGFRPSDULVRQVIURPSURMHFWVEXWWKHUHVXOWVZHUHZLGH
UDQJLQJZLWKSHUFHQWRIWKHSURMHFWVUHSRUWLQJDSHUFHQWLQFUHDVHRUPRUH
+RZHYHULWVKRXOGEHSRLQWHGRXWWKDWQRWDOOWKHVHSURMHFWVFRPSO\IXOO\ZLWKWKHSULQFLSOHVRIDJURHFRORJ\
5HVHDUFKRQDJURIRUHVWU\LQ=DPELDGRHVQRWVXSSRUW´WKHSRSXODUQRWLRQWKDWDJURIRUHVWU\SUDFWLFHVDUHPRUH
ODERXULQWHQVLYHµ$MD\LHWDO
6HHZZZFOLPDWHIXQGVXSGDWHRUJ
$FFRUGLQJWRWKH,3&&DQDWPRVSKHULF&2FRQFHQWUDWLRQRISSPZLOOOHDGWRDƒ&ULVHLQJOREDODYHUDJH
WHPSHUDWXUHV
&LVDPHWDEROLFSDWKZD\IRUFDUERQÀ[DWLRQLQSKRWRV\QWKHVLVFRQYHUWLQJ&2DQGULEXORVHELVSKRVSKDWH5X%3
LQWRWZRFDUERQPROHFXOHVRISKRVSKRJO\FHUDWH3*$
&LVDPHWDEROLFSDWKZD\IRUFDUERQÀ[DWLRQLQSKRWRV\QWKHVLVZKLFKÀ[HV&2WRSKRVSKRHQROS\UXYDWH3(3
DQGFRQYHUWVLWLQWRWKHFDUERQLQWHUPHGLDWHPDODWH
7KHZKROHSDSHUFDQEHGRZQORDGHGDWIWSIWSIDRRUJGRFUHSIDRDNHDNHSGI
6WDWHPHQWVE\)HHGWKH)XWXUHRIÀFLDOVDUHUHYHDOLQJWKH\UHIHUWRWKH´GLVFRYHU\DQGGHOLYHU\µRI´EUHDNWKURXJKµ
WHFKQRORJLHV IUHTXHQWO\ PHQWLRQLQJ ELRWHFKQRORJ\ UDWKHU WKDQ DJURHFRORJLFDO DSSURDFKHV 6HH VWDWHPHQWV
E\ 86'$ 6HFUHWDU\ 7RP 9LOVDFN DWKWWSZZZDPHULFDJRYVWGHYHORSHQJOLVK0D\
DNOOHQQRFFPHKWPO 86$,' 'LUHFWRU 5DMLY 6KDK DW KWWSZZZXVDLGJRYSUHVVUHOHDVHV
SUKWPO DQG 0RQVDQWR &RUSRUDWLRQ DW KWWSZZZDPHULFDJRYVWGHYHORSHQJOLVK-XO\
FSDWDUXNKWPOGLVWLG XFV 6HH DOVR *DWHV )RXQGDWLRQ DW KWWSZZZJDWHVIRXQGDWLRQRUJ
DJULFXOWXUDOGHYHORSPHQW3DJHVZK\ZHIXQGUHVHDUFKLQFURSELRWHFKQRORJ\DVS[
7KLV86$,'SURJUDPPHSDUWQHUVZLWKELRWHFKQRORJ\LQGXVWU\OHDGHUVVXFKDV0RQVDQWR0D\FRDQG%D\HU)RU
GHWDLOVVHHKWWSZZZDEVSFRUQHOOHGX
$WRHLVDFRPPRQXQLWRIHQHUJ\ZKLFKH[SUHVVHVWKHDPRXQWRIHQHUJ\UHOHDVHGZKHQDWRQRIRLOLVEXUQWWRH
*- 0:K *FDO
:DWHUSXPSLQJFRQVXPHVFRQVLGHUDEOHHQHUJ\
6R\EHDQVFDQEHJURZQZLWKRXWQLWURJHQIHUWLOL]HUVDVWKH\KDYHQDWXUDOQLWURJHQÀ[DWLRQSURSHUWLHVZKLFKLVWKH
PDLQUHDVRQIRUWKHLUORZHUHQHUJ\GHPDQG
:KLOHWKHUHZHUHDOVRRWKHUIDFWRUVGULYLQJWKHLQFUHDVHLQIRRGSULFHVVXFKDVWKHGLYHUVLRQRIVRPHFURSVIRUWKH
SURGXFWLRQRIELRIXHOVLQFUHDVHGPHDWFRQVXPSWLRQDQGVSHFXODWLRQWKHKLJKHURLOSULFHZDVGRXEWOHVVDPDMRU
GULYHU
7KHLQWURGXFWLRQRIHQHUJ\VDYLQJVWRYHVRUWKHXVHRIRWKHUIXHOVWKDWDUHHDVLHUWRUHJXODWHVKRXOGEHDSULRULW\QRW
RQO\IRUWKHFRQVHUYDWLRQRIIRUHVWVDQGVDYLQJRIHQHUJ\EXWDOVREHFDXVHWKHWUDGLWLRQDOVWRYHVHPLWFRQVLGHUDEOH
LQGRRUVRRWDQGVPRNHZKLFKDUHDKHDOWKKD]DUGDQGRQHRIWKHELJJHVWNLOOHUV%HWZHHQPLOOLRQ:+2
DQGPLOOLRQ3LPHQWHOHWDOSHRSOHGLHIURPWKHVHHPLVVLRQVHYHU\\HDU
$VVXPLQJWKDWWKHIDUPHUVFDQVDYHWKHLUHQWLUHVXUSOXVZKLFKLVKLJKO\XQOLNHO\
6HHKWWSZZZIDRRUJZRUOGIRRGVLWXDWLRQZIVKRPHIRRGSULFHVLQGH[HQ
6HH2IIJULGV\VWHPVDWZZZHQHUJ\VROXWLRQVFRXNRIIJULG
.H\'HYHORSPHQW&KDOOHQJHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH
6HH/LJKWLQJ$IULFD&DWDO\]LQJPDUNHWVIRUPRGHUQOLJKWLQJDWZZZOLJKWLQJDIULFDRUJ
6HHKWWSHDUWKREVHUYDWRU\QDVDJRY)HDWXUHV'XVW
7KLVSDSHUGUDZVKHDYLO\IURPDDUWLFOHE\WKHDXWKRUVHQWLWOHG&RPSHWLWLRQIRU:DWHUIRUWKH)RRG6\VWHP
SXEOLVKHGLQ3KLORVRSKLFDO7UDQVDFWLRQVRIWKH5R\DO6RFLHW\%LRORJLFDO6FLHQFHV²
$ WKRURXJK GLVFXVVLRQ RI WKHVH DQG RWKHU VROXWLRQV LV SURYLGHG LQ VHYHUDO FRPSUHKHQVLYH UHSRUWV HJ ,:0,
7KH UHODWLRQVKLS EHWZHHQ SRSXODWLRQ ZDWHU DQG IRRG SURGXFWLRQ KDV EHHQ H[SORUHG LQ GHSWK E\ D QXPEHU RI
DXWKRUVVHHIRUH[DPSOH*OHLFN3LPHQWHOHWDO3RVWHO9|U|VPDUW\HWDO7LOPDQHWDO
DQG,:0,
1RWHWKDWWKLVSDSHUGRHVQRWFRQVLGHUWKUHDWVWRDJULFXOWXUDOZLWKGUDZDOVIURPJURXQGZDWHUUHVRXUFHVWKDWDUHQRW
GLUHFWO\OLQNHGWRVXUIDFHZDWHUV\VWHPVDVWKHVHUHVRXUFHVDUHXQOLNHO\WRVHUYHDVDYLDEOHVXEVWLWXWHIRUVXUIDFH
ZDWHULQIXWXUH\HDUV,QPDQ\UHJLRQVRIWKHZRUOGJURXQGZDWHUUHVHUYHVKDYHGHFOLQHGWRWKHSRLQWZKHUHZHOO
\LHOGV KDYH IDOOHQ GUDPDWLFDOO\ ODQG KDV VXEVLGHG DQG DTXLIHU VDOLQL]DWLRQ KDV RFFXUUHG .RQLNRZ DQG .HQG\
$V WKH JOREDO GHPDQG IRU JURXQGZDWHU FRQWLQXHV WR LQFUHDVH JURXQGZDWHU WDEOHV DQG ZHOO \LHOGV ZLOO
GHFOLQHPRUHUDSLGO\UHGXFLQJVXUIDFHZDWHUUXQRIIDQGIRUFLQJWKRVHWKDWUHO\RQJURXQGZDWHUUHVRXUFHVWRVHHN
QHZVRXUFHV%RWKZLOOKDYHQHJDWLYHHIIHFWVRQWKHDYDLODELOLW\RIZDWHUIRUDJULFXOWXUH
,Q WKLV SDSHU RXU IRFDO ´JHRSROLWLFDO UHJLRQVµ DUH (XURSH $IULFD 1RUWK $PHULFD $VLD /DWLQ $PHULFD DQG WKH
&DULEEHDQDQG2FHDQLD:LWKLQ(XURSHZHDOVRIRFXVRQWKH(XURSHDQ8QLRQQRUWKZHVWHUQ(XURSHWKH8QLWHG
.LQJGRPDQGWKHIRUPHU6RYLHW8QLRQ6XE6DKDUDQ$IULFDDQGWKH1LOH5LYHUEDVLQDUHUHSRUWHGIRU$IULFDDQGLQ
$VLDZHUHSRUWÀQGLQJVIRU&KLQDDQG,QGLD)LQDOO\ZHLGHQWLI\LPSDFWVRQ%UD]LO
)ROORZLQJ:LQWHUHWDOZHDVVXPHWKDWUHJLRQDOJURXQGZDWHUZLWKGUDZDOVGHSOHWHULYHUEDVLQUXQRIIDQG
WKHUHIRUHLPSOLFLWO\FRQVLGHUVXEVXUIDFHZDWHULQRXUPRGHOOLQJH[HUFLVH,WPXVWEHQRWHGWKDWWKLVDQDO\VLVPD\
XQGHUHVWLPDWHWKUHDWVWRDJULFXOWXUHIRUWZRUHDVRQVLZHPDNHWKHVHFRPSDULVRQVUHODWLYHWRFXUUHQWDJULFXOWXUDO
GHPDQGVUDWKHUWKDQWKHH[SHFWHGKLJKHUGHPDQGVRIDQGLLZHGRQRWFRQVLGHUWKHHIIHFWVRIGURXJKW
RU LQFUHDVHG H[WUHPH HYHQWV 2Q WKH RWKHU KDQG WKH DQDO\VLV PD\ RYHUHVWLPDWH WKUHDWV EHFDXVH ZH PRGHO
ZLWKGUDZDOVUDWKHUWKDQFRQVXPSWLYHXVHDQGWKXVGRQRWDFFRXQWIRUUHXVHRIUHWXUQÁRZV
0HDVXUHPHQWVZHUHWDNHQLQSORWVRISDVVLRQIUXLWLQPL[HGFURSSLQJV\VWHPVLQHDFKRIWZRGLIIHUHQWDUHDVRI
WKH&HQWUDODQG:HVWHUQ3URYLQFHVRI.HQ\D
)RUIXUWKHULQIRUPDWLRQVHHZZZFFRIIHHDVVRFLDWLRQRUJRXUVHUYLFHVZRUNRQFOLPDWHFKDQJHKWPO
6HHZZZJURZLQJIRUWKHIXWXUHFRPFRQWHQW&RRO)DUP7RRO
)RUDPRUHGHWDLOHGGLVFXVVLRQRIWKHGHYHORSPHQWRIIRRGVXSSO\FKDLQVLQORZLQFRPHFRXQWULHVDQGHPHUJLQJ
HFRQRPLHVVHH3DUÀWW%DUWKHODQG0DFQDXJKWRQ
6HHZZZZISRUJSXUFKDVHSURJUHVV
,QVRPH(8FRXQWULHVHJ*HUPDQ\DEVROXWHH[SHQGLWXUHRQIRRGKDVUHPDLQHGFRQVWDQWVLQFHWKHV
6HHIRUH[DPSOHZZZQHZHFRQRPLFVRUJSXEOLFDWLRQVLQFRQYHQLHQWVDQGZLFK
)XUWKHU LQIRUPDWLRQ DERXW WKH 3ODWIRUP·V YLHZV LQ (QJOLVK VHH ZZZGLHEHVVHUHDJUDUSROLWLNGH(QJOLVK
GRFXPHQWVKWPO
6HHDOVRZZZHIVDHXURSDHXHQWRSLFVWRSLFDPUKWP"ZWUO 7KH6$1&2VWXG\FLWHG$QGHUVRQ
6HH DOVR 6WRFNKROP 5HVLOLHQFH &HQWUH 6WRFNKROP 8QLYHUVLW\ 7LSSLQJ WRZDUGV WKH XQNQRZQ DW ZZZ
VWRFNKROPUHVLOLHQFHRUJSODQHWDU\ERXQGDULHV
5HJXODWLRQ(&1ROD\LQJGRZQWKHJHQHUDOSULQFLSOHVDQGUHTXLUHPHQWVRIIRRGODZHVWDEOLVKLQJWKH
(XURSHDQ)RRG6DIHW\$XWKRULW\DQGOD\LQJGRZQSURFHGXUHVLQPDWWHUVRIIRRGVDIHW\KWWSHFHXURSDHXGJV
KHDOWKBFRQVXPHUOLEUDU\SXESXEBHQSGI
$UWLFOHRI5HJXODWLRQ(&´IRUPDOO\HVWDEOLVKHVWKHSUHFDXWLRQDU\3ULQFLSOHDVDQRSWLRQRSHQWRULVN
PDQDJHUV ZKHQ GHFLVLRQV KDYH WR EH PDGH WR SURWHFW KHDOWK EXW VFLHQWLÀF LQIRUPDWLRQ FRQFHUQLQJ WKH ULVN LV
LQFRQFOXVLYH RU LQFRPSOHWH LQ VRPH ZD\µ 6HH KWWSHFHXURSDHXIRRGIRRGIRRGODZSUHFDXWLRQDU\LQGH[B
HQKWPKWWSHXUOH[HXURSDHX/H[8UL6HUY/H[8UL6HUYGR"XUL &20),1(13')
)RUPRUHGHWDLOVVHH*XHQWKHUDQG:LOO
75$'($1'(19,5210(175(9,(:
'#&46+%.'U X
$QLWD,GHO)HGHUDWLRQRI*HUPDQ6FLHQWLVWVDQG7RELDV5HLFKHUW*HUPDQZDWFK
$EVWUDFW
7RRSWLPL]HWKHLQWHUUHODWLRQVKLSEHWZHHQWKHJOREDOFOLPDWHDQGFDWWOHDQGPD[LPL]HWKHODWWHU·VFRQWULEX
WLRQWRJOREDOIRRGVHFXULW\WKHIROORZLQJVWHSVQHHGWREHWDNHQ
‡ 0RUHUHVHDUFKRQJUDVVODQGPDQDJHPHQWDLPHGDWRSWLPL]LQJLWVFDSDFLW\WRVHUYHDVDFDUERQVLQN
‡ 0RUHVXSSRUWIRUJUD]LQJ
‡ /DQGXVHFKDQJHVKRXOGEHEURXJKWXQGHUVWULFWFRQWUROLQFOXGLQJWKDWUHODWHGWRLPSRUWHGDQLPDO
IHHG
‡ /LYHVWRFNSURGXFWLRQVKRXOGKDYHDVWURQJHUOLQNWRWKHUHJLRQDOIHHGEDVH
3UHYDLOLQJ WUHQGV WRZDUGV IXUWKHU LQGXVWULDOL]DWLRQ RI
DJULFXOWXUHDORQJZLWKODQGOHVVODUJHVFDOHOLYHVWRFN
SURGXFWLRQ DUH OLNHO\ WR FRQWULEXWH WR DQ LQFUHDVH LQ
JUHHQKRXVH JDV *+* HPLVVLRQV E\ PRUH WKDQ D
WKLUGWLOO$FFRUGLQJWRWKHWK,3&&$VVHVVPHQW
5HSRUW ´:LWKRXW DGGLWLRQDO SROLFLHV DJULFXOWXUDO
12 >QLWURXV R[LGH@ DQG &+ >PHWKDQH@ HPLVVLRQV
DUH SURMHFWHG WR LQFUHDVH E\ DQG UHVSHFWLYHO\ WR WKXV LQFUHDVLQJ PRUH UDSLGO\
WKDQ WKH LQFUHDVH RI QRQ&2 *+* REVHUYHG
IURPWRµ,3&&
7KHUH LV D WHQGHQF\ WR LJQRUH WKH QHHG WR UHGXFH
PHDW FRQVXPSWLRQ DV ZHOO DV WR LPSOHPHQW D OHJDO
IUDPHZRUN IRU VXVWDLQDEOH SURGXFWLRQ PHWKRGV WR
DGGUHVV WKHLU PHGLXP DQG ORQJWHUP HIIHFWV RQ
FOLPDWH HQYLURQPHQW DQG DQLPDO ZHOIDUH ,QGXVWULDO
OLYHVWRFNSURGXFWLRQVKRXOGEHFXUEHGVRWKDWWKHWRWDO
VWRFNRIUDLVHGDQLPDOVVXFKDVFDWWOHSLJVFKLFNHQV
DQGVKHHSLVUHGXFHGDQGWKHFRQVXPSWLRQRIDQLPDO
IHHG VKRXOG EH FRPPHQVXUDWH ZLWK VXVWDLQDEOH
ORFDO SURGXFWLRQ SRWHQWLDO 5HGXFHG FRQVXPSWLRQ RI
DQLPDO SURGXFWV LV D SDUWLFXODU FKDOOHQJH IRU WKRVH
FRXQWULHV ZKHUH DQLPDO SURWHLQ FRQVXPSWLRQ LV KLJK
²UHSUHVHQWLQJDIDOVHPRGHORILPDJLQDU\SURVSHULW\
7KH IDFW WKDW DQ LQFUHDVLQJ QXPEHU RI SHRSOH DUH
EHFRPLQJYHJDQVPD\KHOSLQWHUPVRIWKHUHGXFHG
GHPDQG IRU DQLPDO SURWHLQ DQG HQHUJ\ULFK IRRG
EXW ´WR FRQFOXGH WKDW D YHJDQ DJULFXOWXUDO DQG IRRG
V\VWHP ZRXOG EH WKH SUHIHUDEOH VROXWLRQ LV IDU WRR
VLPSOLVWLFµ *DUQHW )DLUOLH '·6LOYD DQG
:HEVWHU
2YHU WKH SDVW IHZ GHFDGHV IHHGLQJ V\VWHPV KDYH
WXUQHG PRUH DQG PRUH IURP EHLQJ ORFDOUHJLRQDO WR
JOREDOWKHEDVLFVRXUFHRIIRGGHULVOHVVDQGOHVVWKH
IDUP LWVHOI 7KH UHVXOWLQJ SUREOHP RI H[SDQVLRQ DQG
LQWHQVLÀFDWLRQ RI OLYHVWRFN SURGXFWLRQ LV DVVRFLDWHG
ZLWK WKH VKLIW IURP D IHHG V\VWHP EDVHG RQ JUDVV
DQG SODQW UHPDLQV WR RQH EDVHG PDLQO\ RQ FURSV
HYHQ IRU UXPLQDQWV +RZHYHU WKH PDMRU LVVXH LV QRW
ZKHWKHU OLYHVWRFN LV WKH ZRUOG·V ODUJHVW XVHU RI ODQG
EXW UDWKHU KRZ WKH ODQG DQG OLYHVWRFN DUH PDQDJHG
:KLOH VXVWDLQDEOH DQG DQLPDOIULHQGO\ V\VWHPV DUH
FKDUDFWHUL]HG E\ DUHDVVSDFH IRU RXWGRRU NHHSLQJ
DQGJUD]LQJLQGXVWULDODQLPDOUHDULQJLVFKDUDFWHUL]HG
DV ODQGOHVV 7KXV WKH GDWD LQGLFDWLQJ OLYHVWRFN DV
WKH ZRUOG·V ODUJHVW XVHU RI ODQG DUH DYHUDJH YDOXHV
WKDW DOVR LQFOXGH D UHOHYDQW SDUW RI VXVWDLQDEO\ XVHG
JUDVVODQGV
7KH LQWHQVLÀFDWLRQ RI OLYHVWRFN V\VWHPV DQG
HVSHFLDOO\IHHGLQJV\VWHPVKDVJRQHKDQGLQKDQG
ZLWK PRUH VSHFLDOL]DWLRQ DQG UDWLRQDOL]DWLRQ WKHUHE\
FUHDWLQJ OLYHVWRFN V\VWHPV WKDW DUH LQFUHDVLQJO\
GHSHQGHQW RQ HQHUJ\ LQSXW DQG IRUHLJQ IRGGHU
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
VRXUFHV7KHJURZLQJGHPDQGIRUVXFKIHHGKDVOHG
WRDKXJHGHPDQGIRUODQGZKLFKLVDFUXFLDOIDFWRU
OHDGLQJ WR ODQGJUDEELQJ DQG ODQG FRQYHUVLRQ
LQFOXGLQJ WKH GHIRUHVWDWLRQ RI UDLQIRUHVWV 2QO\ OLWWOH
E\ OLWWOH LV D ZLGHU SXEOLF UHDOL]LQJ LQ WKH FRQWH[W RI
ODQGJUDEELQJWKDWWKHUHLVDKXJHGHPDQGIRUODQG
LQWKH6RXWKUHVXOWLQJPDLQO\IURPGHPDQGIRUDQLPDO
IHHGLQWKH1RUWK,QDUHFHQWVWXG\YRQ:LW]NHDQG
1ROHSSD HVWLPDWH WKDW LQ RUGHU WR SURGXFH
WKRVH DJULFXOWXUDO SURGXFWV WKDW ZHUH LPSRUWHG E\
WKH (XURSHDQ 8QLRQ (8 LQ PLOOLRQ
KHFWDUHVKDRIDUDEOHODQGZHUHXVHGLQRWKHUSDUWV
RIWKHZRUOG7KH(8RQWKHRWKHUKDQGXVHGRQO\
PLOOLRQKDIRUSURGXFWVLWH[SRUWHGGXULQJWKDWSHULRG
$VDUHVXOWWKH(8LPSRUWV´YLUWXDOODQGµLQWKHRUGHU
RI PLOOLRQ KD 7KLV UHSUHVHQWV D WKLUG RI WKH PLOOLRQKDXVHGLQWKH(8DVDUDEOHODQG7KHVLQJOH
ELJJHVW IDFWRU WKDW FRQWULEXWHV WR WKLV LPEDODQFH LV
WKH LPSRUW RI VR\ ZKLFK XVHV PLOOLRQ KD RXWVLGH
WKH (8 PDLQO\ LQ /DWLQ $PHULFD VHH EHORZ 7KLV
VSDWLDOVHSDUDWLRQRILQGXVWULDOOLYHVWRFNV\VWHPVIURP
IHHGFURSSURGXFWLRQLVFOHDUO\OLQNHGZLWKOHVVULJLG
HQYLURQPHQWDOUHJXODWLRQV1D\ORUHWDO
*UHDWHUVWDQGDUGL]DWLRQDQGVSHFLDOL]DWLRQLQLQGXVWULDO
DJULFXOWXUHLVFORVHO\UHODWHGWRWKHGHOLQNLQJRIFURS
DQG OLYHVWRFN SURGXFWLRQ 7KLV VHSDUDWLRQ FDXVHV
KLJKHUHQHUJ\DQGIHUWLOL]HUFRQVXPSWLRQZKLFKZKLOH
LQFUHDVLQJ WKH VFDOH RI SURGXFWLRQ DQG \LHOGV ERWK
RI FURSV DQG OLYHVWRFN JLYHV ULVH WR HQRUPRXV ULVNV
VXFKDVSHVWLQIHVWDWLRQDQGGLVHDVHV7KHSUHYDLOLQJ
V\VWHP RI LQGXVWULDO OLYHVWRFN SURGXFWLRQ ZLWK LWV
VSHFLÀF EUHHGLQJ IHHGLQJ DQG JHQHUDO KXVEDQGU\
SUDFWLFHV OHDGV WR HYHU ODUJHU QXPEHUV RI DQLPDOV
EHLQJ VXEMHFWHG WR HQRUPRXV DQG LUUHVSRQVLEOH
SHUIRUPDQFHDQGUHDULQJVWUHVV
,UUHVSHFWLYH RI WKH DQLPDO SURWHFWLRQ DVSHFW WKH
FRQFHSW RI ´ELRVHFXULW\µ LQ OLYHVWRFN SURGXFWLRQ FDQ
EHFRQVLGHUHGDIDLOXUH7KLVLVEHFDXVHWKHDWWHPSWWR
WUHDWORZLPPXQLW\DQGWKHLQFUHDVLQJWKUHDWRILQIHFWLRQ
E\DQHYHULQFUHDVLQJXVHRIGUXJVDQGGLVLQIHFWDQWV
JLYHV ULVH WR UHVLVWDQFH SUREOHPV WKH LQHYLWDEOH
VHOHFWLRQRIGDQJHURXVPLFUREHVDQGDODUPLQJOHYHOV
RIUHVLGXHVLQZDWHUVRLOIRRGDQGDQLPDOIHHG
$VXVWDLQDEOHDSSURDFKUHTXLUHVDGUDVWLFUHGXFWLRQRI
LQGXVWULDODQLPDOIHHGSURGXFWLRQDQGDFRQFRPLWDQW
GHFOLQHLQWKHSURGXFWLRQRIDQLPDOSURGXFWV,QVWHDG
RI UHSODFLQJ WKH SURGXFWLRQ RI KXPDQ IRRG E\
DQLPDO IHHG DQLPDO DQG FURS SURGXFWLRQ VKRXOG EH
UHLQWHJUDWHGLQRUGHUWR
‡ 8VHWKHQXWULHQWVFRQWDLQHGLQJUDVVDQGKDUYHVWLQJ
UHVLGXHV DV DQLPDO IHHG WKDW FDQQRW EH GLUHFWO\
XVHGIRUKXPDQFRQVXPSWLRQDQG
‡ 8VH PDQXUH DV IHUWLOL]HU RQ JUDVVODQGV DQG
FURSODQGV
7KLV UHTXLUHV D PRYH IURP WKH H[LVWLQJ RQHVLGHG
RULHQWDWLRQ DQG VHOHFWLRQ DLPHG DW PD[LPXP
SHUIRUPDQFH RI ERWK FURSV DQG OLYHVWRFN WRZDUGV D
PRUHKROLVWLFYLHZWKDWSURPRWHVLQWHUDFWLRQVDQGWKH
SURGXFWLYLW\ RI WKH V\VWHP DV D ZKROH )XUWKHUPRUH
LW LV LPSHUDWLYH WR UHGXFH WKH HQYLURQPHQWDO KHDOWK
DQG FOLPDWHUHODWHG LPSDFWV IURP WKH PDVVLYH XVH
RIV\QWKHWLFQLWURJHQIHUWLOL]HUVDQGSURPRWHWKHXVH
RI DQLPDO H[FUHPHQW DV QDWXUDO IHUWLOL]HU 'LVFDUGLQJ
WKHODWWHUDQGGHÀQLQJLWDVZDVWHFRQVWLWXWHVDKXJH
ORVVRIQXWULHQWVDQGPLQHUDOVVLPLODUWRSRVWKDUYHVW
ORVVHVRIIRRG
7KH VXVWDLQDEOH SURGXFWLRQ RI IRRG RI DQLPDO RULJLQ
UHTXLUHV WKH GHYHORSPHQW RI FRRSHUDWLRQ RQ D
UHJLRQDOOHYHODVZHOODVFRRSHUDWLRQEHWZHHQVPDOO
DQG PHGLXPVL]HG IDUPV DQG SDVWRUDOLVWV 7KHUH
LV D VLJQLÀFDQW XQWDSSHG SRWHQWLDO IRU VXVWDLQDEOH
JUDVVODQG DQG UXPLQDQW PDQDJHPHQW LQFOXGLQJ
WKHLU XVH E\ SDVWRUDOLVWV 7KH LPSRUWDQFH RI ZRUNLQJ
DQLPDOV KDV DOVR EHHQ XQGHUHVWLPDWHG <HW WKH\ DUH
SDUWLFXODUO\ XVHIXO LQ WKH FRQWH[W RI SHDN RLO ZKLFK
OHDGVWRKLJKHUFRVWVRIPHFKDQL]DWLRQ+RZHYHUWKHLU
HIIHFWLYHXWLOL]DWLRQQHHGVWREHRSWLPL]HGDWWKHORFDO
OHYHOLQSDUWLFXODUDVUHJDUGVIHHGVHOHFWLRQULJKWRI
SDVVDJH DQG WKH IXQFWLRQDOLW\ RI PRVWO\ LQDGHTXDWH
HTXLSPHQW
$(IIHFWVRILQH[SHQVLYHHQHUJ\DQG
QLWURJHQIHUWLOL]HUV
7KH DYDLODELOLW\ RI FKHDS IRVVLO IXHO KDV GULYHQ WKH
H[SDQVLRQRIDQLPDOIRRGSURGXFWLRQLHWKHPDVWRI
FDWWOH SLJV DQG FKLFNHQV DV ZHOO DV WKH SURGXFWLRQ
RIPLONDQGHJJVVHHWKHFRPPHQWVRI5XQGJUHQLQ
FKDSWHUDQG+HLQEHUJLQFKDSWHURIWKLV5HYLHZ
7KLV FRQFHUQV WKH SURGXFWLRQ SURFHVVLQJ DQG
WUDQVSRUWDWLRQ RI DQLPDO SURGXFWV DV ZHOO DV SODQW
DQG HTXLSPHQW 7KH HFRORJLFDO FOLPDWLF DQG VRFLR
HFRQRPLF SUREOHPV UHVXOWLQJ IURP LQWHQVLYH DQLPDO
KXVEDQGU\ DQG WKH UHODWHG DQLPDO ZHOIDUH YLRODWLRQV
DQDO\VHG LQ WKLV DUWLFOH DUH ODUJHO\ WKH UHVXOW RI WKH
DPSOHDYDLODELOLW\RILQH[SHQVLYHHQHUJ\
(QHUJ\IRUWKHSURGXFWLRQRIFKHDSV\QWKHWLFQLWURJHQ
IHUWLOL]HULVWKHPDLQFRQWULEXWLQJIDFWRULQWKHH[SDQVLRQ
DQG LQWHQVLÀFDWLRQ RI DQLPDO SURGXFWLRQ +LJKHU
QLWURJHQIHUWLOL]HUXVHEHFRPHVWKHOHDGLQJGULYHURIWKH
75$'($1'(19,5210(175(9,(:
LQFUHDVHVLQDJULFXOWXUDOSURGXFWLRQLQJHQHUDO,WVXVH
KDVLQFUHDVHGHLJKWIROGLQWKHSDVW\HDUVÀJXUH
ZKLOHJOREDOFHUHDOSURGXFWLRQKDVVFDUFHO\GRXEOHG
7KHVWLOOLQFUHDVLQJDPRXQWRIV\QWKHWLF1IHUWLOL]HUXVH
LVQRWRQO\RXWRIVFDOHEXWLVFRPSHQVDEOHE\RUJDQLF
PHWKRGVDVDQLPDOIHUWLOL]HUDQGFRPSRVWDVZHOODV
OHJXPHVLQFURSURWDWLRQ7KHLQFUHDVHLQV\QWKHWLF1
IHUWLOL]HUXVHWKURXJKLWVGLUHFWDQGLQGLUHFWHIIHFWVLV
UHVSRQVLEOHIRUWKHELJJHVWFRQWULEXWLRQRIDJULFXOWXUH
WR FOLPDWH FKDQJH ,Q WKH SURGXFWLRQ RI V\QWKHWLF
QLWURJHQIHUWLOL]HUWKURXJKWKH+DEHU%RVFKSURFHVV
VRPHWRQVRIFDUERQGLR[LGH&2DUHUHOHDVHGSHU
WRQRIDPPRQLD+HOOHEUDQGDQG6FKRO]DQG
²SHUFHQWRIWKHQLWURJHQIHUWLOL]HUDSSOLHGWRWKHVRLO
LVUHOHDVHGDVQLWURXVR[LGH12ZKLFKKDVDJOREDO
ZDUPLQJSRWHQWLDOWLPHVKLJKHUWKDQWKDWRI&2
6RPHDPPRQLD1+LVDOVRUHOHDVHG6XWWRQHWDO
VHHEHORZ
2YHU WKH SDVW IHZ \HDUV OLYHVWRFN V\VWHPV KDYH
EHHQLGHQWLÀHGDVWKHPDLQFRQWULEXWRUWRDJULFXOWXUDO
*+* HPLVVLRQV 2QH FULWLFDO DVSHFW LV WKH LQFUHDVH
LQ WKH WRWDO QXPEHU RI OLYHVWRFN +RZHYHU WKH H[WHQW
RI *+*V HPLWWHG GHSHQGV RQ WKH JLYHQ DJULFXOWXUDO
V\VWHP7KHV\VWHPERXQGDULHVDUHNH\GHWHUPLQDQWV
RI WKH UHVXOWLQJ GDWD FRQFHUQLQJ WKH *+* EDODQFH
7KHUHIRUH WUDQVSDUHQF\ UHJDUGLQJ WKHVH V\VWHP
ERXQGDULHV LV D QHFHVVDU\ FRQGLWLRQ IRU FRPSDULQJ
WKHUHVXOWVRIGLIIHUHQWVWXGLHV6LQFHWKHVHERXQGDULHV
DUHRIWHQHLWKHUQRWFOHDUO\GHÀQHGRUVHWLQDGHTXDWHO\
PRVWRIWKHDYDLODEOHVWXGLHVDUHRIOLPLWHGDQDO\WLFDO
YDOXHDQGDUHKDUGO\FRPSDUDEOH
$VPRQRFXOWXUHVIRUDQLPDOIHHGFRYHUDOPRVWSHU
FHQWRIWKHJOREDOFURSODQGDQGDQLPDOIHHGDEVRUEV
YLUWXDOO\ KDOI RI JOREDO FHUHDO SURGXFWLRQ OLYHVWRFN LV
WKH PDLQ GULYHU RI FOLPDWH FKDQJH IURP DJULFXOWXUH
,Q RWKHU ZRUGV WKH VXVWDLQDELOLW\ RU LQWHQVLW\ RI
IHHGLQJV\VWHPVLVNH\WRWKH*+*EDODQFHRIJLYHQ
DJULFXOWXUDO V\VWHPV 6FKXO]H HW DO 6FKXO]H
HW DO EHOLHYH WKDW WKH GDPDJH FDXVHG E\ 12 DV
FDOFXODWHGE\WKH,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH
&KDQJH ,3&& LV DQ XQGHUHVWLPDWLRQ DQG VXJJHVW
GRXEOLQJWKHGDPDJHIDFWRUDWWKHYHU\OHDVW
7KH KLJK HQHUJ\ DQG IHUWLOL]HU LQSXWV LQ LQWHQVLYH
OLYHVWRFNSURGXFWLRQKDYHWKHIROORZLQJLPSDFWVDSDUW
IURPWKHGLUHFWDQGLQGLUHFWLPSDFWVRQFOLPDWH
‡ 7KH HFRQRPLHV RI VFDOH DVVRFLDWHG ZLWK WKH QRQ
LQWHUQDOL]DWLRQ RI HFRORJLFDO VRFLDO KHDOWK DQG
FOLPDWH FRVWV DOORZ FKHDS PDVV SURGXFWLRQ RI
DQLPDOIHHGEDVHGRQPRQRFURSSLQJZLWKRXWFURS
URWDWLRQ
‡ 7KH ZRUOGZLGH DYDLODELOLW\ RI LQH[SHQVLYH
FRQFHQWUDWH IHHG DOORZV WKH UDPSDQW H[SDQVLRQ
RI WKH QXPEHU RI DQLPDOV LQGHSHQGHQW IURP WKH
ORFDOO\DYDLODEOHDQLPDOIHHGVXSSO\
‡ 6\QWKHWLF IHUWLOL]HUV DQG SHVWLFLGHV VXEVWLWXWH IRU
FURS URWDWLRQ LQFOXGLQJ WKH JUHHQ IHUWLOL]HUV DQG
OHJXPHV UHTXLUHG IRU QLWURJHQ HQULFKPHQW RI WKH
)LJXUH:RUOGIHUWLOL]HUFRQVXPSWLRQ²
10 9All fertilizers (1961=31.2 Mt)
Ratio (1961=1)
876Nitrogenous fertilizers (1961=11.6 Mt)
5432-
6RXUFH 5R\DO6RFLHW\FLWLQJ)$2)HUWLOL]HU
2010 -
2000 -
1990 -
1980 -
1970 -
1960 -
1-
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
VRLO$VDUHVXOWWKHIDUP·VLQWHUQDOVXSSO\RIDQLPDO
IHHGLVGUDVWLFDOO\UHGXFHG
:LWK PRXQWLQJ QXPEHUV RI OLYHVWRFN WKH YROXPH RI
DQLPDOH[FUHPHQWVIDHFHVDQGXULQHGUDVWLFDOO\VRDUV
0RVWRIWKHSURWHLQVIHGWROLYHVWRFNLQWKH(8RULJLQDWH
IURPFRXQWULHVLQ6RXWK$PHULFDEXWWKHH[FUHPHQWV
DUH SURGXFHG LQ (XURSHDQ FRXQWULHV $W WKH VDPH
WLPH KRZHYHU H[FUHPHQWV ORVH WKHLU LPSRUWDQFH DV
QDWXUDO IHUWLOL]HUV EHFDXVH RI WKH KLJK XVH RI PLQHUDO
IHUWLOL]HUV RQ WKH ÀHOGV )RU GHFDGHV UHVHDUFK KDV
EHHQ IRFXVLQJ RQ KRZ WR XVH V\QWKHWLF QLWURJHQ
IHUWLOL]HUVPRUHHIÀFLHQWO\'XHWRWKHFRQWDPLQDWLRQRI
WKH H[FUHPHQWV ZLWK DQLPDODGPLQLVWHUHG GUXJV DQG
GLVLQIHFWDQWV WKH\ SRVH D KXJH GLVSRVDO SUREOHP
$V H[FUHPHQWV DUH XVHG OHVV DQG OHVV DV QDWXUDO
IHUWLOL]HUVUHODWHGVNLOOVGLPLQLVKDQGUHVHDUFKRQWKLV
VXEMHFWLVQRORQJHUGRQH$FRPPRQZD\RIJHWWLQJ
ULG RI VOXUU\ LV WR GXPS LW RQ SDVWXUH ODQGV ² RIWHQ
DVDNLQGRIZDVWHGLVSRVDO²ZKLFKJUHDWO\UHGXFHV
SDVWXUHTXDOLW\
%R[.H\ÀQGLQJVRIWKH(XURSHDQ1LWURJHQ$VVHVVPHQW
7KH(XURSHDQ1LWURJHQ$VVHVVPHQW(1$LPSOHPHQWHGLQWKHWK(85HVHDUFK)UDPHZRUN3URJUDPPHIRFXVHVRQ
WKHLPSOLFDWLRQVRIWKHPRXQWLQJXVHRIQLWURJHQIHUWLOL]HUVLQDJULFXOWXUH6XWWRQHWDO7KHDXWKRUVRIWKH$VVHVV
PHQWUHYLHZHGWKHGLUHFWFRQQHFWLRQEHWZHHQLQH[SHQVLYHHQHUJ\DQGWKHSURGXFWLRQRIV\QWKHWLFQLWURJHQIHUWLOL]HU7KH
$VVHVVPHQWUHFRPPHQGVPRUHUHVHDUFKRQWKHLQWHUSOD\EHWZHHQWKHFDUERQDQGQLWURJHQF\FOHVDQGWKHLULPSDFWRQ
VRLOIHUWLOLW\FOLPDWHDQGWKHHFRV\VWHP
,QWKHWHFKQLFDOVXPPDU\RIWKH$VVHVVPHQW6XWWRQDQG%LOOHQ;;;9HPSKDVL]HWKDW´WKHGHOLEHUDWHSURGXFWLRQ
DQGUHOHDVHRI1U>UHDFWLYHQLWURJHQ@LQWKH+DEHU%RVFKSURFHVVFDQEHFRQVLGHUHGDVSHUKDSVWKHJUHDWHVWVLQJOH
H[SHULPHQWLQJOREDOJHRHQJLQHHULQJWKDWKXPDQVKDYHHYHUPDGH«:KDWZDVQRWDQWLFLSDWHGZDVWKDWWKLVH[SHUL
PHQWZRXOGOHDGWRD¶QLWURJHQLQKHULWDQFH·RIXQLQWHQGHGFRQVHTXHQFHVZLWK1UOHDNLQJLQWRWKHHQYLURQPHQWLQPXOWLSOH
IRUPVFDXVLQJDQHYHQODUJHUQXPEHURIHQYLURQPHQWDOHIIHFWVµ
7KH$VVHVVPHQWIRFXVHVRQ´ÀYHNH\VRFLHWDOWKUHDWVµIURPH[FHVVQLWURJHQXVHLQWHUPVRILWVLPSDFWRQZDWHUTXDOLW\
DLUTXDOLW\JUHHQKRXVHEDODQFHHFRV\VWHPVDQGELRGLYHUVLW\7KHDXWKRUVVWDWHWKDW´WKHXQGHUVWDQGLQJRI1F\FOLQJKDV
XQGHUJRQHDSDUDGLJPVKLIWVLQFH8QWLOWKHQWKHSHUFHSWLRQZDVWKDW1UPLQHUDOL]DWLRQLVWKHOLPLWLQJVWHS
LQ1F\FOLQJSODQWVRQO\WDNHXSLQRUJDQLF1UDQGSODQWVFRPSHWHSRRUO\IRU1UDJDLQVWPLFUREHVDQGXVH
RQO\WKH1UZKLFKLV¶OHIWRYHU·E\PLFUREHV6LQFHWKHQVWXGLHVKDYHVKRZQWKDWSODQWVFRPSHWHHIIHFWLYHO\IRU1UZLWK
PLFURRUJDQLVPVDQGWDNHXSRUJDQLF1LQDEURDGUDQJHRIHFRV\VWHPVµ6XWWRQDQG%LOOHQ;;;9,,7KHDXWKRUV
DOVRSRLQWRXWWKDWWLOOWKHLPSUHVVLRQWKDWSODQWVRQO\WDNHXSLQRUJDQLF1UGHPRQVWUDWHVKRZLQGXVWULDOL]DWLRQRI
DJULFXOWXUHKDVLQÁXHQFHGUHVHDUFKDQGH[WHQVLRQVHUYLFHVLQDRQHVLGHGZD\DQGKDVHURGHGWKHLPSRUWDQFHRIUHODWHG
ORFDOIDUPLQJNQRZOHGJH
7KHDXWKRUVKLJKOLJKWKRZOLWWOHWKDW´SDUDGLJPVKLIWµKDVEHHQWDNHQLQWRDFFRXQWLQDGYLVRU\DQGFRXQVHOOLQJVHUYLFHV
7KH\QRWH´,QFHUHDOIDUPLQJWKHXVHRIRQO\PLQHUDO1UIHUWLOL]HUVLQVWHDGRIDQLPDOPDQXUHVRUFRPSRVWVDVZHOODV
WKHVLPSOLÀFDWLRQRIWKHFURSURWDWLRQVFKHPHWKDWWKLVKDGPDGHSRVVLEOHKDVLQVRPHFDVHVUHVXOWHGLQDGHFOLQHRI
VRLORUJDQLFPDWWHU,QWKHORQJWHUPWKLVSUDFWLFHRIXVLQJRQO\PLQHUDOIHUWLOL]HUKDVGHFUHDVHGWKHEXIIHUFDSDFLW\RIWKH
VRLOWRZDUGVLQRUJDQLF1LQSXWVWKXVLQFUHDVLQJLWVSURSHQVLW\WR1OHDFKLQJµ7KH\DGGWKDW´QLWURJHQHQULFKHGWHUUHVWLDO
HFRV\VWHPVORVHVLJQLÀFDQWDPRXQWVRI1YLDQLWUDWHOHDFKLQJDQGJDVHRXVHPLVVLRQV112121+WRWKHHQYLURQ
PHQW(VWLPDWHVRIGHQLWULÀFDWLRQWR1UHPDLQKLJKO\XQFHUWDLQGXHWRGLIÀFXOWLHVLQPHDVXUHPHQWDQGDKLJKGHJUHHRI
WHPSRUDODQGVSDWLDOYDULDELOLW\7KHUHUHPDLQVXEVWDQWLDOXQFHUWDLQWLHVLQWKHDYHUDJHIUDFWLRQRI1UDSSOLHGWRÀHOGVWKDW
LVHPLWWHGDV12UDQJLQJIURPWRRIIHUWLOL]HU1DSSOLHGXVLQJERWWRPXSDQGWRSGRZQHVWLPDWHVUHVSHF
WLYHO\µ$QGUHJDUGLQJDPPRQLDFWKHDXWKRUVFRQFOXGH´)XUWKHUUHVHDUFKLVQHHGHGWREHWWHUXQGHUVWDQGWKHUHODWLYH
FRQWULEXWLRQRIGLUHFWDQGLQGLUHFW12HPLVVLRQVµ6XWWRQDQG%LOOHQ;;;9,,,
+RZ LQHIIHFWLYH HQIRUFHPHQW DQG LPSOHPHQWDWLRQRIH[LVWLQJQLWURJHQDQG UHODWHG(8GLUHFWLYHVDKDYHEHHQEHFRPHV
DSSDUHQWLQWKHDXWKRUV·VXPPDU\´(XURSH(8LVDKRWVSRWLQWKLVVHQVHSURGXFLQJRIJOREDODQWKURSRJHQLF
1UHYHQWKRXJKLWVVXUIDFHFRYHUVOHVVWKDQRIWKHWRWDOZRUOGFRQWLQHQWDODUHDµ6XWWRQDQG%LOOHQ;;;97KH
DXWKRUVDOVRFULWLFL]HWKHORZSURFXUHPHQWFRVWV´WKHORZSULFHRI1UIHUWLOLVHUFRPELQHGZLWKLWVFOHDUEHQHÀWVWR
DJULFXOWXUDOSURGXFWLRQGRHVQRWSURYLGHDVWURQJLQFHQWLYHIRUIDUPHUVWRXVHOHVVWKDQWKHSULYDWHHFRQRPLFRSWLPXPµ
6XWWRQDQG%LOOHQ;;;9,
6RXUFH6XWWRQHWDO
1RWH D )RU LQVWDQFH 1LWUDWHV 'LUHFWLYH :DWHU )UDPHZRUN 'LUHFWLYH *URXQGZDWHU 'LUHFWLYH $PELHQW $LU 4XDOLW\
'LUHFWLYH 1DWLRQDO (PLVVLRQV &HLOLQJV 'LUHFWLYH 8UEDQ :DVWH :DWHU 7UHDWPHQW 'LUHFWLYH 0DULQH 6WUDWHJ\
)UDPHZRUN'LUHFWLYH,QWHJUDWHG3ROOXWLRQDQG&RQWURO,33&DQG+DELWDWV'LUHFWLYH
75$'($1'(19,5210(175(9,(:
7KURXJK HFRQRPLHV RI VFDOH IDUPV ZKHUH OLYHVWRFN
SURGXFWLRQLVVWLOOEDVHGRQIDUPJHQHUDWHGIHHGFRPH
XQGHULQFUHDVLQJHFRQRPLFSUHVVXUH,QGXVWULDOPHJD
IDUPVRUIDUPVWKDWDUHPXFKODUJHUWKDQWKHUHJLRQDO
DYHUDJHGULYHWKLVWUHQGVHHDOVRWKHFRPPHQWDU\RI
2VWHQGRUIILQWKLVFKDSWHU
%6XVWDLQDELOLW\UHTXLUHVDQHZGHÀQLWLRQ
RIWKHWHUPVSURGXFWLYLW\DQGJURZWK
7KH FRQYHQWLRQDO DSSURDFK WR DJULFXOWXUDO JURZWK
DLPVDWLQFUHDVLQJFURS\LHOGVSHUKHFWDUHWDNLQJLQWR
DFFRXQWWKHFRVWVRISURFXUHGLQSXWVVXFKDVHQHUJ\
IHUWLOL]HUSHVWLFLGHVDQGODERXU7KLVFDOFXODWLRQIDLOVWR
FRQVLGHUQRWRQO\WKHH[WHUQDOL]HGFRVWVGDPDJHWR
VRLO ZDWHU ERGLHV DQG DLU SROOXWLRQ WKURXJK UHVLGXHV
DQGFRQWDPLQDWLRQDVZHOODVWKHVRFLDOLPSOLFDWLRQV
EXWDOVRWKHGHFOLQHLQVRLOIHUWLOLW\WKURXJKVRLOHURVLRQ
FRPSDFWLRQDQGQLWULÀFDWLRQ²DGHYHORSPHQWWKDWKDV
QRW\HWEHHQIXOO\DSSUHFLDWHGEHFDXVHRIWKHDPSOH
DYDLODELOLW\RIFKHDSV\QWKHWLFIHUWLOL]HUV7URHK+REEV
DQG 'RQDKXH )RU H[DPSOH IDUPHUV LQ WKH
8QLWHG6WDWHVDSSO\IHUWLOL]HUVZRUWKDERXWELOOLRQ
DQQXDOO\WRRIIVHWWKHHIIHFWVRIVRLOQXWULHQWORVVGXHWR
VRLOHURVLRQ7URHKHWDO
7KHUHLVDGHSORUDEOHSUREOHPRISHUFHSWLRQEHFDXVH
HIIRUWVWRVWUHQJWKHQLQWHQVLYHDJULFXOWXUDOSURGXFWLRQ
DQG LQFUHDVH \LHOGV WKURXJK HQKDQFHG XVH RI
V\QWKHWLF IHUWLOL]HUV JLYH WKH ZURQJ LPSUHVVLRQ WKDW
WKH SURGXFWLRQ RI DQLPDO IHHG LV QRW LQ FRPSHWLWLRQ
ZLWK IRRG SURGXFWLRQ 7KH QHJDWLYH LPSDFWV RI WKH
HQKDQFHG XVH RI V\QWKHWLF QLWURJHQ IHUWLOL]HUV DUH
QRW WDNHQ LQWR DFFRXQW DQG UHODWHG FRVWV UHPDLQ
H[WHUQDOL]HG $FFRUGLQJ WR WKH (XURSHDQ 1LWURJHQ
$VVHVVPHQW 6XWWRQ HW DO WKH WRWDO FRVWV RI
QLWURJHQSROOXWLRQRIZDWHUWKHDWPRVSKHUHDQGRWKHU
LPSDFWV RQ HFRV\VWHPV DQG FOLPDWH FKDQJH DUH
HVWLPDWHGWREHEHWZHHQĄELOOLRQDQGĄELOOLRQ
SHUDQQXPLHĄ²ĄSHUSHUVRQSHU\HDUZKLFK
LVPRUHWKDQWZLFHWKHPRQHWDU\EHQHÀWVGHULYHGIURP
QLWURJHQLQDJULFXOWXUH
%HWZHHQDQGWKHQXPEHURIDQLPDOVUHDUHG
IRU PHDW DQG GDLU\ SURGXFWLRQ LQFUHDVHG UDSLGO\
$FFRUGLQJWRWKH)$2)$267$7LQDWRWDO
DPRXQWRIELOOLRQKHDGVRIFDWWOHDQGEXIIDORZHUH
UHDUHGJOREDOO\²WKHQXPEHUGRXEOHGGXULQJWKHODVW
\HDUV'XULQJWKHVDPHSHULRGWKHQXPEHURISLJV
PRUH WKDQ GRXEOHG IURP PLOOLRQ WR PLOOLRQ
7KHQXPEHURIFKLFNHQVJUHZWKHPRVWGUDPDWLFDOO\
DOPRVW ÀYHIROG IURP ELOOLRQ WR ELOOLRQ 6LQFH
QRW RQO\ WKH QXPEHU RI DQLPDOV LQFUHDVHG EXW DOVR
WKHDYHUDJHZHLJKWSHUDQLPDOPHDWSURGXFWLRQURVH
DW DQ HYHQ IDVWHU UDWH EHHI SURGXFWLRQ PRUH WKDQ
GRXEOHGWRELOOLRQWRQVLQSRUNSURGXFWLRQ
TXDGUXSOHG WR ELOOLRQ WRQV DQG FKLFNHQ PHDW
SURGXFWLRQLQFUHDVHGWHQIROGWRELOOLRQWRQV7KLV
UDSLGH[SDQVLRQRIJOREDOPHDWSURGXFWLRQZDVRQO\
SRVVLEOH EHFDXVH WKH IHHG VXSSO\ IRU WKH DQLPDOV
LQFUHDVHG DW D VLPLODUO\ GUDPDWLF UDWH 7KH (8 LV D
SULPHH[DPSOHLQWKLVUHVSHFW,WVLPSRUWVRIVR\EHDQ
FDNH ² D FUXFLDO VRXUFH RI SURWHLQ LQ LQWHQVLYH DQG
LQGXVWULDO DQLPDO SURGXFWLRQ ² URVH WHQIROG EHWZHHQ
DQGDQGQRZVWDQGVDWDOPRVWELOOLRQ
WRQVSHU\HDUÀJXUH7KHIRFXVRQFDNHLVEHFDXVH
)LJXUH(8LPSRUWVRIVR\EHDQFDNHDQGVR\EHDQV²WR²PLOOLRQVRIWRQV
40 000-
Soybeans (cake weight)
30 00020 000Cake of soy
6RXUFH$XWKRUV·FDOFXODWLRQVEDVHGRQ)$267$7
2006-2008 -
2001-2005 -
1996-2000 -
1991-1995 -
1986-1990 -
1981-1985 -
1976-1980 -
1961-1965 -
0-
1971-1975 -
10 0001966-1970 -
Millions of tons
50 000-
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
)LJXUH$UHDXQGHUVR\FXOWLYDWLRQVHOHFWHGFRXQWULHV²PLOOLRQVRIKHFWDUHV
0LOOLRQVRIKHFWDUHV
86$
% UD]LO
$ UJHQWLQD
,QGLD
& KLQD
3 DUDJXD\
& DQDGD
6RXUFH$XWKRUV·FDOFXODWLRQVEDVHGRQ)$267$7
RQO\WKLVLVXVHGDVDQLPDOIHHGZKLOHVR\EHDQRLOLV
XVHG IRU KXPDQ FRQVXPSWLRQ LQGXVWULDO DQG HQHUJ\
XVH
&7KHUROHRIDJULFXOWXUDODQGWUDGH
SROLF\LQWKHLQGXVWULDOL]DWLRQRIDQLPDO
SURGXFWLRQ
$Q LPSRUWDQW GULYHU RI WKLV GHYHORSPHQW KDV EHHQ
WKH (8·V &RPPRQ $JULFXOWXUDO 3ROLF\ &$3 DQG
LWV OLQN WR WUDGH SROLF\ 8QWLO WKH HDUO\ V WKH (8
JXDUDQWHHGSULFHVIRUOLYHVWRFNSURGXFWV²HVSHFLDOO\
EHHI DQG GDLU\ SURGXFWV ² WKDW ZHUH VLJQLÀFDQWO\
KLJKHU WKDQ ZRUOG PDUNHW SULFHV 7KLV SURYLGHG DQ
HIIHFWLYH LQFHQWLYH IRU (XURSHDQ IDUPHUV WR LQFUHDVH
SURGXFWLRQ $W WKH VDPH WLPH WKH &$3 LQWHUYHQHG
LQ WKH PDUNHWV IRU IHHGVWRFN :KLOH KLJK SULFHV IRU
FHUHDOV LQ WKH (8 ZHUH DOVR JXDUDQWHHG WKHUH ZDV
QRVXSSRUWIRURLOVHHGVDQGWKHLUSURGXFWV²RLOVDQG
FDNHV 7KLV VLWXDWLRQ LV DOVR UHÁHFWHG LQ WKH (8·V
DJULFXOWXUDOWUDGHSROLF\ZKLOHOLYHVWRFNSURGXFWVDQG
FHUHDOVZHUHDQGJHQHUDOO\VWLOODUHSURWHFWHGE\KLJK
WDULIIVRLOVHHGVDQGWKHLUSURGXFWVKDYHH[SHULHQFHG
QR RU RQO\ YHU\ ORZ WDULIIV 7KHVH WDULIIV ZHUH À[HG
PXOWLODWHUDOO\LQWKH*HQHUDO$JUHHPHQWRQ7DULIIVDQG
7UDGH *$77 WKH SUHGHFHVVRU RI WKH :RUOG 7UDGH
2UJDQL]DWLRQ:72
,Q WKH V WKH (8 DWWHPSWHG UHODWLYHO\
VXFFHVVIXOO\WRVXSSRUWRLOVHHGSURGXFWLRQZLWKRWKHU
SROLF\ LQVWUXPHQWV VXFK DV SURGXFWLRQ SUHPLXPV
+RZHYHUWKHVHZHUHIRXQGWRUXQFRXQWHUWRLWV*$77
FRPPLWPHQWV :LWK WKH VKLIW IURP SULFH VXSSRUW WR
SD\PHQWV EDVHG RQ WKH DUHD SODQWHG ZLWK FHUWDLQ
FURSV VRPH VXSSRUW IRU RLOVHHG SURGXFWLRQ FRXOG
EHSURYLGHG+RZHYHUWKH%ODLU+RXVH$JUHHPHQWD
ELODWHUDODJUHHPHQWEHWZHHQWKH(XURSHDQ&RPPXQLW\
DQG WKH 8QLWHG 6WDWHV ZKLFK SDYHG WKH ZD\ IRU WKH
:72 $JUHHPHQW RQ $JULFXOWXUH SODFHG D OLPLW RQ
WKH DUHD SODQWHG ZLWK RLOVHHGV LQ WKH (8 WKDW FRXOG
EHQHÀWIURPSD\PHQWV$VDUHVXOWWKH(8·VLPSRUWV
RIVR\EHDQVDQGVR\EHDQFDNHZKLFKKDGUHPDLQHG
DW URXJKO\ D FRQVWDQW OHYHO LQ WKH V VWDUWHG WR
LQFUHDVH LQ WKH V 7KH %6( FULVLV LQ ²
JDYHDQDGGLWLRQDOERRVWWR(8VR\LPSRUWV,QWKHVH
\HDUV DORQH WKH (8·V VR\ LPSRUWV MXPSHG IURP
PLOOLRQ WRQV WR PLOOLRQ WRQV )$267$7 DQG
DXWKRUV·FDOFXODWLRQV
7KH (8·V ULVLQJ LPSRUW GHPDQG ZDV PDLQO\ PHW E\
6RXWK$PHULFDHVSHFLDOO\$UJHQWLQDDQG%UD]LOZKHUH
WKHDUHDSODQWHGZLWKVR\URVHIURPMXVWRYHUPLOOLRQ
KD LQ ERWK FRXQWULHV FRPELQHG LQ WR RYHU PLOOLRQKDLQÀJXUH7KLVWULJJHUHGWKHPDVVLYH
GHIRUHVWDWLRQ RI WKH WURSLFDO UDLQIRUHVWV LQ %UD]LO DQG
WKH FRQYHUVLRQ RI JUDVVODQGV FHUUDGR LQ %UD]LO DQG
SDPSDVLQ$UJHQWLQDWRFURSODQG
,W LV HVWLPDWHG WKDW WKH ODQGXVH FKDQJHV GLUHFWO\
UHODWHGWRWKHH[SDQGHGVR\SURGXFWLRQLQ$UJHQWLQD
%UD]LO DQG 3DUDJXD\ ZHUH UHVSRQVLEOH IRU RQ
DYHUDJH RYHU PLOOLRQ WRQV RI &2HTXLYDOHQW
&2HHPLVVLRQVDQQXDOO\EHWZHHQDQG
5HLFKHUW DQG 5HLFKDUGW 7KLV DPRXQWV WR
DERXW SHU FHQW RI WKH WRWDO *+* HPLVVLRQV RI
WKHVHFRXQWULHV
7KHUDSLGH[SDQVLRQRIIHHGLQSDUWLFXODUHQDEOHGWKH
(8 QRW RQO\ WR PHHW LWV ULVLQJ GHPDQG IRU PHDW DQG
GDLU\SURGXFWVEXWDOVRWREHFRPHDQHWH[SRUWHURI
EHHIGDLU\SURGXFWVDQGSRUN6LQFHWKHJXDUDQWHHG
GRPHVWLF SULFHV ZHUH XVXDOO\ VLJQLÀFDQWO\ KLJKHU
WKDQZRUOGPDUNHWSULFHVH[SRUWVZHUHRQO\SRVVLEOH
WKURXJK ´UHIXQGVµ IRU H[SRUWHUV ZKLFK FRYHUHG WKH
GLIIHUHQFH EHWZHHQ WKH LQWHUQDO DQG H[WHUQDO SULFHV
7KHVH ´H[SRUW VXEVLGLHVµ WXUQHG RXW WR EH D PDMRU
LVVXHRIFRQÁLFWLQLQWHUQDWLRQDOWUDGH7KHVLJQLÀFDQW
(XURSHDQ H[SRUWV RI DQLPDO SURGXFWV DV ZHOO DV
ZKHDW DQG VXJDU JDYH WKH ZURQJ LPSUHVVLRQ WKDW
WKH (8 ZDV SURGXFLQJ RYHUDOO DJULFXOWXUDO VXUSOXVHV
7KH IDFW WKDW WKLV ZDV RQO\ SRVVLEOH EHFDXVH RI WKH
HYHULQFUHDVLQJ LPSRUWV RI DQLPDO IHHG ZDV ODUJHO\
QHJOHFWHGLQWKHSXEOLFGHEDWH
&RQVHTXHQWO\ WKH UHIRUPV RI WKH &$3 LQ WKH HDUO\
V IRFXVHG RQ FXWWLQJ GRZQ VXUSOXV SURGXFWLRQ
E\UHGXFLQJJXDUDQWHHGSULFHVIRUFHUHDOVDQGEHHI
DQG LQLWLDOO\ WR D PXFK OHVVHU H[WHQW IRU PLON 7KH
LQFRPH ORVVHV ZHUH SDUWO\ FRPSHQVDWHG E\ VSHFLÀF
DUHDSD\PHQWVWRIDUPHUV2QHFRQGLWLRQIRUUHFHLYLQJ
WKRVH SD\PHQWV ZDV WKDW D FHUWDLQ SURSRUWLRQ RI
DUDEOH ODQG ZRXOG KDYH WR EH NHSW LGOH ² WKH PRVW
GLUHFWLQVWUXPHQWIRUDGGUHVVLQJWKH´RYHUSURGXFWLRQµ
SUREOHP 7KH DPRXQW RI ODQG WR EH ´VHW DVLGHµ ZDV
À[HG E\ WKH (8 RQ DQ DQQXDO EDVLV GHSHQGLQJ RQ
PDUNHWFRQGLWLRQV2QDYHUDJHLWZDVDURXQGSHU
FHQW RI WKH FURSODQG $V D UHVXOW H[SRUWV RI FHUHDOV
DQG EHHI IHOO VLJQLÀFDQWO\ DQG ZKLOH WKH (8 UHPDLQV
D QHW H[SRUWHU RI ZKHDW LW LV QRZ D QHW LPSRUWHU RI
EHHI DQG VXJDU $W WKH VDPH WLPH QHW H[SRUWV RI
SRUN PRUH WKDQ GRXEOHG IURP DURXQG WRQV
DQQXDOO\LQWKHODWHVWRDURXQGRQHPLOOLRQWRQV
DQQXDOO\ LQ UHFHQW \HDUV 7KH ÀJXUH IRU ZDV DV
KLJKDVPLOOLRQWRQV)$267$77KHH[SDQVLRQRI
SRUNSURGXFWLRQDQGH[SRUWVZDVOHVVGLUHFWO\OLQNHG
WR DJULFXOWXUDO SROLF\ LQVWUXPHQWV DQG PRUH D UHVXOW
RIWKHLQFUHDVLQJLQGXVWULDOL]DWLRQRIDQLPDOSURGXFWLRQ
GLVFXVVHGHDUOLHU
6LQFH WKH DQLPDOV DUH VHSDUDWHG IURP WKHLU QDWXUDO
HQYLURQPHQW DQG IHHG FDQ EH VRXUFHG JOREDOO\
WKH VXLWDELOLW\ RI D FHUWDLQ DUHD IRU DQLPDO DQG IHHG
SURGXFWLRQ LV OHVV LPSRUWDQW WKDQ WKH LQIUDVWUXFWXUH
IRU WUDQVSRUWLQJ DQG SURFHVVLQJ IHHG DQG DQLPDOV
7KHDQLPDOEUHHGVDQGWKHEDUQVIRULQGXVWULDODQLPDO
SURGXFWLRQKDYHDOVREHFRPHJOREDOO\VWDQGDUGL]HG
$V D UHVXOW QRUWKHUQ )UDQFH QRUWKHUQ *HUPDQ\
'HQPDUNDQGWKH1HWKHUODQGVZLWKWKHLUSUR[LPLW\WR
5RWWHUGDP DV WKH ODUJHVW SRUW IRU UHFHLYLQJ LPSRUWV
75$'($1'(19,5210(175(9,(:
RI VR\EHDQV DQG VR\EHDQ FDNH DORQJ ZLWK D ZHOO
GHYHORSHGLQIUDVWUXFWXUHDQGDPDWXUHIRRGLQGXVWU\
KDYHEHFRPHWKHPDLQSRUNDQGFKLFNHQSURGXFLQJ
UHJLRQV LQ WKH (8 7KLV KDV EHHQ SDUWO\ VXSSRUWHG
E\ &$3UHODWHG LQYHVWPHQW DVVLVWDQFH WKURXJK
VXEVLGL]HGLQWHUHVWUDWHV
,Q VXP WKH LQWHQVLW\ RI OLYHVWRFN SURGXFWLRQ LV
GHFLVLYHO\GHWHUPLQHGE\WKHLQWHQVLW\RIDQLPDOIHHG
ZKLFK LQ WXUQ LV FRUUHODWHG ZLWK WKH HQKDQFHG XVH
RI HQHUJ\ DQG V\QWKHWLF IHUWLOL]HUV IRU WKH SURGXFWLRQ
RI WKDW IHHG 7KLV LV ZK\ D FRPSDUDWLYH DQDO\VLV RI
WKH HFRORJLFDO DQG FOLPDWH EDODQFH RI OLYHVWRFN
SURGXFWLRQ UHTXLUHV GDWD RQ ZKHUH DQG KRZ WKH
DQLPDOIHHGZDVSURGXFHG,QWKLVUHJDUGWKHODQG
XVHFKDQJHVUHTXLUHGIRULQWHQVLYHDQGPRQRFXOWXUH
EDVHG IHHG SURGXFWLRQ DUH D SDUWLFXODU VRXUFH RI
FRQFHUQ ZLWK UHJDUG WR WKHLU VRFLDO HFRORJLFDO DQG
FOLPDWHLPSDFWV
7KH GHSHQGHQFH RQ IRUHLJQ IRGGHU VRXUFHV LV
RQO\ RQH RXWFRPH RI WKH IXQGDPHQWDO FKDQJH LQ
DJULFXOWXUDO OLYHVWRFN V\VWHPV $QRWKHU PDLQ GULYHU
RI LQGXVWULDO DJULFXOWXUH LV WKDW IRRG UHWDLOHUV DUH
GHPDQGLQJ LQFUHDVLQJO\ VWDQGDUGL]HG SURGXFWV LQ
WHUPVRITXDQWLWLHVVL]HVDQGIDWWHQLQJSHULRGV6LQFH
WKH V VWDQGDUGL]DWLRQ E\ DQG IRU LQGXVWULDOL]HG
PHDW DQG GDLU\ SURGXFWLRQ V\VWHPV KDV UHVXOWHG LQ
WKHUHSODFHPHQWRIZLOGDQGFXOWXUHGELRGLYHUVLW\ULFK
ODQG E\ PRQRWRQRXV ODQGVFDSHV $V D UHVXOW ZLOG
ELRGLYHUVLW\VXIIHUVDVUHÁHFWHGLQWKHGHFUHDVHLQZLOG
EHHVLQPDQ\DUHDVVXIÀFLHQWSROOLQDWRUVDUHODFNLQJ
EXWWHUÁLHV DQG KHGJHV IRU H[DPSOH 7KH ORVV RI
EUHHGVDQGWKHORZUHJXODUXWLOL]DWLRQRIWKHUHPDLQLQJ
RQHVOHDGWRWKHORVVRIWUDGLWLRQDONQRZOHGJH
7KH PDQ\ \HDUV RI 6WDWH VXSSRUW IRU SHUIRUPDQFH
WHVWLQJ DQG HVWLPDWLRQ RI EUHHGLQJ YDOXHV DLPHG
XQLTXHO\ DW DFKLHYLQJ PRUH ÀQDQFLDO \LHOG SHU XQLW
UDQFRQWUDU\WRWKHJRDOVUHODWLQJWR´JHQHWLFGLYHUVLW\µ
DVHPERGLHGLQWKH&RQYHQWLRQRQ%LRORJLFDO'LYHUVLW\
&%',2H:HWDO7KH&%'LVEDVHGXSRQWKUHH
SLOODUV WKDW UHSUHVHQW WKH DLPV RI LQWHUQDWLRQDO SROLF\
LQ IXWXUH GHYHORSPHQW L FRQVHUYDWLRQ RI ELRORJLFDO
GLYHUVLW\ LL IDLU DQG HTXLWDEOH DFFHVV DQG EHQHÀW
VKDULQJRIELRORJLFDOGLYHUVLW\DQGLLLWKHVXVWDLQDEOH
XVH RI DQLPDO DQG SODQW JHQHWLF UHVRXUFHV DQG WKHLU
KDELWDWV$VZLOGOLIHDQGZLOGSODQWVQHHGWKHLUVSHFLÀF
HQYLURQPHQWVKDELWDWV SODQWV DQG OLYHVWRFN EUHHGV
QHHGD´FXOWXUHGKDELWDWµRIZKLFKWKH\DUHDSDUWDQG
WKXV LQÁXHQFH DQG DUH LQÁXHQFHG E\ WKDW KDELWDW ,I
WKH JHQHWLF UHVRXUFHV RI DQLPDOV DQG SODQWV DUH QRW
XVHGWKH\GLVDSSHDUDVSDUWRIWKHZKROHV\VWHPDQG
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
FDQ QR ORQJHU SOD\ WKHLU SDUW LQ WKHLU V\VWHP $JUR
ELRGLYHUVLW\VKRXOGEHXVHGLQDZD\WKDWGHYHORSVLW
IXUWKHUUDWKHUWKDQEHLQJ´XQGHUXWLOL]HGµDVDWSUHVHQW
DQGWKHUHIRUHULVNLQJGLVDSSHDUDQFH
'5LVNVDVVRFLDWHGZLWKVHOHFWLYH
EUHHGLQJIRUKLJKHUSURGXFWLYLW\
$OWKRXJK VHOHFWLRQ LV DLPHG DW KLJK SHUIRUPDQFH
LQ ERWK DQLPDO DQG FURS EUHHGLQJ WKHUH LV D PDMRU
GLVWLQFWLRQEHWZHHQWKHWZR$FHUWDLQDQGLQFUHDVLQJ
SURSRUWLRQ RI FURSV VXFK DV YHJHWDEOHV DUH JURZQ
LQ JUHHQKRXVHV RU XQGHU SODVWLF IRLO IRU FRPPHUFLDO
SXUSRVHV+RZHYHUWKHYDVWPDMRULW\RIFURSVDUHVWLOO
SODQWHGLQWKHRSHQDQGDUHH[SRVHGWRWKHYDJDULHV
RI WKH ZHDWKHU XQOLNH DQLPDOV 6LQFH WKH V
DQLPDO SURGXFWLRQ E\ LQFUHDVLQJO\ UHO\LQJ RQ DQLPDO
IHHGDQGWKHLULPSRUWVV\QWKHWLFJURZWKKRUPRQHV
YLWDPLQV DPLQR DFLGV DQG PLQHUDO VXSSOHPHQWV
KDV EHFRPH OHVV GHSHQGHQW RQ ORFDWLRQ ,GHO DQG
3HWVFKRZ $ JURZLQJ QXPEHU RI FKLFNHQV
SLJVDQGLQFUHDVLQJO\FDWWOHDUHUDLVHGLQDZD\WKDW
FRPSOHWHO\ VKLHOGV WKHP IURP WKH HIIHFWV RI WKH VXQ
DQGWKHZHDWKHU
%UHHGLQJ LQFUHDVLQJO\ RYHUEXUGHQV DQLPDOV WKDW
KDYH EHHQ VHOHFWHG WR PD[LPL]H WKHLU SURGXFWLRQ
)RU H[DPSOH KHQV WKDW DUH EUHG WR PD[LPL]H HJJ
SURGXFWLRQ JHQHUDWH DERXW HJJV SHU DQQXP
FKLFNHQV VHOHFWHG IRU PHDW SURGXFWLRQ UHDFK WKHLU
VODXJKWHUZHLJKWDIWHUOHVVWKDQÀYHZHHNVRILQWHQVLYH
UDLVLQJ \RXQJ SLJV OHVV WKDQ VL[ PRQWKV ROG DUH
VODXJKWHUHGZKHQWKH\UHDFKDERXWNJDQGVRPH
FRZVDUHEUHGWRPD[LPL]HPLONSURGXFWLRQGHOLYHULQJ
RYHU OLWUHV GXULQJ RQH ODFWDWLRQ SHULRG DORQH
PRVWRIWKHPGRQRWJHWROGHUWKDQÀYH\HDUVEHFDXVH
RIWKHVHH[FHVVLYHSHUIRUPDQFHUHTXLUHPHQWV0DQ\
RIWKHVHDQLPDOVVXIIHUIURP´RFFXSDWLRQDOµGLVHDVHV
VXFK DV LQÁDPPDWLRQ RI WKH IDOORSLDQ WXEHV LQ KHQV
XGGHU LQÁDPPDWLRQ RI FRZV RU SUREOHPV ZLWK MRLQWV
LQSLJVKHQVDQGFDWWOHFDXVHGE\H[FHVVLYHO\UDSLG
ZHLJKW JDLQ VHH DOVR WKH FRPPHQWDU\ RQ DQLPDO
ZHOIDUHLVVXHVRI'·6LOYDLQWKLVFKDSWHU
7KH WHQHW WKDW ´SHUIRUPDQFH LV DQ H[SUHVVLRQ RI
JRRGKHDOWKµLVQRORQJHUYDOLG,QGHHGIRUFLQJWKHLU
HQKDQFHG SHUIRUPDQFH FDXVHV DQLPDO VWUHVV DQG
´EXUQRXWµLQSRXOWU\SLJVDQGFDWWOHIRUPDVWUHVXOWLQJ
LQDVKRUWOLIHVSDQGDLU\DQGUHTXLULQJWKHIUHTXHQW
DGPLQLVWHULQJ RI GUXJV VXFK DV DQWLELRWLFV DQG
DQDOJHVLFV ,Q DGGLWLRQ KRUPRQHV DUH EHLQJ ZLGHO\
XVHGWRRYHUFRPHIHUWLOLW\SUREOHPVRIFRZVWKDWDUH
EUHG IRU PD[LPL]LQJ PLON SURGXFWLRQ *HQHUDOO\ KLJK
H[WHUQDO LQSXW V\VWHPV DLP DW PLQLPL]LQJ WKH HQHUJ\
ORVVHVRIDQLPDOERGLHVFDXVHGE\SK\VLFDOPRYHPHQW
DQGDGDSWDWLRQWRFKDQJHVLQWHPSHUDWXUHDQGIHHG
7KLV RVWHQVLEO\ UHGXFHV WKH HQHUJ\ FRQVXPSWLRQ
RI ERG\ IXQFWLRQV DQG PD[LPL]HV WKH SURGXFWLRQ
RI DQLPDO SURGXFWV 7KHVH FRQVLVWHQWO\ UHVWULFWLYH
FRQGLWLRQV DUH D PDMRU IDFWRU WKDW FRQWULEXWHV WR WKH
EUHHGLQJ RI XQLIRUP DQLPDOV DQG WKHLU VHOHFWLRQ IRU
KLJKSHUIRUPDQFH
$VDUHVXOWWKHÁH[LEOHDGDSWLYHFDSDFLW\RIDQLPDOV
WR FKDQJLQJ DQG GLYHUJHQW SURGXFWLRQ FRQGLWLRQV
KDV EHHQ UHSODFHG E\ LQÁH[LEOH VWDWLF DQG ORFDWLRQ
VSHFLÀF EHKDYLRXU $Q H[WUHPH H[DPSOH LV WKH XVH
RI VWDQGDUGL]HG FDJHV IRU K\EULG KHQV ZKHWKHU LQ
&DOLIRUQLD +RQJ .RQJ 1RUZD\ RU 2PDQ 7KH OLJKW
DQG WHPSHUDWXUH LQ WKH VKHGV ZKHUH WKH FDJHV DUH
NHSW DORQJ ZLWK WKH FRQFHQWUDWHG IHHG DQG OLPLWHG
SK\VLFDO PRYHPHQW DUH DOO GHVLJQHG WR HQVXUH
PD[LPXP DQG VWDQGDUGL]HG HJJ SURGXFWLRQ
*HQHUDOO\ WKH DGDSWDWLRQ LV DFKLHYHG DW WKH FRVW RI
DGDSWLYH FDSDFLW\ WKH DQLPDOV KDYH IHZ UHVHUYHV WR
UHVSRQG WR FKDQJLQJ HQYLURQPHQWDO FRQGLWLRQV VXFK
DV YDULDWLRQV LQ WHPSHUDWXUH IHHG RU VWUHVV IURP
WUDQVSRUW 'HVSLWH WKLV EHLQJ FRPPRQ NQRZOHGJH
WKLVVWUHVVIURPEUHHGLQJLVGHDOWZLWKQRWE\FKDQJHV
LQ EUHHGLQJ SUDFWLFHV LQFOXGLQJ EUHHGLQJ JRDOV EXW
RQO\ E\ FKDQJLQJ WKH UDLVLQJ PHWKRGV FKLFNHQV·
EHDNVDQGSLJV·WDLOVDUHWULPPHGDQGWKHDQLPDOVDUH
RIWHQKHOGLQVWUHVVUHGXFLQJGLPPHGOLJKWLQRUGHUWR
UHGXFHWKHH[WHQWDQGFRQVHTXHQFHVRIFDQQLEDOLVP
DPRQJWKHDQLPDOVWKDWUHVXOWVIURPHQKDQFHGVWUHVV
&RPSDVVLRQ LQ :RUOG )DUPLQJ D ,Q DGGLWLRQ
DQWLELRWLFV DUH LQFUHDVLQJO\ XVHG WR WUHDW WKH JUHDWHU
LQFLGHQFH RI LOOQHVV DPRQJ DQLPDOV UHVXOWLQJ IURP
KLJKSHUIRUPDQFHEUHHGLQJ
7KH GHYHORSPHQW RI D VROLG LPPXQH V\VWHP LQ
DQLPDOVZKLFKLVVRLPSRUWDQWIRURSHQDLUUHDULQJRI
DQLPDOVUHFHLYHVOLWWOHDWWHQWLRQXQGHUVXFKFRQGLWLRQV
%HVLGHVWKHJUHDWHUVXVFHSWLELOLW\WRLOOQHVVLQDQLPDOV
WKH WDUJHWHG VHOHFWLRQ IRU PD[LPXP SHUIRUPDQFH
UDLVHVRWKHUDQLPDOSURWHFWLRQDQGZHOIDUHLVVXHV$V
WKHSHUIRUPDQFHRIIHPDOHDQLPDOVGLUHFWO\FRUUHODWHV
ZLWK WKH WDUJHWHG VHOHFWLRQ LQ EUHHGLQJ IDWWHQLQJ
SHUIRUPDQFHGHFOLQHVDQGZLWKLWWKHSHUIRUPDQFHRI
PDOHDQLPDOV)RUH[DPSOHWKHIDWWHQLQJRIEURWKHUV
RIHJJSURGXFLQJKHQVLVFRQVLGHUHGXQHFRQRPLFDO
$V D UHVXOW LQ WKH (8 PRUH WKDQ PLOOLRQ PDOH
FKLFNHQVDUHNLOOHGHDFK\HDUDVVRRQDVWKH\KDWFK
6LPLODUO\ LQ WKH 8QLWHG .LQJGRP IRU LQVWDQFH PDOH
FDOYHVRIEUHHGVWKDWDUHVHOHFWHGIRUPD[LPL]LQJPLON
SHUIRUPDQFH DUH NLOOHG ² VRPH HDFK \HDU
:HHNV
,JQRULQJ WKH DQLPDO KHDOWK DQG ZHOIDUH LVVXHV
DVVRFLDWHGZLWKWKLVGHYHORSPHQWJHQHWLFHQJLQHHULQJ
KDV EHHQ XVHG IRU GHFDGHV WR PD[LPL]H DQLPDO
SHUIRUPDQFH $QG LQ VSLWH RI H[WHQVLYH SXEOLF DQG
SULYDWH UHVHDUFK RQ JHQHWLF PDQLSXODWLRQ RYHU WKH
SDVW \HDUV XQWLO WRGD\ QR WUDQVJHQLF DQLPDOV DUH
XVHG IRU FRPPHUFLDO DJULFXOWXUH SXUSRVHV RZLQJ WR
VLJQLÀFDQW ELRORJLFDO DQG WHFKQLFDO SUREOHPV 7KHQ
DQG $V HDUO\ DV WKH PLGV VRPH
UHVHDUFKHUV HQYLVDJHG WKH WHFKQRORJ\OLQNHG IDLOXUH
RI WUDQVJHQLF PDQLSXODWLRQ 7KLV IDLOXUH EHFDPH WKH
HQJLQH IRU FORQLQJ UHVHDUFK 7KH REMHFWLYH ZDV WR
FORQH WUDQVJHQLF LQGLYLGXDOV LQ WKRVH H[FHSWLRQDO
FDVHVZKHUHWKH\KDGGHVLUDEOHSURSHUWLHVDQGQRRU
IHZ XQLQWHQGHG SUREOHPV <HW FORQLQJ WRR KDV EHHQ
UHODWLYHO\XQVXFFHVVIXOLQWKHSDVW\HDUVZLWKWKH
UDUHVXFFHVVHVGXHPDLQO\WRFRLQFLGHQFH
2QO\DIHZYLDEOHDQLPDOVKDYHEHHQSURGXFHGXVLQJ
WKH´'ROO\PHWKRGµ$FFRUGLQJWRWKH(XURSHDQ)RRG
6DIHW\$XWKRULW\()6$´7KHRYHUDOOVXFFHVV
UDWH RI WKH FORQLQJ SURFHGXUH LV VWLOO ORZ DQG GLIIHUV
JUHDWO\ EHWZHHQ VSHFLHV 7KH RYHUDOO VXFFHVV UDWH
H[SUHVVHGDVWKHSHUFHQWDJHRIYLDEOHRIIVSULQJERUQ
IURPWUDQVIHUUHGHPEU\RFORQHVUDQJHVDSSUR[LPDWHO\
IURP WR GHSHQGLQJ RQ WKH VSHFLHVµ 2I WKH
VXUYLYLQJ FORQHG DQLPDOV ´'ROO\µ UHPDLQHG D XQLTXH
VSHFLPHQ7KHKRSHWKDWZKROHVWDEOHVFRXOGEHÀOOHG
ZLWK DQLPDOV FORQHG IURP RQH LQGLYLGXDO LQ RUGHU WR
DFKLHYHDQLGHQWLFDOIDWWHQLQJUHVXOWZLWKDVWDQGDUGDQG
HFRQRPLFDOIHHGLQJDQGWUHDWPHQWUHJLPH²DKRSHRI
XQOLPLWHG PDVV LQGXVWULDO SURGXFWLRQ ² KDV UHPDLQHG
D GLVWDQW GUHDP ,Q DQ\ FDVH VDPHQHVV LQ WHUPV RI
GHVLUDEOHIDWWHQLQJDQGRWKHUSHUIRUPDQFHVZRXOGOHDG
WRJUHDWHUYXOQHUDELOLW\WRVLFNQHVVDQGFRQWDJLRQ
$OUHDG\WKHFXUUHQWSUDFWLFHRIWKHXVHRIRQO\DIHZ
FRPPHUFLDO DQLPDO UDFHV DQG K\EULGV IRU LQGXVWULDO
OLYHVWRFN SURGXFWLRQ LV OHDGLQJ WR D ORVV RI JHQHWLF
GLYHUVLW\ DQG FDUULHV WKH ULVN WKDW DQLPDOV DUH PRUH
YXOQHUDEOH WR LQIHFWLRXV GLVHDVHV DQG SHVWV 7KLV
LQWHUUHODWLRQVKLS KDV EHHQ DQDO\VHG DW OHQJWK E\ DQ
LQWHUQDWLRQDO WHDP RI UHVHDUFKHUV 0XLU *DQH DQG
=KDQJ:LWKUHJDUGWRFKLFNHQVIRUH[DPSOH
WKHÀQGLQJVFRQÀUPWKDWDOPRVWDOODQLPDOVUDLVHGIRU
SRXOWU\PHDWVRPHELOOLRQZRUOGZLGHDUHEDVHGRQ
RQO\WKUHHUDFHVDQG KHQVUDLVHGIRU PD[LPXPHJJ
SURGXFWLRQVWHPIURPRQO\RQHUDFH
75$'($1'(19,5210(175(9,(:
(7KHSXVKIRUELRVHFXULW\SRVHVDWKUHDW
WRDQLPDODQGFRQVXPHUSURWHFWLRQ
2YHUWKHSDVWIHZGHFDGHVWKHLPPXQHV\VWHPKDV
LQFUHDVLQJO\ EHHQ SHUFHLYHG DV D PHUH SURWHFWLRQ
V\VWHP SULPDULO\ DJDLQVW EDFWHULD UDWKHU WKDQ DV
DQ LQWHUIDFH EHWZHHQ WKH ZRUOGV RI PLFUR DQG
PDFURRUJDQLVPV $V D UHVXOW WZR IDFWV KDYH EHHQ
RYHUORRNHGEDFWHULDDUHDQLQGLVSHQVDEOHFRPSRQHQW
RI RXU LPPXQH V\VWHP DQG EDFWHULD KDYH H[LVWHG
PXFKORQJHURQRXUSODQHWWKDQKXPDQVVRWKDWRXU
GHYHORSPHQW RYHU PLOOLRQV RI \HDUV KDV EHHQ PRUH
ZLWKUDWKHUWKDQDJDLQVWEDFWHULD
6LQFHWKHLPPXQHV\VWHPOLQNVXVWRRXUHQYLURQPHQW
UHDFWLQJ WR HDFK SDWKRJHQLF SUREOHP E\ HQKDQFLQJ
VWHULOLW\E\DWWHPSWLQJWRHUDGLFDWHDOOPLFURRUJDQLVPV
SRVHVDULVNWRRXUIXWXUHGHYHORSPHQW7KXVWKHEHOLHI
WKDW WKLV VWUDWHJ\ HQKDQFHV VHFXULW\ ² DOVR FDOOHG
ELRVHFXULW\²LVDIDOODF\,WPD\ZRUNLQVRPHLQGLYLGXDO
FDVHV EXW LW LQFUHDVHV WKH LQKHUHQW ULVNV DQG PD\
FRPSRXQGIXWXUHSUREOHPV,QSDUWLFXODUWKHUHJXODU
DQGH[WHQVLYHXVHRIDQWLELRWLFVDQGGLVLQIHFWDQWVIRU
KXPDQ DQG DQLPDO KHDOWK XQDYRLGDEO\ OHDGV WR WKH
HPHUJHQFHRISDWKRJHQVZLWKKLJKHUUHVLVWDQFHDQG
LQIHFWLRQSRWHQWLDO
%\ ZD\ RI LOOXVWUDWLRQ WKH EDFWHULXP 3VHXGRPRQDV
DHUXJLQRVD ZKLFK LV UHVLVWDQW WR PDQ\ DQWLELRWLFV
FDQ VXUYLYH GLVLQIHFWDQWV DQG HYHQ WKULYHV RQ
K\JLHQH SURGXFWV 6XFK H[WUHPHV KDYH EHHQ NQRZQ
IRU GHFDGHV DV ´KRVSLWDO JHUPVµ EHFDXVH WKH\
KDYH PXVKURRPHG LQ KRVSLWDOV 7KH SULQFLSOH LV
WKH VDPH WKH XQLQWHQWLRQDO VHOHFWLRQ RI PRUH DQG
PRUH GDQJHURXV JHUPV 7KH PRUH UHVLVWDQW D JHUP
DOUHDG\LVWRWUHDWPHQWZLWKDQWLELRWLFVWKHJUHDWHUWKH
OLNHOLKRRGWKDWLWZLOOVXUYLYHWKHQH[WZDYHRIWUHDWPHQW
ZLWKDQWLELRWLFVDQGGLVLQIHFWDQWV
$JDLQVW WKLV EDFNJURXQG ´ELRVHFXULW\µ WKURXJK
UHSHDWHG XVH RI QHZ DQWLELRWLFV DQG GLVLQIHFWDQWV
LV QRW RQO\ QR VROXWLRQ EXW LQ WKH ORQJ WHUP LW LV
DOVR KLJKO\ ULVN\ +XPDQV DQG DQLPDOV QHHG WKH
FRQWDFW ZLWK PLFURRUJDQLVPV IRU VWUHQJWKHQLQJ
WKHLU LPPXQH V\VWHP LQ SDUWLFXODU DW WKH MXYHQLOH
VWDJH 7KXV RVWHQVLEOH ´ELRVHFXULW\µ LQ LQWHQVLYH
OLYHVWRFN SURGXFWLRQ LV D SUREOHP LQ WKDW LW KDPSHUV
WKHGHYHORSPHQWRIDKHDOWK\LPPXQHV\VWHPDQGLW
VWUHQJWKHQVWKHUHVLVWDQFHRIJHUPVDQGSDWKRJHQV
PDNLQJ LW LQFUHDVLQJO\ GLIÀFXOW IRU WKH FKHPLFDO DQG
SKDUPDFHXWLFDOLQGXVWU\WRFRQWDLQWKRVHJHUPVDQG
SDWKRJHQV 7KH HYROXWLRQDU\ G\QDPLFV RI JHUPV
DOORZV WKHP WR TXLFNO\ DGMXVW WR QHZ DQWLELRWLFV RU
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
%R[5HDVRQVIRUWKHLQVXIÀFLHQWSHUFHSWLRQRIWKHSRWHQWLDORIVXVWDLQDEOHDJULFXOWXUHWRFRQWULEXWHWRIRRGVHFXULW\
DQGVXVWDLQDEOHUXUDOGHYHORSPHQW
‡ 7KHGHVWUXFWLRQZDVWHDQGFRQWDPLQDWLRQRIUHVRXUFHVDVVRFLDWHGZLWKWKHLQGXVWULDOL]DWLRQRIDJULFXOWXUHKDYHFUH
DWHGDPLVFRQFHSWLRQWKDWDJULFXOWXUHDOZD\VDQGJHQHUDOO\SRVHVDSUREOHP7KXVLWSURYHVWREHH[WUHPHO\GLIÀFXOW
WRSHUFHLYHWKHSRWHQWLDOIRUVXVWDLQDEOHDJULFXOWXUDOGHYHORSPHQWLQJUDVVODQGOLYHVWRFNDQGFURSODQGPDQDJHPHQW
‡ )RUGHFDGHVPRUHDQGPRUHLQWHQVLÀHGDJULFXOWXUDOSUDFWLFHVKDYHGDPDJHGWKHHQYLURQPHQW7KXVRQHRIWKHPDLQ
REMHFWLYHVRIQDWXUHSURWHFWLRQKDVEHHQVHHQDVWDNLQJODQGDZD\IURPDQ\NLQGRIDJULFXOWXUDOSURGXFWLRQ7KLVKDV
LQGLUHFWO\DQGXQZLWWLQJO\OHGWRPRUH´FROODWHUDOGDPDJHµE\FUHDWLQJJUHDWHUSUHVVXUHIRUIXUWKHULQWHQVLI\LQJSURGXF
WLRQRQWKHUHPDLQLQJDJULFXOWXUDOODQG,WKDVEHHQEDVHGRQWKHSHUFHSWLRQWKDWWKHPRUHLQWHQVLYHO\H[LVWLQJODQGLV
XVHGWKHJUHDWHUZLOOEHWKHDYDLODEOHDUHDIRUQDWXUHFRQVHUYDWLRQ,WRYHUORRNVWKHIDFWWKDWLWLVLQGXVWULDODJULFXOWXUH
WKDWKDVH[HUWHGSUHVVXUHRQUHVRXUFHVDQGODQGXVHDQGOHGWRZLGHVSUHDGFRQWDPLQDWLRQRIODQGLQJHQHUDO
‡ 7KHDYDLODELOLW\RIDPSOHUHODWLYHO\LQH[SHQVLYHHQHUJ\DQGV\QWKHWLFIHUWLOL]HUVKDVGLVWUDFWHGDWWHQWLRQIURPWKHLP
SRUWDQFHRIVRLOIHUWLOLW\DVWKHPRVWEDVLFDQGSUHFLRXVUHVRXUFHRIDJULFXOWXUHDQGLWVORVVWKURXJKHURVLRQ5HODWHG
WRWKDWWKHSRWHQWLDORIVXVWDLQDEOHJUDVVODQGPDQDJHPHQWDQGSDVWRUDOLVPIRUJOREDOIRRGVHFXULW\VRLODQGFOLPDWH
SURWHFWLRQ KDV EHHQ DQG VWLOO LV XQGHUHVWLPDWHG DQG WKHUHIRUH WKH ORQJWHUP GDQJHUV RI FRQYHUWLQJ SHUPDQHQW
JUDVVODQGWRRWKHUXVHVDUHRYHUORRNHG
‡ 7KHLQKHUHQWJURZWKDQGSURGXFWLYLW\SUHVVXUHRILQGXVWULDODJULFXOWXUHKDVGHYDVWDWLQJLPSDFWVRQRXUHQYLURQPHQW
DQGZHOOEHLQJDQGWKXVYLRODWHVWKHWKLUGSLOODURIWKH&%'LHWKHVXVWDLQDEOHXVHRIDQLPDODQGSODQWJHQHWLFUH
VRXUFHVDQGWKHLUKDELWDWV
‡ $Q\DWWHPSWDWPD[LPL]LQJVLQJOHFURS\LHOGVLVLUUHFRQFLODEOHZLWKWKHRSWLPL]DWLRQRIHFRORJLFDOVHUYLFHV<HWSXEOLF
DQGSULYDWHVXSSRUWWRVHHGVFXOWLYDWLRQSODQWSURWHFWLRQDQGIHUWLOL]DWLRQIRFXVHQWLUHO\RQVXFKD\LHOGPD[LPL]LQJ
VWUDWHJ\&RQYHUVHO\WKHPHDQVIRUH[SORULQJDQGVWXG\LQJWKHHFRV\VWHPLFSRWHQWLDORIDJULFXOWXUHDQGVSHFLÀFSUR
GXFWLRQV\VWHPVRUPHWKRGVLQGLIIHUHQWODQGVFDSHVKDYHEHHQZRHIXOO\LQDGHTXDWH
‡ 7KHHFRQRPLFLQWHUHVWVRIGLIIHUHQWHFRQRPLFDFWRUVWKDWGHULYHVLJQLÀFDQWSURÀWVIURPWKHLQGXVWULDOL]DWLRQRIDJUL
FXOWXUHLQFOXGLQJWKHXVHRIFKHPLFDOLQSXWVDUHRQHRIWKHPDLQUHDVRQVIRUWKHODFNRILPSOHPHQWDWLRQRIWKHNH\
UHFRPPHQGDWLRQV RI WKH ,QWHUQDWLRQDO $VVHVVPHQW RI $JULFXOWXUDO .QRZOHGJH 6FLHQFH DQG 7HFKQRORJ\ ,$$67'
QDPHO\WKHSUHYHQWLRQRIVRFLDOHQYLURQPHQWDODQGFOLPDWHGDPDJHLQWHUQDOL]DWLRQRIHQYLURQPHQWDOH[WHUQDOLWLHV
DQGDQDO\VLVDQGIXUWKHUGHYHORSPHQWRIWKHPXOWLIXQFWLRQDOLW\RIHFRV\VWHPV0F,QW\UHHWDO
DQWLYLUDOGUXJV7KLVRIWHQKDSSHQVPXFKIDVWHUWKDQ
WKHWLPHUHTXLUHGE\UHVHDUFKWHDPVWRGHYHORSQHZ
DQGHIIHFWLYHPHGLFLQHV
7KHUH VKRXOG QHYHU KDYH EHHQ D FRPSHWLWLYH UDFH
EHWZHHQ FKHPLFDO WUHDWPHQWV DQG PLFURRUJDQLVPV
DV WKH ODWWHU KDYH HYROYHG RYHU D SHULRG RI DERXW
ELOOLRQ \HDUV 2QO\ H[FHSWLRQDOO\ DJJUHVVLYH DQG
UHVLVWDQWFDVHVDUHSHUFHLYHGE\WKHJHQHUDOSXEOLFDV
DUHDOGDQJHUEXWHYHQWKRVHFDVHVKDYHEHFRPHPRUH
IUHTXHQWRYHUWLPH(YHQVRWKHJHQHUDOWHQGHQF\DQG
WKHIDWDOO\ODWHQWGDQJHUDUHEHLQJLJQRUHG
)'HIRUHVWDWLRQDQGDQLPDOIHHG
SURGXFWLRQ
%R[ OLVWV VRPH H[SODQDWRU\ IDFWRUV IRU WKH ODFN RI
DZDUHQHVV RI WKH SRWHQWLDO RI VXVWDLQDEOH JUDVVODQG
PDQDJHPHQWZLWKUXPLQDQWVIRUDFKLHYLQJIRRGVHFXUL
W\DQGVXVWDLQDEOHGHYHORSPHQW7KHUHLVDZLGHVSUHDG
EHOLHIWKDWUDLQIRUHVWVDUHEHLQJGHVWUR\HGRQO\WREH
FRQYHUWHGWRODQGIRUSDVWXUH,QUHDOLW\KRZHYHUWKH
FXWWLQJRIIRUHVWVLVRIWHQWULJJHUHGE\DVHTXHQFHRI
LQFRPHJHQHUDWLQJF\FOHVRIZKLFKSDVWXUHIRUFDWWOH
LV RQH &RQWUDU\ WR SUDLULHV DQG SDPSDV WKH VRLOV
RI WURSLFDO UDLQIRUHVWV KDYH D ORZHU FRQWHQW RI JUDVV
VHHGV DQG DUH OHVV IHUWLOH EHFDXVH RI WKH ZDVKLQJ
RXWRIQXWULHQWV7KLVLVZK\GHIRUHVWHGDUHDVWHQGWR
EHXVHGVRPHWLPHVRQO\WHPSRUDULO\DVSDVWXUHDQG
WKHUHDIWHUIRUJURZLQJFURSVIRUIRGGHUSURGXFWLRQDQG
LQFUHDVLQJO\ IRU ELRIXHO SURGXFWLRQ 7KH H[SDQVLRQ
RIDJURIXHOSURGXFWLRQDQGUHODWHGODQGJUDEELQJRIIHU
WKHRSSRUWXQLW\WRUDLVHWKHSXEOLF·VDZDUHQHVVRIWKH
HFRORJLFDO DQG VRFLDO FRQVHTXHQFHV RI DQLPDO IHHG
SURGXFWLRQRQIRUPHUIRUHVWDQGSDVWXUHODQG
7KURXJKWKHSUHVVLQJRIVR\DERXWSHUFHQWRIRLO
FDQEHJHQHUDWHGLQYROXPHWHUPVDQGSHUFHQWLV
OHIW RYHU DV FDNH EUXLVHG JUDLQ )XWXUH GLVFXVVLRQV
RQ VR\ FXOWLYDWLRQ VKRXOG LQFOXGH DQ XQGHUVWDQGLQJ
RI WKLV FRPPHUFLDOO\ DWWUDFWLYH GXDO FKDUDFWHU RI
VR\EHDQVUHODWLYHWRRWKHUOHJXPLQRXVFURSVVXFKDV
UDSH VHHGV $SDUW IURP DWWUDFWLYH SULFHV LQ GLIIHUHQW
PDUNHWVLWLVDOVROLNHO\WKDWGHPDQGLQWKHWKUHHPDUNHW
VHJPHQWV²VR\FDNHIRUDQLPDOIHHGDQGVR\RLOIRU
YHJHWDEOHRLODQGELRGLHVHO²ZLOOLQFUHDVHIXUWKHUDQG
WKXV SURYLGH SURGXFHUV DQG PLOOLQJ FRPSDQLHV ZLWK
JUHDWHUÁH[LELOLW\0RUHRYHUVR\FDNHIRUDQLPDOIHHG
SURYLGHV DSSUR[LPDWHO\ WKH VDPH LQFRPH DV WKH SHUFHQWVKDUHRIWKHVR\RLOXVHGDVYHJHWDEOHRLODQG
ELRGLHVHO
$V LV WKH FDVH IRU SHUPDQHQW JUDVVODQG LQ PRVWO\
QRQUDLQIRUHVWV WRR WKH ODUJHVW VKDUH RI WKH VWRUHG
FDUERQFDQEHIRXQGLQWKHVRLO%HFDXVHRIWKHYLVLEOH
DERYHJURXQGELRPDVVLWLVJHQHUDOO\SHUFHLYHGWKDW
IRUHVWV DUH PRUH LPSRUWDQW IRU FDUERQ VWRUDJH WKDQ
JUDVVODQGV ZKHQ LQ IDFW JUDVVODQGV DUH JOREDOO\
DV LPSRUWDQW ,Q DGGLWLRQ WKHUH DUH WZR GLVWLQFWLRQV
EHWZHHQ JUDVVODQGV DQG IRUHVWV XQOLNH SHUPDQHQW
JUDVVODQGV WKH VWRUDJH RI FDUERQ LQ IRUHVWV LV
VXEMHFW WR VDWXUDWLRQ DQG LQ FRQWUDVW WR SHUPDQHQW
JUDVVODQGV FRPPHUFLDOO\ XVHG IRUHVWV ZLOO LQ WKH
ORQJ WHUP DOZD\V EH KDUYHVWHG DQG ODUJH SDUWV RI
WKHFDUERQVWRUHGLQWKHELRPDVVRIWKHVRLOVZLOOHQG
XSEHLQJUHOHDVHGLQWRWKHDWPRVSKHUH,QVWHDGVRLOV
XQGHUJUD]HGSDVWXUHVDUHDOZD\VFRYHUHG
**UDVVODQGVDQGUXPLQDQWVDQH[DPSOH
RIPLVFRQFHSWLRQVDQGRSSRUWXQLWLHV
&DWWOH UHDULQJ LV DQ LOOXVWUDWLYH H[DPSOH RI KRZ QRQ
WUDQVSDUHQWDQGLOORJLFDOV\VWHPERXQGDULHVFDQOHDG
WRZURQJFRQFOXVLRQVLQFOXGLQJWKHPLVFRQFHSWLRQRI
WKHFRZEHLQJDPDMRUFRQWULEXWRUWRFOLPDWHFKDQJH
)LUVW WKHUH LV WKH LVVXH RI DQ H[FHVVLYHO\ JHQHULF
DQDO\VLV RI DQLPDO KXVEDQGU\ ZKLFK GRHV QRW
GLVWLQJXLVK EHWZHHQ GLIIHUHQW SURGXFWLRQ V\VWHPV
,QVWHDGRIDFRPSDUDWLYHDQDO\VLVRIGDWDRIUHVRXUFH
HIÀFLHQW VXVWDLQDEOH SURGXFWLRQ RQ WKH RQH KDQG
DQG HQHUJ\LQWHQVLYH LQGXVWULDO SURGXFWLRQ RQ WKH
RWKHU YHU\ RIWHQ DYHUDJH YDOXHV DUH XVHG 6HFRQG
WKH DQDO\VLV LV PRVWO\ FRQÀQHG WR RQO\ RQH *+* ²
PHWKDQH²DQGH[FOXGHV12HPLVVLRQVPDLQO\FDXVHG
E\WKHXVHRIV\QWKHWLFQLWURJHQIHUWLOL]HUVIRULQWHQVLYH
SURGXFWLRQRIDQLPDOIHHG7KLUGDVRXQGDVVHVVPHQW
RI WKH HIIHFWV RI DJULFXOWXUDO SURGXFWLRQ RQ FOLPDWH
UHTXLUHV WDNLQJ LQWR DFFRXQW QRW RQO\ HPLVVLRQV EXW
DOVR F\FOHV DV VXVWDLQDEOH DJULFXOWXUH DQG IRUHVWU\
DUH WKH RQO\ HFRQRPLF DFWLYLWLHV ZLWK WKH SRWHQWLDO WR
SURYLGHQDWXUDOVLQNIXQFWLRQVFDUERQVHTXHVWUDWLRQ
+RZHYHU UHJDUGLQJ WKH UHOHYDQFH IRU FOLPDWH
LQ WKH UHODWLYHO\ FRPPRQ HPLVVLRQ FRPSDULVRQV
75$'($1'(19,5210(175(9,(:
EHWZHHQ FDWWOH UDLVLQJ DQG YHKLFXODU WUDIÀF FDWWOH
WHQG WR IDUH EDGO\ $V DQ DSSDUHQWO\ ORJLFDO UHVXOW RI
VXFK FRPSDULVRQV HYHQ PRUH LQWHQVLYH OLYHVWRFN
SURGXFWLRQ LV EHLQJ DGYRFDWHG LQ SDUWLFXODU WKDW RI
FKLFNHQV DQG SLJV :UJHU %XW WKLV QHJOHFWV
WRWDNHDFFRXQWRIFDUERQDQGQLWURJHQF\FOHVDQGLQ
SDUWLFXODUWKHSRVLWLYHHIIHFWVRIVXVWDLQDEOHJUDVVODQG
PDQDJHPHQWIRUWKHFOLPDWHDVDZKROH7KHUHODWHG
LPSRUWDQFHRIJUDVVODQGLVEDVHGRQWKHYDVWDUHDLW
FRYHUVDFFRXQWLQJIRUSHUFHQWRIWKHJOREDOODQG
VXUIDFH6XVWDLQDEOHSDVWXUHPDQDJHPHQWHQKDQFHV
VRLOIHUWLOLW\OLQNHGWRFDUERQULFKKXPXVDQGWKHUHE\
WRQ RI KXPXV UHPRYHV WRQV RI &2 IURP WKH
DWPRVSKHUH DV HDFK WRQ RI KXPXV FRQWDLQV PRUH
WKDQNJRIFDUERQ$SURPLQHQWH[DPSOHLQWKLV
UHJDUG LV JUD]LQJ ZKLFK DOORZHG SUDLULH VRLOV RYHU
PLOOHQQLDWRUHDFKDGHSWKRIVHYHUDOPHWUHV
:K\GRFRZVJHQHUDWHPHWKDQHZKLFKKDVDJOREDO
ZDUPLQJSRWHQWLDOWLPHVKLJKHUWKDQ&2"
&RZVFDQRQO\GLJHVWJUDVVWKURXJKWKHV\PELRVLVRI
ELOOLRQV RI PLFURRUJDQLVPV LQ WKHLU UXPHQ SDXQFK
3DUW RI WKHVH PLFURRUJDQLVPV FDQ GHFRPSRVH
FHOOXORVH DQG OLJQLQ LQ JUDVV DQG WKXV PDNH WKH
QXWULHQWV FRQWDLQHG WKHUHLQ DYDLODEOH WR WKH FRZV
,Q WKH FRXUVH RI WKLV GLJHVWLRQ SURFHVV PHWKDQH LV
JHQHUDWHG E\ PLFURRUJDQLVPV $QG MXVW DV KXPDQV
H[KDOH &2 FRZV H[KDOH ERWK &2 DQG PHWKDQH
7KURXJKWKLVV\PELRVLVUXPLQDQWVVXFKDVFRZVGR
QRWFRPSHWHZLWKKXPDQEHLQJVIRUIRRG²DQDELOLW\
LQHYLWDEO\OLQNHGWRPHWKDQHSURGXFWLRQ
7KHH[FOXVLYHIRFXVRQPHWKDQHIURPFRZVLVVKRUW
VLJKWHG LI WKH DQDO\VLV LV FRQÀQHG WR HPLVVLRQV
DQG WKHLU SRWHQWLDO QHJDWLYH HIIHFWV 6RPH GDWD
IURP (XURSH LOOXVWUDWHV WKLV FUXFLDO SRLQW ,W LV 12
DQG QRW PHWKDQH WKDW FRQVWLWXWHV WKH ODUJHVW WKUHDW
WR FOLPDWH LQ WKH FRQWH[W RI OLYHVWRFN SURGXFWLRQ
/LYHVWRFN SURGXFWLRQ LV UHVSRQVLEOH IRU SHU FHQW
RIDOO12HPLVVLRQVDQGSHUFHQWRIDOODPPRQLD
HPLVVLRQVLQSDUWLFXODUGXHWRLQWHQVLYHIHUWLOL]HUXVH
IRUWKHSURGXFWLRQRIDQLPDOIHHG:KHUHDVPHWKDQH
KDVDJOREDOZDUPLQJSRWHQWLDOWLPHVKLJKHUWKDQ
&2 WKH JOREDO ZDUPLQJ SRWHQWLDO RI 12 LV WLPHVKLJKHUWKDQWKDWRI&2,WLVDVVXPHGWKDWRQ
DYHUDJH²SHUFHQWRIFRQVXPHGQLWURJHQIHUWLOL]HUV
DUH FRQYHUWHG LQWR 12 6XWWRQ DQG %LOOHQ 6FKXO]HHWDO
$JDLQVW WKLV EDFNJURXQG EHVLGHV LWV DGYHUVH
HFRORJLFDO LPSDFWV LQWHQVLYH IHHGLQJ RI OLYHVWRFN LQ
WKHFRQWH[WRIJOREDOKXQJHUDQGZDUPLQJKDVWKUHH
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
%R[(UURQHRXVFRQFOXVLRQVRQH[WHQVLYHDQGLQWHQVLYHOLYHVWRFNSURGXFWLRQV\VWHPVGXHWRLOOGHÀQHG
V\VWHPERXQGDULHV
,QRUGHUWRJLYHDVWURQJHULPSHWXVWRVXVWDLQDEOHSURGXFWLRQLQDJULFXOWXUDOSROLF\UHVHDUFKDQGH[WHQVLRQLQWKHIXWXUHLW
LVLPSHUDWLYHWRREMHFWLYHO\HYDOXDWHWKHGLIIHUHQWDJUDULDQV\VWHPV7RGDWHVXIÀFLHQWFRPSDUDWLYHVWXGLHVDUHODFNLQJ,Q
DGGLWLRQWKHUHDUHVLJQLÀFDQWGHÀFLHQFLHVLQWHUPVRIWKHFRPSDUDELOLW\RIGDWDDQGWKHODFNRIWUDQVSDUHQF\FRQFHUQLQJ
WKHVSHFLÀFV\VWHPERXQGDULHV7KLVRIWHQOHDGVWRGDWDQRWEHLQJFRUUHFWO\DVVLJQHGZKLFKULVNVOHDGLQJWRHUURQHRXV
FRQFOXVLRQV$SURPLQHQWH[DPSOHLQWKLVUHJDUGLVWKHVWXG\E\6WHLQIHOGHWDOZKLFKGRHVQRWGLVWLQJXLVKEH
WZHHQH[WHQVLYHDQGLQWHQVLYHSURGXFWLRQV\VWHPV,QWKDWVWXG\RQO\RQHWDEOHRQPDMRUÁX[HVRIFDUERQDVVRFLDWHGZLWK
LQWHQVLYHDQGH[WHQVLYHOLYHVWRFNSURGXFWLRQV\VWHPV$VQHUDQG$UFKHUWDEOHDWWHPSWVWRSURYLGHDVHSD
UDWHDFFRXQWRIFDUERQÁX[HVIRUHDFKV\VWHP%XWWKDWWDEOHKDVQXPHURXVDQDO\WLFDOSUREOHPVDQGJRHVVRIDUDVWR
VXJJHVWWKDWH[WHQVLYHOLYHVWRFNV\VWHPVZRXOGKDYHVLJQLÀFDQWO\KLJKHUQHJDWLYHFOLPDWHHIIHFWVWKDQLQWHQVLYHV\VWHPV
,PSRUWDQWFDUERQVWUHDPVXQGHULQWHQVLYHDQGH[WHQVLYHOLYHVWRFNSURGXFWLRQV\VWHPV
&DWHJRU\
&2HPLVVLRQVIURPSURGXFWLRQ
1LWURJHQIHUWLOL]HUVIRUDQLPDOIHHGFURSSURGXFWLRQ
)XHOIRUWUDQVSRUWRIIHHGWRSURGXFWLRQIDFLOLW\
)XHOIRUWUDQVSRUWRIDQLPDOVLQWKHSURGXFWLRQIDFLOLW\
3ORXJHGFURSODQG
8QSORXJKHGFURSODQG
3URFHVVLQJRIDQLPDOV
)XHOIRUWUDQVSRUWRXWVLGHWKHSURGXFWLRQIDFLOLW\
(FRORJLFDOO\UHODWHG&2HPLVVLRQV
'HVHUWLÀFDWLRQ
'HIRUHVWDWLRQLQWKHWURSLFV
6SUHDGLQJRIEXVK\DUHDV
0HWKDQHHPLVVLRQVRIOLYHVWRFN
'LJHVWLRQRIUXPLQDQWV
/LTXLGDQGVROLGPDQXUH
7RWDO&2HPLVVLRQV
7RWDOPHWKDQHHPLVVLRQV
7RWDO*+*HPLVVLRQVLQ&2HTXLYDOHQW
([WHQVLYH
,QWHQVLYH
*W
*W
6RXUFH$VQHUDQG$UFKHUWDEOH
)LUVWDQGIRUHPRVWLWLVVXUSULVLQJWKDWWKHVXPRIHPLVVLRQVIURPH[WHQVLYHOLYHVWRFNSURGXFWLRQV\VWHPVLVHVWLPDWHGWR
EHJLJDWRQQHV*WDQGWKXVLVKLJKHUWKDQWKHVXPRIHPLVVLRQVRIWKHLQGLYLGXDOLWHPV$QH[SODQDWLRQIRUWKLVLVQRW
SURYLGHG(VWLPDWHVIRUWRWDOHPLVVLRQVIURPLQWHQVLYHSURGXFWLRQDUHQRWSURYLGHGDWDOO
2XUFULWLFLVPUHJDUGLQJWKLVDFFRXQWLQJDSSURDFKFRQFHUQVLQSDUWLFXODUWKHDVVLJQPHQWPHWKRGRORJ\
‡ (PLVVLRQVFDXVHGE\GHIRUHVWDWLRQDUHHQWLUHO\DFFRUGHGWRJUDVVODQGPDQDJHPHQWLHWRH[WHQVLYHPDQDJHPHQW
PHWKRGV+RZHYHULQUHDOLW\SDVWXUHXVDJHLVRIWHQRQO\DQLQWHULPXVHRIWKHFRQYHUVLRQRIODQGWKDWLVHYHQWXDOO\
FKDQJHG WR FURSODQG QXWULHQWSRRU VRLOV RI WURSLFDO IRUHVWV DUH FRQYHUWHG WR FURSODQG UHO\LQJ RQ H[WHUQDO IHUWLOL]HU
LQSXWV7KHIDFWWKDWVR\FXOWLYDWLRQLVUHVSRQVLEOHIRUVRPHSHUFHQWRIGHIRUHVWDWLRQLVPHQWLRQHGLQWKHVWXG\·V
WH[WEXWWKHWDEOHDFFRUGVWKHVHHPLVVLRQVHQWLUHO\WRH[WHQVLYHSURGXFWLRQV\VWHPVHYHQWKRXJKVR\PHDODVDQLPDO
IHHGLVDFHQWUDOFRPSRQHQWRILQWHQVLYHSURGXFWLRQV\VWHPV
‡ $OWKRXJKDÀJXUHIRU&2HPLVVLRQVUHODWHGWRIHUWLOL]HUSURGXFWLRQIRUDQLPDOIHHGSURGXFWLRQLVSURYLGHGDQGLVUH
ODWHGWRLQWHQVLYHOLYHVWRFNSURGXFWLRQ12HPLVVLRQVDUHQRWDFFRXQWHGIRU$IRRWQRWHH[SODLQVWKDWWKRVHHPLVVLRQV
DUHH[FOXGHGEHFDXVHWKH\DUHGHDOWZLWKLQDQRWKHUFKDSWHU$OWKRXJKWKHLPSRUWDQFHRI12HPLVVLRQVLQLQWHQVLYH
V\VWHPVLVLQGHHGKLJKOLJKWHGLQWKDWRWKHUFKDSWHULWVLPSDFWRQFOLPDWHLVQRWTXDQWLÀHG
75$'($1'(19,5210(175(9,(:
%R[FRQWLQXHG
‡ (PLVVLRQVFDXVHGE\ODQGGHJUDGDWLRQDUHRQO\FDOFXODWHGIRUH[WHQVLYHV\VWHPVZKHUHDVODQGGHJUDGDWLRQUHVXOWLQJ
IURPLQWHQVLYHDQLPDOIHHGSURGXFWLRQUHPDLQVXQDFFRXQWHGIRU
‡ 0HWKDQHHPLVVLRQVOLQNHGWRIDHFHVJHQHUDWLRQDUHFRQVLGHUHGWREHRIWKHVDPHPDJQLWXGHLQH[WHQVLYHDQGLQWHQ
VLYHV\VWHPVDOWKRXJKPHWKDQHLVQRWJHQHUDWHGLQPDQXUHXQGHUWKHDHURELFFRQGLWLRQVRIH[WHQVLYHSDVWXULQJ
$V D UHVXOW HYHQWKLV DQDO\VLV ZKLFK SXUSRUWV WRSURYLGHDQRYHUYLHZRIWKHDYDLODEOHVFLHQWLÀFNQRZOHGJHUHJDUGLQJ
LQWHQVLYHYHUVXVH[WHQVLYHSURGXFWLRQV\VWHPVFRQWDLQVVRPHVHULRXVPHWKRGRORJLFDOVKRUWFRPLQJV,WLVDSSDUHQWWKDW
WKHFRPSDUDWLYHDQDO\VLVXQGHUHVWLPDWHVWKHQHJDWLYHHQYLURQPHQWDODQGFOLPDWHLPSDFWVRILQWHQVLYHSURGXFWLRQV\V
WHPVDQGRYHUHVWLPDWHVWKRVHRIH[WHQVLYHSURGXFWLRQV\VWHPV7KLVUHQGHUVWKHUHVXOWVDQGWKHSROLF\UHFRPPHQGDWLRQV
VFLHQWLÀFDOO\TXHVWLRQDEOHD
1RWHD)RUDPRUHHODERUDWHFULWLTXHVHH,GHODQG
DGGLWLRQDODGYHUVHHIIHFWV
‡ /LYHVWRFN DUH FRPSHWLQJ ZLWK KXPDQV IRU IRRG
1RUPDOO\OLYHVWRFNSDUWLFXODUO\FDWWOHVKRXOGGHULYH
WKHLUIHHGIURPDJULFXOWXUDOODQGRUVRLOVWKDWFDQQRW
EHXVHGIRUGLUHFWIRRGSURGXFWLRQIRUKXPDQV2Q
WKH FRQWUDU\ FDWWOH FDQ JHQHUDWH PLON DQG PHDW
IURP JUDVV DQG WKH\ FDQ DOVR SURYLGH SURGXFWLYH
SRZHU
‡ 7KHLQWHQVLYHSURGXFWLRQRIDQLPDOIHHGKDVGLUHFW
DQGLQGLUHFWLPSDFWVRQFOLPDWHWKURXJK
1LWURXV R[LGH DPPRQLD DQG &2 HPLVVLRQV
FDXVHGE\V\QWKHWLFQLWURJHQIHUWLOL]HUV
,QFUHDVHGPHWKDQHHPLVVLRQVOLQNHGWRWKHKXJH
VFDOH RI LQGXVWULDO OLYHVWRFN SURGXFWLRQ DQG WKH
H[FHVVLYHXVHRIXQQDWXUDOFRQFHQWUDWHIHHG
([FHVVLYH JHQHUDWLRQ RI DQLPDO H[FUHPHQWV
UHODWHGWRODUJHVFDOHSURGXFWLRQDQGXQQDWXUDO
IHHGLQJ
+LJKHU JDV HPLVVLRQV WKURXJK WKH PL[LQJ RI
XULQHDQGIDHFHVFDXVHGE\DODFNRISDVWXULQJ
WKDWZRXOGDOORZQDWXUDOVHJUHJDWLRQ
‡ 7KH LQFUHDVHG XVH RI FRQFHQWUDWH IHHG GLVSODFHV
WKH FRQVXPSWLRQ RI JUDVV DQG WKHUHE\ UHPRYHV
WKHIROORZLQJSRVLWLYHHIIHFWVRISDVWXUHRQFOLPDWH
7KHSHUPDQHQWDQGGHQVHJUDVVFRYHUSURWHFWV
VRLOVDQGSUHYHQWVWKHLUHURVLRQ
6XVWDLQDEOH
SDVWXUH
DQG
JUDVVODQG
PDQDJHPHQW SURPRWHV WKH ELRORJLFDO DFWLYLW\
SKRWRV\QWKHVLV RI JUDVV DQG LWV URRWV ,Q
DGGLWLRQ PLFURRUJDQLVPV SDUWLFXODUO\ ZRUPV
FRQYHUW ELRPDVV LQWR KXPXV ZKLFK FRQWDLQV
RYHUSHUFHQWRIFDUERQ
+*UDVVODQGVRIWKHZRUOG
,QWKH)RRGDQG$JULFXOWXUH2UJDQL]DWLRQRIWKH
8QLWHG1DWLRQV)$2SXEOLVKHGDVXUYH\RIZRUOGZLGH
JUDVVODQGV 6XWWL 5H\QROGV DQG %DWHOOR *UDVVODQGV LQ VHPLDULG ]RQHV FRQWDLQ JUHHQ JUDVV
RQO\IRUDVKRUWSHULRGDIWHUWKHUDLQ\VHDVRQZKLFKLV
RWKHUZLVH FKDUDFWHULVWLF RI WKH UDLQLQWHQVLYH UHJLRQV
RIWKHZRUOG&OLPDWHH[SHUWVRIWKH*UDVVODQG&DUERQ
:RUNLQJ*URXSVWXGLHGWKHLPSRUWDQFHRIJUDVVODQGV
DV FDUERQ VLQNV DQG SXEOLVKHG FRXQWU\VSHFLÀF
LQIRUPDWLRQ RQ JUDVVODQG HFRV\VWHPV *UDVVODQG
FRYHUV D WRWDO DUHD RI PLOOLRQ NP LH DERXW
SHU FHQW RI WKH WRWDO ODQG VXUIDFH RI RXU SODQHW
:KLWH 0XUUD\ DQG 5RKZHGHU $FFRUGLQJ WR
WKH)$2JUDVVODQGDFFRXQWVIRUDERXWWKUHHTXDUWHUV
RIWKHELOOLRQKDRIDJULFXOWXUDOO\XVHGODQG(YHQ
VR NQRZOHGJH DERXW LWV VSHFLÀF SURSHUWLHV IRU HDFK
FOLPDWLF ]RQH LV VXUSULVLQJO\ OLPLWHG $V D UHVXOW WKH
SRWHQWLDOVRIJUDVVODQGVDUHJURVVO\XQGHUHVWLPDWHG
DQG DUH QRW SDUW RI WKH GHEDWH RQ WKH IXWXUH RI RXU
SODQHW7KLVFRXOGDQGVKRXOGFKDQJH
7KH JLDQW JUDVVODQGV RI WKH ZRUOG VWRUH LQ WKHLU VRLO
PRUH WKDQ D WKLUG RI WKH JOREDO FDUERQ VWRFN ,Q
VDYDQQDK VRLOV LW LV HVWLPDWHG WKDW PRUH WKDQ SHU FHQW RI WKH ELRPDVV FDQ EH IRXQG LQ WKH URRWV
5HLFKKROI *UDFH HW DO +RZHYHU DV
JUDVVODQGVUHFHLYHOLWWOHDWWHQWLRQLWLVKLJKO\OLNHO\WKDW
WKHLU HFRORJLFDO DJULFXOWXUDO DQG FOLPDWH SRWHQWLDOV
DUH QRW IXOO\ SHUFHLYHG 7KH SORXJKLQJ RI JUDVVODQG
FDXVHVKXJHORVVHVRIFDUERQDQGELRPDVVFRQWDLQHG
LQWKHVRLO²LQPDQ\UHJLRQVXSWRDWKLUGRIWKHVWRUHG
DPRXQW*XRDQG*LIIRUG3RHSODXHWDO
6RIDUWKHLQFUHDVLQJGHPDQGIRUSURWHLQDQGHQHUJ\
ULFKDQLPDOIHHGIRULQGXVWULDOOLYHVWRFNSURGXFWLRQKDV
EHHQ RQH RI WKH PDLQ IDFWRUV EHKLQG WKH UHPRYDO RI
WURSLFDO UDLQIRUHVWV DQG WKH FRQYHUVLRQ RI JUDVVODQG
WR FURSODQG 'RQ HW DO $GGLWLRQDOO\ WKH
ULVLQJFRQVXPSWLRQRIELRIXHOVLVWDNLQJLWVWROO0DQ\
PRQRFXOWXUHV QRW RQO\ GHVWUR\ HFRV\VWHPV EXW DUH
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
DOVRTXHVWLRQDEOHIURPDQHQHUJ\SRLQWRIYLHZLIRQH
GHGXFWV WKH HQHUJ\ LQSXW IRU WKHLU SURGXFWLRQ IURP
WKH HQHUJ\ RXWSXW SDUWLFXODUO\ GXH WR WKH H[SDQGLQJ
SURGXFWLRQ RI ERWK FRQFHQWUDWH IHHG DQG ELRIXHOV
6XVWDLQDEO\ XVHG JUDVVODQG FDQ JHQHUDWH D KLJKHU
YROXPHRIXVDEOHHQHUJ\SHUXQLWRIODQGWKDQHWKDQRO
IURP PDL]H $W WKH VDPH WLPH LW FDQ PDNH D KLJKHU
FRQWULEXWLRQ WR WKH UHGXFWLRQ RI *+* HPLVVLRQV DQG
LQFUHDVH VRLO IHUWLOLW\ 7ULDOV LQ WKH 8QLWHG 6WDWHV KDYH
VKRZQWKDW\LHOGVIURPSHUPDQHQWJUDVVODQGVRYHUD
GHFDGHVXUSDVVHGWKRVHRIPRQRFXOWXUHVE\SHU
FHQW7LOPDQ+LOODQG/HKPDQ
,*OREDOODQGVFDSHJDUGHQHUV
,Q JUDVVODQGV URRWV SOD\ D FUXFLDO UROH LQ KXPXV
JHQHUDWLRQ 6LPSO\ SXW WKH URRWV RI WRGD\ DUH WKH
KXPXVRIWRPRUURZ:KHUHDVFURSVRQO\JURZGXULQJ
WKHLUYHJHWDWLRQSHULRGXQWLOWKH\DUHKDUYHVWHGJUDVV
LQ SHUPDQHQW JUDVVODQG IRUPV PRUH DQG PRUH URRW
ELRPDVV YLUWXDOO\ RQ D SHUPDQHQW EDVLV DV ORQJ DV
GD\OLJKW DQG D PLQLPXP RI KXPLGLW\ DUH DYDLODEOH
DQG WHPSHUDWXUHV DUH VWLOO VOLJKWO\ DERYH ]HUR 7KH
IRUPDWLRQ RI URRWV GLUHFWO\ GHSHQGV RQ WKH UK\WKP
RIWKHSDVWXULQJ9HU\LPSRUWDQWLQWKLVUHJDUGLVWKDW
JUDVVODQG VKRXOG KDYH FRQVWUXFWLYH SDXVHV GXULQJ
SDVWXULQJ VR WKDW JUDVV SODQWV FDQ UHFRYHU DQG
REWDLQ EHVLGHV ZDWHU DQG &2 VXIÀFLHQW RUJDQLF
QLWURJHQ DQG RWKHU QXWULHQWV IURP WKH H[FUHPHQWV RI
JUD]LQJ DQLPDOV 7KHUHDIWHU VRODU HQHUJ\ WKURXJK
SKRWRV\QWKHVLV GULYHV WKH JURZWK RI QHZ JUDVV DQG
DGGLWLRQDOURRWELRPDVV
$Q LOOXVWUDWLYH H[DPSOH IRU VXFK D QDWXUDO SURFHVV ²
LQFOXGLQJUHJHQHUDWLYHSHULRGV²FDQEHIRXQGLQWKH
ELJJHVWDQQXDOPLJUDWLRQRIDQLPDOVRQRXUSODQHWWKH
PLJUDWLRQRIWKHKXJHKHUGVRIJQXVLQ$IULFD6DIDULV
WKHUHRIIHUDUHWURVSHFWLYHYLHZRIQDWXUH·VKLVWRU\DV
DOORWKHUJUDVVODQGVVDYDQQDKVHPHUJHGIURPWKHFR
HYROXWLRQRIJUDVVSODQWVDQGJUD]LQJDQLPDOV+XJH
KHUGV RI ELVRQ DQG DXURFKV DQFHVWRUV RI WRGD\·V
GRPHVWLF FDWWOH FRQWULEXWHG WR WKH GHYHORSPHQW RI
VRLOV LQ (XUDVLD DOWKRXJK WKH\ KDYH GLVDSSHDUHG
IURP WKH FROOHFWLYH PHPRU\ RI KXPDQ VHWWOHUV ,Q
FRQWUDVWPDQ\$PHULFDQVWRGD\VWLOOUHFDOOVWRULHVRI
WKHLU DQFHVWRUV DERXW WKH KXJH KHUGV RI ELVRQ 7KH
QXPEHURIELVRQWKDWSRSXODWHGWKHSUDLULHVRI1RUWK
$PHULFDLQWKHHDUO\GHFDGHVRIWKHQLQHWHHQWKFHQWXU\
LV HVWLPDWHG WR KDYH EHHQ DERXW PLOOLRQ DQLPDOV
7RGD\ 1RUWK $PHULFDQ VRLOV VXIIHU IURP DQ DYHUDJH
KXPXV ORVV RI PRUH WKDQ SHU FHQW 7KLV DOVR
DSSOLHVWRSUDLULHVRLOVVHYHUDOPHWUHVWKLFNRQZKLFK
PRQRFXOWXUHV VXFK DV VR\ PDL]H RU FHUHDOV KDYH
EHHQFXOWLYDWHGIRUGHFDGHV+RZHYHUWKHEHWWHUWKH
VLWXDWLRQ LQ VRPH SUHIHUHQWLDO ORFDWLRQV WKH ORZHU LV
WKHSHUFHSWLRQRIH[LVWLQJSUREOHPV,QRUGHUWRVKRZ
WKDWVRLOTXDOLW\DQGIHUWLOLW\DUHVXIIHULQJIURPLQGXVWULDO
VRLOPDQDJHPHQWV\VWHPVWKHKXPXVFRQWHQWRIVRLOV
QHHGVWREHUHJXODUO\PRQLWRUHGDQGGRFXPHQWHG
-&DWWOHDVLGHDOXVHUVRIIHHG
7DNLQJ DFFRXQW RI FDUERQ DQG QLWURJHQ F\FOHV QRW
RQO\ OHDGV WR D GLIIHUHQW DVVHVVPHQW RI WKH LPSDFWV
RI DJULFXOWXUH RQ FOLPDWH LW DOVR SURYLGHV D GLIIHUHQW
SHUVSHFWLYH RI DQLPDO KXVEDQGU\ SDUWLFXODUO\ WKDW RI
UXPLQDQWV ,JQRUDQFH ZLWK UHJDUG WR WKH SRWHQWLDO RI
JUDVVODQGVDULVHVIURPWKHPLVFRQFHSWLRQWKDWFDWWOH
DUHSRRUIHHGXVHUVZKLFKVLQFHWKHHQGRIWKHV
KDVDOVREHHQWDXJKWWRVWXGHQWV,QWKLVUHJDUGFDWWOH
DQGRWKHUUXPLQDQWVDUHQRWFRQWH[WXDOL]HGDVDQLPDOV
WKDW GHYHORSHG LQ FRHYROXWLRQ ZLWK JUDVVODQGV RYHU
WKRXVDQG RI \HDUV XVLQJ JUDVV DQG KD\ DV IRGGHU
WKDW ZLWKRXW DGGLWLRQDO ODERXU ZDV WXUQHG LQWR PHDW
DQG PLON ,QVWHDG WKHVH UXPLQDQWV DUH DVVHVVHG LQ
WHUPV RI WKHLU HIÀFLHQF\ LQ GLJHVWLQJ FHUHDOV PDL]H
DQGVR\
7KH IDFW WKDW FDWWOH FRQVXPH RQ DYHUDJH NJ RU
PRUHRIFHUHDOVSHUNLORJUDPRIEHHIDÀJXUHZKLFK
H[FHHGV WKH LQWDNH RI SLJV DQG FKLFNHQV LV D
UHVXOW RI D IDXOW\ V\VWHP QRW IDXOW\ DQLPDOV ,W GRHV
QRW WDNH LQWR FRQVLGHUDWLRQ WKHLU QHJDWLYH LPSDFW RQ
UHVRXUFH FRQVXPSWLRQ EHFDXVH RI LQDSSURSULDWH
V\VWHPERXQGDULHV7KHZLGHVSUHDGDVVXPSWLRQWKDW
RQHFRZZKLFKSURGXFHVVRPHOLWUHVRIPLON
DQQXDOO\ZRXOGEHEHWWHUIRUWKHHFRV\VWHPDQGWKH
FOLPDWHWKDQWZRDQLPDOVSURYLGLQJOLWUHVHDFKLV
TXHVWLRQDEOHEHFDXVH
7KH KLJKHU WKH SURGXFWLRQ SHUIRUPDQFH RI FRZV
SHUGD\RUSHU\HDUWKHPRUHLQWHQVLYHWKHUHTXLUHG
IHHGLQJ SUDFWLFHV ,W LV RQO\ SRVVLEOH WR DFKLHYH
D SURGXFWLRQ RI PRUH WKDQ OLWHUV RI PLON
SHU FRZ SHU DQQXP WKURXJK JUHDWHU LQWHQVLW\ RI
IHHGLQJ EDVHG RQ FRQFHQWUDWH IHHG 6XFK IHHG LQ
WXUQLVSURGXFHGDVDUHVXOWRIYHU\KLJKLQSXWVRI
ELRORJLFDO DQG IRVVLO UHVRXUFHV LQYROYLQJ KLJKHU
HPLVVLRQVRI&2DQG12
1RQKLJKSHUIRUPDQFHFDWWOHFDQVDWLVI\WKHLUHQWLUH
GHPDQGIRUIHHGE\FRQVXPLQJURXJKDJHZLWKRXW
DQ\H[WHUQDOIRGGHUVXSSO\
6XVWDLQDEO\XVHGSDVWXUHVFDQFRQWULEXWHWRKXPXV
DFFXPXODWLRQDQGWKXVKHOSWRUHGXFHDWPRVSKHULF
&2WKURXJKFDUERQÀ[DWLRQ
75$'($1'(19,5210(175(9,(:
1HDUO\ DOO FRZV ZLWK DQ DQQXDO PLON SURGXFWLRQ
RI OLWHUV KDYH D ORQJHU WKDQ DYHUDJH OLIH
VSDQ &RQYHUVHO\ PRVW FRZV ZLWK DQ DQQXDO PLON
SHUIRUPDQFH RI OLWHUV KDYH D VKRUWHU WKDQ
DYHUDJH OLIH VSDQ 7KH KLJKHU WKH PLON SURGXFWLRQ
RI WKH DQLPDO SHU GD\ RU SHU \HDU WKH KLJKHU WKH
ULVN RI LWV YXOQHUDELOLW\ WR GLVHDVHV DQG EXUQRXW
7KLV LV WKH UHDVRQ ZK\ WKH DYHUDJH OLIH VSDQ RI D
FRZ LQ *HUPDQ\ IRU LQVWDQFH KDV IDOOHQ WR OHVV
WKDQÀYH\HDUV%XUQRXWLQIHUWLOLW\DQGPDVWLWLVKDYH
EHFRPH ´RFFXSDWLRQDO GLVHDVHVµ RI GDLU\ FRZV
UHVXOWLQJ LQ WKHLU EHLQJ VODXJKWHUHG SUHPDWXUHO\
DQGVWDWLVWLFDOO\WKH\SURGXFHRQO\FDOYHV
)LJXUH7KHLPSRUWDQFHRIFRZORQJHYLW\WRSURWHFWWKH
HQYLURQPHQWWKHFOLPDWHDQGWKHHFRQRP\
120 -
Months
100 Cow to be
replaced
80 60 -
Substitute
cow
40 20 0Cow
,Q DGGLWLRQ WR WKH OLIH VSDQ RI WKH FRZ WR EH
UHSODFHG IRGGHU DQG DGGLWLRQDO ODERXU DV ZHOO DV
*+*HPLVVLRQVE\WKHVXEVWLWXWHFRZQHHGWREH
WDNHQLQWRDFFRXQW)LJXUHVKRZVWKDWLUUHVSHFWLYH
RI WKH DJH RI WKH FRZ GHVWLQHG IRU VODXJKWHU WKH
DJHRIWKHVXEVWLWXWHFRZLVDOZD\VWKHVDPH7KH
ODWWHU LV DERXW PRQWKV ROG PRQWKV DW WKH
WLPH RI LQVHPLQDWLRQ SOXV QLQH PRQWKV JHVWDWLRQ
7KHUHSODFHPHQWUDWHRIDSURGXFWLRQXQLWLQGLFDWHV
WKH SHUFHQWDJH RI FRZV WKDW ZLOO KDYH WR EH
UHSODFHG DQQXDOO\ WR NHHS WKH GDLU\ SURGXFWLRQ
UDWH XQFKDQJHG ,Q SURGXFWLRQ XQLWV ZLWK D YHU\
KLJKGDLU\SHUIRUPDQFHWKHUHSODFHPHQWUDWHRIWHQ
H[FHHGV SHU FHQW 7KDW LV ZK\ ORQJHYLW\ OHDGV
WRORZHUUHSODFHPHQWUDWHV+LJKUHSODFHPHQWUDWHV
WKXVLPSO\WKDWLQDGGLWLRQWRWKHGLUHFWHFRORJLFDO
HIIHFWV RI GDLU\ FRZV WKH HFRORJLFDO DQG FOLPDWH
LPSDFWVRIWKHVXEVWLWXWHFRZVKDYHWREHWDNHQLQWR
FRQVLGHUDWLRQLQHYDOXDWLQJWKHLUGDLU\SHUIRUPDQFH
7KHHDUOLHUDGDLU\FRZKDVWREHVODXJKWHUHGWKH
ORQJHULVWKHSHULRGWKDWDVXEVWLWXWHDQLPDOQHHGV
IHHGLQJDQGHPLWV*+*V)RUDGDLU\FRZ\RXQJHU
WKDQ \HDUV D VXEVWLWXWH DQLPDO ZLOO KDYH WR EH
UHDUHGGXULQJKDOIRIWKHOLIHWLPHRIWKHFRZWREH
UHSODFHG 7KXV DQ\ SURGXFWLYLW\ FDOFXODWLRQ RI D
GDLU\FRZVKRXOGQRWEHFRQÀQHGWRLWVDQQXDOPLON
EXWVKRXOGDOVRWDNHLQWRDFFRXQWLWVSHUIRUPDQFH
RYHULWVOLIHWLPH,GHO
,Q WKH SHUIRUPDQFH EDODQFH DOO WRR RIWHQ RQO\
GDWDIRUSURGXFHGPLONDUHSURYLGHGZKLFKGRQRW
UHSUHVHQWWKHYROXPHRIPDUNHWDEOHPLON3UHVVXUHV
IRU LQFUHDVLQJ GDLU\ SURGXFWLRQ UHVXOW LQ D FHUWDLQ
VKDUH RI PLON RULJLQDWLQJ IURP GLVHDVHG FRZV
ZKLFKFDQQRWEHVROGEHFDXVHWKHFRZVDUHEHLQJ
WUHDWHGZLWKDQWLELRWLFV
7RDUULYHDWDFRUUHFWFDOFXODWLRQRIWKHSURGXFWLYLW\
DQGWKHLPSDFWRQFOLPDWHRIDGDLU\FRZLWVRZQ
EHHISURGXFWLRQDQGWKDWRILWVSURJHQ\DOVRKDYHWR
EHWDNHQLQWRDFFRXQW'DLU\DQGEHHISHUIRUPDQFH
DUH QRUPDOO\ QHJDWLYHO\ FRUUHODWHG ² WKH KLJKHU
WKH GDLU\ SURGXFWLRQ RI D FRZ EUHHG WKH ORZHU
LWV PHDW RXWSXW LQ SDUWLFXODU WKDW RI WKH VRQV DQG
EURWKHUV&RPSDULQJDSURGXFWLRQV\VWHPZLWKDQ
DYHUDJH PLON SURGXFWLRQ RI OLWUHV UHODWLYH WR
RQH SURGXFLQJ OLWUHV SHU \HDU 5RVHQEHUJHU
DQG 5XW]PRVHU QRWH WKDW WKH ODWWHU VKRZV
VLJQLÀFDQWO\ KLJKHU HPLVVLRQV RI PHWKDQH SHUFHQWKLJKHUQLWURJHQSHUFHQWKLJKHUDQG
SKRVSKRURXVSHUFHQWKLJKHU
7KH LQGXVWULDOL]HG DJULFXOWXUDO SURGXFWLRQ V\VWHP
H[FOXGHV OLYHVWRFN IURP JUDVVODQGV DQG LQFUHDVHV
WKH LQSXW RI SURWHLQULFK FRQFHQWUDWH IHHG GHULYHG
IURP PDL]H VR\ DQG FHUHDOV UHVXOWLQJ LQ D VLWXDWLRQ
ZKHUH FRZV DQG KXPDQV FRPSHWH IRU IRRG ,Q WKH
FRQWH[WRIVXFKLQWHQVLYHIHHGLQJV\VWHPVUXPLQDQWV
FRQIXVLQJO\ DUH FRQVLGHUHG LQHIÀFLHQW IRGGHU
FRQVXPHUVUHODWLYHWRSLJVDQGFKLFNHQV,QWHUPVRI
IHHGFRQVXPSWLRQDQGRXWSXWRQHFRZGRHVWKHUHIRUH
QRWHTXDODQRWKHU
&DWWOH VKHHS DQG EXIIDORHV KDYH WKH ZRQGHUIXO
FDSDFLW\ WR GLJHVW SDVWXUH IRUDJH LQ V\PELRVLV ZLWK
PLFURRUJDQLVPVLQWKHUXPHQDQGWXUQLWLQWRPLONDQG
PHDW,QWKLVVHQVHFDWWOHDUHLGHDOIRGGHUFRQVXPHUV
DQG DUH WKHUHIRUH SUHGHVWLQHG IRU JUD]LQJ LQ WKRVH
DUHDV WKDW DUH VXLWDEOH DV SDVWXUHV RU JUDVVODQGV
,Q DGGLWLRQ WKH\ FDQ XVH JUDVV UHVXOWLQJ IURP JUHHQ
IHUWLOL]DWLRQWKURXJKVXVWDLQDEOHFURSURWDWLRQLQRUGHU
WR SURGXFH PLON PHDW DQG ODERXU $FFRUGLQJO\ LW LV
RQO\DWÀUVWJODQFHWKDWPLONDQGPHDWIURPLQWHQVLYH
SURGXFWLRQ DSSHDU WR EH FKHDS 7KH WUXH FRVWV RI
LQWHQVLYHDQLPDOIHHGSURGXFWLRQDUHUHÁHFWHGLQWHUPV
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
RILGDPDJHWRWKHHFRV\VWHPDQGWKHFOLPDWHLL
UHGXFWLRQ RI ELRORJLFDO GLYHUVLW\ LLL WKH FRQYHUVLRQ
RI SHUPDQHQW JUDVVODQG DQG FRQYHUWHG UDLQIRUHVWV
LQFOXGLQJ WKH &2 WKXV UHOHDVHG IURP WKHLU FDUERQ
ULFK VRLOV LY RLO FRQVXPSWLRQ IRU WKH SURGXFWLRQ RI
V\QWKHWLF QLWURJHQ IHUWLOL]HUV DQG DJURFKHPLFDOV Y
12HPLVVLRQVFDXVHGE\H[FHVVLYHXVHRIV\QWKHWLF
IHUWLOL]HUV YL WKH QLWULÀFDWLRQ RI VRLOV DQG ZDWHU
FRXUVHV DQG YLL HQKDQFHG DPPRQLD ORDG LQ WKH
DWPRVSKHUH
,WLVWUXHWKDWFDWWOHHPLWPHWKDQHEXWWKH\DQGRWKHU
UXPLQDQWVDUHLQGLVSHQVDEOHIRUJOREDOIRRGVHFXULW\
8QGHUVXVWDLQDEOHSDVWXUHFRQGLWLRQVFDWWOHSURGXFH
PLON DQG PHDW IURP JUDVV DQG IRUDJH DQG WKHUHE\
PDNHDVLJQLÀFDQWFRQWULEXWLRQWRWKHSUHVHUYDWLRQRI
VRLO IHUWLOLW\ DQG WR FOLPDWH FKDQJH PLWLJDWLRQ 7KLV LV
ZK\QRWRQO\GRFRZVKDYHWREHUHKDELOLWDWHGEXWWKH
FRUUHFWDJULFXOWXUDOV\VWHPQHHGVWREHDGRSWHG7KH
GHFLVLRQZKHWKHUZHZLOOSURWHFWRUGHVWUR\WKHFOLPDWH
WKURXJKWKHZD\ZHFKRRVHWRUHDUFDWWOHLVXSWRXV
75$'($1'(19,5210(175(9,(:
1//'06#4;U:%'55+8'0&7564+#.+<#6+101(+8'561%-
41&7%6+10U*'''&(14#'9)4+%7.674#.
#4#&+)/
)ULHGULFK2VWHQGRUII
'HSXW\&KDLUPDQ$JULFXOWXUDO&RPPLWWHHRIWKH*HUPDQ3DUOLDPHQW
$EVWUDFW
7KHH[FHVVLYHLQGXVWULDOL]DWLRQRIFKLFNHQDQGSRUNSURGXFWLRQLVDJODULQJH[DPSOHRIWKHLQGXVWULDOPRGHO
RIDJULFXOWXUHZKLFKKDVWXUQHGDJULFXOWXUHLQWRDPDMRUFOLPDWHHQYLURQPHQWDOVRFLDODQGDQLPDOZHOIDUH
KD]DUG,QRUGHUWRUHGUHVVWKLVVLWXDWLRQSROLFLHVVKRXOGDGRSWDSRVWLQGXVWULDOSDUDGLJPIRUDJULFXOWXUH
ZKLFKVXSSRUWVPXOWLIXQFWLRQDOIDUPVLQVWHDGRIDJULFXOWXUDOIDFWRULHV7KLVVKRXOGLQFOXGHWKHDSSOLFDWLRQ
RIWKHIRUHUXQQHUDQGWKHSROOXWHUSD\VSULQFLSOHWRÀQDQFLDOLQFHQWLYHVVFKHPHVWKHWLJKWHQLQJRIUHJXODWRU\
ODZVEHWWHUPDUNHWVWHZDUGVKLSDQGSUHIHUHQFHIRUWUDQVSDUHQF\DQGIDUPHUDQGFRQVXPHUSDUWLFLSDWLRQ
LQSROLF\PDNLQJ
7UHDWLQJ D IDUP DV D IDFWRU\ WKDW XVHV LQSXWV VXFK
DV SHVWLFLGHV IHHG IHUWLOL]HUV DQG IXHO WR SURGXFH
RXWSXWVVXFKDVFRUQFKLFNHQDQGSRUNKDVEHFRPH
WKH GRPLQDWLQJ SULQFLSOH RI WRGD\·V DJULFXOWXUH
ZKLFK LV H[SRVHG WR WKH GULYHUV DQG SUHVVXUHV RI
JOREDOL]DWLRQ $OWKRXJK WKLV PRGHO RI LQGXVWULDOL]HG
DJULFXOWXUHSURGXFHVLPSUHVVLYHHFRQRPLHVRIVFDOH
LWLVKLJKO\SUREOHPDWLFRZLQJWRLWVGHWULPHQWDOLPSDFW
RQFOLPDWHWKHHQYLURQPHQWKXPDQKHDOWKDQGDQLPDO
ZHOIDUH SDUWLFXODUO\ DV WKH DVVRFLDWHG FRVWV UHPDLQ
H[WHUQDOL]HG
7KH YHUWLFDOO\ LQWHJUDWHG DQG JHRJUDSKLFDOO\
FRQFHQWUDWHG FKLFNHQ LQGXVWU\ KDV EHHQ WKH LFRQLF
H[DPSOH RI LQGXVWULDOL]HG DJULFXOWXUH IRU GHFDGHV
%HWZHHQ DQG FKLFNHQ SURGXFWLRQ
ZRUOGZLGHJUHZIURPWRPLOOLRQWRQVDQGSRUN
SURGXFWLRQLQFUHDVHGIURPWRPLOOLRQWRQV
)$26WDW
7KLV LQFUHDVH LQ SURGXFWLRQ RFFXUUHG LQ SDUDOOHO ZLWK
WKH PDVVLYH LQGXVWULDOL]DWLRQ DQG FRQFHQWUDWLRQ RI
SURGXFWLRQVWUXFWXUHV$WWKHEHJLQQLQJRIWKLVFHQWXU\
DURXQGSHUFHQWRISRXOWU\SURGXFWLRQZDVFRQWUROOHG
E\ LQGXVWULDO FRPSDQLHV )$2 ,Q WKH PDMRU
SRXOWU\ SURGXFLQJ FRXQWULHV D IHZ SOD\HUV GRPLQDWH
WKHPDUNHWVVXFKDV7\VRQLQWKH8QLWHG6WDWHVZKLFK
KROGV SHU FHQW RI WKH QDWLRQDO PDUNHW VKDUH DQG
SURFHVVHV PLOOLRQ FKLFNHQV SHU ZHHN 5RKVWRIIH
NRPSDNWRUWKH3+:*URXSLQ*HUPDQ\ZKLFK
KROGVDURXQGSHUFHQWRIWKHQDWLRQDOPDUNHWVKDUH
LQFKLFNHQSURGXFWLRQDQGDFFRXQWVIRUSHUFHQWRI
FKLFNHQ EUHHGLQJ )$= )LFKWHO DV ZHOO
DVSHUFHQWRIWKHZRUOGPDUNHWLQSRXOWU\YDFFLQH
SURGXFWLRQ:LQWHUV
7KH SUREOHP ZLWK LQGXVWULDOL]HG DJULFXOWXUH LV WKDW LW
FUHDWHV PDVVLYH HQYLURQPHQWDO DQG VRFLDO FROODWHUDO
GDPDJH ,QGXVWULDO FKLFNHQ DQG SRUN SURGXFWLRQ
LV SDUW RI JOREDOO\ LQWHJUDWHG SURGXFWLRQ FKDLQV
7KH\ ODUJHO\ GHSHQG RQ LPSRUWHG IHHGVWXII PDLQO\
VR\EHDQV IURP 6RXWK $PHULFD RIWHQ JURZQ RQ ODQG
IRUPHUO\ RFFXSLHG E\ UDLQIRUHVWV DQG SODQWHG DV
PRQRFXOWXUHVZLWKKLJKIHUWLOL]HUDQGSHVWLFLGHLQSXWV
7KH VR\EHDQV DUH WKHQ VKLSSHG RYHU WKRXVDQGV
RI PLOHV EHIRUH WKH\ UHDFK WKH FKLFNHQ DQG SRUN
IDFWRULHV ZKLFK DUH FRQFHQWUDWHG DURXQG KDUERXUV
DQG DORQJ KLJKZD\V ,Q WKHVH IDFWRULHV FKLFNHQV RI
YHU\IHZEUHHGVDUHIDWWHQHGZLWKLQIRXUWRVL[ZHHNV
RIWHQXQGHULQKXPDQHOLYLQJFRQGLWLRQV
7KH ZRUOGZLGH GLVWULEXWLRQ RI IUR]HQ FKLFNHQ SDUWV
ZKRVH SURGXFWLRQ EHQHÀWV WR D ODUJH H[WHQW IURP
VLJQLÀFDQW GLUHFW DQG LQGLUHFW VXEVLGLHV FDQ KDYH
GHYDVWDWLQJ LPSDFWV RQ PDQ\ ORFDO PDUNHWV LQ
GHYHORSLQJFRXQWULHVDVLOOXVWUDWHGE\WKHH[DPSOHRI
(XURSHDQFKLFNHQSDUWVH[SRUWHGWR:HVW$IULFD
,QGXVWULDOL]DWLRQKDVWXUQHGDJULFXOWXUHXSVLGHGRZQ
WKHVRXUFHRIIRRGKDVEHFRPHDUHDVRQIRUKXQJHU
LQ PDQ\ UHJLRQV RI WKH ZRUOG DQG WKH PDLQ VRXUFH
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
RI ELRGLYHUVLW\ KDV EHFRPH RQH RI LWV JUHDWHVW
WKUHDWV $W WKH VDPH WLPH ZKDW XVHG WR EH D *+*
VLQN KDV EHFRPH D PDMRU SROOXWHU $FFRUGLQJ WR WKH
)$2 D WKH PDMRU VRXUFHV RI *+* HPLVVLRQV
UHODWHG PDLQO\ WR SRUN DQG FKLFNHQ SURGXFWLRQ DUH
WKHSURGXFWLRQRIQLWURJHQIHUWLOL]HUIRUIHHGFURSV
PLOOLRQWRQVRI&2IRUWKHPDLQSURGXFLQJFRXQWULHV
RQIDUP IRVVLO IXHO FRQVXPSWLRQ PLOOLRQ WRQV RI
&2SHU\HDUOLYHVWRFNUHODWHGODQGXVHFKDQJHV
ELOOLRQWRQVRI&2SHU\HDUDQGPHWKDQHHPLVVLRQV
PRUHWKDQPLOOLRQWRQVSHU\HDU
7KHTXHVWLRQWKHQLVKRZFDQDJULFXOWXUDOSURGXFWLRQ
EH UHRUJDQL]HG VR WKDW LW EHFRPHV D VROXWLRQ UDWKHU
WKDQ D SUREOHP" )LYH EDVLF SULQFLSOHV WR UHIRUP
DJULFXOWXUDOSROLFLHVDUHSURSRVHGKHUH
$$QHZDJULFXOWXUDOSDUDGLJP
$OWKRXJKLQGXVWULDODJULFXOWXUHLVVWLOOZLGHO\SURPRWHG
E\ FXUUHQW DJULFXOWXUDO SROLFLHV WKHUH DUH JURZLQJ
FDOOV IRU FKDQJH -DFTXHV 'LRXI IRUPHU 'LUHFWRU
*HQHUDORIWKH)$2VWDWHG´7KHSUHVHQWSDUDGLJPRI
LQWHQVLYHFURSSURGXFWLRQFDQQRWPHHWWKHFKDOOHQJHV
RIWKHQHZPLOOHQQLXPµ)$2,IWKLVLVWUXHIRU
DJULFXOWXUHDVDZKROHZKDWZHQHHGLVDQHZSRVW
LQGXVWULDOSDUDGLJPIRUDJULFXOWXUH
7KHSUREOHPZLWKIDFWRU\IDUPLQJOLHVÀUVWRIDOOLQLWV
IXQGDPHQWDO PLVFRQFHSWLRQ RI DJULFXOWXUH )DUPV
VKRXOGQRWEHIDFWRULHV²WKH\VKRXOGQRWEHSODFHVRI
ODUJHVFDOH SURGXFWLRQ KDOOV LQVWHDG WKH\ VKRXOG EH
KLJKO\ LQWHJUDWHG OLYLQJ V\VWHPV ZKHUH HYHU\ SDUW RI
WKH V\VWHP SOD\V D FUXFLDO UROH LQ WKH IXQFWLRQLQJ RI
WKHV\VWHPDVDZKROH$WUDGLWLRQDOIDUPLVEDVHGRQ
LWV LQWHUQDO UHVRXUFHV UDWKHU WKDQ RQ H[WHUQDO LQSXWV
,WV PDLQ VRXUFH RI HQHUJ\ LV VRODU DQG QRW IRVVLO
7KH DQLPDOV RI WKH IDUP SURGXFH ² EHVLGHV RUJDQLF
IHUWLOL]HUV²IRRGPLONHJJVPHDWEDVHGRQSURGXFWV
WKDWKXPDQVFDQQRWFRQVXPHDQGGLJHVWHJJUDVV
ÀEUHDQGRUJDQLFZDVWH
%\ LJQRULQJ WKH LQWHJUDWHG QDWXUH RI WKH IDUP
LQGXVWULDOL]DWLRQ KDV WXUQHG DJULFXOWXUH LQWR D PDMRU
HQYLURQPHQWDO VRFLDO KHDOWK DQG DQLPDO ZHOIDUH
KD]DUG$JULFXOWXUDOSROLFLHVVKRXOGWKHUHIRUHQRORQJHU
IROORZ WKH LQGXVWULDO PRGHO RI DJULFXOWXUH 5DWKHU WKH
IDUP PRGHO VKRXOG EHFRPH WKH QHZ SDUDGLJP IRU
DJULFXOWXUDO SROLFLHV 7KLV FRQFHSW RI D IDUP LV QRW D
EOXHSULQWEXWLWFDQWHDFKXVKRZWRWDFNOHWKHJUHDW
FKDOOHQJHVWRDJULFXOWXUHRIRXUWLPHVXFKDVFOLPDWH
FKDQJHELRGLYHUVLW\HQHUJ\ZDWHUDQGIRRGVHFXULW\
%)LQDQFLDOLQFHQWLYHVUHYHUVLQJUXOHV
DQGH[FHSWLRQV
5XOHV DQG H[FHSWLRQV UHODWLQJ WR FXUUHQW SXEOLF
VXSSRUWVFKHPHVIRUDJULFXOWXUHVKRXOGEHUHYHUVHG
6XVWDLQDEOH IDUPLQJ SUDFWLFHV VKRXOG EHFRPH WKH
UXOH DQG LQGXVWULDO IDUPLQJ WUHDWHG DQG UHJXODWHG
DV WKH H[FHSWLRQ WR WKLV UXOH $JULFXOWXUDO SROLFLHV
VKRXOG DSSO\ WKH IRUHUXQQHU DQG WKH SROOXWHUSD\V
SULQFLSOHV 7KH IRUHUXQQHU SULQFLSOH ZKLFK VHWV WKH
EHVW VXVWDLQDEOH SUDFWLFHV DYDLODEOH LQ D UHJLRQ RU
SURGXFWLRQVHFWRUDVDUHIHUHQFHIRUIDUPLQJV\VWHPV
VKRXOG EH PDLQVWUHDPHG 3XEOLF IDUP SD\PHQWV
VKRXOG PRYH IURP D ´ORJLF RI FRPSHQVDWLRQµ WR D
´ORJLFRILQYHVWPHQWLQEHVWSUDFWLFHVµ´3XEOLFPRQH\
IRUSXEOLFJRRGVµVKRXOGEHFRPHWKHGULYLQJSULQFLSOH
IRUÀQDQFLDOVXSSRUWWRDJULFXOWXUH
7KHSROOXWHUSD\VSULQFLSOHRQWKHRWKHUKDQGREOLJHV
IDUP LQGXVWULHV WKDW XVH XQVXVWDLQDEOH SUDFWLFHV WR
FRPSHQVDWHVRFLHW\IRUWKHLUQHJDWLYHLPSDFWVRQWKH
HQYLURQPHQWDQGRQSXEOLFKHDOWK7KLVSULQFLSOHQHHGV
WR UHSODFH WKH SUDFWLFH RI FRPSHQVDWLQJ IDUPHUV IRU
QRWSROOXWLQJWKHHQYLURQPHQW
&7LJKWHQLQJUHJXODWRU\ODZ
1RUPDOO\ LQGXVWULDO IDUPLQJ LV XQGHUWDNHQ ZLWKLQ
WKH UXOH RI ODZ HYHQ WKRXJK LW PD\ EH WKUHDWHQLQJ
WR KHDOWK WKH HQYLURQPHQW DQG DQLPDO ZHOIDUH
7KHUHIRUH UHJXODWRU\ ODZV VKRXOG EH WLJKWHQHG
LQ RUGHU WR SUHYHQW QHJDWLYH H[WHUQDOLWLHV DQG WKH
DELOLW\ RI LQGXVWULDO DJULFXOWXUH WR JDLQ FRPSDUDWLYH
DGYDQWDJHV E\ LPSRVLQJ H[WHUQDO FRVWV RQ VRFLHW\
7LJKWHQHGUHJXODWRU\ODZVVKRXOGEHLQWHUQDWLRQDOL]HG
VR DV WR DOORZ EHWWHU ODZ HQIRUFHPHQW DQG SUHYHQW
WKH WUDQVIHU RI DJULFXOWXUDO IDFWRULHV WR FRXQWULHV ZLWK
ZHDNHUOHJLVODWLRQ$OVRKHDOWKHQYLURQPHQWDOVRFLDO
DQGDQLPDOZHOIDUHVWDQGDUGVIRUDJULFXOWXUDOSURGXFWV
VKRXOGEHPRUHHIIHFWLYHO\KDUPRQL]HGLQWHUQDWLRQDOO\
WKDQLVFXUUHQWO\WKHFDVH
'%HWWHUPDUNHWVWHZDUGVKLS
$JULFXOWXUDO SROLFLHV VKRXOG HVWDEOLVK QHZ IRUPV RI
PDUNHW RUJDQL]DWLRQ ZKLFK VXSSRUW IDUPHUV DQG
FRQVXPHUV LQ UHJDLQLQJ RZQHUVKLS RI WKHLU UHJLRQDO
DQG ORFDO PDUNHWV )DUPHUV VKRXOG EH VXSSRUWHG LQ
HVWDEOLVKLQJ SURGXFHU RUJDQL]DWLRQV WKDW VWUHQJWKHQ
WKHLUEDUJDLQLQJSRZHUDQGHQDEOHWKHPWRJHDUIRRG
SURGXFWV WR PRUH UHJLRQDOL]HG DQG ORFDO PDUNHWV
6XFK DQ DSSURDFK VKRXOG DOVR LQYROYH D FKDQJH RI
UHJXODWLRQV UHODWLQJ WR FRPSHWLWLRQ LQ RUGHU WR VWRS
WKHDEXVHRIEX\HUSRZHUE\ROLJRSROLVWLFSURFHVVLQJ
DQG UHWDLOLQJ FRPSDQLHV DQG UHYHUVH WKH FXUUHQW
FRQFHQWUDWLRQLQWKHIRRGFKDLQ
(7UDQVSDUHQF\DQGSDUWLFLSDWLRQ
7UDQVSDUHQF\ VKRXOG EHFRPH D NH\ SULQFLSOH RI
DJULFXOWXUDO SROLF\ ,QIRUPDWLRQ DERXW WKH UHDOLW\ RI
DJULFXOWXUDOSURGXFWLRQWKHVRFLDOVLWXDWLRQRIIDUPHUV
DQG IDUP ZRUNHUV WKH HQYLURQPHQWDO LPSOLFDWLRQV RI
SURGXFWLRQ SURFHVVHV DQG WKH OLYLQJ FRQGLWLRQV RI
DQLPDOVVKRXOGQRWEHKLGGHQDQ\PRUHEHKLQGIDFWRU\
GRRUVDQGOREE\EURFKXUHVLWPXVWEHPDGHSXEOLF
7KH ÀUVW ELJ DJULFXOWXUHUHODWHG FULVHV RI WKH WZHQW\
ÀUVWFHQWXU\LQ(XURSH²%6(DQGWKHIRRWDQGPRXWK
RXWEUHDNLQ²UHVXOWHGLQFDOOVIRUDIXQGDPHQWDO
FKDQJH LQ DJULFXOWXUH $V D FRQVHTXHQFH *HUPDQ\
LPSOHPHQWHGDQ´DJULFXOWXUDOWXUQDURXQGµDWWKHFRUH
RI ZKLFK ZDV FRQVXPHU LQYROYHPHQW DQG JUHDWHU
WUDQVSDUHQF\LQDJULFXOWXUH
7KH GHYHORSPHQW RI D QHZ DJULFXOWXUDO PRGHO
75$'($1'(19,5210(175(9,(:
VKRXOG QR ORQJHU HPHUJH IURP WRSGRZQ SROLFLHV
LPSOHPHQWHG LQ FORVHGGRRU IDFWRULHV ,QVWHDG
IDUPHUVDQGFRQVXPHUVVKRXOGSOD\DQDFWLYHSDUWLQ
SROLF\PDNLQJ ([DPSOHV IURP WKH FXUUHQW UHIRUP RI
WKH(8&RPPRQ$JULFXOWXUDO3ROLF\VKRZWKHGHPDQG
IRUDQGVXFFHVVRISDUWLFLSDWRU\SROLF\DSSURDFKHV
$JULFXOWXUDO UHVHDUFK VKRXOG DOVR EHFRPH PRUH
SDUWLFLSDWLYH DQG LQFOXVLYH DV VWUHVVHG E\ WKH
,QWHUQDWLRQDO $VVHVVPHQW RI $JULFXOWXUDO 6FLHQFH
DQG 7HFKQRORJ\ IRU 'HYHORSPHQW ,$$67' $IWHU D
SHULRGRIDOPRVWH[FOXVLYHÀQDQFLQJRIELRWHFKQRORJ\
DQG JHQHWLF HQJLQHHULQJ SXEOLF VXSSRUW VKRXOG EH
UHGLUHFWHGWRZDUGVLQWHJUDWHGUHVHDUFKWKDWHPEUDFHV
IDUPHUV· ORFDO NQRZOHGJH RI EHVW SUDFWLFHV DV ZHOO
DV WKH NQRZOHGJH RI VFLHQWLVWV IURP WKH YDULRXV
GLVFLSOLQHV FRQFHUQHG ,QYHVWPHQWV LQ SDUWLFLSDWRU\
UHVHDUFK VFKHPHV VKRXOG VSHFLÀFDOO\ IRFXV RQ WKH
QHZFKDOOHQJHVVXSSRUWLQJPRGHUQORZLQSXWRUJDQLF
DQG VRODUEDVHG SURGXFWLRQ VPDOOVFDOH IDUPLQJ
HQKDQFHPHQW RI RQIDUP ELRGLYHUVLW\ LPSURYHG
JUDVVODQG PDQDJHPHQW DQG FURS GLYHUVLÀFDWLRQ WR
UHGXFHYXOQHUDELOLW\
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
1//'06#4;U*;0&7564+#.+8'561%-
#4/+0)
505756#+0#$.'
-R\FH'·6LOYD
&RPSDVVLRQLQ:RUOG)DUPLQJ
%XWIRUWKHVDNHRIVRPHOLWWOHPRXWKIXORIÁHVKZHGHSULYHDVRXORIWKHVXQDQGOLJKWDQGRIWKDWSUR
SRUWLRQRIOLIHDQGWLPHLWKDGEHHQERUQLQWRWKHZRUOGWRHQMR\3OXWDUFK
$EVWUDFW
‡ )DUPDQLPDOVDUHVHQWLHQWEHLQJVZKRVHZHOOEHLQJQHHGVWREHSURWHFWHG
‡ ,QGXVWULDOIDUPLQJNHHSVDQLPDOVLQLVRODWLRQRUFURZGHGWRJHWKHULQWRWDOO\XQQDWXUDOFRQGLWLRQV
‡ $QLPDOVKDYHEHHQVHOHFWLYHO\EUHGIRUWKHLUPHDWRUKLJKPLON\LHOGZLWKGHYDVWDWLQJLPSDFWVRQWKHLU
KHDOWKDQGZHOIDUH
‡ ,QGXVWULDOOLYHVWRFNIDUPLQJXVHVKXJHDPRXQWVRIJUDLQDQGVR\WRIHHGWKHDQLPDOVLQDZRUOGZKHUH
PDQ\JRKXQJU\
2YHU PLOOHQQLD ZH KXPDQV KDYH GHYHORSHG
VRSKLVWLFDWHG IRUPV RI VKHOWHU IRU RXUVHOYHV IURP
UXGLPHQWDU\KXWVWRDLUFRQGLWLRQHGKRXVHV:HPD\
ZHOOKDYHEHFRPHOHVVKDUG\LQWKHSURFHVVEXWDORW
PRUHFRPIRUWDEOHDQGZHDWKHUSURRIHG
1RQKXPDQFUHDWXUHVKDYHXVHGWKHQDWXUDOVKHOWHURI
ZRRGODQGVDQGHDUWKEXUURZVRUEXLOWWKHLURZQPRUH
VRSKLVWLFDWHGKRXVLQJVXFKDVELUGDQGSLJQHVWVRU
EHHKLYHV EXW WKH\ KDYH DOZD\V UHPDLQHG LQ FRQWDFW
ZLWK WKH ODQG ZLWK WUHHV YHJHWDWLRQ DQG ZDWHU DQG
HQMR\HGWKHIUHHGRPRIWKHVNLHV3HUKDSVWKHKXPDQ
VXEVWLWXWH IRU WKLV LV WKH JDUGHQ RU \DUG DWWDFKHG WR
WKH KRXVH RU RXU DWWHPSWV WR ´JR IRU D ZDONµ LQ WKH
FRXQWU\VLGHRUVZLPLQWKHVHD
:KLOH D KXJH SURSRUWLRQ RI WKH HDUWK·V SRSXODWLRQ
PDNHWKHLUOLYLQJIURPIDUPLQJWKHODQGRIWHQLQFOXGLQJ
EUHHGLQJ RU WHQGLQJ WR VRPH IDUP DQLPDOV WKH
FRQÀQHPHQWRIYDVWQXPEHUVRIDQLPDOVLQLQGXVWULDO
IDUPVLVDUHODWLYHO\QHZH[SHULHQFHIRUERWKIDUPHUV
DQG DQLPDOV 7KLV H[SHULPHQW LQ WKH LQGXVWULDOL]DWLRQ
RI OLYHVWRFN IDUPLQJ KDV SURYHG D GLVDVWHU IRU WKH
ZHOOEHLQJRIWKHDQLPDOVSURYLGHGVKRUWOLYHGJDLQV
IRU DJULEXVLQHVV LQWHUHVWV OHG WR WKH GHYDVWDWLRQ RI
SUHFLRXV HFRV\VWHPV DQG JHQHUDWHG KXJH DPRXQWV
RIWR[LFJDVHVDQGRWKHUKDUPIXOZDVWHV,WPD\DOVR
EH D FRQWULEXWRU\ IDFWRU WR WKH JURZLQJ HSLGHPLF RI
REHVLW\ DQG WKH VFDQGDORXV JURZWK LQ QXPEHUV RI
PDOQRXULVKHGSHRSOH
5HPRYLQJDQLPDOVIURPWKHODQGKDVOHGWRXQQDWXUDO
V\VWHPV RI LQGRRU DQLPDO FRQÀQHPHQW HLWKHU
LQGLYLGXDOO\ RU LQ KXJH QXPEHUV LQ YDVW VKHGV 7KLV
KDVEURNHQXSWKHVRFLDOERQGVZKLFKDUHVRYLWDOWR
DQLPDO ZHOOEHLQJ ,VRODWHG DQLPDOV VXFK DV FDOYHV
LQ QDUURZ YHDO FUDWHV RU SUHJQDQW VRZV LQ HYHQ
QDUURZHUVRZVWDOOVJHVWDWLRQFUDWHVVXIIHUQRWRQO\
IURP SK\VLFDO GLVFRPIRUW EXW IURP SV\FKRORJLFDO
GHSULYDWLRQ 7KLV FDQ EH REVHUYHG LQ WKHLU WHQGHQF\
WRGHYHORSVWHUHRW\SLFEHKDYLRXUVLPLODUWRWKHOLRQLQ
D ]RR FDJH 6RZV NHSW LQ WKHVH QDUURZ FUDWHV PD\
VSHQGXSWRSHUFHQWRIWKHLUDFWLYHWLPHZLWKVXFK
VWHUHRW\SLFEHKDYLRXU-HQVHQ/DUJHUQXPEHUV
RIDQLPDOVFURZGHGWRJHWKHUFDQEHFRPHDJJUHVVLYH
ÀQGLQJQRWKLQJWRGRDOOGD\DQGQRHVFDSHIURPWKHLU
SHQPDWHVRIWHQUHVXOWLQJLQLQMXU\
6FLHQFHWRGD\FRQÀUPVZKDWPRVWRIXVNQRZWKURXJK
FRPPRQ VHQVH WKDW DQLPDOV DUH LQWHOOLJHQW VHQWLHQW
EHLQJV FDSDEOH RI D UDQJH RI HPRWLRQDO VWDWHV DQG
FDSDFLWLHV:HQRORQJHUKDUNEDFNWR'HVFDUWHVZKR
EHOLHYHGWKDWDVFUHDPLQJGRJEHLQJGLVVHFWHGDOLYH
ZDV H[KLELWLQJ D SXUHO\ PHFKDQLFDO UHDFWLRQ 'DUZLQ
KLPVHOI UHFRJQL]HG WKDW DQLPDOV ZHUH FDSDEOH RI
PDQ\ HPRWLRQV VLPLODU WR KXPDQV ZKHQ KH VWDWHG
´:H KDYH VHHQ WKDW WKH VHQVHV DQG LQWXLWLRQV WKH
YDULRXVHPRWLRQVDQGIDFXOWLHVVXFKDVORYHPHPRU\
DWWHQWLRQDQGFXULRVLW\LPLWDWLRQUHDVRQHWFRIZKLFK
PDQ ERDVWV PD\ EH IRXQG LQ DQ LQFLSLHQW RU HYHQ
75$'($1'(19,5210(175(9,(:
VRPHWLPHV D ZHOO GHYHORSHG FRQGLWLRQ LQ WKH ORZHU
DQLPDOVµ 'DUZLQ 6DGO\ 'DUZLQ·V ZLVGRP LQ
WKLVUHVSHFWOD\IRUJRWWHQIRUGHFDGHV
QHXURWLFLVPLQFUDWHGVRZV69&$WKHQH7UXVW
RU GLVWUHVVHG EHKDYLRXU LQ FRZV GHSULYHG RI
WKHLUFDOYHV
3LJV FDQ RSHUDWH FRPSXWHU FKDOOHQJHV ZLWK PRUH
DELOLW\ WKDQ GRJV ² EXW WKDW RQO\ SURYHV WKDW VRPH
HOHPHQW RI SLJV· LQWHOOLJHQFH LV QRW XQOLNH RXU RZQ
3LJV DUH RI FRXUVH XQLTXHO\ LQWHOOLJHQW DW EHLQJ
SLJV 7KH FRQFUHWH DQG VODWWHG ÁRRU RI WKH DYHUDJH
SLJ IDFWRU\ IDUP IUXVWUDWHV WKH QDWXUDO H[SORUDWRU\ RU
URRWLQJ EHKDYLRXU RI SLJV ZKR OLNH WR VSHQG SHU
FHQWRIWKHLUGD\OLJKWKRXUVLQVXFKEHKDYLRXU6WROED
DQG:RRG*XVK7KHPHWDOEDUVVXUURXQGLQJ
DQG LPPRELOL]LQJ WKH SUHJQDQW VRZ FDQ UHGXFH KHU
WR GHVSHUDWH GHVSRQGHQF\ 69& RU IUDQWLF
VWHUHRW\SLFUHSHWLWLYHEHKDYLRXUVXFKDVFKHZLQJRQ
WKHEDUV%URRPHWDO
$SDUWIURPNHHSLQJWKHVHDQLPDOVWKURXJKRXWWKHLUOLYHV
LQWRWDOO\XQQDWXUDOVRFLDOJURXSLQJVDQGFRQGLWLRQVRI
GHSULYDWLRQ LQGXVWULDO IDUPLQJ KDV LQÁLFWHG DQRWKHU
VFDQGDORXV WHFKQRORJ\ XSRQ WKHVH FUHDWXUHV ,W KDV
WDNHQ VHOHFWLYH EUHHGLQJ WR D ZKROH QHZ OHYHO RI
VRSKLVWLFDWLRQZLWKGLVDVWURXVLPSDFWVRQWKHGD\WR
GD\OLYHVRIWKHDQLPDOV)RUH[DPSOHWKHUHDUHWKUHH
JOREDOFRPSDQLHVQRZUHVSRQVLEOHIRUWKHEUHHGVRI
FKLFNHQVEUHGIRUPHDWEURLOHUFKLFNHQVVROGZLGHO\
ZRUOGZLGH7KRVHFKLFNHQVQRZJURZVRIDVWWKDWWKH\
UHDFKVODXJKWHUZHLJKWLQÀYHRUVL[ZHHNV²KDOIWKH
WLPHLWWRRN\HDUVDJR%UHGIRUPRUHEUHDVWPXVFOH
PHDWWKH\WHQGWRWLSIRUZDUGDQGXQDEOHWRVXSSRUW
WKHLUKHDY\ERGLHVKDYHEHFRPHSURQHWRDSSDOOLQJO\
SDLQIXOOHJSUREOHPV$UHVHDUFKWHDPVSRQVRUHGE\
WKH *RYHUQPHQW RI WKH 8QLWHG .LQJGRP IRXQG WKDW
SHUFHQWRIFKLFNHQVZHUHSDLQIXOO\ODPHIRUGD\V
EHIRUHWKH\ZHQWWRVODXJKWHU.QRZOHVHWDO
-RKQ:HEVWHU(PHULWXV3URIHVVRUDW%ULVWRO8QLYHUVLW\
DQG IRUPHU KHDG RI WKH 9HWHULQDU\ 6FKRRO REVHUYHG
WKDW ´DSSUR[LPDWHO\ RQH TXDUWHU RI KHDY\ VWUDLQV RI
EURLOHU FKLFNHQ DQG WXUNH\V DUH LQ FKURQLF SDLQ IRU
DSSUR[LPDWHO\RQHWKLUGRIWKHLUOLYHVµ:HEVWHU
/D\LQJ KHQV NHSW IURP SXEHUW\ LQ D FURZGHG FDJH
ZLWK RIWHQ OHVV ÁRRU VSDFH WKDQ D VKHHW RI W\SLQJ
SDSHUFDQSURGXFHHJJVIRUDURXQGD\HDUDQGFRXOG
FDUU\RQIRUORQJHU%XWE\WKHWLPHWKHVH´VSHQWµKHQV
UHDFK WKH VODXJKWHU KRXVH RQH VXUYH\ VKRZHG WKDW
SHUFHQWKDYHEURNHQERQHV*UHJRU\HWDO
3URGXFLQJ HQRXJK FDOFLXP WR SURYLGH WKH VKHOOV IRU
WKHHJJVVKHOD\VHDFK\HDUFRXSOHGZLWKODFN
RIH[HUFLVHIURPEHLQJFDJHGUHQGHUWKHKHQ·VERQHV
IUDJLOH DQG EULWWOH ,Q DGGLWLRQ WKH FDJH SUHYHQWV WKH
KHQIURPFDUU\LQJRXWWKHUHJXODUVHTXHQFHRIDFWLYLWLHV
VKH ZRXOG GR LQ D QDWXUDO HQYLURQPHQW ² SHFNLQJ
DW WKH JURXQG IRU IRRG VWUHWFKLQJ DQG ÁDSSLQJ KHU
ZLQJVGXVWEDWKLQJWRFOHDQKHUIHDWKHUVÁ\LQJXSWR
DSHUFKDWQLJKWDZD\IURPSUHGDWRUVDQGOD\LQJKHU
HJJVLQDVHFOXGHGQHVW7KXVWKHFDJHVFRQVWLWXWHD
FRPELQDWLRQRISK\VLRORJLFDODQGPHQWDOGHSULYDWLRQ
0RUHDQGPRUHDQLPDOVSDUWLFXODUO\SLJVDQGSRXOWU\
EXW DOVR FDWWOH DUH EHLQJ NHSW LQ LQGXVWULDO IDUPV
WKURXJKRXWWKHZRUOG7KH)$2UHSRUWVWKDWLQGXVWULDO
DQLPDOSURGXFWLRQV\VWHPVDUHLQFUHDVLQJDWVL[WLPHV
WKH UDWH RI WUDGLWLRQDO PL[HG IDUPLQJ V\VWHPV )$2
E$URXQGSHUFHQWRIIDUPDQLPDOVDUHQRZ
NHSW LQ WKHVH V\VWHPV SHUPDQHQWO\ KRXVHG RXW RI
VLJKWDQGVDGO\RXWRIPLQG$QGWKHJOREDOEXUGHQ
RIIDUPDQLPDOVXIIHULQJLVRQO\OLNHO\WRLQFUHDVH
7KLVLVQRWDFRQÁLFWEHWZHHQVFLHQWLÀFSURJUHVVDQG
KXPDQ HPSDWK\ ZLWK DQLPDOV 7KH VFLHQWLÀF GRVVLHU
RQ WKH VXIIHULQJ FDXVHG WR DQLPDOV LQ LQGXVWULDO
IDUPLQJV\VWHPVLVFRQVWDQWO\JURZLQJ1HZUHVHDUFK
VKRZV WKH FDSDFLW\ RI FKLFNHQV ² DQG ÀVK ² WR IHHO
SDLQ 'DQEXU\ HW DO 6QHGGRQ %UDLWKZDLWH
DQG *HQWOH 2WKHU UHVHDUFK VKRZV VWDWHV RI
'DLU\ FRZV VXFK DV WKH XELTXLWRXV EODFNDQGZKLWH
+ROVWHLQV KDYH EHHQ EUHG WR SURGXFH VR PXFK PLON
WKDWWKH\DUHPHWDEROLFDOO\EHLQJSXVKHGWRWKHOLPLW
QRZSURGXFLQJXSWRRUHYHQPRUHWKDQOLWUHV
D \HDU PDQ\ WLPHV PRUH WKDQ FDOYHV ZRXOG KDYH
GUXQNIURPWKHLUPRWKHUV7KH\DUHSURQHWRVXIIHULQJ
IURPKLJKUDWHVRISDLQIXOFRQGLWLRQVOLNHPDVWLWLVDQG
ODPHQHVV DVVRFLDWHG ZLWK WKHLU EUHHGLQJ IHHGLQJ
DQGKRXVLQJFRQGLWLRQV&RZVWKDWDUHNHSWLQ]HUR
JUD]LQJLQGRRUV\VWHPVDUHDWKLJKHUULVNRIPDVWLWLV
ODPHQHVVPHWULWLVNHWRVLVWHDWWUDPSGLIÀFXOWELUWKV
DQG VRPH EDFWHULDO LQIHFWLRQV ()6$ $JDLQ
WKHFRPELQDWLRQRIEUHHGLQJIRUSURGXFWLYLW\DQGWKH
WRWDOO\ XQQDWXUDO HQYLURQPHQWV KDV SURYHG KLJKO\
LQMXULRXVWRWKHDQLPDOV· ZHOIDUH<HWVRPHJRVR IDU
DV WR DGYRFDWH NHHSLQJ GDLU\ FRZV LQ VHDOHG XQLWV
/8&&*VRWKDWWKHLUPHWKDQHHPLVVLRQVFDQ
EH´VFUXEEHGµDQGSXWWRJRRGXVH6XFKDP\RSLF
UHFRPPHQGDWLRQ ZKLFK GLUHFWO\ DIIHFWV WKH OLYHV RI
WKH DQLPDOV WKHPVHOYHV VKRXOG VXUHO\ EH VXEMHFW WR
DQ DVVHVVPHQW RI LWV HIIHFWV RQ DQLPDO KHDOWK DQG
ZHOIDUH
6R ZKHUH GR WKH EHVW VROXWLRQV OLH" 3HUKDSV WKH
DQVZHUV WR WKHVH SUREOHPV RI WR[LF HPLVVLRQV IURP
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
IDFWRU\IDUPVRYHUH[SORLWDWLRQRIWKHHDUWK·VUHVRXUFHV
UXUDOSRYHUW\XUEDQREHVLW\DQGSRRUDQLPDOZHOIDUH
FDQEHIRXQGLQDSSO\LQJDPL[WXUHRIJRRGVFLHQFH
FRPPRQVHQVHDQGFRPSDVVLRQWRSURGXFHJHQXLQH
ZLQZLQVLWXDWLRQV
,WLVQRZZHOONQRZQWKDWSHUPDQHQWSDVWXUHFDQDFW
DV D FDUERQ VLQN 5HFHQW UHVHDUFK FRPSDULQJ WKH
HQYLURQPHQWDOLPSDFWVRIIRXUGLIIHUHQWNLQGVRIGDLU\
IDUPV IRXQG WKDW D ZHOOPDQDJHG GDLU\ KHUG NHSW
RXWGRRUV\HDUURXQGOHIWDFDUERQIRRWSULQWSHUFHQW
VPDOOHUWKDQWKDWRIDKLJKSURGXFWLRQGDLU\KHUGNHSW
LQ SHUPDQHQWKRXVLQJ ,QDGGLWLRQ DYHUDJHQHWIDUP
JUHHQKRXVHJDVHPLVVLRQVGHFOLQHGE\DERXWSHU
FHQW E\ NHHSLQJ WKH KHUG RXWGRRUV \HDUURXQG DQG
FXWDPPRQLDHPLVVLRQVE\DURXQGSHUFHQW5RW]
HWDO$VUXPLQDQWDQLPDOVWKHVHFRZVFRXOG
SXUVXHWKHLUQDWXUDOJUD]LQJEHKDYLRXUDQGDOWKRXJK
WKHLUSURGXFWLYLW\ZDVORZHULQWHUPVRIOLWUHVSURGXFHG
WKHLUPLONZDVKLJKHULQSURWHLQDQGIDWFRQWHQW7KXV
WKH QXWULWLRQDO RXWSXW IURP LQGRRU DQG RXWGRRU FRZV
ZDVVLPLODU
7R DFKLHYH KLJK ZHOIDUH VWDQGDUGV WKH QHHGV RI WKH
DQLPDOVWKHPVHOYHVVKRXOGEHFRQVLGHUHG,ISRXOWU\
VXFKDVFKLFNHQVWXUNH\VDQGGXFNVKDYHZLQJVZLWK
ZKLFK WR Á\ WKH\ VKRXOG QRW EH EUHG WR EHFRPH VR
KHDY\WKDWWKH\DUHQRORQJHUDEOHWRÁ\DQGLQWKH
FDVHRIWXUNH\VQRORQJHUDEOHWRPDWHQDWXUDOO\GXH
WR WKHLU ZHLJKW $QLPDOV VKRXOG QRW EH EUHG LQ ZD\V
WKDWWKHLURZQSK\VLRORJ\EHFRPHVWKHLUZRUVWHQHP\
DV LV WKH FDVH ZLWK EURLOHU FKLFNHQV ,I KHQV VWUHWFK
WKHLUZLQJVDQGÁDSWKHPWKH\VKRXOGKDYHVSDFHWR
GR VR ,I SLJV VSHQG PRVW RI WKHLU WLPH URRWLQJ ZLWK
WKHLU KLJKO\ VHQVLWLYH VQRXWV WKH\ VKRXOG QHYHU EH
NHSW RQ IXOO\ VODWWHG ÁRRUV ZKHUH VXFK EHKDYLRXU LV
LPSRVVLEOH,IWKHDQLPDOVDUHNHSWLQGRRUVWKH\PXVW
EH SURYLGHG ZLWK D GHHSO\ HQULFKHG HQYLURQPHQW
ZKLFKSURYLGHVFRPIRUWDEOHEHGGLQJPDWHULDOSOHQW\
RI VSDFH DQG RSSRUWXQLWLHV IRU QDWXUDO EHKDYLRXU WR
ÁRXULVK
$QLPDOV· ERGLHV VKRXOG QRW EH PXWLODWHG WKURXJK
SUDFWLFHV VXFK DV GRFNLQJ SLJV· WDLOV LQ RUGHU WR
NHHSWKHPLQIDFWRU\IDUPFRQGLWLRQV$QLPDOVVKRXOG
EH IHG ZLWK DV QHDU D QDWXUDO GLHW DV SRVVLEOH DQG
QRW EH GHSULYHG RI QRUPDO TXDQWLWLHV RI IRRG DV LV
WKHFDVHZLWKWKHEUHHGHUELUGVRIWKHEURLOHUYDULHW\
7KH\ VKRXOG QRW EH GHSULYHG RI QHFHVVDU\ QXWULHQWV
DVKDSSHQVZLWKFDOYHVWKDWDUHIHGDORZLURQOLTXLG
GLHWWRSURGXFH´ZKLWHµYHDOQRUVKRXOGWKH\EHIRUFH
IHGIRUJRXUPHWSXUSRVHVVXFKDVIRUWKHSURGXFWLRQ
RI IRLH JUDV 0RUHRYHU DQLPDOV VKRXOG EH SURYLGHG
ZLWK WKH FRPSDQ\ RI WKHLU RZQ NLQG LQ QXPEHUV DV
FORVHDVSRVVLEOHWRQDWXUDOFRQGLWLRQV,VRODWLRQDQG
RYHUFURZGLQJVKRXOGQRWEHDOORZHG
%R[7ZHOYH)DUP$QLPDO:HOIDUH&ULWHULD
6RFLHW\LVSURJUHVVLYHO\UHFRJQL]LQJDQLPDOV·FDSDFLWLHVDQGQHHGV7KH/LVERQ7UHDW\RIWKH(XURSHDQ8QLRQ(8LQ
FOXGHVDQDUWLFOHZKLFKUHFRJQL]HVWKDWDQLPDOVDUH´VHQWLHQWEHLQJVµDQGUHTXLUHVPHPEHU6WDWHVWRSURWHFWWKHLUZHOIDUH
(8)URPWKH(8WRVRPHVWDWHVLQWKH8QLWHG6WDWHVWR1HZ=HDODQGDQG$XVWUDOLDWKHUHDUHPRYHVWRSKDVHRXW
DQGEDQVRPHRIWKHPRUHH[WUHPHFRQÀQHPHQWV\VWHPVDVVRFLDWHGZLWKLQGXVWULDOIDUPLQJ
7KH(XURSHDQ&RPPLVVLRQVSRQVRUHG:HOIDUH4XDOLW\UHVHDUFKSURMHFWHVWDEOLVKHGDOLVWRIWZHOYHIDUPDQLPDOZHOIDUH
FULWHULD7KHVHDUH
‡ $QLPDOVVKRXOGQRWVXIIHUIURPSURORQJHGKXQJHU
‡ $QLPDOVVKRXOGQRWVXIIHUIURPSURORQJHGWKLUVW
‡ $QLPDOVVKRXOGKDYHFRPIRUWDURXQGUHVWLQJ
‡ $QLPDOVVKRXOGKDYHWKHUPDOFRPIRUW
‡ $QLPDOVVKRXOGKDYHHQRXJKVSDFHWRPRYHDURXQGIUHHO\
‡ $QLPDOVVKRXOGEHIUHHRISK\VLFDOLQMXULHV
‡ $QLPDOVVKRXOGEHIUHHRIGLVHDVH
‡ $QLPDOVVKRXOGQRWVXIIHUSDLQIURPLQDSSURSULDWHPDQDJHPHQWRUKDQGOLQJ
‡ $QLPDOVVKRXOGEHDEOHWRH[SUHVVQRUPDOQRQKDUPIXOEHKDYLRXUV
‡ $QLPDOVVKRXOGEHDEOHWRH[SUHVVRWKHUVSHFLHVVSHFLÀFQRUPDOEHKDYLRXUV
‡ $QLPDOVVKRXOGEHKDQGOHGZHOOLQDOOVLWXDWLRQV
‡ 3RVLWLYHHPRWLRQVVKRXOGEHSURPRWHGDQGQHJDWLYHHPRWLRQVVXFKDVIHDUGLVWUHVVIUXVWUDWLRQDQGDSDWK\VKRXOG
EHDYRLGHG
6RXUFHZZZDQLPDOZHOIDUHSODWIRUPHX
75$'($1'(19,5210(175(9,(:
%R[7KH)LYH)UHHGRPV
)UHHGRPIURPKXQJHUDQGWKLUVW²E\UHDG\DFFHVVWRIUHVKZDWHUDQGDGLHWWRPDLQWDLQIXOOKHDOWKDQGYLJRXU
)UHHGRPIURPGLVFRPIRUW²E\SURYLGLQJDQDSSURSULDWHHQYLURQPHQWLQFOXGLQJVKHOWHUDQGDFRPIRUWDEOHUHVWLQJ
DUHD
)UHHGRPIURPSDLQLQMXU\RUGLVHDVH²E\SUHYHQWLRQRUUDSLGGLDJQRVLVDQGWUHDWPHQW
)UHHGRPWRH[SUHVVQRUPDOEHKDYLRXU²E\SURYLGLQJVXIÀFLHQWVSDFHSURSHUIDFLOLWLHVDQGFRPSDQ\RIWKHDQLPDO·V
RZQNLQG
)UHHGRPIURPIHDUDQGGLVWUHVV²E\HQVXULQJFRQGLWLRQVDQGWUHDWPHQWZKLFKDYRLGPHQWDOVXIIHULQJ
6RXUFHZZZIDZFRUJXNIUHHGRPVKWP
,W LV YLWDO WKDW WKRVH LQ FKDUJH RI WKH DQLPDOV DUH QRW
RQO\ WUDLQHG EXW DUH DOVR FRPSDVVLRQDWH +RZHYHU
JRRG PDQDJHPHQW LV QHYHU DQ H[FXVH IRU NHHSLQJ
DQLPDOVLQDSRRUHQYLURQPHQWLQWKHÀUVWSODFH:HOO
PDQDJHG LQGXVWULDO SLJ IDUPV DUH VWLOO GHWULPHQWDO WR
DQLPDOZHOOEHLQJHYHQLIWKHLUPDQDJHUVGRWKHLUEHVW
WRPLWLJDWHWKHKDUPIXOLPSDFWV
9DULRXV PHWKRGV WR HQVXUH JRRG DQLPDO ZHOIDUH
VWDQGDUGV KDYH EHHQ GHYHORSHG VXFK DV WKH
PXFK DGPLUHG )LYH )UHHGRPV DQG WKH 7ZHOYH )DUP
$QLPDO :HOIDUH &ULWHULD GHYHORSHG IRU WKH (XURSHDQ
&RPPLVVLRQ·V :HOIDUH 4XDOLW\ SURMHFW VHH ER[HV DQG
FRPSHWH 7KH PHVVDJH WR FRQVXPHUV ZKR FDQ
DIIRUGPHDWHYHU\GD\LVWRUHGXFHWKHLUFRQVXPSWLRQ
DQG ZKHQ WKH\ EX\ PHDW WR VSHQG D OLWWOH PRUH
² EXW OHVV IUHTXHQWO\ ² RQ SXUFKDVLQJ RQO\ DQLPDO
IULHQGO\ HQYLURQPHQWDOO\ IULHQGO\ SURGXFWV $ UHSRUW
FRPPLVVLRQHGE\&RPSDVVLRQLQ:RUOG)DUPLQJDQG
)ULHQGV RI WKH (DUWK 8QLWHG .LQJGRP VKRZV WKDW LW
ZLOOEHSRVVLEOHWRIHHGWKHZRUOGSRSXODWLRQLQ
XVLQJ D FRPELQDWLRQ RI PL[HG IDUPLQJ DQG RUJDQLF
PHWKRGV DORQJ ZLWK JRRG DQLPDO ZHOIDUH V\VWHPV
EXW RQO\ LI JOREDOO\ FRQVXPHUV RI ODUJH TXDQWLWLHV
RI DQLPDO SURGXFWV FXW EDFN RQ WKHLU FRQVXPSWLRQ
&RPSDVVLRQ LQ :RUOG )DUPLQJ DQG )ULHQGV RI WKH
(DUWKE
,W LV QRW MXVW IDUPHUV RU DJULEXVLQHVV FRPSDQLHV
WKDW QHHG WR DFW WR DFKLHYH DQLPDOIULHQGO\ IDUPLQJ
,I FRQVXPHUV FRQWLQXH WR FDOO IRU ´FKHDS PHDWµ WKH
IDFWRU\ IDUPV ZLOO FRQWLQXH 7KH LURQ\ LV WKDW VXFK
IDUPV DUH LQ IDFW FRVWO\ WR WKH HQYLURQPHQW WR WKH
DQLPDOV DQG WR VPDOOVFDOH IDUPHUV ZKR FDQQRW
*HQXLQHZLQZLQVDUHSRVVLEOH,WLVXSWRLQGLYLGXDOV
JRYHUQPHQWV OHQGLQJ EDQNV DQG JOREDO DJULFXOWXUDO
DQG IRRG LQVWLWXWLRQV WR PDNH HWKLFDO FKRLFHV DQG
GULYHSROLFLHVDQGSUDFWLFHVLQWKHULJKWGLUHFWLRQ7KH
HDUWKWKHDQLPDOVDQGRXUIHOORZKXPDQVQHHGVXFK
DFRPPLWPHQW
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
1//'06#4;U06')4#6'&412X+8'561%-#0&0'4);
#0#)'/'06U*'#5'1(+1)#5+074#.
6*+12+#
6WDQOH\*ZDYX\D
.QRZOHGJH0DQDJHPHQW&RRUGLQDWRU3DUWQHUVKLSIRU'HYHORSPHQW,QLWLDWLYH7UXVW=LPEDEZH
$EVWUDFW
‡ %LRJDVWHFKQRORJ\HQKDQFHVV\QHUJLHVLQFURSOLYHVWRFNDQGHQHUJ\V\VWHPVEHFDXVHWKHE\SURG
XFWRIIHUPHQWDWLRQVOXUU\IURPVDYHGGXQJLVXVHGDVIHUWLOL]HUDQGWKHVDYHGFURSUHVLGXHVDUHXVHG
DVDQLPDOIHHG
‡ /DERXURWKHUZLVHXVHGIRUFROOHFWLQJÀUHZRRGDQGGXQJFDQEHGLUHFWHGWRZDUGVHFRQRPLFDOO\SUR
GXFWLYHDFWLYLWLHVVXFKDVDJULFXOWXUH
‡ ,QFUHDVHGDJULFXOWXUDOSURGXFWLYLW\DQGRURYHUDOOLQFRPHLPSURYHWKHDWWUDFWLYHQHVVRIELRJDVDVD
ODERXUVDYLQJWHFKQRORJ\VRWKDWDSRVLWLYHV\QHUJ\HIIHFWOLPLWHGWRKRXVHKROGVFROOHFWLQJWKHLURZQ
HQHUJ\ VRXUFHV DQG LQ WKH DEVHQFH RI D VXEVLG\ EHWZHHQ HFRQRPLF GHYHORSPHQW DQG LPSURYHG
HQHUJ\XWLOL]DWLRQFDQEHUHDOL]HG
%LRPDVVFRQVLVWLQJRIÀUHZRRGFKDUFRDOGXQJDQG
FURSUHVLGXHVUHPDLQVWKHPDLQVRXUFHRIHQHUJ\LQ
VXE6DKDUDQ$IULFD'DYLGVRQDQG6RNRQD ,Q
(WKLRSLDIRULQVWDQFHELRPDVVVXSSOLHVRYHUSHU
FHQW RI WKH WRWDO QDWLRQDO HQHUJ\ GHPDQG DQG UXUDO
KRXVHKROGV DUH DOPRVW HQWLUHO\ GHSHQGHQW RQ WKLV
VRXUFH IRU WKHLU HQHUJ\ QHHGV 7KH PDLQ VRXUFHV RI
HQHUJ\DUHZRRG\ELRPDVVSHUFHQWGXQJSHU
FHQWFURSUHVLGXHVSHUFHQWDQGSHWUROHXPSHU
FHQW+RXVHKROGVDFFRXQWIRUSHUFHQWRIQDWLRQDO
HQHUJ\FRQVXPSWLRQZKLOHUXUDOKRXVHKROGVDFFRXQW
IRU SHU FHQW RI WKH QDWLRQDO HQHUJ\ FRQVXPSWLRQ
GHULYHGPDLQO\IURPELRPDVVHQHUJ\VRXUFHV(VWKHWH
6RQGHUDQG+HHGJH
ZRUOGZLGHZKLFKLVKLJKHUWKDQGHDWKVIURPPDODULD
DQG DOPRVW KDOI RI DOO +,9$,'6 GHDWKV WKH PDMRULW\
RI ZKLFK RFFXU LQ VXE6DKDUDQ $IULFD ,($ $OWKRXJKÀUHZRRGUHPDLQVWKHPDLQELRPDVVHQHUJ\
VRXUFH LW LV EHFRPLQJ VFDUFH LQ WKH UXUDO DUHDV RI
(WKLRSLDDQGKRXVHKROGVDUHLQFUHDVLQJO\XVLQJGXQJ
DQG FURS UHVLGXHV LQVWHDG 7KH JURZLQJ VFDUFLW\ RI
ÀUHZRRGLVOHDGLQJWRUHGXFHGDJULFXOWXUDOSURGXFWLRQ
DVKRXVHKROGVDOORFDWHODERXUDZD\IURPDJULFXOWXUH
DV PRUH DJULFXOWXUDO ODQG LV DOORFDWHG WR ÀUHZRRG
SURGXFWLRQ DQG DV KRXVHKROGV XVH PRUH GXQJ DQG
FURS UHVLGXHV IRU IXHO UDWKHU WKDQ IRU IHUWLOL]HU DQG
DQLPDO IHHG UHVSHFWLYHO\ &RRNH .|KOLQ DQG +\GH
6FDUFLW\RIÀUHZRRGDOVRSODFHVDQLQFUHDVLQJ
EXUGHQ RQ ZRPHQ DQG FKLOGUHQ ZKR DUH LWV PDLQ
FROOHFWRUV
7KH ZLGHVSUHDG XVH RI ELRPDVV HQHUJ\ VRXUFHV
KDV EHHQ IRXQG WR EH ODUJHO\ LQHIÀFLHQW DGYHUVHO\
DIIHFWLQJ WKH HQYLURQPHQW KXPDQ KHDOWK DQG IRRG
VHFXULW\ 'HZHHV 'DQJ ,($ (QYLURQPHQWDOSUREOHPVDULVHIURPGHIRUHVWDWLRQODQG
GHJUDGDWLRQDQGDLUSROOXWLRQWKDWOHDGWRJUHHQKRXVH
JDV*+*HPLVVLRQV$QQXDOGHDWKVIURPLQGRRUDLU
SROOXWLRQ UHVXOWLQJ IURP WKH XVH RI ELRPDVVVRXUFHG
HQHUJ\ KDYH EHHQ HVWLPDWHG DW DURXQG PLOOLRQ
%LRJDVZKLFKRIIHUVRQHWHFKQLFDOO\SRVVLEOHHQHUJ\
DOWHUQDWLYHIRUUXUDODUHDVFDQKHOSPLWLJDWHVRPHRI
WKH FRQVHTXHQFHV RI DQ RYHUUHOLDQFH RQ ELRPDVV
HQHUJ\ DQG LV JDLQLQJ SRSXODULW\ LQ $IULFD 81(6&2
DQG 7DWD (QHUJ\ 5HVHDUFK ,QVWLWXWH :LWK WKH
SRWHQWLDOWRVHUYHXSWRPLOOLRQIDPLO\XQLWVELRJDV
WHFKQRORJ\KDVEHHQSURPRWHGVLQFHLQRUGHUWR
KHOSRYHUFRPHWKHLQFUHDVLQJHQHUJ\FULVLVLQ(WKLRSLD
(60$3 +RZHYHU VWXGLHV LQGLFDWH WKDW
$,QWURGXFWLRQDQGEDFNJURXQG
FRPPXQLW\ GLJHVWHUV DUH SURQH WR IDLOXUH FRPSDUHG
ZLWKLQGLYLGXDOIDPLO\XQLWV$IHDVLELOLW\VWXG\FDUULHG
RXWE\(VWKHWH6RQGHUDQG+HHGJHUHYHDOHG
WKDW RI WKH WR GRPHVWLF SODQWV LQ (WKLRSLD
DERXWSHUFHQWKDGVWRSSHGIXQFWLRQLQJGXHWRD
UDQJH RI SUREOHPV LQFOXGLQJ ZDWHU VKRUWDJH GXQJ
VKRUWDJHWHFKQLFDOSUREOHPVDEDQGRQPHQWDQGORVV
RI LQWHUHVW 'HVSLWH SDVW IDLOXUHV WKHUH LV UHQHZHG
LQWHUHVW LQ ELRJDV HQHUJ\ LQ (WKLRSLD ,Q WKH
1DWLRQDO%LRJDV3URJUDPPH(WKLRSLD1%3(LQLWLDWHG
D PXOWLVWDNHKROGHUGULYHQ SURJUDPPH WR GHYHORS
D YLDEOH DQG VXVWDLQDEOH FRPPHUFLDO ELRJDV VHFWRU
(WKLRSLD 5XUDO (QHUJ\ 'HYHORSPHQW DQG 3URPRWLRQ
&HQWHU DQG 619 (WKLRSLD ,QLWLDOO\ IDPLO\ VL]H
ELRJDVSODQWVUDQJLQJIURPPWRPDUHEHLQJ
FRQVWUXFWHG LQ VHOHFWHG UHJLRQV RI 7LJUD\ $PKDUD
2URPLD DQG 6RXWKHUQ 1DWLRQV 1DWLRQDOLWLHV DQG
3HRSOHV5HJLRQ61135
$ VXUYH\ RI UDQGRPO\ VHOHFWHG KRXVHKROGV LQ
WKH 'DOH DQG $UVL 1HJHOH GLVWULFWV RI (WKLRSLD ZDV
FRQGXFWHG EHWZHHQ $SULO DQG 0D\ WR DVVHVV
WKH HFRQRPLFV RI ÀUHZRRG DQG GXQJ XVH LQ UXUDO
(WKLRSLD WR LPSURYH XQGHUVWDQGLQJ RI KRXVHKROG
HQHUJ\ XVH SDWWHUQV DQG DQDO\VH WKH SRWHQWLDO RI
ELRJDV WHFKQRORJ\ DV D SRVVLEOH DOWHUQDWLYH VR DV
WR LQFUHDVH WKH FKDQFHV RI VXFFHVV LQ SURPRWLQJ
FOHDQHU HQHUJ\ VRXUFHV 6FKODJ DQG =X]DUWH 7KHÀQGLQJVRIWKHVWXG\DUHSUHVHQWHGEULHÁ\LQWKH
QH[WVHFWLRQIROORZHGE\VRPHRILWVFRQFOXVLRQVDQG
UHFRPPHQGDWLRQV
%5HVHDUFKÀQGLQJVIURPKRXVHKROG
VXUYH\VDQGFRVWEHQHÀWDQDO\VLV
$JULFXOWXUDO SURGXFWLRQ V\VWHPV LQ WKH VXUYH\HG
DUHDV DUH PDLQO\ VPDOOVFDOH DQG VXEVLVWHQFH
RULHQWHG JHDUHG WR OLYHVWRFN DQG FURS SURGXFWLRQ
7KHPDLQO\UDLQIHGFURSSURGXFWLRQKDVWZRVHDVRQV
WKH PDLQ VHDVRQ 0HKHU EHJLQQLQJ LQ $SULO0D\
ZLWK KDUYHVWV LQ 1RYHPEHU'HFHPEHU DQG D VKRUWHU
VHDVRQ %HOJ IURP )HEUXDU\ WR -XQH 7KH OLYHVWRFN
DQG FURS SURGXFWLRQ V\VWHPV DUH KLJKO\ LQWHJUDWHG
FURS UHVLGXHV DUH VWRUHG DV DQLPDO IHHG ZKLOH GXQJ
LVDQLPSRUWDQWVRXUFHRIIHUWLOL]HU+RXVHKROGVLQWKH
VXUYH\HGDUHDVXVHDFRPELQDWLRQRIHQHUJ\VRXUFHV
WKURXJKRXW WKH \HDU )LUHZRRG LV WKH ODUJHVW VRXUFH
RIHQHUJ\ZLWKWKHKLJKHVWDPRXQWEHLQJXVHGLQWKH
WKLUGTXDUWHURIHDFK\HDU2WKHUFRRNLQJIXHOVFRQVLVW
PDLQO\RIGXQJDQGFURSUHVLGXHVEXWDOVRNHURVHQH
FKDUFRDO DQG HOHFWULFLW\ 8VH RI FURS UHVLGXH LV KLJK
DWKDUYHVWWLPHZKLFKUXQVIURP2FWREHUWR-DQXDU\
75$'($1'(19,5210(175(9,(:
ZKHQ PRUH FURS UHVLGXHV DUH DYDLODEOH 'XQJ
FROOHFWLRQ LV PRUH SURPLQHQW GXULQJ WKH GU\ VHDVRQ
ZKHQLWLVHDVLHUWRSURFHVV,WLVWKHQVWRUHGIRUXVH
GXULQJWKHZHWVHDVRQ
&$QDO\VLVRIWKHSRWHQWLDORI
ELRJDVHQHUJ\
$ FRVWEHQHÀW DQDO\VLV RI P DQG P ELRJDV
SODQWVSURPRWHGE\WKH1%3(ZDVFRQGXFWHG:KLOH
WKH P SODQW LV WKH PRVW FRPPRQ WKH P SODQW
LV DSSURSULDWH XQGHU FRQGLWLRQV ZKHUH OLYHVWRFN
QXPEHUV DUH ORZ )RU TXDOLI\LQJ KRXVHKROGV 1%3(
UHFRPPHQGVDOLYHVWRFNKROGLQJRIDWOHDVWIRXUFDWWOH
IRU WKH P ELRJDV SODQW DQG VL[ FDWWOH IRU WKH P
ELRJDVSODQW$PRQJWKHVXUYH\HGKRXVHKROGVDERXW
SHU FHQW TXDOLÀHG IRU WKH P ELRJDV SODQW DQG
DERXWSHUFHQWIRUWKHPSODQW,QYHVWPHQWFRVWV
XVHGLQWKLVVWXG\ZHUHEDVHGRQGDWDSURYLGHGE\WKH
1%3(EDVHGRQSULFHVSUHYDLOLQJLQ0DUFK7KH
WRWDOFRVWVRILQYHVWLQJLQDELRJDVSODQWDPRXQWHGWR
(WKLRSLDQELUU(7%IRUDPSODQWDQG
(7%IRUDPSODQW7KH1%3(SD\VD
VXEVLG\ RI (7% SHUSODQW UHJDUGOHVV RI
VL]H7KHUHPDLQLQJFRVWVIRUHDFKRIWKRVHSODQWVDUH
ERUQHE\WKHIDUPHUV7KHFRVWVRIRSHUDWLQJWKHSODQW
DOVR LQFOXGHG WKH RSSRUWXQLW\ FRVWV RI WLPH XVHG LQ
FROOHFWLQJGXQJDQGWKHFRVWVRIZDWHUQHHGHGWRIHHG
WKHELRJDVSODQW
7KH P DQG P ELRJDV SODQWV KDYH WKH SRWHQWLDO
WRUHSODFHXSWRNJDQGNJUHVSHFWLYHO\
RI ÀUHZRRG SHU \HDU ZKHQ RSHUDWLQJ DW IXOO FDSDFLW\
DQG WKH\ FDQ VDYH XS WR NJ DQG NJ RI
GXQJUHVSHFWLYHO\SHU\HDU+RZHYHUWKHSRWHQWLDOWR
UHSODFHÀUHZRRGZLWKELRJDVZDVDVVXPHGWREHRQO\
SHU FHQW DV WKH FXUUHQW VHWXS GRHV QRW VXSSRUW
,QMHUDEDNLQJZKLFKDFFRXQWVIRUXSWRSHUFHQW
RIUXUDOKRXVHKROGV·WRWDOHQHUJ\XVH((65&
2EWDLQHG ELRJDV ZDV YDOXHG LQ WHUPV RI UHSODFHG
ÀUHZRRGDQGGXQJ
7RFDSWXUHWKHEHQHÀWVIRUGLIIHUHQWKRXVHKROGW\SHV
LQ WHUPV RI HQHUJ\ PDQDJHPHQW D FRVWEHQHÀW
DQDO\VLVZDVSHUIRUPHGXVLQJWKUHHVFHQDULRVLIRU
KRXVHKROGVWKDWLQYHVWLQELRJDVWRUHSODFHSXUFKDVHG
ÀUHZRRGRULLWRUHSODFHFROOHFWHGÀUHZRRGDQGLLL
IRU KRXVHKROGV WKDW XVH GXQJ DV DQ HQHUJ\ VRXUFH
LQ DGGLWLRQ WR FROOHFWHG ÀUHZRRG $OO WKUHH VFHQDULRV
DVVXPHG WKDW GXQJ DQG VOXUU\ ZRXOG EH XVHG DV
IHUWLOL]HU)RUFROOHFWHGHQHUJ\VRXUFHVZLWKQRPDUNHW
YDOXH WKH PDUJLQDO SURGXFWLYLW\ RI IHPDOH ODERXU LQ
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
IDUP SURGXFWLRQ ZDV XVHG 'XQJ FDUULHV DGGLWLRQDO
YDOXHIRULWVIHUWLOL]HUFRQWHQW$FFRUGLQJWRODERUDWRU\
WHVWV FRQGXFWHG RQ GXQJ VDPSOHV WDNHQ NJ RI
GLDPPRQLXP SKRVSKDWH '$3 LV HTXLYDOHQW WR
DSSUR[LPDWHO\NJRIGU\PDQXUH$FFRUGLQJWRWKH
VXUYH\ÀQGLQJV'$3KDVDQDYHUDJHIDUPJDWHSULFH
SXUFKDVH SULFH SOXV WUDQVSRUW FRVWV RI (7%
SHU NLORJUDP 7KLV WUDQVODWHV LQWR (7%
SHUNLORJUDPRIGXQJ&RPELQLQJFROOHFWLRQFRVWVDQG
IHUWLOL]HURSSRUWXQLW\FRVWVGXQJKDVDVKDGRZSULFH
RI(7%SHUNLORJUDPDQG(7%
SHUJLJDMRXOHZKHQXVHGDVDQHQHUJ\VRXUFH
7KHVXUYH\IRXQGUDWHVRIUHWXUQRQFDSLWDOLQYHVWHGLQ
ELRJDVSODQWVWREHDERYHSHUFHQWWDEOHZKLFK
VKRZHG WKDW DGRSWLQJ ELRJDV WHFKQRORJ\ LV PRUH
EHQHÀFLDO IRU KRXVHKROGV WKDW SXUFKDVH DOO RI WKHLU
ÀUHZRRG 7KLV IDFWRU DOVR PDNHV ELRJDV DWWUDFWLYH
WR WKLV VHJPHQW RI UXUDO KRXVHKROGV DV EHQHÀWV DUH
ÀQDQFLDOO\ UHFRYHUHG WKURXJK VDYLQJV RQ ÀUHZRRG
SXUFKDVH+RXVHKROGVWKDWXVHGXQJIRUFRPEXVWLRQ
VWDQG WR EHQHÀW PRUH KLJKHU QHW SUHVHQW YDOXH
139 WKDQ WKRVH FROOHFWLQJ ÀUHZRRG E\ DGRSWLQJ
ELRJDV WHFKQRORJ\ 8QGHU DOO WKUHH VFHQDULRV GXQJ
DQG VOXUU\ XVHG DV IHUWLOL]HU DFFRXQWHG IRU RYHU SHU FHQW RI FRVWV DQG EHQHÀWV UHVSHFWLYHO\ 7KHVH
UHVXOWVDUHKLJKO\VHQVLWLYHWRFKDQJHVLQWLPHVDYLQJV
H[SHQGLWXUH OHYHOV DQG SULFH RI UHSODFHG IXHO LQ DOO
WKUHHKRXVHKROGVFHQDULRV7KHVHIDFWRUVDUHFUXFLDO
DV WKH\ DUH OLNHO\ WR GHWHUPLQH DQWLFLSDWHG EHQHÀWV
DQG SHUFHLYHG RSSRUWXQLW\ FRVWV RI FDSLWDO ZKLFK
LQÁXHQFH KRXVHKROGV· GHFLVLRQ RQ ZKHWKHU WR LQYHVW
LQELRJDV:LWKRXWWKHVXEVLG\JLYHQWRIDUPHUVE\WKH
1%3( LQYHVWLQJ LQ WKH ELRJDV SODQW LV YHU\ ULVN\ IRU
KRXVHKROGVWKDWFROOHFWWKHLURZQÀUHZRRG
'&RQFOXVLRQVDQGUHFRPPHQGDWLRQV
%LRJDV WHFKQRORJ\ SUHVHQWV DQ RSSRUWXQLW\ WR
HQKDQFH V\QHUJLHV LQ FURS OLYHVWRFN DQG HQHUJ\
V\VWHPV LQ UXUDO (WKLRSLD 7KH E\SURGXFW RI WKH
IHUPHQWDWLRQ²VOXUU\²UHWDLQVWKHQXWULHQWFRQWHQWWKDW
LV RWKHUZLVH ORVW WKURXJK GLUHFW FRPEXVWLRQ RI GXQJ
IRU HQHUJ\ &URS UHVLGXHV WKDW PLJKW RWKHUZLVH EH
XVHGIRUHQHUJ\DUHVDYHGIRUDQLPDOIHHG+RZHYHU
ORZ VKDGRZ SULFHV RI HQHUJ\ VRXUFHV FROOHFWHG E\
KRXVHKROGV PHDQ WKDW ELRJDV LV XQDEOH WR FRPSHWH
XQOHVV KHDYLO\ VXEVLGL]HG 7KH SUHVHQW VXEVLG\
VFKHPH PDNHV ELRJDV DQ DWWUDFWLYH RSWLRQ EXW WKLV
7DEOH&RVWEHQHÀWDQDO\VLVRIELRJDVSODQWVFRPSDUHGZLWKGLIIHUHQWWUDGLWLRQDOVRXUFHVRIKRXVHKROGHQHUJ\LQ
(WKLRSLD(WKLRSLDQELUU
3XUFKDVLQJÀUHZRRG
P
P
&RVWV
,QYHVWPHQWFRVWV
0DLQWHQDQFHFRVWV
:DWHUFRVWV
'XQJYDOXH
7RWDOFRVWV
&ROOHFWLQJÀUHZRRG
P
P
&ROOHFWLQJGXQJ
P
P
%HQHÀWV
%LRJDVYDOXH
/LJKWLQJHQHUJ\VDYHG
7LPHVDYHG
6OXUU\YDOXH
7RWDOEHQHÀWV
1HWSUHVHQWYDOXH
,QWHUQDOUDWHRIUHWXUQ
SHUFHQW
6RXUFH6XUYH\GDWDDQG619
1RWHĄ (7% (7%DZHLJKWHGDYHUDJH$SULO
'LVFRXQWUDWHSHULRGRIXVHRIELRJDVSODQW\HDUV
ZRXOGQRWEHWKHFDVHLIVXEVLGLHVZHUHUHPRYHG
)URP WKH FRVWEHQHÀW DVVHVVPHQW RI ELRJDV SODQWV
LQYHVWLQJKRXVHKROGVVWDQGWREHQHÀWPDLQO\WKURXJK
WKH XVH RI VOXUU\ DV D IHUWLOL]HU DV ZHOO DV WKURXJK
FRVW VDYLQJV RQ HQHUJ\ XVH IRU WUDGLWLRQDO FRRNLQJ
DQG OLJKWLQJ DQG WKH DVVRFLDWHG ODERXU VDYLQJV
&RQVHTXHQWO\SURÀWDELOLW\GHSHQGVODUJHO\RQWKHXVH
RI VOXUU\ DV D IHUWLOL]HU DQG RQ WKH SULFH RI UHSODFHG
HQHUJ\VRXUFHV7KXVSURPRWLRQRIGXQJDQGVOXUU\
LV YLWDO IRU WKH VXFFHVV RI WKH ELRJDV SURJUDPPH LQ
(WKLRSLDDQGIRULPSURYLQJDJULFXOWXUDOSURGXFWLRQIRU
IRRGVHFXULW\$V\QHUJ\WREHIXUWKHUH[SORLWHGLVWKH
ODERXUVDYLQJ HIIHFW RI ELRJDV FRPSDUHG ZLWK ZRRG
75$'($1'(19,5210(175(9,(:
RU GXQJ FROOHFWLRQ 7KXV WKH PRUH LQFHQWLYHV WKHUH
DUH WR VZLWFK WR VXVWDLQDEOH HQHUJ\ VRXUFHV VXFK
DV ELRJDV WKH JUHDWHU ZLOO EH WKH SURÀWDELOLW\ DQG
LPSURYHPHQWRIODERXUSURGXFWLYLW\LQDJULFXOWXUHDQG
RWKHUVHFWRUV
7KHHFRQRPLFDWWUDFWLYHQHVVRIELRJDVSODQWVZRXOG
EH FRQVLGHUDEO\ LPSURYHG LI VXLWDEOH ELRJDV
LQMHUD VWRYHV ZHUH GHYHORSHG IRU XVH E\ LQYHVWLQJ
KRXVHKROGV 7KHVH VWRYHV KDYH WKH SRWHQWLDO WR
HQKDQFHWKHXVHRIELRJDVSODQWVWKHUHE\LQFUHDVLQJ
WKH EHQHÀWV DFFUXLQJ WR KRXVHKROGV &KHDSHU
DOWHUQDWLYHV WR ELRJDV SODQWV DQG LPSURYHPHQWV LQ
WKH WHFKQRORJ\ UHPDLQ DQ RSWLRQ LQ FDWHULQJ WR SRRU
KRXVHKROGV
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
5HIHUHQFHV
$VQHU*DQG$UFKHU6/LYHVWRFNDQGWKHJOREDOFDUERQF\FOH,Q/LYHVWRFNLQDFKDQJLQJODQGVFDSH/RQGRQ
6WHLQIHOG+HWDOHGV²
$WKHQH7UXVW'RHVFORVHFRQÀQHPHQWFDXVHGLVWUHVVLQVRZV"$UHYLHZRIWKHVFLHQWLÀFHYLGHQFH3UHSDUHGE\
WKH6FRWWLVK)DUP%XLOGLQJV,QYHVWLJDWLRQ8QLW$EHUGHHQ6FRWODQG
%ODVEDOJ7/&KDQJHVLQFRQVXPSWLRQRIRPHJDDQGRPHJDIDWW\DFLGVLQWKH8QLWHG6WDWHVGXULQJWKHWK
FHQWXU\$PHULFDQ-RXUQDORI&OLQLFDO1XWULWLRQ²
%URRP'00HQGO07DQG=DQHOOD$-$FRPSDULVRQRIWKHZHOIDUHRIVRZVLQGLIIHUHQWKRXVLQJFRQGLWLRQV
$QLPDO6FLHQFH
&RPSDVVLRQLQ:RUOG)DUPLQJDQG)ULHQGVRIWKH(DUWKD&RPSDVVLRQLQ:RUOG)DUPLQJ:HOIDUH
RISLJVLQWKH(XURSHDQ8QLRQ7KHXUJHQWQHHGIRUUHIRUPRIH[LVWLQJOHJLVODWLRQDQGHIIHFWLYHHQIRUFHPHQW
$YDLODEOH DW ZZZFLZIRUJXNLQFOXGHVGRFXPHQWVFPBGRFVZZHOIDUHBRIBSLJVBLQBWKHBHXURSHDQB
XQLRQBSGI
&RPSDVVLRQ LQ :RUOG )DUPLQJ DQG )ULHQGV RI WKH (DUWK E (DWLQJ WKH 3ODQHW )HHGLQJ DQG IXHOOLQJ WKH ZRUOG
VXVWDLQDEO\IDLUO\DQGKXPDQHO\$YDLODEOHDWFLZIRUJHDWLQJWKHSODQHW
&RRNH3.|KOLQ*DQG+\GH:))XHOZRRGIRUHVWVDQGFRPPXQLW\PDQDJHPHQW(YLGHQFHIURPKRXVHKROG
VWXGLHV(QYLURQPHQWDQG'HYHORSPHQW(FRQRPLFV²
'·6LOYD-DQG:HEVWHU-7KH0HDW&ULVLV/RQGRQDQG:DVKLQJWRQ(DUWKVFDQ
'DQEXU\7&:HHNV&$:DWHUPDQ3HDUVRQ$(.HVWLQ6&DQG&KDPEHUV-36HOIVHOHFWLRQRIWKHDQDOJHVLF
GUXJFDUSURIHQE\ODPHEURLOHUFKLFNHQV9HWHULQDU\5HFRUG²
'DQJ+)XHOVXEVWLWXWLRQLQVXE6DKDUDQ$IULFD(QYLURQPHQWDO0DQDJHPHQW²
'DUZLQ&7KH'HVFHQWRI0DQDQG6HOHFWLRQLQ5HODWLRQWR6H[3ULQFHWRQ1-3ULQFHWRQ8QLYHUVLW\3UHVV
'DYLGVRQ2DQG6RNRQD<(QHUJ\DQGVXVWDLQDEOHGHYHORSPHQW.H\LVVXHVIRU$IULFD,Q81(33URFHHGLQJVRI
WKH+LJK/HYHO5HJLRQDO0HHWLQJRQ(QHUJ\DQG6XVWDLQDEOH'HYHORSPHQWIRUWKH1LQWK6HVVLRQRIWKH&RPPLVVLRQ
RQ6XVWDLQDEOH'HYHORSPHQW1DLUREL²-DQXDU\
'HZHHV3$7KHZRRGIXHOFULVLVUHFRQVLGHUHG2EVHUYDWLRQVRQWKHG\QDPLFVRIDEXQGDQFHDQGVFDUFLW\:RUOG
'HYHORSPHQW²
'RQ$2VERUQH%HWDO/DQGXVHFKDQJHWRELRHQHUJ\SURGXFWLRQLQ(XURSH,PSOLFDWLRQVIRUWKHJUHHQKRXVH
JDVEDODQFHDQGVRLOFDUERQ*OREDO&KDQJH%LRORJ\GRLM[$YDLODEOHDWKWWS
RQOLQHOLEUDU\ZLOH\FRPGRLM[DEVWUDFWODVWFDOOPDUFK
'RQ$6FKXPDFKHU-DQG$)UHLEDXHU,PSDFWRIWURSLFDOODQGXVHFKDQFHRQVRLORUJDQLFFDUERQVWRFNV²D
PHWDDQDO\VLV*OREDO&KDQJH%LRORJ\9ROLVVXHSS
((65& 7LJUDL HQHUJ\ UHVRXUFHV DQG KRXVHKROG HQHUJ\ FRQVXPSWLRQ 3DSHU SUHVHQWHG DW WKH (QHUJ\
6\PSRVLXP0HNHOOH8QLYHUVLW\(WKLRSLD²$SULO
()6$6FLHQWLÀFRSLQLRQRIWKH3DQHORQ$QLPDO+HDOWKDQG:HOIDUHRQDUHTXHVWIURP(XURSHDQ&RPPLVVLRQRQ
ZHOIDUHRIGDLU\FRZV7KH()6$-RXUQDO²
(VWKHWH*6RQGHU.DQG+HHGJH55HSRUWRQWKHIHDVLELOLW\VWXG\RIDQDWLRQDOSURJUDPPHIRUGRPHVWLFELRJDV
LQ(WKLRSLD1HWKHUODQGV'HYHORSPHQW2UJDQLVDWLRQ619(WKLRSLD
(60$3(WKLRSLDHQHUJ\DVVHVVPHQW5HSRUW1R-RLQW81'3:RUOG%DQN(QHUJ\6HFWRU0DQDJHPHQW
$VVLVWDQFH3URJUDPPH:DVKLQJWRQ'&
(WKLRSLD 5XUDO (QHUJ\ 'HYHORSPHQW DQG 3URPRWLRQ &HQWHU (5('3& DQG 619 (WKLRSLD 1DWLRQDO %LRJDV
3URJUDPPH(WKLRSLD3URJUDPPHLPSOHPHQWDWLRQGRFXPHQW
(8&RQVROLGDWHG9HUVLRQRIWKH7UHDW\RQWKH)XQFWLRQLQJRIWKH(XURSHDQ8QLRQ2IÀFLDO-RXUQDORIWKH(XURSHDQ
8QLRQ&$YDLODEOHDWKWWSHXUOH[HXURSDHX/H[8UL6HUY/H[8UL6HUYGR"XUL 2-&H
Q3')
75$'($1'(19,5210(175(9,(:
(XURSHDQ)RRG6DIHW\$XWKRULW\()6$'5$)76FLHQWLÀF2SLQLRQRQ)RRG6DIHW\$QLPDO+HDOWKDQG:HOIDUH
DQG(QYLURQPHQWDO,PSDFWRI$QLPDOVGHULYHGIURP&ORQLQJE\6RPDWLF&HOO1XFOHDU7UDQVIHU6&17DQGWKHLU
2IIVSULQJDQG3URGXFWV2EWDLQHGIURPWKRVH$QLPDOV%UXVVHOVS
)DLUOLH60HDW$%HQLJQ([WUDYDJDQFH+DPSVKLUH3HUPDQHQW3XEOLFDWLRQV
)$2:RUOG$JULFXOWXUH7RZDUGV5RPH
)$2D/LYHVWRFN·V/RQJ6KDGRZ(QYLURQPHQWDO,VVXHVDQG2SWLRQV5RPH
)$2E3URWHFWLQJ$QLPDO*HQHWLF'LYHUVLW\IRU)RRGDQG$JULFXOWXUH7LPHIRU$FWLRQ$QLPDO*HQHWLF5HVRXUFHV
*URXS)$25RPH$YDLODEOHDWZZZIDRRUJDJPDJD]LQHSGIDQJUSGI
)$2*UDVVODQGV(QDEOLQJWKHLUSRWHQWLDOWRFRQWULEXWHWRJUHHQKRXVHJDVPLWLJDWLRQ5RPH
)$2)RUHZRUG,Q)$26DYHDQG*URZ$3ROLF\0DNHUV*XLGHWRWKH6XVWDLQDEOH,QWHQVLÀFDWLRQRI6PDOOKROGHU
&URS3URGXFWLRQ5RPH
)$26WDW5RPH)$2
)$=)UDQNIXUWHU$OOJHPHLQH=HLWXQJ/HEHQVPLWWHOSUHLVH*HÁJHOYRQ:LHVHQKRIVROOWHXUHUZHUGHQ)UDQNIXUW
DP0DLQWK)HEUXDU\
)LFKWHO.:RGLH)UKVWFNVHLHULKUHQ8UVSUXQJKDEHQ+DPEXUJHU$EHQGEODWW+DPEXUJVW1RYHPEHU
*DUQHW 7 /LYHVWRFN DQG FOLPDWH FKDQJH ,Q '·6LOYD - DQG :HEVWHU - HGV 7KH 0HDW &ULVLV /RQGRQ DQG
:DVKLQJWRQ'&(DUWKVFDQ²
*UDFH-6DQ-RVH-0HLU30LUDQGD+DQG0RQWHV53URGXFWLYLW\DQGFDUERQÁX[HVRIWURSLFDOVDYDQQDV
-RXUQDORI%LRJHRJUDSK\²
*UHJRU\1*:LONLQV/-(OHSHUXPD6'%DOODQW\QH$-DQG2YHUÀHOG1'%URNHQERQHVLQGRPHVWLFIRZOV(IIHFW
RIKXVEDQGU\V\VWHPDQGVWXQQLQJPHWKRGLQHQGRIOD\KHQV%ULWLVK3RXOWU\6FLHQFH²
*XR/DQG*LIIRUG56RLOFDUERQVWRFNVDQGODQGXVHFKDQJH$PHWDDQDO\VLV*OREDO&KDQJH%LRORJ\
2[IRUG²
+HOOHEUDQG +- DQG 9 6FKRO] /DFKJDVHPLVVLRQHQ XQG 7UHLEKDXVELODQ] QDFKZDFKVHQGHU 5RKVWRIIH ZZZ
DWESRWVGDPGH+DXSWVHLWHGHXWVFK,QVWLWXW$EWHLOXQJHQ$EW0LWDUEHLWHUMKHOOHEUDQGMKHOOHEUDQGSXEOLNDW12
'3*SGI
,GHO$6LHQFHRGHU)LFWLRQ"-DKUH.ORQIRUVFKXQJDQ7LHUHQ/DQGZLUWVFKDIW'HU.ULWLVFKH$JUDUEHULFKW
+DPP$JUDUEQGQLV(GSS
,GHO$'LH.XKLVWNHLQ.OLPD.LOOHU:LHGLH$JUDULQGXVWULHGLH(UGHYHUZVWHWXQGZDVZLUGDJHJHQWXQN|QQHQ
0DUEXUJ0HWURSROLV9HUODJ$UHYLVHGDQGHQODUJHG(QJOLVKWUDQVODWLRQRIWKHERRN´7KHFRZLVQRWDFOLPDWHNLOOHU
+RZWKHDJULFXOWXUDOLQGXVWU\GHVWUR\VWKHHDUWKDQGZKDWZHFDQGRDJDLQVWLWµLVLQSUHSDUDWLRQ
,GHO $ .OLPDVFKW]HU DXI GHU :HLGH 7LHUKDOWXQJ .OLPD (UQlKUXQJ XQG OlQGOLFKH (QWZLFNOXQJ FOLPDWH
SURWHFWRUV RQ SDVWXUH DQLPDO KXVEDQGU\ FOLPDWH QXWULWLRQ DQG UXUDO GHYHORSPHQW 6WXG\ IRU *HUPDQZDWFK
DQG $UEHLWVJHPHLQVFKDIW ElXHUOLFKH /DQGZLUWVFKDIW FRPPLVVLRQHG SURMHFW ´-HW]W KDQGHOQ .OLPD XQG
HQWZLFNOXQJVIUHXQGOLFKH$JUDUSROLWLNµ
,GHO$DQG3HWVFKRZ8'DVJOREDOH+XKQWKHJOREDOKHQ,Q5HVVRXUFHQNRQÁLNWH9HUHLQLJXQJ]XU.ULWLNGHU
SROLWLVFKHQgNRQRPLHH90QVWHU352./$=HLWVFKULIWIUNULWLVFKH6R]LDOZLUWVFKDIW
,($(QHUJ\IRUFRRNLQJLQGHYHORSLQJFRXQWULHV,Q,($:RUOG(QHUJ\2XWORRN²
,2H:2HNR,QVWLWXWH96FKZHLVIXUWK6WLIWXQJ)8%HUOLQ/DQGHVDQVWDOWIU*UR‰VFKXW]JHELHWH(GV3HWVFKRZ
8$JURELRGLYHUVLWlWHQWZLFNHOQ+DQGOXQJVVWUDWHJLHQIUHLQHQDFKKDOWLJH7LHUXQG3ÁDQ]HQ]XFKW(QGEHULFKW%HUOLQ
,3&&²VHH0HW]HWDO$YDLODEOHDWZZZLSFFFKSXEOLFDWLRQVBDQGBGDWDDUZJHQFRQWHQWVKWPO
-HQVHQ3)L[HULQJHQVHIIHFWSDVLQVXJJRUVEHWHHQGH²HQHWRORJLVNVWXGLH,QVWLWXWLRQHQIRUKXVGMXUVK\JLHQ
PHGKRYVODJDUVNRODQ5HSRUW8SSVDOD/DQWEUXNVXQLYHUVLWHW
.LQJ)+)DUPHUVRI)RUW\&HQWXULHV2U3HUPDQHQW$JULFXOWXUHLQ&KLQD.RUHDDQG-DSDQ0LQHROD1<'RYHU
3XEOLFDWLRQV,QF$YDLODEOHDWKWWSZZZJXWHQEHUJRUJHERRNV
.QRZOHV7*.HVWLQ6&+DVODP60%URZQ61*UHHQ/(%XWWHUZRUWK$3RSH6-3IHLIIHU'DQG1LFRO&-/HJ
GLVRUGHUVLQEURLOHUFKLFNHQV3UHYDOHQFHULVNIDFWRUVDQGSUHYHQWLRQ3ORV2QHH
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
/8&&* /DQG 8VH &OLPDWH &KDQJH 5HSRUW WR WKH :HOVK $VVHPEO\ *RYHUQPHQW $YDLODEOH DW KWWSWLQ\XUO
FRPW[EEPZ
0F,QW\UH%+HUUHQ+:DNKXQJX-DQG%:DWVRQ(GV,QWHUQDWLRQDO$VVHVVPHQWRI$JULFXOWXUDO.QRZOHGJH
6FLHQFHDQG7HFKQRORJ\IRU'HYHORSPHQW,$$67'$JULFXOWXUHDWD&URVVURDGV:DVKLQJWRQ$YDLODEOHDWZZZ
DJDVVHVVPHQWRUJ
0HW]%'DYLGVRQ25HWDOHGV&RQWULEXWLRQRI:RUNLQJ*URXS,,,WRWKH)RXUWK$VVHVVPHQW5HSRUWRIWKH
,QWHUJRYHUQPHQWDO 3DQHO RQ &OLPDWH &KDQJH ,3&& &DPEULGJH ZZZLSFFFKSXEOLFDWLRQVBDQGBGDWDDUZJ
HQFRQWHQWVKWPO
0XLU:*DQH.6DQG=KDQJ<*HQRPHZLGHDVVHVVPHQWRIZRUOGZLGHFKLFNHQ613JHQHWLFGLYHUVLW\LQGLFDWHV
VLJQLÀFDQWDEVHQFHRIUDUHDOOHOHVLQFRPPHUFLDOEUHHGV3URFHHGLQJVRIWKH1DWLRQDO$FDGHP\RI6FLHQFH
1RYHPEHU²
1D\ORU56WHLQIHOG+)DOFRQ:HWDO/RVLQJWKH/LQNV%HWZHHQ/LYHVWRFNDQG/DQG6FLHQFHYRO
1NRQ\D ( *HUEHU 1 %DXPJDUWQHU 3 YRQ %UDXQ - 'H 3LQWR $ *UDZ 9 .DWR ( .ORRV - DQG :DOWHU 7 7KH
HFRQRPLFVRIGHVHUWLÀFDWLRQODQGGHJUDGDWLRQDQGGURXJKW7RZDUGDQLQWHJUDWHGJOREDODVVHVVPHQW:DVKLQJWRQ
'&,QWHUQDWLRQDO)RRG3ROLF\5HVHDUFK,QVWLWXWH
3DXO+(UQVWLQJ$6HPLQR6*XUD6DQG/RUFK$$JULFXOWXUHDQG&OLPDWH&KDQJH5HDO3UREOHPV)DOVH
6ROXWLRQV5HSRUWSXEOLVKHGIRUWKHWK&RQIHUHQFHRIWKH3DUWLHVRIWKH81)&&&LQ&RSHQKDJHQ'HFHPEHU
$YDLODEOH DW ZZZHFRQH[XVLQIRVLWHVHFRQH[XVÀOHV$JULFXOWXUHBFOLPDWHBFKDQJHBFRSHQKDJHQB
SGI
3RHSODX&'RQ$HWDO7HPSRUDOG\QDPLFVRIVRLORUJDQLFFDUERQDIWHUODQGXVHFKDQJHLQWKHWHPSHUDWH]RQH
²FDUERQUHVSRQVHIXQFWLRQVDVDPRGHODSSURDFK*OREDO&KDQJH%LRORJ\9ROXPH,VVXHSS²
-XO\
5HLFKHUW DQG 5HLFKDUGW 6DXPDJHQ XQG 5HJHQZDOG %HUOLQ DQG %RQQ )RUXP 8PZHOW XQG (QWZLFNOXQJ XQG
*HUPDQZDWFK
5HLFKKROI-+'HU7DQ]XPGDVJROGHQH.DOE%HUOLQ'HUgNRNRORQLDOLVPXV(XURSDV²
5RKVWRIIHNRPSDNW7\VRQ)RRGV²)OHLVFKLQJUR‰HP6WLO,VVXH1UQEHUJ
5RVHQEHUJHU(DQG.5XW]PRVHUgNRORJLVFKH)ROJHZLUNXQJHQGHU=XFKWDXIK|KHUH0LOFKOHLVWXQJHQ*UXEHU
,QIRSS
5RW] &$ 6RGHU .- 6NLQQHU 5+ 'HOO &- .OHLQPDQ 3- 6FKPLGW -3 DQG %U\DQW 5% *UD]LQJ FDQ UHGXFH WKH
HQYLURQPHQWDOLPSDFWRIGDLU\SURGXFWLRQV\VWHPV3ODQW0DQDJHPHQW1HWZRUN,QWHUQDWLRQDO6W3DXO01$YDLODEOH
DWZZZSODQWPDQDJHPHQWQHWZRUNRUJVXEIJUHVHDUFKLPSDFW
5R\DO 6RFLHW\ 5HDSLQJ WKH EHQHÀWV 6FLHQFH DQG VXVWDLQDEOH LQWHQVLÀFDWLRQ RI JOREDO DJULFXOWXUH 56 3ROLF\
GRFXPHQW/RQGRQ
6FKODJ1DQG=X]DUWH)0DUNHWEDUULHUVWRFOHDQFRRNLQJIXHOVLQVXE6DKDUDQ$IULFD$UHYLHZRIWKHOLWHUDWXUH
6WRFNKROP6WRFNKROP(QYLURQPHQW,QVWLWXWH
6FKXO]H('/X\VVDHUW6&LDLV3)UHLEDXHU$-DQVVHQV,,PSRUWDQFHRIPHWKDQHDQGQLWURXVR[LGHIRU(XURSH¶V
WHUUHVWULDOJUHHQKRXVHJDVEDODQFH1DWXUH*HRVFLHQFH²
6QHGGRQ /8 %UDLWKZDLWH %$ DQG *HQWOH 0- 'R ÀVKHV KDYH QRFLFHSWRUV" (YLGHQFH IRU WKH HYROXWLRQ RI D
YHUWHEUDWH VHQVRU\ V\VWHP 3URFHHGLQJV RI WKH 5R\DO 6RFLHW\ /RQGRQ %LRORJLFDO 6FLHQFHV ²
$YDLODEOHDWKWWSUVSEUR\DOVRFLHW\SXEOLVKLQJRUJFRQWHQWIXOOSGI
6197KH3RWHQWLDORI6PDOO6FDOH%LRJDV'LJHVWHUVWR$OOHYLDWH3RYHUW\DQG,PSURYH/RQJ7HUP6XVWDLQDELOLW\
RI (FRV\VWHP 6HUYLFHV LQ 6XE6DKDUDQ $IULFD $YDLODEOH DW KWWSZZZDEGQDFXNVXVWDLQDEOHLQWHUQDWLRQDO
GHYHORSPHQWXSORDGVILOHV)LQDOB5HSRUWBB3RWHQWLDOBRIB6PDOO6FDOHB%LRJDVB'LJHVWHUVBLQB6XE6DKDUDQB
$IULFD%'SGI
6WHLQIHOG+0RRQH\+$6FKQHLGHU)DQG1HYLOOH/(HGV/LYHVWRFNLQD&KDQJLQJ/DQGVFDSH9RODQG
&RPPLVVLRQHGE\&,5$')$2/($',/5,6&23(DQGWKH:RRGV,QVWLWXWH:DVKLQJWRQ'&,VODQG3UHVV
6WROED$DQG:RRG*XVK'*07KHEHKDYLRXURISLJVLQDVHPLQDWXUDOHQYLURQPHQW$QLPDO3URGXFWLRQ
²
75$'($1'(19,5210(175(9,(:
6XWWL-05H\QROGV6*DQG%DWHOOR&HGV*UDVVODQGVRIWKH:RUOG5RPH)$2
6XWWRQ 0$ DQG %LOOHQ * 7HFKQLFDO VXPPDU\ ,Q 6XWWRQ 0$ +RZDUG &0 (ULVPDQ -: %LOOHQ * %OHHNHU $
*UHQQIHZOW3YDQ*ULQVYHQ+DQG*UL]HWWL%HGV7KH(XURSHDQ1LWURJHQ$VVHVVPHQW6RXUFHV(IIHFWVDQG3ROLF\
3HUVSHFWLYHV&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV;;;9,,,
6XWWRQ0$+RZDUG&0(ULVPDQ-:%LOOHQ*%OHHNHU$*UHQQIHZOW3YDQ*ULQVYHQ+DQG*UL]HWWL%HGV
7KH(XURSHDQ1LWURJHQ$VVHVVPHQW6RXUFHV(IIHFWVDQG3ROLF\3HUVSHFWLYHV&DPEULGJH&DPEULGJH8QLYHUVLW\
3UHVV
69& 7KH ZHOIDUH RI LQWHQVLYHO\ NHSW SLJV %UXVVHOV 6FLHQWLÀF 9HWHULQDU\ &RPPLWWHH $YDLODEOH DW KWWS
HFHXURSDHXIRRGIVVFROGFRPPRXWBHQKWPO
7KHQ&K-RLQWLQSXWRI7HVWELRWHFKDQG)ULHQGVRIWKH(DUWK(XURSHLQSXWRQIRRGGHULYHGIURPJHQHWLFDOO\
HQJLQHHUHGDQLPDOV0XQLFKDQG%UXVVHOV)ULHQGVRIWKH(DUWK(XURSHDQG7HVW%LRWHFKKWWSZZZWHVWELRWHFK
GHQRGH
7KHQ&K2SHQOHWWHUDERXW(8·VDVVHVVPHQWRI*0DQLPDOV%UXVVHOVDQG0XQLFK(XURJURXSIRUDQLPDOV
)ULHQGVRIWKH(DUWK(XURSH,)2$0(8*URXS7HVW%LRWHFK
7LOPDQ'+LOO-DQG/HKPDQ&&DUERQQHJDWLYHELRIXHOVIURPORZLQSXWKLJKELRGLYHUVLW\JUDVVODQGELRPDVV
6FLHQFH²
7URHK)5+REEV-$DQG'RQDKXH5/7LOODJHSUDFWLFHVIRUFRQVHUYDWLRQ,Q7URHK)5+REEV-$DQG'RQDKXH
5/HGV6RLODQG:DWHU&RQVHUYDWLRQQGHGLWLRQ(QJOHZRRG&OLIIV1-3UHQWLFH+DOO
81(6&2 DQG 7DWD (QHUJ\ 5HVHDUFK ,QVWLWXWH &RQVROLGDWLRQ RI LQIRUPDWLRQ $ UHYLHZ RI WKH OLWHUDWXUH RQ
SURPRWLRQRIELRJDVV\VWHPV,Q*HQHUDO,QIRUPDWLRQ3URJUDPPHDQG81,6,673DULV
YRQ:LW]NH+DQG1ROHSSD6(8DJULFXOWXUDOSURGXFWLRQDQGWUDGH&DQPRUHHIÀFLHQF\SUHYHQWLQFUHDVLQJ
¶ODQGJUDEELQJ·RXWVLGHRI(XURSH"5HVHDUFKUHSRUW%HUOLQ+XPEROGW8QLYHUVLWlW]X%HUOLQDQGDJULSRO
:HEVWHU-$QLPDO:HOIDUH$&RRO(\H7RZDUGV(GHQ2[IRUG%ODFNZHOO6FLHQFH
:HHNV&8.FDOIWUDQVSRUWDQGYHDOUHDULQJ&RPSDVVLRQLQZRUOGIDUPLQJ/RQGRQKWWSZZZFLZIRUJXN
LQFOXGHVGRFXPHQWVFPBGRFVXXNBFDOIBWUDQVSRUWBDQGBYHDOBUHDULQJSGI
:KLWH 5 0XUUD\ 6 DQG 5RKZHGHU 0 3LORW DQDO\VLV RI JOREDO HFRV\VWHPV *UDVVODQG (FRV\VWHPV :5,
:DVKLQJWRQ*UDFH-6DQ-RVH-0HLU30LUDQGD+DQG50RQWHV3URGXFWLYLW\DQGFDUERQÁX[HVRI
WURSLFDOVDYDQQDV-RXUQDORI%LRJHRJUDSK\
:LQWHUV+&3+:LQ&X[KDYHQHQWZLFNHOWVLFKSRVLWLY$UWLFOHLQ&X[KDYHQHU1DFKULFKWHQ)HEUXDU\&X[KDYHQ
:UJHU7'DV5OSVHQGHU5LQGHUWKHEHOFKLQJRIFDWWOH'HU6SLHJHO+DPEXUJ
/LYHVWRFN3URGXFWLRQ$&OLPDWH&KDQJHDQG)RRG6HFXULW\+RW6SRW
1RWHV
$QLPDOVXIIHULQJDQGZHOIDUHDUHGLUHFWO\DIIHFWHGE\LQGXVWULDOOLYHVWRFNSURGXFWLRQ)RUPRUHLQIRUPDWLRQVHHWKH
FRPPHQWRI-R\FH'·6LOYDLQWKLVFKDSWHUVHHDOVR'·6LOYDDQG:HEVWHU
,WLVEH\RQGWKHVFRSHRIWKLVDUWLFOHWRDQDO\VHWKHGDPDJLQJHIIHFWVRIOHJDODQGLOOHJDOGLVSRVDORIGDQJHURXV
VXEVWDQFHVLQDQLPDOIHHGIRULQGXVWULDOOLYHVWRFNSURGXFWLRQDQGWKHXVHRIFRQWDPLQDWHGVOXGJHDVIHUWLOL]HURQ
FURSODQG
7KLVDUWLFOHGRHVQRWGLVFXVVWKHQRQUHF\FOLQJRIKXPDQIDHFHVLQVRLOIRUDGLVFXVVLRQRIWKLVLVVXHVHH.LQJ
%\ZD\RILOOXVWUDWLRQDIWHULWVDFFHVVLRQWRWKH(85RPDQLDUHVWULFWHGWKHIUHHPRYHPHQWRIKRUVHRUFRZGUDZQ
WUDQVSRUWLQIDYRXURIPRWRUL]HGWUDQVSRUW
´,QH[SHQVLYHµRU´FKHDSµKHUHPHDQVWKDWDFRQVLGHUDEOHSURSRUWLRQRIWKHFRVWVRISURGXFWLRQUHPDLQH[WHUQDOL]HG
LQSULFHV
7KLVSURFHVVXVHGIRUWKHLQGXVWULDOSURGXFWLRQRIDPPRQLDLQYROYHVWKHQLWURJHQÀ[DWLRQUHDFWLRQRIQLWURJHQJDV
DQGK\GURJHQJDVRYHUDQHQULFKHGLURQRUUXWKHQLXPFDWDO\VW
$PPRQLDLVQRWFDWHJRUL]HGDVD*+*WKDWKDVDGLUHFWLPSDFWRQWKHFOLPDWHVXFKDV&212DQG&+EXWLW
GRHVKDYHDUHOHYDQWLQGLUHFWLPSDFWWKURXJKLWVHIIHFWRQWKHDWPRVSKHUH
)RU VRPH \HDUV PRQRFXOWXUHV IRU DJURHQHUJ\ SURGXFWLRQ DUH LQFUHDVLQJ WKH DPRXQW RI 12 HPLWWHG IURP
DJULFXOWXUHIRUDPRUHHODERUDWHDQDO\VLVVHH+XUQLHWDOLQFKDSWHURIWKLV5HYLHZ
%HVLGHVWKHJHQHUDOXVHRIDQLPDOH[FUHPHQWVWKLVDOVRFRQFHUQVWKHVHSDUDWHXVHRIXULQHDQGIDHFHV1RUPDOO\
WKHVHSDUDWLRQLVGRQHWKURXJKSDVWXULQJWKHQDWXUDOVHSDUDWLRQIRUPDPPDOVSUHYHQWVWKHPRGLÀFDWLRQRIWKH
QLWURJHQFRPSRXQGVLQWKHXULQHWKURXJKWKHEDFWHULDFRQWDLQHGLQWKHIDHFHV
&DOFXODWHGXVLQJWKH&OLPDWH$QDO\VLV,QGLFDWRUV·7RRORIWKH:RUOG5HVRXUFHV,QVWLWXWHDWKWWSFDLWZULRUJ
7KHIDFWWKDWDQLPDOEUHHGLQJLVPRUHDGYDQFHGWKDQFURSEUHHGLQJGRHVQRWUHÁHFWDKLJKHUOHYHORIWHFKQRORJLFDO
LQQRYDWLRQ %\ ZD\ RI LOOXVWUDWLRQ WKH FRPPHUFLDOL]DWLRQ RI VRPH WUDQVJHQLF FURSV LV IDU PRUH GHYHORSHG WKDQ
WUDQVJHQLFDQLPDOV
,QWKHFORQHGVKHHS´'ROO\µZDVERUQDIWHUWKRXVDQGVRIDWWHPSWVZLWKHPEU\RV'ROO\ZDVWKHÀUVWPDPPDO
WKDWZDVFUHDWHGE\DQGVXUYLYHGWKHWHFKQRORJ\RIVRPDWLFFHOOQXFOHXVWUDQVIHU6&17$OWKRXJKDUPHGZLWKD
SDWHQWWKH´'ROO\µPHWKRGLVDVDOORWKHUJHQHWLFDQGFORQLQJPHWKRGVQRWDEOXHSULQWWRJHWLGHQWLFDOFRSLHV
,QGHHGWKHKXPDQPLFURELDOUHODWLRQVKLSLVH[WUHPHO\FORVH$PDVVLYHDPRXQWRIEDFWHULDH[LVWRQDQGLQ
KXPDQV²DQXPEHUWLPHVKLJKHUWKDQWKHELOOLRQFHOOVLQDKXPDQERG\
$JDLQVWWKLVEDFNJURXQGELRIXHOFHUWLÀFDWHVWKDWFRQÀUPWKDWWKHIHHGVWRFNZDVQRWSURGXFHGRQFURSODQGGHULYHG
IURPGHIRUHVWDWLRQDUHRQO\XVHIXOLIWKHWLPHVSDQEHIRUHFRQYHUVLRQLVZHOOGHÀQHG
)RU PRUH LQIRUPDWLRQ VHH IRU LQVWDQFH ZZZLQGH[PXQGLFRPFRPPRGLWLHV"FRPPRGLW\ VR\EHDQRLO DQG
)DLUOLH,PEDODQFHVLQWKHSDWWHUQVRIIDWW\DFLGVWKURXJKWKHUHMHFWLRQRUUHSODFHPHQWRIRWKHURLOVE\FKHDSHU
VR\RLODUHQRWIXUWKHUHODERUDWHGKHUH)RUPRUHLQIRUPDWLRQLQWKLVUHJDUGVHH%ODVEDOJ
)RUDPRUHHODERUDWHDQDO\VLVVHH,GHO
WRI&WRI2 WRI&2
7KHUHLVDFUXFLDOLQWHUSOD\EHWZHHQJUDVVODQGDQGUXPLQDQWPDQDJHPHQWDVPHQWLRQHGDERYHSHUFHQWRI
DOOODQGLVJUDVVODQGDQGSHUHQQLDOJUDVVLVYHU\HIIHFWLYHIRUFDUERQVHTXHVWUDWLRQ:KLOVWIRUHVWVH[SDQGWKHLU
ELRPDVVYROXPHE\RQO\DERXWSHUFHQWSHU\HDUVDYDQQDKVFDQUHSURGXFHSHUFHQWRIWKHLUYROXPH,GHO
3DXOHWDO
2QWKH&2DVVLPLODWLRQSRWHQWLDORIJUDVVODQGVVHH)$2
1RWDFFRXQWHGIRUDUHSHUPDQHQWLFHFRYHUHGVXUIDFHVRI*UHHQODQGDQGWKH$QWDUFWLFZKHUHWKHUHLVQRJUDVVODQG
\HW,Q(XURSHJUDVVODQGFRYHUVDERXWDTXDUWHURIWKHWRWDOODQGVXUIDFH
,QWHUDOLDFDUERQVLQNIXQFWLRQSURWHFWLRQIRUHURVLRQSURWHLQDQGHQHUJ\VRXUFHVRXUFHRILQFRPHIRUDERXWRQH
WHQWKRIWKHZRUOGSRSXODWLRQ
75$'($1'(19,5210(175(9,(:
$VK\EULGSLJVDQGFKLFNHQVDUHIHGZLWKFRQFHQWUDWHVLQLQWHQVLYHSURGXFWLRQV\VWHPVJUDVVIHGODQGUDFHVRI
UDUHSLJVJHHVHFKLFNHQVDQGRWKHUVFDQQRWFRPSHWHDJDLQVWWKHPVRWKDWWKH\HQGXSRQWKHOLVWRIVSHFLHVWKDW
DUHWKUHDWHQHGZLWKH[WLQFWLRQIRUPRUHLQIRUPDWLRQVHH)$27KH6WDWHRIWKHZRUOG·VDQLPDOJHQHWLFUHVRXUFHV
IRUIRRGDQGDJULFXOWXUHZZZIDRRUJGRFUHSDHDHKWP
7KLVHIIHFWLVDORJLFDOFRQVHTXHQFHRIWKHLQFUHDVHRIWKHVH[VSHFLÀFSHUIRUPDQFHRIIHPDOHDQLPDOV7KHIRFXV
RQERRVWLQJGDLU\SHUIRUPDQFHLVDWWKHH[SHQVHRIWKHHQHUJ\EHLQJXVHGIRUPHDWJHQHUDWLRQ%DVHGRQWKHVDPH
ORJLFWKHEURWKHUVRIK\EULGOD\LQJKHQVJDLQZHLJKWYHU\VORZO\
,QWKH8QLWHG.LQJGRPGXHWRXQVDWLVIDFWRU\IDWWHQLQJSHUIRUPDQFHDODUJHSHUFHQWDJHRIPDOHFDOYHVRIKLJK
SHUIRUPDQFHGDLU\FRZVLH+ROVWHLQ)ULHVLDQ-HUVH\DUHEHLQJNLOOHGHYHU\\HDULPPHGLDWHO\DIWHUWKH\DUHERUQ
:HHNV
,QMHUDLVDWKLQÁDWDQGVSRQJ\EUHDGPDGHIURPWHIIÁRXUZLWKDGLDPHWHURIDERXWFPDQGLVDQLPSRUWDQWSDUW
RIWKHWUDGLWLRQDOGLHWLQ(WKLRSLD,WLVWUDGLWLRQDOO\SUHSDUHGRQDÁDWFOD\SDQRIPDWFKLQJGLDPHWHU
75$'($1'(19,5210(175(9,(:
'#&46+%.'U X
+DQV5+HUUHQ
3UHVLGHQW0LOOHQQLXP,QVWLWXWH
$EVWUDFW
7KHPDLQFKDOOHQJHVFRQIURQWLQJVXVWDLQDEOHDJULFXOWXUDONQRZOHGJHVFLHQFHDQGWHFKQRORJ\$.67GH
YHORSPHQWUHODWHWRDFKLHYLQJDWUDQVLWLRQIURPWKHFRQYHQWLRQDOLQGXVWULDODJULFXOWXUHPRGHOZLWKLWVKLJK
H[WHUQDOLQSXWVDQGYHVWHGLQWHUHVWVRIWKHPDLQSOD\HUVLQVXSSO\LQJDJULFXOWXUDOLQSXWVRXWSXWSURFHVVLQJ
DQGPDUNHWLQJ7KLVUHTXLUHVSROLWLFDOZLOORQWKHSDUWRISROLF\PDNHUVWRLPSOHPHQWWKHQHZFRXUVHRIDF
WLRQVXJJHVWHGE\VHYHUDOVSHFLDOL]HGLQVWLWXWLRQVLQFOXGLQJWKH,$$67'81&7$'81(381'(6$DQG
WKH+LJK/HYHO3DQHORI([SHUWVRQ)RRG6HFXULW\DQG1XWULWLRQDVZHOODVE\WKHUHFHQW)$22(&'([SHUW
0HHWLQJRQ*UHHQLQJWKH(FRQRP\ZLWK$JULFXOWXUHKHOGLQ6HSWHPEHU7KHUHLVDPSOHHYLGHQFHLQ
WKHVHUHSRUWVWRMXVWLI\QHZLQYHVWPHQWVLQ$.67IRUVXVWDLQDEOHDJULFXOWXUH3UHVVXUHDWWKHSROLF\OHYHOLV
JURZLQJGXHWRWKHVHULHVRIIRRGFULVHVERWKZLWKUHVSHFWWRVKRUWDJHVDQGSULFHLQFUHDVHVH[SHULHQFHG
RYHUWKHSDVWIHZ\HDUV7KHWHQGHQF\UHPDLQVVWURQJWRFRQWLQXHZLWKEXVLQHVVDVXVXDOZKLFKDLPVDW
TXLFNÀ[HVDQGTXLFNUHVXOWV,IWKHUHSHWLWLRQRIWKHIRRGFULVHVWKDWDUHEHFRPLQJPRUHIUHTXHQWLVDQ\
LQGLFDWLRQWKHQWKHVHTXLFNÀ[HVZLOOUXQWKHLUFRXUVHIDVWZLWKHQRUPRXVQHJDWLYHVRFLDOHQYLURQPHQWDO
DQGHFRQRPLFFRQVHTXHQFHV
7KHFDVHIRUDFKDQJHLQSDUDGLJPLVZHOOGRFXPHQWHG0HUHO\ÀQHWXQLQJWKHSUHVHQWV\VWHPVRUUHGHÀQ
LQJWKHVWDWXVTXRZLWKQHZWHUPVVXFKDV´VXVWDLQDEOHFURSSURGXFWLRQLQWHQVLÀFDWLRQµRU´FOLPDWHVPDUW
DJULFXOWXUHµDPRQJRWKHUVZLOOQRWEULQJDERXWWKHSDUDGLJPVKLIWQHHGHG7RVWRSWKH´PLQLQJµRIQDWXUDO
FDSLWDODQGLQSDUWLFXODUWRGUDVWLFDOO\UHGXFH*+*HPLVVLRQVIURPDJULFXOWXUHDQGPDNHLWPRUHFOLPDWH
UHVLOLHQWUHTXLUHVDJHQXLQHIXQGDPHQWDOWUDQVIRUPDWLRQEDFNHGE\DGGLWLRQDOUHVHDUFK$JURHFRORJ\KDV
WKHSURSHUIRXQGDWLRQVWRVXSSRUWWKHQHHGHGWUDQVLWLRQIURPZKHUHZHDUHWRGD\WRZKHUHZHQHHGWREH
E\ZLWKDOORXUDJULFXOWXUHZKHWKHULWLVVPDOORUODUJHVFDOHERWKDWWKHORFDODQGJOREDOOHYHOV$JUL
FXOWXUHDQGIDUPHUVQHHGWREHDPRQJWKHNH\FRQVLGHUDWLRQVRISROLF\PDNHUVDVSHRSOHPD\VXIIHUIURP
ÀQDQFLDOFULVLVEXWWKH\FDQQRWVXUYLYHZLWKRXWIRRGDQGZDWHU
$JULFXOWXUHVKRXOGEHWRSRIWKHDJHQGDLQWKHGHEDWHRQVXVWDLQDEOHGHYHORSPHQWDQGWKHJUHHQHFRQRP\
IROORZLQJWKH5LRFRQIHUHQFH,WLVRQO\LIDJULFXOWXUHLQLWVPXOWLIXQFWLRQDOUROHWDNHVFHQWUHVWDJHWKDW
WKHRWKHUDVSHFWVRIVXVWDLQDEOHGHYHORSPHQWZLOOIDOOLQWRSODFH7KHFKDOOHQJHIRU$.67LVSRVHGDQGWKH
VROXWLRQVIRUDQHZDJULFXOWXUDOSDUDGLJPSUHVHQWHG,WLVQRZXSWRSROLF\PDNHUVWRVZLQJLQWRDFWLRQ7KH
WLPHIRUPRUHUHSRUWVDQGGHEDWHVRQWKHPHULWVRIWKLVRUWKDWWHFKQRORJ\KDVSDVVHGZHRZHLWWRIXWXUH
JHQHUDWLRQVWRDFWQRZDQGGHFLVLYHO\WRVDIHJXDUGRXUFOLPDWHE\EXLOGLQJUHVLOLHQFHDQGPXOWLIXQFWLRQDO
LW\LQWRRXUIRRGV\VWHPVWRFRSHZLWKWKHLQHYLWDEOHFKDQJHV7KHVHDUHWKH\DUGVWLFNVDJDLQVWZKLFKZH
ZLOOKDYHWRPHDVXUHSURJUHVVWRZDUGVVXVWDLQDEOHDJULFXOWXUH7KH$.67SROLFLHVRIWRPRUURZZLOOQHHGWR
DGGUHVVWKHVHFKDOOHQJHVDQGGHYHORSWKHQHHGHGVFLHQFHWRROVDQGFULWHULDWRLPSOHPHQWWKHWUDQVLWLRQ
DQGPHDVXUHSURJUHVV
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
$,QWURGXFWLRQ
7KHUHLVDQLPSHUDWLYHQHHGIRUDIXQGDPHQWDOFKDQJH
LQWKHZD\WKHZRUOGJURZVSURFHVVHVDQGFRQVXPHV
LWVIRRG$VVWDWHGLQWKH5HSRUWRIWKH,QWHUQDWLRQDO
$VVHVVPHQW RI $JULFXOWXUDO .QRZOHGJH 6FLHQFH
DQG 7HFKQRORJ\ IRU 'HYHORSPHQW ,$$67' ´%XVLQHVVDVXVXDOLVQRWDQRSWLRQµ:KDWLVPHDQW
E\WKLVLVWKDWLQRUGHUWRWUDQVIRUPDJULFXOWXUHDQGWKH
EURDGHUIRRGV\VWHPDJULFXOWXUDONQRZOHGJHVFLHQFH
DQGWHFKQRORJ\$.67QHHGWREHUHFDVWWRDGGUHVV
WKHSDVWXQVROYHGSUHVHQWDQGIXWXUHFKDOOHQJHVRI
IRRG DQG QXWULWLRQ VHFXULW\ SRYHUW\ DQG KXQJHU DQG
SUHVHUYHUXUDOOLYHOLKRRGVKHDOWKDQGWKHHQYLURQPHQW
7KH SURFHVV WKDW OHG WR WKH ,$$67' DOVR NQRZQ DV
WKH $J $VVHVVPHQW DQG LWV LPSOHPHQWDWLRQ ZDV
XQLTXHLQWKHVHQVHWKDWLWLQFOXGHGDOOVWDNHKROGHUV
IURP SURGXFHUV WR FRQVXPHUV DV ZHOO DV LQSXW
VXSSOLHUVDQGSURFHVVRUV7KHSURFHVVZDVGHFLGHG
DW WKH 8QLWHG 1DWLRQV :RUOG 6XPPLW RQ 6XVWDLQDEOH
'HYHORSPHQW LQ -RKDQQHVEXUJ LQ XQGHU D
MRLQW LQLWLDWLYH RI WKH :RUOG %DQN DQG WKH )RRG DQG
$JULFXOWXUH2UJDQL]DWLRQRIWKH8QLWHG1DWLRQV)$2
DQGZDVVXSSRUWHGE\WKH8QLWHG1DWLRQV(QYLURQPHQW
3URJUDPPH81(3WKH8QLWHG1DWLRQV'HYHORSPHQW
3URJUDPPH81'3WKH8QLWHG1DWLRQV(GXFDWLRQDO
6FLHQWLÀF DQG &XOWXUDO 2UJDQL]DWLRQ 81(6&2 WKH
:RUOG +HDOWK 2UJDQL]DWLRQ :+2 DQG WKH *OREDO
(QYLURQPHQW )DFLOLW\ *() 7KLV LQWHUJRYHUQPHQWDO
VXSSRUWJDYHWKH,$$67'WKHEURDGEDVHQHHGHGWR
VHW WKH VWDJH IRU FKDQJLQJ WKH FRXUVH RI DJULFXOWXUH
WKURXJK D UHFDVWLQJ RI WKH $.67 RU DW OHDVW LW ZDV
WKRXJKW VR JLYHQ WKDW WKH UHSRUW ZDV XOWLPDWHO\ DOVR
HQGRUVHG E\ FRXQWULHV DQG ZHOFRPHG E\ DQ
DGGLWLRQDOWKUHH
6LQFHIHZ$.67SROLFLHVDWWKHQDWLRQDOUHJLRQDO
RU LQWHUQDWLRQDO OHYHOV KDYH DFWXDOO\ FKDQJHG 0RUH
UHSRUWV KDYH EHHQ ZULWWHQ PRVWO\ RQO\ WR GLOXWH WKH
VWURQJ NH\ PHVVDJHV RI WKH ,$$67' UHJDUGLQJ WKH
FHQWUDOLW\ RI VPDOOKROGHU IDUPHUV ZKR SUDFWLFH KLJKO\
GLYHUVH IRUPV RI FXOWLYDWLRQ WKH LQDSSURSULDWHQHVV
RI DQ XQGXH UHOLDQFH RQ ELRWHFKQRORJ\ DQG JHQHWLF
HQJLQHHULQJ WR VROYH WKH PDLQ SUREOHPV RI RXU
DJULFXOWXUDODQGIRRGV\VWHPVDVZHOODVWKHQHHGWR
DOORZFRXQWULHVWRFKRRVHWKHLURZQDJULFXOWXUDOWUDGH
UHVHDUFK DQG GHYHORSPHQW 5' SROLFLHV WKDW VXLW
WKHLUVSHFLÀFFRQGLWLRQVDQGQHHGV
,Q WKH ,$$67' DOUHDG\ REVHUYHG WKDW ZKDW
KDSSHQV ZLWK $.67 DQG DJULFXOWXUH LQ JHQHUDO LQ
GHYHORSHG FRXQWULHV VWURQJO\ DIIHFWV ZKDW KDSSHQV
LQ GHYHORSLQJ FRXQWULHV EHFDXVH RI WKH KLJKO\
LQWHUFRQQHFWHGZRUOGLQWHUPVRIWUDGHDQGNQRZOHGJH
H[FKDQJH,WVKRXOGEHQRWHGWKDWZKLOHRYHUDOO5'
LQ DJULFXOWXUH KDV GLPLQLVKHG LQ LPSRUWDQFH RYHU WKH
SDVWWZRGHFDGHVIRUHLJQDLGLVQRZRQWKHULVHDJDLQ
DVDUHVSRQVHWRVHYHUDOIRRGFULVHVDOWKRXJKPRVWO\
LQ WKH IRUP RI TXLFN À[HV VXFK DV WKH SURYLVLRQ RI
VHHGVSHVWLFLGHVDQGIHUWLOL]HUV)RUHLJQDLGFRQWLQXHV
WR FRPPDQG ODUJH LQYHVWPHQWV PRVWO\ FRQWUROOHG
DQGGHFLGHGE\GHYHORSHGFRXQWULHVZKLFKVWLOOWHQG
WR FRQVLGHU WKHLU DJULFXOWXUH DV WKH ´UROHµ PRGHO IRU
GHYHORSLQJ FRXQWULHV 8QIRUWXQDWHO\ WKHUH UHPDLQV
D WHQGHQF\ WR LQFUHDVH VKRUWWHUP LQYHVWPHQWV LQ
TXLFNÀ[HVPRVWO\DIWHUPDMRUFDWDVWURSKHVDQGIRRG
HPHUJHQFLHV6XFKDFWLRQVDOWKRXJKQHHGHGLQRUGHU
WRDOOHYLDWHVKRUWWHUPKXPDQLWDULDQSUREOHPVVHOGRP
WDFNOHWKHURRWRIWKHSHUHQQLDOKXQJHUSUREOHPDQG
PHUHO\SURYLGHDEULGJHWRWKHQH[WHPHUJHQF\7KLV
IRUPRIDLGLVFOHDUO\LQDGHTXDWHIRUVROYLQJWKHFDXVHV
RIWKHUHSHDWHGKXQJHUDQGSRYHUW\SUREOHPVWKHUHLV
DQHHGWRUHWKLQNWKHRYHUDOODSSURDFKWRIRRGVHFXULW\
7KH ,$$67' DQG 81&7$' +RIIPDQQ DV ZHOO DV WKH +LJK /HYHO 3DQHO RI ([SHUWV RQ )RRG
6HFXULW\ DQG 1XWULWLRQ WR WKH )$2 &RPPLWWHH RQ
:RUOG )RRG 6HFXULW\ &)6+/3( JLYH D YHU\
JRRG DFFRXQW RI WKH PDJQLWXGH RI SDVW LQYHVWPHQWV
LQDJULFXOWXUDO5'DWQDWLRQDODQGUHJLRQDOOHYHOVDV
ZHOODVWKHLUVRXUFHVERWKSXEOLFLHE\PXOWLODWHUDO
DQG PHPEHU 6WDWHV RI WKH 'HYHORSPHQW $VVLVWDQFH
&RPPLWWHH '$& RI WKH 2(&' DQG SULYDWH 7KHUH
ZDV D VOLJKW GHFOLQH RI VXFK LQYHVWPHQWV XQWLO DIWHU ZKLFK WKH\ VWDUWHG VKRZLQJ VLJQV RI UHFRYHU\
ZKHQ GHYHORSLQJFRXQWU\ JRYHUQPHQWV EHJDQ
LQFUHDVLQJWKHLUVSHQGLQJRQDJULFXOWXUHDQG'$&DQG
PXOWLODWHUDO DLG DJHQFLHV DOVR LQFUHDVHG WKH DPRXQW
DOORFDWHGWRDJULFXOWXUHERWKLQWRWDOYROXPHDQGDVD
VKDUHRIRIÀFLDOGHYHORSPHQWDVVLVWDQFH2'$81
'(6$
)URP WKH GDWD SURYLGHG LQ WKHVH UHSRUWV LW LV
FOHDU WKDW WKHUH LV D VHULRXV DQG XUJHQW QHHG WR
DFFHOHUDWH WKH PRGHVW XSZDUG WUHQG LQ DJULFXOWXUDO
LQYHVWPHQWV$VVWDWHGLQWKH,$$67'UHSRUW
WKHUH LV DOVR D QHHG WR UHFWLI\ WKH LPEDODQFH LQ WKH
VRXUFHVRIIXQGLQJE\VXEVWDQWLDOO\LQFUHDVLQJSXEOLF
VXSSRUWWR$.67ERWKLQGHYHORSHGDQGGHYHORSLQJ
FRXQWULHVVLQFHWKHUHVHDUFKLVVXSSRVHGWRGHOLYHU
FRPPRQ SXEOLF JRRGV 7KLV ZRXOG KHOS FRXQWHUDFW
WKH WUHQG LQ SULYDWH LQYHVWPHQWV ZKLFK HPSKDVL]HV
D QDUURZ DSSURDFK WKDW WHQGV WR IRFXV ODUJHO\
RQ SURPRWLQJ SODQW EUHHGLQJ ELRWHFKQRORJ\ DQG
JHQHWLF HQJLQHHULQJ DV VROXWLRQV WR WKH SUREOHPV
RI FOLPDWH FKDQJH DGDSWDWLRQ DQG PLWLJDWLRQ IRRG
VHFXULW\ KXQJHU DQG SRYHUW\ UXUDO OLYHOLKRRGV DQG
WKHDVVRFLDWHGKHDOWKDQGHQYLURQPHQWDOSUREOHPV
+RZHYHU WKH FRPSOH[LW\ RI WKH DJULFXOWXUDO DQG
ZLGHU IRRG V\VWHPV XUJHQWO\ UHTXLUHV DQ XSJUDGLQJ
DQG FKDQJH RI FRXUVH DZD\ IURP WKH UHGXFWLRQLVW
DSSURDFKWRSUREOHPVROYLQJ7KHIDUPRUHVRFLDOO\
HQYLURQPHQWDOO\ DQG XOWLPDWHO\ HFRQRPLFDOO\
UHZDUGLQJ URXWH RI LQYHVWLQJ LQ VPDOOKROGHU DQG
IDPLO\UXQDJURHFRORJLFDOIDUPLQJV\VWHPVGRHVQRW
UHFHLYHWKHDWWHQWLRQLWGHVHUYHV
75$'($1'(19,5210(175(9,(:
7KHVKLIWLQ$.67LQYHVWPHQWVDWLQWHUQDWLRQDOUHJLRQDO
DQGQDWLRQDOOHYHOVWKHUHIRUHQHHGVXUJHQWO\WRDGGUHVV
WKHVHIXQGDPHQWDOLVVXHVDVVXJJHVWHGERWKE\WKH
,$$67'DQGPRUHUHFHQWO\E\81(3
7KHIXQGDPHQWDOLVVXHLQDJULFXOWXUHWRGD\LVQRWWKDW
WKHUHLVWRROLWWOHIRRGSURGXFHGDIWHUDOOZHSURGXFH
DQ DYHUDJH RI NFDO SHU SHUVRQGD\ ² URXJKO\
GRXEOH WKH DPRXQW QHHGHG IRU KHDOWK\ QXWULWLRQ $
QXPEHURILVVXHVOLQNHGWRWKLVRYHUSURGXFWLRQQHHG
WREHDGGUHVVHGWKURXJKQHZ$.67SROLFLHV
,Q PHPEHU 6WDWHV RI WKH $IULFDQ 8QLRQ
FRPPLWWHG WR VSHQG SHU FHQW RI WKHLU QDWLRQDO
EXGJHWV RQ DJULFXOWXUDO GHYHORSPHQW 6R IDU RQO\ D
KDQGIXORIWKHPDUHPHHWLQJWKLVODXGDEOHWDUJHW7KDW
GHFLVLRQ ZDV PDGH EDVHG RQ WKH UHFRJQLWLRQ WKDW
LW LV LQ HDFK FRXQWU\·V EHVW LQWHUHVW WR KDYH D VWURQJ
DJULFXOWXUDO VHFWRU EDFNHG E\ D ZHOOGHYHORSHG
UHVHDUFKDQGH[WHQVLRQFDSDFLW\7KHODWHVWIRRGFULVLV
LQWKH+RUQRI$IULFDPD\\HWJLYHPRUHFUHGHQFHWR
WKH QHHG IRU XUJHQW DFWLRQ LQ SDUWLFXODU WR GHYHORS
VXVWDLQDEOH VROXWLRQV WR WKH LQFUHDVLQJ LPSDFWV RI
FOLPDWHFKDQJHLQGXFHG SKHQRPHQD VXFK DV WKRVH
FDXVHGE\(O1LxRDQGOD1LxD
‡ 2QO\DIHZFRPPRGLWLHVPDNHXSWKHEXONRIJOREDO
IRRG SURGXFWLRQ ZKLFK GRHV QRW VDWLVI\ WKH QHHG
IRUPRUHGLYHUVHDQGORFDOL]HGSURGXFWLRQRITXDOLW\
DQGDIIRUGDEOHIRRG
‡ 7KH H[FHVV IRRG LV SURGXFHG PRVWO\ LQ
LQGXVWULDOL]HG FRXQWULHV ZLWK VRPH GHYHORSLQJ
FRXQWU\H[FHSWLRQVVXFKDV,QGLDZLWKWKHKHOSRI
SULFH DQG WUDGHGLVWRUWLQJ VXEVLGLHV DQG DW JUHDW
VRFLDOFRVWV
‡ 7KH H[FHVV IRRG LV SURGXFHG DOVR DW JUHDW
HQYLURQPHQWDOFRVWVFRQWULEXWLQJEHWZHHQDQG
SHU FHQW RI WKH WRWDO JUHHQKRXVH JDV *+*
HPLVVLRQV WKDW DUH SDUWO\ UHVSRQVLEOH IRU FOLPDWH
FKDQJHVHHWKHFRPPHQWRI*5$,1LQFKDSWHURI
WKLV5HYLHZ
‡ $QLPDO IHHG SURGXFWLRQ SDUWLFXODUO\ FHUHDOV IRU
UXPLQDQWV KDV D QHJDWLYH LPSDFW RQ DQLPDO
DQG FRQVXPHU KHDOWK GXH WR PHDW TXDOLW\ DQG
DQWLELRWLF DQG KRUPRQH UHVLGXHV DQG RQ WKH
HQYLURQPHQW WKURXJK FDUERQ F\FOHV ZKHQ IHHG LV
WUDQVSRUWHG DURXQG WKH ZRUOG 7KHUH LV DOVR WKH
HQYLURQPHQWDO SUREOHP RI DQLPDO IDFWRULHV ZKLFK
QHHGVWREHRYHUFRPHDORQJZLWKDQHPSKDVLVRQ
DQLPDOZHOIDUHFOLPDWHFKDQJHDQGKXPDQKHDOWK
FRQVLGHUDWLRQV
‡ &RQVXPSWLRQ RI ELRIXHOV LQ WKH IRUP RI FHUHDOV
DQG YHJHWDEOH RLOV VKRXOG EH UHDVVHVVHG DQG
SROLFLHV UHYLVHG WR UHYHUVH WKH VWURQJ JURZWK RI
VXFKFRQVXPSWLRQZKLFKLVFOHDUO\XQVXVWDLQDEOH
%HVLGHVVRPHREVHUYHUVKDYHIRXQGQRHYLGHQFH
RIDGGHGEHQHÀWVRIELRIXHOVLQWHUPVRIORZHU*+*
HPLVVLRQVEXWWKH\GRDIIHFWIRRGSULFHVQHJDWLYHO\
&)6+/3(/DJLHWDO
7KH 8QLWHG 1DWLRQV &RQIHUHQFH RQ 6XVWDLQDEOH
'HYHORSPHQW ² 5LR ² KHOG LQ -XQH ZDV
DQRWKHU JRRG RSSRUWXQLW\ WR VWURQJO\ FRPPLW WR D
QHZ DJULFXOWXUDO DQG IRRG V\VWHP DORQJ WKH OLQHV RI
D PXOWLIXQFWLRQDO DJULFXOWXUDO V\VWHP DV GHÀQHG LQ
WKH,$$67'UHSRUW$V+RIIPDQQDQG*5$,1LOOXVWUDWH
LQ FKDSWHU RI WKLV 5HYLHZ DJULFXOWXUH LV VWURQJO\
LPSOLFDWHG DV SDUW RI WKH FOLPDWHFKDQJH SUREOHP ,W
PXVWWKHUHIRUHDOVREHSDUWRIWKHVROXWLRQ(QRUPRXV
KHDOWK SUREOHPV KDYH DULVHQ IURP ´PRGHUQ GLHWVµ
RI KLJKO\ SURFHVVHG DQG FKHPLFDOODFHG IRRGVWXIIV
QRW WR PHQWLRQ WKH HFRORJLFDO LPSDFWV RI H[LVWLQJ
FRQYHQWLRQDO IRRG SURGXFWLRQ V\VWHPV WKDW RYHUXVH
ZDWHU IHUWLOL]HUV DQG RWKHU IRVVLOIXHOEDVHG LQSXWV
DQG DUH WKHUHIRUH E\ GHÀQLWLRQ XQVXVWDLQDEOH
)XUWKHUPRUH WKH VRFDOOHG FRQYHQWLRQDOLQGXVWULDO
DJULFXOWXUH LV VXSSRUWHG E\ SHUYHUVH VXEVLGLHV LQ
GHYHORSHG FRXQWULHV WKDW UHLQIRUFH XQVXVWDLQDEOH
SUDFWLFHV RQ WKH RQH KDQG DQG RYHUFRQVXPSWLRQ
DQG ZDVWH RQ WKH RWKHU ,Q GHYHORSLQJ FRXQWULHV
IDUPHUV WU\LQJ WR FRPSHWH ZLWK WKHVH VXEVLGL]HG
SURGXFWV DUH IRUFHG WR FXW FRUQHUV DQG H[SORLW
WKHLU QDWXUDO UHVRXUFHV 'XH WR SRRU LQYHVWPHQW
LQ DJULFXOWXUH WKHVH IDUPHUV VXIIHU IURP D ODFN RI
NQRZOHGJH H[FKDQJH DQG LQVXIÀFLHQW RU D FRPSOHWH
DEVHQFH RI LQYHVWPHQW FDSDFLW\ WR LQQRYDWH DQG
SXUFKDVHPLVFHOODQHRXVLQSXWVLQFOXGLQJLQIRUPDWLRQ
DQG HTXLSPHQW 0RUHRYHU WKH\ GR QRW EHQHÀW IURP
LQVXUDQFH VFKHPHV $JULFXOWXUH HYHU\ZKHUH LV D
UDWKHU ULVN\ EXVLQHVV ZKLFK QHHGV WR EH EDFNHG E\
LQVXUDQFHVFKHPHVWRDVVXUHIDUPHUVWKHLUVXUYLYDOLQ
EDG\HDUVZKLFKDUHEHFRPLQJPRUHUHJXODUHYHQWV
DVFOLPDWHFKDQJHLPSDFWVLQFUHDVH
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
7KH WUDQVLWLRQ IURP DQ HQHUJ\LQWHQVLYH IRUP RI
DJULFXOWXUHEHLWE\LPSRUWLQJWKHLQSXWVRUSURGXFLQJ
WKHP ORFDOO\ WR D V\VWHP WKDW EXLOGV SURGXFWLYH
HFRV\VWHP VHUYLFHV WR VXVWDLQ PXOWLIXQFWLRQDO
VXVWDLQDEOH UHVLOLHQW YLDEOH DQG HTXLWDEOH DJULFXOWXUH
UHTXLUHV PDMRU QHZ LQYHVWPHQWV LQ LQVWLWXWLRQV DQG
LQIUDVWUXFWXUH 7KLV LQHYLWDEO\ UHTXLUHV WKH FUHDWLRQ RI
QHZUHVHDUFKFHQWUHVDQGLQLWLDWLYHVZKLFKVKRXOGEH
GHGLFDWHGWRUHVHDUFKHGXFDWLRQDQGH[WHQVLRQXQGHU
DIXOO\SDUWLFLSDWRU\V\VWHPWKDWZLOODOVRIDYRXUZRPHQ
DQG FRYHU HFRV\VWHP VHUYLFHV RUJDQLF IDUPLQJ
DJURHFRORJ\DQGDJURIRUHVWU\7KHXOWLPDWHDLPRIWKRVH
FHQWUHVDQGLQLWLDWLYHVVKRXOGEHWKHWUDQVIRUPDWLRQRI
WKH SUHVHQW DJULFXOWXUDO UHVHDUFK V\VWHP DW QDWLRQDO
UHJLRQDODQGLQWHUQDWLRQDOOHYHOVWRFDWHUWRWKHQHHGV
RI D QHZ DJULFXOWXUDO SDUDGLJP VHH WKH FRPPHQWV
RI5HLMLQWKLVFKDSWHUDQGRI$OWLHULDQG.RRKDINDQLQ
FKDSWHURIWKLV5HYLHZ7HFKQRORJLFDODQGVFLHQWLÀF
LQQRYDWLRQV VKRXOG UHVSRQG WR WKH QHHGV LGHQWLÀHG
E\ WKH HQGXVHUV WR PHHW WKH JRDOV RI PXOWLIXQFWLRQDO
DJULFXOWXUHLQVWHDGRIGULYLQJWKRVHQHHGV
FKDOOHQJHVWKDWOLHDKHDGZKLOHSURYLGLQJWKHQHHGHG
IRRG DQG QXWULWLRQ VHFXULW\ IRU WKH SURMHFWHG ELOOLRQ
SHRSOH E\ 81(3 VRXJKW WR H[DPLQH
KRZ JUHHQ LQYHVWPHQWV ZRXOG KHOS DFKLHYH JUHDWHU
HFRQRPLF HQYLURQPHQWDO DQG VRFLDO VXVWDLQDELOLW\
)ROORZLQJWKH6WHUQ5HYLHZ·VUHFRPPHQGDWLRQV
WR LQYHVW DQ H[WUD RU SHU FHQW RI JURVV GRPHVWLF
SURGXFW *'3 LQ D JUHHQ HFRQRP\ WZR VFHQDULRV
ZHUH LGHQWLÀHG XVLQJ WKH 0LOOHQQLXP ,QVWLWXWH·V 7
V\VWHP G\QDPLFV PRGHO LQ ZKLFK WKH VXJJHVWHG
DGGLWLRQDOLQYHVWPHQWVLQJUHHQDJULFXOWXUHZRXOGEH
XQGHUWDNHQ JOREDOO\ ,Q WKH ÀUVW VFHQDULR * DQ
DGGLWLRQDOSHUFHQWRI*'3ZRXOGEHLQYHVWHGLQ
JUHHQ DJULFXOWXUH DQQXDOO\ HTXDO WR ELOOLRQ ² LQ
FRQVWDQW GROODUV EHWZHHQ DQG ,Q
WKH VHFRQG VFHQDULR * SHU FHQW ZRXOG EH
LQYHVWHGLQJUHHQDJULFXOWXUHDQQXDOO\HTXDOWR
ELOOLRQ GXULQJ WKH VDPH SHULRG 7KHVH DGGLWLRQDO
LQYHVWPHQWVZRXOGEHXQGHUWDNHQLQHTXDORQHIRXUWK
PHDVXUHVLQWKHIROORZLQJIRXUDFWLYLWLHVDORQJWKHOLQHV
VXJJHVWHGE\WKH,$$67'
&RQWUDU\ WR PDQ\ SUHFRQFHSWLRQV DJURHFRORJ\ LV
QRW WKH ORZSURGXFWLYLW\ V\VWHP RI RXU DQFHVWRUV
UDWKHU LW LV D PRGHUQ NQRZOHGJHEDVHG VFLHQFH
DQG WHFKQRORJ\HPSRZHUHG IRRG ÀEUH DQG IRGGHU
SURGXFWLRQV\VWHPDQGLWLVWKHRQO\RQHFDSDEOHRI
DVVXULQJIRRGVHFXULW\LQWKHPHGLXPDQGORQJWHUP
VHHDOVRWKHFRPPHQWRI1HPHVRQWKHSURGXFWLYLW\
DQG SURÀWDELOLW\ RI RUJDQLF DJULFXOWXUH LQ FKDSWHU 7KH PHUJLQJ RI NQRZOHGJH ZLWK WHFKQRORJ\ DQG
VFLHQFHWRFUHDWHLQQRYDWLRQVWKDWDGGUHVVWKHEURDG
UDQJH RI LVVXHV LQ D V\VWHPLF PDQQHU LQ FRQWUDVW WR
WKHUHGXFWLRQLVWDSSURDFKWKDWSURPRWHVELRWHFKDQG
JHQHWLF HQJLQHHULQJ LQGXVWULHV QHHGV WR EH VWURQJO\
SURPRWHG WKURXJK SXEOLF VHFWRU LQYHVWPHQWV $UHDV
WKDW UHTXLUH VSHFLDO DQG LQFUHDVHG DWWHQWLRQ DUH VRLO
VFLHQFHVIRUWKHUHVWRUDWLRQEXLOGLQJDQGPDLQWHQDQFH
RI VRLO IHUWLOLW\ ZLWKRXW WKH PDVVLYH LQSXW RI V\QWKHWLF
IHUWLOL]HUV WKH GHYHORSPHQW RI PL[HG FURSSLQJ DQG
DQLPDO KXVEDQGU\ V\VWHPV ZLWKLQ URWDWLRQ SDWWHUQV
WKDW IDYRXU KHDOWK\ SODQW JURZWK ÀUVW OLQH RI GHIHQVH
IRU SHVW DQG GLVHDVH FRQWURO DQG WKH SURGXFWLRQ RI
TXDOLW\ SODQW DQG DQLPDO SURGXFWV WKDW LPSURYH WKH
KHDOWK RI FRQVXPHUV DQG WKH HQYLURQPHQW $.67V
WKDW IXOÀO WKHVH FULWHULD DUH KROLVWLF LQ QDWXUH WDNH D
ODQGVFDSH RU ULYHUEDVLQ YLHZ DQG HPSKDVL]H WKH
VXVWDLQDEOH XWLOL]DWLRQ RI ELRGLYHUVLW\ ZDWHU VRLO DQG
HQHUJ\ZLWKLQWKHDJURHFRV\VWHPV
‡ 3URPRWLQJ VXVWDLQDEOH DJULFXOWXUDO PDQDJHPHQW
SUDFWLFHV LH HQYLURQPHQWDOO\ VRXQG SUDFWLFHV
VXFKDVQRORZWLOODJHDQGRUJDQLFDJULFXOWXUH
‡ 0LQLPL]LQJSUHKDUYHVWORVVHVWKURXJKWUDLQLQJDQG
SHVWFRQWURODFWLYLWLHV
‡ 'HYHORSLQJ RU LPSURYLQJ IRRG SURFHVVLQJ IRU
WKH SUHYHQWLRQ RI SRVWKDUYHVW ORVVHV DQG EHWWHU
VWRUDJHHVSHFLDOO\LQUXUDODUHDV
‡ 6XSSRUWLQJ UHVHDUFK DQG GHYHORSPHQW LQ
DJURQRP\ SKRWRV\QWKHVLV HIÀFLHQF\ VRLO ELRORJ\
DQGIHUWLOLW\WRFORVHWKH\LHOGJDSDGDSWDWLRQWR
FOLPDWHFKDQJHWKURXJKELRORJLFDOSURFHVVHVDQG
QHZ FURSV DQG IRU HIÀFLHQF\ LPSURYHPHQWV LQ
HQHUJ\DQGZDWHUXVH
,Q DQ HIIRUW WR HYDOXDWH WKH IHDVLELOLW\ RI VXVWDLQDEOH
´JUHHQµ DJULFXOWXUH WR GHDO ZLWK WKH SUREOHPV DQG
,WVKRXOGEHQRWHGWKDW5'LPSOLHVWKHSDUWLFLSDWLRQ
LQ UHVHDUFK DQG NQRZOHGJH GLVVHPLQDWLRQ RI WKH
GLIIHUHQWVWDNHKROGHUVLQSDUWLFXODUIDUPHUV²ZKRDUH
RIWHQZRPHQ²LQGHYHORSLQJFRXQWULHV81(3
VKRZV WKDW LQYHVWPHQWV LQ VXVWDLQDEOH DJULFXOWXUH
FDQPHHWWKHQHHGIRUIRRGVHFXULW\LQWKHORQJWHUP
ZKLOHUHGXFLQJDJULFXOWXUH·VFDUERQIRRWSULQWWKHUHE\
PDNLQJ LW SDUW RI WKH FOLPDWH FKDQJH VROXWLRQ 7KH
PRGHOOLQJUHVXOWVVXPPDUL]HGLQWDEOHDUHLQOLQHZLWK
WKHH[SHFWDWLRQVRIDQHZDJULFXOWXUDOSDUDGLJPDQG
WKH ÀQGLQJV RI PDQ\ RUJDQLF DQG DJURHFRORJ\ FDVH
VWXGLHV 7KH\ VKRZ WKDW QRW RQO\ IRRG VHFXULW\ EXW
DOVRHQYLURQPHQWDODQGVRFLDOJRDOVFDQEHDFKLHYHG
ZLWKDVXVWDLQDEOHDQGUHVLOLHQWDJULFXOWXUDOV\VWHP
,Q WDEOH WKH ´JUHHQ VFHQDULRµ * LV FRPSDUHG
75$'($1'(19,5210(175(9,(:
7DEOH*UHHQVFHQDULR,PSDFWRIJUHHQLQYHVWPHQWVLQDJULFXOWXUHDPRXQWLQJWRSHUFHQWRI*'3
<HDU
6FHQDULR
$JULFXOWXUDOSURGXFWLRQELOOLRQ\U
&URSVELOOLRQ\U
/LYHVWRFNELOOLRQ\U
)LVKHULHVELOOLRQ\U
(PSOR\PHQWPLOOLRQV
6RLOTXDOLW\'PQO
$JULFXOWXUHZDWHUXVH.0\U
+DUYHVWHGODQGELOOLRQVRIKD
'HIRUHVWDWLRQPLOOLRQVRIKD\U
&DORULHVSHUFDSLWDGD\NFDO
DYDLODEOHIRUVXSSO\
&DORULHVSHUFDSLWDGD\NFDO
DYDLODEOHIRUKRXVHKROGFRQVXPSWLRQ
%DVH\HDU
*UHHQ
%$8D
*UHHQ
%$8D
6RXUFH 81(3
1RWHD%$8 EXVLQHVVDVXVXDOVFHQDULR
ZLWK D ´EXVLQHVVDVXVXDOµ %$8 VFHQDULR ZKHUH
WKHVDPHDPRXQWRIDGGLWLRQDOLQYHVWPHQWHTXDOOLQJ
SHU FHQW RI *'3\HDU LV PDGH LQ FRQYHQWLRQDO
DQG WUDGLWLRQDO DJULFXOWXUH RYHU D \HDU SHULRG
7KH UHVXOWV DUH LPSUHVVLYH DQG DOWKRXJK WKHVH DUH
FRPSLOHG RQ D JOREDO VFDOH WKH EDVLF SULQFLSOHV
DOVR DSSO\ WR WKH LQYHVWPHQWV PDGH WR IDFLOLWDWH WKH
WUDQVLWLRQ WRZDUGV PXOWLIXQFWLRQDO DQG VXVWDLQDEOH
DJULFXOWXUH WKDW DGRSWV WUDGLWLRQDO DQG ORZLQSXW
WHFKQLTXHVDVFXUUHQWO\SUDFWLFHGLQPRVWGHYHORSLQJ
FRXQWULHVE\VPDOOVFDOHIDUPHUVDVZHOODVE\VRPH
ODUJHUVFDOHRSHUDWLRQV2YHUDOOWKHVHLQYHVWPHQWVZLOO
OHDG WR LPSURYHG VRLO TXDOLW\ LQFUHDVHG DJULFXOWXUDO
\LHOG DQG UHGXFHG ODQG DQG ZDWHU UHTXLUHPHQWV
7KH\ZLOODOVRLQFUHDVH*'3JURZWKDQGHPSOR\PHQW
LPSURYH QXWULWLRQ DQG UHGXFH HQHUJ\ FRQVXPSWLRQ
DQGFDUERQGLR[LGH&2HPLVVLRQV
%$JULFXOWXUDOSURGXFWLRQDQG
YDOXHDGGHG
,QWKHJUHHQVFHQDULRWRWDODJULFXOWXUDOSURGXFWLRQLH
DJULFXOWXUDOSURGXFWVOLYHVWRFNÀVKHULHVDQGIRUHVWU\
ZRXOG LQFUHDVH VLJQLÀFDQWO\ FRPSDUHG ZLWK WKH %$8
VFHQDULR7KLVFKDQJHZRXOGEHGULYHQE\LQFUHDVHG
FURSSURGXFWLRQWKDWZRXOGEHFDSDEOHRIPHHWLQJWKH
QHHGVRIDJURZLQJSRSXODWLRQSURMHFWHGWRUHDFKRYHU
ELOOLRQE\6LPLODUO\YDOXHDGGHGLQDJULFXOWXUDO
SURGXFWLRQZRXOGLQFUHDVHE\PRUHWKDQSHUFHQW
FRPSDUHGZLWKWKH%$8VFHQDULR,WLVLPSRUWDQWWRQRWH
WKDWGHVSLWHDQLQFUHDVHLQDJULFXOWXUDOSURGXFWLRQDQG
YDOXHDGGHGWKHUHZRXOGEHQRLQFUHDVHLQWKHDUHD
KDUYHVWHGZKLOHGHIRUHVWDWLRQUDWHVZRXOGEHKDOYHG
DQG ZDWHUHIÀFLHQF\ LQFUHDVHG E\ RQH WKLUG 7KLV
VXJJHVWV SRVLWLYH V\QHUJLHV EHWZHHQ LQYHVWPHQWV LQ
HFRORJLFDODJULFXOWXUHDQGIRUHVWPDQDJHPHQW
&/LYHVWRFNSURGXFWLRQQXWULWLRQDQG
OLYHOLKRRGV
$GGLWLRQDO LQYHVWPHQWV LQ JUHHQ DJULFXOWXUH ZRXOG
DOVR OHDG WR LQFUHDVHG OHYHOV RI OLYHVWRFN SURGXFWLRQ
DQGUXUDOOLYHOLKRRGVDQGLPSURYHGQXWULWLRQDOVWDWXV
6XFK LQYHVWPHQWV DUH SURMHFWHG WR OHDG WR JURZWK
LQ HPSOR\PHQW RI DERXW SHU FHQW FRPSDUHG ZLWK
FXUUHQWOHYHOVDQGWRDQLQFUHDVHRIDERXWSHUFHQW
FRPSDUHGZLWKWKH%$8VFHQDULR7KHPRGHOOLQJDOVR
VXJJHVWVWKDWLQYHVWPHQWVLQJUHHQDJULFXOWXUHFRXOG
FUHDWHPLOOLRQDGGLWLRQDOMREVFRPSDUHGZLWK%$8
RYHU WKH QH[W \HDUV 7KH DGGLWLRQDO LQYHVWPHQWV
LQ JUHHQ DJULFXOWXUH FRXOG DOVR OHDG WR LPSURYHG
QXWULWLRQDVDUHVXOWRIHQKDQFHGSURGXFWLRQPHWKRGV
0HDWSURGXFWLRQZRXOGLQFUHDVHE\SHUFHQWGXH
WR DGGLWLRQDO LQYHVWPHQWV EHWZHHQ DQG ZKLOH ÀVK SURGXFWLRQ ZRXOG EH SHU FHQW EHORZ
OHYHOVDQG\HWSHUFHQWKLJKHUWKDQWKH%$8
VFHQDULR E\ 0RVW RI WKHVH LQFUHDVHV ZRXOG
EH WKH UHVXOW RI JUHDWHU RXWOD\V IRU RUJDQLF IHUWLOL]HUV
LQVWHDG RI FKHPLFDO IHUWLOL]HUV DQG UHGXFHG ORVVHV
EHFDXVH RI EHWWHU SHVW PDQDJHPHQW DQG ELRORJLFDO
FRQWURO
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
'*+*HPLVVLRQV
7RWDO &2 HPLVVLRQV LQ WKH DJULFXOWXUDO VHFWRU DUH
SURMHFWHGWRLQFUHDVHE\SHUFHQWUHODWLYHWR
EXWZLOOEHSHUFHQWEHORZ%$8:KLOHHQHUJ\UHODWHG
HPLVVLRQV PRVWO\ IURP IRVVLO IXHOV DUH SURMHFWHG WR
JURZLWLVZRUWKQRWLQJWKDWHPLVVLRQVIURPFKHPLFDO
IHUWLOL]HUXVHGHIRUHVWDWLRQDQGKDUYHVWHGODQGZRXOG
GHFOLQHUHODWLYHWR%$8:KHQDFFRXQWLQJIRUFDUERQ
VHTXHVWUDWLRQLQWKHVRLOIURPHFRORJLFDOSUDFWLFHVDQG
IRUV\QHUJLHVZLWKLQWHUYHQWLRQVLQWKHIRUHVWU\VHFWRU
QHW *+* HPLVVLRQV ZRXOG GHFOLQH FRQVLGHUDEO\
7KHVH UHGXFWLRQV ZRXOG QRW EH VXIÀFLHQW KRZHYHU
DQG ZRXOG QHHG WR EH VXEVWDQWLDOO\ VWHSSHG XS WR
PDNH DJULFXOWXUH *+*QHXWUDO 'HSHQGLQJ RQ KRZ
WKH *+* HPLVVLRQV DUH FDOFXODWHG DW SURGXFWLRQ
RU IRRG V\VWHP OHYHO WKH UHGXFWLRQ ZRXOG KDYH WR
EH EHWZHHQ DQG SHU FHQW RI WKH HPLVVLRQV
UHVXOWLQJIURPSUHVHQWGD\DJULFXOWXUDOSUDFWLFHVMXVW
WR VWD\ DW SDUWV SHU PLOOLRQ SSP RI &2 7KLV
E\DQ\PHDVXUHLVVWLOOWRRKLJKDQGULVNVFRQWLQXLQJ
WR H[SRVH HFRV\VWHPV WR LUUHYHUVLEOH GDPDJHV
,W LV WKHUHIRUH QHFHVVDU\ WR WDNH D PXFK PRUH EROG
DSSURDFKWRWUDQVLWLRQLQJWRZDUGVRUJDQLFDQGVLPLODU
DJULFXOWXUDOSUDFWLFHVWKDWDUHDEOHWRDEVRUEWKUHHWR
IRXUWLPHVDVPXFK&2DVFRQYHQWLRQDODQGLQGXVWULDO
SUDFWLFHV EHIRUH VDWXUDWLRQ RFFXUV ZLWKLQ VRPH \HDUV,$$67'
$JULFXOWXUH WKHUHIRUH XQGRXEWHGO\ UHSUHVHQWV WKH
ORZHVWKDQJLQJIUXLWIRUFOLPDWHFKDQJHPLWLJDWLRQE\
VLPSO\GRLQJZKDWZHDOUHDG\NQRZKRZWRGRDQGDW
OLWWOHFRVWVIRUWKHWUDQVLWLRQ,QDGGLWLRQWKHWUDQVLWLRQ
ZRXOGEHDFFRPSDQLHGE\DQXPEHURIZLQGIDOOVIURP
D VXEVWDQWLDO UHGXFWLRQ LQ KHDOWKFDUH FRVWV GXH WR
KHDOWKLHUHDWLQJDQGOLYLQJKDELWVWRDGUDVWLFUHGXFWLRQ
RI HFRV\VWHP VHUYLFH FRVWV DQG VXEVWDQWLDO VDYLQJV
IURPVWRSSLQJSHUYHUVHVXEVLGLHV7KXVDWUDQVLWLRQWR
RUJDQLFDJURHFRORJLFDO IDUPLQJ SUDFWLFHV VKRXOG EH
WKHDEVROXWHSULRULW\ZKHQLQYHVWLQJLQ$.67DQGQHZ
DJULFXOWXUDOSUDFWLFHV
2YHUDOO FRPELQLQJ WKHVH UHVXOWV ZLWK UHVHDUFK IURP
RWKHUVRXUFHVSUHVHQWVWKHIROORZLQJUHVXOWV
‡ 5HWXUQVRQLQYHVWPHQWVLQ´EURZQµDJULFXOWXUHZLOO
FRQWLQXH WR GHFUHDVH LQ WKH ORQJ UXQ PDLQO\ GXH
WRLQFUHDVLQJFRVWVRILQSXWVHVSHFLDOO\ZDWHUDQG
HQHUJ\DQGVWDJQDWLQJGHFUHDVLQJ\LHOGV
‡ 7KH FRVWV RI QHJDWLYH H[WHUQDOLWLHV RI ´EURZQµ
DJULFXOWXUH ZLOO FRQWLQXH WR LQFUHDVH JUDGXDOO\
LQLWLDOO\ QHXWUDOL]LQJ DQG HYHQWXDOO\ H[FHHGLQJ DQ\
HFRQRPLFDQGGHYHORSPHQWJDLQV
‡ *UHHQLQJ DJULFXOWXUH DQG IRRG GLVWULEXWLRQ ZLOO
UHVXOWLQPRUHFDORULHVSHUSHUVRQGD\PRUHMREV
DQG EXVLQHVV RSSRUWXQLWLHV ² HVSHFLDOO\ LQ UXUDO
DUHDV ² DQG JUHDWHU PDUNHW DFFHVV RSSRUWXQLWLHV
HVSHFLDOO\IRUGHYHORSLQJFRXQWULHV
:KLOHHDFKRIWKHSURSRVHGPHDVXUHVZLOOFRQWULEXWH
WRWKHVKLIWWRZDUGVDJUHHQHUDJULFXOWXUDOVHFWRUWKH
FRPELQDWLRQRIDOOWKHVHLQWHUUHODWHGDFWLRQVZLOO\LHOG
DGGLWLRQDOSRVLWLYHV\QHUJLHV)RULQVWDQFHLQYHVWPHQW
LQPRUHVXVWDLQDEOHIDUPLQJSUDFWLFHVZLOOOHDGWRVRLO
FRQVHUYDWLRQZKLFKZRXOGLQFUHDVHDJULFXOWXUDO\LHOG
LQWKHPHGLXPWRORQJHUWHUP7KLVZRXOGDOORZPRUH
ODQGIRUUHIRUHVWDWLRQZKLFKLQWXUQZRXOGUHGXFHODQG
GHJUDGDWLRQDQGLPSURYHVRLOTXDOLW\
/RRNLQJ DW WKH NH\ LVVXH RI UHVLOLHQFH QHHGHG LQ WKH
\HDUV DKHDG WR GHDO ZLWK WKH FKDOOHQJHV RI FOLPDWH
FKDQJHLQSDUWLFXODULQGHYHORSLQJFRXQWULHVWKDWZLOO
EH DIIHFWHG PXFK PRUH WKDQ GHYHORSHG FRXQWULHV
LQYHVWPHQWLQ$.67ZLOOQHHGWREHZHOODERYHWKHOHYHO
LQGLFDWHGLQWKH6WHUQ5HYLHZJLYHQWKDWWKHUHLVWKH
QHHGWRDOORZIRUDFDWFKXSSHULRGRIDWOHDVW\HDUVWR
DGDSWWKHUHVHDUFKV\VWHPVXQLYHUVLWLHVQDWLRQDODQG
UHJLRQDOWRWKHQHHGVRIVPDOOVFDOHIDUPHUVZKRDUH
SUDFWLFLQJVXVWDLQDEOHDJULFXOWXUH$OVRWKHHQRUPRXV
GLYHUVLW\LQPRVWWURSLFDODQGVXEWURSLFDODJULFXOWXUDO
V\VWHPVDGGVWRWKHQHHGIRUGHFHQWUDOL]DWLRQRIWKH
UHVHDUFKDQGWKHDFFRPSDQ\LQJPHDVXUHVVXFKDV
NQRZOHGJHDQGLQIRUPDWLRQGLVVHPLQDWLRQ
((QDEOLQJFRQGLWLRQV
'HVSLWH WKH FOHDU ORJLF DQG HFRQRPLF UDWLRQDOH IRU
PRYLQJPRUHUDSLGO\WRZDUGVVXVWDLQDEOHDJULFXOWXUH
WKH WUDQVLWLRQ ZLOO UHTXLUH D VXSSRUWLYH SROLF\
HQYLURQPHQW DQG HQDEOLQJ FRQGLWLRQV WKDW FRXOG
KHOS OHYHO WKH SOD\LQJ ÀHOG EHWZHHQ FRQYHQWLRQDO
DQG VXVWDLQDEOH DJULFXOWXUDO SUDFWLFHV ,Q SDUWLFXODU
ODUJH LQYHVWPHQWV LQ UXUDO LQIUDVWUXFWXUH LQFOXGLQJ
URDGVSRZHULQWHUQHWDFFHVVDFFHVVWRKHDOWKFDUH
DQGTXDOLW\VFKRROLQJDVZHOODVLQYHVWPHQWVLQQRQ
IDUPLQJ EXW DJULFXOWXUHUHODWHG MREV DUH HVVHQWLDO
IRU PDLQWDLQLQJ WKH UXUDO DUHDV DV OLYHO\ LQWHUHVWLQJ
DQG UHZDUGLQJ SODFHV VR DV WR NHHS WKH \RXWK IURP
PLJUDWLQJWRWKHHYHUJURZLQJXUEDQVOXPV
)7KHZD\IRUZDUG
,PSOHPHQWDWLRQ RI WKH NH\ ÀQGLQJV DQG RSWLRQV IRU
DFWLRQRIWKH,$$67'UHSRUWZLOOPDNHDJULFXOWXUHSDUW
RI WKH FOLPDWHFKDQJH VROXWLRQ ,W ZLOO DOVR DVVXUH
VXVWDLQDEOHTXDOLW\DQGTXDQWLW\RIIRRGSURGXFWLRQWR
QRXULVKWKHJURZLQJDQGPRUHGHPDQGLQJSRSXODWLRQ
ZKLOH VXSSRUWLQJ VWURQJ UXUDO GHYHORSPHQW LQ
DJULFXOWXUHUHODWHGMREV
7KHJURXQGEUHDNLQJÀQGLQJVRIWKH,$$67'SURFHVV
QHHGWREHLQWHUQDOL]HGDQGWUDQVODWHGLQWRSODQVWKDW
FDQ EH LPSOHPHQWHG E\ WKH UHOHYDQW JRYHUQPHQW
DJHQFLHVUHVSRQVLEOHIRU$.67DVZHOODVE\QDWLRQDO
DQG LQWHUQDWLRQDO GHYHORSPHQW DJHQFLHV DQG QRQ
JRYHUQPHQWDO RUJDQL]DWLRQV 1*2V 7KH ,$$67'
UHSRUWQHHGVWREHVHHQDVWKHEDVLVIRUDFWLRQDQG
IRU GHYHORSLQJ D JHQXLQH PXOWLIXQFWLRQDO DJULFXOWXUDO
V\VWHP 1HZ DVVHVVPHQWV QHHG WR EH GRQH DW WKH
JOREDO DQG UHJLRQDO OHYHOV WR XSGDWH WKH RULJLQDO
UHSRUWFRPSOHPHQWJDSVDQGWDNHLQWRDFFRXQWQHZ
VRFLDO HQYLURQPHQWDO DQG HFRQRPLF GHYHORSPHQWV
$VVHVVPHQWVDOVRQHHGWREHFRQGXFWHGDWQDWLRQDO
OHYHOV DV UHFRPPHQGHG E\ WKH ,$$67' DV
DJULFXOWXUDO SROLFLHV DUH YHU\ PXFK D QDWLRQDO LVVXH
DQG DOVR EHFDXVH DJULFXOWXUH LV KLJKO\ ORFDO $
UHYLHZ RI WKH UHSRUWV RQ DJULFXOWXUH WKDW KDYH EHHQ
SXEOLVKHG VLQFH WKH UHOHDVH RI WKH ,$$67' UHSRUW
VHULHV $JULFXOWXUH DW D &URVVURDGV LQ KDYH
DGGHGOLWWOHH[FHSWFRQIXVLRQWRWKHFDOOIRUDFKDQJH
LQ SDUDGLJP DQG WR WKH DVVHUWLRQ WKDW EXVLQHVV DV
XVXDOLVQRORQJHUDQRSWLRQ7KHIXQGVDQGYDOXDEOH
H[SHUW WLPH VSHQW RQ UHZULWLQJ DQG PRUH RIWHQ
WKDQ QRW GLOXWLQJ WKH VWURQJ RULJLQDO PHVVDJH IRU D
WUDQVLWLRQWRPXOWLIXQFWLRQDODJULFXOWXUHDORQJWKHOLQHV
RIDJURHFRORJ\IRUH[DPSOHFRXOGKDYHEHHQEHWWHU
XVHGWRVWDUWLPSOHPHQWLQJLWLQVWHDG
7KH PDLQ H[SHFWHG RXWSXWV IURP LPSOHPHQWLQJ WKH
,$$67' RSWLRQV IRU DFWLRQ DW UHVHDUFK GHYHORSPHQW
DQG H[WHQVLRQ SROLF\ OHYHO DV LQ WKH JUHHQ VFHQDULR
ZKLFK WKH 0LOOHQQLXP ,QVWLWXWH GHYHORSHG IRU 81(3
PD\EHVXPPDUL]HGDVIROORZV
‡ *UHHQ DJULFXOWXUH LV FDSDEOH RI QRXULVKLQJ D
JURZLQJ DQG PRUH GHPDQGLQJ ZRUOG SRSXODWLRQ
DW KLJKHU QXWULWLRQDO OHYHOV $Q LQFUHDVH LQ IRRG
HQHUJ\ FRQVXPSWLRQ IURP WRGD\·V NFDO
SHU SHUVRQGD\ WR DURXQG NFDO E\ LV
SRVVLEOH ZLWK WKH XVH RI NQRZOHGJH VFLHQFH DQG
WHFKQRORJ\LQVXSSRUWRIDJURHFRORJ\,WLVSRVVLEOH
WRJDLQVLJQLÀFDQWQXWULWLRQDOLPSURYHPHQWVIURPDQ
LQFUHDVHLQTXDQWLW\DQGGLYHUVLW\RIIRRGHVSHFLDOO\
QRQFHUHDO SURGXFWV 3XEOLF SULYDWH DQG FLYLO
VRFLHW\ LQLWLDWLYHV IRU LPSURYLQJ IRRG VHFXULW\ DQG
VRFLDOHTXLW\ZLOOEHQHHGHGWRHQDEOHDQHIÀFLHQW
WUDQVLWLRQDWWKHIDUPOHYHODQGWRDVVXUHDVXIÀFLHQW
TXDOLW\RIQXWULWLRQIRUDOOGXULQJWKLVSHULRG
‡ $JURHFRORJ\ FDQ VLJQLÀFDQWO\ UHGXFH SRYHUW\ DQG
75$'($1'(19,5210(175(9,(:
WKH DVVRFLDWHG QHJDWLYH VRFLDO DQG HQYLURQPHQWDO
LPSDFWV )RU HYHU\ SHU FHQW LQFUHDVH LQ IDUP
\LHOGV WKHUH KDV EHHQ D SHU FHQW UHGXFWLRQ RI
SRYHUW\LQ$IULFDDQGPRUHWKDQSHUFHQWLQ$VLD
$QLQFUHDVHLQRYHUDOO*'3GHULYHGIURPDQLQFUHDVH
LQ DJULFXOWXUDO ODERXU SURGXFWLYLW\ LV RQ DYHUDJH
WLPHVPRUHHIIHFWLYHLQUDLVLQJWKHLQFRPHVRI
WKH SRRUHVW TXLQWLOH LQ GHYHORSLQJ FRXQWULHV WKDQ
DQ HTXLYDOHQW LQFUHDVH LQ *'3 GHULYHG IURP DQ
LQFUHDVH LQ QRQDJULFXOWXUDO ODERXU SURGXFWLYLW\
(YLGHQFH VXJJHVWV WKDW WKH DSSOLFDWLRQ RI JUHHQ
IDUPLQJSUDFWLFHVKDVLQFUHDVHG\LHOGVE\²
SHUFHQWHVSHFLDOO\RQVPDOOIDUPV
‡ $ WUDQVLWLRQ WR DJURHFRORJ\ SURYLGHV VLJQLÀFDQW
HQYLURQPHQWDO EHQHÀWV $JURHFRORJ\EDVHG IRRG
SURGXFWLRQKDVWKHSRWHQWLDOWRUHEXLOGQDWXUDOFDSL
WDOE\UHVWRULQJDQGPDLQWDLQLQJVRLOIHUWLOLW\UHGXFLQJ
VRLOHURVLRQDQGLQRUJDQLFDJURFKHPLFDOSROOXWLRQ
LQFUHDVLQJ ZDWHU XVH HIÀFLHQF\ GHFUHDVLQJ
GHIRUHVWDWLRQELRGLYHUVLW\ORVVDQGRWKHUODQGXVH
LPSDFWV DQG VLJQLÀFDQWO\ UHGXFLQJ DJULFXOWXUDO
*+*HPLVVLRQV,PSRUWDQWO\JUHHQDJULFXOWXUHKDV
WKH SRWHQWLDO WR WUDQVIRUP DJULFXOWXUH IURP EHLQJ
D PDMRU HPLWWHU RI *+*V WR RQH WKDW LV QHW *+*
QHXWUDO²DQGSRVVLEO\SURYLGHVHYHQD*+*VLQN
²ZKLOHUHGXFLQJGHIRUHVWDWLRQDQGIUHVKZDWHUXVH
E\SHUFHQWDQGSHUFHQWUHVSHFWLYHO\
‡ $JURHFRORJLFDO IRRG SURGXFWLRQ KDV WKH SRWHQWLDO
WREHDQHWMREFUHDWRUDQGWHQGVWRHPSOR\PRUH
SHRSOH SHU XQLW RI DJULFXOWXUDO SURGXFWLRQ WKDQ
FRQYHQWLRQDO DJULFXOWXUH $GGLWLRQDOO\ IDFLOLWLHV
IRU HQVXULQJ IRRG VDIHW\ DQG KLJKHU TXDOLW\ RI
IRRG SURFHVVLQJ LQ UXUDO DUHDV FRXOG FUHDWH QHZ
KLJKTXDOLW\ MREV LQ WKH IRRG SURGXFWLRQ FKDLQ
7KHWZRVFHQDULRV*DQG*FRQFHLYHGE\WKH
0LOOHQQLXP ,QVWLWXWH VXJJHVW WKDW LQYHVWPHQWV LQ
HFRORJLFDO DJULFXOWXUH FRXOG FUHDWH PLOOLRQ DQG
PLOOLRQ DGGLWLRQDO MREV UHVSHFWLYHO\ FRPSDUHG
ZLWKWKH%$8VFHQDULRRYHUWKHQH[W\HDUV
‡ $WUDQVLWLRQWRDJURHFRORJLFDOIDUPLQJSUDFWLFHVZLOO
UHTXLUHDGGLWLRQDOLQYHVWPHQWV7KHDJJUHJDWHJOREDO
FRVW RI WKH LQYHVWPHQWV DQG SROLF\ LQWHUYHQWLRQV
UHTXLUHGIRUDWUDQVLWLRQWRZDUGVJUHHQDJULFXOWXUHLV
HVWLPDWHGWRDYHUDJHEHWZHHQDQGELOOLRQ
SHUDQQXPRYHUWKHSHULRGWRIRUWKH
RU SHU FHQW *'3 VFHQDULRV UHVSHFWLYHO\ DQG LW
ZLOO SURYLGH VLJQLÀFDQW DQFLOODU\ EHQHÀWV WR RWKHU
HFRQRPLF VHFWRUV DQG WKH HQYLURQPHQW ,W VKRXOG
EH QRWHG WKDW FRPSDUHG ZLWK WKH SUHVHQW OHYHO RI
SHUYHUVH VXEVLGLHV WR LQGXVWULDO DJULFXOWXUH RI
PRUHWKDQELOOLRQSHUDQQXPWKHLQYHVWPHQW
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
VXJJHVWHG E\ WKH 6WHUQ 5HYLHZ LV YHU\ PRGHVW ²
WRR PRGHVW LQ IDFW WR DFKLHYH WKH QHHGHG OHYHOV
RI *+* PLWLJDWLRQ DQG UHDOL]H WKH IXOO SRWHQWLDO RI
HQYLURQPHQWDOVHUYLFHV
6XVWDLQDEOH DJULFXOWXUH UHTXLUHV LQYHVWPHQWV LQ
UHVHDUFK DQG FDSDFLW\EXLOGLQJ LQ WKH IROORZLQJ
NH\DUHDVVRLOIHUWLOLW\PDQDJHPHQWPRUHHIÀFLHQW
DQG VXVWDLQDEOH ZDWHU XVH FURS DQG OLYHVWRFN
GLYHUVLÀFDWLRQ DQG SODQW DQG DQLPDO KHDOWK
PDQDJHPHQWDVZHOODVSUHDQGSRVWKDUYHVWORVV
UHGXFWLRQ ,W DOVR UHTXLUHV VXEVWDQWLDO LQYHVWPHQWV
LQ DSSURSULDWH OHYHOV RI PHFKDQL]DWLRQ EXLOGLQJ
XSVWUHDP DQG GRZQVWUHDP VXSSO\ FKDLQV IRU
EXVLQHVVHVDQGWUDGHUHGXFWLRQRIIRRGSURFHVVLQJ
ZDVWH VXSSRUWLQJ DQG LPSOHPHQWLQJ FDSDFLW\
EXLOGLQJ HIIRUWV VXFK DV IDUPHU ÀHOG VFKRROV
LQFOXGLQJ H[SDQGLQJ DQG HTXLSSLQJ DJULFXOWXUDO
H[WHQVLRQ VHUYLFHV ZLWK PRGHUQ ,&7 WRROV DQG
IDFLOLWDWLQJLPSURYHGPDUNHWDFFHVVIRUVPDOOKROGHU
IDUPHUVDQGFRRSHUDWLYHV
1RW XQOLNH DJULFXOWXUDO PRGHUQL]DWLRQ VXVWDLQDEOH
DJULFXOWXUH UHTXLUHV LQVWLWXWLRQDO VWUHQJWKHQLQJ
LQFOXGLQJ UHIRUP RI ODQG ULJKWV JRRG JRYHUQDQFH
DQG LQIUDVWUXFWXUH GHYHORSPHQW VXFK DV URDGV
HOHFWULÀFDWLRQDQGLQWHUQHWDFFHVVLQUXUDODUHDVLQ
GHYHORSLQJ FRXQWULHV ,$$67' 7KHVH FDQ
EHVXPPHGXSDVHQDEOLQJFRQGLWLRQV
‡ 6XVWDLQDEOH DJULFXOWXUH DOVR UHTXLUHV QDWLRQDO
DQG LQWHUQDWLRQDO SROLF\ LQQRYDWLRQV LQFOXGLQJ
LQ LQWHUQDWLRQDO WUDGH SROLF\ 6XFK SROLF\
FKDQJHV VKRXOG IRFXV SDUWLFXODUO\ RQ UHIRUPLQJ
´HQYLURQPHQWDOO\KDUPIXOµVXEVLGLHVWKDWDUWLÀFLDOO\
ORZHUFRVWVRIDJULFXOWXUDOLQSXWVDQGSURPRWHWKHLU
H[FHVVLYH XVH 3ROLF\ PHDVXUHV DUH QHHGHG WKDW
UHZDUG IDUPHUV IRU SRVLWLYH H[WHUQDOLWLHV VXFK DV
UHGXFLQJ IRVVLOIXHOEDVHG DJULFXOWXUDO LQSXWV DQG
LPSOHPHQWLQJ RWKHU VXVWDLQDEOHJUHHQ DJULFXOWXUDO
SUDFWLFHV&KDQJHVLQWUDGHSROLFLHVWKDWLQFUHDVH
DFFHVV RI DJULFXOWXUDO H[SRUWV RULJLQDWLQJ LQ
GHYHORSLQJ FRXQWULHV WR PDUNHWV LQ KLJKLQFRPH
FRXQWULHVDUHDOVRQHFHVVDU\DORQJZLWKUHIRUPVRI
WUDGHGLVWRUWLQJ SURGXFWLRQ DQG H[SRUW VXEVLGLHV
7KHVH ZLOO IDFLOLWDWH JUHDWHU SDUWLFLSDWLRQ E\
VPDOOKROGHU IDUPHUV FRRSHUDWLYHV DQG ORFDO
IRRGSURFHVVLQJ HQWHUSULVHV LQ IRRG SURGXFWLRQ
YDOXH FKDLQV *RYHUQPHQWV ZLOO DOVR QHHG WR
FRQVLGHU VXSSRUWLQJ WKHLU IDUPHUV E\ PHDQV RI
SUL]H VWDELOL]DWLRQ IXQGV ,Q DGGLWLRQ WKH\ VKRXOG
FRQVLGHUVHWWLQJXSVWUDWHJLFUHVHUYHVWRFRSHZLWK
XQH[SHFWHG HYHQWV DQG PRUH DQG PRUH OLNHO\
H[WUHPHZHDWKHUHYHQWVVXFKDVGURXJKWV ÁRRGV
DQG VWRUPV UHVXOWLQJ IURP FOLPDWH FKDQJH IRU D
PRUH GHWDLOHG GLVFXVVLRQ VHH FKDSWHU RI WKLV
5HYLHZ
75$'($1'(19,5210(175(9,(:
1//'06#4;U(('%6+8':6'05+10'48+%'5(14;56'/+%*#0)'U
%*+'8'/'065#0&#44+'4561/2.'/'06#6+10
/DXUHQV.OHUN[
&RPPXQLFDWLRQDQG,QQRYDWLRQ6WXGLHV:DJHQLQJHQ8QLYHUVLW\:DJHQLQJHQ7KH1HWKHUODQGV
$EVWUDFW
7KHUROHRIH[WHQVLRQVHUYLFHVKDVZLGHQHGEH\RQGVLPSO\GLVVHPLQDWLRQRILQIRUPDWLRQDQGQRZLQFOXGHV
WKH EURNHULQJ DQG IDFLOLWDWLRQ RI PXOWLVWDNHKROGHU LQQRYDWLRQ QHWZRUNV 7KLV H[SDQGHG UROH QHHGV WR EH
IXUWKHUGHYHORSHGLQWHUPVRIERRVWLQJWKHLUFDSDFLWLHVDQGUHFRJQL]HGDVFDWDO\WLFWRV\VWHPLFFKDQJH
$,QWURGXFWLRQ
,Q WKH OLJKW RI WKH FKDOOHQJHV IDFLQJ WKH FXUUHQW
DJULFXOWXUDO VHFWRU LQQRYDWLRQ LV FUXFLDO WR DFKLHYLQJ
D V\VWHPLF VKLIW IURP FRQYHQWLRQDO LQGXVWULDO
PRQRFXOWXUHEDVHG SURGXFWLRQ V\VWHPV WKDW DUH
KLJKO\ GHSHQGHQW RQ H[WHUQDO LQSXWV WRZDUGV PRUH
VXVWDLQDEOH SURGXFWLRQ V\VWHPV WKDW ERWK LPSURYH
WKH SURGXFWLYLW\ RI VPDOOVFDOH IDUPHUV DQG IDFLOLWDWH
VHOIVXVWDLQHG ORFDO UXUDO GHYHORSPHQW 7KLV UHTXLUHV
V\VWHPZLGH DGDSWDWLRQV LQ ERWK SURGXFWLRQ DQG
FRQVXPSWLRQ V\VWHPV DV ZHOO DV D UHRUGHULQJ RI
WKH YDOXH FKDLQ 0DQ\ FRXQWULHV DUH DWWHPSWLQJ WR
UHIRUP WKHLU DJULFXOWXUDO LQQRYDWLRQ VXSSRUW V\VWHPV
ZLWK WKH DLP RI GHYHORSLQJ ÁH[LEOH DQG UHVSRQVLYH
FDSDFLWLHV WR DFKLHYH WKLV V\VWHPLF FKDQJH &HQWUDO
WR WKLV UHIRUP LV WKH VKLIW IURP D OLQHDU DSSURDFK
WR LQQRYDWLRQ LQ ZKLFK SXEOLF VHFWRU DJULFXOWXUDO
UHVHDUFKDQGH[WHQVLRQGHOLYHUVQHZWHFKQRORJ\LQD
SLSHOLQHFRQÀJXUDWLRQLHWKURXJKDOLQHDUÁRZIURP
UHVHDUFK YLD H[WHQVLRQ WR IDUPHUV WR D V\VWHPLF
DSSURDFKLQZKLFKLQQRYDWLRQLVWKHUHVXOWRIDSURFHVV
RI QHWZRUNLQJ LQWHUDFWLYH OHDUQLQJ DQG QHJRWLDWLRQ
DPRQJ D KHWHURJHQHRXV VHW RI SXEOLF SULYDWH DQG
FLYLOVRFLHW\DFWRUV:RUOG%DQN,$$67'
6XFKDQDSSURDFKUHFRJQL]HVWKDWV\VWHPLFFKDQJH
LQDJULFXOWXUHEH\RQGQHZWHFKQLFDOSUDFWLFHVUHTXLUHV
LQVWLWXWLRQDO FKDQJH LQYROYLQJ DOWHUQDWLYH ZD\V RI
RUJDQL]LQJ IRU H[DPSOH PDUNHWV ODERXU ODQG WHQXUH
DQGGLVWULEXWLRQRIEHQHÀWV
7KLVSDSHUGLVFXVVHVWKHFKDQJLQJUROHRIH[WHQVLRQ
VHUYLFHV LQ VXFK DQ LQQRYDWLRQ V\VWHP DLPHG DW
FRQWULEXWLQJ WR D V\VWHPLF FKDQJH LQ DJULFXOWXUDO
SURGXFWLRQV\VWHPV
%&KDQJLQJGHÀQLWLRQVDQG
UROHVRIH[WHQVLRQ
,QPDQ\FRXQWULHVDGYLFHWRIDUPHUVLVSURYLGHGQRW
MXVW E\ D VLQJOH SXEOLF H[WHQVLRQ VHUYLFH EXW UDWKHU
E\VHYHUDOH[WHQVLRQVHUYLFHVDOVRLQFUHDVLQJO\FDOOHG
´DGYLVRU\ VHUYLFHVµ ZKLFK FRQVLVW RI D SOHWKRUD RI
SXEOLF SULYDWH DQG 1*2EDVHG DGYLVHUV 5LYHUD
DQG 6XODLPDQ 7KLV LPSOLHV WKDW H[WHQVLRQ
V\VWHPV WRGD\ FDQ EH YHU\ EURDGO\ GHÀQHG DV
´V\VWHPVWKDWVKRXOGIDFLOLWDWHWKHDFFHVVRIIDUPHUV
WKHLU RUJDQL]DWLRQV DQG RWKHU PDUNHW DFWRUV WR
NQRZOHGJH LQIRUPDWLRQ DQG WHFKQRORJLHV IDFLOLWDWH
WKHLULQWHUDFWLRQZLWKSDUWQHUVLQUHVHDUFKHGXFDWLRQ
DJULEXVLQHVV DQG RWKHU UHOHYDQW LQVWLWXWLRQV
DQG DVVLVW WKHP WR GHYHORS WKHLU RZQ WHFKQLFDO
RUJDQL]DWLRQDODQGPDQDJHPHQWVNLOOVDQGSUDFWLFHVµ
&KULVWRSORV 7KH UROH RI H[WHQVLRQ LQ UXUDO
DUHDVKDVWKXVH[SDQGHGWRLQFOXGHVHUYLFHVWKDWJR
EH\RQG DJULFXOWXUH DQG PD\ LQFOXGH WKH IROORZLQJ
&KULVWRSORV
‡ 'LVVHPLQDWLRQ RI LQIRUPDWLRQ DERXW WHFKQRORJLHV
QHZUHVHDUFKPDUNHWVLQSXWDQGÀQDQFLDOVHUYLFHV
DVZHOODVFOLPDWHDQGZHDWKHU
‡ 7UDLQLQJDQGDGYLFHIRULQGLYLGXDOIDUPHUVJURXSV
RIIDUPHUVIDUPHURUJDQL]DWLRQVFRRSHUDWLYHVDQG
RWKHUDJULEXVLQHVVHVDORQJWKHPDUNHWFKDLQ
‡ 7HVWLQJ DQG SUDFWLFDO DGDSWDWLRQ RI QHZ RQIDUP
WHFKQRORJLHVDQGSUDFWLFHV
‡ 'HYHORSPHQW RI EXVLQHVV PDQDJHPHQW VNLOOV
DPRQJ VPDOOKROGHU IDUPHUV DQG RWKHU ORFDO
HQWUHSUHQHXUV
‡ )DFLOLWDWLQJ OLQNDJHV DPRQJ PDUNHW DFWRUV HJ
IRU ÀQDQFLDO DQG QRQÀQDQFLDO LQSXWV SURFHVVLQJ
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
%R[%URNHULQJWKH6RXWK$PHULFDQ3DSD$QGLQDVXVWDLQDEOHYDOXHFKDLQLQQRYDWLRQQHWZRUN
7KH,QWHUQDWLRQDO3RWDWR&HQWUH&,3LQ3HUXVHUYHVDVDQLQQRYDWLRQEURNHUWKURXJKWKH3DSD$QGLQDQHWZRUNLQWKHFRQ
WH[WRIYDOXHFKDLQLQQRYDWLRQVZKLFKOLQNIDUPHUVWRPDUNHWVLQ%ROLYLD(FXDGRUDQG3HUXIRUGHWDLOVVHH'HYDX[HWDO
DQG%\DSSO\LQJDVRFDOOHGSDUWLFLSDWRU\PDUNHWFKDLQDSSURDFKUHOHYDQWPDUNHWFKDLQDFWRUVDUHEURXJKW
WRJHWKHUWRGLVFXVVSRVVLEOHLQQRYDWLRQVDQGWUXVWKDVEHHQEXLOWDPRQJVWRUJDQL]DWLRQVDVGLYHUVHDVDJULFXOWXUDOUH
VHDUFKRUJDQL]DWLRQV1*2VIDUPHUJURXSVDQGWUDGHUVZKLFKLQWKHSDVWKDGQRWJHQHUDOO\LQWHUDFWHG7KHVHDFWRUV
DUHEURXJKWWRJHWKHURQVWDNHKROGHUSODWIRUPVERWKDWWKHORFDOOHYHODPRQJVWSRWDWRSURYLGHUVORFDODXWKRULWLHVDQGD
UDQJHRIVHUYLFHSURYLGHUVHJLQSXWVDQGDOVRDWWKHPDUNHWFKDLQOHYHOLQFOXGLQJWUDGHUVSURFHVVRUVVXSHUPDUNHWV
UHVHDUFKHUVDQGH[WHQVLRQDJHQWV$VDUHVXOWQHZSURGXFWVKDYHEHHQFUHDWHGZLWKJUHDWHUYDOXHDGGHGIRUVPDOOIDUP
HUV)RUH[DPSOHSRWDWRFKLSVPDGHIURPLQGLJHQRXVSRWDWRYDULHWLHVSURGXFHGE\VPDOOKROGHUVDUHPDUNHWHGLQ3HUX
XQGHUWKH/D\·VODEHOZKLFKLVRZQHGE\WKHPXOWLQDWLRQDOFRUSRUDWLRQ3HSVLFR7KLHOHHWDO
‡
‡
‡
‡
‡
‡
‡
‡
‡
‡
‡
‡
DQGWUDGLQJLQFOXGLQJEURNHULQJFROODERUDWLRQDQG
SURPRWLQJOHDUQLQJDPRQJWKHP
/LQNLQJ VPDOOKROGHU IDUPHUV UXUDO HQWUHSUHQHXUV
DQGRWKHUPHPEHUVRIWKHDJULFXOWXUDOFRPPXQLW\
ZLWKLQVWLWXWLRQVWKDWRIIHUWUDLQLQJDQGHGXFDWLRQLQ
ÀHOGVUHOHYDQWWRWKHDJULFXOWXUDOVHFWRU
)DFLOLWDWLQJ OLQNDJHV EHWZHHQ IDUPHUV WKHLU
RUJDQL]DWLRQVDQGWKHSXEOLFVHFWRU
6XSSRUWLQJ LQVWLWXWLRQDO GHYHORSPHQW SURFHVVHV
DQG VRFLDO LQVWLWXWLRQDO DQG RUJDQL]DWLRQDO
LQQRYDWLRQV
6XSSRUWLQJWKHGHYHORSPHQWRILQIRUPDODQGIRUPDO
IDUPHURUJDQL]DWLRQVDQGUXUDO\RXWKRUJDQL]DWLRQV
DQGKHOSLQJWKHPWRDUWLFXODWHWKHLUGHPDQGV
6XSSRUWIRULPSOHPHQWLQJJRYHUQPHQWSROLFLHVDQG
SURJUDPPHV WKURXJK LQIRUPDWLRQ DZDUHQHVV DQG
DGYLFH RQ WHFKQRORJLFDO RSWLRQV LQFOXGLQJ ODQG
VWHZDUGVKLSIRRGVDIHW\DQGDQLPDOZHOIDUH
&RQWULEXWLQJ WR WKH GHYHORSPHQW RI PRUH
DSSURSULDWHSROLFLHVDQGSURJUDPPHVE\IDFLOLWDWLQJ
IHHGEDFNIURPIDUPHUVDQGORFDOHQWUHSUHQHXUV
,QFUHDVLQJ DZDUHQHVV RI QHZ RSSRUWXQLWLHV IRU
FHUWLÀFDWLRQ RI ¶¶JUHHQ·· IDLU WUDGH DQG RWKHU
SURGXFWLRQPHWKRGV
)DFLOLWDWLQJ DFFHVV WR QRQH[WHQVLRQ JRYHUQPHQW
VXSSRUW VXFK DV ZHDWKHUUHODWHG LQVXUDQFH
SK\WRVDQLWDU\ DQG FHUWLÀFDWLRQ VHUYLFHV DQG
VXEVLG\ SURJUDPPHV LQFOXGLQJ SD\PHQW WR
IDUPHUV IRU HQYLURQPHQWDO VHUYLFHV DQG RWKHU
VFKHPHVUHODWHGWRFDUERQFUHGLWV
)DFLOLWDWLQJ DFFHVV WR FUHGLW IURP UXUDO ÀQDQFH
LQVWLWXWLRQVIRUIDUPHUVDQGORFDOHQWUHSUHQHXUV
3URYLGLQJQXWULWLRQHGXFDWLRQ
0HGLDWLQJLQFRQÁLFWVRYHUQDWXUDOUHVRXUFHV
3URYLGLQJOHJDODQGÀVFDODGYLFH
&7KHUROHRIH[WHQVLRQDVV\VWHPLF
´LQQRYDWLRQEURNHUVµ
7KH DERYH GHVFULSWLRQ RI WKH H[SDQGHG UROH RI
H[WHQVLRQVHUYLFHVPDNHVLWFOHDUWKDWWRHQKDQFHPXOWL
VWDNHKROGHULQWHUDFWLRQIRUV\VWHPLFFKDQJHH[WHQVLRQ
VHUYLFHVQHHGWRSURYLGHPRUHWKDQRQO\RQHRQRQH
WHFKQLFDO DGYLFH DQG WUDLQLQJ DOWKRXJK WKLV UHPDLQV
DQLPSRUWDQWDQGHVVHQWLDOIXQFWLRQRIH[WHQVLRQWKH\
DOVRQHHGWRVHUYHDVLQQRYDWLRQEURNHUVLQLQQRYDWLRQ
V\VWHPV.OHUN[+DOODQG/HHXZLVHQKDQFLQJ
WKH IRUPDWLRQ RI PXOWLVWDNHKROGHU OHDUQLQJ DQG
LQQRYDWLRQQHWZRUNVDQGDFWLQJDVIDFLOLWDWRUVRIWKRVH
QHWZRUNV6XFKLQQRYDWLRQEURNHUVSHUIRUPWKUHHFRUH
IXQFWLRQV
‡ $UWLFXODWLQJGHPDQGDUWLFXODWLQJLQQRYDWLRQQHHGV
DQG YLVLRQV DV ZHOO DV FRUUHVSRQGLQJ GHPDQGV
LQ WHUPV RI WHFKQRORJ\ NQRZOHGJH IXQGLQJ DQG
SROLF\ DFKLHYHG WKURXJK SUREOHP GLDJQRVLV DQG
IRUHVLJKWH[HUFLVHV
‡ 6XSSRUWLQJ WKH FUHDWLRQ RI QHWZRUNV IDFLOLWDWLQJ
OLQNDJHV DPRQJVW UHOHYDQW DFWRUV LH VFDQQLQJ
VFRSLQJ ÀOWHULQJ DQG PDWFKPDNLQJ RI SRVVLEOH
FRRSHUDWLRQSDUWQHUV
‡ 8QGHUWDNLQJ LQQRYDWLRQ SURFHVV PDQDJHPHQW
HQKDQFLQJ FRQYHUJHQFH RI JRDOV DQG LQWHUHVWV
DQG PXWXDO XQGHUVWDQGLQJ LQ PXOWLVWDNHKROGHU
QHWZRUNV FRPSULVLQJ DFWRUV ZLWK GLIIHUHQW
LQVWLWXWLRQDO UHIHUHQFH IUDPHV UHODWHG WR QRUPV
YDOXHVDQGLQFHQWLYHDQGUHZDUGV\VWHPV
7KHUHDUHVHYHUDOH[DPSOHVRIWKHXVHIXOQHVVRIWKLV
LQQRYDWLRQ EURNHU UROH LQ GHYHORSLQJ FRXQWULHV IRU
DFKLHYLQJ WKH QHHGHG VLPXOWDQHRXV DGDSWDWLRQV DW
VHYHUDOOHYHOVLQSURGXFWLRQV\VWHPVDQGYDOXHFKDLQV
VHHER[HVDQG
75$'($1'(19,5210(175(9,(:
%R[,QQRYDWLRQEURNHULQJIRULQFOXVLYHGHPDQGGULYHQUHVHDUFKDQGLQQRYDWLRQLQ,QGLD
1DWLRQDO$JULFXOWXUDO,QQRYDWLRQ3URJUDPPH
7RPDNHUHVHDUFKPRUHGHPDQGGULYHQDQGVXSSRUWLYHRIIDUPHUV·LQQRYDWLRQSURFHVVHVWKH1DWLRQDO$JULFXOWXUDO,Q
QRYDWLRQ3URJUDPPH1$,3RIWKH,QGLDQ&RXQFLORI$JULFXOWXUDO5HVHDUFKIRFXVHVRQHVWDEOLVKLQJFRQVRUWLDRISXEOLF
UHVHDUFKRUJDQL]DWLRQVLQSDUWQHUVKLSZLWKIDUPHUV·JURXSVWKHSULYDWHVHFWRUFLYLOVRFLHW\RUJDQL]DWLRQVDQGRWKHUVWDNH
KROGHUV DURXQG DJULFXOWXUDO GHYHORSPHQW WKHPHV :LWKLQ 1$,3·V OD\HUHG DQG GHFHQWUDOL]HG JRYHUQDQFH VWUXFWXUH WKH
3URMHFW,PSOHPHQWDWLRQ8QLWLVUHVSRQVLEOHIRUFRRUGLQDWLQJDQGIDFLOLWDWLQJLPSOHPHQWDWLRQZKLOHFRQVRUWLXPLPSOHPHQ
WDWLRQFRPPLWWHHVFRRUGLQDWHWKHUHVHDUFKFRQVRUWLD,QRWKHUZRUGVWKH1$,3DLPVWRFRQQHFWUHVHDUFKPRUHHIIHFWLYHO\
ZLWKLQQRYDWLRQSUDFWLFHV,WSHUIRUPVWKLVWDVNE\XVLQJWHFKQRORJ\IRUHFDVWLQJWRKHOSGHYHORSDYLVLRQRIZKDWFDQEH
DFKLHYHGEULQJLQJDFWRUVWRJHWKHUDQGRUJDQL]LQJPXOWLVWDNHKROGHUSULRULW\VHWWLQJH[HUFLVHVDQGRSHUDWLQJDVDQDJHQW
RIFKDQJHLQWKHSROLF\DQGLQVWLWXWLRQDOHQYLURQPHQWWRHQDEOHLQQRYDWLRQ(VWDEOLVKLQJWKLVNLQGRIHQDEOLQJHQYLURQPHQW
UHTXLUHVFKDQJHVLQIXQGLQJV\VWHPVLQFHQWLYHVVNLOOVDQGDQRUJDQL]DWLRQDOFXOWXUHWRPDNHUHVHDUFKPRUHUHFHSWLYH
WR GHPDQGGULYHQ SDUWLFLSDWRU\ DSSURDFKHV WKDW DUH JHQGHUVHQVLWLYH DQG HQFRPSDVV ZKROH VHFWRUV IDUPHUV RWKHU
UXUDOHQWUHSUHQHXUVLQSXWVXSSO\DQGDJULSURFHVVLQJLQGXVWULHVWUDGHUVDQGUHWDLOHUV$GGLWLRQDOUHTXLUHPHQWVDUHWKH
GHYHORSPHQWRIEXVLQHVVSODQQLQJVNLOOVVXSSRUWIRULQFXEDWRURUJDQL]DWLRQVIRUWUDQVIRUPLQJLQQRYDWLYHUHVHDUFKLGHDV
LQWRVRXQGFRPPHUFLDOYHQWXUHVDQGWKHXVHRI,&7V\VWHPVWRPDQDJHNQRZOHGJHHQKDQFHLQIRUPDWLRQVKDULQJDQG
PDWFKWKHGHPDQGIRULQIRUPDWLRQWRLWVVXSSO\
6RXUFHZZZQDLSLFDURUJLQ
',QQRYDWLYHH[WHQVLRQDSSURDFKHVDW
WKHIDUPOHYHO
7KHVH LQQRYDWLRQ EURNHUV W\SLFDOO\ WDUJHW D YDULHW\
RI VWDNHKROGHUV IRU DFKLHYLQJ V\VWHPLF FKDQJH DQG
RIWHQ DFW DW UHJLRQDO QDWLRQDO DQG VHFWRUDO OHYHOV
7KH\PD\DOVRWDUJHWUHODWLYHO\VPDOOJURXSVRIPRUH
LQQRYDWLYH DQG HQWUHSUHQHXULDO IDUPHUV ,Q DGGLWLRQ
LQQRYDWLYH H[WHQVLRQ PRGDOLWLHV DQG PHWKRGV KDYH
EHHQ GHYHORSHG WR VXSSRUW V\VWHPLF FKDQJH DW WKH
IDUP OHYHO DQG WKH VFDOLQJ XS RI LQQRYDWLRQV WKDW
IDFLOLWDWH VXFK FKDQJH 7KUHH SURPLVLQJ DSSURDFKHV
DUH IDUPHU ÀHOG VFKRROV ))6 WKH XVH RI YLGHR
PHGLDWHG OHDUQLQJ DQG WKH XVH RI LQIRUPDWLRQ DQG
FRPPXQLFDWLRQ WHFKQRORJLHV ,&7V DQG PRELOH
SKRQHV
))6 DUH D SDUWLFLSDWRU\ PHWKRG RI VXVWDLQDEOH
WHFKQRORJ\ GHYHORSPHQW EDVHG RQ DGXOW HGXFDWLRQ
SULQFLSOHVVXFKDVH[SHULHQWLDOOHDUQLQJ'DYLV
DQG D IRUP RI IDUPHUWRIDUPHU H[WHQVLRQ *URXSV RI
IDUPHUVPHHWLQDQLQIRUPDOVHWWLQJRQWKHLUIDUPVZLWK
DIDFLOLWDWRUVXFKDVDQH[WHQVLRQZRUNHU7KH))6LV
DQ LQWHUDFWLYH WUDLQLQJ PHWKRG WR HQDEOH IDUPHUV WR
EHFRPH WHFKQLFDO H[SHUWV RQ WKHLU IDUPLQJ V\VWHPV
DQG IDUPHUV DUH KHOSHG WR GLDJQRVH SUREOHPV ÀQG
VROXWLRQVFRQGXFWH[SHULPHQWVDQGGLVVHPLQDWHZKDW
WKH\KDYHOHDUQHGWRRWKHUIDUPHUV
3DUWLFLSDWRU\ RU IDUPHUOHG YLGHR SUHVHQWDWLRQV DUH D
SRZHUIXOWRROWKDWFDQVLJQLÀFDQWO\LQFUHDVHWKHLPSDFW
RIJRRGSUDFWLFHVDQGUHVHDUFK9DQ0HOH9DQ
0HOH :DQYRHNH DQG =RVVRX 7KH\ RIIHU WKH
DGYDQWDJH RI EHLQJ PRUH FRVWHIIHFWLYH WKDQ IDUPHU
WRIDUPHU H[WHQVLRQ DQG FDQ VRPHWLPHV KDYH D
VWURQJHUOHDUQLQJLPSDFWEHFDXVHWKH\RIIHUDEHWWHU
PHDQVRIH[SODLQLQJXQGHUO\LQJELRORJLFDORUSK\VLFDO
SURFHVVHV )XUWKHUPRUH IDUPHUOHG YLGHRV FDQ
YDORUL]HDQGEXLOGRQIDUPHUV·NQRZOHGJHDQGH[SODLQ
LQQRYDWLRQ LQ WKHLU RZQ ODQJXDJH 7KH $IULFD 5LFH
&HQWHULQ&{WHG·,YRLUHKDVIDFLOLWDWHGWKHGHYHORSPHQW
DQGWUDQVODWLRQRIULFHYLGHRV9DQ0HOH:DQYRHNH
DQG =RVVRX ZKLFK KDYH EHHQ WUDQVODWHG LQWR
$IULFDQ ODQJXDJHV 2SHQ DLU YLGHR VKRZV KDYH
HQKDQFHGOHDUQLQJH[SHULPHQWDWLRQFRQÀGHQFHWUXVW
DQGJURXSFRKHVLRQDPRQJUXUDOSHRSOH7KHIDUPHU
OHGOHDUQLQJYLGHRVLHQDEOHXQVXSHUYLVHGOHDUQLQJ
LL IRVWHU ORFDO FUHDWLYLW\ DQG H[SHULPHQWDWLRQ LLL
IDFLOLWDWH LQVWLWXWLRQDO LQQRYDWLRQV DQG LY LPSURYH
VRFLDOLQFOXVLRQRIWKHSRRUWKH\RXWKDQGZRPHQ
)ROORZLQJWKHUDSLGVSUHDGRIWKH,QWHUQHWDQGPRELOH
SKRQHV LQ PDQ\ GHYHORSLQJ FRXQWULHV D UDQJH RI
,&7VVXFKDVLQIRUPDWLRQNLRVNVDQGWHOHFHQWUHVDQG
PRELOHSKRQHEDVHG ´LQIRPHGLDULHVµ KDYH HPHUJHG
%DOODQW\QHZKLFKHQDEOHVPDOOKROGHUIDUPHUV
WR DFFHVV IRU H[DPSOH UHOHYDQW VRXUFHV RI PDUNHW
LQIRUPDWLRQLQSXWSULFHVDQGDQLPDOKHDOWKLQIRUPDWLRQ
$QH[DPSOHRISRVLWLYHFKDQJHLQDQLPDOKHDOWKFDUH
V\VWHPV LV )$50$IULFD DQ 1*2 ZRUNLQJ LQ .HQ\D
ZKLFK GHYHORSHG D GHFHQWUDOL]HG DQLPDO KHDOWK
FDUH V\VWHP LQ LWV .HQ\D 'DLU\ *RDW DQG &DSDFLW\
%XLOGLQJ 3URMHFW .'*&%3 .LWKXND 0XWHPL DQG
0RKDPHG 7KH .'*&%3 V\VWHP ZRUNV ZLWK
FRPPXQLW\DQLPDOKHDOWKZRUNHUVZKREX\GUXJNLWV
DQGPRELOHSKRQHVDWDVXEVLGL]HGSULFH7KHSURMHFW
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
DOVR LQVWDOOV FRPPXQLW\ SKRQHV DW YHWHULQDU\ VKRSV
SRZHUHG E\ VRODU SDQHOV DQG EDWWHULHV LQ YLOODJHV
WKDWODFNHOHFWULFLW\7KHSKRQHV\VWHPDOORZVDQLPDO
KHDOWKZRUNHUVWRVKDUHLQIRUPDWLRQDQGXSGDWHVDQG
FRQGXFW UHIHUUDOV DQG LW UHVXOWV LQ ORZHU WUDQVDFWLRQ
FRVWVZKLFKHQKDQFHVWKHHIÀFLHQF\RIDQLPDOKHDOWK
FDUHSURYLVLRQ
(%DUULHUVWRLPSOHPHQWDWLRQRIHIIHFWLYH
H[WHQVLRQVHUYLFHVIRUV\VWHPLFFKDQJH
,PSOHPHQWDWLRQ RI DQ LQQRYDWLRQ EURNHU UROH IRU
H[WHQVLRQVHUYLFHVDQGWKHXVHRIH[WHQVLRQPHWKRGV
VXFK DV ))6 DQG SDUWLFLSDWRU\ YLGHRV ZKLOH NH\ WR
DFKLHYLQJV\VWHPLFFKDQJHDUHQRWZLWKRXWFKDOOHQJHV
DQGEDUULHUV7KHVHUHODWHWRFDSDFLW\DQGIXQGLQJ
‡ &DSDFLW\ ZKLOH H[WHQVLRQ VHUYLFHV DUH XUJHG WR
GHYHORSLQWRIDFLOLWDWLQJRUJDQL]DWLRQVWKDWFRQQHFW
IDUPHUV ZLWK GLIIHUHQW VHWV RI VHUYLFH SURYLGHUV
PDQ\VWLOODGKHUHWRDOLQHDUWUDQVIHURIWHFKQRORJ\
SDUDGLJP5LYHUDDQG6XODLPDQ([WHQVLRQ
RUJDQL]DWLRQV HLWKHU GR QRW VHH WKH LQQRYDWLRQ
EURNHUUROHDVFHQWUDOWRWKHLUFRUHEXVLQHVVRUWKH\
GRQRWJLYHWKHIUHHGRPWRH[HFXWHWKHLQQRYDWLRQ
EURNHUUROHZLWKLQWKHLUPDQGDWH7KXVWKHUHDUHVWLOO
FRQVWUDLQWVLQWHUPVRIPLQGVHWDQGFDSDFLW\ZKLFK
QHHG WR EH RYHUFRPH E\ UHWUDLQLQJ H[WHQVLRQ
SURYLGHUVDQGUHWRROLQJRUUHLQYHQWLQJH[WHQVLRQLQ
RUGHUWRSOD\WKHUROHRILQQRYDWLRQEURNHU+RZHYHU
WKLVZLOOQRWEHDQHDV\SURFHVV
‡ )XQGLQJ IXQGLQJ DJHQFLHV VXFK DV GRQRUV DQG
JRYHUQPHQWV VKRXOG UHFRJQL]H WKH LPSRUWDQFH
RI WKH EURNHULQJ DQG IDFLOLWDWLQJ UROH RI H[WHQVLRQ
7KHVH DUH W\SLFDOO\ DFWLYLWLHV ZLWK ´VRIW LPSDFWVµ
ZKLFKDUHQRWHDV\WRFDSWXUHLQWKHKDUGLQGLFDWRUV
QHHGHG WR VKRZ HIIHFWLYHQHVV DQG KHQFH WKHUH
PD\EHDUHOXFWDQFHWRIXQGVXFKDFWLYLWLHV.OHUN[
+DOO DQG /HHXZLV 'HYHORSLQJ DGHTXDWH
PHDVXUHPHQWV RI WKH ´LQWDQJLEOHVµ WKDW PDWWHU
IRU VWLPXODWLQJ LQQRYDWLRQ DQG V\VWHPLF FKDQJH
LV WKHUHIRUH D PDMRU FRQFHUQ *)5$6 ,W LV
ZRUWKQRWLQJWKDWUHFHQWVWXGLHVHJ'DYLVHWDO
)ULLVV+DQVHQDQG'XYHVNRJ<RUREH
-U 5HMHVXV DQG +DPPLJ KDYH IRXQG
SRVLWLYHLPSDFWVRIPHWKRGVVXFKDV))6
75$'($1'(19,5210(175(9,(:
1//'06#4;U1/$+0+0)0&+)'0175(4+%#0019.'&)'9+6*
1&'40019.'&)';56'/5(14
11&'%74+6;+0
*#0)+0).+/#6+%10&+6+105U
*#..'0)'5#0&4152'%65
+2.D\DDQG<16HOHWL
,.6&HQWUHRI([FHOOHQFH1RUWK:HVW8QLYHUVLW\0PDEDWKR6RXWK$IULFD
$EVWUDFW
,PSURYLQJWKHXVHRILQGLJHQRXVNQRZOHGJHV\VWHPV,.6WKURXJKWKHLUHIIHFWLYHFRPELQDWLRQZLWKPRG
HUQNQRZOHGJHDQGWHFKQRORJ\V\VWHPVLVDQLPSRUWDQWLVVXHLQSDUWLFXODUIRU$IULFD0RGHUQWHFKQRORJ\
V\VWHPVRIWHQWHQGWRPDUJLQDOL]H$IULFDQ,.6DQGDUHWKXVQRWVXVWDLQDEOH$Q\LQWHUIDFHEHWZHHQWKHWZR
ZLOORQO\EHUHOHYDQWLILQGLJHQRXVDJULFXOWXUDOSUDFWLFHVDUHDSSOLHGWRDJULFXOWXUHLQ$IULFDLQDZD\WKDWHQ
DEOHV$IULFDQIDUPHUVWREHFRPHNQRZOHGJHFUHDWRUVDQGUHFRJQL]HV,.6DVDQLPSRUWDQWVRXUFHRINQRZO
HGJH7RHQDEOHWKHH[FKDQJHRILQIRUPDWLRQEHWZHHQWKHWZRNQRZOHGJHV\VWHPVSDUWLFLSDWRU\PHDVXUHV
VKRXOGEHWDNHQWRFDSWXUHDQGFRQVHUYH$IULFDQ,.6DQGGLVVHPLQDWHLWDPRQJDJULFXOWXUDOUHVHDUFKHUV
DQGH[WHQVLRQZRUNHUVHQVXULQJWKDWERWKV\VWHPVRINQRZOHGJHDUHUHOHYDQWLQORFDOVHWWLQJV
$,QWURGXFWLRQ
$IULFDQ FRPPXQLWLHV OLYLQJ LQ GLIIHUHQW HFRORJLFDO
FRQGLWLRQV KDYH GHYHORSHG WKHLU RZQ ORFDO RU
LQGLJHQRXV NQRZOHGJH DQG WHFKQRORJLFDO V\VWHPV
RYHU WKH \HDUV WR HQVXUH IRRG VHFXULW\ LQ FKDQJLQJ
FOLPDWLF FRQGLWLRQV .D]LQJD :HUQHU GHÀQHVLQGLJHQRXVNQRZOHGJHV\VWHPVDVERGLHVRI
NQRZOHGJH VNLOOV DQG EHOLHIV JHQHUDWHG ORFDOO\ DQG
WUDGLWLRQDOO\ WUDQVPLWWHG RUDOO\ IURP RQH JHQHUDWLRQ
WR WKH RWKHU :+2 KDV GHÀQHG IRRG VHFXULW\
DVH[LVWLQJZKHQDOOSHRSOHDWDOOWLPHVKDYHDFFHVV
WR VXIÀFLHQW VDIH QXWULWLRXV IRRG WR PDLQWDLQ D
KHDOWK\ DQG DFWLYH OLIH 6HID VWDWHV WKDW IRU
WKHLUVXUYLYDOPRUHWKDQSHUFHQWRIWKHSHRSOHLQ
$IULFDHVSHFLDOO\LQWKHUXUDODUHDVGHSHQGRQ,.6IRU
IRRG VHFXULW\ KHDOWK QDWXUDO UHVRXUFH PDQDJHPHQW
FRQÁLFWUHVROXWLRQDQGQDWXUDOGLVDVWHUPDQDJHPHQW
LQFOXGLQJ DGDSWDWLRQ WR DQG PLWLJDWLRQ RI WKH HIIHFWV
RI FOLPDWH FKDQJH VXFK DV GURXJKW DQG ÁRRGV
7KHVH ORFDO NQRZOHGJH V\VWHPV DUH DIIRUGDEOH
FXOWXUDOO\DFFHSWDEOHDQGKHQFHVXVWDLQDEOH7KURXJK
DQ H[DPLQDWLRQ RI VHFRQGDU\ VRXUFHV WKLV SDSHU
SURYLGHVH[DPSOHVRI,.6LQDJULFXOWXUHDQGGLVFXVVHV
WKHSURVSHFWVDQGFKDOOHQJHVRILQWHUIDFLQJ,.6ZLWK
PRGHUQ NQRZOHGJH DQG WHFKQRORJLFDO V\VWHPV WR
HQKDQFHIRRGVHFXULW\LQFKDQJLQJFOLPDWLFFRQGLWLRQV
%,QGLJHQRXV$IULFDQDJULFXOWXUDO
NQRZOHGJHDQGWHFKQRORJLFDO
V\VWHPVIRUIRRGVHFXULW\
$UFKDHRORJLFDOÀQGLQJVLQYDULRXVSDUWVRI$IULFDVKRZ
WKDW DJULFXOWXUH VWDUWHG VHYHUDO PLOOHQQLD EHIRUH WKH
&KULVWLDQ HUD ,W KDV EHHQ IRXQG WKDW WKH JURZLQJ RI
GRPHVWLFZKHDWEDUOH\LQWKHZHVWHUQGHVHUWRI(J\SW
GDWHVDVIDUEDFNDVDURXQG%&DQGWKHUHLV
HYLGHQFH RI DQLPDO KXVEDQGU\ VKHHSJRDWV GDWLQJ
EDFNWRDURXQG%&$IULFDQIRRGWHFKQRORJLHV
KDYHQRWRQO\ZLWKVWRRGWKHWHVWRIWLPHEXWKDYHDOVR
VSUHDGDFURVVWKHJOREHDGDSWLQJWRDQGPLWLJDWLQJ
FOLPDWHFKDQJH6HID6RPHRIWKHLQGLJHQRXV
$IULFDQ DJULFXOWXUDO NQRZOHGJH DQG WHFKQRORJLFDO
V\VWHPVDUHHQXPHUDWHGDQGGLVFXVVHGEHORZ
L 0L[HG RU PXOWLSOH FURSSLQJ 7KLV LV WKH JURZLQJ
RI WZR RU PRUH FURSV VLPXOWDQHRXVO\ RQ WKH VDPH
SLHFHRIODQG7KHFRQFHSWEHKLQGWKLVV\VWHPLVWKDW
SODQWLQJ PXOWLSOH FURSV KDV YDULRXV DGYDQWDJHV IRU
KRXVHKROG DQG FRPPXQLW\ IRRG VHFXULW\ LQFOXGLQJ
SUHYHQWLQJ WKH ORVV RI VRLO QXWULHQWV UHGXFLQJ
ZHHGV DQG LQVHFW SHVWV LQFUHDVLQJ UHVLVWDQFH WR
FOLPDWHH[WUHPHVZHWGU\KRWFROGUHGXFLQJSODQW
GLVHDVHV LQFUHDVLQJ RYHUDOO SURGXFWLYLW\ DQG XVLQJ
VFDUFHUHVRXUFHVWRWKHIXOOHVWH[WHQW,WDOVRSURYLGHV
LQVXUDQFH DJDLQVW FURS IDLOXUH GXH WR DEQRUPDO
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
ZHDWKHU FRQGLWLRQV 7KHUH DUH GLIIHUHQW YDULDQWV RI
LQWHUFURSSLQJ V\VWHPV SUDFWLFHG LQ $IULFD 7KHVH
LQFOXGH PL[HG LQWHUFURSSLQJ URZ LQWHUFURSSLQJ DQG
UHOD\LQWHUFURSSLQJ0L[HGLQWHUFURSSLQJZKHUHE\WKH
FRPSRQHQWFURSVDUHWRWDOO\PL[HGLQWKHÀHOGLVWKH
EDVLFIRUPXVHGLQPRVW$IULFDQFRXQWULHV$QH[DPS
OHRIDFRPPRQSUDFWLFHLQWKHFRDVWDODUHDVRI(DVW
$IULFD .HQ\D DQG WKH 8QLWHG 5HSXEOLF RI 7DQ]DQLD
LV PL[HG JURZLQJ RI SHUHQQLDOV VXFK DV FDVKHZV
FRFRQXWVDQGPDQJRHV2WKHUFRPELQDWLRQVLQFOXGH
FDVVDYD PL[HG ZLWK EDQDQDV PDL]H PL[HG ZLWK
OHJXPHVVRUJKXPZLWKSLJHRQSHDVDQGFRWWRQZLWK
FRZSHDV
LL 6KLIWLQJURWDWLRQDO IDUPLQJ =DUE GHÀQHV
URWDWLRQDO IDUPLQJ DV WKH FXOWXUDO DQG SK\VLFDO
LQWHJUDWLRQ RI IRUHVW DQG DJULFXOWXUH ZKLFK VWUHVVHV
WKHFRQQHFWLRQEHWZHHQWKHDJULFXOWXUDOV\VWHPDQG
WKHHFRV\VWHP:KHQWKHÀHOGVDUHIDOORZWKH\DOORZ
WKH UHJHQHUDWLRQ RI WKH VRLO DQG ODQG DQG WKLV LV
IROORZHGE\DQRWKHUF\FOHRIIDUPLQJ7KHIDOORZSHULRG
SURPRWHVULFKQXWULHQWVWRFUHDWHDFRQWLQXLQJV\VWHP
RI DJULFXOWXUH 7KH F\FOH DLGV WKH UHJHQHUDWLRQ RI
IDXQDDQGÁRUDWKHUHE\FRQVHUYLQJORFDOELRGLYHUVLW\
6DPXHO HODERUDWHV WKH DGYDQWDJHV RI WKLV
V\VWHPEDVHGRQKLVH[SHULHQFHVLQWKH&RQJRDQG
&DPHURRQ7KHORFDOFRPPXQLWLHVWKHUHZHUHDEOHWR
FXOWLYDWHDZLGHYDULHW\RISODQWVSHFLHVGXHWRDWR
\HDUSHULRGRIIDOORZ$FFRUGLQJWRKLVREVHUYDWLRQ
WKHURWDWLRQDOIDUPLQJV\VWHPDVDQLQGLJHQRXVIRRG
VHFXULW\VWUDWHJ\ZDVQRWDVWDQGDORQHV\VWHPEXW
ZDV FRPELQHG ZLWK RWKHU V\VWHPV VXFK DV NLWFKHQ
JDUGHQVDQLPDOKXVEDQGU\KXQWLQJDQGJDWKHULQJ
+RZHYHU WKH FXUUHQW GLVFRXUVH RQ WKH FKDOOHQJHV
RI FOLPDWH FKDQJH KDV FUHDWHG SUHMXGLFH DJDLQVW
URWDWLRQDO IDUPLQJ &$5( 3HRSOH WHQG WR
EODPHGHIRUHVWDWLRQIRUHVWÀUHVDQGVODVKDQGEXUQ
SUDFWLFHVDVVRPHRIWKHFDXVHVRIFDUERQHPLVVLRQV
7KLV FULWLFLVP LV UHIXWHG E\ $QGHUVRQ XVLQJ
KLV REVHUYDWLRQV RI URWDWLRQDO IDUPLQJ LQ HDVWHUQ
1LJHULD +H LQGLFDWHV WKDW WKH IDOORZ V\VWHP RIIHUV
RSSRUWXQLWLHV IRU DGDSWDWLRQ RI IDUPLQJ WR FOLPDWH
FKDQJH$FFRUGLQJWRKLVVWXG\WKHVKLIWLQJFXOWLYDWRUV
QXUWXUHWKHIRUHVWVHYHQGXULQJWKHFXOWLYDWLRQSKDVH
,IIDOORZSHULRGVDUHORQJHQRXJKURWDWLRQDOIDUPLQJ
LV D VWDEOH V\VWHP WKDW PDLQWDLQV VRLO IHUWLOLW\ DQG
FDQWKHUHIRUHEHH[SHFWHGWREHFDUERQQHXWUDO7KH
ELRPDVVDFFXPXODWLRQLQURWDWLRQDOIDUPLQJLVORZHVW
DIWHU WZR F\FOHV HDFK ODVWLQJ DW OHDVW VL[ \HDUV
KLJKHVW DIWHU RQH RU IRXU F\FOHV DQG LQWHUPHGLDWH
DIWHUVL[WRWHQF\FOHV
LLL 6HOHFWLRQ RI VSHFLÀF FURSV DQG DJULFXOWXUDO
SUDFWLFHVVXLWHGWRSDUWLFXODUFOLPDWLFDQGHFRORJLFDO
FRQGLWLRQV ,Q DULG DQG VHPLDULG DUHDV QRPDGLF
SDVWRUDOLVWV SUDFWLFH H[WHQVLYH JUD]LQJ DQG FXOWLYDW
RUVJURZGURXJKWUHVLVWDQWFURSVVXFKDVPLOOHWDQG
VRUJKXP VKRUWF\FOH FRZSHDV SKDVHROXV EHDQV
DQG JURXQGQXWV &DUSHQWHU ,Q KXPLG DQG
VXEKXPLGFRQGLWLRQVIDUPHUVJURZIRRGFURSVVXFK
DV PLOOHW VRUJKXP PDL]H JURXQGQXWV FDVVDYD
FRZSHDV VZHHW SRWDWRHV UDLQIHG ULFH VR\EHDQV
EDQDQDVDQG\DPV
LY7KHLPSRUWDQFHRILQGLJHQRXV$IULFDQSRVWKDUYHVW
WHFKQRORJLHVIRUWKHSUHVHUYDWLRQRISHULVKDEOHIRRG
FURSV VXFK DV URRW FURSV HJ FDVVDYD \DPV DQG
VZHHWSRWDWRHVJURZQPDLQO\LQWKHKXPLGDQGVXE
KXPLG WURSLFV FDQQRW EH RYHUHPSKDVL]HG JLYHQ
WKDW PXFK RI WKH IRRG KDUYHVW SURGXFHG LQ $IULFDQ
FRXQWULHVLVORVWWRVSRLODJHDQGLQIHVWDWLRQV.DZHVD
7UDGLWLRQDO $IULFDQ VRFLHWLHV WKDW KDYH EHHQ
ODUJHO\GHSHQGHQWRQWKHVHVWDSOHVKDYHGHYHORSHG
YDULRXV ORFDO VWRUDJH DQG SURFHVVLQJ WHFKQLTXHV
IRU WKHP RYHU WKH \HDUV $FFRUGLQJ WR .DZHVD WKH
FXOWXUDOKLVWRULFDO HYROXWLRQ RI WKHVH VRFLHWLHV LQ
UHODWLRQ WR WKHLU IRRG SODQWV KDV LQ JHQHUDO PDGH
WKHPVWURQJO\HFRFHQWULFLQWKHLUWKLQNLQJLQFRQWUDVW
WR WKH WHFKQRFHQWULF DSSURDFK SUHYDLOLQJ LQ WKH
:HVWHUQ ZRUOG 7KH GLIIHUHQW VWDSOHV DUH DGDSWHG WR
SDUWLFXODUHFRV\VWHPVDQGWKHFURSVKDUYHVWHGQHHG
GLIIHUHQWDSSURDFKHVLQWKHSRVWKDUYHVWWHFKQRORJLHV
)RULQVWDQFHFDVVDYDKDVKLJKO\SHULVKDEOHURRWVWKDW
FDQEHVWRUHGIRURQO\DIHZGD\V7RRYHUFRPHWKLV
FRQVWUDLQW VRPH $IULFDQ VRFLHWLHV KDYH GHYHORSHG
LQGLJHQRXVWHFKQLTXHVWKDWKDYHEHHQVXEVWDQWLDOO\
LPSURYHG E\ UHFHQW UHVHDUFK IRU VWRULQJ WKH URRWV
IRU VXEVWDQWLDO SHULRGV %DNU 0RVW FDVVDYD
FRQVXPLQJ FXOWXUHV DOVR SURFHVV WKH URRWV XVLQJ D
YDULHW\RIVRDNLQJGU\LQJRUIHUPHQWDWLRQWHFKQLTXHV
WRSURGXFHVWDEOHGULHGSURGXFWVLQZKLFKWKHOHYHORI
WKHWR[LFF\DQLGHLVVXEVWDQWLDOO\UHGXFHG
Y 5HDULQJ RI GURXJKWUHVLVWDQW DQLPDOV VXFK DV
JRDWV VKHHS DQG FRZV 3KHSKH GLVFXVVHV
WKH DGYDQWDJHV RI NHHSLQJ VDYDQQDK JRDWV LQ WKH
DULG DQG VHPLDULG FOLPDWH RI 6RXWKHUQ $IULFD 7KH\
DUHKDUG\DQGDGDSWDEOHZLWKDQDWXUDOUHVLVWDQFHWR
WLFNERUQH GLVHDVHV VXFK DV KHDUWZDWHU DQG RWKHU
H[WHUQDO SDUDVLWHV DQG UHTXLUH PLQLPXP KDQGOLQJ
DQGFDUH7KH\DUHDOVRKHDWDQGGURXJKWUHVLVWDQW
DQGHDVLO\HQGXUHFROGDQGUDLQZKLOHWKHLUSLJPHQWHG
VNLQ SURYLGHV SURWHFWLRQ IURP VWURQJ XOWUDYLROHW
UD\V 7KH\ KDYH UHODWLYHO\ VLPSOH DQG ORZ QXWULWLRQDO
UHTXLUHPHQWVDQGFDQVXUYLYHDQGUHSURGXFHZKHUH
RWKHUVPDOOVWRFNEUHHGVFDQQRWH[LVW7KHVDYDQQDK
JRDWVIHWFKDKLJKHUQHWSURÀWEHFDXVHRIORZHULQSXW
FRVWV 7KH\ EUHHG \HDU URXQG H[KLELW HDUO\ VH[XDO
PDWXULW\DQGKDYHORQJUHSURGXFWLYHOLYHV,QDGGLWLRQ
UDQJH SHUIRUPDQFH WULDOV KDYH VKRZQ WKDW WKH\ DUH
UHVLVWDQWWRPRXWKDQGKRRISUREOHPV
YL $IULFDQ LQGLJHQRXV FRPPXQLWLHV KDYH ULFK
NQRZOHGJH RI QDWXUDO GLVDVWHU PDQDJHPHQW DV
LOOXVWUDWHGE\3LWVR)RUH[DPSOHWKH%DWVZDQD
=XOXDQGRWKHUHWKQLFJURXSVLQ6RXWKHUQ$IULFDKDYH
XVHGWKHEHKDYLRXURIYDULRXVDQLPDOVELUGVSODQWV
DQG LQVHFWV DV HDUO\ ZDUQLQJ LQGLFDWRUV RI QDWXUDO
GLVDVWHUVVXFKDVGURXJKWÁRRGVDQGIDPLQH
YLL,QKHUVWXG\RILQGLJHQRXVIRRGVHFXULW\V\VWHPV
LQ HDVWHUQ =DPELD 0DWLNH ORRNV DW WKH UROH
SOD\HG E\ WUDGLWLRQDO JUDQDULHV DV D SRVWKDUYHVW
VWUDWHJ\ WR HQVXUH IRRG VHFXULW\ 7KH WUDGLWLRQDO
JUDQDU\LVWKHSRRUPDQ·VIRRGVWRUHEXLOWXVLQJORFDO
PDWHULDOVNQRZOHGJHDQGVNLOOVWRVWRUHDQGSUHVHUYH
VHHGV DQG IRRG FURSV VXFK DV PDL]H PLOOHW DQG
VRUJKXP GULHG EHDQV DQG FDVVDYD IRU IXWXUH XVH
DQGSODQWLQJ7KHJUDQDULHVDUHEXLOWRQHOHYDWLRQVWR
SURWHFWWKHJUDLQVIURPPRLVWXUHLQVHFWVDQGURGHQWV
YLLL7UDGLWLRQDOJRYHUQDQFHKDVSOD\HGDQLPSRUWDQW
UROH LQ IRRG VHFXULW\ DFFRUGLQJ WR D VWXG\ E\
'LVDWVDJDH)RUH[DPSOHWKHVWXG\REVHUYHG
WKDW DPRQJ WKH =XOX DQG ;KRVD SHRSOH LQ 6RXWK
$IULFD ORFDO FKLHIV PDLQWDLQHG FRPPXQLW\ JUDQDULHV
WRSURWHFWWKHLUSHRSOHIURPVWDUYDWLRQGXULQJQDWXUDO
GLVDVWHUVVXFKDVIDPLQHVÁRRGVDQGGURXJKW
L[ 2EVHUYLQJ QDWXUH WR SUHGLFW ZHDWKHU 1JDQ\L
UDLQPDNHUVLQWKH/XK\DFRPPXQLW\RIZHVWHUQ.HQ\D
KDYH EHHQ SUHGLFWLQJ WKH ZHDWKHU IRU JHQHUDWLRQV
XVLQJFKDQJHVLQQDWXUHWRJXLGHWKHLUDGYLFHRQKRZ
WKHFRPPXQLW\VKRXOGWLPHLWVIDUPLQJ2JDOOR
+RZHYHU WKH HUUDWLF ZHDWKHU SDWWHUQV FDXVHG E\
FOLPDWHFKDQJHPHDQWKDWWKHVHUDLQPDNHUVFDQQR
ORQJHUXVHQDWXUDOVLJQVVXFKDVREVHUYLQJZKHQWUHHV
VKHG WKHLU OHDYHV RU WKH EHKDYLRXU RI DQWV WR PDNH
WKHLUSUHGLFWLRQV0RUHRYHUWKH\GRQRWKDYHDFFHVV
WR WKH WHFKQRORJLHV DYDLODEOH WR PHWHRURORJLVWV $
MRLQWSURMHFWE\WKH8QLWHG.LQJGRPDQG&DQDGDOLQNV
WKHUDLQPDNHUVZLWKJRYHUQPHQWPHWHRURORJLVWV7KH
WZR JURXSV JHW WRJHWKHU HDFK VHDVRQ DQG SURGXFH
D IRUHFDVW ZKLFK LV GLVVHPLQDWHG XVLQJ D YDULHW\ RI
PHWKRGVVXLWHGWRFRPPXQLWLHVZKHUHPDQ\SHRSOH
DUHLOOLWHUDWH
75$'($1'(19,5210(175(9,(:
&&RPELQLQJLQGLJHQRXV$IULFDQ
NQRZOHGJHZLWKPRGHUQ
NQRZOHGJHDQGWHFKQRORJLHV
3URVSHFWVDQGFKDOOHQJHV
:LWKRYHUSODQWVSHFLHVDQGRYHUHWKQLF
JURXSV $IULFD KDV ERWK WKH FXOWXUDO DQG LQGLJHQRXV
SODQW GLYHUVLW\ QHHGHG WR LQYLJRUDWH LWV DJULFXOWXUDO
HFRQRP\DQGHQVXUHLWVIRRGVHFXULW\XQGHUFKDQJLQJ
FOLPDWLF FRQGLWLRQV 81'3 3HRSOH LQ WKH
UHJLRQXVHFORVHWRLQGLJHQRXVSODQWVIRUIRRG
LQFOXGLQJ IUXLW FHUHDOV OHJXPHV OHDI\ YHJHWDEOHV
DERXW GLIIHUHQW NLQGV WXEHUV DQG URRWV DQG
PDQ\ QRQIRRGV VXFK DV JXPV DQG DGGLWLYHV 7KH
KLJKFXOWXUDOGLYHUVLW\LVOLQNHGWRYHUVDWLOHLQGLJHQRXV
NQRZOHGJH DQG UHODWHG SUDFWLFHV LQFOXGLQJ D
YDULHW\ RI IRRG SURFHVVLQJ WHFKQLTXHV DQG UHFLSHV
+RZHYHU LQ VSLWH RI WKLV JUHDW SRWHQWLDO LQGLJHQRXV
NQRZOHGJH KDV QRW EHHQ HIIHFWLYHO\ XVHG WR UHGXFH
FXUUHQW ZLGHVSUHDG PDOQXWULWLRQ DQG SRYHUW\ 7KH
W\SHV RI LQGLJHQRXV IRRGV FRQVXPHG E\ PRVW
$IULFDQ FRPPXQLWLHV HVSHFLDOO\ LQ WKH UXUDO DUHDV
DQGWKHPHWKRGVRIKDQGOLQJSURFHVVLQJPDUNHWLQJ
GLVWULEXWLRQDQGXWLOL]DWLRQDUHGHHSO\URRWHGLQWUDGLWLRQ
DQGH[SHULHQFHOHDGLQJWRWKHGHYHORSPHQWRIYDULRXV
LQGLJHQRXV IRRG WHFKQRORJLHV 7KHVH WHFKQRORJLHV
DUHEDVHGRQORFDONQRZOHGJHH[SHULHQFHDUWFXOWXUH
DQGEHOLHIV\VWHPVDQGKDYHEHHQGLVWLOOHGIURPORFDO
H[SHULHQFHVRYHUFHQWXULHV7KH\DIIHFWWKHHFRQRPLF
DQGVRFLDOOLYHVRIWKHRSHUDWRUVDUHVLPSOHODERXU
LQWHQVLYH DQG SUHGRPLQDQWO\ KRPHEDVHG DQG
FRQWUROOHG E\ ZRPHQ +RZHYHU WKH\ DUH DOVR WLPH
FRQVXPLQJZLWKSRRURUQRTXDOLW\FRQWURO
0DWLNHSURYLGHVH[DPSOHVRIEHVWSUDFWLFHVLQ
FRPELQLQJ LQGLJHQRXV DQG PRGHUQ WHFKQRORJLHV LQ
HDVWHUQ=DPELDVXFKDVORFDOIDUPHUVXVLQJPRGHUQ
VSUD\HUV WR WUHDW WKHLU IDUPV ZLWK RUJDQLF IHUWLOL]HUV
DQG SHVWLFLGHV OLTXLG WHD ,Q WKH 8QLWHG 5HSXEOLF
RI7DQ]DQLDDQGLQRWKHUSDUWVRI$IULFDLQFUHDVLQJO\
LQGLJHQRXV VHDVRQDO IRRGV DUH EHLQJ VWRUHG LQ
PRGHUQ IRRG VWRUDJH DQG SUHVHUYDWLRQ IDFLOLWLHV
LQFOXGLQJGULHUVDQGIULGJHVWRSURORQJWKHLUVKHOIOLIH
.DZHVD+RZHYHU.DZHVDDUJXHVWKDWZKLOH
WKHLQWHUIDFHEHWZHHQ$IULFDQLQGLJHQRXVNQRZOHGJH
DQG PRGHUQ NQRZOHGJH V\VWHPV LV LPSRUWDQW WR
HQKDQFH IRRG VHFXULW\ DQG SURPRWH FOLPDWH FKDQJH
DGDSWDWLRQ DQG PLWLJDWLRQ LQ WKH FRQWH[W RI $IULFDQ
LQGLJHQRXVNQRZOHGJHV\VWHPVIRRGSURGXFWLRQDQG
FRQVXPSWLRQ DUH PXFK PRUH WKDQ MXVW HFRQRPLF RU
QXWULWLRQDO DFWLYLWLHV 7KH SURFHVVHV DQG SUDFWLFHV
LQYROYHGWDNHSODFHZLWKLQVSHFLÀFVRFLDOFXOWXUDODQG
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
SROLWLFDO FRQWH[WV ZKLFK DUH QRW DOZD\V XQGHUVWRRG
E\ VFKRODUV UHVHDUFKHUV DQG SROLF\PDNHUV WUDLQHG
LQ:HVWHUQHQYLURQPHQWVDQGSHUVSHFWLYHV7KLVKDV
OHG WR WKH IDLOXUH RI PDQ\ GHYHORSPHQW SURMHFWV WKDW
DLPHGWRLPSURYHWKHHIÀFLHQF\RI$IULFDQLQGLJHQRXV
IRRGWHFKQRORJLHV)RUH[DPSOHWKH*UHHQ5HYROXWLRQ
GHPRQVWUDWHG WKH FRQVHTXHQFHV RI ´RXWVLGHUµ
NQRZOHGJH LW JHQHUDOO\ VXFFHHGHG LQ SODFHV ZKHUH
WKH WHFKQRORJ\ ZDV GHYHORSHG DQG IDLOHG LQ WKRVH
SODFHV ZKHUH ORFDO IDUPHUV· QHHGV YDOXHV DQG
FRQVWUDLQWVGLIIHUHGIURPWKRVHZKHUHWKHWHFKQRORJ\
ZDVGHYHORSHG*ODHVHU
,QFUHDVLQJO\ D JURZLQJ QXPEHU RI $IULFDQ VFLHQWLVWV
DQG SROLF\PDNHUV DUH EHFRPLQJ DZDUH WKDW ,.6
FDQ PDNH D VLJQLÀFDQW FRQWULEXWLRQ WR HQKDQFLQJ
IRRG VHFXULW\ DQG VXVWDLQDEOH GHYHORSPHQW )ORUD
6XFK NQRZOHGJH LV UHOHYDQW WR WKH PRGHUQ
VFLHQWLÀF ZRUOG IRU D QXPEHU RI UHDVRQV LQFOXGLQJ
IRU WKH SURWHFWLRQ RI ELRGLYHUVLW\ DQG WKH LQWHOOHFWXDO
SURSHUW\ RI WKH LQGLJHQRXV NQRZOHGJH KROGHUV ,.6
FRXOG EH XVHG DV WKH EDVLV IRU WKH FRQVWUXFWLRQ RI
D WUXO\ DOWHUQDWLYH DJULFXOWXUH IRU IRRG VHFXULW\ DQG
VXVWDLQDEOHFRPPXQLW\OLYHOLKRRGVLQ$IULFDZKLFKLV
ZK\LWLVEHLQJLQFUHDVLQJO\LQFOXGHGLQWKHDJHQGDVRI
UHVHDUFKDQGGHYHORSPHQWLQVWLWXWLRQV7KHUHQHHGVWR
EHD´GHFRQVWUXFWLYHµSURFHVVLQWKH´UHFRQVWUXFWLRQµ
RIDQDOWHUQDWLYHVFLHQFHDSSOLFDEOHWRDJULFXOWXUH,Q
RUGHU WR DFKLHYH MXVW DQG VXVWDLQDEOH DJULFXOWXUH IRU
IRRGVHFXULW\XQGHUFKDQJLQJFOLPDWLFFRQGLWLRQVLWLV
QHFHVVDU\ WR UHFRJQL]H WKDW NQRZOHGJH KDV PXOWLSOH
VRXUFHV LQFOXGLQJ ,.6 ,Q D VWXG\ WKDW PDSSHG DQG
DXGLWHG LQGLJHQRXV DJULFXOWXUDO NQRZOHGJH LQ WKH
8DVLQ *LVKX DQG .HL\R GLVWULFWV LQ WKH 5LIW 9DOOH\
3URYLQFH .HQ\D .LSODQJ· DW DQG 5RWLFK KDYH VXJJHVWHG PHDVXUHV IRU LPSURYLQJ WKH
FDSWXULQJ SUHVHUYLQJ DQG GLVVHPLQDWLQJ RI $IULFDQ
LQGLJHQRXV NQRZOHGJH WR DJULFXOWXUDO UHVHDUFKHUV
H[WHQVLRQ ZRUNHUV DQG IDUPHUV 7KLV VKRXOG
IDFLOLWDWH WKH H[FKDQJH RI LQIRUPDWLRQ EHWZHHQ
LQGLJHQRXV NQRZOHGJH SUDFWLWLRQHUV DQG DJULFXOWXUDO
H[WHQVLRQ VHUYLFHV SURPRWH FXOWXUDO DFFHSWDELOLW\ RI
GHYHORSPHQW SURMHFWV DQG SURJUDPPHV LQFUHDVH
DJULFXOWXUDO SURGXFWLYLW\ DQG IRRG VHFXULW\ SURPRWH
ORFDO DJULFXOWXUDO FRQWHQW LQ PRGHUQ WHFKQRORJLFDO
DSSOLFDWLRQV DQG FUHDWH FRPPXQLW\EDVHG LQFRPH
HDUQLQJRSSRUWXQLWLHVIRUORFDOIDUPHUV
1//'06#4;U
75$'($1'(19,5210(175(9,(:
*';/$+15+5'69''01&'40%+'0%'
#0&4#&+6+10#.019.'&)'(140*#0%+0)
11&'%74+6;#0&.+/#6'*#0)'
&#26#6+10
600EXNX
.HQ\D$JULFXOWXUDO5HVHDUFK,QVWLWXWH1DWLRQDO%HHI5HVHDUFK&HQWUHDQG,6.RVJH\'HSDUWPHQWRI$QLPDO
6FLHQFHV(JHUWRQ8QLYHUVLW\1MRUR.HQ\D
$EVWUDFW
7KLV FRPPHQW GHPRQVWUDWHV WKH ULFKQHVV RI LQGLJHQRXV NQRZOHGJH ,. DQG WKH GLYHUVLW\ RI ,.UHODWHG
LQGLFDWRUVIRUPRQLWRULQJFOLPDWHYDULDELOLW\DQGFKDQJH$OWKRXJKWKHLQGLFDWRUVZHUHQRWFRPSDUHGZLWK
VHDVRQDO IRUHFDVWV LVVXHG E\ WKH UHVSHFWLYH IRUPDO LQVWLWXWLRQV LW LV HYLGHQW WKDW WKLV ULFK NQRZOHGJH LV
\HWWREHIXOO\KDUQHVVHGDQGFRPELQHGZLWKPRGHUQVFLHQFH.QRZOHGJHVKDULQJDPRQJVFLHQWLVWVDQG
SDVWRUDOLVWVFRPELQHGZLWKFDSDFLW\EXLOGLQJLVQHFHVVDU\IRULPSURYLQJWKHTXDOLW\RIFOLPDWHIRUHFDVWV
DQGHQDEOLQJSDVWRUDOLVWVDQGH[WHQVLRQDJHQWVWRLQWHUSUHWWKHSUREDELOLVWLFFOLPDWHLQIRUPDWLRQLQRUGHUWR
JHQHUDWH´EHVWEHWµRQIDUPSUDFWLFHVIRUWKHYDULRXVVHDVRQV7KLVZLOOHYHQWXDOO\FRQWULEXWHWRLQFUHDVHG
IRRGDQGQXWULWLRQVHFXULW\LQGHYHORSLQJFRXQWULHV
&OLPDWHFKDQJHDQGYDULDELOLW\DUHLVVXHVRIJUHDWFRQFHUQJOREDOO\DQGDUHPRUHSURQRXQFHGLQGHYHORS
LQJ FRXQWULHV WKDW IDFH PDQ\ GHYHORSPHQW FKDOOHQJHV &XUUHQW UHSRUWV LQGLFDWH WKDW WKH ZRUOG·V FOLPDWH
LVFKDQJLQJDWXQSUHFHGHQWHGUDWHVDIIHFWLQJHFRV\VWHPIXQFWLRQVDQGSURFHVVHVELRGLYHUVLW\DQGWKH
KXPDQSRSXODWLRQ7KHUHIRUHWKHUHLVDQHHGWRGHYHORSDOOLQFOXVLYHUREXVWVWUDWHJLHVIRUFOLPDWHFKDQJH
PLWLJDWLRQDQGDGDSWDWLRQWRWKHFKDQJLQJHQYLURQPHQWDOFRQGLWLRQV0RGHUQWHFKQRORJLHVKDYHSOD\HGDQ
LPSRUWDQWUROHLQWKHVXVWDLQDEOHPDQDJHPHQWRIQDWXUDOUHVRXUFHVLQWKHSDVWEXWZLWKWKHOLNHOLKRRGRI
IXUWKHUFKDQJHVRFFXUULQJPRGHUQVFLHQFHDORQHFDQQRWFRQVHUYHQDWXUHRUPLWLJDWHWKHHIIHFWVRIDQG
IDFLOLWDWHDGDSWDWLRQWRFOLPDWHFKDQJHWRHQKDQFHIRRGVHFXULW\7RDFKLHYHWKLVLWZLOOEHQHFHVVDU\WR
LQWHJUDWHWUDGLWLRQDONQRZOHGJHDQGLQVWLWXWLRQVZLWKPRGHUQVFLHQFH7KLVFRPPHQWDU\SURYLGHVH[DPSOHV
IURP.HQ\D²DFRXQWU\LQVXE6DKDUDQ$IULFDWKDWKDVHQRUPRXVELRGLYHUVLW\²WRVKRZWKHSRWHQWLDORI
WUDGLWLRQDO NQRZOHGJH IRU SURPRWLQJ FRQVHUYDWLRQ RI ELRORJLFDO GLYHUVLW\ DQG FOLPDWH FKDQJH PLWLJDWLRQ
*HQHUDOOHVVRQVDUHDOVRGUDZQIURPRWKHUDUHDVLQ$IULFDRQWKHXVHRIWUDGLWLRQDONQRZOHGJHSUDFWLFHV
DQGLQVWLWXWLRQVLQGHVLJQLQJUHVSRQVHVWRFOLPDWHFKDQJH
$,QWURGXFWLRQ
6WUDWHJLHV RI PLWLJDWLRQ DQG DGDSWDWLRQ WR FKDQJLQJ
HQYLURQPHQWDO FRQGLWLRQV KDYH EHHQ HPSKDVL]HG
LQ QXPHURXV GLVFXVVLRQV DW D QXPEHU RI IRUXPV
LQFOXGLQJ WKH 8QLWHG 1DWLRQV )UDPHZRUN &RQYHQWLRQ
RQ &OLPDWH &KDQJH &RQIHUHQFHV )RU WKH PDMRULW\
RI FRPPXQLWLHV WKURXJKRXW WKH ZRUOG WKDW GLUHFWO\
XWLOL]H QDWXUDO UHVRXUFHV IRU WKHLU OLYHOLKRRGV WKH
H[SHFWHG FKDQJHV LQ FOLPDWH GXULQJ WKLV FHQWXU\
SUHVHQW VLJQLÀFDQW WKUHDWV RI GLVWXUEDQFHV 7KRPDV
HW DO HVSHFLDOO\ ZKHUH FKDQJHV PD\ EH
XQSUHFHGHQWHGDQGSHUYDVLYH&RRSHUHWDO
7KH )RXUWK $VVHVVPHQW 5HSRUW RI WKH ,QWHUJRYHUQ
PHQWDO 3DQHO RQ &OLPDWH &KDQJH ,3&& LQGLFDWHV WKDW WKH H[DFW QDWXUH RI FKDQJHV LQ
FOLPDWH UHPDLQV XQFHUWDLQ EXW WKH OLNHOLHVW VFHQ
DULR LV LQFUHDVHG YDULDELOLW\ SDUWLFXODUO\ DW WKH
H[WUHPHV 7KHUHIRUH DSSURDFKHV IRU PLWLJDWLQJ WKH
DFFRPSDQ\LQJ GLUHFW DQG FROODWHUDO HIIHFWV QHHG WR
EHGLVFXVVHGE\LQGLJHQRXVFRPPXQLWLHVVFLHQWLVWV
GHYHORSPHQWSDUWQHUVDQGWKHSROLWLFDOFODVV
7KHUHDUHSRWHQWLDOV\QHUJLHVIURPFRPELQLQJ,.ZLWK
HPHUJLQJ DQG QHZ SDWWHUQV LQ VFLHQFH WR SURGXFH
RSWLPXP NQRZOHGJH ,. XVXDOO\ EXLOGV RQ KROLVWLF
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
SLFWXUHV RI WKH HQYLURQPHQW E\ FRQVLGHULQJ D ODUJH
QXPEHU RI YDULDEOHV TXDOLWDWLYHO\ ZKLOH VFLHQFH
WHQGVWRFRQFHQWUDWHRQDVPDOOQXPEHURIYDULDEOHV
TXDQWLWDWLYHO\5HFHQWVWXGLHVE\$EHGLDQG%DGUDJKHK
LQGLFDWHWKDW,.LVDYDOXDEOHVRXUFHRISUDFWLFHV
DQGDWLPHWHVWHGWRROWKDWZRXOGEHXVHIXOWRKDUQHVV
IRU VXVWDLQDEOH GHYHORSPHQW DQG IRU LPSURYLQJ IRRG
VHFXULW\,WLVEHFRPLQJFUXFLDOO\LPSRUWDQWWRUHFRJQL]H
WKH OLPLWV RI RXU VFLHQWLÀF NQRZOHGJH %URZQ DQGWRUHYLHZRXUXQGHUVWDQGLQJRIZKDWXQFHUWDLQW\
DQG YDULDELOLW\ LPSOLHV DV ZHOO DV WR H[DPLQH KRZ
LQGLJHQRXV FRPPXQLWLHV OLYH WKHLU HYHU\GD\ OLYHV
7KLV FRPPHQWDU\ SURYLGHV H[DPSOHV IURP .HQ\D
DQGGUDZVJHQHUDOOHVVRQVIURPRWKHUDUHDVLQ$IULFD
DERXWWKHXVHRIWUDGLWLRQDONQRZOHGJHSUDFWLFHVDQG
LQVWLWXWLRQVLQGHVLJQLQJUHVSRQVHVWRFOLPDWHFKDQJH
DQGYDULDELOLW\
%&RQJUXHQFHRILQGLJHQRXVDQG
VFLHQWLÀFNQRZOHGJHV\VWHPVLQ
FOLPDWHSUHGLFWLRQ
7KHUROHRIFOLPDWHDQGZHDWKHULQIRUPDWLRQLQKHOSLQJ
WKHIDUPLQJFRPPXQLW\WRPDNHFULWLFDOGHFLVLRQVIRU
DGDSWDWLRQ WR FOLPDWH FKDQJH DQG YDULDELOLW\ FDQQRW
EH RYHUHPSKDVL]HG )DUPEDVHG GHFLVLRQPDNLQJ
LQ GHYHORSLQJ FRXQWULHV UHOLHV WR D ODUJH H[WHQW RQ
LQGLJHQRXV ZHDWKHU IRUHFDVWV SDUWO\ EHFDXVH RI
WKH DEVHQFH RI IRUPDO FOLPDWH LQIRUPDWLRQ V\VWHPV
LQ VRPH GHYHORSLQJ FRXQWULHV ,Q RWKHU FRXQWULHV
ZKHUH PHWHRURORJLFDO VHUYLFHV DUH GHYHORSHG
WKHUHH[LVWVHYHUDOFKDOOHQJHVLQFRPPXQLFDWLQJWKLV
LQIRUPDWLRQ WR YXOQHUDEOH FRPPXQLWLHV %XW RYHUDOO
LW KDV EHHQ REVHUYHG WKDW WKH DFFXUDF\ RI PRGHUQ
PHWHRURORJLFDOSUHGLFWLRQVDQG,.EDVHGIRUHFDVWVLV
IDLUO\FRPSDUDEOH2UORYHHWDO
7UDGLWLRQDOO\ IDUPHUV KDYH EHHQ XVLQJ WKHLU RZQ
NQRZOHGJH WR SUHGLFW UDLQIDOO ² NQRZOHGJH WKDW KDV
HYROYHG WKURXJK REVHUYDWLRQV DQG H[SHULHQFH RYHU
VHYHUDOGHFDGHVDQGSDVVHGRQIURPRQHJHQHUDWLRQ
WR WKH RWKHU ,Q ZHDWKHU IRUHFDVWLQJ WKH\ KDYH EHHQ
XVLQJ D VHW RI LQGLFDWRUV DQG KDYH GHYHORSHG D
UHOLDELOLW\ IDFWRU IRU HDFK RI WKHP +RZHYHU LW LV
RQO\ ZKHQ ,. LV XVHG FKDOOHQJHG DQG DGDSWHG WR
FKDQJLQJ FRQWH[WV WKDW LW ZLOO FRQWULEXWH WR FOLPDWH
FKDQJHDGDSWDWLRQ'HVSLWHWKHLQFUHDVLQJLQWHUHVWLQ
WKH XVH RI ,. VFHSWLFLVP WRZDUGV LW SHUVLVWV ZKLFK
OLPLWVLWVVSUHDGWRPDQDJHPHQWSUDFWLFHDQGVFLHQFH
*LOFKULVW 0DOORU\ DQG 0HUNHO 2UORYH HW DO
&RQVHTXHQWO\LWLVXVHIXOWRGRFXPHQWDQGFRPSDUH
WKHVH H[SHULHQFHV DFURVV DJURHFRORJLFDO ]RQHV
DQG OLYHOLKRRG JURXSV ZLWK D YLHZ WR GUDZLQJ VRPH
OHVVRQV DQG UHFRPPHQGDWLRQV RQ KRZ LQGLJHQRXV
IRUHFDVWLQJ PD\ EH VWUHQJWKHQHG WR VXSSRUW DGDSW
DWLRQLQGLIIHUHQWVHWWLQJV
&,QGLJHQRXVNQRZOHGJHDQGGURXJKW
PRQLWRULQJDFDVHRI.HQ\DQ
DJURSDVWRUDOLVP
$JURSDVWRUDO SURGXFWLRQ V\VWHPV KDYH EHHQ FODVV
LÀHGEDVHGRQDQXPEHURIFULWHULD2WWHDQG&KLORQGD
3DVWRUDOLVWV DQG DJURSDVWRUDOLVWV XVXDOO\
GHULYH,.EDVHGIRUHFDVWVMXVWEHIRUHWKHEHJLQQLQJRI
WKH IDUPLQJ VHDVRQ ,Q QRUWKHUQ .HQ\D WKH 5HQGLOOH
SDVWRUDOLVWV XWLOL]H D QXPEHU RI LQGLFDWRUV IURP ORFDO
ZHDWKHU UDQJLQJ IURP WHPSHUDWXUH KXPLGLW\ DQG
ZLQGFRQGLWLRQVWRWKHSUHVHQFHRUDEVHQFHRIFHUWDLQ
W\SHVRIFORXGVUDLQIDOOSDWWHUQVDQGDPRXQWV7KHVH
ZHDWKHU LQGLFDWRUV DUH DOVR XVHG LQ IRUPDO FOLPDWH
PRQLWRULQJ
$GGLWLRQDOO\ZKHQSUHGLFWLQJSURORQJHGGURXJKWWKH
5HQGLOOH SDVWRUDOLVWV REVHUYH WKH ÁRUD DQG IDXQD IRU
DQ\XQXVXDOEHKDYLRXUVXFKDVQRLVHVRIFHUWDLQELUGV
WKHDSSHDUDQFHRIVSDUURZZHDYHUVJUHHQELUGEHHV
PLJUDWLQJ OLYHVWRFN VSHFLHV ORRNLQJ HPDFLDWHG HYHQ
ZKHQWKHUHLVSOHQW\RISDVWXUHWKHLQYDVLRQRIFHUWDLQ
DQWV WKH PDNLQJ RI QRLVH E\ FULFNHWV DW QLJKW DQG
XQXVXDOÁRZHULQJRIFHUWDLQWUHHVHJ/RQFKRFDUSXV
VSVWHULOH$VWURORJLFDOFRQVWHOODWLRQVOLNHWKHSRVLWLRQ
RIWKHVXQDQGPRRQDUHDOVRREVHUYHGLQJUHDWGHWDLO
E\ WKH 5HQGLOOH DQG *DEUD SDVWRUDOLVWV ,QWHUHVWLQJO\
DQXPEHURIWKHVHLQGLFDWRUVKDYHDOVREHHQXVHGIRU
GURXJKWPRQLWRULQJLQRWKHUFRPPXQLWLHVVXFKDVWKH
.DPED DJURSDVWRUDOLVWV RI .HQ\D 6SHUDQ]D HW DO
7KHUH DUH KRZHYHU VRPH GLVVHQWLQJ RSLQLRQV
RYHU WKH HIIHFWLYHQHVV RI LQGLFDWRUV XVHG E\ WKH
FRPPXQLWLHV DFURVV FRXQWULHV DQG WKH ZRUOG DQG
IXUWKHU VWXGLHV DUH QHFHVVDU\ WR EHWWHU FDSWXUH WKH
QDWXUHRIWKHLQGLFDWRUV/XVHQRHWDOVXJJHVW
WKDWLQGLJHQRXVPHWKRGVIRUFOLPDWHIRUHFDVWLQJFRXOG
RIIHULQVLJKWVWRLPSURYHWKHYDOXHRIPRGHUQVHDVRQDO
IRUHFDVWV IRU SDVWRUDOLVWV LQ (DVW $IULFD 7KH\ DUJXH
WKDW LQGLJHQRXV IRUHFDVWLQJ PHWKRGV DUH QHHGV
GULYHQIRFXVRQWKHORFDOLW\DQGWLPLQJRIUDLQVDQG
DUH ´FRPPXQLFDWHG LQ ORFDO ODQJXDJHV DQG W\SLFDOO\
E\ H[SHUWV· NQRZQ DQG WUXVWHG E\ SDVWRUDOLVWVµ ,Q
FRQWUDVW LQ %XUNLQD )DVR 5RQFROL HW DO DQG
/HVRWKR=LHUYRJHODQG'RZQLQJWKHUHLVOHVV
XVHRIORFDOIRUHFDVWLQJNQRZOHGJHZKLFKLVDWWULEXWHG
WR LQFUHDVHG FOLPDWH YDULDELOLW\ OHDGLQJ WR OHVV
FRQVLVWHQF\ EHWZHHQ LQGLFDWRUV DQG RXWFRPHV GXH
WR WKH FKDQJLQJ VRFLDO HQYLURQPHQW &RQVHTXHQWO\
IDUPHUV LQ WKHVH FRXQWULHV KDYH DOVR EHHQ VKRZLQJ
LQWHUHVW LQ KRZ WKH\ PLJKW EH DEOH WR XVH VHDVRQDO
PHWHRURORJLFDO IRUHFDVWV WR PDNH FULWLFDO IDUPLQJ
GHFLVLRQV
'HYHORSHG FRXQWULHV KDYH WHQGHG WR UHMHFW WKH ,.
RI ORFDO FRPPXQLWLHV DV SULPLWLYH QRQTXDQWLWDWLYH
HPSOR\LQJ
QRQFRQYHQWLRQDO
PHWKRGV
DQG
XQVFLHQWLÀF+RZHYHUPRUHUHFHQWO\,.V\VWHPVKDYH
DWWUDFWHG WKH DWWHQWLRQ RI PDQ\ REVHUYHUV LQ ERWK
GHYHORSHG DQG GHYHORSLQJ FRXQWULHV 3UDFWLWLRQHUV
DUH VWDUWLQJ WR UHDOL]H WKH LPSRUWDQFH RI UHFRJQL]LQJ
DQG ZRUNLQJ ZLWK ,. ZKLFK EXLOGV RQ JHQHUDWLRQV RI
H[SHULHQFHWREHVWVXSSRUWWKHDGDSWLYHFDSDFLW\DQG
VWUDWHJLHVRIUXUDOFRPPXQLWLHV6SHUDQ]DHWDO
2UORYHHWDO
'$GDSWDWLRQVWUDWHJLHV
/DUJHSURSRUWLRQVRISDVWRUDOUDQJHODQGVLQDULGDQG
VHPLDULG ODQGV $6$/V KDYH EHHQ V\VWHPDWLFDOO\
GHJUDGHG RYHU WLPH ZKLOH DEVROXWH QXPEHUV RI
OLYHVWRFN KDYH LQFUHDVHG DQG DUH QRZ WKUHDWHQLQJ
WKHKHDOWKRI $6$/ KDELWDW WKURXJK RYHUJUD]LQJDQG
VXEVHTXHQWO\ VRLO HURVLRQ 0JDQJD HW DO &RQVHTXHQWO\PRVWRIWKH$6$/VDUHFXUUHQWO\XQDEOH
WR VXSSRUW JURZWK RI QDWXUDO YHJHWDWLRQ EHVLGHV
GLPLQLVKLQJ WKH FDUERQ VLQN 7KLV UDLVHV GRXEWV
DERXW WKH VXVWDLQDELOLW\ RI SDVWRUDOLVP DV D PHDQV
RI OLYHOLKRRG ,Q WKH $6$/V RI QRUWKHUQ .HQ\D WKH
PDLQ IDFWRU LQÁXHQFLQJ WKH SURGXFWLYLW\ RI OLYHVWRFN
ZKLFK LV WKH SUHGRPLQDQW HFRQRPLF DFWLYLW\ LV IHHG
DYDLODELOLW\ 3HDFRFN DQG 6KHUPDQ <HW WKHUH
DUHIHZDOWHUQDWLYHVWROLYHVWRFNPRELOLW\DVDQHIÀFLHQW
DGDSWLYH PDQDJHPHQW VWUDWHJ\ WR RYHUFRPH IHHG
GHÀFLWV
7KHSDVWRUDOLVWJURXSVLQ.HQ\DKDYHGHYHORSHGIDLUO\
HIIHFWLYH FRSLQJ VWUDWHJLHV LQ UHVSRQVH WR GURXJKW
HYHQWV DLPHG DW PLQLPL]LQJ ORVVHV RU IDFLOLWDWLQJ
UHFRYHU\DIWHUGURXJKW7KHSUDFWLFHRINHHSLQJPL[HG
KHUGVRIJUD]HUVDQGEURZVHUVQRWRQO\HQVXUHVWKDW
WKHDQLPDOVPDNHXVHRIWKHGLIIHUHQWUHVRXUFHVHJ
JUDVVHVDQGVKUXEVEXWLWLVDOVRDULVNPDQDJHPHQW
VWUDWHJ\ DV WKH GLIIHUHQW JURXSV RI DQLPDOV DUH
75$'($1'(19,5210(175(9,(:
XQOLNHO\WREHDIIHFWHGLQWKHVDPHZD\GXULQJSHULRGV
RI GURXJKW $GGLWLRQDOO\ PDQ\ KRXVHKROGV NHHS
DQLPDOVHOVHZKHUHZLWKUHODWLYHVDQGIULHQGVWRJXDUG
DJDLQVW ORVVHV WKURXJK GLVHDVH UDLGV RU GURXJKW
6XFKDQLPDOVDOZD\VFRPHLQKDQG\DIWHUDGLVDVWHU
DVWKHSDVWRUDOLVWIDPLOLHVDUHDEOHWRUHVWRFNTXLFNO\
DQG FDUU\ RQ ZLWK WKHLU OLYHV &RPPXQDO RZQHUVKLS
DQGPDQDJHPHQWRIQDWXUDOUHVRXUFHVDUHFHQWUDOWR
SDVWRUDOLVP LQ QRUWKHUQ .HQ\D EHFDXVH WKH\ HQVXUH
WKDWOLYHVWRFNNHHSHUVPRYHIUHHO\DVWKH\VHDUFKIRU
ZDWHU DQG SDVWXUHV LQ GLIIHUHQW ORFDWLRQV DW GLIIHUHQW
WLPHVRIWKH\HDU
1\RQJ$GHVLQDDQG2VPDQ(ODVKDREVHUYHG
WKDW WKH SHRSOH RI WKH $IULFDQ 6DKHO SUDFWLFH ]HUR
WLOODJHPXOFKLQJIDOORZLQJDJURIRUHVWU\DQGRUJDQLF
IDUPLQJ ² SUDFWLFHV WKDW FUHDWH FDUERQ VLQNV 7KH\
UHSRUW WKDW ,. KDV EHHQ XVHG LQ ZHDWKHU IRUHFDVWLQJ
DQGYXOQHUDELOLW\DVVHVVPHQWDQGIRULPSOHPHQWDWLRQ
RI DGDSWDWLRQ VWUDWHJLHV VXFK DV FRQVHUYDWLRQ RI
ELRGLYHUVLW\ XVH RI HPHUJHQF\ IRGGHU LQ WLPHV RI
GURXJKW PXOWLVSHFLHV FRPSRVLWLRQ RI KHUGV DQG
PRELOLW\
7KH XQSUHGLFWDEOH QDWXUH RI UDQJHODQGV IRUFHV
WKH SDVWRUDOLVWV WR HPEDUN RQ VWUDWHJLHV WR WDNH
DGYDQWDJH RI WKH JRRG \HDUV )RU LQVWDQFH WKH\
RIWHQ VWRFN PRUH SURGXFWLYH IHPDOHV LQ WKHLU KHUGV
WRHQVXUHWKDWDQLPDOVORVWDUHHDVLO\UHSODFHGZKHQ
FOLPDWLFFRQGLWLRQVLPSURYHLHZKHQJUDVVDQGZDWHU
EHFRPH DEXQGDQW $OVR WKH\ NHHS D ODUJH QXPEHU
RIDQLPDOVZKLFKLVRQHRIWKHSDUDPRXQWDVSHFWVRI
SDVWRUDOLVPWKDWJHQHUDOO\LVQRWZHOOXQGHUVWRRGDQG
WKDW RIWHQ OHDGV RXWVLGHUV WR FDOO IRU GHVWRFNLQJ WR
OHYHOVLQOLQHZLWKFDUU\LQJFDSDFLW\
2XWVLGHREVHUYHUVDOVRWHQGWRRYHUORRNWKHIDFWWKDW
WKH ZD\ DQLPDOV DUH JUD]HG PD\ EH PRUH LPSRUWDQW
WKDQ WKH QXPEHUV FRQVLGHULQJ WKH PRELOH QDWXUH RI
SDVWRUDOLVWV 8QIRUWXQDWHO\ PDQ\ RI WKHVH VWUDWHJLHV
WKDW KDYH VHUYHG GURXJKWDIIHFWHG FRPPXQLWLHV
ZHOOLQWKHSDVWPD\EHFRPHLQDGHTXDWHLQWKHOLJKW
RI WKH PRUH IUHTXHQW RFFXUUHQFH RI GURXJKWV DQG
XQSUHFHGHQWHGZHDWKHUH[WUHPHVLQUHFHQW\HDUV
:LWK GZLQGOLQJ QDWXUDO UHVRXUFHV HVSHFLDOO\ SDVWXUH
DQG ZDWHU WKHUH LV OLWWOH WKH SDVWRUDOLVWV FDQ GR WR
DFFHVV VXFK UHVRXUFHV ,W LV LPSRUWDQW WKDW H[WHUQDO
SOD\HUV ZRUN ZLWK WKHVH SDVWRUDOLVWV WR LGHQWLI\ ZD\V
RIFUHDWLQJDFFHVVWRWKRVHUHVRXUFHV)RULQVWDQFH
IDUPHUV FRXOG EH HQFRXUDJHG WR SODQW SDVWXUHV WKDW
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
FDQEHVROGWRSDVWRUDOLVWVDWVXEVLGL]HGUDWHVVRWKDW
WKHSDVWRUDOLVWVZRXOGQRWKDYHWRJUD]HWKHLUDQLPDOV
LQFXOWLYDWHG]RQHVZKLFKRIWHQJLYHVULVHWRFRQÁLFWV
ZLWKFURSIDUPHUVDWSUHVHQW
75$'($1'(19,5210(175(9,(:
1//'06#4;U&&4'55+0)6*'#75'51(#0&')4#&#6+10X
11&#0&764+6+10#.05'%74+6;#0&18'46;U
'92241#%*61)4+%7.674#.06'05+(+%#6+10+0
6*'412+%5#0&7$6412+%5
5RJHU5%/HDNH\
$JURIRUHVWU\DQG1RYHO&URSV8QLW6FKRRORI0DULQHDQG7URSLFDO%LRORJ\-DPHV&RRN8QLYHUVLW\
&DLUQV$XVWUDOLD
$EVWUDFW
7KHVKRUWDJHRIQHZODQGIRUDJULFXOWXUHDQGWKHSRYHUW\RIVPDOOKROGHUIDUPHUVLQWKHWURSLFVDUHVHULRXV
FRQVWUDLQWVRQWKHH[SDQVLRQRIPRGHUQLQWHQVLYHDJULFXOWXUHWRRYHUFRPHWKHIRRGFULVLV&RQVHTXHQWO\
WKHUH LV DQ XUJHQW QHHG IRU ERWK WKH UHKDELOLWDWLRQ RI GHJUDGHG IDUPODQG DQG IRU WKH UHDOL]DWLRQ RI QHZ
LQFRPHJHQHUDWLQJRSSRUWXQLWLHV
7KLVFRPPHQWDU\SUHVHQWVDWULHGDQGWHVWHGDZDUGZLQQLQJ(TXDWRU3UL]HWKUHHSRLQWDFWLRQSODQXVLQJ
ELRORJLFDOQLWURJHQÀ[DWLRQDQGD´QHZZDYHµRIFURSGRPHVWLFDWLRQIRFXVLQJRQPDUNHWDEOHDQGKLJKO\
QXWULWLRXVWUDGLWLRQDOIRRGV,IZLGHO\DGRSWHGWKLVSDFNDJHFRXOGÀOOWKH\LHOGJDSRIFURSVVXFKDVPDL]H
WKHUHE\ SURPRWLQJ QHZ OLYHVWRFN HQWHUSULVHV DQG VDWLVI\LQJ JOREDO IRRG GHPDQG WR ,W FRXOG DOVR
FUHDWHQHZEXVLQHVVDQGHPSOR\PHQWRSSRUWXQLWLHVLQGLYHUVLÀHGORFDOUXUDOHFRQRPLHVDQGSHUKDSVKHOS
H[SDQGDJULEXVLQHVVHV
7KH *UHHQ 5HYROXWLRQ HQDEOHG D FRQVLGHUDEOH
LQFUHDVHLQWKHSURGXFWLYLW\RIFRQYHQWLRQDOKLJKLQSXW
DJULFXOWXUH WKHUHE\ VDYLQJ PLOOLRQV RI SHRSOH IURP
VWDUYDWLRQ+RZHYHUWKLVDFKLHYHPHQWFDPHDWDKLJK
FRVWWRWKHHQYLURQPHQWDVDUHVXOWRIODQGFRQYHUVLRQ
WKURXJK GHIRUHVWDWLRQ ODQG GHJUDGDWLRQ DQG WKH
RYHUH[SORLWDWLRQ RI QDWXUDO UHVRXUFHV HVSHFLDOO\ VRLO
DQG ZDWHU 0RUHRYHU VXFK KLJKLQSXW DJULFXOWXUH LV
QRZDOVRUHFRJQL]HGDVEHLQJDPDMRUFRQWULEXWRUWR
FOLPDWH FKDQJH )XUWKHUPRUH GHVSLWH WKH LPSURYHG
SURGXFWLYLW\RIPDMRUIRRGVWDSOHVWKHUHDUHVWLOOELOOLRQV
RI SHRSOH VXIIHULQJ IURP SRYHUW\ PDOQXWULWLRQ DQG
KXQJHU &RQVHTXHQWO\ WKHUH KDYH EHHQ PDQ\ FDOOV
IRUDQHZDSSURDFKWRIRRGSURGXFWLRQHVSHFLDOO\LQ
WKH WURSLFV DQG VXEWURSLFV ZKHUH WKH SUREOHPV DQG
LVVXHV DUH WKH PRVW XUJHQW DQG SUHYDOHQW 7KH NH\
LVVXHV WR EH DGGUHVVHG DUH ODQG UHKDELOLWDWLRQ IRRG
DQG QXWULWLRQDO VHFXULW\ DQG LQFRPH JHQHUDWLRQ ² DOO
ZLWKLQVXVWDLQDEOHODQGXVHSUDFWLFHV7KHRYHUULGLQJ
TXHVWLRQV DUH +RZ FDQ WKH ODQG EH XVHG WR IHHG D
JURZLQJSRSXODWLRQZLWKRXWIXUWKHUGDPDJHWRWKHORFDO
DQGJOREDOHQYLURQPHQW"+RZFDQIRRGDQGQXWULWLRQDO
VHFXULW\EHDFKLHYHGRQDGHFOLQLQJDUHDRIDYDLODEOH
ODQG"$QGKRZFDQWKHODQGEHXVHGWRHQKDQFHWKH
OLYHOLKRRGVDQGLQFRPHVRIWKHUXUDOSRRU"
$QVZHUVWRWKHVHTXHVWLRQVIDOOLQWRWZRPDLQFDPSV
WKHUHDUHVRPHZKREHOLHYHWKDWWKHRQO\ZD\IRUZDUGLV
E\LQWHQVLI\LQJWKHKLJKHQHUJ\LQSXW*UHHQ5HYROXWLRQ
PRGHO LQYROYLQJ IXUWKHU SURGXFWLYLW\ LPSURYHPHQWV
WKURXJK UHVHDUFK DQG EUHDNWKURXJKV LQ FURS DQG
OLYHVWRFNJHQHWLFVRWKHUVWKLQNWKDWPRUHHFRORJLFDOO\
EDVHGDSSURDFKHVLQYROYLQJORZLQSXWDJULFXOWXUHDUH
WKHZD\IRUZDUG7RFRQVLGHUWKHPHULWVRIWKHVHWZR
FRQWUDVWLQJDQGKLJKO\SRODUL]HGYLHZVZHORRNDWWKH
HQYLURQPHQWDODQGVRFLRHFRQRPLFSUREOHPVDULVLQJ
IURP ODQG FRQYHUVLRQ WR DJULFXOWXUH DQG RIIHU VRPH
VROXWLRQV
&XUUHQW ODQGXVH SUDFWLFHV LQ WKH WURSLFV KDYH OHG
WR GHIRUHVWDWLRQ RYHUJUD]LQJ DQG RYHUH[SORLWDWLRQ
RI VRLOV DQG ZDWHU UHVRXUFHV ÀJXUH FDXVLQJ D
FDVFDGHRIQHJDWLYHLPSDFWVODQGGHJUDGDWLRQORVV
RI VRLO IHUWLOLW\ ORVV RI ELRGLYHUVLW\ WKH EUHDNGRZQ RI
DJURHFRV\VWHP IXQFWLRQV GHFOLQLQJ \LHOGV KXQJHU
DQGPDOQXWULWLRQDQGGHFOLQLQJOLYHOLKRRGV$VVRFLDWHG
ZLWKWKHVHDUHUHGXFHGDFFHVVWRWUDGLWLRQDOZLOGIRRGV
ORVV RI LQFRPH DQG WKH LQFUHDVHG QHHG IRU FRVWO\
RIWHQXQDIIRUGDEOHDJULFXOWXUDOLQSXWV7KHUHVSRQVH
RI SURSRQHQWV RI LQWHQVLYH KLJKLQSXW LQGXVWULDO
IDUPLQJ LV WR UHGRXEOH HIIRUWV WR LQFUHDVH WKH \LHOG
RI VWDSOH IRRG FURSV E\ HQKDQFLQJ WKHLU FDSDFLW\ WR
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
)LJXUH7KHF\FOHRIODQGGHJUDGDWLRQDQGVRFLDOGHSULYDWLRQ
External factors (e.g. entrepreneurs)
Desire for security and wealth
Deforestation
Overfishing
Overgrazing
Unsustainable use
of soils and water
Regulated by
social organizations
at national and
international level
Ecosystem degradation
and soil erosion
Breakdown of nutrient
cycling and loss of
soil fertility/structure
Loss of biodiversity
Loss of income
from food crops
and wildlife
Breakdown of ecosystem function
Increased use of
agrichemicals
Loss of crop yields
Hunger and
malnutrition
Increased
Pollution of
costs
waterways,
aquifers and wetland
Increased
vulnerability to HIV/AIDS
Other external factors
(e.g. war and disasters)
Increased
health risks
Declining livelihoods,
leading to poverty and social deprivation
Regulated by social organizations at the
community level
6RXUFH$GDSWHGIURP/HDNH\HWDO
ZLWKVWDQGELRWLFDQGDELRWLFVWUHVV7KLVDSSURDFKIDLOV
WRUHFRJQL]HWKUHHLPSRUWDQWSRLQWVLVLQFHIDUPHUV
DUH IDLOLQJ WR JURZ VWDSOH IRRGV DQ\ZKHUH QHDU WKHLU
H[LVWLQJELRORJLFDOSRWHQWLDOUHVXOWLQJLQZKDWLVFDOOHG
WKH ´\LHOG JDSµ ² WKH GLIIHUHQFH EHWZHHQ SRWHQWLDO
\LHOGSHUKHFWDUHDQGDFWXDO\LHOGDFKLHYHGE\IDUPHUV
ÀJXUH LQFUHDVLQJ WKH ELRORJLFDO SRWHQWLDO ZLOO QRW
KHOSLLSRRUVPDOOKROGHUIDUPHUVORFNHGLQDSRYHUW\
WUDS FDQQRW DIIRUG WR EX\ WKH UHTXLVLWH IHUWLOL]HUV DQG
SHVWLFLGHV HYHQ LI WKH\ KDG DGHTXDWH DFFHVV WR
WKHPWKDWZRXOGDOORZWKHPWRSUDFWLFHPRQRFXOWXUH
DJULFXOWXUH DQG LLL WKH RYHUULGLQJ GRPLQDQFH RI
VWDUFK\ IRRG VWDSOHV LQ PRGHUQ DJULFXOWXUH PD\
SURYLGH DGHTXDWH FDORULHV IRU VXUYLYDO EXW WKH\ ODFN
WKHSURWHLQVDQGPLFURQXWULHQWVQHFHVVDU\IRUKHDOWK\
OLYLQJQRWWRPHQWLRQWKHVHQVRU\SOHDVXUHVSURYLGHG
E\ WUDGLWLRQDO DQG KLJKO\ QXWULWLRXV IRRGV ZKLFK
XVHGWREHJDWKHUHGIURPWKHIRUHVW,QDGGLWLRQWKH
ZLGHVSUHDGFOHDUDQFHRIIRUHVWVIURPWKHODQGVFDSH
HVSHFLDOO\IURPKLOOVLGHVH[SRVHVVRLOVWRHURVLRQDQG
LQFUHDVHVUXQRIIUHVXOWLQJLQODQGVOLGHVDQGÁRRGLQJ
WKDW GHVWUR\ SURSHUW\ DQG OHDG WR WKH GHDWK RI ODUJH
QXPEHUVRISHRSOH/RVVRISHUHQQLDOYHJHWDWLRQDOVR
FRQWULEXWHVWRFOLPDWHFKDQJH
7KHUHIRUH DQ DOWHUQDWLYH DSSURDFK WR DJULFXOWXUDO
LQWHQVLÀFDWLRQ LV UHTXLUHG ,QGHHG VHYHUDO UHFHQW
75$'($1'(19,5210(175(9,(:
)LJXUH$UHSUHVHQWDWLRQRIWKH\LHOGJDSLQDJULFXOWXUHDQGWKHVWHSVQHHGHGWRFORVHWKHJDS
Biological yield potential
Actual yield
Filling the gap - Step 1
Filling the gap - Step 2+3
Crop yield (tons/ha)
10
8
Steps 2+3
6
Yield Gap
4
Step 1
2
0
Weeks
2
6
10
14
Weeks
UHYLHZV RI DJULFXOWXUH ,$$67' 5R\DO 6RFLHW\
DQGRILVVXHVUHODWLQJWRWKHUROHRIDJULFXOWXUH
LQ WKH JOREDO HQYLURQPHQW HJ +DVVDQ 6FKROHV
DQG $VK 81(3 &$:0$ KDYH
VXJJHVWHGWKDW´EXVLQHVVDVXVXDOµLVQRORQJHUWKH
DSSURSULDWH RSWLRQGXHWRWKHVFDOHRIWKHSUREOHPV
DQG WKH FRQVWUDLQWV IDFLQJ SRRU IDUPHUV :H QHHG
WR JR EDFN WR EDVLFV DQG ORRN DW WKH F\FOH RI ODQG
GHJUDGDWLRQDQGVRFLDOGHSULYDWLRQÀJXUH&OHDUO\
D IRFXV RQ FURS \LHOG LV LPSRUWDQW EXW UDWKHU
WKDQ WU\LQJ WR LQFUHDVH \LHOG SRWHQWLDO ZH QHHG WR
IRFXV RQ FORVLQJ WKH \LHOG JDS ,Q WKH ZRUVW FDVHV
IDUPHUV JURZLQJ PDL]H DUH DFKLHYLQJ RQO\ ² WRQ
SHU KHFWDUH ZKHQ WKH SRWHQWLDO LV DURXQG WRQV
SHU KHFWDUH ,Q WKLV VLWXDWLRQ FORVLQJ WKH JDS FRXOG
LQFUHDVHIRRGSURGXFWLRQE\WRIROGEXWHYHQLI
LWZHUHLQFUHDVHGE\RQO\WRIROGRQDYHUDJHWKLV
ZRXOGEHZHOORYHUWKHSHUFHQWLQFUHDVHWKDWPLJKW
EHUHTXLUHGWRIHHGWKHELOOLRQSHRSOHSUHGLFWHGWR
SRSXODWHWKHZRUOGE\DFFRUGLQJWR,)35,
7KH SULPDU\ FDXVH RI WKH \LHOG JDS LV SRRU FURS
KXVEDQGU\ ZKLFK KDV D QXPEHU RI DGYHUVH HIIHFWV
LQFOXGLQJ ORVV RI VRLO IHUWLOLW\ DQG DJURHFRV\VWHP
IXQFWLRQV VXFK DV WKH F\FOLQJ RI QXWULHQWV FDUERQ
DQG ZDWHU LPSHGLQJ WKH RSHUDWLRQ RI OLIH F\FOHV
DQG IRRG ZHEV WKDW PDLQWDLQ WKH QDWXUDO EDODQFH
EHWZHHQ RUJDQLVPV DQG UHGXFLQJ SROOLQDWLRQ DQG
VHHGGLVSHUVDO7\SLFDOO\UHGXFHGVRLOQLWURJHQLVWKH
PDMRU FRQVWUDLQW RQ FURS JURZWK LQ GHJUDGHG VRLOV
7KLV FDQ EH UHVWRUHG E\ KDUQHVVLQJ WKH FDSDFLW\ RI
FHUWDLQ OHJXPHV WR À[ DWPRVSKHULF QLWURJHQ LQ URRW
QRGXOHV FRORQL]HG E\ V\PELRWLF EDFWHULD 5KL]RELXP
VSS1XPHURXVWHFKQLTXHVKDYHEHHQGHYHORSHGWR
LQWHJUDWH DSSURSULDWH OHJXPH VSHFLHV ZLWKLQ IDUPLQJ
V\VWHPV 3UREDEO\ WKH PRVW HIIHFWLYH DQG HDVLHVW WR
DGRSWDUHKLJKGHQVLW\LPSURYHGIDOORZVZLWKVSHFLHV
VXFKDV6HVEDQLDVHVEDQDQG7HSKURVLDYRJHOLLRUUHOD\
FURSSLQJZLWK*OLULFLGLDVHSLXP&RRSHUHWDO
%XUHVK DQG &RRSHU &XOWLYDWLQJ OHJXPLQRXV
FURSVVXFKDVEHDQVDQGSHDQXWVFDQDOVRFRQWULEXWH
WR WKLV SURFHVV 7RJHWKHU WKH OHJXPHV FDQ LQFUHDVH
VRLOQLWURJHQWRDOHYHOWKDWZLOOSURGXFHPDL]H\LHOGV
RI²WRQVSHUKHFWDUHZLWKLQ²\HDUV7KLVZRXOG
KHOS QDUURZ WKH \LHOG JDS DQG JUHDWO\ LQFUHDVH IRRG
VHFXULW\ +RZHYHU LW ZRXOG QRW DGGUHVV WKH SUREOHP
RIWKHORZOHYHOVRIRWKHUVRLOQXWULHQWVZKLFKPHDQV
WKDW WKH FRPSOHWH FORVXUH RI WKH \LHOG JDS ZRXOG
UHTXLUH DQRWKHU DSSURDFK LQYROYLQJ WKH SURYLVLRQ
RI LQRUJDQLF QXWULHQWV VXFK DV URFN SKRVSKDWH RU
FKHPLFDOIHUWLOL]HUVZKLFKKDYHWREHSXUFKDVHG7KLV
QHFHVVLWDWHVLQFRPHJHQHUDWLRQ
+RZHYHU EHIRUH DGGUHVVLQJ WKH QHHG IRU LQFRPH LW
LVQHFHVVDU\WRÀQGZD\VRIUHVWRULQJDJURHFRV\VWHP
IXQFWLRQ 7KH OHJXPHV ZLOO VWDUW WKLV SURFHVV )RU
H[DPSOHRQHRIWKHPRUHGDPDJLQJZHHGVRIFHUHDO
FURSV VXFK DV PDL]H PLOOHW DQG VRUJKXP LV 6WULJD
KHUPRQWKLFD ,W LV D URRW SDUDVLWH RQ WKHVH FHUHDOV
DQGLWVVHHGVJHUPLQDWHLQUHVSRQVHWRURRWH[XGDWHV
IURP WKH \RXQJ FHUHDO SODQWV ,QWHUHVWLQJO\ KRZHYHU
VLQFH 6HVEDQLD VHVEDQ DQG WKH IRGGHU OHJXPHV
'HVPRQLXP LQWRUWXP DQG ' XQFLQDWXP DOVR WULJJHU
6WULJD JHUPLQDWLRQ WKH\ FDQ EH XVHG WR SURPRWH
VXLFLGHJHUPLQDWLRQLQWKHDEVHQFHRIWKHFHUHDOKRVWV
.KDQ HW DO 'HVPRGLXP VSS DOVR DFWV DV D
UHSHOOHQWWRLQVHFWSHVWVRIFHUHDOVVXFKDVWKHVWHP
ERUHUV %XVVHROD IXVFD DQG &KLOR SDUWHOOXV /LNHZLVH
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
)LJXUH3URFHGXUHVIRUFORVLQJWKH\LHOGJDS
External factors (e.g. entrepreneurs)
Desire for security and wealth
Deforestation
Overgrazing
Overfishing
Unsustainable use
of soils and water
Regulated by
social organizations
at national and
international level
Ecosystem degradation
and soil erosion
Breakdown of nutrient
cycling and loss of
soil fertility/structure
Loss of bio diversity
Loss of income
from food crops
and wildlife
DIVERSIFY
STEP 1
Breakdown of ecosystem function
Increased use of
agrichemicals
Loss of crop yields
STEPs
2+3
Increased
vulnerability to HIV/AIDS
Other external factors
(e.g. war and disasters)
Focus of AF
Hunger and
malnutrition
Increased
Pollution of
costs
waterways,
aquifers and wetland
GENERATE INCOME
Increased
health risks
Declining livelihoods,
leading to poverty and social deprivation
Regulated by social organizations at the
community level
VLPSOH DJURHFRORJLFDO EHQHÀWV FDQ EH DWWDLQHG E\
SODQWLQJ1DSLHUJUDVV3HQQLVHWXPSXUSXUHXPDVDQ
LQWHUFURS RU DURXQG VPDOO ÀHOGV DV WKH\ DWWUDFW WKH
SHVWVDZD\IURPWKHFURSV.KDQHWDO
7KHWZRLQWHUYHQWLRQVGHVFULEHGDERYHFDQWKHUHIRUH
EH XVHG WR UHVWRUH VRLO IHUWLOLW\ DQG LQLWLDWH DQ
DJURHFRORJLFDO VXFFHVVLRQ WKHUHE\ UHKDELOLWDWLQJ
IDUPODQGDQGUHYHUVLQJVRPHRIWKHODQGGHJUDGDWLRQ
SURFHVVHV7KLVPD\EHFRQVLGHUHGDVWKHÀUVWVWHS
WRZDUGVFORVLQJWKH\LHOGJDSÀJXUH
7KHQH[WVWHSWRDIXOO\IXQFWLRQDODQGPRUHSURGXFWLYH
DJURHFRV\VWHPLQYROYHVWKHLQWHJUDWLRQRIWUHHVZLWKLQ
WKHIDUPLQJV\VWHPV6RPHWUHHVDUHRIFRXUVHFDVK
FURSVVXFKDVFRIIHHFRFRDDQGUXEEHUZKLFKLQWKH
SDVW ZHUH HLWKHU JURZQ DV ODUJHVFDOH PRQRFXOWXUDO
SODQWDWLRQV RU DV D WZR VSHFLHV PL[ VXFK DV FRFRD
XQGHU WKH VKDGH RI FRFRQXWV RU *OLULFLGLXP VHSLXP
,QFUHDVLQJO\KRZHYHUWKH\DUHEHFRPLQJVPDOOKROGHU
FURSV JURZQ LQ PXFK PRUH GLYHUVH VSHFLHV PL[LQJ
VXFK DV EDQDQDV ZLWK IUXLWV WUHHV OLNH PDQJR
DYRFDGR DQG ORFDO LQGLJHQRXV WUHHV WKDW SURGXFH
PDUNHWDEOHSURGXFWV/HDNH\DQG7FKRXQGMHX
7KLVSUDFWLFHLVZHOOGHYHORSHGLQ/DWLQ$PHULFDDQG
$VLD DQG LV EHFRPLQJ ZLGHO\ UHFRJQL]HG DV D ZD\
WR UHVWRUH WKH ELRGLYHUVLW\ QRUPDOO\ IRXQG LQ QDWXUDO
IRUHVWV 6FKURWK HW DO &ORXJK HW DO &HUWDLQO\ WKH UHSODFHPHQW RI VKDGH WUHHV ZLWK WUHHV
75$'($1'(19,5210(175(9,(:
DFKLHYHV VHYHUDO LPSRUWDQW RXWFRPHV ,W SURWHFWV
VORSLQJODQGIURPHURVLRQLPSURYHVZDWHULQÀOWUDWLRQ
LQWR WKH VRLO VHTXHVWHUV FDUERQ DQG VR PLWLJDWHV
FOLPDWH FKDQJH JHQHUDWHV LQFRPH HQKDQFHV
ELRGLYHUVLW\ DQG SURPRWHV DJURHFRV\VWHP IXQFWLRQV
,QRWKHUZRUGVLWSHUIRUPVDOOWKHIXQFWLRQVWKDWODUJH
VFDOH PRQRFXOWXUHV IDLO WR GR DQG WKH OLYHOLKRRGV RI
WKHIDUPHUVDUHIDUEHWWHUWKDQWKRVHORFNHGLQSRYHUW\
GXH WR JURZLQJ D IDLOHG PDL]H FURS LQ $IULFD IRU
LQVWDQFH7KLVDSSURDFKWRDJULFXOWXUHDFKLHYHVKLJK
FURS\LHOGVWKDWDUHFORVHWRWKHELRORJLFDOSRWHQWLDORI
WKHEHVWDQGPRVWIHUWLOHODQGDQGLWJHQHUDWHVLQFRPH
IURPWUHHFURSVRQWKHPRUHPDUJLQDOODQGFUHDWLQJD
ODQGXVHPRVDLFZLWKPDQ\HQYLURQPHQWDOO\EHQHÀFLDO
LPSDFWV SKRWRJUDSK IURP 9LHWQDP ,PSRUWDQWO\
WKHUH LV DOVR VRPH HYLGHQFH WKDW FRPSOH[ SHUHQQLDO
YHJHWDWLRQVXFKDVDQDWXUDOIRUHVWRUDQDJURIRUHVW
LVEHWWHUWKDQDKHUEDFHRXVFURSDWUHF\FOLQJPRLVWXUH
WRWKHDWPRVSKHUHWKDWFDQEHDGYHFWHGGRZQZLQGWR
IDOODVUDLQ7KXVDJURIRUHVWVDUHOLNHO\WREHEHQHÀFLDO
WRUDLQIHGDJULFXOWXUHLQGU\DQGGURXJKWSURQHDUHDV
RIWKHZRUOG
,QWHQVLYHULFHFXOWLYDWLRQLQWKHYDOOH\ERWWRPZLWKKLOOVLGHV
SODQWHGZLWKGLYHUVHFRPPHUFLDOO\LPSRUWDQWWUHHVIRULQFRPH
JHQHUDWLRQDQGHQYLURQPHQWDOEHQHÀWV,QGRQHVLDDORQHKDV
DERXWWKUHHPLOOLRQKHFWDUHVRIWKHVH´DJURIRUHVWVµ
WKDWDOVRSURGXFHXVHIXODQGPDUNHWDEOHSURGXFWVLVD
JRRGVWUDWHJ\IRUIDUPHUVWRHQDEOHWKHPWRPD[LPL]H
RXWSXWIURPWKHODQGDQGPLQLPL]HWKHULVNVDVVRFLDWHG
ZLWKH[FHVVLYHUHOLDQFHRQDVLQJOHFURSVSHFLHV
7KHUH KDV DOVR EHHQ DQRWKHU VLOHQW IDUPHUOHG
UHYROXWLRQLQWKHWURSLFVHVSHFLDOO\LQ6RXWK(DVW$VLD
,Q,QGRQHVLDLQSDUWLFXODUPDQ\IDUPHUVZKRXVHGWR
SUDFWLFHVKLIWLQJDJULFXOWXUHKDYHUHSODFHGWKHQDWXUDO
IDOORZZLWKDFRPPHUFLDOIDOORZDJURIRUHVWEDVHGRQ
WUHHFURSV7KH\JURZULFHLQWKHYDOOH\ÁRRUVDQGSODQW
D ZLGH UDQJH RI XVHIXO DQG FRPPHUFLDOO\ LPSRUWDQW
WUHH VSHFLHV DPRQJ WKH RWKHU IRRG FURSV ZKLFK
WKH\ KDYH SODQWHG RQ WKH YDOOH\ VORSHV 0LFKRQ DQG
GH )RUHVWD 7KHVH WUHHV EHFRPH SURGXFWLYH
VXFFHVVLYHO\ LQ ODWHU \HDUV FUHDWLQJ D FRQWLQXRXV
VXSSO\ RI PDUNHWDEOH SURGXFH HJ FLQQDPRQ WXQJ
QXW GDPDU GXNX DQG UXEEHU IRU VHYHUDO GHFDGHV
RIWHQ HQGLQJ LQ D WLPEHU FURS 7KLV GLYHUVLÀFDWLRQ RI
WKH IDUPLQJ V\VWHP ZLWK SHUHQQLDO FURSV WKHUHIRUH
,Q D IXUWKHU LQLWLDWLYH RYHU WKH SDVW \HDUV DJUR
IRUHVWHUVKDYHVRXJKWWRWDNHWKLVVWUDWHJ\WRDKLJKHU
OHYHOE\VWDUWLQJWRGRPHVWLFDWHVRPHRIWKHYHU\ZLGH
UDQJH RI WUHH VSHFLHV ZKLFK KDYH EHHQ WKH VRXUFH
RI ORFDOO\ LPSRUWDQW IRRG DQG QRQIRRG SURGXFWV
WUDGLWLRQDOO\ JDWKHUHG IURP WKH IRUHVW /HDNH\ HW DO
/HDNH\HWDO7KHDSSURDFKKDVEHHQWR
DSSO\ZHOONQRZQKRUWLFXOWXUDOWHFKQLTXHVRIYHJHWDWLYH
SURSDJDWLRQ IRU FXOWLYDU GHYHORSPHQW /HDNH\ /HDNH\ DQG $NLQQLIHVL 8QFRQYHQWLRQDOO\
WKLV KDV EHHQ LPSOHPHQWHG DW WKH YLOODJH OHYHO DV D
$PXOWLIXQFWLRQDODJULFXOWXUHODQGVFDSHLQ9LHW1DPZLWK
PDQ\LQFRPHJHQHUDWLQJWUHHEDVHGSURGXFWLRQV\VWHPVRQ
KLOOVLGHVVXUURXQGLQJDQDUHDRILQWHQVLYHIRRGSURGXFWLRQRQ
WKHPRVWIHUWLOHVRLOV
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
)LJXUH,QFRPHJHQHUDWHGIURPWUHHVDOHVE\YLOODJHQXUVHULHVDVVRFLDWHGZLWKUXUDOUHVRXUFHVFHQWUHVLQQRUWKDQG
QRUWKZHVWUHJLRQVRI&DPHURRQDIWHUDQG\HDUVGROODUV
30.000
2 Years
25.000
5 Years
US$ 28.350
15.000
5.000
US$ 145
10.000
US$ 16.000
Income US$
10 Years
20.000
-
6RXUFH%DVHGRQ$VDDKHWDO
SDUWLFLSDWRU\ SURFHVV ZLWK ORFDO FRPPXQLWLHV UDWKHU
WKDQ RQ D UHVHDUFK VWDWLRQ /HDNH\ 6FKUHFNHQEHUJ
DQG7FKRXQGMHX7FKRXQGMHXHWDO$VDDK
HW DO 7KLV SDUWLFLSDWRU\ DSSURDFK KDV EHHQ
LPSOHPHQWHGWRHQVXUHWKDWWKHIDUPHUVDUHWKHLQVWDQW
EHQHÀFLDULHVRIWKHGRPHVWLFDWLRQDQGWKDWWKH\DUH
HPSRZHUHG E\ WKH GHYHORSPHQW RI WKHLU LQGLJHQRXV
DQGORFDONQRZOHGJH%HFDXVHZLOGSRSXODWLRQVRIWUHH
VSHFLHVFRQWDLQWRIROGYDULDWLRQVRIDOPRVWDQ\
WUDLWRIFRPPHUFLDOLQWHUHVW/HDNH\HWDOWKHUH
LVFRQVLGHUDEOHSRWHQWLDOIRUVXEVWDQWLDOLPSURYHPHQWV
LQ FKDUDFWHULVWLFV VXFK DV IUXLWQXW VL]H TXDOLW\ DQG
FKHPLFDO FRQWHQW 7KLV PHDQV WKDW QHZ KLJKO\
SURGXFWLYHFXOWLYDUV\LHOGLQJJRRGTXDOLW\SURGXFHDQG
WKHSURGXFWXQLIRUPLW\UHTXLUHGE\PDUNHWVDUHHDVLO\
REWDLQDEOH )XUWKHUPRUH EHFDXVH WKH PXOWLSOLFDWLRQ
SURFHVV LV LPSOHPHQWHG E\ YHJHWDWLYH SURSDJDWLRQ
EDVHG RQ PDWXUH WLVVXHV ZLWK WKH FDSDFLW\ WR ÁRZHU
DQG IUXLW WKH ORQJ XQSURGXFWLYH SHULRG XVXDOO\
DVVRFLDWHGZLWKWUHHFURSVLVFLUFXPYHQWHGDQGWUHHV
EHFRPHSURGXFWLYHLQ²\HDUV
3URRI RI FRQFHSW KDV UHFHQWO\ EHHQ GHPRQVWUDWHG
E\ WKH LPSOHPHQWDWLRQ RI D SDUWLFLSDWRU\ WUHH
GRPHVWLFDWLRQ SURMHFW LQ &DPHURRQ 7FKRXQGMHX HW
DO $VDDK HW DO ,Q \HDUV WKH
SURMHFWJUHZIURPIRXUYLOODJHVDQGDVPDOOQXPEHURI
IDUPHUV WR RYHU YLOODJHV ZLWK IDUPHUV 7KH
ÁRZ RI EHQHÀWV VXFK DV LQFRPH JHQHUDWLRQ VWDUWHG
ZLWKLQOHVVWKDQÀYH\HDUVÀJXUHDQGWKHIDUPHUV
DUH UHSRUWLQJ PDQ\ RWKHU ZD\V LQ ZKLFK WKH SURMHFW
KDV DOVR LPSURYHG WKHLU OLYHV $VDDK HW DO 3HUKDSV WKH PRVW VLJQLÀFDQW RXWFRPH KDV EHHQ WKH
IDFWWKDW\RXQJPHQDQGZRPHQLQWKHVHFRPPXQLWLHV
QRZVHHDIXWXUHIRUWKHPVHOYHVE\UHPDLQLQJZLWKLQ
WKH FRPPXQLW\ UDWKHU WKDQ PLJUDWLQJ WR ORFDO WRZQV
,Q DGGLWLRQ WKH SURFHVVLQJ DQG YDOXH DGGLWLRQ RI
SURGXFH IURP GRPHVWLFDWHG WUHHV DQG RWKHU FURSV
KDYHEHHQIRXQGWRSURYLGHRIIIDUPHPSOR\PHQWDQG
WRVWLPXODWHORFDOHQWHUSULVHDQGWUDGH
+LVWRULFDOO\ FURS GRPHVWLFDWLRQ KDV EHHQ LPSOLFDWHG
LQ WKH ULVH RI FLYLOL]DWLRQV WKDW KDYH EHFRPH VHWWOHG
SROLWLFDOO\FHQWUDOL]HGVRFLDOO\VWUDWLÀHGHFRQRPLFDOO\
FRPSOH[ DQG WHFKQRORJLFDOO\ LQQRYDWLYH VRFLHWLHV
'LDPRQG $V WKH ÀUVW ZDYH RI FURS
GRPHVWLFDWLRQ SULPDULO\ EHQHÀWHG WKH LQGXVWULDO
FRXQWULHV RI WKH QRUWKHUQ ODWLWXGHV LW VHHPV WKDW WKH
WLPHLVQRZULSHIRUDVHFRQGZDYHRIGRPHVWLFDWLRQ
WR IDYRXU WURSLFDO DQG VXEWURSLFDO FRXQWULHV ZKLFK
ZRXOG HQKDQFH VRFLDO HTXLW\ DQG HQYLURQPHQWDO
UHKDELOLWDWLRQ ZRUOGZLGH /HDNH\ /HDNH\ DQG
$VDDKIRUWKFRPLQJ
7KHFUHDWLRQRIQHZFDVKFURSVIURPWKHGRPHVWLFDWLRQ
RIWUDGLWLRQDOO\LPSRUWDQWKLJKO\QXWULWLRXVDQGXVHIXO
VSHFLHVPD\EHFRQVLGHUHGWKHVHFRQGVWHSWRZDUGV
FORVLQJWKH\LHOGJDSEHFDXVHWKH\FDQJHQHUDWHWKH
LQFRPH QHHGHG IRU WKH SXUFKDVH RI IHUWLOL]HUV DQG
RWKHU DJULFXOWXUDO LQSXWV ÀJXUH 7KH WUHHV FDQ EH
XVHG WR HQULFK DQG LPSURYH WKH IDUPLQJ V\VWHPV
ZKHWKHUE\SURYLGLQJVKDGHIRUFRPPRGLW\FURSVRU
E\IRUPLQJDJURIRUHVWVRQKLOOVLGHVRUFKDUGVÀHOGDQG
IDUPERXQGDULHVIRGGHUEDQNVRUZRRGORWV+RZHYHU
IDUPHUVKDYHPDQ\RWKHUFRPSHWLQJGHPDQGVIRUWKHLU
PRQH\ LQFOXGLQJ IRU ORFDO FHUHPRQLHV KHDOWK FDUH
FKLOGUHQ·V HGXFDWLRQ IDUP LQIUDVWUXFWXUH DQG PDUNHW
WUDQVSRUW&RQVHTXHQWO\WKHWKLUGVWHSWRFORVLQJWKH
\LHOG JDS LV WR IXUWKHU H[SDQG WKH FRPPHUFLDOL]DWLRQ
RI WKHVH QHZ WUHH FURSV WKXV FUHDWLQJ EXVLQHVV
RSSRUWXQLWLHVDQGHPSOR\PHQW
0RVW RI WKH WUDGLWLRQDOO\ LPSRUWDQW SURGXFWV IURP
WURSLFDO IRUHVWV KDYH EHHQ PDUNHWHG ORFDOO\ IRU
FHQWXULHV 2YHU WKH SDVW GHFDGH DQ LQFUHDVLQJ
QXPEHURIWKHVHKDYHEHHQSURFHVVHGDVQHZIRRGV
DQGIRUXVHLQPHGLFLQDOQXWUDFHXWLFDODQGFRVPHWLF
SURGXFWV EDVHG RQ WKH IUXLWV QXWV JXPV UHVLQV
DQG ÀEUHV 6RPH RI WKHVH KDYH HQWHUHG UHJLRQDO
DQG LQWHUQDWLRQDO PDUNHWV +RZHYHU WKH PDUNHWLQJ
DQG WUDGH RI FRPPRGLWLHV IURP WURSLFDO SURGXFHUV
KDYH RIWHQ EHHQ H[SORLWDWLYH $V D UHVXOW ZLWK WKH
HPHUJHQFHRIWKLVQHZWUDGHWKHUHKDVEHHQDSDUDOOHO
LQLWLDWLYH WR HQVXUH WKDW WKH SURGXFHUV UHFHLYH D IDLU
SULFHVHHIRUH[DPSOHWKH)DLU7UDGH)RXQGDWLRQDW
ZZZIDLUWUDGHRUJXN ,Q DGGLWLRQ ZD\V KDYH EHHQ
VRXJKW WR GHYHORS PDUNHWLQJ SDUWQHUVKLSV DLPHG DW
WKH SURSRRU FRPPHUFLDOL]DWLRQ RI WKH WUDGLWLRQDOO\
LPSRUWDQW SURGXFWV GHULYHG IURP LQGLJHQRXV WUHHV
/RPEDUGDQG/HDNH\7KHVHSDUWQHUVKLSVZRUN
WRGHYHORSWKHSURGXFWVWRDPDUNHWDEOHVWDQGDUGDQG
HVWDEOLVK VWURQJ DQG YLDEOH WUDGH DVVRFLDWLRQV WKDW
DUH IRUZDUG WKLQNLQJ DQG PDUNHW RULHQWHG 7KURXJK
WKHVHSDUWQHUVKLSVLWLVSRVVLEOHWRHVWDEOLVKORQJWHUP
UHODWLRQVKLSV DQG VXSSO\ DJUHHPHQWV ZKLFK HQVXUH
75$'($1'(19,5210(175(9,(:
WKDWWKHSURGXFHUVUHPDLQLQWKHYDOXHFKDLQ
$QRWKHU DVSHFW WKDW GHVHUYHV DWWHQWLRQ LV WKH
LPSRUWDQFH RI OLYHVWRFN LQ DJULFXOWXUH 7KH SURMHFWLRQVRIWKH,QWHUQDWLRQDO)RRG3ROLF\5HVHDUFK
,QVWLWXWH,)35,VXJJHVWWKDWSHUFHQWPRUHJUDLQ
SURGXFWLRQZLOOEHQHHGHGDQGWKDWPRUHPHDWZLOOEH
FRQVXPHG E\ WKH ZRUOG·V SRSXODWLRQ $V PHQWLRQHG
HDUOLHU JUDLQ SURGXFWLRQ FRXOG EH JUHDWO\ LQFUHDVHG
E\FORVLQJWKH\LHOGJDS5HFHQWGHYHORSPHQWVKDYH
DOVR GHPRQVWUDWHG WKDW IRGGHU WUHHV FDQ EH XVHG
WR LQFUHDVH WKH SURGXFWLYLW\ RI FDWWOH DQG JRDWV 7KH
LQWHJUDWLRQ RI IRGGHU WUHHV DQG OLYHVWRFN LQWR D IDUP
LVRQHRIWKHHOHPHQWVRIGLYHUVLÀFDWLRQWKDWFRXOGEH
SDUWRIVWHS
$QRWKHU UHFHQW GHYHORSPHQW KDV EHHQ WKH
HVWDEOLVKPHQWRISXEOLFSULYDWHSDUWQHUVKLSVEHWZHHQ
PXOWLQDWLRQDO FRPSDQLHV QDWLRQDO DQG LQWHUQDWLRQDO
UHVHDUFK WHDPV DQG ORFDO SURGXFHU FRPPXQLWLHV WR
SURPRWHDQGSURGXFHQHZSURGXFWVIRULQWHUQDWLRQDO
WUDGH ([DPSOHV LQFOXGH 'DLPOHU $* LQ %UD]LO ZKLFK
LV PDQXIDFWXULQJ FRPSRQHQWV IRU WKH PRWRU LQGXVWU\
EDVHG RQ SURGXFWV IURP DJURIRUHVWU\ V\VWHPV
SURGXFHGE\ORFDOFRPPXQLWLHV3DQLNDVZHOO
DV8QLOHYHUSOFWKDWLVGHYHORSLQJDQHZRLOFURSIRU
PDUJDULQHSURGXFWLRQZLWKFRPPXQLWLHVLQ*KDQDDQG
WKH8QLWHG5HSXEOLFRI7DQ]DQLDXVLQJNHUQHORLOIURP
$OODQEODFNLDVSS-DPQDGDVVHWDO
$OO RI WKHVH GHYHORSPHQWV RIIHU D QHZ DSSURDFK WR
DJULFXOWXUHGHOLYHUHGE\DJURIRUHVWU\SUDFWLFHV/HDNH\
ZKLFK LV PRUH VXVWDLQDEOH ² HQYLURQPHQWDOO\
VRFLDOO\DQGHFRQRPLFDOO\²WKDQFXUUHQWFRQYHQWLRQDO
DSSURDFKHV 7KLV PRGHO FRQIRUPV WR WKH FRQFHSWV
RI PXOWLIXQFWLRQDO DJULFXOWXUH SURPRWHG E\ WKH
,QWHUQDWLRQDO $VVHVVPHQW RI $JULFXOWXUDO .QRZOHGJH
6FLHQFH DQG 7HFKQRORJ\ IRU 'HYHORSPHQW ,$$67'
ZKLFKZDVUDWLÀHGE\RYHUFRXQWULHVLQ
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
1//'06#4;U&#26+0)61.+/#6'*#0)'#0&/2418+0)
175'*1.&
11&'%74+6;+0(4+%#*417)*
)41(14'564;U1/''55105
41/6*'#*'.
&KULV5HLM
)DFLOLWDWRU$IULFDQ5HJUHHQLQJ,QLWLDWLYHV&HQWUHIRU,QWHUQDWLRQDO&RRSHUDWLRQ)UHH8QLYHUVLW\$PVWHUGDP
$EVWUDFW
7KHIXWXUHRIIDUPLQJLQ$IULFD·VGU\ODQGVDQGVXEKXPLGUHJLRQVZLOOODUJHO\GHSHQGRQWKHVXFFHVVRIDOO
VWDNHKROGHUVLQGHYHORSLQJDJURIRUHVWU\V\VWHPVWKDWDUHPDQDJHGE\IDUPHUVSURGXFHPXOWLSOHLPSDFWV
DQGGRQRWOHDGWRUHFXUUHQWFRVWVIRUJRYHUQPHQWV$VDSWO\SXWE\DIDUPHUIURP7LJUD\´7UHHVDUHRXU
EDFNERQHµ:DWHUV%D\HUDQG*HEUH0LFKDHO
0DQ\VPDOODQGELJJHUUHJUHHQLQJVXFFHVVHVFDQEHIRXQGLQ$IULFD·VGU\ODQGV7KHVHFDQEHXVHGDV
VWDUWLQJSRLQWVIRUVFDOLQJXS6FDOLQJXSFDQEHDFKLHYHGE\EXLOGLQJDJUDVVURRWVRUJDQL]DWLRQEXWLWLV
YLWDOWRGHYHORSQDWLRQDOSROLFLHVDQGOHJLVODWLRQFRQFHUQLQJODQGDQGWUHHWHQXUHZKLFKZRXOGLQGXFHPLO
OLRQVRIVPDOOVFDOHIDUPHUVLQ$IULFDWRLQYHVWLQQDWXUDOUHVRXUFHVLQJHQHUDODQGLQWUHHVLQSDUWLFXODU7KH
GHYHORSPHQWRIDJURIRUHVWU\V\VWHPVLQ1LJHUIRULQVWDQFHWRRNRIIDVVRRQDVIDUPHUVEHJDQSHUFHLYLQJ
DQH[FOXVLYHULJKWWRWKHLURQIDUPWUHHV,QSDUWVRI0DOLWKHSURFHVVEHJDQLQDIWHUDFKDQJHLQWKH
IRUHVWU\ODZDQGDIWHUIDUPHUVZHUHLQIRUPHGDERXWWKHFKDQJH
'LIIHUHQWIRUPVRIUHJUHHQLQJLQ$IULFDUHTXLUHDPL[RILQYHVWPHQWVFKDQJHVLQSROLFLHVDQGOHJLVODWLRQWKH
EXLOGLQJRIVRFLDOFDSLWDODQGRIDPRYHPHQWLQVXSSRUWRIUHJUHHQLQJDVZHOODVDFWLRQRULHQWHGUHVHDUFK
WRTXDQWLI\PXOWLSOHLPSDFWV7KLVZLOOPDNHLWSRVVLEOHWRKHOSIDUPHUVDGDSWWRFOLPDWHFKDQJHZKLOHLP
SURYLQJKRXVHKROGIRRGVHFXULW\DQGDOOHYLDWLQJUXUDOSRYHUW\+RZHYHUWKHUHLVVWLOORQHPDMRUREVWDFOH
YHU\UDSLGSRSXODWLRQJURZWK)RULQVWDQFHWKHDQQXDOGHPRJUDSKLFJURZWKUDWHVLQ1LJHUDQG0DOLDUHLQ
WKHRUGHURISHUFHQWZKLFKPHDQVWKDWWKHLUSRSXODWLRQVZLOOGRXEOHLQOHVVWKDQ\HDUV(YHQLILW
ZHUHWHFKQLFDOO\SRVVLEOHWRIHHGDUDSLGO\JURZLQJSRSXODWLRQLWZLOOEHKDUGWRFUHDWHEHWWHUOLYHOLKRRGRS
SRUWXQLWLHVIRUPRVWRIWKH\RXQJSHRSOH
$7KHPDFURFRQWH[W
0DFUR FRQGLWLRQV LQ WKH 6DKHO DQG LQ RWKHU GU\ODQGV
LQ $IULFD VHHP FKDOOHQJLQJ RYHU WKH QH[W GHFDGHV
7HPSHUDWXUHV DUH H[SHFWHG WR LQFUHDVH DQG FURS
\LHOGV WR UHPDLQ VWDEOH DW EHVW EXW PRVW OLNHO\ WKH\
ZLOOGHFOLQHGXHWRGHSOHWLRQRIVRLOIHUWLOLW\OHYHOVDQG
PRUH HUUDWLF UDLQIDOO ZKLOH WKH SRSXODWLRQ LV VHW WR
GRXEOH7KH6DKHOKDVIDFHGVLPLODUFKDOOHQJHVLQWKH
SDVWDQGKDVEHHQDEOHWRFRSHZLWKVXFKFKDQJHV
$WWKHHQGRIWKHVDQGWKHHDUO\VUDLQIDOO
VXGGHQO\ GHFOLQHG E\ DERXW SHU FHQW FDXVLQJ
ZLGHVSUHDGKXQJHUDQGKDUGVKLS$QGPDQ\UHVHDUFK
UHSRUWV DQDO\VLQJ DJULFXOWXUH DQG WKH HQYLURQPHQW LQ
WKH 6DKHO LQ WKH V ZHUH YHU\ SHVVLPLVWLF HJ
0DUFKDO 5D\QDXW 7KH\ XVHG WHUPV
VXFKDVIDLOXUHDQGEUHDNGRZQWRGHVFULEHWUHQGVLQ
DJULFXOWXUH
%'HYHORSLQJQHZDJURIRUHVWU\SDUNODQGV
WRLQWHQVLI\DJULFXOWXUH
)DUPHUV DQG SDVWRUDOLVWV LQ WKH 6DKHO QHHGHG VRPH
\HDUVWRDGDSWWRWKHORZHUUDLQIDOO5HFHQWVWXGLHVRQ
ORQJWHUP WUHQGV LQ DJULFXOWXUH DQG WKH HQYLURQPHQW
LQ WKH UHJLRQ VKRZ VRPH VXUSULVLQJ WUHQGV 5HLM
7DSSDQ DQG %HOHPYLUH %RWRQL DQG 5HLM
5HLM 7DSSDQ DQG 6PDOH 7KH ÀUVW LV
WKDW IDUPHUV LQ VHYHUDO GHQVHO\ SRSXODWHG UHJLRQV
RI 1LJHU KDYH EHHQ SURWHFWLQJ DQG PDQDJLQJ RQ
IDUP QDWXUDO UHJHQHUDWLRQ RI WUHHV DQG EXVKHV 7KLV
SURFHVV ZKLFK EHJDQ DURXQG KDV OHG WR RQ
IDUP UHJUHHQLQJ RQ DERXW PLOOLRQ KHFWDUHV ² WKH
ODUJHVW VFDOH RI HQYLURQPHQWDO WUDQVIRUPDWLRQ LQ WKH
6DKHODQGSRVVLEO\LQ$IULFD7KLVRQIDUPSURWHFWLRQ
DQGPDQDJHPHQWRIXVHIXOWUHHVVXFKDV)DLGKHUELD
DOELGD D QLWURJHQÀ[LQJ VSHFLHV WKDW LPSURYHV VRLO
75$'($1'(19,5210(175(9,(:
‡ 7KH WUHHV KHOS LQFUHDVH DJJUHJDWH DJULFXOWXUDO
SURGXFWLRQ DQG WKXV FRQWULEXWH WR UHGXFLQJ UXUDO
SRYHUW\
<RXQJKLJKGHQVLW\DJURIRUHVWU\SDUNODQGLQWKHVRXWKHUQ
=LQGHUUHJLRQ1LJHU7KHSDUNODQGLVGRPLQDWHGE\
)DLGKHUELDDOELGD
IHUWLOLW\DQGSURYLGHVIRGGHUIRUOLYHVWRFN3LOLRVWLJPD
UHWLFXODWXP IRU IRGGHU &RPEUHWXP JOXWLQRVXP IRU
ÀUHZRRG$GDQVRQLDGLJLWDWDIRUOHDYHVDQGIUXLWWKDW
SURYLGH KLJKTXDOLW\ QXWULWLRQ *XLHUD VHQHJDOHQVLV
IRU IRGGHU KDV HQDEOHG WKH IHHGLQJ RI DERXW PLOOLRQ SHRSOH 7KH DQQXDO SURGXFWLRQ YDOXH RI WKH
QHZWUHHVLVLQWKHRUGHURIDWOHDVWĄPLOOLRQDOORI
ZKLFKJRHVWRIDUPHUVQRWQHFHVVDULO\LQWKHIRUPRI
FDVKEXWLQWKHIRUPRISURGXFH
7KH GHYHORSPHQW RI QHZ DJURIRUHVWU\ V\VWHPV KDV
KDGWKHIROORZLQJLPSDFWV
‡ 7UHHVUHGXFHZLQGVSHHGDQGIDUPHUVLQGHQVHO\
SRSXODWHG SDUWV RI 1LJHU QRZ SODQW FURSV RQFH
LQVWHDG RI RU WLPHV DV WKH\ GLG \HDUV DJR
ZKHQWKHFURSVZHUHFRYHUHGE\VDQGRUGHVWUR\HG
E\VDQGEODVW
‡ 7KH VKDGH RI WKH WUHHV UHGXFHV WHPSHUDWXUH DQG
KHQFHHYDSRUDWLRQ
‡ $QXPEHURIZRRG\VSHFLHVSURGXFHIRGGHU
‡ 2WKHU VSHFLHV À[ QLWURJHQ DQG FRQWULEXWH WR VRLO
IHUWLOLW\ )RU LQVWDQFH GHSHQGLQJ RQ WKHLU DJH D
JRRGVWDQGRI)DLGKHUELDDOELGDÀ[HVXSWRNJ
RIQLWURJHQSHUKHFWDUH
‡ 6RPH WUHHV SURGXFH IUXLW DQG OHDYHV ZLWK KLJK
YLWDPLQFRQWHQWIRUKXPDQFRQVXPSWLRQ
‡ 7KH\DOVRFRQWULEXWHWRELRGLYHUVLW\
‡ 7UHHV PLWLJDWH FOLPDWH FKDQJH E\ VHTXHVWHULQJ
FDUERQ
‡ 7KH\ KHOS DGDSW WR FOLPDWH FKDQJH E\ UHGXFLQJ
ZLQGVSHHGVDQGWHPSHUDWXUHV
‡ 7KH WUHHV LPSURYH KRXVHKROG IRRG VHFXULW\
EHFDXVHWKH\FUHDWHPRUHFRPSOH[DQGSURGXFWLYH
IDUPLQJV\VWHPVWKDWDUHPRUHUHVLOLHQWWRGURXJKW
(YHQLIFURSVIDLOWUHHVSURGXFH
7KLVRQIDUPUHJUHHQLQJKDVRFFXUUHGRQO\LQUHJLRQV
ZLWKKLJKSRSXODWLRQGHQVLWLHVDQGVDQG\VRLOVZKLFK
LV QRW VXUSULVLQJ DV LQFUHDVLQJ SRSXODWLRQ LQGXFHV
IDUPHUV WR LQWHQVLI\ DJULFXOWXUH )RU IDUPHUV SURWHF
WLRQ DQG PDQDJHPHQW RI ZRRG\ VSHFLHV WKDW VSRQ
WDQHRXVO\UHJHQHUDWHRQIDUPLVWKHOHDVWFRVWO\IRUP
RIDJULFXOWXUDOLQWHQVLÀFDWLRQDVLWGRHVQRWUHTXLUHWKH
SURFXUHPHQWRIH[WHUQDOLQSXWVWKHRQO\LQYHVWPHQWLV
WKDWRIWKHLUODERXUZKLOHYLOODJHLQVWLWXWLRQVDUHUHVSRQ
VLEOHIRUWKHQHZWUHHVWRFNFDSLWDODVVHWV,WVKRXOG
EH HPSKDVL]HG WKDW WKLV UHJUHHQLQJ RFFXUV PDLQO\
RQIDUP,QUHJLRQVZLWKORZSRSXODWLRQGHQVLWLHVWKH
YHJHWDWLRQ FRQWLQXHV WR GHJUDGH DQG WKH UHPDLQLQJ
SDWFKHVRIQDWXUDOYHJHWDWLRQWHQGWREHHQFURDFKHG
XSRQDQGGHWHULRUDWH
0DQ\ H[DPSOHV RI IDUPHUPDQDJHG UHJUHHQLQJ FDQ
EHIRXQGLQRWKHU6DKHOFRXQWULHVDVZHOO)RULQVWDQFH
LWZDVUHFHQWO\GLVFRYHUHGWKDWIDUPHUVLQ0DOL·V6HQR
3ODLQV SURWHFW DQG PDQDJH QDWXUDO UHJHQHUDWLRQ RQ
DERXWKDZKHUH²SHUFHQWRIWKHWUHHV
DUH\RXQJHUWKDQ\HDUV$VHOVHZKHUHWKLVUHJLRQ
KDG D JRRG WUHH FRYHU LQ WKH V DQG V EXW
GXHWRGURXJKWVLQWKHVDQGVPXFKRIWKH
YHJHWDWLRQZDVGHVWUR\HGIRUÀHOGFXOWLYDWLRQ7KLVOHG
WR ODUJHVFDOH ZLQG DQG ZDWHU HURVLRQ DQG GHFOLQLQJ
FURS\LHOGV,QWKHVHFRQGKDOIRIWKHVDQGWKH
V IDUPHUV JRYHUQPHQWV DQG GRQRUV EHJDQ WR
UHDFWWRWKHFULVLVE\VXSSRUWLQJWKHSODQWLQJRIRQIDUP
WUHHVLQDJURZLQJQXPEHURIUHJLRQV&RQVHTXHQWO\
WKH QXPEHU RI VXFK WUHHV KDV EHHQ LQFUHDVLQJ LQ D
QXPEHURIUHJLRQVWKRXJKQRWHYHU\ZKHUH
6RPHREVHUYHUVDUJXHWKDWWKLVSURFHVVRIUHJUHHQLQJ
FDQEHDWWULEXWHGWRDQLQFUHDVHLQUDLQIDOOLQWKH6DKHO
VLQFHWKHPLGV+RZHYHUDFRPSDULVRQRIWUHH
GHQVLWLHV LQ VRXWKHUQ 1LJHU DQG QRUWKHUQ 1LJHULD
ZKLFK KDYH VLPLODU VRLOV DQG SRSXODWLRQ GHQVLWLHV
UHYHDOVWKDWRQIDUPWUHHGHQVLWLHVLQQRUWKHUQ1LJHULD
DUHPXFKORZHUWKDQLQVRXWKHUQ1LJHUGHVSLWHWKHIDFW
WKDWWKHIRUPHUKDVKLJKHUUDLQIDOO5DLQIDOOLVLPSRUWDQW
IRUUHJUHHQLQJEXWLWVHHPVWKDWKXPDQPDQDJHPHQW
LVDPRUHLPSRUWDQWGHWHUPLQLQJIDFWRUWKDQUDLQIDOO
&:DWHUKDUYHVWLQJWHFKQLTXHVWR
UHKDELOLWDWHGHJUDGHGODQG
)DUPHUV LQ WKH 6DKHO KDYH QRW RQO\ GHYHORSHG QHZ
DJURIRUHVWU\ V\VWHPV WKH\ KDYH DOVR XVHG VLPSOH
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
ZDWHU KDUYHVWLQJ WHFKQLTXHV WR UHKDELOLWDWH VWURQJO\
GHJUDGHG ODQG ,Q WKH HDUO\ V WKH QRUWKHUQ SDUW
RI WKH FHQWUDO SODWHDX RI %XUNLQD )DVR ZDV D NLQG
RI ODERUDWRU\ IRU WHVWLQJ GLIIHUHQW ZDWHU KDUYHVWLQJ
WHFKQLTXHVVXFKDVLPSURYHGWUDGLWLRQDOSODQWLQJSLWV
DOVRNQRZQDV]DwDQGFRQWRXUVWRQHEXQGVZKLFK
VORZGRZQUDLQIDOOUXQRIIDQGLQGXFHLWWRLQÀOWUDWHLQWR
WKH VRLO $V D UHVXOW PRUH ZDWHU EHFRPHV DYDLODEOH
IRUSODQWJURZWKDQGVRPHZDWHUKHOSVUHFKDUJHORFDO
JURXQGZDWHU OHYHOV 7UHH GHQVLWLHV DQG WKH GLYHUVLW\
RI ZRRG\ VSHFLHV RQ UHKDELOLWDWHG ODQG DUH XVXDOO\
KLJKHUWKDQRQDGMDFHQWODQG7KLVLVEHFDXVHZKHUH
IDUPHUV LQYHVW LQ ZDWHU KDUYHVWLQJ WHFKQLTXHV WKH\
DOPRVW DOZD\V DOVR LQYHVW LQ LPSURYHG VRLO IHUWLOLW\
PDQDJHPHQW 7KH PDQXUH RU FRPSRVW WKH\ XVH
FRQWDLQV VHHGV RI WUHHV DQG EXVKHV RQ ZKLFK WKHLU
OLYHVWRFN EURZVH ,I IDUPHUV GHFLGH WR SURWHFW DQG
PDQDJHWKH\RXQJWUHHVZKLFKHPHUJHWRJHWKHUZLWK
WKHLUFURSVWKH\FUHDWHDQHZDJURIRUHVWU\V\VWHPLQ
WKHSURFHVV7KHVFDOHRIODQGUHKDELOLWDWLRQLQ1LJHU
DQG%XUNLQD)DVRVLQFHWKHHQGRIWKHVLVLQWKH
RUGHURIKD/DQGWKDWXVHGWREHEDUUHQDQG
GHJUDGHG KDV EHFRPH SURGXFWLYH &URS \LHOGV YDU\
IURPDIHZKXQGUHGNJKDLQ\HDUVRISRRUUDLQIDOOWR
XSWR²WRQVKDLQ\HDUVRIQRUPDORUJRRGUDLQIDOO
7KH\LHOGOHYHOVDUHQRWRQO\GHWHUPLQHGE\UDLQIDOOEXW
DOVR E\ WKH TXDQWLW\ DQG TXDOLW\ RI RUJDQLF IHUWLOL]HUV
XVHG+DUGO\DQ\LQRUJDQLFIHUWLOL]HUVDUHXVHG/DQG
UHKDELOLWDWLRQ RQ WKH FHQWUDO SODWHDX RI %XUNLQD )DVR
IHHGVDQDGGLWLRQDOSHRSOH
UHJLRQ WR OHDUQ DERXW VRLO IHUWLOLW\ PDQDJHPHQW SUDF
WLFHV
7KH TXHVWLRQ LV XQGHU ZKDW FRQGLWLRQV FDQ D UDSLG
H[SDQVLRQ RI IDUPHUPDQDJHG UHJUHHQLQJ EH
H[SHFWHG" %DVHG RQ H[SHULHQFHV LQ 1LJHU DQG 0DOL
UDSLG H[SDQVLRQ FDQ EH FDWDO\VHG LI WKH IROORZLQJ
FRQGLWLRQVH[LVWLKLJKSRSXODWLRQGHQVLW\EHFDXVH
WKLV LQGXFHV UHVRXUFH XVHUV WR LQWHQVLI\ DJULFXOWXUH
LLVDQG\VRLOVDVWKHVHFDQHDVLO\EHSHQHWUDWHGE\
URRWVLLLFXUUHQWORZRQIDUPWUHHGHQVLWLHVDQGLY
HQDEOLQJSROLFLHVDQGOHJLVODWLRQ)DUPHUVZLOOEHPRUH
OLNHO\WRLQYHVWLQWUHHVLIWKH\DUHJLYHQFOHDURZQHUVKLS
ULJKWV WR WKHLU WUHHV ,Q DOO WUHHV LQ 1LJHU ZHUH
RZQHG E\ WKH 6WDWH EXW LQ WKH SHUFHSWLRQ RI
IDUPHUV LV WKDW WKH\ KDYH RZQHUVKLS RI WKHLU RQIDUP
WUHHV ,W LV YLWDO WKDW VXFK SHUFHSWLRQV DUH VXSSRUWHG
E\IRUHVWU\ODZV
(5HJUHHQLQJLQWKH+RUQRI$IULFD
'7KHUROHRIH[WHUQDOLQWHUYHQWLRQVDQG
WKHSRWHQWLDOIRUVFDOLQJXSIDUPHU
PDQDJHGUHJUHHQLQJ
.HQ\DLVWKHRQO\FRXQWU\LQ$IULFDDQGSRVVLEO\LQWKH
ZRUOGLQZKLFKWKHQHZFRQVWLWXWLRQREOLJHVIDUPHUV
WR JURZ WUHHV RQ SHU FHQW RI WKHLU ODQG 5HOHYDQW
PLQLVWULHVDUHFXUUHQWO\GLVFXVVLQJKRZWKLVFRXOGEH
LPSOHPHQWHG 0DQ\ IDUPHUV LQ WKH IHUWLOH KLJKODQGV
DOUHDG\ KDYH SHU FHQW RI WKHLU ODQG XQGHU WUHHV
*UHYLOOHDUREXVWDEXWWKLVLVQRWWKHFDVHLQ.HQ\D·V
DULG DQG VHPLDULG ODQGV 7UHH SODQWLQJ LQ GU\ODQGV
DFURVV $IULFD WHQGV WR KDYH D GLVPDO WUDFN UHFRUG
ZLWK VXUYLYDO UDWHV XVXDOO\ UDQJLQJ EHWZHHQ RQO\ DQG SHU FHQW 7KH SURWHFWLRQ DQG PDQDJHPHQW
RIRQIDUPQDWXUDOUHJHQHUDWLRQLQGU\ODQGVLQFOXGLQJ
LQ.HQ\D·VGU\ODQGVZLOOKHOSLQFUHDVHWKHQXPEHURI
RQIDUPWUHHV
([WHUQDO LQWHUYHQWLRQV KDYH KHOSHG FDWDO\VH SURF
HVVHVRIUHJUHHQLQJDVLQWKH0DUDGL5HJLRQLQ1L
JHULQDURXQGE\7RQ\5LQDXGRZKRZRUNHGIRU
DQ 1*2 FDOOHG 6HUYLQJ,Q0LVVLRQ 7RXJLDQL *XHUR
DQG5LQDXGR2WKHU1*2VDVZHOODVDQ,)$'
IXQGHG SURMHFW KDYH DOVR VXSSRUWHG WKH VSUHDGLQJ
RIIDUPHUPDQDJHGUHJUHHQLQJDQGRWKHUEHVWSUDF
WLFHV LQ QDWXUDO UHVRXUFH PDQDJHPHQW E\ RUJDQL]LQJ
IDUPHUWRIDUPHUVWXG\YLVLWV'XULQJWKHVHYLVLWVIDUP
HUVPHQDQGZRPHQZLWKH[SHULHQFHLQVSHFLÀFUH
JUHHQLQJWHFKQLTXHVDUHJLYHQDQRSSRUWXQLW\WRGLV
FXVV WKHVH ZLWK RWKHU IDUPHUV ZRUNLQJ XQGHU VLPLODU
DJURHFRORJLFDOFRQGLWLRQV)RULQVWDQFHIDUPHUVIURP
%XUNLQD)DVRKDYHYLVLWHGWKHODUJHVFDOHRQIDUPUH
JUHHQLQJLQ0DOL·V6HQR3ODLQVDQGIDUPHUVIURPWKH
6HQR3ODLQVKDYHYLVLWHGIDUPHUVLQ%XUNLQD·V<DWHQJD
(YHQ FDVXDO REVHUYHUV WUDYHOOLQJ WR 7LJUD\ (WKLRSLD
ZLOO EH VWUXFN E\ WKH VFDOH RI QDWXUDO UHJHQHUDWLRQ LQ
SDUWV RI WKLV UHJLRQ ,W LV QRW HDV\ WR ÀQG GDWD DERXW
WKH VFDOH RI UHJUHHQLQJ EXW LW FRYHUV DW OHDVW RQH
PLOOLRQKHFWDUHV0RVWRIWKHUHJUHHQLQJKDVRFFXUUHG
LQ ZKDW DUH XVXDOO\ FDOOHG HQFORVXUHV ZKLFK DUH
GHJUDGHGODQGVVHWDVLGHIRUUHKDELOLWDWLRQ$QXPEHU
RIDFWLYLWLHVDUHFRPELQHGLQWKHVHHQFORVXUHVZDWHU
KDUYHVWLQJWHFKQLTXHVWRJHWPRUHZDWHULQWRWKHVRLO
QDWXUDO UHJHQHUDWLRQ DQG VRPH HQULFKPHQW SODQWLQJ
XVXDOO\ZLWKH[RWLFVSHFLHV)RULQVWDQFHLQWKHYDOOH\
RI$EUDKD$WVEDKDVXFKDFWLYLWLHVOHGWRDQLQFUHDVH
LQZDWHUOHYHOVLQWKHYDOOH\ZKLFKHQDEOHGWKHGLJJLQJ
RI VHYHUDO KXQGUHG VKDOORZ ZHOOV ,Q HYHQ
ZKHQ UDLQIDOO ZDV YHU\ ORZ DQG FHUHDO FRSV IDLOHG
PDQ\ IDPLOLHV PDQDJHG WR FRSH EHWWHU ZLWK GURXJKW
75$'($1'(19,5210(175(9,(:
$QHQFORVXUHDQGQDWXUDOUHJHQHUDWLRQLQWKH7LJUD\UHJLRQ
(WKLRSLD
$GHQVHVWDQGRI\RXQJ&RPEUHWXPJOXWLQRVXPWUHHV
RQ0DOL·V6HQR3ODLQVDQQXDOO\SURGXFHVWRQVRIOLWWHUSHU
KHFWDUH0DUFK
EHFDXVH WKH\ ZHUH DEOH WR LUULJDWH IUXLW WUHHV DV ZHOO
DV WKH YHJHWDEOH JDUGHQV DURXQG WKH ZHOOV :KDW
KDV EHHQ DFKLHYHGLQ SDUWV RI 7LJUD\ VLQFH WKHHDUO\
V XQGHU DGYHUVH FRQGLWLRQV LV DQRWKHU RI WKRVH
UHJUHHQLQJVXFFHVVHVLQ$IULFD·VGU\ODQGVWKDWKDYH
ODUJHO\JRQHXQQRWLFHG
OLPLWHG ÀQDQFLDO UHVRXUFHV EXW ZDQW WR LQWHQVLI\ WKHLU
DJULFXOWXUDO SURGXFWLRQ KDYH RQH PDMRU ORZFRVW
RSWLRQ ZKLFK LV WR LQFUHDVH WKH QXPEHU RI WUHHV
6RPHGU\ODQGVLQ$IULFDVWLOOVXIIHUIURPWKHOHJDF\RI
VXEVLGL]HG PHFKDQL]DWLRQ RI WKH V DQG V
ZKLFKVWLPXODWHGWKHUHPRYDORIRQIDUPWUHHV(YHQ
WRGD\PHFKDQL]DWLRQDQGODUJHVFDOHIDUPVWHQGWREH
UHJDUGHGE\PDQ\SROLF\PDNHUVDVWKHZD\IRUZDUG
GHVSLWHWKHFRQVLGHUDEOHGDPDJHLWRIWHQGRHVWRWKH
VRLOVDVLOOXVWUDWHGE\WKHSLFWXUHEHORZ
)$*UHHQ5HYROXWLRQLQ$IULFDRUDQRWKHU
NLQGRIJUHHQUHYROXWLRQ"
7KHFXUUHQWWKLQNLQJDERXWD*UHHQ5HYROXWLRQLQ$I
ULFDLQYROYHVLQFUHDVLQJWKHXVHRIFKHPLFDOIHUWLOL]HUV
DQGLPSURYHGVHHGVH[SDQVLRQRILUULJDWLRQPHFKD
QL]DWLRQDQGLPSURYLQJPDUNHWDFFHVV+RZHYHUWKH
FRVWVRIFKHPLFDOIHUWLOL]HUVDUHKLJKDQGWKHLUXVHLQ
GU\ODQGVLVQRWDOZD\VHIÀFLHQWDVWKHVRLO·VFRQWHQWRI
RUJDQLFPDWWHULVORZ7KHFKDOOHQJHLVWRÀUVWLQFUHDVH
WKHRUJDQLFPDWWHUDQGWKHPRVWHIÀFLHQWZD\RIGR
LQJ VR LV LQ PDQ\ FDVHV E\ LQFUHDVLQJ WKH QXPEHU
RIRQIDUPWUHHV7UHHVFDQSURGXFHVLJQLÀFDQWTXDQ
WLWLHV RI OLWWHU ZKLFK KHOSV PDLQWDLQ RU LPSURYH VRLO
RUJDQLF PDWWHU FRQWHQW DV LOOXVWUDWHG E\ WKH SLFWXUH
DERYH)DUPHUVSUXQHWKHWUHHVHDUO\LQWKHUDLQ\VHD
VRQZKLFKVXSSOLHVÀUHZRRGIRUFRRNLQJDQGUHGXFHV
FRPSHWLWLRQ ZLWK FURSV 0RUHRYHU WKH WUHHV SURYLGH
GLVSHUVHG VKDGH WR WKH FURSV ZKLFK SURWHFWV WKHP
SDUW RI WKH GD\ DJDLQVW WKH VXQ )DUPHUV OHDYH WKH
SUXQHGEUDQFKHVRQWKHODQGXQWLOWKHOHDYHVDUHVXI
ÀFLHQWO\GU\DIWHUZKLFKWKHEUDQFKHVDUHFROOHFWHGIRU
ÀUHZRRGZKLOHWKHOHDYHVDUHOHIWEHKLQGRQWKHODQG
)DUPHUV ZKR KDYH PDQDJHG WR LQFUHDVH WKH VRLO·V
FRQWHQW RI RUJDQLF PDWWHU ZRXOG EHQHÀW JUHDWO\ IURP
VPDOOGRVHVRILQRUJDQLFQLWURJHQ1IHUWLOL]HU6PDOO
VFDOH IDUPHUV LQ $IULFD DQG HOVHZKHUH ZKR KDYH
$ODUJHPHFKDQL]HGFRPPHUFLDOIDUPLQ(WKLRSLD·V5LIW9DOOH\
FORVHWRWKHWRZQRI+DZDVVZLWKDWUDFWRUSORXJKLQJWKH
ODQGWRSULJKW7KHODQGGRHVQRWKDYHDVLQJOHWUHHRQLWWR
SURWHFWLWDJDLQVWWKHVXQDQGZLQG7KLVÀHOGORVHVWRQVRI
WRSVRLOHYHU\\HDUGXHWRZLQGDQGZDWHUHURVLRQ
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
1//'06#4;U'0'6+%0)+0''4+0)#0&+16'%*01.1);(14
11&
'%74+6;#0&(14.+/#6'*#0)'+6+)#6+10#0&
&#26#6+10U16'06+#.#0&+5-5
-DFN$+HLQHPDQQ
&HQWUHIRU,QWHJUDWHG5HVHDUFKLQ%LRVDIHW\,1%,DQG6FKRRORI%LRORJLFDO6FLHQFHV8QLYHUVLW\RI&DQWHUEXU\
&KULVWFKXUFK1HZ=HDODQG
$EVWUDFW
:RUOGKXQJHULVDPXOWLIDFHWHGSUREOHPWKDWFDQQRWEHVROYHGE\WHFKQRORJLFDOFKDQJHVDORQH
,QGXVWULDODJULFXOWXUHLVXQVXVWDLQDEOHDQGWHFKQRORJLFDODGMXVWPHQWVEDVHGRQJHQHWLFHQJLQHHULQJKDYH
QRWEHHQDEOHWRDFKLHYHWKHUHOHYDQW0LOOHQQLXP'HYHORSPHQW*RDOVLQVWHDGWKH\KDYHLQWURGXFHGSURG
XFWV WKDW UHVWULFW IDUPHUEDVHG LQQRYDWLRQ LQ VLWX FRQVHUYDWLRQ DQG DFFHVV WR WKH EHVW ORFDOO\ DGDSWHG
JHUPSODVP
$OWHUQDWLYHDJULFXOWXUDOPRGHOVVXFKDVDJURHFRORJ\GHPRQVWUDWHSRWHQWLDOWRUHGXFHSRYHUW\LQFUHDVH
IRRGVHFXULW\DQGUHGXFHDJULFXOWXUH·VHQYLURQPHQWDOIRRWSULQWEHFDXVHWKH\LQFUHDVHDJURHFRV\VWHPUHVLO
LHQFHORZHUH[WHUQDOLQSXWVERRVWIDUPHUV·LQFRPHVDQGDUHEDVHGRQWHFKQRORJLHVWKDWIRUWKHPRVWSDUW
FDQEHXQGHUVWRRGLPSOHPHQWHGDQGIXUWKHUPRGLÀHGE\SRRUDQGVXEVLVWHQFHIDUPHUV
*OREDO IRRG SURGXFWLRQ LV LQFUHDVLQJ IDVWHU WKDQ
GHPDQG ,$$67' $VLGH IURP SULFH VSLNHV LQ
DQG IRRG SULFHV KDYH EHHQ DW RQH
KXQGUHG\HDUORZV1HOOHPDQQHWDO'HVSLWH
WKLVELOOLRQVRISHRSOHDUHPDOQRXULVKHGDQGDELOOLRQ
DUH VWDUYLQJ +RIIPDQQ .KDQ DQG +DQMUD
&XUUHQWDJULFXOWXUDOSUDFWLFHVLQFOXGLQJWKHKDUYHVWLQJ
RI QDWXUDO UHVRXUFHV VXFK DV RFHDQ ÀVKHULHV DUH
KDYLQJ HQRUPRXV DQG XQVXVWDLQDEOH HQYLURQPHQWDO
LPSDFWV.KDQDQG+DQMUD5LYHUD)HUUH
$QG LQFUHDVHG DJULFXOWXUDO SURGXFWLRQ LV SXWWLQJ
SUHVVXUH RQ HYHUVKULQNLQJ HFRV\VWHP VHUYLFHV
'DLO\HWDO,$$67'7KHVHVHUYLFHVDUH
QHHGHGWRPDLQWDLQWKHSURGXFWLYLW\RIODQGDVZHOODV
IUHVKDQGVDOWZDWHUXVHGWRSURGXFHIRRG0($
7LOPDQHWDO7KHXQIRUWXQDWHIHHGEDFNF\FOHLV
WKDWDVDJULFXOWXUHH[SDQGVLQWRHYHUPRUHPDUJLQDOO\
SURGXFWLYHHFRV\VWHPVLWVLPSDFWRQFOLPDWHFKDQJH
JURZV1HOOHPDQQHWDO
$+XQJHULVDFKRLFH
7KH FXUUHQW IDLOXUHV WR IHHG WKH ZRUOG DUH QRW GXH
WR OLPLWDWLRQV RI WHFKQRORJ\ EXW WR VRFLDO FKRLFHV
+HLQHPDQQ,$$67'.LHUVHWDO
,PSRUWDQWO\ WKHVH FKRLFHV XQGHUPLQH WKH DYDLODELOLW\
RI EDODQFHG GLHWV LQ DUHDV ZKHUH KXQJHU DQG
PDOQXWULWLRQDUHHQGHPLF1RUG
7KHFRVWRIIRRGDQGWKHHQYLURQPHQWDOFRVWRIIRRG
SURGXFWLRQ FRXOG EH GUDPDWLFDOO\ UHGXFHG MXVW E\
FXWWLQJ IRRG ZDVWH $FFRUGLQJ WR 1HOOHPDQQ HW DO
´>'@HYHORSLQJ DOWHUQDWLYHV WR WKH XVH RI
FHUHDOLQDQLPDOIHHGVXFKDVE\UHF\FOLQJZDVWHDQG
XVLQJÀVKGLVFDUGVFRXOGVXVWDLQWKHHQHUJ\GHPDQG
IRU WKH HQWLUH SURMHFWHG SRSXODWLRQ JURZWK RI RYHU ELOOLRQSHRSOHµE\6RPHRIWKLVZDVWHIURPIDUP
WRIRUNFRXOGEHUHGXFHGE\WHFKQRORJLFDODGYDQFHV
DVZHOODVE\FXWWLQJFRQVXPHUUHMHFWLRQEHIRUHDQG
DIWHU SXUFKDVH EXW PRVWO\ LW FRXOG EH RYHUFRPH E\
D FKDQJH LQ VRFLDO SROLF\ DQG DWWLWXGHV HVSHFLDOO\
DPRQJ FRQVXPHUV LQ GHYHORSHG FRXQWULHV ZKR
ZDVWH XS WR WLPHV WKH DPRXQW RI IRRG ZDVWHG LQ
GHYHORSLQJFRXQWULHV*XVWDYVVRQHWDO
'HPDQG IRU IRRG DORQH LV QRW WKH RQO\ FDXVH RI
DJULFXOWXUH·VJURZLQJIRRWSULQW0DQ\FRXQWULHVHYHQ
WKRVH H[SHULHQFLQJ IDPLQH UHO\ RQ WKH H[SRUW RI
IRRG WR JHQHUDWH LQFRPH 9DQGHUPHHU DQG 3HIHFWR
,Q UHFHQW GHFDGHV ODUJHVFDOH FRQYHUVLRQV
RI WKH DJURHFRV\VWHP LQ VRPH FRXQWULHV KDYH EHHQ
FRUUHODWHGZLWKDQLQFUHDVHLQIRRGLQVHFXULW\PRWLYDWHG
E\WKHSXVKWRSURGXFHPRUHH[SRUWFRPPRGLWLHVDW
WKH H[SHQVH RI IRRGV RI KLJKHU QXWULWLRQDO YDOXH IRU
75$'($1'(19,5210(175(9,(:
7DEOH&KDQJHVLQIRRGVHFXULW\LQ$UJHQWLQD
)RRGVXSSO\IRUKXPDQ
FRQVXPSWLRQ
SHUSHUVRQGD\
'LHWDU\HQHUJ\VXSSO\NFDO
7RWDOSURWHLQLQWDNHJUDPV
$QLPDOSURWHLQJUDPV
)DWJUDPV
²
²
D
²
E
²
F
²WR ²WR ²WR
²
² ²
G
G
G
6RXUFH%DVHGRQGDWDIURP)$267$7
1RWHVD3HULRGRIÀUVWLQWURGXFWLRQRIFRPPHUFLDO*0SODQWVLQGXVWU\ÀJXUHVUHSRUWPLOOLRQKHFWDUHVRI*0
FURSVZHUHEHLQJFXOWLYDWHGLQ,6$$$%ULHI1R
E
$FFRUGLQJWRLQGXVWU\ÀJXUHVGXULQJWKLVSHULRGPLOOLRQKHFWDUHVRI*0FURSVZHUHEHLQJ
FXOWLYDWHG,6$$$%ULHI1R
F
$FFRUGLQJWRLQGXVWU\ÀJXUHVGXULQJWKLVSHULRGPLOOLRQKHFWDUHVRI*0FURSVZHUHEHLQJ
FXOWLYDWHG,6$$$%ULHI1R
G
$QQXDOUDWHRIFKDQJH²QRWWRWDOFKDQJHRYHUWKHSHULRG
GRPHVWLF FRQVXPSWLRQ 3HQJXH DQG WDEOH DERYH
1HZ RU LPSURYHG WHFKQRORJLHV FRXOG KHOS IHHG WKH
ZRUOG +HLQHPDQQ ,$$67' %HIRUH
FRQVLGHULQJZKLFKWHFKQRORJLFDODSSURDFKHVDUHEHVW
IRUUHGXFLQJWKHHIIHFWVRIFOLPDWHFKDQJHRQDJULFXOWXUH
DQG PLWLJDWLQJ DJULFXOWXUH·V FRQWULEXWLRQ WR IDFWRUV
FDXVLQJFOLPDWHFKDQJHVXFKDVJUHHQKRXVHJDVHV
LW ZLOO EH HVVHQWLDO WR GHWHUPLQH ZKLFK SUREOHPV DUH
EHVWVROYHGE\WHFKQRORJLFDOWRROVDQGZKLFKFDQEH
VROYHGE\FKDQJHVLQWKHVRFLRHFRQRPLFDQGVRFLR
SROLWLFDOVWDWXVTXR7KLVZLOOHQWDLOFRQVLGHULQJVRPH
SDLQIXOTXHVWLRQVDERXWWKHFDXVHVRIWKHSUREOHPV
&RQVSLFXRXVO\IHZDUHOLNHO\WRKDYHEHHQFDXVHGE\
DODFNRIWHFKQRORJ\1DWXUH
%&KRRVLQJDPRQJWHFKQRORJLFDOSDWKVWR
SURSRRUFOLPDWHUHVLOLHQWDJULFXOWXUH
7KHULJKWWHFKQRORJ\GHOLYHUHGLQWKHULJKWZD\VKRXOG
EHDEOHWRKHOSUHYHUVHDJULFXOWXUH·VDGYHUVHLPSDFW
RQ FOLPDWH FKDQJH DQG XOWLPDWHO\ FRQWULEXWH WR
IRRG VHFXULW\ +HLQHPDQQ 6FLDODEED D
2WKHUZLVH SURSRVHG WHFKQRORJLFDO VROXWLRQV WR
WKHVH SUREOHPV ZLOO QRW EH VXVWDLQDEOH PDNH WKHLU
IDLU FRQWULEXWLRQ WR WKH 0LOOHQQLXP 'HYHORSPHQW
*RDOV RU KHOS GLVWULEXWH WKH EHQHÀWV PRUH HTXLWDEO\
DPRQJWKHSHRSOHVRIWKHZRUOG$VFRQFLVHO\VWDWHG
E\ WKH 'LUHFWRU RI WKH ,QWHUQDWLRQDO $VVHVVPHQW RI
$JULFXOWXUDO .QRZOHGJH 6FLHQFH DQG 7HFKQRORJ\ IRU
'HYHORSPHQW,$$67'´EXVLQHVVDVXVXDOLVQRWDQ
RSWLRQµ2QHIRUPRI´EXVLQHVVDVXVXDOµLVWKHKLJKO\
GDPDJLQJWUDGLWLRQDODJULFXOWXUDOSUDFWLFH'DPDJLQJ
WUDGLWLRQDOLVWDSSURDFKHVDUHGXHPRUHWRWKHQHJOHFW
RIIDUPHUVWKDQWRIDUPHUVSUHIHUULQJWRXVHWKHP3RRU
DQGVXEVLVWHQFHIDUPHUVDUHFKDOOHQJHGE\DODFNRI
DGHTXDWHH[WHQVLRQDQGFRPPXQLW\VXSSRUWVHUYLFHV
WKDWGLVVHPLQDWHNQRZOHGJHDIIRUGDEOHÀQDQFLQJDQG
DFFHVVWRPDUNHWVIRUWKHVDOHRIVXUSOXVSURGXFWLRQ
$QRWKHUIRUPRI´EXVLQHVVDVXVXDOµLVWKHLQWHQVLYH
XVHRIH[WHUQDOLQSXWVLQDJULFXOWXUHDQGHVSHFLDOO\
VXSSRUW WR PDVVLYH PRQRFXOWXUHV ERWK RI ZKLFK
DUH FRQFHQWUDWHG LQ GHYHORSHG FRXQWULHV DQG VRPH
UDSLGO\ LQGXVWULDOL]LQJ GHYHORSLQJ FRXQWULHV 8QOLNH
XQVXVWDLQDEOHWUDGLWLRQDODSSURDFKHVLQSXWLQWHQVLYH
DJULFXOWXUH ² ORRVHO\ UHIHUUHG WR DV FRQYHQWLRQDO RU
LQGXVWULDODJULFXOWXUH²KDVEHHQSURPRWHGE\SROLF\
GHFLVLRQV7KHSROLFLHVDQGWHFKQRORJLHVDVVRFLDWHG
ZLWKLQGXVWULDODJULFXOWXUHLQYROYHDVKLIWLQLQQRYDWLRQ
UHVRXUFHV IURP SXEOLF FRQWURO WR WKH SULYDWH VHFWRU
,$$67' 6SLHOPDQ DV D UHVXOW RI WKH
SULYDWHVHFWRULQYHVWLQJPRUHWKDQWKHSXEOLFVHFWRULQ
UHVHDUFKDQGGHYHORSPHQW3ULYDWHLQYHVWPHQWIXUWKHU
OHYHUDJHVPXFKRIZKDWUHPDLQVRISXEOLFLQYHVWPHQW
WKURXJK JRYHUQPHQW SROLFLHV WKDW SURPRWH FR
IXQGLQJE\WKHSULYDWHVHFWRUWKHSXUVXLWRILQWHOOHFWXDO
SURSHUW\ ,3 E\ SXEOLF VHFWRU LQVWLWXWLRQV HJ
XQLYHUVLWLHV DQG DJULFXOWXUH DJHQFLHV DQG SXEOLF
VHFWRUOLFHQVLQJRI,3IURPWKHSULYDWHVHFWRU,$$67'
9DQORTXHUHQ DQG %DUHW ,QGXVWULDO
DJULFXOWXUHDOVRUHFHLYHVODUJHSXEOLFVXEVLGLHVGLUHFW
DQG LQGLUHFW LQ GHYHORSHG HFRQRPLHV ZKLFK VWLÁH
SURGXFHUVDQGPDUNHWVLQGHYHORSLQJFRXQWULHVDQG
IXUWKHUXQGHUPLQHWKHDELOLW\RISRRUDQGVXEVLVWHQFH
IDUPHUV WR LQWHQVLI\ SURGXFWLRQ DQG UHGXFH WKHLU
HQYLURQPHQWDOIRRWSULQW.LHUVHWDO6SLHOPDQ
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
)XUWKHUPRUH LQGXVWULDO DJULFXOWXUH KDV QHLW
KHU SURGXFHG D VXVWDLQDEOH KLJKO\ SURGXFWLYH
DJURHFRV\VWHP QRU FXUEHG DJULFXOWXUH·V LPSDFW RQ
FOLPDWHFKDQJH
2I WKH PDQ\ ELRWHFKQRORJ\ RSWLRQV DYDLODEOH IRU
WHVWLQJRULPSOHPHQWLQJSHUKDSVWKHRQHWKDWUHFHLYHV
WKHPRVWDWWHQWLRQLVJHQHWLFHQJLQHHULQJ*(IRUWKH
SURGXFWLRQRIJHQHWLFDOO\PRGLÀHGRUJDQLVPV*02V
² SODQWV DQLPDOV DQG PLFUREHV ,$$67' $V FXUUHQWO\ DSSOLHG *( KDV FRPH WR V\PEROL]H
DJULFXOWXUDO SURGXFWLRQ V\VWHPV WKDW PDNH LQWHQVLYH
XVH RI H[WHUQDO LQSXWV DQG SURPRWH PRQRFXOWXUHV
5LYHUD)HUUH 7KLV LV EHFDXVH RI WKH W\SHV
RI FRPPHUFLDOL]HG *0 SURGXFWV WKDW DUH WKH PRVW
FRPPRQLHVR\EHDQVPDL]HUDSHVHHGDQGFRWWRQ
EHFDXVHRIWKHSDUWLFXODUO\ODUJHDJURHFRV\VWHPVWKDW
KDYH DGRSWHG *0 FURSV PDLQO\ WKRVH LQ $UJHQWLQD
%UD]LO &DQDGD 3DUDJXD\ WKH 8QLWHG 6WDWHV DQG
8UXJXD\ÀJXUHDQGEHFDXVHRIWKHPRVWFRPPRQ
FRPPHUFLDOL]HG *0 WUDLWV KHUELFLGH WROHUDQFH
DQG LQVHFWLFLGH SURGXFWLRQ +HUELFLGH WROHUDQFH LQ
SDUWLFXODU OHQGV LWVHOI WR PHFKDQL]HG GHOLYHU\ RI DQ
LQVHSDUDEOH FRWHFKQRORJ\ D FKHPLFDO IRU ZHHG
PDQDJHPHQW 7KLV ZHHGFRQWURO VWUDWHJ\ UHTXLUHV
ODUJH WUDFWV RI PRQRFXOWXUH WR DYRLG KHUELFLGH GULIW
RQWR QHLJKERXULQJ RU RWKHU DJULFXOWXUDO ODQG )LQDOO\
EHFDXVH RI WKH UHODWLYHO\ VPDOO QXPEHU RI FRXQWULHV
WKDWKDYHDGRSWHG*0FURSVDQGWKHIHZFRPSDQLHV
WKDW KDYH FRPPHUFLDOL]HG LW LQGLYLGXDO FRXQWU\ DQG
FRPSDQ\VSHFLÀF SROLFLHV DQG EXVLQHVV SODQV KDYH
KDG DQ LPSRUWDQW LQÁXHQFH RQ WKH DGRSWLRQ RI WKLV
ELRWHFKQRORJ\
7KDW VRPH RI WKH ODUJHVW DJULFXOWXUDO FRXQWULHV LQ
WKHZRUOGKDYHDGRSWHG*0YHUVLRQVRIDIHZFURSV
)LJXUH'HJUHHVRIFRPPLWPHQWWR*0DJULFXOWXUHHVWLPDWHVIRU
&DQDGD
3RUWXJDO
)UDQFH
6SDLQ
6ORYDNLD
8QLWHG6WDWHV
&KLQD
0H[LFR
,QGLD
&RORPELD
3KLOLSSLQHV
&KLOH
$XVWUDOLD
$UJHQWLQD
3DUDJXD\
8UXJXD\
%UD]LO
6RXWK$IULFD
6RXUFHV5HSURGXFHGIURP+HLQHPDQQ
1RWH2QO\WZRFRXQWULHVLQWKHZRUOGKDYHFRQYHUWHGWKHPDMRULW\RIWKHLUDJULFXOWXUDOV\VWHPVWR*0
FURSSLQJEODFNER[HV$FFRUGLQJWRLQGXVWU\ÀJXUHV$UJHQWLQDDQG3DUDJXD\DUHWUXH´PHJD
FRXQWULHVµRI*0FURSV-DPHV7KHPDMRULW\RIWKHWRS*0SURGXFLQJFRXQWULHVFRPPLW
OHVVWKDQ²SHUFHQWRIWKHLUDJULFXOWXUDOSURGXFWLRQWR*0ZKLWHER[HVZLWKVROLGOLQHVLQGLFDWH
DERYHSHUFHQW(YHQWKHZRUOG·VODUJHVWSURGXFHUWKH8QLWHG6WDWHVFRPPLWVQRPRUHWKDQDERXW
DWKLUGRILWVFURSSLQJFDSDFLW\WR*0JUH\ER[HVIRUFRXQWULHVKDYLQJPRUHWKDQSHUFHQW
75$'($1'(19,5210(175(9,(:
2009 -
Percentage of GM
-0
-
0.5 -
2005 -
- 20
-
1.0 2003 -
- 40
-
1.5 -
2001 -
- 60
-
2.0 -
-
- 80
1999 -
2.5 -
1997 -
- 100
-
3.0 -
1995 -
Ratio of yield (Hg/Ha)
)LJXUH&RPSDUDWLYH\LHOGVLQ*0DGRSWLQJDQGQRQDGRSWLQJDJULFXOWXUDOV\VWHPV²
United States maize
United States rapeseed
Canada rapeseed
Western Europe/ Canada rapeseed productivity
Western Europe/ United States rapeseed productivity
Western Europe/ United States maize productivity
6RXUFHV)$267$7IRUUDWLRRI\LHOGDQG*02&RPSDVVIRUSHUFHQWDJHRI*0PDL]HDQGUDSHVHHG
DFFHVVHG0D\
1RWH/HIWD[LVLVWKHUDWLRRI\LHOGLQKHFWRJUDPV+JSHUKHFWDUH+DIRUWZRFURSVUDSHVHHGWRSDQG
PDL]HERWWRPDQGWKUHHSURGXFHUV:HVWHUQ(XURSH&DQDGDDQGWKH8QLWHG6WDWHV5LJKWD[LV
UHSUHVHQWVWKHSURSRUWLRQRI*0E\FURSW\SHLQWKH1RUWK$PHULFDQDJULFXOWXUDOV\VWHPV
VKRXOGQRWEHWDNHQDVHYLGHQFHWKDW*(KDVGHOLYHUHG
VXVWDLQDEO\ DQG UHOLDEO\ JUHDWHU \LHOGV &RQWUDVWLQJ
1RUWK $PHULFDQ DQG :HVWHUQ (XURSHDQ SURGXFWLRQ
RI PDL]H DQG UDSHVHHG LV LQVWUXFWLYH LQ WKLV UHJDUG
EHFDXVH WKH\ ERWK KDYH KLJKLQSXW KLJKSURGXFWLRQ
DJURHFRV\VWHPV ,Q &DQDGD IRU H[DPSOH UDSHVHHG
FDQRODDQGLQWKH8QLWHG6WDWHVPDL]HDUHDOPRVW
H[FOXVLYHO\ SURGXFHG IURP *0 SODQWV &ROOHFWLYHO\
:HVWHUQ (XURSH KDV VKXQQHG WKH FXOWLYDWLRQ RI *0
PDL]H DQG UDSHVHHG ÀJXUH <HW PDL]H \LHOGV DUH
YHU\VLPLODULQWKHWZRDJURHFRV\VWHPVDQG:HVWHUQ
(XURSH·VUDSHVHHG\LHOGVDUHDERXWGRXEOHWKRVHRI
1RUWK$PHULFD7KLVWUHQGKDVQRWFKDQJHGVLQFHWKH
DGRSWLRQRI*0SODQWVLQ1RUWK$PHULFD
%URDGO\VSHDNLQJFRXQWULHVPDNLQJDVXEVWDQWLDOVKLIW
WR*0FURSVDUHLQDJURXSZKHUHIRRGVHFXULW\KDV
HLWKHUVKRZQQRLPSURYHPHQWHJ8QLWHG6WDWHVRU
ZKHUH LW LV GHFOLQLQJ HJ $UJHQWLQD ÀJXUH DQG
+HLQHPDQQ
&+RZVRPHELRWHFKQRORJLHVDUHIDLOLQJ
$UJXDEO\ VRPH *0 SURGXFWV KDYH ORZHUHG WKH
RYHUDOO LPSDFW RI LQGXVWULDO DJULFXOWXUH )RU H[DPSOH
WKHXVHRIJO\SKRVDWHEDVHGKHUELFLGHVRQ*0FURSV
KDV UHGXFHG WKH QHHG IRU WLOOLQJ DV D ZHHG FRQWURO
VWUDWHJ\3HQJXH6HUYLFH6LPLODUO\WKH
XVHRI*0LQVHFWLFLGHSODQWVRIWHQFDOOHG%WSODQWV
SDUWLFXODUO\ FRWWRQ KDV UHGXFHG WKH XVH RI H[WHUQDO
FKHPLFDOLQVHFWLFLGHV
8QIRUWXQDWHO\WKHVHEHQHÀWVDUHERWKFRQWHVWHGDQG
GHWHUPLQLVWLFDOO\ XQVXVWDLQDEOH +HLQHPDQQ 7KH SUHGLFWDEOH SDWWHUQ DQG TXDQWLW\ RI JO\SKRVDWH
KHUELFLGH XVH LQ *0 DJULFXOWXUH KDV FDXVHG WKH
HYROXWLRQ RI UHVLVWDQFH LQ ZHHGV RQ D VFDOH QHYHU
H[SHULHQFHGLQWKHGHFDGHVRIJO\SKRVDWHXVHSULRUWR
*0FURSVOHDGLQJWRDUHWXUQWRWLOOLQJDQGWKHXVHRI
RWKHUKHUELFLGHVIRUZHHGFRQWURO*DLQHVHWDO
3RZOHV6HUYLFH0HDQZKLOHWKHXQLTXH
SDWWHUQ RI XVH RI JO\SKRVDWH RQ *0 VR\EHDQV KDV
UHGXFHG LQ VLWX QLWURJHQ À[DWLRQ E\ FKHODWLQJ QLFNHO
D UHTXLUHG FRIDFWRU IRU HQ]\PDWLF DFWLYLWLHV LQ WKH
PLFURELDOV\PELRQWV=RELROHHWDODQGUHGXFHG
QRUPDOLURQXSWDNHDQGVWRUDJHLQVR\EHDQV%HOODORXL
HWDO*O\SKRVDWHRQKHUELFLGHWROHUDQWSODQWV
DOVRUHGXFHVURRWELRPDVVHORQJDWLRQDQGODWHUDOURRW
IRUPDWLRQ%RWWHWDO6\VWHPLFGLVWULEXWLRQ RI
JO\SKRVDWH WKURXJKRXW WKH SODQW LV DVVRFLDWHG ZLWK
LQFUHDVHG VXVFHSWLELOLW\ WR FRORQL]DWLRQ E\ GLVHDVH
FDXVLQJ IXQJL .UHPHU 0HDQV DQG .LP 7KHVHHIIHFWVIXUWKHUUHGXFHWKHVXVWDLQDELOLW\RI*0
DSSURDFKHV/LNHZLVHUHSODFLQJFRPSOHPHQWDU\DQG
GLYHUVHSHVWFRQWUROSUDFWLFHVVXFKDVLQWHJUDWHGSHVW
PDQDJHPHQW0DQFLQLHWDODQGWKHMXGLFLRXV
XVHRIQDWXUDOVRXUFHVRI%WLQVHFWLFLGHVDVLQRUJDQLF
DJULFXOWXUH DORQJ ZLWK WKH PDVV SODQWLQJ RI *0 %W
FURSVLVFDXVLQJWKHDSSHDUDQFHRIVHFRQGDU\SHVWV
/XHWDO=KDR+RDQG$]DGL
0RUHRYHU ZKDWHYHU WKH FRPSDUDWLYH EHQHÀWV
RI *( PD\ EH WKH\ DUH ODUJHO\ ORVW ZKHQ *(
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
)LJXUH)RRGVHFXULW\LQ*0DQGQRQ*0DGRSWLQJFRXQWULHVLQ6RXWK$PHULFDFRPSDUHG
²NFDOSHUVRQGD\
)RRGVHFXULW\LQQRQ*0DGRSWLQJ6RXWK$PHULFDQFRXQWULHV
3 200 Chile
kcal/person/day
3 000 -
2 800 Columbia
2 600 -
Venezuela
2 400 -
Peru
2 200 -
2007 -
2002 -
1997 -
2 000 -
1992 -
Bolivia
- 0.7
3 200 -
- 0.6
- 0.5
Argentina (kcal)
2 800 -
- 0.4
Brazil (kcal)
2 600 -
2 400 -
- 0.3
Paraguay (kcal)
- 0.2
Uruguay (kcal)
- 0.0
2007 -
2 000 -
2002 -
- 0.1
1997 -
2 200 -
1992 -
kcal/person/ day
3 000 -
Proportion of arable farmland under GM crops
)RRGVHFXULW\LQ*0DGRSWLQJ6RXWK$PHULFDQFRXQWULHV
3 400 -
Paraguay
(proportion of GM)
Argentina
(proportion of GM)
Uruguay
(proportion of GM)
Brazil
(proportion of GM)
6RXUFHV)$26WDW
1RWH$FROOHFWLRQRI6RXWK$PHULFDQFRXQWULHVWKDWKDYHQRWDGRSWHG*0EDVHGDJULFXOWXUDOV\VWHPV
VKRZVLPLODULPSURYHPHQWVLQIRRGVHFXULW\WRSSDQHO&RXQWULHVZLWKYDU\LQJSURSRUWLRQVRI*0
ULJKWD[LVERWWRPSDQHOVKRZPL[HGUHVXOWV7KRVHZLWKUDSLGDGRSWLRQRIJUHDWHUDPRXQWVRI*0LQ
WKHLUDJULFXOWXUHDUHPRUHSURQHWRLQFUHDVHGLQVHFXULW\OHYHOVPHDVXUHGLQNFDOOHIWD[LV
75$'($1'(19,5210(175(9,(:
LQGXVWULDO DJULFXOWXUH LV FRPSDUHG ZLWK DOWHUQDWLYH
ELRWHFKQRORJLHVVXFKDVDJURHFRORJLFDOWHFKQRORJLHV
3LPHQWHOHWDO3UHWW\/DQGFRQYHUWHGWR
DJULFXOWXUH IURP RWKHU XVHV JXLGHG E\ DJURHFRORJ\
UHTXLUHV WLPH WR FRQGLWLRQ DQG EULQJ WR IXOO SRWHQWLDO
%DGJOH\ HW DO 3LPHQWHO HW DO 2QFH
WKLV KDV EHHQ DFKLHYHG DJURHFRORJLFDO DSSURDFKHV
KDYH EHHQ REVHUYHG WR JHQHUDWH KLJKHU \LHOGV WKDQ
LQGXVWULDODJULFXOWXUHDVVKRZQLQVHYHUDOFRPSLODWLRQV
DQGPHWDDQDO\VHVDWFRXQWU\FRQWLQHQWDODQGJOREDO
OHYHOV %DGJOH\ HW DO 8SKRII 3ODQWV
JURZQ RQ DJURHFRORJLFDO IDUPV DUH PRUH UHVLOLHQW
WR VWUHVV WKDQ WKRVH JURZQ E\ PHDQV RI LQGXVWULDO
DJULFXOWXUH /RWWHU 6HLGHO DQG /LHEKDUGW 3LPHQWHO HW DO $JURHFRORJLFDO IDUPV UHTXLUH
IDUOHVVIRVVLOIXHOGHULYHGHQHUJ\DQGVHTXHVWHUPRUH
FDUERQ 3LPHQWHO HW DO 6FLDODEED E ,Q
DGGLWLRQWKHDGRSWLRQRIDJURHFRORJLFDODSSURDFKHV
FRQWULEXWHV WR VXVWDLQDEOH VRFLHWLHV E\ UHGXFLQJ
SRYHUW\ DQG LPSURYLQJ IRRG VHFXULW\ 6FLDODEED
D81(3DQG81&7$'
RQ IRRG SURGXFWLRQ 7KLV KDV GULYHQ WKH VHDUFK IRU
SODQWVWKDWPDLQWDLQRULPSURYH\LHOGXQGHUFRQGLWLRQV
RI ZDWHU GHSULYDWLRQ 'HVSLWH PDQ\ DWWHPSWV WR
GDWHWKHUHDUHQRFRPPHUFLDOO\DYDLODEOH*0SODQWV
ZLWK WUDLWV WKDW UHGXFH WKH HIIHFWV RI DELRWLF VWUHVV
+HLQHPDQQ7KHFORVHVWVRIDULVDYDULHW\RI
´GURXJKWWROHUDQWµPDL]HFDOOHG021ZKLFK
LVXQGHUUHJXODWRU\FRQVLGHUDWLRQLQVRPHFRXQWULHV
$FFRUGLQJ WR WKH GHYHORSHU·V GDWD WKH *0 PDL]H
KDG D PDUJLQDOO\ S VWDWLVWLFDOO\ VLJQLÀFDQW
LQFUHDVHLQ\LHOGLQRQO\RQHRIIRXUÀHOGWHVWVZKLFK
LVXQFRQYLQFLQJIRUWKHJHQHUDOH[SHFWDWLRQWKDWWKH
YDULHW\LVKLJKHU\LHOGLQJXQGHUVWUHVV7KHGHYHORSHU
FODLPVWKDW´WKHPDMRUFRPSRQHQWFRQWULEXWLQJWRWKH
LPSURYHG \LHOG RI 021 XQGHU ZDWHUOLPLWHG
FRQGLWLRQV LV WKH LQFUHDVHG QXPEHU RI NHUQHOV SHU
HDUµ0RQVDQWRUDWKHUWKDQFODLPLQJWKDW
WKH YDULHW\ SURGXFHV PRUH XVDEOH ELRPDVV 7KH
GHYHORSHUFDOOVWKLVWUDLWDFKDQJHLQ´\LHOGSRWHQWLDOµ
UDWKHUWKDQDQLQFUHDVHLQ\LHOG
$IWHU DSSUR[LPDWHO\ \HDUV RI FRPPHUFLDOL]DWLRQ
DQG SUHFRPPHUFLDO *( UHVHDUFK DQG GHYHORSPHQW
LW KDV QRW PDGH D VXEVWDQWLDO FRQWULEXWLRQ WR
VXVWDLQDEOH DJULFXOWXUH 7KH ,$$67' ZDV
WKHUHIRUH MXVWLÀHG LQ TXHVWLRQLQJ ZKHWKHU *( FRXOG
GHOLYHU RQ 0LOOHQQLXP 'HYHORSPHQW *RDOV RU UHGXFH
DJULFXOWXUH·VFRQWULEXWLRQWRFOLPDWHFKDQJH+RZHYHU
KDG WKH LQFHQWLYHV IRU GHOLYHULQJ *0 SURGXFWV
EHHQ GLIIHUHQW DQG WKH JRDOV RI SXEOLF DQG SULYDWH
LQQRYDWLRQQRWEHHQVRWKRURXJKO\LQWHUWZLQHGLQWKLV
ELRWHFKQRORJ\9DQORTXHUHQDQG%DUHWZRXOG
*( KDYH SURGXFHG GLIIHUHQW UHVXOWV" ,Q RWKHU ZRUGV
KDV *( IDLOHG EHFDXVH RI SROLF\ GHFLVLRQV DQG LWV
SDUWLFXODUKLVWRU\RIFRPPHUFLDOL]DWLRQRUEHFDXVHWKH
WHFKQRORJ\LWVHOIKDVEHHQLQDSSURSULDWH"
'URXJKW WROHUDQFH KDV ORQJ EHHQ D JRDO RI
FRQYHQWLRQDO EUHHGLQJ DQG FXUUHQW K\EULGV DOUHDG\
H[KLELW VRPH WROHUDQFH 0RQVDQWR ZLWK
LPSURYHPHQWVRQWKLVEDVHOLQHH[SHFWHG$FFRUGLQJ
WR WKH :RUOG %DQN WKH ´,QWHUQDWLRQDO
0DL]H DQG :KHDW ,PSURYHPHQW &HQWHU &,00<7
DIWHU PRUH WKDQ \HDUV RI UHVHDUFK WR SURGXFH
GURXJKWWROHUDQW PDL]H YDULHWLHV DQG K\EULGV LV
QRZ VHHLQJ UHVXOWV LQ HDVWHUQ DQG VRXWKHUQ $IULFD
(YDOXDWHG DJDLQVW H[LVWLQJ K\EULGV WKH QHZ RQHV
\LHOG SHUFHQW PRUH RQ DYHUDJH XQGHU GURXJKW
FRQGLWLRQV 6LPLODUO\ UHFHQW HYLGHQFH SRLQWV WR
VLJQLÀFDQW\LHOGJDLQVLQEUHHGLQJZKHDWIRUGURXJKW
DQGKHDWVWUHVVHGHQYLURQPHQWVµ
':K\VRPHELRWHFKQRORJLHV
FRXOGVXFFHHG
$JDLQ FRPSDULVRQV ZLWK DOWHUQDWLYH ELRWHFKQRORJLHV
PD\EHLQVWUXFWLYHIRUUHVSRQGLQJWRWKHVHTXHVWLRQV
7KH WZR ELRWHFKQRORJLHV EHLQJ FRQWUDVWHG ZLWK *(
KHUH DUH FRQYHQWLRQDO EUHHGLQJ ZLWK RU ZLWKRXW
PDUNHUDVVLVWHG VHOHFWLRQ DQG DJURHFRORJ\ 7KH
WUDLWV FRQVLGHUHG DUH GURXJKW WROHUDQFH DQG QXWULHQW
HQKDQFHPHQW
'URXJKWWROHUDQFH
$JULFXOWXUH PDNHV WUHPHQGRXV GHPDQGV RQ
JURXQGZDWHUDQGZDWHUVKRUWDJHVDUHDJOREDOGUDJ
$JURHFRORJLFDO DSSURDFKHV IXUWKHU UHGXFH WKH QHHG
IRU LQWHQVLYH EUHHGLQJ RU *( WR SURGXFH GURXJKW
WROHUDQW YDULHWLHV ,QFUHDVLQJ WKH RUJDQLF PDWWHU LQ
VRLOXVLQJFRYHUFURSVDQGLQWHUVSHUVLQJIDOORZ\HDUV
VLJQLÀFDQWO\ LQFUHDVHV ODWHQW VRLO PRLVWXUH PDNLQJ
DJURHFRORJLFDO IDUPV IDU PRUH UHVLOLHQW WR GURXJKW
UHODWHG VWUHVV +HLQHPDQQ :DWHU SHUFRODWLQJ
WKURXJK WKH VRLOV LQ DJURHFRORJLFDO WHVW SORWV KDV
EHHQ UHSRUWHG WR EH EHWZHHQ SHU FHQW DQG PRUH
WKDQ SHU FHQW KLJKHU WKDQ LQ FRQYHQWLRQDO SORWV
XQGHU GURXJKW FRQGLWLRQV DQG KDV GHPRQVWUDWHG
FRPPHQVXUDWH LQFUHDVHV LQ \LHOGV FRPSDUHG ZLWK
PDWFKHG FRQYHQWLRQDO PDQDJHPHQW /RWWHU 6HLGHO
DQG/LHEKDUGW3LPHQWHOHWDO6FLDODEED
D
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
1XWULHQWHQKDQFHPHQW
0LFURQXWULHQW GHÀFLHQFLHV FRQWULEXWH VLJQLÀFDQWO\
WR PDOQXWULWLRQ 6FLDODEED D ZKLFK LV ZK\
GHYHORSLQJ SODQWV WKDW DUH HQULFKHG ZLWK PLFURQXWUL
HQWV KDV EHHQ D ORQJWHUP JRDO ,W LV WKHUHIRUH
SDUWLFXODUO\ XQIRUWXQDWH WKDW WKH ODUJHVW JURXS
RI FRPPHUFLDOL]HG *0 SODQWV WKRVH WROHUDQW WR
JO\SKRVDWH KHUELFLGHV DUH DOVR OHVV DEOH WR WDNH XS
VRPHLPSRUWDQWPLFURQXWULHQWVIURPWKHVRLO%HOODORXL
HWDO%RWWHWDO,PSRUWDQWO\VSUD\GULIWDW
QRQOHWKDOFRQFHQWUDWLRQVKDVDVLPLODUHIIHFWRQQRQ
*0FURSV%HOODORXLHWDO%HFDXVHJO\SKRVDWH
FDQEHXVHGPXOWLSOHWLPHVGXULQJWKHJURZLQJVHDVRQ
RQ KHUELFLGH WROHUDQW *0 SODQWV QRQ*0 FURSV DUH
QRZURXWLQHO\H[SRVHGWRVSUD\GULIW
$WWHQWLRQKDVEHHQGUDZQWRWKHGHYHORSPHQWRI*0
ULFHWKDWSURGXFHV‰FDURWHQHZKLFKFDQEHFRQYHUWHG
E\KXPDQVWRYLWDPLQ$+HLQHPDQQ6FKXEHUW
+RZHYHU KLJK PLFURQXWULHQW YDULHWLHV DUH QRW
XQLTXHWR*(IRULQVWDQFHPDL]HOLQHVWKDWSURGXFH
QHDUO\ IRXU WLPHV WKH DPRXQW RI ‰FDURWHQH —J
Jï RI VHFRQG JHQHUDWLRQ *0 ULFH YDULHWLHV —J
Jï KDYH EHHQ GHYHORSHG WKURXJK FRQYHQWLRQDO
EUHHGLQJ<DQHWDO7KLVLVPHQWLRQHGQRWWR
GLVSDUDJH WKH WHFKQLFDO DFKLHYHPHQW RI LQWURGXFLQJ
WKH ELRV\QWKHWLF SDWKZD\ IRU ‰FDURWHQH LQWR ULFH
EXW WR HPSKDVL]H WKH LPSRUWDQFH RI SURWHFWLQJ FURS
JHQHWLF GLYHUVLW\ DQG LWV RQJRLQJ SRWHQWLDO WR EH
WDSSHGIRUXVHLQEDODQFHGGLHWV=DPLU
:+27KHVHSURWUDFWHGQHJRWLDWLRQVZHUH
UHFHQWO\ UHVROYHG ZLWK DQ DJUHHPHQW WKDW H[HPSWHG
VSHFLÀHGFRXQWULHVIURPKDYLQJWRSD\UR\DOW\IHHVIRU
JURZLQJWKLVYDULHW\RI*0ULFHSURYLGHGWKDWWKHULFH
ZDVQRWH[SRUWHG*52RQOLQH*LYHQWKHGLIÀFXOWLHV
LQ FRQWDLQLQJ WUDQVJHQHV LQFOXGLQJ WKRVH LQ ULFH
9HUPLMWKLVKXPDQLWDULDQOLFHQFHPD\WUDQVIHU
OLDELOLW\IRUJHQHÁRZDQGSRWHQWLDOSDWHQWLQIULQJHPHQW
WRWKHIDUPHUDQGWKHDGRSWLQJFRXQWU\+HLQHPDQQ
1RQ*0 YDULHWLHV DQG DJURHFRORJLFDO
WHFKQRORJLHVDUHXVXDOO\SURWHFWHGE\OHVVUHVWULFWLYH
,3 LQVWUXPHQWV DQG DV SURFHVV LQQRYDWLRQV DUH QRW
SURQH WR DFFLGHQWDO DQG XQDYRLGDEOH HVFDSH LQ WKH
ZD\WKDWVHHGVDQGSROOHQDUHWKLVOLDELOLW\ZRXOGQRW
EHLQFXUUHGWKURXJKWKHLUXVH
(&RQFOXVLRQV
&RPELQHG VWXGLHV KDYH IRXQG WKDW EDODQFHG GLHWV
DUH PRUH DFFHVVLEOH WR SRRU DQG VXEVLVWHQFH
IDUPHUV XVLQJ DJURHFRORJLFDO UDWKHU WKDQ LQGXVWULDO
IDUPLQJ DSSURDFKHV 7KLV LV EHFDXVH RI WKH XVH RI
PXOWLFURSSLQJDQGWKHLQWHJUDWLRQRIOLYHVWRFNUHDULQJ
DQG WKH KLJKHU PLFURQXWULHQW FRQWHQW RI WKH SODQWV
WKH\ JURZ DQG EHFDXVH WKHVH IDUPHUV WHQG WR HDUQ
PRUH ZKLFK DOORZV WKHP WR SXUFKDVH RWKHU IRRGV
6FLDODEEDD81(3DQG81&7$'
7HFKQRORJLFDO VROXWLRQV DUH UDUHO\ VXVWDLQDEOH LI WKH\
GR QRW UHFWLI\ WKH FDXVH RI WKH SUREOHP 5HJDUGOHVV
RIWKHDELOLW\RILQGXVWULDODJULFXOWXUHWRSURGXFHIRRG
VXUSOXVHV LQ SUHYLRXV GHFDGHV 5LYHUD)HUUH IXWXUH WHFKQRORJLHV PXVW SURGXFH VXVWDLQDEOH VROXW
LRQVDQGEHXVHIXOWRWKRVHZKRDUHQRZPDOQRXULVKHG
$VVWDWHGE\8SKRII´7KHPRVWGLUHFWZD\
WRUHGXFHSRYHUW\LVWRUDLVHWKHSURGXFWLYLW\RIWKRVH
IDFWRUVRISURGXFWLRQFRQWUROOHGE\WKHSRRUÀUVWRIDOO
WKHLUODERUEXWDOVRWKHLUNQRZOHGJHDQGVNLOOVDQGIRU
PDQ\ WKRXJK QRW DOO VPDOO DUHDV RI ODQG ,QFUHDVHG
IDFWRU SURGXFWLYLW\ RI ODQG ODERU FDSLWDO DQG ZDWHU
FDQKDYHVHFRQGRUGHUEHQHÀWVIRUWKHSRRUXUEDQDV
ZHOODVUXUDOE\ORZHULQJWKHSULFHRIIRRGDQGRWKHU
WKLQJVRQZKLFKWKHSRRUVSHQGPRVWRIWKHLUPHDJHU
LQFRPHVµ 7KH H[SRUW RI WKH LQGXVWULDO PRGHO RI
DJULFXOWXUHDQGLWVDVVRFLDWHG*(EDVHGWHFKQRORJLHV
WKDW DUH HPEHGGHG LQ SDUWLFXODUO\ H[FOXVLRQDU\ ,3
LQVWUXPHQWVVXFKDVSDWHQWVWRIRRGSRRUFRXQWULHV
VKRZV OLWWOH SURPLVH RI DGGUHVVLQJ WKH QHHGV RI WKH
KXQJU\SRRU,$$67'3UD\DQG1DVHHP
:+2:RUOG%DQN
3URSRQHQWVRI‰FDURWHQHHQULFKHG*0ULFHDUJXHWKDW
VDIHW\UHJXODWLRQVKDYHEHHQWKHSULPDU\KLQGUDQFHWR
WKH WUDQVIHU RI WKLV SURGXFW WR SRRU DQG VXEVLVWHQFH
IDUPHUVLQVRFLHWLHVWKDWVXIIHUIURPVLJQLÀFDQWYLWDPLQ
$ GHÀFLHQF\ 'XERFN +RZHYHU PDOQXWULWLRQ
LVFDXVHGE\WKHODFNRIDEDODQFHGGLHWUDWKHUWKDQ
WKH ODFN RI DFFHVV WR *0 FURSV 0RUHRYHU WKHVH
FRPPHQWDWRUV QHJOHFW WR WDNH LQWR DFFRXQW WKH
HVWLPDWHGSDWHQWVDQGSDWHQWKROGHUVWKDWKDG
WRDJUHHWRWKHXVHRIWKHLULQWHOOHFWXDOSURSHUW\SULRU
WRUHOHDVHRIWKH*0ULFH*UDIIHWDO6SLHOPDQ
)RUWXQDWHO\RWKHUWHFKQRORJLHVVKRZSURPLVHERWK
IRULQFUHDVLQJ\LHOGLQ\LHOGOLPLWHGDJURHFRV\VWHPV
DQGIRUSURPRWLQJZKDWWKHSUHVHQWV\VWHPKDVQRW
EHHQDEOHWRDFKLHYHQDPHO\VXVWDLQDEOHVRFLHWLHV
LQ SRRU FRXQWULHV 5LYHUD)HUUH 81(3 DQG
81&7$'7KLVLVREWDLQHGZKHQWHFKQRORJLHV
UHGXFHH[WHUQDOLQSXWVDQGRQIDUPFRVWVRIVHHGV
LQFRUSRUDWHPXOWLFURSSLQJDQGOLYHVWRFNIRUEDODQFHG
GLHWVSURPRWHRQJRLQJIDUPHULQQRYDWLRQXQGHUDQ
DSSURSULDWH,3ULJKWVIUDPHZRUNDQGDUHSURGXFHG
E\ D SXEOLF VHFWRU WKDW RIIHUV WKH DSSURSULDWH
LQFHQWLYHV +HLQHPDQQ 9DQORTXHUHQ DQG
%DUHW
&OLPDWHFKDQJHKDVEHHQUDSLGEXWQRWXQSUHGLFWDEOH
LQGHHG LWV RFFXUUHQFH KDV RIWHQ EHHQ SUHGLFWHG
HYHQLIWKHPHVVDJHKDVEHHQUHVLVWHGIRUGHFDGHV
/LNHZLVH D IDPLOLDU PHVVDJH IRU GHFDGHV KDV EHHQ
WKDWDJULFXOWXUHLVPDNLQJXQVXVWDLQDEOHGHPDQGVRQ
HFRV\VWHP UHVRXUFHV ZRUOGZLGH DQG LV FRQWULEXWLQJ
WRFOLPDWHFKDQJH2QHRIWKHPRVWLPSRUWDQWOHVVRQV
75$'($1'(19,5210(175(9,(:
WR EH OHDUQW EHIRUH GHFLGLQJ RQ D WHFKQRORJLFDO
SDWKZD\WRUHGXFHDJULFXOWXUH·VDSSHWLWHIRUUHVRXUFHV
DQGLWVIRRWSULQWRQWKHFOLPDWHLVWKDWHDUO\ZDUQLQJRI
GHOHWHULRXVEXWDYRLGDEOHRXWFRPHVQHHGWREHWDNHQ
VHULRXVO\UDWKHUWKDQLJQRUHGDVLQWKHSDVW,IZHDOORZ
WKHVDPHYRLFHVWREHGURZQHGRXWDJDLQZHZLOOIDLO
WRSURWHFWWKRVHZKRZLOOVXIIHUWKHPRVWIURPFOLPDWH
FKDQJH DQG LWV GDPDJLQJ HIIHFWV RQ DJULFXOWXUDO
SURGXFWLRQ
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
5HIHUHQFHV
$EHGL0DQG%DGUDJKHK$,PSRUWDQFHRILQGLJHQRXVNQRZOHGJHLQUXUDODUHDV/LIH6FLHQFH-RXUQDO²
$QGHUVRQ$6KLIWLQJFXOWLYDWLRQDQGGHIRUHVWDWLRQ([SHULHQFHVIURP(DVWHUQ1LJHULD:RUOG'HYHORSPHQW
²
$VDDK(.7FKRXQGMHX=/HDNH\55%7DNRXVWLQJ%1MRQJ-DQG(GDQJ,7UHHVDJURIRUHVWU\DQGPXOWLIXQFWLRQDO
DJULFXOWXUHLQ&DPHURRQ,QWHUQDWLRQDO-RXUQDORI$JULFXOWXUDO6XVWDLQDELOLW\²
%DGJOH\ & 0RJKWDGHU - 4XLQWHUR ( =DNHP ( &KDSSHOO 0- $YLOpV9i]TXH] . 6DPXORQ $ DQG 3HUIHFWR , 2UJDQLFDJULFXOWXUHDQGWKHJOREDOIRRGVXSSO\5HQHZDEOH$JULFXOWXUHDQG)RRG6\VWHPV²
%DNU5&DVVDYDGU\LQJ,EDGDQ&DVVDYD,QIRUPDWLRQ&HQWUH
%DOODQW\QH3$FFHVVLQJVKDULQJDQGFRPPXQLFDWLQJDJULFXOWXUDOLQIRUPDWLRQIRUGHYHORSPHQW(PHUJLQJWUHQGV
DQGLVVXHV,QIRUPDWLRQ'HYHORSPHQW²
%HOODORXL15HGG\.1=DEORWRZLF]50$EEDV+.DQG$EHO&$(IIHFWVRIJO\SKRVDWHDSSOLFDWLRQRQVHHG
LURQDQGURRWIHUULF,,,UHGXFWDVHLQVR\EHDQFXOWLYDUV-RXUQDORI$JULFXOWXUDODQG)RRG&KHPLVWU\²
%RWRQL(DQG5HLM&6LOHQWWUDQVIRUPDWLRQRIHQYLURQPHQWDQGSURGXFWLRQV\VWHPVLQWKH6DKHO,PSDFWVRISXEOLF
DQGSULYDWHLQYHVWPHQWVLQQDWXUDOUHVRXUFHPDQDJHPHQW2XDJDGRXJRX&,/66DQG)UHH8QLYHUVLW\$PVWHUGDP
%RWW67HVIDPDULDP7&DQGDQ+&DNPDN,5|PKHOG9DQG1HXPDQQ**O\SKRVDWHLQGXFHGLPSDLUPHQW
RISODQWJURZWKDQGPLFURQXWULHQWVWDWXVLQJO\SKRVDWHUHVLVWDQWVR\EHDQ*O\FLQHPD[/3ODQWDQG6RLO
²
%URZQ-'.QRZOHGJHXQFHUWDLQW\DQGSK\VLFDOJHRJUDSK\7RZDUGVWKHGHYHORSPHQWRIPHWKRGRORJLHVIRU
TXHVWLRQLQJEHOLHI7UDQVDFWLRQVRIWKH,QVWLWXWHRI%ULWLVK*HRJUDSKHUV²
%XUHVK5-DQG&RRSHU3-07KHVFLHQFHDQGSUDFWLFHRIVKRUWWHUPIDOORZV$JURIRUHVWU\6\VWHPV²
&$5(5HYLHZRIIDUPHUSHUVSHFWLYHVDQGDVVHVVPHQWRIVPDOOKROGHUIRUHVWU\V\VWHPVLQUHODWLRQWRUHIRUHVWDWLRQ
LQ&HQWUDO$IULFD1HZ<RUN:RUOG)RRG3URJUDPPH
&DUSHQWHU 3% (FRQRPLF DQG (FRORJLFDO $QDO\VLV RI (QYLURQPHQWDO ,PSDFWV LQ VXE6DKDUDQ $IULFD /RQGRQ
(DUWKVFDQ3XEOLFDWLRQV/WG
&$:0$ :DWHU IRU )RRG :DWHU IRU /LIH $ &RPSUHKHQVLYH $VVHVVPHQW RI :DWHU 0DQDJHPHQW LQ $JULFXOWXUH
0ROGHQ'HG/RQGRQ(DUWKVFDQ
&)6+/3(3ULFH9RODWLOLW\DQG)RRG6HFXULW\WDEOHVDQG$YDLODEOHDWKWWSZZZIDRRUJÀOHDGPLQXVHUB
XSORDGKOSHKOSHBGRFXPHQWV+/3(SULFHYRODWLOLW\DQGIRRGVHFXULW\UHSRUW-XO\SGI
&KULVWRSORV,0RELOL]LQJWKHSRWHQWLDORIUXUDODQGDJULFXWXUDOH[WHQVLRQ5RPHDQG/LQGDX)$2DQG*OREDO
)RUXPIRU5XUDO$GYLVRU\6HUYLFHV
&ORXJK<%DUNPDQQ--XKUEDQGW-.HVVOHU0:DQJHU7&$QVKDU\$%XFKRUL'&LFX]]D''DUUDV.3XWUDP''
(UDVPL63LWRSDQJ56FKPLGW&6FKXO]H&+6HLGHO'6WHIIDQ'HZHQWHU,6WHQFKO\.9LGDO6:HLVW0:LHOJRVV
$&DQG7VFKDUQWNH7&RPELQLQJKLJKELRGLYHUVLW\ZLWKKLJK\LHOGVLQWURSLFDODJURIRUHVWV3URFHHGLQJVRI
WKH1DWLRQDO$FDGHP\RI6FLHQFHV²
&RRSHU3-/HDNH\55%5DR05DQG5H\QROGV/$JURIRUHVWU\DQGWKHPLWLJDWLRQRIODQGGHJUDGDWLRQLQWKH
KXPLGDQGVXEKXPLGWURSLFVRI$IULFD([SHULPHQWDO$JULFXOWXUH²
&RRSHU 3-0 'LPHV - 5DR .3& 6KDSLUR % 6KLIHUDZ % DQG 7ZRPOR 6 &RSLQJ EHWWHU ZLWK FXUUHQW FOLPDWLF
YDULDELOLW\LQWKHUDLQIHGIDUPLQJV\VWHPVRIVXE6DKDUDQ$IULFD$QHVVHQWLDOÀUVWVWHSLQDGDSWLQJWRIXWXUHFOLPDWH
FKDQJH"$JULFXOWXUH(FRV\VWHPVDQG(QYLURQPHQW²
'DLO\ * 'DVJXSWD 3 %ROLQ % &URVVRQ 3 GX *XHUQ\ - (KUOLFK 3 )RONH & -DQVVRQ $0 -DQVVRQ %2 .DXWVN\ 1
.LQ]LJ$/HYLQ60lOHU.*3LQVWUXS$QGHUVHQ36LQLVFDOFR'DQG:DONHU%)RRGSURGXFWLRQSRSXODWLRQ
JURZWKDQGWKHHQYLURQPHQW6FLHQFH²
'DYLV.([WHQVLRQLQVXE6DKDUDQ$IULFD2YHUYLHZDQGDVVHVVPHQWRISDVWDQGFXUUHQWPRGHOVDQGIXWXUH
SURVSHFWV-RXUQDORI,QWHUQDWLRQDO$JULFXOWXUDODQG([WHQVLRQ(GXFDWLRQ²
'DYLV.1NRQ\D(.DWR(0HNRQQHQ'$2GHQGR00LLUR5DQG1NXED-,PSDFWRIIDUPHUÀHOGVFKRROVRQ
DJULFXOWXUDOSURGXFWLYLW\DQGSRYHUW\LQ(DVW$IULFD:RUOG'HYHORSPHQW
75$'($1'(19,5210(175(9,(:
'HYDX[$+RUWRQ'9HODVFR&7KLHOH*/RSH]*%HUQHW75HLQRVR,DQG2UGLQROD0&ROOHFWLYHDFWLRQIRU
PDUNHWFKDLQLQQRYDWLRQLQWKH$QGHV)RRG3ROLF\²
'HYDX[$$QGUDGH3LHGUD-+RUWRQ'2UGLQROD07KLHOH*7KRPDQQ$DQG9HODVFR&%URNHULQJLQQRYDWLRQ
IRUVXVWDLQDEOHGHYHORSPHQW7KH3DSD$QGLQDFDVH,/$&:RUNLQJ3DSHU,QVWLWXWLRQDO/HDUQLQJDQG&KDQJH
,QLWLDWLYH5RPH
'LDPRQG-*XQV*HUPVDQG6WHHO7KH)DWHVRI+XPDQ6RFLHWLHV/RQGRQ::1RUWRQ&R
'LVDWVDJDH67UDGLWLRQDOIRRGVHFXULW\V\VWHPVLQ6RXWKHUQ$IULFDQUXUDOKRXVHKROGV0DÀNHQJ6RXWK$IULFD
,QGLJHQRXV.QRZOHGJH6\VWHPV3URJUDPPH1RUWK:HVW8QLYHUVLW\8QSXEOLVKHG
'XERFN$&URSFRQXQGUXP1XWULWLRQ5HYLHZV²
)ORUD&%5HFRQVWUXFWLQJDJULFXOWXUH7KHFDVHIRUORFDONQRZOHGJH5XUDO6RFLRORJ\²
)ULLV+DQVHQ(DQG'XYHVNRJ'7KHHPSRZHUPHQWURXWHWRZHOOEHLQJ$QDQDO\VLVRIIDUPHUÀHOGVFKRROVLQ
(DVW$IULFD:RUOG'HYHORSPHQW
*DLQHV 7$ =KDQJ : :DQJ ' %XNXQ % &KLVKROP 67 6KDQHU '/ 1LVVHQ 6- 3DW]ROGW :/ 7UDQHO 3- &XOSHSSHU
$6*UH\7/:HEVWHU709HQFLOO:.6DPPRQV5'-LDQJ-3UHVWRQ&/HDFK-(DQG:HVWUD3*HQH
DPSOLÀFDWLRQ FRQIHUV JO\SKRVDWH UHVLVWDQFH LQ $PDUDQWKXV SDOPHUL 3URFHHGLQJV RI WKH 1DWLRQDO $FDGHPLHV RI
6FLHQFH²
*)5$6*OREDO)RUXPIRU5XUDO$GYLVRU\6HUYLFHV*XLGHWRH[WHQVLRQHYDOXDWLRQ/LQGDX
*LOFKULVW*0DOORU\0DQG0HUNHO)&DQORFDOHFRORJLFDONQRZOHGJHFRQWULEXWHWRZLOGOLIHPDQDJHPHQW"&DVH
VWXGLHVRIPLJUDWRU\ELUGV(FRORJ\DQG6RFLHW\²
*ODHVHU%7KH*UHHQ5HYROXWLRQ5HYLVLWHG&ULWLTXHDQG$OWHUQDWLYHV/RQGRQ$OOHQ8QZLQ
*UDII *' &XOOHQ 6( %UDGIRUG .- =LOEHUPDQ ' DQG %HQQHWW $% 7KH SXEOLF²SULYDWH VWUXFWXUH RI LQWHOOHFWXDO
SURSHUW\RZQHUVKLSLQDJULFXOWXUDOELRWHFKQRORJ\1DWXUH%LRWHFKQRORJ\²
*52RQOLQHSRVWLQJGDWH,QWHOOHFWXDOSURSHUW\UHODWHGLVVXHV$YDLODEOHDWKWWSZZZJROGHQULFHRUJ&RQWHQW+RZ
KRZB,3KWPO
*XVWDYVVRQ - &HGHUEHUJ & 6RQHVVRQ 8 YDQ 2WWHUGLMN 5 DQG 0H\EHFN $ *OREDO )RRG /RVVHV DQG )RRG
:DVWH([WHQW&DXVHVDQG3UHYHQWLRQ5RPH)$2
+DVVDQ56FKROHV5DQG$VK1HGV(FRV\VWHPVDQG+XPDQ:HOO%HLQJ9RO&XUUHQW6WDWHDQG7UHQGV
:DVKLQJWRQ'&,VODQG3UHVVIRU0LOOHQQLXP(FRV\VWHP$VVHVVPHQW
+HLQHPDQQ-$$W\SRORJ\RIWKHHIIHFWVRIWUDQVJHQHÁRZRQWKHFRQVHUYDWLRQDQGVXVWDLQDEOHXVHRIJHQHWLF
UHVRXUFHV%VSU5RPH)$2
+HLQHPDQQ-$'HVHUWJUDLQ7KH(FRORJLVW²
+HLQHPDQQ-$+RSHQRW+\SH7KHIXWXUHRIDJULFXOWXUHJXLGHGE\WKH,QWHUQDWLRQDO$VVHVVPHQWRI$JULFXOWXUDO
.QRZOHGJH6FLHQFHDQG7HFKQRORJ\IRU'HYHORSPHQW3HQDQJ7KLUG:RUOG1HWZRUN
+RIIPDQQ 8 $VVXULQJ )RRG 6HFXULW\ LQ 'HYHORSLQJ &RXQWULHV XQGHU WKH &KDOOHQJHV RI &OLPDWH &KDQJH .H\
7UDGHDQG'HYHORSPHQW,VVXHVRID)XQGDPHQWDO7UDQVIRUPDWLRQRI$JULFXOWXUH81&7$''LVFXVVLRQSDSHU
81&7$'26*'3*HQHYD$YDLODEOHDWKWWSZZZXQFWDGRUJHQ'RFVRVJGSBHQSGI
,$$67' $JULFXOWXUH DW D &URVVURDGV ,QWHUQDWLRQDO $VVHVVPHQW RI $JULFXOWXUDO .QRZOHGJH 6FLHQFH DQG
7HFKQRORJ\IRU'HYHORSPHQW*OREDOUHSRUW:DVKLQJWRQ'&$YDLODEOHDWZZZDJDVVHVVPHQWRUJ
,)35,3UHVVUHOHDVHRQNH\QRWHOHFWXUHE\'U0DUN5RVHJUDQWWR$J(FRQRPLF)RUXP6W/RXLV020D\
,3&& &OLPDWH &KDQJH 7KH 3K\VLFDO 6FLHQFH %DVLV &RQWULEXWLRQ RI :RUNLQJ *URXS , WR WKH )RXUWK
$VVHVVPHQW5HSRUWRIWKH,QWHUJRYHUQPHQWDO3DQHORQ&OLPDWH&KDQJH&DPEULGJH&DPEULGJH8QLYHUVLW\3UHVV
-DPHV&([HFXWLYHVXPPDU\RIWKHJOREDOVWDWXVRIFRPPHUFLDOL]HGELRWHFK*0FURSV,6$$$%ULHI1R
0DQLOD1DLURELDQG1HZ<RUN,QWHUQDWLRQDO6HUYLFHIRUWKH$FTXLVLWLRQRI$JULELRWHFK$SSOLFDWLRQV$YDLODEOHDW
KWWSZZZLVDDDRUJ
-DPQDGDVV5'DZVRQ,.$QHJEHK3$VDDK($WDQJDQD$&RUGHLUR1-+HQGULFN[++HQQHK6.DGX&$&.DWWDK
&0LVEDK00XFKXJL$0XQMXJD00ZDXUD/1GDQJDODVL+-6LULWR1MDX&1\DPH6.2IRUL'3HSUDK7
5XVVHOO-5XWDWLQD)6DZH&6FKPLGW/7FKRXQGMHX=DQG6LPRQV$-$OODQEODFNLDDQHZWUHHFURSLQ
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
$IULFD IRU WKH JOREDO IRRG LQGXVWU\ 0DUNHW GHYHORSPHQW VPDOOKROGHU FXOWLYDWLRQ DQG ELRGLYHUVLW\ PDQDJHPHQW
)RUHVWV7UHHVDQG/LYHOLKRRGV²
.DZHVD%7KH6WDWXVRI3RVWKDUYHVW7HFKQRORJLHVLQ$IULFD'DUHV6DODDP,'68QLYHUVLW\RI'DUHV6DODDP
8QSXEOLVKHG
.D]LQJD$2$IULFDQIDUPHUV·NQRZOHGJHDQGUHODWLRQWRVFLHQFH,Q/RUL$HG)DUPHU)LUVW)DUPHU,QQRYDWLRQ
DQG$JULFXOWXUDO5HVHDUFK1HZ<RUN,733XEOLFDWLRQV²
.KDQ6DQG+DQMUD0$)RRWSULQWVRIZDWHUDQGHQHUJ\LQSXWVLQIRRGSURGXFWLRQ*OREDOSHUVSHFWLYHV)RRG
3ROLF\²
.KDQ =5 +DVVDQDOL $ 2YHUKROW : .KDPLV 70 +RRSHU $0 3LFNHWW -$ :DGKDPV /- DQG :RRGFRFN &0 &RQWURORIZLWFKZHHG6WULJDKHUPRQWKLFDE\LQWHUFURSSLQJZLWK'HVPRGLXPVSSDQGWKHPHFKDQLVPGHÀQHGDV
DOOHORSDWKLF-RXUQDORI&KHPLFDO(FRORJ\²
.KDQ=50LGHJD&$2+DVVDQDOL$3LFNHWW-$:DGKDPV/-DQG:DQMR\D$0DQDJHPHQWRIZLWFKZHHG6WULJD
KHUPRQWKLFD DQG VWHPERUHUV LQ VRUJKXP 6RUJKXP ELFRORU WKURXJK LQWHUFURSSLQJ ZLWK JUHHQOHDI GHVPRGLXP
'HVPRGLXPLQWRUWXP,QWHUQDWLRQDO-RXUQDORI3HVW0DQDJHPHQW²
.LHUV (7 /HDNH\ 55% ,]DF $0 +HLQHPDQQ -$ 5RVHQWKDO ( 1DWKDQ ' DQG -LJJLQV - $JULFXOWXUH DW D
FURVVURDGV6FLHQFH²
.LSODQJ·DW-1DQG5RWLFK'&0DSSLQJDQGDXGLWLQJRIDJULFXOWXUDOLQGLJHQRXVNQRZOHGJHLQ8DVLQ*LVKXDQG
.HL\R'LVWULFWVLQ5LIW9DOOH\3URYLQFH.HQ\D3DSHUSUHVHQWHGDWWKH:RUOG&RQIHUHQFHRQ$JULFXOWXUDO,QIRUPDWLRQ
7RN\R8QLYHUVLW\RI$JULFXOWXUH7RN\R²$XJXVW
.LWKXND-0XWHPL-DQG0RKDPHG$+.HHSLQJXSZLWKWHFKQRORJ\7KHXVHRIPRELOHWHOHSKRQ\LQGHOLYHULQJ
FRPPXQLW\EDVHGGHFHQWUDOLVHGDQLPDOKHDOWKVHUYLFHVLQ0ZLQJLDQG.LWXLGLVWULFWV.HQ\D)$50$IULFD:RUNLQJ
3DSHU/RQGRQ)$50$IULFD
.OHUN[ / +DOO $ DQG /HHXZLV & 6WUHQJWKHQLQJ DJULFXOWXUDO LQQRYDWLRQ FDSDFLW\ $UH LQQRYDWLRQ EURNHUV WKH
DQVZHU",QWHUQDWLRQDO-RXUQDORI$JULFXOWXUDO5HVRXUFHV*RYHUQDQFHDQG(FRORJ\²
.UHPHU5-0HDQV1(DQG.LP6*O\SKRVDWHDIIHFWVVR\EHDQURRWH[XGDWLRQDQGUKL]RVSKHUHPLFURRUJDQLVPV
,QWHUQDWLRQDO-RXUQDORI(QYLURQPHQWDO$QDO\WLFDO&KHPLVWU\²
/DJL0%DU<DP<%HUWUDQG.=DQG%DU<DP<7KHIRRGFULVLV$TXDQWLWDWLYHPRGHORIIRRGSULFHVLQFOXGLQJ
VSHFXODWRUVDQGHWKDQROFRQYHUVLRQ&DPEULGJH0$1HZ(QJODQG&RPSOH[6\VWHPV,QVWLWXWH$YDLODEOHDWKWWS
QHFVLHGXUHVHDUFKVRFLDOIRRGBSULFHVSGI6HSWHPEHU
/HDNH\55%3K\VLRORJ\RIYHJHWDWLYHUHSURGXFWLRQ,Q%XUOH\-(YDQV-DQG<RXQJTXLVW-$HGV(QF\FORSDHGLD
RI)RUHVW6FLHQFHV/RQGRQ$FDGHPLF3UHVV²
/HDNH\55%$JURIRUHVWU\DGHOLYHU\PHFKDQLVPIRUPXOWLIXQFWLRQDODJULFXOWXUH,Q.HOOLPRUH/5HG+DQGERRN
RQ $JURIRUHVWU\ 0DQDJHPHQW 3UDFWLFHV DQG (QYLURQPHQWDO ,PSDFW (QYLURQPHQWDO 6FLHQFH (QJLQHHULQJ DQG
7HFKQRORJ\6HULHV8+DXSSDXJH1<1RYD6FLHQFH3XEOLVKHUV²
/HDNH\55%3DUWLFLSDWRU\GRPHVWLFDWLRQRILQGLJHQRXVIUXLWDQGQXWWUHHV1HZFURSVIRUVXVWDLQDEOHDJULFXOWXUH
LQ GHYHORSLQJ FRXQWULHV ,Q %LRGLYHUVLW\ LQ $JULFXOWXUH 'RPHVWLFDWLRQ (YROXWLRQ DQG 6XVWDLQDELOLW\ &DPEULGJH
&DPEULGJH8QLYHUVLW\3UHVV
/HDNH\55%DQG$NLQQLIHVL).7RZDUGVDGRPHVWLFDWLRQVWUDWHJ\IRULQGLJHQRXVIUXLWWUHHVLQWKHWURSLFV,Q
$NLQQLIHVL)./HDNH\55%$MD\L2&6LOHVKL*7FKRXQGMHX=0DWDNDOD3DQG.ZHVLJD)HGV,QGLJHQRXV)UXLW
7UHHVLQWKH7URSLFV'RPHVWLFDWLRQ8WLOL]DWLRQDQG&RPPHUFLDOL]DWLRQ:DOOLQJIRUG&$%,QWHUQDWLRQDO²
/HDNH\55%DQG$VDDK(.IRUWKFRPLQJ8QGHUXWLOLVHGVSHFLHVDVWKHEDFNERQHRIPXOWLIXQFWLRQDODJULFXOWXUH²7KH
QH[WZDYHRIFURSGRPHVWLFDWLRQ$FWD+RUWLFXOWXUDH
/HDNH\55%DQG7FKRXQGMHX='LYHUVLÀFDWLRQRIWUHHFURSV'RPHVWLFDWLRQRIFRPSDQLRQFURSVIRUSRYHUW\
UHGXFWLRQDQGHQYLURQPHQWDOVHUYLFHV([SHULPHQWDO$JULFXOWXUH²
/HDNH\ 55% &RUQHOLXV -3 3DJH 7 7FKRXQGMHX = :HEHU -& DQG -DPQDGDVV 5 7UHH GRPHVWLFDWLRQ LQ
DJURIRUHVWU\ 3URJUHVV LQ WKH VHFRQG GHFDGH ,Q 1DLU 3. DQG *DUULW\ ' HGV $JURIRUHVWU\ ² 7KH :D\ )RUZDUG
'RUGUHFKW1HWKHUODQGV6SULQJHU
/HDNH\55%6FKUHFNHQEHUJ.DQG7FKRXQGMHX=7KHSDUWLFLSDWRU\GRPHVWLFDWLRQRI:HVW$IULFDQLQGLJHQRXV
IUXLWV,QWHUQDWLRQDO)RUHVWU\5HYLHZ²
75$'($1'(19,5210(175(9,(:
/HDNH\ 55% 7FKRXQGMHX = 6FKUHFNHQEHUJ . 6KDFNOHWRQ 6 DQG 6KDFNOHWRQ & $JURIRUHVWU\ WUHH SURGXFWV
$)73V7DUJHWLQJSRYHUW\UHGXFWLRQDQGHQKDQFHGOLYHOLKRRGV,QWHUQDWLRQDO-RXUQDORI$JULFXOWXUDO6XVWDLQDELOLW\
²
/RPEDUG&DQG/HDNH\55%3URWHFWLQJWKHULJKWVRIIDUPHUVDQGFRPPXQLWLHVZKLOHVHFXULQJORQJWHUPPDUNHW
DFFHVVIRUSURGXFHUVRIQRQWLPEHUIRUHVWSURGXFWV([SHULHQFHLQ6RXWKHUQ$IULFD)RUHVWV7UHHVDQG/LYHOLKRRGV
²
/RWWHU':6HLGHO5DQG/LHEKDUGW:7KHSHUIRUPDQFHRIRUJDQLFDQGFRQYHQWLRQDOFURSSLQJV\VWHPVLQDQ
H[WUHPHFOLPDWH\HDU$PHULFDQ-RXUQDORI$OWHUQDWLYH$JULFXOWXUH²
/X < :X . -LDQJ < ;LD % /L 3 )HQJ + :\FNKX\V.$* DQG *XR < 0LULG EXJ RXWEUHDNV LQ PXOWLSOH FURSV
FRUUHODWHGZLWKZLGHVFDOHDGRSWLRQRI%WFRWWRQLQ&KLQD6FLHQFH²
/XVHQR:.0F3HDN-*%DUUHWW&%/LWWOH3'DQG*HEUX*$VVHVVLQJWKHYDOXHRIFOLPDWHIRUHFDVWLQIRUPDWLRQ
IRUSDVWRUDOLVWV(YLGHQFHIURPVRXWKHUQ(WKLRSLDDQGQRUWKHUQ.HQ\D:RUOG'HYHORSPHQW²
0DQFLQL ) 7HUPRUVKXL]HQ $- -LJJLQV -/6 DQG YDQ %UXJJHQ $+& ,QFUHDVLQJ WKH HQYLURQPHQWDO DQG VRFLDO
VXVWDLQDELOLW\RIFRWWRQIDUPLQJWKURXJKIDUPHUHGXFDWLRQLQ$QGKUD3UDGHVK,QGLD$JULFXOWXUDO6\VWHPV²
0DUFKDO-</DGpURXWHG·XQV\VWqPHYLYULHUDX%XUNLQDDJULFXOWXUHH[WHQVLYHHWEDLVVHGHSURGXFWLRQ(WXGHV
5XUDOHV²
0DWLNH ( ,QGLJHQRXV FDVVDYD SRVWKDUYHVW WHFKQRORJLHV LQ HDVWHUQ =DPELD 0$ GLVVHUWDWLRQ XQSXEOLVKHG
'HSDUWPHQWRI6RFLRORJ\1RUWK:HVW8QLYHUVLW\0DÀNHQJ6RXWK$IULFD
0($(FRV\VWHPVDQGKXPDQZHOOEHLQJ6\QWKHVLV,Q0LOOHQQLXP(FRV\VWHP$VVHVVPHQW:DVKLQJWRQ'&
,VODQG3UHVV
0JDQJD.=1\DQJLWR000XVLPED1.51\DULNL'00ZDQJRPEH$:(ND\D:10XLUX:0&ODYHO')UDQFLV-
.DXIPDQQ5DQG9HUKDJHQ-7KHFKDOOHQJHVRIUHKDELOLWDWLQJGHQXGHGSDWFKHVRIDVHPLDULGHQYLURQPHQW
LQ.HQ\D$IULFDQ-RXUQDORI(QYLURQPHQWDO6FLHQFHDQG7HFKQRORJ\²
0LFKRQ*DQGGH)RUHVWD+$JURIRUHVWV,QFRUSRUDWLQJDIRUHVWYLVLRQLQDJURIRUHVWU\,Q%XFN/(/DVVRLH
-3DQG)HUQDQGH](&0HGV$JURIRUHVWU\LQ6XVWDLQDEOH$JULFXOWXUDO6\VWHPV1HZ<RUN&5&3UHVVDQG/HZLV
3XEOLVKHUV²
0RQVDQWR3HWLWLRQIRUWKHGHWHUPLQDWLRQRIQRQUHJXODWHGVWDWXVIRU021&58
1DWXUH(GLWRULDO+RZWRIHHGDKXQJU\ZRUOG1DWXUH²
1HOOHPDQQ&0DF'HYHWWH00DQGHUV7(LFNKRXW%6YLKXV%3ULQV$*DQG.DOWHQERUQ%37KH(QYLURQPHQWDO
)RRG &ULVLV 7KH (QYLURQPPHQW·V 5ROH LQ $YHUWLQJ )XWXUH )RRG &ULVHV 1DLUREL 8QLWHG 1DWLRQV (QYLURQPHQW
3URJUDPPH
1RUG0)RRGLQVHFXULW\OHVVSUHYDOHQWLQ&DQDGDWKDQLQWKH8QLWHG6WDWHV$PEHU:DYHV:DVKLQJWRQ'&
8QLWHG6WDWHV'HSDUWPHQWRI$JULFXOWXUH
1\RQJ$$GHVLQD)DQG2VPDQ(ODVKD%7KHYDOXHRILQGLJHQRXVNQRZOHGJHLQFOLPDWHFKDQJHPLWLJDWLRQDQG
DGDSWDWLRQVWUDWHJLHVLQWKH$IULFDQ6DKHO0LWLJDWLRQDQG$GDSWDWLRQ6WUDWHJLHVWR*OREDO&KDQJH²
2JDOOR/7KHPDUULDJHRIVFLHQFHDQGUDLQPDNHUVDPRQJWKH/XK\D.HQ\D$JULFXOWXUHDQG(QYLURQPHQW
)RRG 6HFXULW\ $YDLODEOH DW ZZZVFLGHYQHWHQDJULFXOWXUHDQGHQYLURQPHQWWURSLFDOF\FORQHVIHDWXUHVWKH
PDUULDJHRIVFLHQFHDQGUDLQPDNHUVKWPO
2UORYH%5RQFROL&.DEXJR0DQG0DMXJX$,QGLJHQRXVFOLPDWHNQRZOHGJHLQVRXWKHUQ8JDQGD7KHPXOWLSOH
FRPSRQHQWVRIDG\QDPLFUHJLRQDOV\VWHP&OLPDWH&KDQJH²
2WWH-DQG&KLORQGD3&ODVVLÀFDWLRQRIFDWWOHDQGVPDOOUXPLQDQWSURGXFWLRQV\VWHPVLQVXE6DKDUDQ$IULFD
2XWORRNRQ$JULFXOWXUH²
3DQLN)7KHXVHRIELRGLYHUVLW\DQGLPSOLFDWLRQVIRULQGXVWULDOSURGXFWLRQ,Q/HLKQHU'(DQG0LWVFKHLQ7$HGV
$7KLUG0LOOHQQLXPIRU+XPDQLW\"7KH6HDUFKIRU3DWKVRI6XVWDLQDEOH'HYHORSPHQW)UDQNIXUW3HWHU/DQJ²
3HDFRFN & DQG 6KHUPDQ '0 6XVWDLQDEOH JRDW SURGXFWLRQ 6RPH JOREDO SHUVSHFWLYHV 6PDOO 5XPLQDQW
5HVHDUFK²
3HQJXH:$7UDQVJHQLFFURSVLQ$UJHQWLQDWKHHFRORJLFDODQGVRFLDOGHEW%XOOHWLQRI6FLHQFH7HFKQRORJ\
6RFLHW\²
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
3KHSKH 6 7KH LQGLJHQRXV JRDW EUHHGV RI 6RXWKHUQ $IULFD 0DÀNHQJ 6RXWK $IULFD 1RUWK:HVW 8QLYHUVLW\
8QSXEOLVKHG
3LPHQWHO'+HSSHUO\3+DQVRQ-'RXGV'DQG6HLGHO5(QYLURQPHQWDOHQHUJHWLFDQGHFRQRPLFFRPSDULVRQV
RIRUJDQLFDQGFRQYHQWLRQDOIDUPLQJV\VWHPV%LR6FLHQFH²
3LWVR6)8VHRILQGLJHQRXVNQRZOHGJHLQQDWXUDOGLVDVWHUPDQDJHPHQWDPRQJWKH%DWVZDQD0$GLVVHUWDWLRQ
XQSXEOLVKHG'HSDUWPHQWRI6RFLRORJ\1RUWK:HVW8QLYHUVLW\0DÀNHQJ6RXWK$IULFD
3RZOHV 6% (YROYHG JO\SKRVDWHUHVLVWDQW ZHHGV DURXQG WKH ZRUOG /HVVRQV WR EH OHDUQW 3HVW 0DQDJHPHQW
6FLHQFH²
3UD\&(DQG1DVHHP$6XSSO\LQJFURSELRWHFKQRORJ\WRWKHSRRU2SSRUWXQLWLHVDQGFRQVWUDLQWV-RXUQDORI
'HYHORSPHQW6WXGLHV²
3UHWW\ - 7KH UDSLG HPHUJHQFH RI JHQHWLF PRGLÀFDWLRQ LQ ZRUOG DJULFXOWXUH &RQWHVWHG ULVNV DQG EHQHÀWV
(QYLURQPHQWDO&RQVHUYDWLRQ²
5D\QDXW&/·DJULFXOWXUHQLJpULHQQHHWODFULVHDX6DKHO3ROLWLTXHDIULFDLQH²
5HLM&7DSSDQ*DQG%HOHPYLUp$&KDQJLQJODQGPDQDJHPHQWSUDFWLFHVDQGYHJHWDWLRQLQWKH&HQWUDO3ODWHDX
RI%XUNLQD)DVR²-RXUQDORI$ULG(QYLURQPHQWV²
5HLM&7DSSDQ*DQG6PDOH0$JULFXOWXUDOWUDQVIRUPDWLRQLQWKH6DKHO$QRWKHUNLQGRI´*UHHQ5HYROXWLRQµ
,)35,'LVFXVVLRQ3DSHUQR$YDLODEOHDWZZZLISULRUJPLOOLRQVIHG
5LYHUD:DQG6XODLPDQ59([WHQVLRQ2EMHFWRIUHIRUPHQJLQHIRULQQRYDWLRQ2XWORRNRQ$JULFXOWXUH
²
5LYHUD)HUUH0*7KHIXWXUHRIDJULFXOWXUH(0%25HSRUWV²
5LYHUD)HUUH0*5HVSRQVH(0%25HSRUWV²
5RQFROL & .LUVKHQ 3 ,QJUDP . DQG )OLWFURIW , 2SSRUWXQLWLHV DQG FRQVWUDLQWV WR XVLQJ VHDVRQDO SUHFLSLWDWLRQ
IRUHFDVWLQJWRLPSURYHDJULFXOWXUDOSURGXFWLRQV\VWHPVDQGOLYHOLKRRGVHFXULW\LQWKH6DKHO6XGDQ5HJLRQ$FDVH
VWXG\RI%XUNLQD)DVR&)$5³3KDVH,5,)RUXPRQ&OLPDWH3UHGLFWLRQV$JULFXOWXUHDQG'HYHORSPHQW²
$SULO1HZ<RUN
5R\DO6RFLHW\5HDSLQJWKH%HQHÀWV6FLHQFHDQGWKH6XVWDLQDEOH,QWHQVLÀFDWLRQRI*OREDO$JULFXOWXUH/RQGRQ
5XQGJUHQ * *DUGHQ (DUWK )URP KXQWHU DQG JDWKHUHU WR FDSLWDOLVP ² DQG WKHUHDIWHU IRUWKFRPLQJ ERRN
WUDQVODWLRQIURPRULJLQDOYHUVLRQSXEOLVKHGE\*LGOXQGVLQ6ZHGLVK$SULO
6DPXHO37KHHIÀFDF\RIURWDWLRQDOIDUPLQJLQ&HQWUDO$IULFD&DVHVIURPWKH&RQJRDQG&DPHURRQ.LQVKDVD
8QLYHUVLW\RI.LQVKDVD8QSXEOLVKHG
6FKURWK*GD)RQVHFD*$%+DUYH\&$*DVFRQ&9DVFRQHORV+/DQG,]DF$01HGV$JURIRUHVWU\DQG
%LRGLYHUVLW\&RQVHUYDWLRQLQ7URSLFDO/DQGVFDSHV:DVKLQJWRQ'&,VODQG3UHVV
6FKXEHUW'7KHSUREOHPZLWKQXWULWLRQDOO\HQKDQFHGSODQWV-RXUQDORI0HGLFLQDO)RRG
6FLDODEED1(+D2UJDQLF$JULFXOWXUHDQG)RRG6HFXULW\5RPH)$2
6FLDODEED1(+E2UJDQLFDJULFXOWXUHDQGIRRGVHFXULW\LQ$IULFD,Q1 UVWDG$HG$IULFD&DQ)HHG,WVHOI
2VOR$L7$6HGLW²
6HID3,QGLJHQRXV.QRZOHGJHLQ*OREDO&RQWH[WV7RURQWR8QLYHUVLW\RI7RURQWR3UHVV
6HUYLFH5)$JURZLQJWKUHDWGRZQRQWKHIDUP6FLHQFH²
6SHUDQ]D &, .LWHPH % $PEHQMH 3 :LHVPDQQ 8 DQG 0DNDOL 6 ,QGLJHQRXV NQRZOHGJH UHODWHG WR FOLPDWH
YDULDELOLW\ DQG FKDQJH ,QVLJKWV IURP GURXJKWV LQ VHPLDULG DUHDV RI IRUPHU 0DNXHQL 'LVWULFW .HQ\D &OLPDWH
&KDQJH²
6SLHOPDQ'-3URSRRUDJULFXOWXUDOELRWHFKQRORJ\&DQWKHLQWHUQDWLRQDOUHVHDUFKV\VWHPGHOLYHUWKHJRRGV"
)RRG3ROLF\²
6WHUQ 1 7KH (FRQRPLFV RI &OLPDWH &KDQJH ² 7KH 6WHUQ 5HYLHZ &DPEULGJH &DPEULGJH 8QLYHUVLW\ 3UHVV
$YDLODEOH DW KWWSZHEDUFKLYHQDWLRQDODUFKLYHVJRYXN DQG KWWSZZZKPWUHDVXU\JRYXNVWHUQUHYLHZBLQGH[
KWP
75$'($1'(19,5210(175(9,(:
7FKRXQGMHX=$VDDK($QHJEHK32'HJUDQGH$0ELOH3)DFKHX[&7VREHQJ$$WDQJDQD$5DQG1JR0SHFN0/
3XWWLQJSDUWLFLSDWRU\GRPHVWLFDWLRQLQWRSUDFWLFHLQ:HVWDQG&HQWUDO$IULFD)RUHVWV7UHHVDQG/LYHOLKRRGV
²
7FKRXQGMHX='HJUDQGH$/HDNH\55%6LPRQV$-1LPLQR*.HPDMRX($VDDK()DFKHX[&0ELOH30ERVVR&
6DGR7DQG7VREHQJ$,PSDFWRISDUWLFLSDWRU\WUHHGRPHVWLFDWLRQRQIDUPHUOLYHOLKRRGVLQ:HVWDQG&HQWUDO
$IULFD)RUHVWV7UHHVDQG/LYHOLKRRGV²
7KLHOH*'HYDX[$5HLQRVR,3LFR)0RQWHVGHRFD)3XPLVDFR09HODVFR&)ORUHV3(VSUHOOD57KRPDQQ$DQG
0DQULTXH.0XOWLVWDNHKROGHUSODWIRUPVIRULQQRYDWLRQDQGFRRUGLQDWLRQPDUNHWFKDLQV4XLWR,QWHUQDWLRQDO
3RWDWR&HQWUH8QSXEOLVKHGZRUNLQJSDSHU
7KRPDV '6* 7Z\PDQ & 2VEDKU + DQG +HZLWVRQ % $GDSWDWLRQ WR FOLPDWH FKDQJH DQG YDULDELOLW\ )DUPHU
UHVSRQVHVWRLQWUDVHDVRQDOSUHFLSLWDWLRQWUHQGVLQ6RXWK$IULFD&OLPDWLF&KDQJH²
7LOPDQ'&DVVPDQ.*0DWVRQ3$1D\ORU5DQG3RODVN\6$JULFXOWXUDOVXVWDLQDELOLW\DQGLQWHQVLYHSURGXFWLRQ
SUDFWLFHV1DWXUH²
7RXJLDQL $ *XHUR & DQG 5LQDXGR 7 &RPPXQLW\ PRELOLVDWLRQ IRU LPSURYHG OLYHOLKRRGV WKURXJK WUHH FURS
PDQDJHPHQWLQ1LJHU*HR-RXUQDO9ROXPH1XPEHU$YDLODEOHDWZZZVSULQJHUOLQNFRPFRQWHQW
\SYT
81'(6$:RUOG(FRQRPLFDQG6RFLDO6XUYH\7KH*UHDW*UHHQ7HFKQRORJLFDO7UDQIRUPDWLRQ(
5HY67(6$8QLWHG1DWLRQV1HZ<RUN$YDLODEOHDWKWWSZZZXQRUJHQGHYHORSPHQWGHVDSROLF\ZHVV
ZHVVBFXUUHQWZHVVSGI
81'3&RQVHUYLQJ,QGLJHQRXV.QRZOHGJH,QWHJUDWLQJ1HZ6\VWHPVRI,QWHJUDWLRQ1HZ<RUN
81(3*OREDO(QYLURQPHQWDO2XWORRN3DVW3UHVHQWDQG)XWXUH3HUVSHFWLYHV1DLUREL
81(3$JULFXOWXUH,Q81(37RZDUGVD*UHHQ(FRQRP\3DWKZD\VWR6XVWDLQDEOH'HYHORSPHQWDQG3RYHUW\
(UDGLFDWLRQ $ 6\QWKHVLV IRU 3ROLF\ 0DNHUV $YDLODEOH DW KWWSZZZXQHSRUJJUHHQHFRQRP\3RUWDOV
GRFXPHQWVJHU*(5BB$JULFXOWXUHSGI
81(3 DQG 81&7$' 2UJDQLF $JULFXOWXUH DQG )RRG 6HFXULW\ LQ $IULFD 81&7$'',7&7(' 81(3
81&7$'&DSDFLW\EXLOGLQJ7DVN)RUFHRQ7UDGH(QYLURQPHQWDQG'HYHORSPHQW*HQHYD
8SKRII 1 $JURHFRORJLFDO DOWHUQDWLYHV &DSLWDOLVLQJ RQ H[LVWLQJ JHQHWLF SRWHQWLDOV -RXUQDO RI 'HYHORSPHQW
6WXGLHV²
YDQ0HOH30XOWLSOHDSSURDFKHVWRHQKDQFHFRPPXQLFDWLRQEHWZHHQULFHIDUPHUVUXUDOVHUYLFHSURYLGHUVDQG
VFLHQWLVWV2XWORRNVRQ3HVW0DQDJHPHQW
YDQ0HOH3:DQYRHNH-DQG=RVVRX((QKDQFLQJUXUDOOHDUQLQJOLQNDJHVDQGLQVWLWXWLRQV7KHULFHYLGHRVLQ
$IULFD'HYHORSPHQWLQ3UDFWLFH²
9DQGHUPHHU - DQG 3HUIHFWR , 7KH DJULFXOWXUDO PDWUL[ DQG D IXWXUH SDUDGLJP IRU FRQVHUYDWLRQ &RQVHUYDWLRQ
%LRORJ\²
9DQORTXHUHQ*DQG%DUHW39+RZDJULFXOWXUDOUHVHDUFKV\VWHPVVKDSHDWHFKQRORJLFDOUHJLPHWKDWGHYHORSV
JHQHWLFHQJLQHHULQJEXWORFNVRXWDJURHFRORJLFDOLQQRYDWLRQV5HVHDUFK3ROLF\²
9HUPLM3/LEHUW\/LQNULFHUDLVHVVSHFWHURIWLJKWHQHGUHJXODWLRQV1DWXUH%LRWHFKQRORJ\²
:DWHUV%D\HU$DQG*HEUH0LFKDHO<7UHHVDUHRXUEDFNERQH,QWHJUDWLQJHQYLURQPHQWDQGORFDOGHYHORSPHQW
LQ 7LJUD\ 5HJLRQ RI (WKLRSLD ,,(' ,VVXHV 3DSHU QR /RQGRQ ,QWHUQDWLRQDO ,QVWLWXWH IRU (QYLURQPHQW DQG
'HYHORSPHQW
:HUQHU3,QGLJHQRXVNQRZOHGJHIRUGHYHORSPHQW$IUDPHZRUNIRUDFWLRQ0DVHUX&HQWUHIRU5HVRXUFHDQG
(QYLURQPHQWDO6WXGLHV1DWLRQDO8QLYHUVLW\RI/HVRWKR
:+2$FKLHYLQJKRXVHKROGIRRGDQGQXWULWLRQVHFXULW\LQVRFLHWLHVLQWUDQVLWLRQ*HQHYD
:+20RGHUQIRRGELRWHFKQRORJ\KXPDQKHDOWKDQGGHYHORSPHQW$QHYLGHQFHEDVHGVWXG\*HQHYD
:RUOG %DQN (QKDQFLQJ DJULFXOWXUDO LQQRYDWLRQ +RZ WR JR EH\RQG WKH VWUHQJKWKHQLQJ RI UHVHDUFK V\VWHPV
:DVKLQJWRQ'&
:RUOG%DQN:RUOG'HYHORSPHQW5HSRUW$JULFXOWXUHIRU'HYHORSPHQW:DVKLQJWRQ'&
7KH5ROHRI5HVHDUFKDQG7HFKQRORJ\DQG([WHQVLRQ6HUYLFHV
<DQ - .DQGLDQLV &% +DUMHV &( %DL / .LP (+ <DQJ ;0 6NLQQHU '- )X = 0LWFKHOO 6 /L 4 )HUQDQGH] 0*6
=DKDULHYD0%DEX5)X<3DODFLRV1/L-'HOOD3HQQD'%UXWQHOO7%XFNOHU(6:DUEXUWRQ0/DQG5RFKHIRUG7
5DUHJHQHWLFYDULDWLRQDW=HDPD\VFUW5%LQFUHDVHV>EHWD@FDURWHQHLQPDL]HJUDLQ1DWXUH*HQHWLFV
²
<RUREH-U-05HMHVXV50DQG+DPPLJ0',QVHFWLFLGHXVHLPSDFWVRILQWHJUDWHGSHVWPDQDJHPHQW,30
IDUPHUÀHOGVFKRROV(YLGHQFHIURPRQLRQIDUPHUVLQWKH3KLOLSSLQHV$JULFXOWXUDO6\VWHPV²
=DPLU'3ODQWEUHHGHUVJREDFNWRQDWXUH1DWXUH*HQHWLFV²
=DUE-6PDOOKROGLQJXS6XVWDLQDEOHIDUPLQJLQGXVWU\RYHUYLHZ(FRORJLVW
=KDR -+ +R 3 DQG $]DGL + %HQHÀWV RI %W FRWWRQ FRXQWHUEDODQFHG E\ VHFRQGDU\ SHVWV" 3HUFHSWLRQV RI
HFRORJLFDOFKDQJHLQ&KLQD(QYLURQPHQWDOPRQLWRULQJDQGDVVHVVPHQW²
=LHUYRJHO*DQG'RZQLQJ7(6WDNHKROGHUQHWZRUNV,PSURYLQJVHDVRQDOFOLPDWHIRUHFDVWV&OLPDWH&KDQJH
²
=RELROH/+62OLYHLUD56-U.UHPHU5-&RQVWDQWLQ-<DPDGD7&DVWUR&2OLYHLUD)$DQG2OLYHLUD$-U(IIHFW
RIJO\SKRVDWHRQV\PELRWLF1À[DWLRQ)$DQGQLFNHOFRQFHQWUDWLRQLQJO\SKRVDWHUHVLVWDQWVR\EHDQV$SSOLHG
6RLO(FRORJ\²
75$'($1'(19,5210(175(9,(:
1RWHV
$VDSWO\VWDWHGE\5XQGJUHQ´+RZZHGLVFXVV¶HIÀFLHQF\·RU¶SURGXFWLYLW\·DQG¶WHFKQRORJ\·KDVVWURQJ
ELDVHV FOHDUO\ YLVLEOH LQ DJULFXOWXUH ZKHUH WKH V\VWHPV WKDW ZDVWH PRVW SROOXWH PRVW DQG XVH PXFK H[WHUQDO
HQHUJ\DUHWKRVHWKDWDUHFRQVLGHUHG¶PRGHUQ·¶HIÀFLHQW·DQG¶SURGXFWLYH·7KHIXQFWLRQRIWHFKQRORJ\WRSXWRWKHU
SHRSOHV·UHVRXUFHVLQWKHVHUYLFHRIWKHDOUHDG\ZHDOWK\DQGWRFRQVWDQWO\LQFUHDVHWKHJDSLVREVFXUHGE\RXU
P\WKVDERXW¶SURJUHVV·µ
6XVWDLQDEOH RU JUHHQ DJULFXOWXUH UHIHUV WR WKH LQFUHDVLQJ XVH RI IDUPLQJ SUDFWLFHV DQG WHFKQRORJLHV WKDW
VLPXOWDQHRXVO\LUHVWRUHPDLQWDLQDQGLQFUHDVHIDUPSURGXFWLYLW\DQGSURÀWDELOLW\ZKLOHHQVXULQJWKHSURYLVLRQ
RI IRRG RQ D VXVWDLQDEOH EDVLV LL UHGXFH QHJDWLYH H[WHUQDOLWLHV DQG JUDGXDOO\ OHDG WR SRVLWLYH RQHV DQG LLL
UHEXLOGHFRORJLFDOUHVRXUFHVLHVRLOZDWHUDLUDQGELRGLYHUVLW\´QDWXUDOFDSLWDOµDVVHWVE\UHGXFLQJSROOXWLRQDQG
XVLQJUHVRXUFHVPRUHHIÀFLHQWO\*UHHQDJULFXOWXUHLVH[HPSOLÀHGE\DGLYHUVHORFDOO\DGDSWDEOHVHWRIDJULFXOWXUDO
WHFKQLTXHV SUDFWLFHV DQG PDUNHW EUDQGLQJ FHUWLÀFDWLRQV ([DPSOHV RI WKHVH LQFOXGH RUJDQLF DJULFXOWXUH DQG
DJURHFRORJ\UHIHUUHGWRSUHIHUHQWLDOO\LQWKLVDUWLFOHDVDQDSSURDFKWRDJULFXOWXUHEDVHGRQWKHSULQFLSOHVDQG
VFLHQFHRIHFRORJ\IRUPHHWLQJSHRSOH·VQHHGIRUIRRGZKLFKJLYHVHTXDODWWHQWLRQWRWKHJRDOVRIVXVWDLQDELOLW\
UHVLOLHQFH DQG HTXLW\ ² DQG QRW RQO\ WR SURGXFWLRQ ² ZKLFK UHSUHVHQWV PRUH DFFXUDWHO\ WKH WUDQVLWLRQ JRDOV WR
PXOWLIXQFWLRQDODJULFXOWXUHPRGLÀHGIURP81(37KHSULQFLSOHVXQGHUO\LQJVXVWDLQDEOHRU´JUHHQIDUPLQJ
SUDFWLFHVDQGWHFKQRORJLHVµLQFOXGHLUHVWRULQJDQGHQKDQFLQJVRLOIHUWLOLW\WKURXJKWKHLQFUHDVHGXVHRIQDWXUDOO\
DQG VXVWDLQDEO\ SURGXFHG QXWULHQW LQSXWV GLYHUVLÀHG FURS URWDWLRQV DQG OLYHVWRFN DQG FURS LQWHJUDWLRQ LL
UHGXFLQJ VRLO HURVLRQ DQG LPSURYLQJ WKH HIÀFLHQF\ RI ZDWHU XVH E\ DSSO\LQJ PLQLPXP WLOODJH DQG FRYHU FURS
FXOWLYDWLRQWHFKQLTXHVLLLUHGXFLQJWKHXVHRIFKHPLFDOSHVWLFLGHVDQGKHUELFLGHVE\LPSOHPHQWLQJLQWHJUDWHG
ELRORJLFDOSHVWDQGZHHGPDQDJHPHQWSUDFWLFHVDQGLYUHGXFLQJIRRGVSRLODJHDQGORVVE\LPSURYLQJSRVW
KDUYHVWVWRUDJHDQGSURFHVVLQJIDFLOLWLHVPRGLÀHGIURP81(3
7KHDXWKRUVWKDQN(JHUWRQ8QLYHUVLW\1MRUR.HQ\DWKH.HQ\D$JULFXOWXUDO5HVHDUFK,QVWLWXWH1DLUREL.HQ\D
WKH,QVWLWXWHRI$QLPDO3URGXFWLRQLQWKH7URSLFVDQG6XEWURSLFV6HFWLRQRI$QLPDO%UHHGLQJDQG+XVEDQGU\DQG
WKH)RRG6HFXULW\&HQWHU+RKHQKHLP8QLYHUVLW\6WXWWJDUW*HUPDQ\IRUSURYLGLQJIDFLOLWLHVWRXQGHUWDNHWKHVWXG\
WKDWIRUPHGWKHEDVLVIRUWKLVFRPPHQWDU\7KLVSDSHUZDVZULWWHQZKHQRQHRIWKHDXWKRUVZDVD9LVLWLQJ3URIHVVRU
DW+RKHQKHLP8QLYHUVLW\
)RUDQH[DPSOHRI0DOL·V6HQR3ODLQVHH$5,XSGDWHQRDWZZZDIULFDUHJUHHQLQJEORJVSRWFRP
7KHORZHURQIDUPWUHHGHQVLWLHVLQQRUWKHUQ1LJHULDPD\EHGXHWRGLIIHUHQFHVLQWUHHRZQHUVKLS
3HUVRQDOFRPPXQLFDWLRQZLWKIRUHVWHUVDFURVVWKH6DKHO
7KLVPDNHVLWKDUGWRH[SODLQZK\JRYHUQPHQWVDQGGRQRUDJHQFLHVDWOHDVWXQWLOUHFHQWO\VWXEERUQO\FRQWLQXHGWR
VXSSRUWDQGSURPRWHWUHHSODQWLQJ,WLVPRUHUDWLRQDOWRSURPRWHQDWXUDOUHJHQHUDWLRQDQGWRSODQWRQO\WKRVHWUHH
VSHFLHVWKDWGRQRWUHJHQHUDWHVSRQWDQHRXVO\EXWZKLFKUHVRXUFHXVHUVZRXOGOLNHWRKDYHRQWKHLUÀHOGV
7KHDXWKRUZLVKHVWRWKDQN-DVRQ7\OLDQDNLV*LOHV(ULF6pUDOLQLDQG%ULJLWWD.XUHQEDFKIRUFRPPHQWVRQHDUOLHU
GUDIWVRIWKLVSDSHU
6HHZZZDJDVVHVVPHQWRUJGRFV1$(BSUHVVBUHOHDVHBÀQDOGRF
75$'($1'(19,5210(175(9,(:
'#&46+%.'U +DQV+XUQL7KRPDV%UHX3HWHU0HVVHUOLDQG%ULJLWWH3RUWQHU
&HQWUHIRU'HYHORSPHQWDQG(QYLURQPHQW8QLYHUVLW\RI%HUQ
$EVWUDFW
/DQGFRQYHUVLRQVLQDJULFXOWXUHDUHLPSRUWDQWIRUIRRGVHFXULW\LQGHYHORSLQJFRXQWULHVDWWKHSUHVHQWWLPH
DQGDUHOLNHO\WRLQFUHDVHHYHQPRUHLQWKHIXWXUH
‡ ,QUHODWLRQWRRYHUDOOODQGXVHODQGFRQYHUVLRQVWDNHSODFHDZLWKLQDJULFXOWXUDOODQGIURPPHDGRZV
RUSDVWXUHVWRFURSODQGDQGWRODQGIRUSURGXFLQJDQLPDOIHHGRUELRIXHOIHHGVWRFNDQGEWRDJULFXO
WXUDOODQGIURPRWKHUODQGXVHW\SHVVXFKDVIURPIRUHVWVGU\ODQGVDQGZHWODQGDUHDV7KHG\QDPLFV
RIWKHVHSURFHVVHVDUHHVWLPDWHGWREHLQWKHUDQJHRIWRSHUFHQWRIWKHJOREDOODQGDUHD
VXJJHVWLQJWKDW²PLOOLRQKHFWDUHVRIODQGDUHFRQYHUWHGDQQXDOO\
‡ 7KHHIIHFWVRIODQGFRQYHUVLRQVRQVPDOOVFDOHIDUPLQJFDQEHERWKSRVLWLYHDQGQHJDWLYH)DUPHUV
FRQYHUWQHZODQGIRULPSURYLQJWKHLUOLYHOLKRRGVEXWWKH\DUHQHJDWLYHO\DIIHFWHGE\ODQGGHJUDGDWLRQ
DQGWKHLQWUXVLRQRIEXLOWXSDUHDVLQWRDJULFXOWXUDOODQG6WUDWHJLHVVKRXOGIRFXVRQPHGLXPWRORZ
SRWHQWLDODUHDVLQVXSSRUWRIVPDOOVFDOHIDUPHUVDQGSDVWRUDOLVWVWRKHOSWKHPVXVWDLQDEO\LQFUHDVH
WKHLUDJULFXOWXUDOSURGXFWLRQ
‡ /DQGFRQYHUVLRQWRELRIXHOIHHGVWRFNSURGXFWLRQFDQSURYLGHDPRGHUDWHDGGLWLRQDOLQFRPHDOWKRXJK
IDUPHUVDUHOLNHO\WREHQHJDWLYHO\DIIHFWHGE\DVVRFLDWHGODQGORVVHV2QDJOREDOOHYHOKRZHYHUHI
IRUWV WR DFKLHYH HFRQRPLHV RI VFDOH GHQVLW\ DQG PRUH LQWHQVLYH SURGXFWLRQ RI ELRIXHO IHHGVWRFN
DORQJZLWKRWKHUODQGGHDOVPD\WKUHDWHQIRRGVHFXULW\7RGD\·VSROLF\LQFHQWLYHVGLVSURSRUWLRQDWHO\
IDYRXUODUJHVFDOHELRIXHOIHHGVWRFNSURGXFWLRQPRVWO\IRUH[SRUWPDUNHWV,QQRYDWLYHDUUDQJHPHQWV
DUHQHHGHGWRHQVXUHWKDWODQGFRQYHUVLRQVWRELRIXHOIHHGVWRFNSURGXFWLRQDUHPDGHLQDUHVSRQ
VLEOHPDQQHUDQGWKDWVPDOOVFDOHIDUPLQJLQFOXGLQJPL[HGFURSOLYHVWRFNDQGSDVWRUDOV\VWHPVFDQ
EHLQWHJUDWHGLQWRJOREDODJULFXOWXUH
‡ /DQGSULFHVDQGVSHFXODWLRQDUHOLNHO\WRLQFUHDVHRQFHODQGLVFRQYHUWHGWRPRUHHFRQRPLFDOO\LQWH
JUDWHGPRGHVRISURGXFWLRQZKLOHVXEVLVWHQFHRULHQWHGVPDOOVFDOHIDUPLQJZLOOUHPDLQXQDWWUDFWLYH
DQGWKXVZLOOIXUWKHUORVHRXWDJDLQVWPRUHSRZHUIXODFWRUVLIQDWLRQDODQGLQWHUQDWLRQDOSROLFLHVGRQRW
LPSOHPHQWFRXQWHUVWUDWHJLHV
‡ 2YHUDOOWKHLPSDFWVRIODQGFRQYHUVLRQVRQFOLPDWHDUHOLNHO\WREHQHJDWLYH:KLOHVPDOOVFDOHIDUP
LQJDQGOLYHVWRFNUHDULQJDUHRIWHQFOLPDWHQHXWUDOGHIRUHVWDWLRQUHPDLQVH[WUHPHO\KDUPIXOWKHODUJH
VFDOHUHDULQJRIUXPLQDQWOLYHVWRFNKDVQHJDWLYHLPSDFWVRQJUHHQKRXVHJDVHVDQGVRIDUOLWWOHLV
NQRZQDERXWWKHRYHUDOOLPSDFWVRIELRIXHOIHHGVWRFNSURGXFWLRQRQFOLPDWH
$,QWURGXFWLRQ
/DQG FRYHU DQG ODQG XVH DUH FRQVWDQWO\ FKDQJLQJ
ERWK ZLWKLQ DQG RXWVLGH WKH DJULFXOWXUDO VHFWRUWDEOH
7DEOHVKRZVWKDWRQO\DIHZRIWKHJOREDOO\GRPL
QDQWODQGXVHDQGFRYHUV\VWHPVDUHVWDEOHLQWHUPV
RI WKHLU ODQG DUHD $ ODUJHU QXPEHU RI V\VWHPV DUH
H[SDQGLQJ LWDOLFV DW WKH H[SHQVH RI RWKHUV WKDW DUH
GHFUHDVLQJEROG
$JULFXOWXUDO H[SDQVLRQ LQWR IRUHVW ODQGV LV WKH PRVW
WKUHDWHQLQJ JOREDO FKDQJH SURFHVV 'HIRUHVWDWLRQ LV
OLNHO\WRFRQWLQXHLQWKHQHDUIXWXUH$OOQRQSURWHFWHG
IRUHVW DUHDV DUH WKUHDWHQHG E\ RYHUH[WUDFWLRQ RI
WLPEHU GHIRUHVWDWLRQ DQG ODQGXVH FRQYHUVLRQV WR
IRUHVW SODQWDWLRQV JUD]LQJ ODQG RU FURSODQG 7KLV
SURFHVV LV HVWLPDWHG WR DOUHDG\ FRQWULEXWH DERXW SHUFHQWWRJOREDOJUHHQKRXVHJDV*+*HPLVVLRQV
² D FRQVLGHUDEOH DPRXQW WKDW FRXOG EH DYRLGHG $OO
7KH5ROHRI&KDQJHVLQ/DQG8VH
DJULFXOWXUDO DFWLYLWLHV WRJHWKHU DFFRXQW IRU DQRWKHU
SHU FHQW RI *+* HPLVVLRQV DPRXQWLQJ WR DQ
HVWLPDWHGWRWDORISHUFHQWRI*+*V,3&&
0RUH UHFHQWO\ FURSODQGV IRU ELRIXHO SURGXFWLRQ
KDYH DOVR VWDUWHG WR H[SDQG LQWR IRUHVW ODQGV
DQG ZRRGODQGV ZKLOH ODQG OHDVHV DQG VDOHV WR
WUDQVQDWLRQDO FRUSRUDWLRQV DUH D IXUWKHU PDMRU FDXVH
RIWKLVH[SDQVLRQ
$JULFXOWXUDOH[SDQVLRQLQWRGU\ODQGDUHDVLVDSURFHVV
RIWHQ GULYHQ E\ WKH VSUHDG RI VPDOOVFDOH IDUPLQJ
LQWROHVVVXLWDEOHFXOWLYDWLRQDUHDV$WWKHVDPHWLPH
ELRIXHO SURGXFWLRQ FRQWLQXHV WR VSUHDG LQWR QRQ
DJULFXOWXUDOGU\ODQGVHJVDYDQQDKEXVKVKUXEDQG
VFUXEODQGV+HUHWRRWUDQVQDWLRQDOODQGOHDVHVDQG
VDOHVDUHVLJQLÀFDQWDOWKRXJKWKH\UHSUHVHQWDUHFHQW
WUHQG,/&
/DQGXVH FKDQJHV RQ DJULFXOWXUDO ODQG KRZHYHU
PXVW DOVR EH FRQVLGHUHG DV WKHLU LPSOLFDWLRQV PD\
EHDVJUHDWDVWKHH[SDQVLRQRIDJULFXOWXUHLQWRDUHDV
GHYRWHG WR RWKHU W\SHV RI ODQG XVH DQG ODQG FRYHU
&RQYHUVLRQVPD\WDNHSODFHRQDJULFXOWXUDOODQGIRU
H[DPSOH IURP LQWHQVLYH SDVWXUH ODQG WR FURSODQG
$GGLWLRQDO FURSODQG LV FUHDWHG PDLQO\ DV D UHVXOW
RI SRSXODWLRQ SUHVVXUH EXW DOVR IRU LQGXVWULDOL]HG
IDUPLQJVXFKDVODUJHVFDOHIDUPVRUWUHHSODQWDWLRQV
LQUHFHQWO\GHIRUHVWHGDUHDV
6LQFH DERXW SHU FHQW RI WKH JOREDO ODQG
VXUIDFHKDVEHHQFRQYHUWHGIURPFURSODQGDQGGU\ODQG
IRU IRRG DQG IHHG WR FURSODQG IRU ELRIXHO SURGXFWLRQ
LH ELRGLHVHO HWKDQRO +HUH DJDLQ WUDQVQDWLRQDO
ODQGOHDVHVDQGVDOHVDOWKRXJKQRW\HWLPSRUWDQWLQ
TXDQWLWDWLYH WHUPV DUH QHYHUWKHOHVV DQ LQGLFDWRU RI
FXUUHQWDQGIXWXUHWUHQGV+RZHYHUELRIXHOSURGXFWLRQ
DQG ODQG OHDVHV VWLOO DFFRXQW IRU D UHODWLYHO\ VPDOO
SURSRUWLRQRIFXOWLYDWHGODQGFRPSDUHGZLWKWKDWEHLQJ
XVHG IRU WKH SURGXFWLRQ RI DQLPDO IHHG HJ PDL]H
FHUHDOV DQG VR\EHDQV $ERXW SHU FHQW RI JOREDO
FHUHDO SURGXFWLRQ LV XVHG IRU DQLPDO IHHG 7RJHWKHU
ZLWK SDVWXULQJ WKUHH TXDUWHUV RI DOO DJULFXOWXUDO ODQG
LVWKXVEHLQJXVHGWRJHQHUDWHDQLPDOSURGXFWVHJ
PLONPHDWDQGHJJVZKLOHRQO\RQHTXDUWHULVXVHG
IRUSURGXFLQJQRQPHDWDQGQRQGDLU\SURGXFWVVXFK
DVFHUHDOVYHJHWDEOHVWXEHUFURSVDQGRWKHUSODQWV
7DEOH*OREDOODQGXVHDQGFRYHUW\SHVDQGPDMRUVSDWLDOFKDQJHV
SHUFHQWDJHDQGPLOOLRQKHFWDUHV
6XUIDFH
/DQGXVHDQGRUFRYHU 6KDUH
PLOOLRQVRIKD
$JULFXOWXUDOODQG
&URSODQG
,QWHQVLYHSDVWXUHV
$QLPDOIHHGSURGXFWLRQ
$JURIRUHVWU\
%DGODQGV
%LRIXHOSURGXFWLRQ
)RUHVWODQG
'HJUDGHGIRUHVWV
'HQVHIRUHVWV
3URWHFWHGIRUHVWV
'U\ODQG
'HVHUWVDQGWXQGUD
3URWHFWHGGU\ODQGV
6KUXEODQGVJUD]HG
%XLOWXSDUHDV
:HWDUHDV
*OREDOODQGVXUIDFH
&KDQJHVLQODQGXVH
2QHWKLUGRIWKHODQGLVGHJUDGHG
*DLQVIURPIRUHVWVDQGPHDGRZV
/RVVWRFURSODQGDQGDQLPDOIHHG
*DLQVIURPFURSODQGDQGSDVWXUHV
0RVWO\VWDEOHODQGXVHV\VWHP
6OLJKWLQFUHDVHIURPFURSODQGDQGSDVWXUHV
*DLQVIURPIRUHVWVDQGSDVWXUHODQG
/DUJHVWVSDWLDODUHDORVVHVREVHUYHG
0RVWFRQYHUWHGODQGXVHW\SHSDUWO\JUD]HG
0RVWWKUHDWHQHGODQGFRYHUW\SH
6WDEOHIRUHVWDUHDV
/DUJHVWSURWHFWHGDUHDVUHDOL]HG
6WDEOHODQGFRYHUSDUWO\JUD]HG
/RVVHVWRELRIXHODQGODQGFRQYHUVLRQVSDUWO\JUD]HG
7KUHDWHQHGE\FOLPDWHFKDQJHDQGODQGORVVHVWRELRIXHOV
DQGRWKHUFRQYHUVLRQV
5DSLGXUEDQH[SDQVLRQLQWRDJULFXOWXUDOODQGVDQGGU\ODQGV
:DWHUVXUIDFHVDQGZHWODQGV
*OREDOODQGDUHDH[FO*UHHQODQGDQG$QWDUFWLFD
6RXUFH%DVHGRQ)$267$7ZLWKDXWKRUV·HVWLPDWHVIRUVXEFDWHJRULHVDQGEUHDNGRZQV
1RWH%ROGIRQWVLQGLFDWHJHQHUDOORVVHVRIDSDUWLFXODUW\SHQRUPDOIRQWVLQGLFDWHVWDEOHVLWXDWLRQVDQGLWDOLFV
LQGLFDWHJHQHUDOJDLQVLQVXUIDFHDUHD
3DUWRIWKHJHQHUDOJDLQLQFXOWLYDWHGODQGLVFRQYHUWHG
WR JUD]LQJ ODQG VRPH RI ZKLFK KDV WXUQHG LQWR
EDGODQGV GXH WR H[WUHPH ODQG GHJUDGDWLRQ DQG VRLO
GHSOHWLRQ 7KH SUHVVXUH EHLQJ H[HUWHG RQ FURSODQGV
KDV LQFUHDVHG QRW RQO\ IRU WKH SURGXFWLRQ RI KXPDQ
IRRGDQGDQLPDOIHHGEXWDOVRIRUWKHSURGXFWLRQRI
ÀEUH HJ FRWWRQ VLVDO DQG PRUH UHFHQWO\ ELRIXHOV
IHHGVWRFNWUHHSODQWDWLRQVELRGLHVHODQGHWKDQRO
/DVWEXWQRWOHDVWDQRWKHUH[WUHPHO\LPSRUWDQWVSDWLDO
WUHQGLVXUEDQH[SDQVLRQLQWRDJULFXOWXUDODQGGU\ODQG
DUHDV 2Q D JOREDO OHYHO DQ HVWLPDWHG SHUFHQWRI
WKHODQGVXUIDFHLVFXUUHQWO\EHLQJXVHGIRUXUEDQDQG
LQIUDVWUXFWXUH FRQVWUXFWLRQ 7KLV WUHQG LV FRQWLQXLQJ
XQDEDWHG DV LW FORVHO\ FRUUHODWHV ZLWK HFRQRPLF
JURZWKLHJURZWKRIJURVVGRPHVWLFSURGXFW*'3
)RUH[DPSOHLQ*HUPDQ\WKHVKDUHRIEXLOWXSDUHDV
KDVUHDFKHGSHUFHQWRIWKHWRWDOODQGDUHD+XUQL
HWDO
7KH PDLQ TXHVWLRQV WKDW HPHUJH IURP WDEOH LQ
UHODWLRQWRODQGFRQYHUVLRQVLQDJULFXOWXUHDUH
‡ :KDW LV WKH PDJQLWXGH RI ODQG FRQYHUVLRQV LQ
UHODWLRQWRRYHUDOOODQGXVH"
‡ :KDWDUHWKHHIIHFWVRQVPDOOVFDOHIDUPLQJDQGRQ
IRRGVHFXULW\ERWKORFDOO\DQGJOREDOO\"
‡ :KDWDUHWKHLPSOLFDWLRQVIRUODQGSULFHVUHVXOWLQJ
IURPVSHFXODWLRQDQGODQGJUDEELQJ"
‡ :KDWDUHWKHLPSOLFDWLRQVIRUFOLPDWHFKDQJH"
,Q WKH IROORZLQJ VHFWLRQV WKLV DUWLFOH GLVFXVVHV WKUHH
LPSRUWDQW SURFHVVHV LQ JUHDWHU GHWDLO WKH UHFHQW
HPHUJHQFHRIELRIXHOVWKHFRQVHTXHQFHVRIFKDQJLQJ
FRQVXPSWLRQ SDWWHUQV DQG DQLPDO SURGXFWLRQ
V\VWHPV DQG WKH LPSDFWV RI ODQG FRQYHUVLRQV RQ
VPDOOVFDOHIDUPLQJ7KHVHDFWLYLWLHVFXUUHQWO\HPSOR\
RYHU ELOOLRQ SHRSOH RU SHU FHQW RI WKH ZRUOG
SRSXODWLRQLQYROYLQJZRPHQPHQDQGFKLOGUHQYRQ
%UDXQ1RRWKHUVHFWRULQWKHJOREDOHFRQRP\
HPSOR\VDFRPSDUDEOHQXPEHURISHUVRQV
%/DQGFRQYHUVLRQVIRUELRIXHOSURGXFWLRQ
,PSRUWDQFH RI ELRIXHO SURGXFWLRQ 7KHUH KDV DOZD\V
EHHQ D FORVH OLQN EHWZHHQ DJULFXOWXUH DQG HQHUJ\
DVODQGWKDWLVEHLQJZRUNHGUHTXLUHVHQHUJ\LQSXWV
ZKLOH DJULFXOWXUH FDQ DOVR SURGXFH HQHUJ\ DV DQ
RXWSXW 7UDGLWLRQDOO\ DJURHQHUJ\ LV SURGXFHG LQ WKH
IRUP RI IXHOZRRG FKDUFRDO DQG DQLPDO GXQJ 7KHVH
IRUPVDUHVWLOOZLGHO\XVHGLQGHYHORSLQJFRXQWULHVDQG
FRQWLQXHWREHWKHPRVWLPSRUWDQWHQHUJ\VRXUFHQRW
75$'($1'(19,5210(175(9,(:
RQO\IRUWKHELOOLRQSHRSOHHQJDJHGLQVPDOOVFDOH
IDUPLQJ,($EXWDOVRIRUPRVWSHRSOHOLYLQJLQ
WRZQV$WWKHVDPHWLPHWKHSRWHQWLDOIRUOLTXLGELRIXHO
SURGXFWLRQ LV JUHDWHVW RQ FURSODQG LQ WKH JOREDO
6RXWK ZKHUH ODQG DQG ODERXU DUH DYDLODEOH DW ORZHU
FRVWV WKDQ LQ WKH JOREDO 1RUWK +D]HOO DQG 3DFKDXUL
)DUJLRQHHWDO6PHHWVHWDO
&XUUHQWSURGXFWLRQDQGXVHRIOLTXLGELRIXHOVZKLFKDUH
QRZFRPSHWLQJIRUODQGZLWKDJULFXOWXUDOFRPPRGLWLHV
VXFK DV IRRG WDNHV SODFH PDLQO\ LQ LQGXVWULDOL]HG
DQGHPHUJLQJHFRQRPLHVEXWSURGXFWLRQLVDOVRRQ
WKHULVHLQGHYHORSLQJFRXQWULHV62)$+/3(
D 2QO\ DERXW SHU FHQW RI WKH JOREDO ODQG
VXUIDFHLVEHLQJXVHGWRSURGXFHOLTXLGELRIXHOVVHH
WDEOH(WKDQROLVSURGXFHGPDLQO\LQ%UD]LO&DQDGD
&KLQD)UDQFHDQGWKH8QLWHG6WDWHV*HUPDQ\OHDGV
LQELRGLHVHOSURGXFWLRQIROORZHGE\%UD]LO$UJHQWLQD
)UDQFH DQG WKH 8QLWHG 6WDWHV 5(1 %LRGLHVHO H[SRUWHUV LQ GHYHORSLQJ FRXQWULHV DUH UDUH
ZLWKRQO\0DOD\VLDDQG7KDLODQGH[SHFWHGWREHFRPH
VLJQLÀFDQW SOD\HUV LQ WKH QHDU IXWXUH EHVLGHV %UD]LO
DQG$UJHQWLQD7KHPDMRUIHHGVWRFNXVHGIRUHWKDQRO
LV PDL]H DQG VXJDUFDQH ZKLOH IRU ELRGLHVHO LW LV RLO
SDOPDQGVR\EHDQ2(&'DQG)$2
%UD]LOWKH(XURSHDQ8QLRQ(8DQGWKH8QLWHG6WDWHV
DUHWKHPDLQXVHUVRIOLTXLGELRIXHOVZKLOH&KLQDDQG
,QGLDDUHHPHUJLQJXVHUV,($D0RVWELRIXHOLV
XVHGIRUURDGWUDQVSRUWDQGDOLPLWHGDPRXQWLVXVHG
LQ WKH PDULQH WUDQVSRUW VHFWRU DQG PRVW UHFHQWO\ LQ
DYLDWLRQ 7KH VKDUH RI ELRIXHOV FRQWULEXWLQJ WR JOREDO
ÀQDO HQHUJ\ FRQVXPSWLRQ LV VWLOO ORZ DW SHU FHQW
LQEXWSURGXFWLRQLVLQFUHDVLQJUDSLGO\,Q
DERXWELOOLRQOLWUHVRIHWKDQRODQGDWOHDVWELOOLRQ
OLWUHVRIELRGLHVHOZHUHSURGXFHG(WKDQROSURGXFWLRQ
JUHZÀYHIROGEHWZHHQDQGDQGELRGLHVHO
LQFUHDVHGPRUHWKDQWZHQW\IROG5(1
7RGD\ELRIXHOVSURYLGHDERXWSHUFHQWRIWKHIXHO
XVHGLQJOREDOWUDQVSRUWDWLRQ7KLVVKDUHLVH[SHFWHG
WR ULVH WR EHWZHHQ DQG SHU FHQW LQ DQG
XSWRSHUFHQWLQ5(1,($
,($E*OREDOHWKDQRODQGELRGLHVHOSURGXFWLRQ
DUH SURMHFWHG WR LQFUHDVH RYHU WKH QH[W GHFDGH WR
ELOOLRQ OLWUHV DQG ELOOLRQ OLWUHV UHVSHFWLYHO\
DQG SURMHFWHG XVH LV H[SHFWHG WR EH JUHDWHU WKDQ
SURMHFWHGSURGXFWLRQLQWKH(8DQGWKH8QLWHG6WDWHV
2(&'DQG)$2$WSHUFHQWWKHYROXPHRI
ELRIXHOV LQ FXUUHQW LQWHUQDWLRQDO WUDGH LV UDWKHU VPDOO
,($EXWDVSURMHFWHGGHPDQGDQGXVHZLOOQRW
7KH5ROHRI&KDQJHVLQ/DQG8VH
EHDWWKHVDPHORFDWLRQVWKLVVKDUHZLOODOVRLQFUHDVH
DVZLOOSUHVVXUHRQODQGELRIXHOIHHGVWRFNDQGRWKHU
VRXUFHV RI HQHUJ\ IURP ELRPDVV $W WKH VDPH WLPH
GHPDQG IRU DOWHUQDWLYH IRUPV RI HQHUJ\ SURGXFWLRQ
LV DOVR H[SHFWHG WR LQFUHDVH &RWXOD )LQQHJDQ DQG
0DFTXHHQ
&XUUHQWWUHQGV$QXPEHURISROLFLHVLQERWKGHYHORSHG
DQG GHYHORSLQJ FRXQWULHV VXSSRUW WKH PDVVLYH
LQFUHDVHLQELRIXHOSURGXFWLRQEDVHGRQPRWLYDWLRQV
VXFKDVFOLPDWHFKDQJHPLWLJDWLRQLQFUHDVLQJHQHUJ\
VHFXULW\ DQG IXUWKHULQJ UXUDO GHYHORSPHQW 7KHVH
SROLFLHVZKLFKLQFOXGHWD[H[HPSWLRQVEOHQGLQJDQG
FRQVXPSWLRQPDQGDWHVDQGVXEVLGLHVDUHEHOLHYHG
WR EH WKH PDLQ GULYHUV RI WKH JOREDO SURGXFWLRQ RI
ELRIXHOV )$22(&' '()5$ +/3(
D)RUH[DPSOHRYHUDOOJRYHUQPHQWVXSSRUWIRU
ELRIXHOVDPRXQWHGWR²ELOOLRQLQ2(&'FRXQWULHV
LQ6WHHQEOLN7KLVZDVPRUHWKDQWRWDODLG
FRPPLWPHQWVWRDJULFXOWXUHDQGWRVHFWRUVUHODWHGWR
IRRGVHFXULW\ZKLFKDPRXQWHGWRDSSUR[LPDWHO\
ELOOLRQ LQ ² 2(&''$& ,Q JRYHUQPHQWVXSSRUWIRUELRIXHOVLQWKH8QLWHG6WDWHV
DQGWKH(8DORQHDPRXQWHGWRELOOLRQ,($D
$WSUHVHQWGLUHFWJRYHUQPHQWVXSSRUWWRWKHELRIXHO
VHFWRULVGHFOLQLQJZKLOHGHYHORSPHQWDQGFRPPHUFLDO
EDQNV SHQVLRQ IXQGV DQG SULYDWH HTXLW\ IXQGV DUH
LQYHVWLQJ ODUJHU VXPV 5(1 2, YDQ
*HOGHUDQG*HUPDQ$WWKHVDPHWLPHDOOLDQFHV
EHWZHHQ JRYHUQPHQWV DQG PXOWLQDWLRQDO EXVLQHVV
OREELHV KDYH SURPRWHG ELRIXHO GHYHORSPHQW LQ ERWK
GHYHORSHG DQG GHYHORSLQJ FRXQWULHV )UDQFR HW DO
OHDGLQJ WR WKH HPHUJHQFH RI PDQ\ SOD\HUV
VHHNLQJWRSURGXFHDQGLQYHVWLQELRIXHOSURGXFWLRQ
7KH LQYHVWPHQW ODQGVFDSH LQ DJULFXOWXUH DQG ELRIXHO
SURGXFWLRQ WRGD\ LV YHU\ GLYHUVH 'LUHFW SOD\HUV
VXFK DV WUDGLWLRQDO DJULFXOWXUDO FRPSDQLHV DLPLQJ WR
SURGXFHFURSVRQWKHODQGKDYHEHHQFRPSOHPHQWHG
E\ LQGLUHFW SOD\HUV ZRUNLQJ RQ WKH JOREDO VWRFN
H[FKDQJHVZKRWUHDWODQGDVDVSHFXODWLYHFRPPRGLW\
+/3( E ,QYHVWRUV DUH IRUHLJQ GRPHVWLF
RU IURP WKH GLDVSRUD EXW WKHLU LPSRUWDQFH YDULHV
JOREDOO\LQ%UD]LOIRUH[DPSOHVXJDUFDQHSURGXFWLRQ
LVSUHGRPLQDQWO\ÀQDQFHGE\GRPHVWLFHQWUHSUHQHXUV
DQGWKHJRYHUQPHQWZKLOHLQWKH8QLWHG5HSXEOLFRI
7DQ]DQLDGRPHVWLFEDQNVSOD\DQLPSRUWDQWUROHYDQ
*HOGHUDQG*HUPDQ
,Q DSSUR[LPDWHO\ SHU FHQW RI JOREDO DUDEOH
ODQG LH DSSUR[LPDWHO\ PLOOLRQ KHFWDUHV ZDV
XVHG IRU ELRIXHO FURSV ,($ /DPELQ DQG
0H\IURLGWHVWLPDWHWKDWLQDSSUR[LPDWHO\
PLOOLRQKHFWDUHVZHUHDOUHDG\EHLQJXVHGIRUVXFK
FURSV DQG WKH\ SURMHFW DQ DQQXDO LQFUHDVH RI WR PLOOLRQ KHFWDUHV EDVHG RQ WKH FXUUHQW SROLF\
HQYLURQPHQW ZLWK ODQG UHTXLUHPHQWV IRU VXFK FURSV
LQDPRXQWLQJWRWRPLOOLRQKHFWDUHV7KH
,($EHVWLPDWHVRISHUFHQWRIODQGIRUWKRVH
FURSVLQZRXOGWUDQVODWHLQWREHWZHHQDQG
PLOOLRQKHFWDUHV0XUSK\HWDO,ISURGXFHG
RQ FURSODQG RQO\ WKLV ZRXOG DPRXQW WR ² SHU
FHQWRIWKDWODQGXVHFDWHJRU\ZKLFKZRXOGVHYHUHO\
WKUHDWHQIRRGSURGXFWLRQ7KHFXUUHQWODQGFRQYHUVLRQ
OHYHO WR FURS SURGXFWLRQ IRU ELRIXHOV LV HVWLPDWHG WR
EHOHVVWKDQSHUFHQWRIWKHJOREDOODQGDUHDOHVV
WKDQPLOOLRQKDDVLQGLFDWHGLQWDEOH
0RVW ODQG FRQYHUVLRQV IRU ELRIXHO SURGXFWLRQ DUH
EHOLHYHGWREHWDNLQJSODFHDWWKHH[SHQVHRIIRUHVWV
DQGSDVWXUHV0HOLOORHWDO)LVFKHUHWDO
+DYOLN HW DO /DPELQ DQG 0H\IURLGW 6WXGLHV RI WKH SDOP RLO LQGXVWU\ LQ 6RXWK $VLD IRU
H[DPSOH VKRZ WKDW IURP WR FORVH WR SHUFHQWRIRLOSDOPH[SDQVLRQZDVDWWKHH[SHQVHRI
IRUHVWV ZLWK VWURQJ QHJDWLYH LPSDFWV RQ ELRGLYHUVLW\
DQG FDUERQ VWRFNV .RK DQG :LOFRYH .RK
HW DO 7KH PDJQLWXGH RI ODQG DFTXLVLWLRQV
DQG FRQYHUVLRQV IRU ELRIXHO SURGXFWLRQ LV H[WUHPHO\
GLIÀFXOWWRDVVHVVDVWKHUHLVDODFNRILQIRUPDWLRQRQ
WKH ORFDWLRQV RI ELRIXHO FURS SODQWDWLRQV DQG ELRIXHO
IHHGVWRFNRULJLQV7KHIDFWWKDWPDQ\FURSVXVHGIRU
ELRIXHOVVXFKDVPDL]HRURLOSDOPFDQKDYHPXOWLSOH
XVHV IXUWKHU FRPSOLFDWHV DWWHPSWV WR HVWLPDWH
WKH H[WHQW RI ELRIXHO SURGXFWLRQ )XUWKHUPRUH WKH
PDJQLWXGHRILQGLUHFWFKDQJHVDGGVWRWKHSUREOHP
DVLWLVRIWHQGLIÀFXOWWRHVWDEOLVKGLUHFWFDXVDOLW\DQG
WKH LQLWLDO SXUSRVH RI ODQG FRQYHUVLRQV PLJKW QRW
DOZD\V EH FOHDU &KDOPHUV HW DO *DR HW DO
*DZHODQG/XGZLJ
,PSDFWVRQFDUERQ'LUHFWODQGXVHFKDQJHVVHHPWR
KDYH D UHODWLYHO\ VPDOO LPSDFW RQ FDUERQ HPLVVLRQV
ZKHUHDV LQGLUHFW ODQGXVH FKDQJHV FRXOG FUHDWH D
ODUJH FDUERQ GHEW )DUJLRQH HW DO 0HOLOOR HW
DO/DSRODHWDO%RZ\HU1LWURXV
R[LGH HPLVVLRQV IURP LQFUHDVHG XVH RI IHUWLOL]HUV ZLOO
FRQWULEXWHPRUHWRJOREDOZDUPLQJWKDQVXFKFDUERQ
ORVVHV0HOLOORHWDO=DKHWDOVWXGLHG
HQYLURQPHQWDOFRVWVIURPÀHOGWRWDQNDQGIRXQGWKDW
DOWKRXJKPRVWELRIXHOVRXUFHVUHGXFH*+*VE\PRUH
WKDQ SHU FHQW FRPSDUHG ZLWK FRQYHQWLRQDO IXHO
WKHPDMRURQHVVXFKDV8QLWHG6WDWHVFRUQ%UD]LOLDQ
VXJDUFDQH DQG 0DOD\VLDQ SDOP RLO KDYH JUHDWHU
DJJUHJDWHHQYLURQPHQWDOFRVWVWKDQIRVVLOIXHO
1HJDWLYH LPSDFWV RQ QDWXUDO UHVRXUFHV %LRIXHOV DUH
HLWKHUFRPSHWLWLYHRUFDXVHDGGLWLRQDOODQGGHJUDGDW
LRQ%HVLGHVVRLODQGODQGDPRQJWKHPRVWFRQWHVWHG
UHVRXUFHVLVZDWHUDVWKHFXOWLYDWLRQRIVRPHELRIXHO
IHHGVWRFNVXFKDVVXJDUFDQHOHDGVWRLQFUHDVHGZDWHU
ZLWKGUDZDOVDQGWRVRFLDODQGHQYLURQPHQWDOSUREOHPV
IURP ÀHOG WR ZDWHUVKHG SDUWLFXODUO\ ZKHUH ZDWHU LV
DOUHDG\VFDUFHGH)UDLWXUH*LRUGDQRDQG<RQJVRQJ
/LDR 81(3 E $GGLWLRQDOO\ IHUWLOL]HU DQG
SHVWLFLGH XVH LQ FXOWLYDWLRQ LQDSSURSULDWH IDUPLQJ
SUDFWLFHVDQGXQWUHDWHGZDWHUIURPSURFHVVLQJSODQWV
FDQOHDGWRODQGGHJUDGDWLRQDQGLQFUHDVHGULVNVIRU
ORFDOSRSXODWLRQV*HUPDQHWDO
0XFK RI WKH ODQG SURPRWHG IRU ODUJHVFDOH ELRIXHO
SURGXFWLRQ LV GHFODUHG DV ´PDUJLQDOµ RU ´XQXVHGµ
EXWLWLVIUHTXHQWO\XVHGDVFRPPRQODQGE\YLOODJHUV
RU SDVWRUDOLVWV ,QFUHDVHG LQYHVWPHQW FRXOG SURYLGH
RSSRUWXQLWLHV IRU ORFDO OLYHOLKRRGV DQG QDWLRQDO
HFRQRPLHV9HUPHXOHQDQG&RWXODEXWLWPD\
DOVRUHVXOWLQGLVSRVVHVVLRQRIODQGUHVWULFWHGDFFHVV
WR QDWXUDO UHVRXUFHV DQG FRQÁLFWV DPRQJ UHVRXUFH
XVHUV VHH IRU H[DPSOH 6XOOH DQG 1HOVRQ %XUJHUVHWDO)LQGODWHUDQG.DQGOLNDU
,PSDFWV RQ ODQG SULFHV ,QLWLDO IHDUV WKDW LQFUHDVHG
LQYHVWPHQW PD\ UHVXOW LQ KLJKHU ODQG SULFHV )$2
KDYHEHHQUHSODFHGE\HYLGHQFHWKDWPXFKRI
WKH ODQG LV REWDLQHG DW SULFHV EHORZ LWV DFWXDO YDOXH
2, ,QYHVWRUV DFTXLUH YDVW DUHDV RI ODQG LQ
PDQ\GHYHORSLQJFRXQWULHVEHFDXVHLWLVJLYHQDOPRVW
IRUIUHH/L/DQGGHDOVRIWHQODFNWUDQVSDUHQF\
DQG ZKHUH ORFDO SHRSOH DUH LQYROYHG LQ ELRIXHO
SURGXFWLRQ HPSOR\PHQW FRQWUDFWV DUH RIWHQ YDJXH
2,&RWXOD
,PSDFWV RQ IRRG PDUNHWV 5HFHQW JURZWK LQ ELRIXHO
SURGXFWLRQDQGSURFHVVLQJZDVWKHPDMRUGULYHURIWKH
IRRGSULFHKLNHLQ62)$+/3(D
,QFUHDVHG FRPSHWLWLRQ IRU DQG UHVWULFWHG DFFHVV WR
QDWXUDO UHVRXUFHV DV ZHOO KLJKHU DQG YRODWLOH IRRG
SULFHV FDQ OHDG WR UHGXFWLRQV LQ FDORULH LQWDNH DQG
WR LQFUHDVHG OHYHOV RI PDOQXWULWLRQ 0RUHRYHU WKH\
GLVSURSRUWLRQDWHO\ DIIHFW WKH PRVW YXOQHUDEOH JURXSV
5RVHJUDQWHWDO7RFRXQWHUDFWJURZLQJIRRG
LQVHFXULW\ GXH WR ELRIXHO SURGXFWLRQ D UHFHQW +/3(
UHSRUW D DQG WKH )$22(&' ([SHUW 0HHWLQJ
RQ *UHHQLQJ WKH (FRQRP\ ZLWK $JULFXOWXUH KHOG LQ
75$'($1'(19,5210(175(9,(:
6HSWHPEHU)$22(&'DPRQJRWKHUV
FDOOHG XSRQ WKH &RPPLWWHH RQ :RUOG )RRG 6HFXULW\
WR´GHPDQGRIJRYHUQPHQWVWKHDEROLWLRQRIEOHQGLQJ
WDUJHWVIRUELRIXHOVDQGWKHUHPRYDORIVXEVLGLHVDQG
WDULIIVRQELRIXHOSURGXFWLRQDQGSURFHVVLQJµ
3ROLF\PDNHUVKDYHSURPRWHGELRIXHOVDVDPHDQVWR
IRVWHU UXUDO GHYHORSPHQW EDVHG RQ WKH H[SHFWDWLRQ
WKDW WKHLU SURGXFWLRQ ZLOO LQYROYH WKH SDUWLFLSDWLRQ
RI VPDOOKROGHUV LQ RXWJURZHU VFKHPHV DQG FUHDWH
HPSOR\PHQW 7KLV VWUDWHJ\ VHHPV WR EH VXFFHVVIXO
ZKHUHDQDOUHDG\HVWDEOLVKHGELRIXHOLQGXVWU\H[LVWV
DOWKRXJKPXFKGHSHQGVRQSROLFLHVORFDODXWKRULWLHV
DQG VPDOOKROGHU FRRSHUDWLYHV *HUPDQ HW DO 5LVW)HLQWUHQLHDQG/HYDQW,QHPHUJLQJELRIXHO
LQGXVWULHV KRZHYHU VPDOOKROGHUV GR QRW EHQHÀW
UDWKHU WKH\ EHDU PXFK RI WKH ULVN RI DQ XQVHWWOHG
LQGXVWU\ 9HUPHXOHQ 6XOOH DQG )DXYHDXG *HUPDQHWDO
,QWKHFXUUHQWHFRQRPLFFRQWH[WHVWDEOLVKLQJELRIXHO
SURGXFWLRQLVFRPSHWLWLYHZKHUHHFRQRPLHVRIVFDOH
DUH UHDOL]HG DQG WKLV LV XVXDOO\ WKH FDVH ZKHUH
ODUJHVFDOH SODQWDWLRQV DUH FRPELQHG ZLWK LQGXVWULDO
SURFHVVLQJ %XW ODUJHVFDOH SURGXFWLRQ PHDQV WKDW
VPDOOVFDOH SURGXFHUV PD\ EH H[FOXGHG VR WKDW
LQVWHDGRIFUHDWLQJHPSOR\PHQWRSSRUWXQLWLHVODERXU
LVVDYHG/LDQGLQHTXLWLHVLQFUHDVH7KHUHIRUH
WKH TXHVWLRQ LV ZKHWKHU LW LV IHDVLEOH WR SURPRWH
LQQRYDWLYHEXVLQHVVPRGHOVWKDWZRXOGEULGJHODUJH
VFDOH DQG VPDOOVFDOH SURGXFWLRQ WKURXJK SROLF\
LQVWUXPHQWV DLPHG DW VWHHULQJ WKLV GHYHORSPHQW LQ
RUGHU WR DFKLHYH HFRQRPLHV RI VFDOH SDUWLFXODUO\ IRU
IHHGVWRFNSURFHVVLQJDQGFUHDWLQJPDUNHWDFFHVVIRU
VPDOOKROGHUV 'XIH\ $UQGW HW DO 0DOLN
HW DO 9HUPHXOHQ 6XOOH DQG )DXYHDXG *PQGHUDQG3RUWQHU
7KHUHLVDFRQVHQVXVWKDWWKHSURYLVLRQRIHQHUJ\IURP
DJULFXOWXUHLVQHHGHGLQPDQ\SODFHVWRPHHWGHPDQG
SDUWLFXODUO\ LQ WKH UXUDO 6RXWK 3URFHVVHG IRUPV RI
ELRHQHUJ\VXFKDVELRIXHOVFDQEHDQRSSRUWXQLW\EXW
WKLV HQHUJ\ VKRXOG QRW EH SURGXFHG DW WKH H[SHQVH
RIIRRGWKHHQYLURQPHQWRUWKHSRRUZKLFKLVPRVWO\
WKH FDVH ZKHQ SURGXFHG RQ ODUJHVFDOH SODQWDWLRQV
WKDWSURGXFHIHHGVWRFNIRUH[SRUWLQVWHDGRIIRUORFDO
FRQVXPSWLRQ :KLOH PDQ\ FRXQWULHV KDYH SROLFLHV LQ
SODFHWRVWHHUGHYHORSPHQWWKH\VWLOOODFNHQIRUFHPHQW
6FKRQHYHOGHWDO
7KHUHLVFRQVLGHUDEOHXQFHUWDLQW\DERXWKRZSUHVHQW
ODZ RU YROXQWDU\ FHUWLÀFDWLRQ VFKHPHV VXFK DV WKH
7KH5ROHRI&KDQJHVLQ/DQG8VH
5RXQGWDEOH RQ 6XVWDLQDEOH %LRIXHOV 56% FRXOG EH HIIHFWLYHO\ LPSOHPHQWHG *RYHUQPHQWV
XUJHQWO\ QHHG WR UHPRYH PDQGDWRU\ WDUJHWV DQG
ELRIXHO VXEVLGLHV WKDW VWLPXODWH ODUJHVFDOH ELRIXHO
IHHGVWRFN SURGXFWLRQ 7KH\ VKRXOG DOVR HQVXUH WKDW
PXFKQHHGHG LQYHVWPHQWV LQ DJULFXOWXUH DUH PDGH
LQ D UHVSRQVLEOH ZD\ WKDW VPDOOKROGHUV KDYH ULJKWV
WR VHFXUH DFFHVV WR ODQG DQG QDWXUDO UHVRXUFHV
DQG ZKHUH WKH\ DUH LQYROYHG LQ ODUJHVFDOH HQHUJ\
DJULEXVLQHVVWKH\VKRXOGEHRIIHUHGGHFHQWZRUNLQJ
FRQGLWLRQV
&/DQGFRQYHUVLRQIRUOLYHVWRFNSURGXFWLRQ
/LYHVWRFN SURGXFWLRQ DQG DQLPDO VRXUFH IRRG KDYH
SOD\HGDFULWLFDOUROHLQKXPDQGHYHORSPHQW5DQGROSK
HW DO DQG KDYH UHJDLQHG SURPLQHQFH LQ
WKH UHFHQW GHEDWH RQ WKH IRRG FULVLV $FFRUGLQJ WR
HVWLPDWHV E\ WKH )$2 D WKH OLYHVWRFN VHFWRU
DFFRXQWV IRU SHU FHQW RI DJULFXOWXUDO *'3 DQG
SDUWLDOO\HPSOR\VELOOLRQSHRSOH7KHVHFWRULVRI
SDUWLFXODU LPSRUWDQFH WR WKH HFRQRP\ LQ GHYHORSLQJ
FRXQWULHV ZKHUH LW FRQWULEXWHV XS WR SHU FHQW RI
DJULFXOWXUDO *'3 DQG VHUYHV DV D PDMRU VRXUFH RI
OLYHOLKRRG IRU DERXW PLOOLRQ UXUDO SRRU &*,$5
%HVLGHVLWVHFRQRPLFLPSRUWDQFHWRDJULFXOWXUH
LQJHQHUDOOLYHVWRFNDUHDPDMRUDVVHWSDUWLFXODUO\LQ
SDVWRUDO DQG DJURSDVWRUDO V\VWHPV )$2 D
IXOÀOOLQJ YDULRXV IXQFWLRQV LQ UXUDO KRXVHKROGV DQG
FRPPXQLWLHV,QDGGLWLRQWREHLQJDQLPSRUWDQWVRXUFH
RI IRRG DQG LQFRPH OLYHVWRFN RIIHU FRQVLGHUDEOH
SRWHQWLDOIRUUHGXFLQJWKHYXOQHUDELOLW\RIWKHLURZQHUV
DQGH[SDQGLQJOLYHOLKRRGRSSRUWXQLWLHV5DQGROSKHW
DO
,WLVHVWLPDWHGE\&*,$5WKDWFXUUHQWO\WZRWKLUGV
RIWKHZRUOG·VGRPHVWLFDQLPDOVVXFKDVUXPLQDQWV
DUH NHSW LQ GHYHORSLQJ FRXQWULHV ZKHUH RYHU SHU
FHQW DUH RZQHG E\ UXUDO VPDOOKROGHUV %\ WKH
SURGXFWLRQRIPHDWDQGHJJVLQGHYHORSLQJFRXQWULHV
KDG VXUSDVVHG WKDW LQ GHYHORSHG FRXQWULHV DQG WKH
SURGXFWLRQ JDS IRU PLON ZDV DOPRVW FORVHG )$2
D7KHZRUOG·VOLYHVWRFNSRSXODWLRQH[SHULHQFHG
DQ XQSUHFHGHQWHG RYHUDOO LQFUHDVH RI SHU FHQW
EHWZHHQ DQG IRU WKH IRXU PDMRU DQLPDO
FDWHJRULHV RI FDWWOH VKHHS DQG JRDWV SLJV DQG
FKLFNHQ ,Q WRWDO VWRFNV LQ WKHVH FDWHJRULHV
DPRXQWHG WR DOPRVW ELOOLRQ DQLPDOV ELOOLRQ
FDWWOHSHUFHQWELOOLRQVKHHSDQGJRDWV
SHU FHQW PLOOLRQ SLJV SHU FHQW DQG ELOOLRQFKLFNHQSHUFHQW$VWDEOHVKRZVWKH
LQFUHDVH LQ OLYHVWRFN KDV EHHQ PRVW SURQRXQFHG LQ
$IULFDDQG$VLDZKHUHDVWKHVWDWLVWLFVVKRZGHFOLQLQJ
OLYHVWRFNKROGLQJVLQ(XURSHDQGDPRGHUDWHLQFUHDVH
LQ$PHULFDDQG2FHDQLD
7KH WUHQG RI LQFUHDVLQJ OLYHVWRFN SRSXODWLRQV
ZRUOGZLGH VHHPV WR EH FRQWLQXLQJ LQ OLQH ZLWK DQ
H[SHFWHG GRXEOLQJ RI PHDW FRQVXPSWLRQ E\ FRPSDUHG ZLWK WKH SUHVHQW UDWH RI FRQVXPSWLRQ
1DUGRQH HW DO 7KLV ZLOO UHVXOW LQ DQQXDO
JOREDOPHDWSURGXFWLRQRIPLOOLRQWRQVDQGDPLON
RXWSXW RI PLOOLRQ WRQV )$2 D +RZHYHU
7DEOH*URZWKRIOLYHVWRFNDQGVKDUHVRIGLIIHUHQWOLYHVWRFNE\UHJLRQ²SHUFHQW
$PHULFD
,QFUHDVHLQFDWWOH
$VLD
$IULFD
(XURSH
2FHDQLD
:RUOG
6KDUHRISLJV
6KDUHRIFKLFNHQ
7RWDOVKDUHRIOLYHVWRFN
7RWDOLQFUHDVH
,QFUHDVHLQKXPDQSRSXODWLRQ²
,QFUHDVHLQVKHHSDQGJRDWV
,QFUHDVHLQSLJV
,QFUHDVHFKLFNHQV
6KDUHRIFDWWOH
6KDUHRIVKHHSDQGJRDWV
6RXUFH)$267$7
LW LV H[SHFWHG WKDW JURZWK UDWHV RI PHDW SURGXFWLRQ
ZLOO GHFUHDVH ZKHUHDV WKRVH RI PLON ZLOO FRQWLQXH WR
ULVHUDSLGO\DVLQFUHDVHGGHPDQGIRUGDLU\SURGXFWV
LQ GHYHORSLQJ FRXQWULHV DSSHDUV WR EH FRQWLQXLQJ
XQDEDWHG)$2D
$V D UHVXOW RI LQFUHDVLQJ GHPDQG IRU OLYHVWRFN
SURGXFWVDQGWKHUDSLGJURZWKLQOLYHVWRFNSURGXFWLRQ
OLYHVWRFN V\VWHPV KDYH H[SHULHQFHG SURIRXQG
FKDQJHV ,$$67' +RZHYHU QRW DOO OLYHVWRFN
V\VWHPVKDYHEHHQHTXDOO\DIIHFWHGDQGFKDOOHQJHG
E\FKDQJLQJFRQGLWLRQVDQGULVNVIURPWKHHIIHFWVRI
FOLPDWHFKDQJHWKDWFDQDIIHFWWKHIRRGV\VWHP*RG
IUD\ HW DO ,QGXVWULDO OLYHVWRFN V\VWHPVDUHRQ
WKHULVHZRUOGZLGHDQGDUHLQGLVSHQVDEOHIRUPHHWLQJ
WKH JOREDO GHPDQG IRU OLYHVWRFN SURGXFWV 7KHVH
LQWHQVLYH V\VWHPV DUH KRZHYHU EHLQJ LQFUHDVLQJO\
FRQIURQWHG ZLWK HQYLURQPHQWDO UHVWULFWLRQV DQG ULVLQJ
IHHG SULFHV 6HUp HW DO 0L[HG FURSOLYHVWRFN
V\VWHPVZKHUHFURSVDQGDQLPDOVDUHLQWHJUDWHGRQ
WKH VDPH IDUP ,$$67' ZLOO FRQWLQXH WR EH
FULWLFDO WR IXWXUH IRRG VHFXULW\ DV D ODUJH SURSRUWLRQ
RI WKH JOREDO SRSXODWLRQ GHSHQGV RQ WKHVH V\VWHPV
IRULWVOLYHOLKRRG7KRUQWRQHWDO,WLVH[SHFWHG
WKDWIDUPHUVLQWKHVHV\VWHPVZLOOIXUWKHUGLYHUVLI\DQG
LQWHQVLI\WKHLUSURGXFWLRQLQWKHIDFHRIWKHFKDOOHQJHV
SRVHG E\ LQFUHDVLQJ FRPSHWLWLRQ IRU ODQG DQG ULVLQJ
FRVWVRILQSXWVDVZHOODVDFFHVVWRVHUYLFHV6HUpHWDO
3DVWRUDOV\VWHPVDUHFRQIURQWHGZLWKGLIIHUHQW
GHYHORSPHQWVDQGUHVXOWLQJDGDSWDWLRQUHTXLUHPHQWV
2QWKHRQHKDQGLQVXLWDEOHDUHDVLPSURYHPHQWVLQ
SDVWXUHV DQG DGDSWHG PDQDJHPHQW V\VWHPV FRXOG
LQFUHDVH WKH HFRQRPLF YLDELOLW\ RI OLYHVWRFN UHDULQJ
+RZHYHURQWKHRWKHUKDQGSDVWRUDOV\VWHPVZLOODOVR
KDYHWRFRSHZLWKWKHJURZLQJHQFURDFKPHQWRIFURS
SURGXFWLRQ 6HUp HW DO DFFHOHUDWLQJ SDVWXUH
GHJUDGDWLRQDQGLQFUHDVLQJO\GLIÀFXOWDFFHVVWRIHHG
DQGZDWHUUHVRXUFHV7KRUQWRQ
'ULYHUV RI FKDQJH LQ WKH OLYHVWRFN VHFWRU ,W LV
FRPPRQO\ DVVXPHG WKDW WKH PDMRU GULYHUV RI WKH
REVHUYHGLQFUHDVHLQSURGXFWLRQDQGFRQVXPSWLRQRI
OLYHVWRFN SURGXFWV DUH UHODWHG WR WKH JURZLQJ JOREDO
SRSXODWLRQ DQG WR GLHWDU\ FKDQJHV DV D UHVXOW RI
ULVLQJ LQFRPHV DPRQJ D FRQVLGHUDEOH SURSRUWLRQ RI
WKHZRUOG·VSRSXODWLRQ1HOOHPDQQHWDO)$2
D +RZHYHU SRSXODWLRQ JURZWK LV RQO\ RQH RI
PDQ\IDFWRUVDQGDUJXDEO\QRWWKHPRVWSURPLQHQW
WDEOH$VWXG\E\)$2DVKRZHGDSRVLWLYH
FRUUHODWLRQEHWZHHQLQFUHDVHGLQFRPHVDQGOLYHVWRFN
FRQVXPSWLRQ LQ FRXQWULHV ZLWK ORZHU LQFRPHV EXW
75$'($1'(19,5210(175(9,(:
D OHVV SRVLWLYH RU HYHQ D QHJDWLYH FRUUHODWLRQ IRU
FRXQWULHV ZLWK KLJKHU *'3 SHU FDSLWD %HVLGHV WKH
LPSRUWDQWUROHRILQFRPHOHYHOVXUEDQL]DWLRQSOD\VD
FRQVLGHUDEOH UROH LQ ERRVWLQJ FRQVXPSWLRQ RI PHDW
DQGPLONSURGXFWVDVDUHVXOWRISHRSOHDGGLQJYDULHW\
WR WKHLU GLHW 'HOJDGR 'LHWDU\ WUHQGV FDQ EH
VXPPDUL]HGLQWHUPVRIGHFUHDVLQJLQWDNHRIIUXLWDQG
YHJHWDEOHVDQGLQFUHDVLQJLQWDNHRIPHDWVXJDUVDOW
DQG SUHFRRNHG DQG FRQYHQLHQFH IRRGV 3RSNLQ
:+2)$2FLWHGLQ,$$67'6RFLR
FXOWXUDOIDFWRUVVXFKDVWUDGLWLRQVDQGUHOLJLRXVEHOLHIV
DOVR KDYH D PDMRU LQÁXHQFH RQ WKH FRQVXPSWLRQ RI
OLYHVWRFN SURGXFWV ZKLOH QDWXUDO HQGRZPHQW KDYLQJ
DGLUHFWLPSDFWRQSURGXFWLRQSRWHQWLDO2QHH[DPSOH
RI VRFLRFXOWXUDO GLIIHUHQWLDWLRQ LV 6RXWK $VLD ZKHUH
PHDWFRQVXPSWLRQLVORZHUWKDQH[SHFWDWLRQVEDVHG
RQ LQFRPH OHYHOV )$2 D )XUWKHU GULYHUV RI
OLYHVWRFN SURGXFWLRQ WKDW DIIHFW FRQVXPSWLRQ DQG
SULFHVDUHUHODWHGWRWKHGHYHORSPHQWRIPDUNHWVDQG
WR LPSURYHPHQWV LQ WUDQVSRUW DQG WUDGH +DZNHV
%HWZHHQDQGPHDWSURGXFWLRQLQGHYHORS
HGFRXQWULHVLQFUHDVHGE\RQO\SHUFHQWZKHUHDV
LW DOPRVW TXDGUXSOHG LQ GHYHORSLQJ FRXQWULHV ,W ZDV
PDLQO\WKH(DVWDQG6RXWK$VLDQFRXQWULHV&KLQDDQG
%UD]LOWKDWDFFRXQWHGIRUWKLVLQFUHDVH&KLQDVKRZHG
WKH ELJJHVW JURZWK LQ PHDW SURGXFWLRQ GXULQJ WKLV
SHULRGSHUFHQWDQGWRGD\DFFRXQWVIRUDOPRVW
SHU FHQW RI WKH PHDW SURGXFHG LQ GHYHORSLQJ
FRXQWULHVRUSHUFHQWRIWKHWRWDOZRUOGSURGXFWLRQ
)$2 D ,QGLD RQ WKH RWKHU KDQG VKRZHG
LPSUHVVLYHJURZWKRIPLONSURGXFWLRQDFFRXQWLQJIRU
SHUFHQWRIWKHZRUOG·VPLONVXSSO\EXWLWUHPDLQVD
UDWKHUVPDOOSURGXFHURIPHDWLQUHODWLRQWRLWVVL]HDQG
SRSXODWLRQ)$2D
$QQXDO PHDW FRQVXPSWLRQ SHU FDSLWD ZRUOGZLGH LV
SURMHFWHGWRLQFUHDVHVKDUSO\E\SHUFHQWIURP
² IURP NJ WR RYHU NJ LQ )$2 E
$FFRUGLQJ WR %RXZPDQ HW DO DQG %UXLQVPD
WKH JUHDWHVW LQFUHDVH LQ PHDW FRQVXPSWLRQ
LV H[SHFWHG WR RFFXU LQ GHYHORSLQJ FRXQWULHV SHU FHQW DQG WUDQVLWLRQ HFRQRPLHV SHU FHQW ,Q
LQGXVWULDOL]HG FRXQWULHV D PRGHUDWH LQFUHDVH RI SHU FHQW UHSUHVHQWLQJ DQ DQQXDO PHDW FRQVXPSWLRQ
RIURXJKO\NJSHUSHUVRQLVIRUHFDVW*LYHQWKDW
WKH FRQYHUVLRQ UDWH RI SODQW WR DQLPDO PDWWHU LV RQO\
DERXW SHU FHQW *RGIUD\ HW DO D IXUWKHU
LQFUHDVH LQ PHDW FRQVXPSWLRQ ZLOO QHFHVVDULO\ DOWHU
WKH UDWLR RI IRRG DQG IHHG SURGXFWLRQ DQG ZLOO KDYH
7KH5ROHRI&KDQJHVLQ/DQG8VH
PDMRULPSOLFDWLRQVIRUWKHSULFHVRIVWDSOHIRRGVDQG
ODQGFRQYHUVLRQV
/LYHVWRFN SURGXFWLRQ DQG ODQG FRQYHUVLRQ ,W LV
HVWLPDWHG WKDW DERXW SHU FHQW RI WKH JOREDO ODQG
DUHDLVXVHGIRUOLYHVWRFNJUD]LQJPDLQO\DVSDVWRUDO
V\VWHPVDQGWRDPXFKOHVVHUH[WHQWDVPL[HGFURS
OLYHVWRFNV\VWHPV'HOJDGRHWDO)$2D
8QOLNH LQGXVWULDO OLYHVWRFN SURGXFWLRQ V\VWHPV WKHVH
V\VWHPV GR QRW UHO\ RQ H[WHUQDO LQSXWV RI IHUWLOL]HUV
SHVWLFLGHV LUULJDWLRQ DQG IHHG )RGGHU SURGXFWLRQ
LV RIWHQ DEVHQW LQ H[WHQVLYH SDVWRUDO V\VWHPV RU LV
OLPLWHG WR VKRUWHU SHULRGV RI FRPSOHPHQWDU\ IHHGLQJ
HJZLQWHUIRGGHURUWRIHHGSURGXFWVGHULYHGIURP
GHFHQWUDOL]HGDQGQRQLQGXVWULDOL]HGIRRGSURFHVVLQJ
,QRUGHUWRIHHGWKHFXUUHQWJOREDOOLYHVWRFNSRSXODWLRQ
DERXWSHUFHQWRIWRWDODUDEOHODQGLVXVHGIRUIHHG
FURSSURGXFWLRQ)$2DHVWLPDWHVWKDW´OLYHVWRFN
SURGXFWLRQ DFFRXQWV IRU RI DOO DJULFXOWXUDO ODQG
DQG RI WKH ODQG VXUIDFH RI WKH SODQHWµ 'HVSLWH
WKHRYHUDOOVWURQJLQFUHDVHLQWKHOLYHVWRFNSRSXODWLRQ
EHWZHHQ DQG WKH DUHD XQGHU SDVWXUH
ZRUOGZLGHLQFUHDVHGE\RQO\E\SHUFHQWZKLOHWKH
DUHDXQGHUFURSVLQFUHDVHGE\SHUFHQW)$26WDW
7KHZRUOGIRUHVWDUHDGHFOLQHGEHWZHHQ
DQG E\ SHU FHQW RU E\ DOPRVW PLOOLRQ
KD:RUOG%DQN²ODUJHUWKDQWKHDUHDRI3HUX
7KHVH ÀJXUHV LPSO\ WKDW WKH DEVROXWH ODQG DUHD DQG
WKH VKDUH RI DUDEOH ODQG XVHG IRU IHHG SURGXFWLRQ
DQGJUD]LQJDUHVWLOOJURZLQJDWWKHH[SHQVHRIIRUHVW
ODQGV7KH)$2EUHSRUWVWKDWJUD]LQJODQGLVD
NH\GULYHURIGHIRUHVWDWLRQSDUWLFXODUO\LQWKH$PD]RQ
%DVLQZKHUHSHUFHQWRIWKHFOHDUHGIRUHVWVLVXVHG
DVSDVWXUHDQGIRUIHHGFURSV$OWKRXJKPRVWRIWKH
ZRUOG·VIHHGFURSSURGXFWLRQVWLOOWDNHVSODFHLQ2(&'
FRXQWULHVLQWKHUHFHQWSDVWLWKDVEHHQREVHUYHGWKDW
GLIIHUHQWGHYHORSLQJFRXQWULHVLQ6RXWK$PHULFD)$2
DEXWLQFUHDVLQJO\LQ$IULFDDVZHOODUHUDSLGO\
H[SDQGLQJ WKHLU SURGXFWLRQ RI IHHG FURSV QRWDEO\
PDL]HDQGVR\EHDQ
%DVHGRQWKHGHYHORSPHQWVFHQDULRVLQ)$2·VUHSRUW
:RUOG $JULFXOWXUH 7RZDUGV %UXLQVPD
DQG :LUVHQLXV $]DU DQG %HUQGHV FDOFXODWH DQ LQFUHDVH RI PLOOLRQ KD LQ WKH WRWDO
DJULFXOWXUDO DUHD E\ RU SHU FHQW PRUH WKDQ
WRGD\ /DPELQ DQG 0H\IURLGW SUHVHQW D KLJK
HVWLPDWHIRUDQLQFUHDVHLQWKHDUHDXQGHUSHUPDQHQW
SDVWXUHRIPLOOLRQKDE\ZKLFKZRXOGEHLQ
OLQHZLWKPRVWODQGXVHPRGHOVWKDWSURMHFWDQLQFUHDVH
RI DERXW SHU FHQW IRU WKH SHULRG ² ,Q
WKH HYHQW WKDW JUD]LQJ V\VWHPV DUH QRW H[SDQGHG
EXW OLYHVWRFN SURGXFWLRQ LV LQWHQVLÀHG WR PHHW WKH
DQWLFLSDWHGGHPDQGIRUOLYHVWRFNSURGXFWVFURSODQG
IRUDQLPDOIHHGSURGXFWLRQZRXOGKDYHWRLQFUHDVHE\
PLOOLRQKD/DPELQDQG0H\IURLGW
7KH REVHUYHG JURZWK LQ JOREDO OLYHVWRFN GHPDQG
DQGKRZLWWUDQVODWHVLQWKHIXWXUHLQWRDOORFDWHGODQG
DUHDZLOOODUJHO\GHSHQGRQLQWHUQDWLRQDOLQYHVWPHQWV
LQ DJULFXOWXUDO ODQG SDUWLFXODUO\ LQ GHYHORSLQJ DQG
WUDQVLWLRQ HFRQRPLHV +/3( E $FFRUGLQJ WR
GDWD IRU IURP WKH ,QWHUQDWLRQDO /DQG &RDOLWLRQ
,/& SHU FHQW RI UHJLVWHUHG ODUJHVFDOH ODQG
DFTXLVLWLRQV ZHUH UHODWHG WR JUD]LQJ JURXQGV RU
DQLPDO IHHG SURGXFWLRQ 7KH ,/& HVWLPDWHV WKH WRWDO
DUDEOH ODQG DQG SDVWXUH DUHD XVHG RU DOORFDWHG WR
LQWHUQDWLRQDO ODQG LQYHVWRUV IRU OLYHVWRFN WR EH PLOOLRQ KD ,QYHVWPHQWV GLUHFWO\ UHODWHG WR OLYHVWRFN
SURGXFWLRQDUHWKXVDYHU\SURPLQHQWGULYHURIODUJH
VFDOH ODQG DFTXLVLWLRQV JLYHQ WKDW DERXW PLOOLRQ
KD RI ODQG ZRUOGZLGH DUH HVWLPDWHG WR KDYH EHHQ
OHDVHGRUVROGRUDUHXQGHUQHJRWLDWLRQLQWKHSHULRG
EHWZHHQDQG$QVHHXZHWDO
/LYHVWRFNSURGXFWLRQDQG HQYLURQPHQWDO LPSOLFDWLRQV
7RGD\ PRUH WKDQ KDOI RI WKH HDUWK·V ODQG VXUIDFH LV
XVHG IRU DJULFXOWXUH DQG HVWLPDWHV VXJJHVW WKDW SHUFHQWRIWKLVLVPRGHUDWHO\GHJUDGHGZKLOHDQRWKHU
SHU FHQW LV KLJKO\ GHJUDGHG UHVXOWLQJ LQ D JOREDO
UHGXFWLRQ LQ FURS \LHOG RI SHU FHQW %UHX HW DO
2OGHPDQ:RRG6HEDVWLDQDQG6FKHUU
,Q DGGLWLRQ LW LV HVWLPDWHG WKDW DERXW SHU
FHQWRUPLOOLRQKDRIWKHZRUOG·VJUD]LQJODQGDQG
SHU FHQW RI UDQJHODQGV ORFDWHG LQ GU\ODQG DUHDV
KDYH EHHQ GHJUDGHG DV UHVXOW RI RYHUJUD]LQJ VLQFH
'HOJDGRHWDO2YHUJUD]LQJLVDIXQFWLRQ
RIJUD]LQJDQGUHFRYHU\WLPHWKHQXPEHURIJUD]LQJ
DQLPDOVDQGQDWXUDOUHVRXUFHEXIIHULQJFDSDFLW\7KH
HIIHFWVRIRYHUJUD]LQJLQFOXGHDUHGXFWLRQLQVRLOFRYHU
FRPSDFWLRQOHDGLQJWRUHGXFHGZDWHULQÀOWUDWLRQDQG
ZDWHU DQG ZLQGLQGXFHG VRLO HURVLRQ $W WKH VDPH
WLPH RYHUJUD]LQJ FDQ DOWHU WKH FRPSRVLWLRQ RI WKH
YHJHWDWLRQ ZLWK SDODWDEOH SHUHQQLDO VSHFLHV EHLQJ
UHSODFHGE\OHVVSDODWDEOHSODQWVGXHWRWKHLUUHGXFHG
DELOLW\ WR FRPSHWH /LQLJHU HW DO 'U\ODQGV
DQGPRXQWDLQDUHDVDUHSDUWLFXODUO\DIIHFWHGE\VXFK
RYHUJUD]LQJ DV LQ PDQ\ FDVHV OLYHVWRFN LV WKH PDLQ
DVVHW RI WKH SHRSOH OLYLQJ LQ WKHVH RIWHQ PDUJLQDO
DUHDV)$2E'HOJDGRHWDO5HGXFWLRQ
RI RYHUJUD]LQJ DQG EHWWHU SDVWXUH SURGXFWLYLW\ FDQ
EHDFKLHYHGE\LQVWLWXWLRQDODQGUHJXODWRU\PHDVXUHV
UHODWLQJ WR DFFHVV DQG XVH RI FRPPRQO\ SRROHG
UHVRXUFHVE\EHWWHUSDVWXUHPDQDJHPHQWSUDFWLFHV
DQG E\ LPSURYLQJ OLYHVWRFN TXDOLW\ DQG SURGXFWLYLW\
%HVLGHV FKDOOHQJHV UHODWHG WR RYHUJUD]LQJ WKH
OLYHVWRFN VHFWRU DQG WKH GLIIHUHQW VHJPHQWV RI WKH
SURGXFWLRQ FKDLQ DOVR KDYH D FRQVLGHUDEOH HIIHFW
RQ ZDWHU XVH ZDWHU TXDOLW\ DQG K\GURORJ\ DQG
HFRV\VWHPV (VWLPDWHV E\ WKH )$2 D LQGLFDWH
WKDW DFWLYLWLHV UHODWHG WR WKH OLYHVWRFN VHFWRU DFFRXQW
IRU PRUH WKDQ SHU FHQW RI JOREDO ZDWHU XVH ZKLOH
IHHGSURGXFWLRQDFFRXQWVIRUDQRWKHUSHUFHQW
%HVLGHVLWVGLUHFWHIIHFWVRQWKHQDWXUDOUHVRXUFHEDVH
WKH OLYHVWRFN VHFWRU LV D PDMRU IDFWRU FRQWULEXWLQJ WR
FOLPDWH FKDQJH ,W LV HVWLPDWHG WKDW OLYHVWRFNUHODWHG
DFWLYLWLHVDUHUHVSRQVLEOHIRUSHUFHQWRIWKHZRUOG·V
*+* HPLVVLRQV RU DERXW SHU FHQW RI WKH RYHUDOO
HPLVVLRQV IURP DJULFXOWXUDO DFWLYLWLHV 6WHLQIHOG HW
DO *UHHQKRXVH JDVHV LQ WKH OLYHVWRFNVHFWRU
DULVH HLWKHU GLUHFWO\ WKURXJK HQWHULF IHUPHQWDWLRQ
DQG PDQXUH RU LQGLUHFWO\ DQG DORQJ WKH IRRG FKDLQ
ODQGXVH FKDQJH IHHG SURGXFWLRQ SURFHVVLQJ DQG
WUDQVSRUW /LYHVWRFN UHDULQJ LV UHVSRQVLEOH IRU SHU
FHQW RI FDUERQ GLR[LGH &2 HPLVVLRQV ZKLFK DUH
UHOHDVHG ZKHQ IRUHVWV DQG RWKHU QDWXUDO YHJHWDWLRQ
DUHUHSODFHGE\SDVWXUHDQGIHHGFURSV6WHLQIHOGHW
DOHVWLPDWHWKDWSHUFHQWRIOLYHVWRFNUHODWHG
FDUERQ HPLVVLRQV DUH GXH WR GHIRUHVWDWLRQ SHU
FHQWDUHIURPHQWHULFIHUPHQWDWLRQDQGSHUFHQW
IURPPDQXUH$VLPLODUDPRXQWRI&2LVUHOHDVHGE\
WKH RQIDUP XVH RI IRVVLO IXHO E\ WKH PDQXIDFWXULQJ
RI FKHPLFDO IHUWLOL]HUV E\ WUDQVSRUW DQG E\ OLYHVWRFN
SURGXFW SURFHVVLQJ 7KH OLYHVWRFN VHFWRU LV DOVR
UHVSRQVLEOH IRU HPLVVLRQV RI RWKHU *+*V LQFOXGLQJ
SHU FHQW RI KXPDQLQGXFHG PHWKDQH ZKLFK KDV
WLPHVWKHJOREDOZDUPLQJSRWHQWLDO*:3RI&2
SHUFHQWRIDQWKURSRJHQLFQLWURXVR[LGHZLWK
WLPHVWKH*:3RI&2DQGSHUFHQWRIDPPRQLD
ZKLFKLVDPDMRUFDXVHRIDFLGUDLQ)$2D)$2
D6WHLQIHOGHWDO
,PSOLFDWLRQVIRUWKHGHYHORSPHQWRIWKHOLYHVWRFNVHFWRU
7KHOLYHVWRFNVHFWRUSOD\VDQLPSRUWDQWUROHLQJOREDO
HFRQRPLFGHYHORSPHQWDQGLQWKHOLYHOLKRRGVRIDERXW
ELOOLRQSHUVRQVGLUHFWO\LQYROYHGLQWKHDJULFXOWXUDO
VHFWRU ,Q SDUWLFXODU WKH VHFWRU LQ FRPELQDWLRQ ZLWK
RWKHUDJULFXOWXUDODFWLYLWLHVSURYLGHVRSSRUWXQLWLHVIRU
SRYHUW\ UHGXFWLRQ DQG JUHDWHU IRRG VHFXULW\ IRU WKH
JURZLQJ ZRUOG SRSXODWLRQ +RZHYHU UDSLG FKDQJHV
LQ WKLV IDVWJURZLQJ VHFWRU DOVR VXEVWDQWLDOO\ ULVN
75$'($1'(19,5210(175(9,(:
PDUJLQDOL]LQJ VPDOOKROGHUV DQG WKHLU PXOWLIXQFWLRQDO
DJULFXOWXUDO V\VWHPV WKHUHE\ DIIHFWLQJ WKH IRRG
VHFXULW\RIWKHZRUOG·VSRRUSDUWLFXODUO\LQGHYHORSLQJ
DQGWUDQVLWLRQHFRQRPLHV$VHFRQGDUHDRIFRQFHUQ
UHODWHVWRWKHULVNRIOLYHVWRFNLQGXFHGHQYLURQPHQWDO
GHJUDGDWLRQ LPSHGLQJ HFRV\VWHP VHUYLFHV 7KLUG
XQFRQWUROOHG IXUWKHU GHYHORSPHQW RI OLYHVWRFN SRVHV
D PDMRU WKUHDW WR KXPDQ KHDOWK JLYHQ WKDW ]RRQRWLF
GLVHDVHV WUDQVPLWWHG EHWZHHQ DQLPDOV DQG KXPDQV
DFFRXQWIRUSHUFHQWRIDOOKXPDQSDWKRJHQV
,QRUGHUIRUWKHOLYHVWRFNVHFWRUWRDGGUHVVWKHDERYH
FKDOOHQJHV DQG FRQWULEXWH WR JOREDO GHYHORSPHQW LW
PXVW EHFRPH DQ LQWHJUDO SDUW RI JOREDO DJULFXOWXUH
PHHWLQJ VRFLDO HFRORJLFDO DQG HFRQRPLF
UHTXLUHPHQWVVLPXOWDQHRXVO\7RDFKLHYHWKLVDOOWKUHH
OLYHVWRFN SURGXFWLRQ V\VWHPV EHORZ ZLOO KDYH WR EH
FDUHIXOO\DGDSWHGDQGIXUWKHUGHYHORSHG7KHNH\WR
VXFKDGHYHORSPHQWLVIRULQYHVWPHQWVLQWKHOLYHVWRFN
VHFWRUWREHPDGHQRWRQO\LQLQGXVWULDOSURGXFWLRQ
V\VWHPVEXWDOVRLQPL[HGOLYHVWRFNFURSV\VWHPV
DQGLQSDVWRUDOV\VWHPV(FRQRPLFDOO\YLDEOHDQG
VRFLDOO\DFFHSWDEOHLQYHVWPHQWVZLOOQHHGWRDGGUHVV
LQFUHDVHGSURGXFWLYLW\HQYLURQPHQWDOFRQFHUQVDQG
WKHFRPSHWLQJODQGUHVRXUFHGHPDQGVRIFURSDQGOL
YHVWRFNSURGXFWLRQV\VWHPV7RDFKLHYHWKLVHQDEOLQJ
LQVWLWXWLRQDO DQG SROLF\ IUDPHZRUNV DQG FRRSHUDWLRQ
DW GLIIHUHQW OHYHOV DUH QHHGHG ,Q RUGHU WR PDNH
OLYHVWRFN V\VWHPV D SDUW RI VXVWDLQDEOH DJULFXOWXUH
LQWHUQDWLRQDO FRRSHUDWLRQ ZLOO EH QHFHVVDU\ DV ZHOO
DVFRRUGLQDWHGDFWLRQDWWKHUHJLRQDODQGORFDOOHYHOV
WR DFKLHYH FKDQJHV LQ WKH ZD\ OLYHVWRFN SURGXFWV
DUH SURGXFHG DQG FRQVXPHG 7KLV WUDQVIRUPDWLRQ
ZLOO GHPDQG DFWLRQ IURP DOO DFWRUV LQ OLYHVWRFN DQG
DJULFXOWXUH V\VWHPV LQFOXGLQJ SURGXFHUV LQYHVWRUV
SURFXUHUV GHFLVLRQPDNHUV UHVHDUFKHUV DQG QRW
OHDVW RI DOO IURP FRQVXPHUV IRU PRUH LQIRUPDWLRQ
VHHWKHOHDGDUWLFOHRI,GHODQG5HLFKHUWLQFKDSWHU
RIWKLV5HYLHZ
'&RQYHUVLRQVGXHWRVPDOOVFDOHIDUPLQJ
DQGUXUDOSRYHUW\
,QWKHFRPLQJGHFDGHVJOREDODJULFXOWXUHIDFHVWKUHH
PDMRU FKDOOHQJHV L SURGXFLQJ DSSUR[LPDWHO\ SHU FHQW PRUH IRRG IRU D SURMHFWHG SRSXODWLRQ RI ELOOLRQSHRSOHE\)$2ELLGHDOLQJZLWK
D YDULHW\ RI LQFUHDVLQJ ULVNV DQG VKRFNV LQFOXGLQJ
FOLPDWHFKDQJHDQGFRPPRGLW\SULFHYRODWLOLW\DQGLLL
HQVXULQJ DQG HQKDQFLQJ WKH SURYLVLRQ RI HFRV\VWHP
VHUYLFHV VXFK DV FOLPDWH FKDQJH PLWLJDWLRQ DQG
7KH5ROHRI&KDQJHVLQ/DQG8VH
ZDWHUUHJXODWLRQ7KHVHFKDOOHQJHVPRVWSURPLQHQWO\
FRQFHUQ VPDOOVFDOH IDUPLQJ ZKLFK SURYLGHV D
OLYHOLKRRGIRUDERXWELOOLRQSHRSOHOLYLQJPRVWO\LQ
ORZLQFRPHFRXQWULHVRIWKHJOREDO6RXWKYRQ%UDXQ
7KHVH ZRPHQ PHQ DQG FKLOGUHQ DFFRXQW IRU
DERXWSHUFHQWRIWKHJOREDODJULFXOWXUDOSRSXODWLRQ
DQG FXUUHQWO\ FXOWLYDWH DSSUR[LPDWHO\ SHU FHQW RI
WKH ZRUOG·V DJULFXOWXUDO ODQG SURYLGLQJ DQ HVWLPDWHG
SHUFHQWRIJOREDOFHUHDOSURGXFWLRQWDEOHDQG
DERXWKDOIRIWRWDOIRRGSURGXFWLRQ,$$67'
&KDQJLQJ DJULFXOWXUDO SUDFWLFHV KDYH HQDEOHG ZRUOG
JUDLQ KDUYHVWV WR GRXEOH LQ WKH SDVW IRXU GHFDGHV
ODUJHO\ GXH WR SURGXFWLRQ JDLQV UHVXOWLQJ IURP
*UHHQ 5HYROXWLRQ WHFKQRORJLHV LQFOXGLQJ KLJK
\LHOGLQJ FXOWLYDUV FKHPLFDO IHUWLOL]HUV DQG SHVWLFLGHV
PHFKDQL]DWLRQ DQG LUULJDWLRQ )ROH\ HW DO <HW
WKH PDMRULW\ RI VPDOOVFDOH IDUPLQJ FRQWLQXHV WR EH
FKDUDFWHUL]HG E\ ORZ ODERXU SURGXFWLYLW\ DQG ORZ WR
PRGHUDWH ODQG SURGXFWLYLW\ 6XE6DKDUDQ $IULFD DQG
/DWLQ$PHULFDKDYHH[SHULHQFHGWKHOHDVWDJULFXOWXUDO
GHYHORSPHQW EXW PD\ KDYH WKH ODUJHVW SRWHQWLDO IRU
LPSURYHPHQWLQWKHFRPLQJGHFDGHV
6PDOOVFDOH IDUPLQJ LQYROYHV JURZLQJ FURSV WR EH
XVHG DW OHDVW LQ SDUW E\ LQGLYLGXDO KRXVHKROGV 6XFK
IDUPLQJLVDVLJQLÀFDQWVRXUFHRIOLYHOLKRRGDQGVRPH
RI WKH FURSV DUH VROG LQ ORFDO RU QDWLRQDO PDUNHWV
/LQLQJHU )DUPLQJ V\VWHPV KDYH HYROYHG
WKURXJK DGDSWDWLRQ WR YDULRXV QDWXUDO FRQGLWLRQV
6RPHV\VWHPVIRFXVRQFURSSLQJRWKHUVRQOLYHVWRFN
UHDULQJDQGVWLOORWKHUVRQDFRPELQDWLRQRIERWK,Q
$IULFDDQG$VLDDYHUDJHIDUPVL]HLVKDDQGJUDLQ
\LHOGV PD\ YDU\ IURP WR WRQV SHU KHFWDUH LQ
D ORZSRWHQWLDO PDQXDO WUDGLWLRQDO DQG VPDOOVFDOH
V\VWHP )DUPV LQ GHYHORSLQJ FRXQWULHV DUH WHQGLQJ
WR EHFRPH VPDOOHU ZKLOH IDUPV LQ PLGGOH WR KLJK
LQFRPH FRXQWULHV DUH EHFRPLQJ ODUJHU YRQ %UDXQ
2I WKH ELOOLRQ SHRSOH OLYLQJ LQ H[WUHPH SRYHUW\
GHÀQHG DV WKRVH OLYLQJ RQ OHVV WKDQ GD\ LQ
DSSUR[LPDWHO\ELOOLRQLHDURXQGSHUFHQW
OLYHGLQUXUDODUHDV,)$'6LJQLÀFDQWSURJUHVV
LQSRYHUW\DOOHYLDWLRQKDVEHHQDFKLHYHGLQ(DVW$VLD
ZKHUHWRGD\WKHLQFLGHQFHRIUXUDOSRYHUW\EDVHGRQ
WKH GD\ OLQH LV DURXQG SHU FHQW ,Q 6RXWK
$VLD DQG VXE6DKDUDQ $IULFD ² SHU FHQW RI WKH
SRSXODWLRQ VWLOO VXIIHUV IURP H[WUHPH SRYHUW\ ZKLOH
² SHU FHQW RI WKH UXUDO SRSXODWLRQ OLYHV RQ OHVV
WKDQ GD\ ,)$' 7KXV VPDOOVFDOH IDUPLQJ
DQGUXUDOSRYHUW\DUHLQWULQVLFDOO\OLQNHG
:KLOH WKHUH DUH KRXVHKROGV WKDW OLYH LQ SHUVLVWHQW
SRYHUW\ UHODWLYHO\ ODUJH SURSRUWLRQV RI SHRSOH
FRQWLQXRXVO\PRYHLQDQGRXWRISRYHUW\VRPHWLPHVLQ
7DEOH $VVHVVPHQWRIVPDOOVFDOHYHUVXVODUJHVFDOHIDUPLQJDWWKHJOREDOOHYHO
7RWDO
/DQGXQGHUFXOWLYDWLRQPLOOLRQKDD
3HUFHQWDJH
3HRSOHLQDJULFXOWXUHPLOOLRQ
3HUFHQWDJHRISHRSOHLQDJULFXOWXUH
1XPEHURIIDUPVPLOOLRQ
3HUFHQWDJHRIVPDOODQGODUJHVFDOHIDUPV
&XOWLYDWHGDUHDSHUIDUPKD
3HUFHQWDJHRIODQGXQGHUFHUHDOSURGXFWLRQ
$YHUDJHFHUHDO\LHOGVWRQVKD
$QQXDOFHUHDOSURGXFWLRQPLOOLRQWRQV
3HUFHQWDJHFXOWLYDWHGRQVPDOODQGODUJHVFDOHIDUPV
E
E
F
F
E
6PDOOVFDOH
PHWDEROLF
D
F
F
/DUJHVFDOH
PHFKDQL]HG
F
F
6RXUFHV(VWLPDWLRQVLQQRUPDOIRQWE\WKH&HQWUHIRU'HYHORSPHQWDQG(QYLURQPHQWEDVHGRQDYDLODEOHGDWD
LQEROGIURPESXEOLFVRXUFHV)$2:%,$$67'DQGF9RQ%UDXQ
1RWHV D &XOWLYDWHGODQGLVFRPSRVHGRIPRVWRIWKHFURSODQGSOXVSDUWVRIDQLPDOIHHGSURGXFWLRQODQGDV
ZHOODVVRPHDJURIRUHVWU\DQGELRIXHODUHDVVHHDOVRWDEOH
DPDWWHURI\HDUV+RXVHKROGVIDOOLQWRSRYHUW\SULPDULO\
DVDUHVXOWRIDODFNRIUHVLOLHQFHWRULVNVDQGVKRFNV
$SDUW IURP LPSRUWDQW DVSHFWV LQFOXGLQJ SROLWLFDO
RU VRFLDO FRQÁLFWV LOO KHDOWK DQG XQIRUHVHHQ VRFLDO
H[SHQVHV PDQ\ ULVNV UHODWH WR IDUPLQJ SUDFWLFHV
ORVVRIDFFHVVWRODQGDQGQDWXUDOUHVRXUFHVPDUNHW
G\QDPLFV DQG SULFH YRODWLOLW\ SRRU KDUYHVWV GXH
WR HQYLURQPHQWDO ULVNV DQG FOLPDWH YDULDELOLW\ DQG
ZHDNHQHG LQVWLWXWLRQDO HQYLURQPHQWV &RQYHUVHO\
KRXVHKROGVFDQHVFDSHIURPSRYHUW\ZKHQWKH\KDYH
VHFXUHGDFFHVVWRODQGHGXFDWLRQDQGRZQHUVKLSRI
SK\VLFDO DVVHWV )XUWKHUPRUH RSSRUWXQLWLHV VXFK DV
PDUNHWV LQIUDVWUXFWXUH DQG HQDEOLQJ LQVWLWXWLRQV SOD\
DNH\UROH,)$'
,Q FRQFOXVLRQ WKH VWDWXV RI VPDOOVFDOH IDUPLQJ
LV LQWULQVLFDOO\ OLQNHG WR D FRPSOH[ LQWHUSOD\ RI
GHWHUPLQDQWV UHODWLQJ WR D VSHFLÀF ORFDO FRQWH[W EXW
LW LV DOVR GULYHQ E\ GHYHORSPHQWV DW QDWLRQDO DQG
JOREDOOHYHOV$PRQJWKHVHWKHFRPSHWLQJGHPDQGV
IRUIRRGIHHGÀEUHDQGIXHODUHWKHPRVWSURPLQHQW
IDFWRUV WKDW LQWHQVLI\ SUHVVXUHV RQ ODQG 7KHVH VR
FDOOHG ´WHOHFRQQHFWLRQVµ RI ODQGXVH FKDQJH ZKHUH
SURGXFWLRQDQGFRQVXPSWLRQRIODQGEDVHGSURGXFWV
DUH LQFUHDVLQJO\ GLVWDQW DQG UDQJH DFURVV YDU\LQJ
VSDWLDO VFDOHV UHSUHVHQW D PDMRU FKDOOHQJH IRU
GHYLVLQJIXWXUHVWUDWHJLHVIRUVXVWDLQDEOHVPDOOVFDOH
IDUPLQJ*/3
/DQGFRQYHUVLRQVWKURXJKVPDOOVFDOHIDUPLQJ7RGD\
QHDUO\ KDOI RI WKH JOREDO ODQG VXUIDFH LV GHYRWHG WR
DJULFXOWXUDO DFWLYLWLHV 2OGHPDQ )ROH\ HW DO
7KLVVSUHDGRIDJULFXOWXUDOODQGIRUDJURZLQJ
ZRUOG SRSXODWLRQ UHSUHVHQWV SHUKDSV WKH PRVW
SURPLQHQW IHDWXUH RI JOREDO FKDQJH 7KH FRPLQJ
GHFDGHVZLOOZLWQHVVIXUWKHUVLJQLÀFDQWGHPRJUDSKLF
FKDQJHVZLWKWKHUXUDOSRSXODWLRQH[SHFWHGWRSHDN
EHWZHHQDQGIROORZHGE\DGHFOLQHDQGWKH
GHYHORSLQJ ZRUOG·V XUEDQ SRSXODWLRQ ZLOO RXWQXPEHU
WKH UXUDO SRSXODWLRQ ,Q 6RXWK(DVW $VLD WKH UXUDO
SRSXODWLRQLVDOUHDG\GHFUHDVLQJLQ1RUWK$IULFD:HVW
$VLDDQGLQ6RXWKDQG&HQWUDO$VLDQXPEHUVPD\VWDUW
WR GHFOLQH DURXQG DQG LQ VXE6DKDUDQ $IULFD
DURXQG,)$'1HYHUWKHOHVVSRYHUW\ZLOO
UHPDLQODUJHO\DUXUDOSUREOHP$Q\VWUDWHJ\IRUUXUDO
GHYHORSPHQWDQGSRYHUW\DOOHYLDWLRQZLOOWKXVKDYHWR
FRQVLGHUWKDWWKHPDMRULW\RIWKHZRUOG·VSRRUZLOOOLYH
LQUXUDODUHDVIRUPDQ\GHFDGHVWRFRPH
,QWU\LQJWRXQGHUVWDQGWKHVLJQLÀFDQFHRIVPDOOVFDOH
IDUPLQJIRUPRUHUHFHQWODQGFRQYHUVLRQVGHPRJUD
75$'($1'(19,5210(175(9,(:
SKLF WUHQGV DORQH SURYLGH DQ LQFRPSOHWH EDVLV :H
QHHGWRGUDZDPRUHGLIIHUHQWLDWHGSLFWXUHLQVSDFHDQG
WLPH DQG XQGHUVWDQG KRZ WKH UHODWLRQVKLS EHWZHHQ
SRSXODWLRQJURZWKDQGODQGFRQYHUVLRQLVPHGLDWHGE\
RWKHUIDFWRUVVXFKDVHQYLURQPHQWDOFRQGLWLRQVODQG
VHWWOHPHQW SROLFLHV DQG PDUNHW IRUFHV $JULFXOWXUDO
ODQG KDV VWHDGLO\ JURZQ E\ SHU FHQW SHU DQQXP
GXULQJ WKH SDVW WZR GHFDGHV <HW PRVW RI WKLV PXVW
EHDWWULEXWHGWRWKHH[WHQVLRQRISHUPDQHQWSDVWXUH
ZKLOHFURSODQGKDVUHPDLQHGIDLUO\VWDWLF7KHUHKDYH
EHHQLPSRUWDQWUHJLRQDOGLIIHUHQFHVZLWKDGHFUHDVH
RIFURSODQGLQ(XURSHWKDWLVRIIVHWE\ODUJHJDLQVLQ
$IULFDDQG/DWLQ$PHULFD$WWKHVDPHWLPHLUULJDWHG
DUHDVKDYHVKRZQDSURJUHVVLYHEXWVORZLQJJURZWK
UDWHGXULQJWKDWSHULRG:RRGHWDO7KHUHIRUH
LWPD\EHDVVXPHGWKDWVPDOOVFDOHIDUPLQJFXUUHQWO\
SOD\V D SURPLQHQW UROH LQ ODQG FRQYHUVLRQV LQ $IULFD
DQG WR D FHUWDLQ H[WHQW LQ /DWLQ $PHULFD DOWKRXJK
SDVWXUH H[WHQVLRQ UHODWHG WR FRPPHUFLDO IDUPLQJ LV
SUREDEO\ PRUH LPSRUWDQW ,Q $VLD WKH UROH RI VPDOO
VFDOHIDUPLQJLQODQGFRQYHUVLRQLVOHVVVLJQLÀFDQW
,Q UHJLRQV DIIHFWHG E\ VPDOOVFDOH ODQG FRQYHUVLRQV
LW DSSHDUV WKDW UDSLG DJULFXOWXUDO H[SDQVLRQ DQG
LQWHQVLÀFDWLRQ PDLQO\ RFFXUV DW WKH IULQJHV RI KLJK
SRWHQWLDO DUHDV ZKHUH WKH QDWXUDO SRWHQWLDO LV
SHUFHLYHGWREHXQGHUXWLOL]HG2QWKHRQHKDQGWKLV
FRQFHUQV IRUHVW HGJHV DQG VWHHS PRXQWDLQ VORSHV
RQ WKH RWKHU KDQG WKHVH DUHDV RI UDSLG DJULFXOWXUDO
H[SDQVLRQ DUH PDLQO\ LQ VHPLDULG DUHDV ZLWK JRRG
VRLOVDQGWKHSRWHQWLDOIRUKLJKSURGXFWLYLW\LIZDWHUFDQ
EHSURYLGHG
$FFRUGLQJWR&KRPLW]DSSUR[LPDWHO\PLOOLRQ
SHRSOHOLYHLQUHPRWHWURSLFDOIRUHVWVDQGDERXW
PLOOLRQUXUDOSHRSOHOLYHLQRUQHDUWURSLFDOIRUHVWVDQG
VDYDQQDKV7KHIRUHVWVSURYLGHDOLYHOLKRRGIRUWKHVH
SHRSOHDVWKH\RIIHUODQGIRUIDUPLQJPDLQO\WKURXJK
VKLIWLQJ FXOWLYDWLRQ EXW WKH\ DUH DOVR DQ LPSRUWDQW
VRXUFH RI IRRG LQFRPH IXHO DQG PHGLFLQHV 6XFK
ODQGXVH SUDFWLFHV KDYH FDXVHG D ² PLOOLRQ
KDQHWORVVRIIRUHVWVRYHUWKHSDVW\HDUV81(3
E+RZHYHUPXFKHYLGHQFHVKRZVWKDWLQUHFHQW
WLPHVFRPPHUFLDODJULFXOWXUHDQGRWKHUDFWLYLWLHVVXFK
DVURDGDQGXUEDQFRQVWUXFWLRQVUDWKHUWKDQVKLIWLQJ
FXOWLYDWRUV DQG VXEVLVWHQFH IDUPHUV KDYH EHHQ WKH
PDLQ GULYHUV RI GHIRUHVWDWLRQ 'H)ULHV HW DO *HLVWDQG/DPELQ0HUW]HWDO5XGHOHW
DO
'U\ODQGVDVHFRQGKRWVSRWRIVPDOOVFDOHDJULFXOWXUDO
7KH5ROHRI&KDQJHVLQ/DQG8VH
)LJXUH$FWXDODQGSRWHQWLDOEHQHÀWVIURPDJULFXOWXUDODFWLYLWLHVDFFRUGLQJWRFXUUHQWDJULFXOWXUDOSRWHQWLDO
Main focus for multi-functional agricultural landscapes
High
1
Actual production benefits
2
Actual environmental
benefits at the farm level
Potential production benefits
Potential environmental
benefits at the farm level
Potential environmental
benefits at the agricultural
landscape
3
4
3
5
Benefits
1
5
4
2
Low
Negative
High
Medium
Low
None
Agricultural potential
1RWH6KDGHGDUHDVKRZVWKHPDLQIRFXVRQSURPRWLQJPXOWLIXQFWLRQDODJULFXOWXUDOODQGVFDSHV
6RXUFH$XWKRUV
H[SDQVLRQFRYHUDSSUR[LPDWHO\SHUFHQWSHUFHQWRI
WKHJOREDOODQGVXUIDFHDQGWKH\DUHKRPHWRPRUHWKDQ
ELOOLRQSHRSOHSHUFHQWRIZKRPOLYHLQGHYHORSLQJ
FRXQWULHV 81(3 E 2YHUDOO DSSUR[LPDWHO\ SHU FHQW RI JOREDO WHUUHVWULDO QHW SULPDU\ SURGXFWLRQ
133 LV ORVW HDFK \HDU GXH WR GU\ODQG GHJUDGDWLRQ
RUEHWZHHQDQGSHUFHQWRIWKHSRWHQWLDO133LQ
GU\ODQGV =LND DQG (UE $PRQJ YDULRXV RWKHU
WULJJHUVVXFKDVXUEDQL]DWLRQGHVHUWLÀFDWLRQZLOGÀUH
DQGRYHUJUD]LQJWKHWUDQVIRUPDWLRQRIJUDVVODQGVWR
FURSODQGVDQGLQDGHTXDWHFXOWLYDWLRQSUDFWLFHVSOD\D
NH\UROHLQVXFKGHJUDGDWLRQ SURFHVVHV ,QDGGLWLRQ
WKHH[SDQVLRQRIODUJHDQGVPDOOVFDOHDJULFXOWXUHLV
SXVKLQJSDVWRUDOLVWVLQWRPRUHPDUJLQDODUHDVWKHUHE\
IRUFLQJ WKHP LQWR YLFLRXV FLUFOHV RI LPSRYHULVKPHQW
DQGGHVHUWLÀFDWLRQ
7RZDUGV IXWXUH VWUDWHJLHV 6PDOOVFDOH IDUPLQJ
LQ PXOWLIXQFWLRQDO DJULFXOWXUDO ODQGVFDSHV 6PDOO
VFDOH IDUPLQJ PXVW EH DW WKH FHQWUH RI DQ\ VWUDWHJ\
WKDW SXUVXHV WKH JRDO RI IHHGLQJ D JURZLQJ ZRUOG
SRSXODWLRQZKLOHDGGUHVVLQJUXUDOSRYHUW\LQDFRQWH[W
RILQFUHDVLQJHQYLURQPHQWDOGHJUDGDWLRQDQGFOLPDWH
FKDQJH,WVKRXOGEXLOGRQDWKRURXJKXQGHUVWDQGLQJRI
WKHPDQLIROGDQGFKDQJLQJSUHVVXUHVRQVPDOOVFDOH
IDUPLQJ WKH FRQYHUVLRQV UHODWHG WR VXFK SUHVVXUHV
DQGWKHUHVXOWLQJHFRQRPLFVRFLDODQGHQYLURQPHQWDO
LPSDFWVIURPWKHORFDOWRWKHJOREDOOHYHO
7KHUH LV D JURZLQJ FRQVHQVXV WKDW VXVWDLQDEOH
DJULFXOWXUDO LQWHQVLÀFDWLRQ LQ VPDOOVFDOH IDUPLQJ
PXVW DGGUHVV WKH V\VWHPLF LQWHUDFWLRQV EHWZHHQ
DJULFXOWXUDO SURGXFWLYLW\ HQYLURQPHQWDO VHUYLFH
SURYLVLRQDQGWKHLPSURYHPHQWRIKXPDQZHOOEHLQJ
$ GLYHUVLW\ RI DJULFXOWXUDO DQG ODQGXVH SUDFWLFHV
FRPELQHG LQ PXOWLIXQFWLRQDO DJULFXOWXUDO ODQGVFDSHV
LV OLNHO\ WR DFKLHYH WKH EHVW VHW RI RXWFRPHV :KLOH
DJULFXOWXUDO LQWHQVLÀFDWLRQ ZLOO FRQWLQXH WR SOD\ DQ
LPSRUWDQW UROH LQ IXWXUH JOREDO IRRG SURGXFWLRQ
FRQWH[WVSHFLÀF DSSURDFKHV DUH DOVR QHHGHG LQ
RUGHU WR DFKLHYH VXVWDLQDEOH ODQG XVH EDVHG RQ
ELRSK\VLFDODVZHOODVVRFLRHFRQRPLFFRQVLGHUDWLRQV
'H)ULHVDQG5RVHQ]ZHLJ0RUHRYHUKRWVSRW
DUHDVRIDJULFXOWXUDOH[SDQVLRQRQWKHIULQJHVRIKLJK
SRWHQWLDO DUHDV VKRXOG EHFRPH WKH PDLQ IRFXV IRU
VXFKPXOWLIXQFWLRQDODJULFXOWXUDOODQGVFDSHV)LJXUH
VFKHPDWLFDOO\SUHVHQWVWKHFRUHHOHPHQWVRIVXFKDQ
DSSURDFK
,Q )LJXUH WRWDO SURGXFWLRQ DQG HQYLURQPHQWDO
EHQHÀWVDUHGHSLFWHGDORQJDJUDGLHQWRIGHFUHDVLQJ
DJULFXOWXUDO SRWHQWLDO 7KLV VWLSXODWHV WKDW IURP KLJK
SRWHQWLDODUHDV²RIWHQGRPLQDWHGE\LQWHQVLÀHGDQG
ODUJHVFDOH DJULFXOWXUH ² WKH SURGXFWLRQ EHQHÀWV
GHFUHDVH UDSLGO\ WRZDUGV PRUH PDUJLQDO DUHDV
GRPLQDWHG E\ VPDOOVFDOH DQG RIWHQ VXEVLVWHQFH
IDUPLQJ FXUYH 0HDQZKLOH WKH KLJKHVW SRWHQWLDO
IRU DGGLWLRQDO SURGXFWLRQ EHQHÀWV FDQ EH ORFDWHG LQ
PHGLXP WR ORZHU DJULFXOWXUDO SRWHQWLDO DUHDV FXUYH
+HQFH WKHVH DUHDV PLJKW RIIHU WKH EHVW UHWXUQV
RQ LQYHVWPHQWV IRU SURGXFWLYLW\ LQFUHDVH ,Q WHUPV RI
DFWXDO HQYLURQPHQWDO EHQHÀWV FXUYH DVVHVVPHQW
LVPRUHGLIÀFXOWEXWJHQHUDOO\WKH\ZRXOGDSSHDUWREH
UDWKHUQHJDWLYHERWKLQKLJKDQGORZSRWHQWLDODUHDV
FRPSULVLQJ ODUJH DV ZHOO DV VPDOOVFDOH IDUPLQJ
+RZHYHU WKH SRWHQWLDO HQYLURQPHQWDO EHQHÀWV
LQFUHDVHVOLJKWO\IURPKLJKWRORZHUSRWHQWLDODUHDVDW
WKHIDUPOHYHOFXUYHDQGVLJQLÀFDQWHQYLURQPHQWDO
EHQHÀWVFDQEHH[SHFWHGDWWKHDJULFXOWXUDOODQGVFDSH
OHYHOV FXUYH :KLOH ODUJHVFDOH HQWHUSULVHV FRYHU
ZKROH ODQGVFDSHV VPDOOVFDOH HQWHUSULVHV DOORZ IRU
PXOWLSOH XVH DUHDV LQEHWZHHQ WKHUHE\ LQFUHDVLQJ
HQYLURQPHQWDO VHUYLFHV DQG RIIVHWWLQJ WUDGHRIIV RI
PRUHLQWHQVLYHFRPSRQHQWV
,Q VXPPDU\ VWUDWHJLHV IRU VXVWDLQDEOH LQWHQVLÀFDWLRQ
RI VPDOOVFDOH IDUPLQJ VKRXOG IRFXV RQ GHYHORSLQJ
DJULFXOWXUDO ODQGVFDSHV LQ DUHDV ZLWK PHGLXP WR
ORZ SRWHQWLDO IRU DJULFXOWXUH 7KHUH WKH KLJKHVW
DGGLWLRQDO SURGXFWLRQ SRWHQWLDOV FDQ EH WDSSHG
ZKLOH HQYLURQPHQWDO EHQHÀWV FDQ EH LQFUHDVHG
VLJQLÀFDQWO\ 6XFK VWUDWHJLHV LQ RUGHU WR OHDSIURJ
DJULFXOWXUDO GHYHORSPHQW IRU LPSURYHG ZHOOEHLQJ
ZLWKRXW FRPSURPLVLQJ HQYLURQPHQWDO KHDOWK ZLOO
UHTXLUH LQYHVWPHQWV RQ D JOREDO VFDOH DV ZHOO DV
DQ HQDEOLQJ SROLF\ DQG LQVWLWXWLRQDO HQYLURQPHQW
)RU WKLV SXUSRVH WKH RQJRLQJ UHYDOXDWLRQ RI UXUDO
DUHDV IRU HFRV\VWHP VHUYLFH SURYLVLRQ EH\RQG WKH
HFRQRPLFDOO\ SURGXFWLYH IXQFWLRQ RI ODQG UHSUHVHQWV
DQ RSSRUWXQLW\ WKDW VKRXOG EH KDUQHVVHG 8QGHU WKH
JXLGDQFHRIVWUHQJWKHQHGSXEOLFLQVWLWXWLRQVIURPWKH
ORFDO WR WKH JOREDO OHYHO PXOWLIXQFWLRQDO VPDOOVFDOH
DJULFXOWXUH DQG SDVWRUDOLVP VKRXOG IHDWXUH DW WKH
WRS RI UXUDO GHYHORSPHQW DJHQGDV .H\ GRPDLQV RI
LQWHUYHQWLRQ UHODWH WR OHJDO DQG LQVWLWXWLRQDO VHFXULW\
RI ODQG DQG QDWXUDO UHVRXUFHV DJULFXOWXUDO H[WHQVLRQ
DQG FDSDFLW\ GHYHORSPHQW LQQRYDWLYH PHFKDQLVPV
WKDW UHZDUG HFRV\VWHP VHUYLFH SURYLVLRQV LPSURYHG
HFRQRPLFJRYHUQDQFHDQGDUHJXODWHGLQWHJUDWLRQLQWR
DJULFXOWXUDOPDUNHWVDVZHOODVSROLWLFDOHPSRZHUPHQW
RIODUJHO\PDUJLQDOL]HGVHJPHQWVRIUXUDOSRSXODWLRQV
75$'($1'(19,5210(175(9,(:
(,PSOLFDWLRQVRIODQGFRQYHUVLRQVIRU
IRRGVHFXULW\
,PSOLFDWLRQVRIJOREDODQGORFDOFKDQJH*OREDOIRRG
VHFXULW\ LV SULPDULO\ GHSHQGHQW RQ WKH SURGXFWLRQ
RI IRRG LQ DJULFXOWXUH LQFOXGLQJ IRRG SURGXFWV IURP
IRUHVWVDQGÀVKHULHVEXWDOVRRQWKHGLVWULEXWLRQDQG
DYDLODELOLW\ RI IRRG IRU FRQVXPHUV DQG VXEVLVWHQFH
IDUPHUV DQG ÀQDOO\ RQ WKH DPRXQW RI IRRG VWRUHG
DW KRXVHKROG FRPPXQLW\ HQWHUSULVH QDWLRQDO DQG
LQWHUQDWLRQDO OHYHOV )RRG SURGXFWLRQ ZLOO GHSHQG RQ
KRZ PXFK ODQG LV DOORFDWHG WR RWKHU XVHV VXFK DV
IHHGÀEUHRUDOOIRUPVRIIXHOKRZPXFKLQFUHDVHLQ
SURGXFWLRQ LV SRVVLEOH SDUWLFXODUO\ IURP VPDOOVFDOH
IDUPLQJDQGRQWKHH[WHQWRIFKDQJHLQFRQVXPSWLRQ
SDWWHUQV WR DQLPDO SURWHLQ /DVW EXW QRW OHDVW IRRG
SURGXFWLRQ LV GHSHQGHQW RQ WKH DYDLODELOLW\ RI LQSXWV
VXFK DV VHHGV ODQG ZDWHU QDWXUDO DQG LQGXVWULDO
IHUWLOL]HUV DQG LQ SDUWLFXODU RQ WKH HIIHFWV RI FOLPDWH
FKDQJH RQ DJULFXOWXUDO SURGXFWLRQ LQ WKH QHDU DQG
GLVWDQWIXWXUH
,Q VPDOOVFDOH IDUPLQJ IRRG VHFXULW\ ZLOO GHSHQG RQ
WKHH[WHQWRIIXUWKHUSUHVVXUHVH[HUWHGRQIDUPVL]HV
WKHH[WHQWRIVRLOGHJUDGDWLRQWKDWRFFXUVWKHGHJUHH
RI SUHVVXUH RQ ODQG WKH VSUHDG RI ZDWHU VFDUFLW\
WKH H[WHQW WR ZKLFK VPDOO IDUP SURGXFWLYLW\ FDQ EH
HQKDQFHG ZLWK LQSXWV DQG UHVHDUFK DQG ZKHWKHU
PDUNHWDFFHVVFDQEHIDFLOLWDWHG,QVXPWKHUHDUHD
QXPEHURILQWULQVLFGULYHUVRIUXUDOSRYHUW\WKDWQHHGWR
EHDGGUHVVHGDVDSULRULW\
,PSURYHPHQW RI IRRG VHFXULW\ IURP ORFDO WR JOREDO
OHYHOV 7KH IROORZLQJ PHDVXUHV FRXOG KHOS VPDOO
VFDOHIDUPHUVWRFRQWULEXWHWRIRRGVHFXULW\
5HJXODWLQJ ODQG FRQYHUVLRQV SUHYHQWLQJ ODQG
FRQYHUVLRQVRQODQGXVHGE\VPDOOVFDOHIDUPHUV
DQG SDVWRUDOLVWV ZLOO VHFXUH WKHLU OLYHOLKRRGV DV
ORQJDVWKH\KDYHQRDOWHUQDWLYHV
(QVXULQJ ODQG WHQXUH H[WHUQDO LQYHVWPHQWV LQ
ODQGTXDOLW\ZLOOEHFRPHDWWUDFWLYHIRUVPDOOVFDOH
IDUPHUVZKHQWKHLUODQGLVVHFXUHGHYHQLIWKHVH
DUHQRWGLUHFWO\EHQHÀFLDOIRUSURGXFWLRQEXWUDWKHU
IRUPDLQWDLQLQJHFRV\VWHPVHUYLFHV7HQXUHQHHGV
WREHJXDUDQWHHGE\6WDWHVZLWKWKHVXSSRUWRIWKH
LQWHUQDWLRQDOFRPPXQLW\
,PSURYLQJ PDUNHW DFFHVV PDUNHW FKDLQV VKRXOG
EH GHYHORSHG IRU VPDOOVFDOH IDUP SURGXFWV
LQFOXGLQJIRUWKHSUHSURFHVVLQJDQGODEHOOLQJRI
SURGXFWVIRUVWRUDJHDQGHDVLHUWUDQVSRUWWKHUHE\
PDNLQJSURGXFWVPRUHFRPSHWLWLYH
7KH5ROHRI&KDQJHVLQ/DQG8VH
'HYHORSLQJJHQGHUHTXLW\HTXDOULJKWVIRUIHPDOH
IDUPHUV DUH VHOGRP JXDUDQWHHG LQ VPDOOVFDOH
IDUPLQJ \HW ZRPHQ DUH RIWHQ WKH PDLQ DFWRUV
RQ WKH IDUP DQG WKHLU HPSRZHUPHQW ERWK
HFRQRPLFDOO\ DQG LQ GHFLVLRQPDNLQJ ZRXOG
FRQWULEXWHWRLPSURYHGOLYHOLKRRGV
5DLVLQJIDUPSURGXFWLYLW\SURGXFWLRQSHUKHFWDUH
RQ VPDOOVFDOH IDUPV FRXOG EH GRXEOHG LQ WKH
FRPLQJ \HDUV ZLWK RQO\ PRGHUDWH LQSXWV
LPSURYHG VHHGV DQG EUHHGV EHWWHU IDUP
LPSOHPHQWVDQGUHVHDUFKFHQWUHGRQVPDOOVFDOH
IDUPLQJ
,QFUHDVLQJ IDUP VL]H $UUHVWLQJ D IXUWKHU GHFOLQH
LQODQGVL]HSHUVPDOOVFDOHIDUPDQGPDLQWDLQLQJ
RUHYHQLQFUHDVLQJIDUPSORWVZRXOGEHEHQHÀFLDO
IRU PRGHUDWH PHFKDQL]DWLRQ DQG PRGHUQL]DWLRQ
HYHQLQVPDOOVFDOHIDUPLQJ
3URPRWLQJ VXVWDLQDEOH ODQG PDQDJHPHQW
5HYHUVLQJ IXUWKHU GHJUDGDWLRQ RI ODQG RQ VPDOO
VFDOHIDUPVZRXOGHQVXUHLQFUHDVHGSURGXFWLYLW\
DQGJHQHUDWHRWKHUHFRV\VWHPVHUYLFHVIURPVRLO
ZDWHUDQGELRGLYHUVLW\
5HPRYLQJ VXEVLGLHV VXEVLGLHV IRU DJULFXOWXUDO
SURGXFWVSDUWLFXODUO\LQGHYHORSHGFRXQWULHVDQG
WUDQVLWLRQHFRQRPLHVVKRXOGEHUHPRYHGDVWKH\
FUHDWH SULFH GLVWRUWLRQV DQG DIIHFW LQWHUQDWLRQDO
FRPPRGLW\PDUNHWV
,QWHUQDOL]LQJ WUDQVDFWLRQ FRVWV LQFRUSRUDWLQJ
WUDQVDFWLRQ FRVWV LQ IRRG DQG IHHG SULFHV
LQFOXGLQJ JOREDO WD[DWLRQ RQ IRVVLO IXHOV ZRXOG
HQDEOH HTXDO DFFHVV WR PDUNHWV IRU ODUJH DQG
VPDOOVFDOHIDUPLQJDOLNH
$QWLFLSDWLQJ FOLPDWH FKDQJH WKHUH LV QHHG IRU D
EHWWHUXQGHUVWDQGLQJRIWKHLPSOLFDWLRQVRIFOLPDWH
FKDQJH DQG DSSURSULDWH PHDVXUHV WR EH WDNHQ
DJDLQVW LW WKURXJK UHVHDUFK HDUO\ ZDUQLQJ DQG
HDUO\DFWLRQ
,PSOLFDWLRQVRIODQGFRQYHUVLRQV6PDOOVFDOHIDUPLQJ
LVWKHPRVWYXOQHUDEOHWRIRRGLQVHFXULW\DQGLWLVOLNHO\
WR EH YHU\ VWURQJO\ DIIHFWHG E\ ODQG FRQYHUVLRQV
SDUWLFXODUO\IURPFURSODQGWROLYHVWRFNSURGXFWLRQDV
DUHVXOWRIFKDQJLQJFRQVXPSWLRQSDWWHUQV$Q\OLNHO\
EDQVRQWKHH[WHQVLRQRIFURSODQGLQWRSDVWXUHVDQG
IRUHVWV ZLOO SODFH LQFUHDVLQJ DQG DGGLWLRQDO SUHVVXUH
RQ IDUP VL]HV DOWKRXJK WKH QXPEHU RI IDUPV PLJKW
GHFUHDVHLQWKHFRPLQJGHFDGHV%LRIXHOSURGXFWLRQ
DQG FKDQJHV LQ OLYHVWRFN SURGXFWLRQ DUH DGGLWLRQDO
IDFWRUV WKDW ZLOO KDYH D SRWHQWLDOO\ JURZLQJ LQÁXHQFH
RQVPDOOVFDOHIDUPLQJSURYLGHGFXUUHQWSROLFLHVDUH
PDLQWDLQHGRUHQKDQFHG+RZHYHUWKLVODWWHUSUHVVXUH
DOVR FRQFHUQV RWKHU ODQG XVH DQG FRYHU W\SHV DV
ELRIXHO ZLOO DIIHFW QRW RQO\ FURSODQG EXW ELRGLYHUVLW\
DQG QDWXUDO UHVRXUFHV LQ RWKHU ODQGXVH V\VWHPV DV
ZHOO
75$'($1'(19,5210(175(9,(:
1//'06#4;T#0&4#$$+0)#0&
7674'10(.+%65
1QLPPR%DVVH\
([HFXWLYH'LUHFWRU(QYLURQPHQWDO5LJKWV$FWLRQ&KDLU)ULHQGVRIWKH(DUWK,QWHUQDWLRQDODQGFRRUGLQDWRU
2LOZDWFK,QWHUQDWLRQDO
$EVWUDFW
2QWKHJURXQGVRIHTXLW\DQGHWKLFVLWLVQHFHVVDU\WRKDOWWKHXQVXVWDLQDEOHSOXQGHURUXVHRIUHVRXUFHV
WRWKHH[WHQWWKDWWKH\DUHSHUPDQHQWO\ORVWWRIXWXUHJHQHUDWLRQV/DQGJUDEELQJDPDQLIHVWDWLRQRIJUHHG
VKRZVDWUHQGRISHRSOHOLYLQJDVLIWKHUHZHUHQRWRPRUURZ,WLVFOHDUO\QRWVLPSO\DGHVLUHWRUHVSRQGWR
IRRGGHÀFLWVVRPHZKHUHEXWDSOR\WRFRQWUROWKHIRRGV\VWHPVRIWKHZRUOGDQGVXEMHFWSHRSOHWRWKH
YDJDULHVRIVSHFXODWLRQ
7KH ZHE RI JOREDO FULVHV FXUUHQWO\ FRQIRXQGLQJ
WKH ZRUOG KDV KDG GHHS LPSDFWV RQ YXOQHUDEOH
FRPPXQLWLHV LQ GHYHORSLQJ FRXQWULHV $V WKH ZRUOG
OXUFKHVIURPRQHFULVLVWRDQRWKHUELGVWRÀQGVROXWLRQV
KDYHEHHQPHUHO\FRPSRXQGLQJUDWKHUWKDQUHVROYLQJ
WKHFULVHV)RUH[DPSOHZLWKUHJDUGWRWKHIRVVLOIXHO
GULYHQ FOLPDWH FULVLV VRPH VDZ DJURIXHO SURGXFWLRQ
DQGXVHDVDNH\VROXWLRQ+RZHYHUDJURIXHOVFDQQRW
UHSODFHIRVVLOIXHOVEHFDXVHWKHUHLVVLPSO\QRWHQRXJK
DUDEOHODQGWRFXOWLYDWHWKHDPRXQWRIFURSVQHHGHGWR
PHHW WKH YRUDFLRXV DSSHWLWH RI FRPEXVWLRQ HQJLQHV
LQFDUVDQGPDFKLQHU\0RUHRYHUDJURIXHOVUHWDLQWKH
IRVVLO IXHO SURGXFWLRQ WUDQVSRUWDWLRQ DQG XWLOL]DWLRQ
SDUDGLJPHJUHÀQHULHVSLSHOLQHVWKXVFDXVLQJWKH
ZRUOGWRLPDJLQHWKHUHLVDFKDQJHZKHQLQIDFWLWLV
EXVLQHVVDVXVXDO
0RUHRYHUWKHFRQYHUVLRQRIODQGIURPWKHFXOWLYDWLRQRI
FURSVIRUIRRGWRFURSVIRUDJURIXHOVKDVKDGDQLPSDFW
RQIRRGVXSSO\6RPHDUJXHWKDWDJURIXHOSURGXFWLRQ
UXQVSDUDOOHOWRWKDWRIIRRGSURGXFWLRQDQGWKDWRQH
GRHVQRWLPSDFWWKHRWKHU&RQVLGHULQJWKDWWKHVDPH
ZRUNIRUFHLVHQJDJHGLQERWKSURFHVVHVLWLVHYLGHQW
WKDWWKHWZRFDQQRWEHGHOLQNHGDQGQHLWKHUFDQODQG
XSWDNH ² WKH\ DUH DOO LQWHUUHODWHG 6RPH SURPRWHUV
RI ELRIXHOV FODLP WKDW WKH\ GR QRW XVH IRRG FURSV
DQGWKDWWKHLUFURSVVXFKDVMDWURSKDDUHJURZQRQ
PDUJLQDO ODQGV 7KH MDWURSKD SODQW DQG WKH FODLPV
DURXQG LW KDYH DOVR UDLVHG QHZ LVVXHV LQFOXGLQJ
WKDW ODQGV FRQVLGHUHG PDUJLQDO PLJKW DSSHDU VR WR
SHUVRQVZKRQHLWKHUOLYHLQWKHORFDOLW\QRUXQGHUVWDQG
WKHG\QDPLFVRIORFDOODQGXVHV\VWHPV7KHPDUJLQDO
ODQG DUJXPHQW LV DOVR VHHQ DV D SOR\ XVHG E\
SROLF\PDNHUVDQGVSHFXODWRUVWRPDUNRXWVXFKODQGV
IRUJUDEELQJZKLOHPDUJLQDOL]LQJWKHSHRSOHZKRRZQ
XQGHUVWDQGDQGXVHWKRVHODQGV
7KH8QLWHG1DWLRQVHVWLPDWHVWKDW$IULFDKDVDWOHDVW
PLOOLRQ KHFWDUHV KD RI PDUJLQDO XQXVHG DQG
XQGHUXVHG ODQG DQG WKDW WKH 'HPRFUDWLF 5HSXEOLF
RIWKH&RQJRLVEHOLHYHGWRKDYHDURXQGPLOOLRQ
KHFWDUHV '\QHV +RZHYHU WKH FODVVLÀFDWLRQ
RIODQGDVEHLQJPDUJLQDORUQRWFDQEHFRQWHQWLRXV
HVSHFLDOO\ LI LW IDLOV WR FRQVLGHU ORFDO NQRZOHGJH DQG
WHFKQRORJLHV
7KH IRRG FULVLV KDV DOVR WULJJHUHG WKH VHDUFK IRU
ODQG E\ VSHFXODWRUV DQG RWKHUV ZKR VHH ODQGV LQ
$IULFDDVVXLWDEOHDQGDYDLODEOHIRUSXUFKDVHIRUFURS
SURGXFWLRQDLPHGDWH[SRUWRXWRI$IULFD7KLVVHHPV
OLNH WKH FRORQLDO FDVKFURSSLQJ V\VWHP UHWXUQLQJ
LQ D GLIIHUHQW JXLVH ,QWHUHVWLQJO\ QRW DOO FDVHV KDYH
FRQFHUQHG ODQG JUDEEHUV IURP RXWVLGH $IULFD 7KHUH
KDYH EHHQ LQVWDQFHV RI $IULFDQV JUDEELQJ ODQGV LQ
RWKHU$IULFDQFRXQWULHVDQGRWKHUVSOD\LQJWKHUROHRI
PLGGOHPDQWRIDFLOLWDWHWKHODQGJUDEVDVUHYHDOHGLQD
UHSRUWE\*5$,1IRUH[DPSOH7KHFDVHRIWKH
/LE\DQ$UDE-DPDKLUL\D·VLQFXUVLRQLQWR0DOLLVZRUWK\
RIQRWHLQWKLVUHJDUG$PXOWLPLOOLRQGROODUQDWLRQDOULFH
LQLWLDWLYH DQQRXQFHG E\ WKH *RYHUQPHQW RI 0DOL ZDV
LQWHQGHGWRKHOSORFDOIDUPHUVSURGXFHPRUHVRWKDW
WKH FRXQWU\ ZRXOG QR ORQJHU EH GHSHQGHQW RQ ULFH
LPSRUWV
+RZHYHUWKH*RYHUQPHQWKDQGHGRYHUDQHQRUPRXV
WUDFW RI SULPH ULFH ODQG WR D /LE\DQ LQYHVWPHQW IXQG
DQG VRPH &KLQHVH FRPSDQLHV ,Q DGGLWLRQ LQ 0DOL·V3UHVLGHQW$PDGRX7RXPDQL7RXUpRIIHUHGXS
WRKDWRWKH/LE\DQ$UDE-DPDKLUL\DDVSDUW
7KH5ROHRI&KDQJHVLQ/DQG8VH
RI D ODUJHU LQIUDVWUXFWXUH LQYHVWPHQW SURMHFW IRU WKH
DUHDWKDWLQFOXGHGWKHHQODUJHPHQWRIDFDQDODQGWKH
LPSURYHPHQWRIDURDG7KLVZDVZLWKLQWKHIUDPHZRUN
RI WKH /LE\D $IULFD ,QYHVWPHQW 3RUWIROLR /$3 7KH
DUUDQJHPHQWVKRZHGWKDWWKHLQIUDVWUXFWXUHSURYLVLRQ
ZDVFRQWUDFWHGWR&*&D&KLQHVHFRPSDQ\RZQHG
E\ &KLQD·V ELJ RLO FRUSRUDWLRQ 6,123(& ZKLOH DQ
XQQDPHG &KLQHVH ÀUP ZDV FRQWUDFWHG WR VXSSO\
&KLQHVHK\EULGULFHVHHGV7KH*5$,1UHSRUWUHYHDOHG
WKDWDOWKRXJKWKHSURMHFWFODLPHGWRSURGXFHULFHIRU
0DOLWKHUHZDV´SOHQW\RIUHDVRQWRVXVSHFWWKDWWKH
UHDOPRWLYDWLRQLVWRH[SRUWULFHWR/LE\Dµ
$3DWKVWRODQGJUDEV
$ODQGJUDEGHDOWKDWZRXOGKDYHVZDOORZHGXSKDOI
RIWKHDUDEOHODQGLQ0DGDJDVFDUZDVDERUWHG,QWKDW
GHDO'DHZRRDFRPSDQ\IURPWKH5HSXEOLFRI.RUHD
ZDVWROHDVHPLOOLRQKDRIDUDEOHODQGRQWKDWLVODQG
6WDWHIRUWKHFXOWLYDWLRQRIFRUQDQGRLOSDOPIRUH[SRUW
EDFNWRLWVKRPHFRXQWU\7KHRLOSDOPVHHGVDVZHOO
DVFRUQZHUHWREHLPSRUWHGIURP/DWLQ$PHULFD7KH
REMHFWLYH RI WKH VFKHPH ZDV WR ERRVW WKH 5HSXEOLF
RI.RUHD·VIRRGVHFXULW\E\SURYLGLQJLWZLWKXSWR
PLOOLRQ WRQV RI FRUQ SHU \HDU UHSUHVHQWLQJ KDOI RI LWV
FRUQLPSRUWV+RQJ-RQJ:DQDPDQDJHUDW'DHZRR
ZDVTXRWHGDVVD\LQJ´:HZDQWWRSODQWFRUQWKHUH
WRHQVXUHRXUIRRGVHFXULW\)RRGFDQEHDZHDSRQLQ
WKLVZRUOG:HFDQHLWKHUH[SRUWWKHKDUYHVWVWRRWKHU
FRXQWULHVRUVKLSWKHPEDFNWR.RUHDLQFDVHRIDIRRG
FULVLVµ7KHSURWHVWVWKDWHQVXHGDIWHUWKHUHYHODWLRQRI
WKHGHDOOHGWRLWVFDQFHOODWLRQDQGWKHSROLWLFDOIDOORXW
VDZWKHXQVHDWLQJRIWKHSUHVLGHQWRIWKHFRXQWU\
$FWLRQVHOVHZKHUHDOVRKDYHWKHSRWHQWLDOWRLQWHQVLI\
ODQG JUDEV LQ $IULFD )RU H[DPSOH WKH PRYH E\ WKH
*RYHUQPHQW RI ,QGRQHVLD WR LPSRVH D WZR\HDU
PRUDWRULXP RQ QHZ SDOP RLO SODQWDWLRQV LQ RUGHU
WR SURWHFW LWV UHPDLQLQJ UDLQIRUHVWV KDV SURPSWHG
DJULEXVLQHVV JLDQWV VXFK DV 6LPH 'DUE\ WR VZLWFK
WKHLU H[SDQVLRQ SODQV WR &DPHURRQ *KDQD DQG
/LEHULD7KLVUXVKLQWR$IULFDLVVHWWRFDXVHPDVVLYH
GHIRUHVWDWLRQ DQG ORVV RI IDUPODQG RI WKH ORFDO
FRPPXQLWLHV /HYLWW ZKLFK DUH VXUH FRQÁLFW
WULJJHUSRLQWV7KHLPSOLFDWLRQRIWKLVVKLIWLVLQVWUXFWLYH
ZKLOHWKH,QGRQHVLDQSODQLVZHOOLQWHQWLRQHGLWLVFOHDU
WKDW UHJXODWLRQV OLPLWHG WR RQH FRXQWU\ ZLOO VLPSO\
FDXVHLQYHVWRUVDQGVSHFXODWRUVWRVKLIWWKHLUDFWLYLWLHV
HOVHZKHUH ZKHUH UHJXODWLRQV PD\ EH OD[ RU QRQ
H[LVWHQW
%)RRGFULVLVODQGJUDEVDQGWKH
´QHZFRORQL]DWLRQµ
7KH IRRG FULVLV RI ² ZDV FKDUDFWHUL]HG E\
VRPHDQDO\VWVDVDVLOHQWWVXQDPL(FRQRPLVW
WKDW KLW WKH GHYHORSLQJ ZRUOG +RZHYHU WKHUH ZDV
QRWKLQJVLOHQWDERXWLWWKHXSKHDYDOKDGEHHQEXLOGLQJ
XS RYHU WLPH DQG WKH UXPEOHV ZHUH DXGLEOH DQG WKH
ZDYHVYLVLEOH$VQRWHGE\DUHFHQWUHSRUW&LVVRNKR
HW DO GHYHORSLQJ FRXQWULHV KDYH VXIIHUHG IRU
VRPH GHFDGHV IURP VZLIW FKDQJHV LQ WKH SULFHV RI
WKHLUFRPPRGLW\H[SRUWVRQZKLFKPRVWRIWKHPUHO\
KHDYLO\IRUWKHLUH[SRUWHDUQLQJVDQGWKLVSUREOHPKDV
EHHQ FRPSRXQGHG E\ ULVLQJ SULFH YRODWLOLW\ LQ IRRG
LPSRUWV IURP WKH JOREDO PDUNHWV 7KHLU SURSRVHG
VROXWLRQV LQFOXGH VKLHOGLQJ WKHLU YXOQHUDEOH PDUNHWV
IURPSULFHYRODWLOLW\E\SURPRWLQJWKHSURGXFWLRQDQG
FRQVXPSWLRQRIZKDWWKH\WHUP´QRQWUDGHGµFURSV
7KHIRRGFULVLVFRPELQHGZLWKWKHÀQDQFLDOFULVLVKDYH
SURPSWHGVSHFXODWRUVWRIRFXVRQLQYHVWLQJLQODQGIRU
WKHFXOWLYDWLRQRIFURSVIRUHQHUJ\DQGRUIRUIRRG7KLV
UXVKIRUODQGLQFRXQWULHVLQ$IULFD6RXWK(DVW$VLDDQG
/DWLQ$PHULFDE\RWKHUFRXQWULHVDQGFRUSRUDWLRQVKDV
OHGWRDWURFLRXVODQGJUDEV7KHVFDOHDQGSXUSRVHRI
WKHODQGJUDEVDPRXQWWRQRWKLQJVKRUWRID´QHZZDYH
RIFRORQL]DWLRQµ7KHFURSVFXOWLYDWHGLQWKHJUDEEHG
ODQGV DUH QRW LQWHQGHG WR IHHG ORFDO SRSXODWLRQV
LQVWHDGWKH\DUHPDLQO\SURGXFHGIRUH[SRUWEDFNWR
WKHKRPHFRXQWULHVRIWKH´LQYHVWRUVµDVH[HPSOLÀHG
E\WKHODQGJUDEGHDOLQYROYLQJ'DHZRRFLWHGDERYH
$QRWKHUH[DPSOHRIDQDWWHPSWHGODQGJUDEGHDOZDV
LQ6RXWK6XGDQZKHUHRQH´SDUDPRXQWFKLHIµVLJQHG
RII KD RI FRPPXQLW\ ODQG ZLWK D SRVVLELOLW\
RIFHGLQJDIXUWKHUKDWRD'DOODVEDVHGÀUP
LQ7KURXJKWKHGHDOWKHÀUPZDVVHWWRHQMR\D
\HDUOHDVHRIWKHODQGDWDSULQFHO\VXPRI
7KHWHUPVRIWKHOHDVHRIIHUHGWKHFRPSDQ\IXOOULJKWV
WR H[SORLW DOO QDWXUDO UHVRXUFHV LQ WKH OHDVHG ODQG
LQFOXGLQJWKHULJKWWR
‡ 'HYHORS SURGXFH DQG H[SORLW WLPEHUIRUHVW
UHVRXUFHV LQFOXGLQJ ZLWKRXW OLPLWDWLRQ WKH
KDUYHVWLQJRIFXUUHQWWUHHJURZWKWKHSODQWLQJDQG
KDUYHVWLQJRIKDUGZRRGWUHHVDQGWKHGHYHORSPHQW
RIZRRGEDVHGLQGXVWULHV
‡ 7UDGHDQGSURÀWIURPDQ\UHVXOWLQJFDUERQFUHGLWV
IURPWLPEHURQWKHOHDVHGODQG
‡ (QJDJH LQ DJULFXOWXUDO DFWLYLWLHV LQFOXGLQJ WKH
FXOWLYDWLRQRIELRIXHOFURSVHJMDWURSKDSODQWVDQG
SDOPRLOWUHHV
‡ ([SORUH GHYHORS PLQH SURGXFH DQGRU H[SORLW
SHWUROHXP QDWXUDO JDV DQG RWKHU K\GURFDUERQ
UHVRXUFHV IRU ERWK ORFDO DQG H[SRUW PDUNHWV DV
ZHOODVRWKHUPLQHUDOVDQGDOVRHQJDJHLQSRZHU
JHQHUDWLRQDFWLYLWLHVRQWKHOHDVHGODQG
‡ 6XEOHDVH DQ\ SRUWLRQ RU DOO RI WKH OHDVHG ODQG RU
VXEOLFHQVHDQ\ULJKWWRXQGHUWDNHDFWLYLWLHVRQWKH
OHDVHGODQGWRWKLUGSDUWLHV
+RZHYHU UHVLVWDQFH WR WKLV GHDO E\ WKH SHRSOH
VXSSRUWHGE\VROLGDULW\DFWLRQVIURPJURXSVVXFKDV
WKH2DNODQG,QVWLWXWHVXFFHHGHGLQGHIHDWLQJWKHGHDO
2,
7KLV H[DPSOH RI D ODQGJUDE GHDO WKRXJK IRLOHG
VKRZV WKH PDLQ DWWUDFWLRQV IRU VSHFXODWRUV 7KHVH
LQFOXGH WKH SRVVLELOLW\ WR H[SORLW VXUIDFH UHVRXUFHV
VXFKDVWLPEHUDQGVXEVRLOUHVRXUFHVVXFKDVRLOJDV
DQG VROLG PLQHUDOV 7KH VSHFXODWRUV DLP WR HQJDJH
LQ FRPSUHKHQVLYH H[SORLWDWLRQ RI WKHLU JUDEEHG ODQG
LQ DOO ZD\V SRVVLEOH 7KLV LV ZK\ LQ WKLV FDVH WKH\
HYHQ ODLG FODLP WR WKH FDUERQ VWRFN LQ WKH WUHHV RQ
WKH ODQG :LWK QHZ W\SHV RI FDUERQ VLQNV EHLQJ
´FRPPRGLÀHGµ LW LV FRQFHLYDEOH WKDW ODQG JUDEEHUV
ZLOO VHHN WR REWDLQ FDUERQ FUHGLWV IURP VRLO FDUERQ
VHTXHVWUDWLRQ $UJXDEO\ WKLV ZDYH RI ODQG JUDEV LV
PRUH REMHFWLRQDEOH WKDQ FRORQLDOLVP $OWKRXJK WKLV
ODQGJUDE GHDO IHOO WKURXJK WKHUH DUH RWKHUV MXVW DV
REQR[LRXVWKDWKDYHQRWEHHQVWRSSHG
6RPHWLPHVODQGJUDEVPD\SDVVXQQRWLFHGDVZLWK
WKH UHFHQW GHFLVLRQ E\ D PLQLQJ FRPSDQ\ $IULFDQ
%DUULFN *ROG LQ WKH 8QLWHG 5HSXEOLF RI 7DQ]DQLD
WR HUHFW D NLORPHWUH FRQFUHWH IHQFH DURXQG LWV
PLQLQJFRQFHVVLRQRVWHQVLEO\WRNHHSYLOODJHUVIURP
VQHDNLQJLQWRVWHDOJROG5HXWHUV&RPSOHWLRQ
RI LWV VRFDOOHG VHFXULW\ IHQFH LQ ZLOO VXJJHVW
WKDW LWV JUDEELQJ RI WKH WHUULWRU\ LV LQ SHUSHWXLW\ DQG
ZLWK WKLV VWURNH RI JHQLXV WKH FRPSDQ\ LV SRVVLEO\
GHSULYLQJ WKH FLWL]HQV RI DFFHVV WR SDUWV RI WKH ODQG
RQZKLFKWKH\FRXOGVWLOOHNHDOLYLQJZLWKRXWLQWHUIHULQJ
ZLWKWKHPLQLQJDFWLYLWLHVRIWKHFRPSDQ\(TXDOO\WKH
FRPPXQLWLHVDUHGHSULYHGRIDFFHVVWRWKHEHDXW\RI
WKH QDWXUDO ODQGVFDSH DOWKRXJK WKH UHOHQWOHVV FODZV
RIPLQLQJPDFKLQHULHVPD\KDYHDOUHDG\VFDUUHGLW
&&RQÁLFWVDQGUHVLVWDQFH
&RQÁLFWV DQG UHVLVWDQFH RYHU ODQG JUDEV DUH DOVR
LQFUHDVLQJ LQ WKH 2JRQL ODQG RI 1LJHULD 7KH SHRSOH
RI WKLV UHJLRQ DUH NQRZQ IRU WKHLU HSLF EDWWOHV
DJDLQVW GHJUDGDWLRQ RI WKHLU WHUULWRU\ WKURXJK WKH RLO
75$'($1'(19,5210(175(9,(:
H[WUDFWLRQ DFWLYLWLHV RI 6KHOO 3HWUROHXP 'HYHORSPHQW
&RPSDQ\6KHOODQGWKH1LJHULDQ1DWLRQDO3HWUROHXP
&RUSRUDWLRQ 113& 6KHOO ZDV H[SHOOHG IROORZLQJ
PDVV SHDFHIXO XSULVLQJV LQ 6LQFH WKHQ WKHUH
KDYHEHHQDWWHPSWVWRUHRSHQWKHRLOZHOOVLQ2JRQL
EXW ZLWKRXW VXFFHVV 3RVVLEO\ DV D VWHS WRZDUGV
HQVXULQJDUHWXUQRIWKHRLOJLDQWLQWRWKHWHUULWRU\WKH
8QLWHG1DWLRQV(QYLURQPHQW3URJUDPPH81(3ZDV
FRPPLVVLRQHGWRDVVHVVWKHHQYLURQPHQWDOVLWXDWLRQ
RI2JRQLODQG
7KH 81(3 DVVHVVPHQW D SUHVHQWHG WR
3UHVLGHQW *RRGOXFN -RQDWKDQ RQ $XJXVW VKRZHG K\GURFDUERQ SROOXWLRQ LQ VXUIDFH ZDWHU
WKURXJKRXWWKHFUHHNVRI2JRQLODQGDQGXSWRFP
LQ WKH JURXQGZDWHU WKDW IHHGV GULQNLQJ ZHOOV DW VLWHVLQFOXGLQJDVHULRXVFDVHLQ1LVLVLRNHQ2JDOHLQ
(OHPH 5LYHUV 6WDWH 6RLOV ZHUH IRXQG WR KDYH EHHQ
SROOXWHGZLWKK\GURFDUERQVXSWRDGHSWKRIPHWUHV
LQREVHUYHGVLWHVZKLOHEHQ]HQHDNQRZQFDQFHU
FDXVLQJFKHPLFDOZDVIRXQGWREHSUHVHQWLQGULQNLQJ
ZDWHU DW D OHYHO WLPHV DERYH WKH OHYHO GHHPHG
DFFHSWDEOHE\WKH:RUOG+HDOWK2UJDQL]DWLRQ:+2
7KHUHSRUWDOVRGRFXPHQWHGWKDWÀVKHULHVKDYHEHHQ
GHVWUR\HG DQG WKDW ZHWODQGV DURXQG 2JRQLODQG DUH
KLJKO\GHJUDGHGRUIDFLQJGHJUDGDWLRQ(QYLURQPHQWDO
5LJKWV$FWLRQ7KHVHLPSDFWVFRPELQHGKDYH
OHGWRDQLUUHSDUDEOHORVVRIOLYHOLKRRGVDQGZLOOWDNH
\HDUV WR UHPHGLDWH 3ROOXWLRQ DSSHDUV WR KDYH
PDGHDSHUPDQHQWJUDERQ2JRQLODQGV
:KLOHWKH*RYHUQPHQWRI1LJHULDDQG6KHOOGLWKHURYHU
ZKDW WR GR DERXW WKH GHVWUR\HG 2JRQL HQYLURQPHQW
WKHUH DUH SHUVLVWHQW HIIRUWV E\ ERWK JRYHUQPHQW DQG
SULYDWHHQWLWLHVWRIXUWKHUJUDEPDVVLYHWUDFWVRIZKDW
LV OHIW RI ODQG LQ WKH WHUULWRU\ IRU EDQDQD DQG RWKHU
SODQWDWLRQV2QHFRPSDQ\LVFDQYDVVLQJWKHLGHDRI
SURGXFLQJ ZKDW LW HXSKHPLVWLFDOO\ FDOOV ´2JRQL RLOVµ
IURPMDWURSKD%HFDXVHRIWKHKLJKO\VHQVLWL]HGVWDWH
RIWKH2JRQLSHRSOHWKHUHLVGHWHUPLQHGUHVLVWDQFH
DQGWKLVLVFOHDUO\QRWDODQGJUDEEHUV·KDYHQ
'&RQFOXVLRQ
7KHSXVKE\WUDQVQDWLRQDOFRUSRUDWLRQVIRUODQGWRJURZ
FURSV IRU H[SRUW DQG ELRIXHOV LQ DGGLWLRQ WR VXSSO\
WKHLU QHHG IRU SXOS DQG SDSHU LV FRPSRXQGHG
E\ WKH DSSHWLWH RI HPHUJLQJ HFRQRPLHV VXFK DV
%UD]LO&KLQDDQG,QGLDIRULQFUHDVLQJDPRXQWVRIRWKHU
QDWXUDO UHVRXUFHV LQFOXGLQJ ZDWHU DQG PLQHUDOV )RU
H[DPSOHLWLVVDLGWKDWWKH*RYHUQPHQWRI0R]DPELTXH
7KH5ROHRI&KDQJHVLQ/DQG8VH
LVDOORFDWLQJVTXDUHNLORPHWUHVRIODQGSHU
FHQWRIWKHFRXQWU\LQIRXURILWVSURYLQFHV²1DPSXOD
1LDVVD=DPEH]LDDQG&DER'HOJDGR²WR%UD]LOLDQ
IDUPHUV IRU FRPPHUFLDO VR\ FXOWLYDWLRQ WR VXSSO\ WKH
HYHUH[SDQGLQJ&KLQHVHPDUNHW1KDQWXPER
7KH LVVXHV UDLVHG E\ ODQG JUDEV DUH LQGHHG GLYHUVH
DQGVHYHUH
WRWKHH[WHQWWKDWWKH\DUHSHUPDQHQWO\ORVWWRIXWXUH
JHQHUDWLRQV/DQGJUDEELQJDPDQLIHVWDWLRQRIJUHHG
VKRZV D WUHQG RI SHRSOH OLYLQJ DV LI WKHUH ZHUH QR
WRPRUURZ,WLVFOHDUO\QRWVLPSO\DGHVLUHWRUHVSRQG
WRIRRGGHÀFLWVVRPHZKHUHEXWDSOR\WRFRQWUROWKH
IRRGV\VWHPVRIWKHZRUOGDQGVXEMHFWSHRSOHWRWKH
YDJDULHVRIVSHFXODWLRQ
/DQG JUDE LV D UHDO PHQDFH LQ D ZRUOG ULGGHQ
ZLWK FULVHV :DWVRQ D OHDGLQJ ÀJXUH LQ VHWWLQJ XS
WKH ,QWHUJRYHUQPHQWDO 3ODWIRUP RQ %LRGLYHUVLW\
DQG (FRV\VWHP 6HUYLFHV VXJJHVWV WKDW JOREDO
HFRV\VWHPV IDFH VHYHUH WKUHDWV IURP ÀYH NH\
GULYHUV ODQG FRQYHUVLRQ VXFK DV GHIRUHVWDWLRQ
RYHUH[SORLWDWLRQVXFKDVRYHUÀVKLQJWKHLQWURGXFWLRQ
RIH[RWLFVSHFLHVSROOXWLRQDQGFOLPDWHFKDQJHFLWHG
E\0F&DUWK\
/DQG JUDEELQJ LV DQ XQVXVWDLQDEOH SDWK DQG QHHGV
WR EH UHLJQHG LQ 2QO\ D JOREDO H[DPLQDWLRQ DQG D
JOREDO UHJXODWRU\ IUDPHZRUN ZLOO EH DEOH WR VWHP WKH
ÁRRG$SDUWIURPUHJXODWLQJWKLVVFRXUJHWKHUHLVDOVR
WKHQHHGWRVHFXUHODQGULJKWVDQGHQVXUHWKDWWKRVH
ULJKWVDUHUHVSHFWHGHVSHFLDOO\LQWKHPRUHYXOQHUDEOH
UHJLRQVDQGFRXQWULHVZKHUHVXFKODZVGRQRWH[LVW
7KHZRUOGFDQQRWDIIRUGQHZIRUPVRIFRQÁLFWDULVLQJ
IURP ODQG JUDEELQJ 0RUH DQG PRUH SHRSOH DUH
EHLQJGLVSODFHGE\ODQGJUDEVOLYHOLKRRGVDUHEHLQJ
GHVWUR\HG DQG KXQJHU LV EHLQJ LPSRUWHG ZKLOH IRRG
SURGXFWVDUHH[SRUWHG
2QWKHJURXQGVRIHTXLW\DQGHWKLFVLWLVQHFHVVDU\
WRKDOWWKHXQVXVWDLQDEOHSOXQGHURUXVHRIUHVRXUFHV
75$'($1'(19,5210(175(9,(:
1//'06#4;T8#.7#6+101(#0&08'56/'06'#.5+0
(4+%#U4'.+/+0#4;
+0&+0)5
$QXUDGKD0LWWDO
2DNODQG,QVWLWXWH
$EVWUDFW
7KH2DNODQG,QVWLWXWH·VDQDO\VLVRQODQGLQYHVWPHQWGHDOVKDVLGHQWLÀHGWKUHHPDMRUODFXQDHZKLFKSRLQW
WRWKHQHHGIRU
‡ EHWWHUGDWDRQDQGDEHWWHUXQGHUVWDQGLQJRIWKHFRQFHSWRI´ODQGDYDLODELOLW\µ
‡ DEHWWHUXQGHUVWDQGLQJRIWKHODQGGHDOVLHWKHLUQDWXUHDQGWKHLULPSOLFDWLRQVIRUGHYHORSLQJFRXQ
WULHVDQGIRUIRRGLQVHFXUHSRSXODWLRQVDQG
‡ DGGUHVVLQJWKHLVVXHRIODQGULJKWV
,QVWHDGRIXVLQJPDUJLQDORULQIHUWLOHODQGDVLVRIWHQFODLPHGPRVWGHDOVLGHQWLÀHGDUHDFWXDOO\WDNLQJSODFH
LQWKHYLFLQLW\RIZDWHUUHVRXUFHVWKDWRIIHULUULJDWLRQSRWHQWLDORUQHDURWKHULQIUDVWUXFWXUHUDLOZD\VURDGVRU
RQIHUWLOHVRLOV0DMRU$IULFDQULYHUVVXFKDVWKH1LOHWKH=DPEH]LDQGWKH1LJHUDUHWDSSHGE\WKHVHODQG
JUDEGHDOVZKLFKJLYHWKHLQYHVWRUVFRQWUROQRWRQO\RIWKHODQGEXWDOVRRIZDWHU
'HVSLWHZLGHVSUHDGFODLPVWKH2DNODQG,QVWLWXWH·VÀHOGUHVHDUFKDQGDQDO\VLVRIWKHODQGGHDOVLQVHYHQ
$IULFDQFRXQWULHVKDVIRXQGWKDWWKHLUSURPLVHVRIHFRQRPLFGHYHORSPHQWWKURXJKWKHLULQYHVWPHQWVLQODQG
DQG DJULFXOWXUH DUH RIWHQ RYHUVWDWHG /DUJHVFDOH ODQG LQYHVWPHQW PD\ LPSURYH VRPH PDFURHFRQRPLF
LQGLFDWRUVRIGHYHORSPHQWEXWLWPD\DOVRUHVXOWLQFRQVLGHUDEOHHQYLURQPHQWDODQGVRFLDOFRVWVWRWKHKRVW
FRXQWU\DQGORVVRIOLYHOLKRRGVRUORVWHFRQRPLFRSSRUWXQLWLHVIRULWVFLWL]HQV
/DQG LQYHVWPHQWV ² WKH SXUFKDVH RU OHDVH RI YDVW
WUDFWVRIODQGIURPPRVWO\SRRUGHYHORSLQJFRXQWULHV
E\ ZHDOWKLHU IRRGLQVHFXUH FRXQWULHV DQG SULYDWH
LQYHVWRUV IRU WKH SURGXFWLRQ DQG H[SRUW RI IRRG DQG
DJURIXHO FURSV ² KDYH JURZQ LQWR DQ LQWHUQDWLRQDO
SKHQRPHQRQ $FFRUGLQJ WR WKH :RUOG %DQN LQ
DORQH QHDUO\ PLOOLRQ KHFWDUHV RI IHUWLOH ODQG
WKURXJKRXWWKHZRUOGLHDOPRVWSHUFHQWRIJOREDO
FURSODQG ZHUH DFTXLUHG E\ LQYHVWRUV RIWHQ DW
JLYHDZD\SULFHV2YHUSHUFHQWRIWKHVHODQGGHDOV
ZHUHLQ$IULFD
,QWHUQDWLRQDO DLG DJHQFLHV DQG PXOWLODWHUDO OHQGLQJ
LQVWLWXWLRQV KDYH FRPPRQO\ VXSSRUWHG IRUHLJQ GLUHFW
LQYHVWPHQW )', DV D ZD\ WR HUDGLFDWH KXQJHU DQG
SRYHUW\ 0DQ\ RI WKHP VXJJHVW WKDW )', FDQ KHOS
GHYHORSLQJ FRXQWULHV E\ JHQHUDWLQJ LQFRPH DQG
HPSOR\PHQWDQGHQDEOLQJWKHWUDQVIHURIWHFKQRORJ\
DQG NQRZKRZ ,Q DGGLWLRQ LW LV EHOLHYHG WR SURPRWH
WKH GHYHORSPHQW RI SURFHVVLQJ DQG HFRQRPLF DQG
VRFLDO LQIUDVWUXFWXUH LQ ´KRVWµ FRXQWULHV 7KLV LPSOLHV
WKDW $IULFDQ FRXQWULHV DUH WKHUHIRUH EHQHÀFLDULHV LQ
VXFK GHDOV +RZHYHU FXUUHQWO\ OLWWOH LV XQGHUVWRRG
RI WKH OHJDO VRFLDO DQG HFRQRPLF LPSOLFDWLRQV
RI WKH ODQG GHDOV LQYROYLQJ )', 7KH DXWKRUV RI D
FRPSUHKHQVLYH UHVHDUFK RQ ODQG JUDEV )$2,)$'
,,(' UHFRJQL]HG WKDW WKHLU UHSRUW KDG ´RQO\
VWDUWHG WR VFUDWFK WKH VXUIDFH RI D YHU\ FRPSOH[ VHW
RI LVVXHVµ 7KH 2DNODQG ,QVWLWXWH·V RZQ DQDO\VLV KDV
LGHQWLÀHG WKUHH PDMRU ODFXQDH ZKLFK SRLQW WR WKH
QHHGIRULEHWWHUGDWDRQDQGDEHWWHUXQGHUVWDQGLQJ
RI WKH FRQFHSW RI ´ODQG DYDLODELOLW\µ LL D EHWWHU
XQGHUVWDQGLQJRIWKHODQGGHDOVLHWKHLUQDWXUHDQG
WKHLU LPSOLFDWLRQV IRU GHYHORSLQJ FRXQWULHV DQG IRU
IRRGLQVHFXUH SRSXODWLRQV DQG LLL DGGUHVVLQJ WKH
LVVXHRIODQGULJKWV
*LYHQ WKH SDUDPRXQW LPSRUWDQFH RI DGGUHVVLQJ WKLV
NQRZOHGJH JDS WKH VFDOH DQG UDWH DW ZKLFK WKHVH
ODQGGHDOVDUHKDSSHQLQJDQGWKHFRPSOHWHODFNRI
WUDQVSDUHQF\VXUURXQGLQJWKHPWKH2DNODQG,QVWLWXWH
LQLWLDWHG D UHVHDUFK SURMHFW HQWLWOHG 8QGHUVWDQGLQJ
7KH5ROHRI&KDQJHVLQ/DQG8VH
/DQG,QYHVWPHQW'HDOVLQ$IULFDLQZKLFKVWXGLHG
VHYHQ FRXQWULHV (WKLRSLD 0DOL 0R]DPELTXH 6LHUUD
/HRQH6RXWK6XGDQWKH8QLWHG5HSXEOLFRI7DQ]DQLD
DQG =DPELD ,Q -XQH WKH ,QVWLWXWH UHOHDVHG D
SDSHUZKLFKKLJKOLJKWVVRPHRIWKHPDLQÀQGLQJVRI
LWV ÀUVW SKDVH RI UHVHDUFK RQ ODQG LQYHVWPHQW GHDOV
LQ$IULFD
$:KRDUHWKHLQYHVWRUV"
1HZV FRYHUDJH KDV WHQGHG WR HPSKDVL]H WKH UROH
WKDW FRXQWULHV VXFK DV &KLQD DQG WKH *XOI 6WDWHV
KDYHSOD\HGLQWKHDFFHOHUDWLRQRIODQGDFTXLVLWLRQVLQ
$IULFD+RZHYHUWKH2DNODQG,QVWLWXWH·VLQYHVWLJDWLRQ
LQYROYLQJRYHUGHDOVLQWKHVHYHQ$IULFDQFRXQWULHV
FRYHUHG UHYHDOHG D PDMRU UROH SOD\HG DOVR E\
:HVWHUQ ÀUPV ZHDOWK\ 8QLWHG 6WDWHV DQG (XURSHDQ
LQGLYLGXDOV DQG LQYHVWPHQW IXQGV ZLWK WLHV WR PDMRU
EDQNVVXFKDV*ROGPDQ6DFKVDQG-30RUJDQ2WKHU
LQYHVWRUVLQFOXGHDOWHUQDWLYHLQYHVWPHQWÀUPVVXFKDV
/RQGRQEDVHG (PHUJHQW $VVHW 0DQDJHPHQW WKDW
VHHNVWRDWWUDFWVSHFXODWRUVLQFOXGLQJXQLYHUVLWLHVLQ
WKH 8QLWHG 6WDWHV VXFK DV +DUYDUG DQG 9DQGHUELOW
ZLWK WKH SURPLVH RI JDLQLQJ DFFHVV WR DJULFXOWXUDO
ODQG WKDW ZLOO \LHOG KLJK ÀQDQFLDO UHWXUQV IRU WKHLU
HQGRZPHQWV $QRWKHU H[DPSOH FRQFHUQV VHYHUDO
7H[DVEDVHGLQWHUHVWVWKDWDUHDVVRFLDWHGZLWKDPDMRU
KDGHDOLQ6RXWK6XGDQZKLFKLQYROYHV.LQ\HWL
'HYHORSPHQW //& ² DQ $XVWLQ 7H[DVEDVHG ´JOREDO
EXVLQHVV GHYHORSPHQW SDUWQHUVKLS DQG KROGLQJ
FRPSDQ\µ PDQDJHG E\ +RZDUG (XJHQH 'RXJODV
D IRUPHU 8QLWHG 6WDWHV $PEDVVDGRU DW /DUJH DQG
&RRUGLQDWRUIRU5HIXJHH$IIDLUV
$ NH\ SOD\HU LQ WKH ODUJHVW ODQG GHDO LQ WKH 8QLWHG
5HSXEOLFRI7DQ]DQLDLV,RZDDJULEXVLQHVVHQWUHSUHQ
HXU%UXFH5DVWHWWHUZKRFRQFXUUHQWO\VHUYHVDV&(2
RI 3KDURV $J FRIRXQGHU DQG 0DQDJLQJ 'LUHFWRU RI
$JUL6RO(QHUJ\DQG&(2RI6XPPLW)DUPVDQGLVDQ
LPSRUWDQWGRQRUWR,RZD6WDWH8QLYHUVLW\5DVWHWWHUZDV
UHFHQWO\ DSSRLQWHG WR WKH ,RZD %RDUG RI 5HJHQWV E\
7HUU\%UDQVWDG,RZD·V*RYHUQRU,RZD6WDWH8QLYHUVLW\
KDVSURYLGHG´SULYDWHµUHVHDUFKVHUYLFHVWKDWEHQHÀW
5DVWHWWHU·V LQYHVWPHQWV LQ WKH 8QLWHG 5HSXEOLF RI
7DQ]DQLD
0DQ\(XURSHDQFRPSDQLHVDUHDOVRLQYROYHGLQODQG
GHDOVLQ$IULFDQFRXQWULHVRIWHQZLWKVXSSRUWSURYLGHG
E\ WKHLU JRYHUQPHQWV DQG HPEDVVLHV LQ WKRVH
FRXQWULHV )RU LQVWDQFH 6ZHGLVK DQG *HUPDQ ÀUPV
KDYHVWURQJLQWHUHVWVLQWKHSURGXFWLRQRIELRIXHOVLQWKH
8QLWHG5HSXEOLFRI7DQ]DQLD0DMRULQYHVWRUVLQ6LHUUD
/HRQH LQFOXGH $GGD[ %LRHQHUJ\ RI 6ZLW]HUODQG DQG
4XLIHO ,QWHUQDWLRQDO +ROGLQJV RI 3RUWXJDO $QG 6LHUUD
/HRQH $JULFXOWXUH LV DFWXDOO\ D VXEVLGLDU\ RI &UDGO
&$3$525HQHZDEOH$JULFXOWXUH'HYHORSPHQWV/WG
EDVHGLQWKH8QLWHG.LQJGRP
%$UHLQYHVWRUVEX\LQJXQXVHG
DYDLODEOHODQG"
7KH 2DNODQG ,QVWLWXWH·V UHVHDUFK IRXQG VHYHUDO
FDVHV ZKHUH VPDOO IDUPHUV YLHZHG DV ´VTXDWWHUVµ
KDYH EHHQ IRUFLEO\ UHPRYHG IURP WKHLU DQFHVWUDO
ODQGV ZLWK QR FRPSHQVDWLRQ LQ RUGHU WR PDNH URRP
IRU WKH FXOWLYDWLRQ RI H[SRUW FRPPRGLWLHV LQFOXGLQJ
ELRIXHOVDQGFXWÁRZHUV,Q(WKLRSLDIRUH[DPSOHWKH
YLOODJL]DWLRQ SURFHVV RI QHDUO\ LQGLJHQRXV
SHRSOHLVWDNLQJSODFHLQWKHYHU\VDPHDUHDVWDUJHWHG
IRU ODQG LQYHVWPHQW E\ ODUJHVFDOH LQYHVWRUV 3HRSOH
ZKR DUH EHLQJ IRUFHG RII WKHLU DQFHVWUDO ODQGV DUH
DIUDLG WR RSSRVH GLVSODFHPHQW IRU IHDU RI WKHLU OLYHV
DQG WKUHDWV RI LPSULVRQPHQW LQ D FRXQWU\ ZKHUH
SROLWLFDO YLROHQFH DQG KXPDQ ULJKWV YLRODWLRQV DUH
FRPPRQ
,Q 6DPDQD 'XJX LQ 0DOL LQ ZKHQ EXOOGR]HUV
PRYHG LQ WR FOHDU WKH ODQG PHQ ZRPHQ DQG \RXWK
IURPWKHFRPPXQLW\ZKRSURWHVWHGWKHFXWWLQJRIWKHLU
WUHHVZHUHPHWE\SROLFHIRUFHDQGZHUHEHDWHQDQG
DUUHVWHG $QG LQ WKH 8QLWHG 5HSXEOLF RI 7DQ]DQLD
WKH PHPRUDQGXP RI XQGHUVWDQGLQJ EHWZHHQ
$JUL6RO (QHUJ\ IURP WKH 8QLWHG 6WDWHV DQG WKH ORFDO
JRYHUQPHQW VWLSXODWHV LQ LWV ÀUVW DUWLFOH WKDW WKH WZR
PDLQ ORFDWLRQV ² .DWXPED DQG 0LVKDPR ² IRU WKH
FRPSDQ\·V SURMHFW DUH UHIXJHH VHWWOHPHQWV WKDW ZLOO
KDYHWREHFORVHGEHIRUHWKHSURMHFWFDQVWDUW<HWWKH
UHIXJHHVOLYLQJWKHUHKDGÁHG%XUXQGLLQ
DQGKDYHEHHQIDUPLQJWKLVODQGIRU\HDUV
2YHUDOO ZKHQ IDUPHUV DUH QRW VLPSO\ UHPRYHG IURP
WKHLU ODQG WKH ODQG OHDVHG WR LQYHVWRUV LQ $IULFD LV
HLWKHU IDOORZ ODQG RU IRUHVWV JHQHUDOO\ XVHG E\ WKH
ORFDO SRSXODWLRQ IRU D ZLGH UDQJH RI SXUSRVHV HJ
FROOHFWLRQ RI WLPEHU ZLOG IRRG ÀUHZRRG PHGLFLQDO
SODQWV FRQVHUYDWLRQ RI ZDWHUVKHGV DQG SURWHFWLRQ
DJDLQVWHURVLRQ,QVWHDGRIXVLQJPDUJLQDORULQIHUWLOH
ODQG DV LV RIWHQ FODLPHG PRVW GHDOV LGHQWLÀHG DUH
DFWXDOO\WDNLQJSODFHLQWKHYLFLQLW\RIZDWHUUHVRXUFHV
WKDWRIIHULUULJDWLRQSRWHQWLDORUQHDURWKHULQIUDVWUXFWXUH
UDLOZD\V URDGV RU RQ IHUWLOH VRLOV 0DMRU $IULFDQ
ULYHUV VXFK DV WKH 1LOH WKH =DPEH]L DQG WKH 1LJHU
75$'($1'(19,5210(175(9,(:
DUHWDSSHGE\WKHVHODQGJUDEGHDOVZKLFKJLYHWKH
LQYHVWRUVFRQWUROQRWRQO\RIWKHODQGEXWDOVRRIZDWHU
&'RHVIRUHLJQLQYHVWPHQWLQODQGOHDGWR
HFRQRPLFGHYHORSPHQW"
7KH EHOLHI WKDW ODUJHVFDOH ODQG LQYHVWPHQW LQ $IULFD
ZLOOUHVXOWLQPXFKQHHGHGHFRQRPLFGHYHORSPHQWLV
VWURQJO\ SURPRWHG E\ IRUHLJQ LQYHVWRUV JRYHUQPHQW
RIÀFLDOVDQGLQWHUQDWLRQDOLQVWLWXWLRQV$VDUHVXOWPDQ\
$IULFDQ JRYHUQPHQWV IHUYHQWO\ HQFRXUDJH IRUHLJQ
LQYHVWPHQW LQ DJULFXOWXUDO ODQG DQG RIIHU ZKDW VRPH
KDYHFDOOHG´PRXWKZDWHULQJµLQFHQWLYHVWRLQYHVWRUV
2IÀFLDOV WUXVW WKDW ODQG GHDOV ZLOO VSXU JURZWK ZLWK
LQFRPLQJFDSLWDODVVLVWZLWKLQIUDVWUXFWXUHDQGFUHDWH
HPSOR\PHQWIRUORFDOSHRSOH2QWKHLUSDUWLQYHVWRUV
UHLQIRUFHWKHVHLGHDVZLWKEROGSURPLVHVRIHFRQRPLF
GHYHORSPHQW ´PRGHUQL]DWLRQµ DQG QXPHURXV MREV
'HVSLWH ZLGHVSUHDG FODLPV WKH 2DNODQG ,QVWLWXWH·V
ÀHOG UHVHDUFK DQG DQDO\VLV RI WKH ODQG GHDOV LQ WKH
VHYHQ FRXQWULHV KDV IRXQG WKDW WKHLU SURPLVHV RI
HFRQRPLF GHYHORSPHQW WKURXJK WKHLU LQYHVWPHQWV LQ
ODQGDQGDJULFXOWXUHDUHRIWHQRYHUVWDWHG/DUJHVFDOH
ODQGLQYHVWPHQWPD\LPSURYHVRPHPDFURHFRQRPLF
LQGLFDWRUV RI GHYHORSPHQW EXW LW PD\ DOVR UHVXOW LQ
FRQVLGHUDEOH HQYLURQPHQWDO DQG VRFLDO FRVWV WR WKH
KRVWFRXQWU\DQGORVVRIOLYHOLKRRGVRUORVWHFRQRPLF
RSSRUWXQLWLHV IRU LWV FLWL]HQV $Q DQDO\VLV RI YDULRXV
HFRQRPLFLVVXHVUHODWHGWRIRUHLJQLQYHVWPHQWLQODQG
GHPRQVWUDWHV WKDW WKH RSSRUWXQLWLHV IRU HFRQRPLF
GHYHORSPHQW DUH LQ IDFW OLPLWHG 7KHUH DUH VHYHUDO
UHDVRQVIRUWKLVDVGLVFXVVHGEHORZ
',QYHVWRULQFHQWLYHVUHVXOWLQJLQ
IRUJRQHSXEOLFUHYHQXHV
$IULFDQ JRYHUQPHQWV DUH RIIHULQJ D ZLGH UDQJH RI
LQFHQWLYHVWRDWWUDFWIRUHLJQLQYHVWPHQW7KHVHLQFOXGH
ÀVFDO LQFHQWLYHV VXFK DV GXW\ H[HPSWLRQV IXOO RU
SDUWLDOWD[KROLGD\VDQGRUUHGXFWLRQVLQWKHWD[UDWH
IRU VSHFLÀF W\SHV RI DFWLYLWLHV DV ZHOO DV QRQÀVFDO
LQFHQWLYHVLQFOXGLQJDOORZLQJH[SDWULDWHHPSOR\PHQW
DQG UHPLWWDQFH RI SURÀWV DQG RWKHU EHQHÀWV IRU
IRUHLJQ SHUVRQQHO 7KH IRUHJRQH SXEOLF UHYHQXHV
DV D UHVXOW RI LQYHVWRU LQFHQWLYHV FDQ VHYHUHO\
XQGHUPLQH D FRXQWU\·V WD[ EDVH ,PSRUW GXWLHV IRU
H[DPSOH UHSUHVHQW DSSUR[LPDWHO\ SHU FHQW RI
WRWDOJRYHUQPHQWUHYHQXHLQ0R]DPELTXHDQGSHU
FHQW LQ 6LHUUD /HRQH 7KH WD[ H[HPSWLRQV
LQ WKH 8QLWHG 5HSXEOLF RI 7DQ]DQLD DPRXQWHG WR ELOOLRQ 7DQ]DQLDQ VKLOOLQJV PLOOLRQ ² PRUH WKDQ
KDOI WKH WULOOLRQ 7DQ]DQLDQ VKLOOLQJV PLOOLRQ
WKH*RYHUQPHQWSODQQHGWRERUURZIURPFRPPHUFLDO
VRXUFHV IRU LQIUDVWUXFWXUH ÀQDQFLQJ LQ +DG
LWEHHQFROOHFWHGLWZRXOGKDYHSURYLGHGSHUFHQW
PRUH UHVRXUFHV IRU HGXFDWLRQ RU SHU FHQW PRUH
UHVRXUFHVIRUKHDOWKLQ
(/RZODQGSULFHVDQGUHQWDOIHHV
,Q $IULFD ODQG LV UHDGLO\ RIIHUHG LQ WKH IRUP RI KXJH
WUDFWVDWH[WUHPHO\ORZSULFHVRUOHDVHUDWHVFRPSDUHG
ZLWKWKRVHLQRWKHUFRQWLQHQWVWDEOHVDQG
7DEOH6DPSOLQJRIIDUPODQGOHDVHIHHVE\ODQGGHDO
/RFDWLRQ
(WKLRSLD
0DOL
(WKLRSLD
6XGDQ
'HDO
3ULFHKD\U
/HDVHWHUPV
6DXGL6WDU
)UHHODQGUHQW
KD\HDUOHDVH
0DOLE\D
)UHHODQGUHQW
KD\HDUOHDVH
.DUXWXUL
D
KD\HDUOHDVH
1LOH7UDGLQJDQG'HYHORSPHQW
KDDW\HDUOHDVH
6LHUUD/HRQH
6LHUUD/HRQH$JULFXOWXUH
KD\HDUOHDVH
6LHUUD/HRQH
4XLIHO$JULEXVLQHVV6//LPLWHG
KD\HDUOHDVH
6RXUFH%DVHGRQ2DNODQG,QVWLWXWHÀHOGUHVHDUFK2FWREHU-XQH
1RWHVD.DUXWXULLQLWLDOO\OHDVHGODQGIRUMXVWKDELUUKDEXWLQVXEVHTXHQWQHJRWLDWLRQVZLWKWKHIHGHUDO
*RYHUQPHQWWKDWSULFHZDVUDLVHGWRKDELUUKD
7KH5ROHRI&KDQJHVLQ/DQG8VH
7DEOH6DPSOLQJRIDYHUDJHIDUPODQGSULFHVE\VHOHF
WHGFRXQWULHV
/RFDWLRQ
$YHUDJHSULFHKD\U
1HZ=HDODQGGDLU\
8QLWHG.LQJGRPDYHUDJH
²DOOODQGW\SHV
8QLWHG6WDWHVGU\ODQG
LQFRUQEHOW
3RODQG
%UD]LO0DWR*URVVRGU\
ODQG
$UJHQWLQD&HQWUDO
SURYLQFHV
²
²
6RXUFH7KH.QLJKW)UDQN)DUPODQG,QGH[
/RZSULFHVDUHFHUWDLQO\DWWUDFWLYHWRIRUHLJQLQYHVWRUV
$FFRUGLQJ WR 6XVDQ 3D\QH &KLHI ([HFXWLYH 2IÀFHU
&(2 RI (PHUJHQW $VVHW 0DQDJHPHQW ´,Q 6RXWK
$IULFD DQG 6XE 6DKDUDQ $IULFD WKH FRVW RI DJULODQG
DUDEOH JRRG DJULODQG WKDW ZH·UH EX\LQJ LV RQH
VHYHQWKRIWKHSULFHRIVLPLODUODQGLQ$UJHQWLQD%UD]LO
DQG $PHULFD 7KDW DORQH LV DQ DUELWUDJH RSSRUWXQLW\
:HFRXOGEHPRURQLFDQGQRWJURZDQ\WKLQJDQGZH
WKLQNZHZLOOPDNHPRQH\RYHUWKHQH[WGHFDGHµVHH
KWWSZZZRDNODQGLQVWLWXWHRUJHPHUJHQWYLGHR
7KH EHQHÀWV IURP WKH LQYHVWPHQWV IRU WKH KRVW
FRXQWULHVDUHXQGHUPLQHGE\WKHVHORZSULFHV3D\QH
DOOXGHVWRWKHIDFWWKDWEHFDXVHRIORZODQGSULFHVLWLV
SHUKDSVLQWKHLQYHVWRU·VEHVWLQWHUHVWWRVLWRQWKHODQG
DQGSURÀWIURPDUELWUDJHEHWZHHQORZODQGDFTXLVLWLRQ
SULFHVFRPSDUHGZLWKWKHLUVDOHVYDOXHVDVWKHPDUNHW
LPSURYHV:KLOHVXFKVSHFXODWLRQRIWHQHQWDLOVKLJKHU
ULVN UHWXUQV RQ VSHFXODWLYH LQYHVWPHQWV LQ $IULFDQ
IDUPODQG KDYH EHHQ UHSRUWHG WR UHDFK SHU FHQW
,QGHHG PDQ\ RI WKH ODQG GHDOV LQYHVWLJDWHG E\ WKH
2DNODQG ,QVWLWXWH DUH QRW \HW RSHUDWLRQDO LQGLFDWLQJ
WKDWWKHLQYHVWPHQWVPD\KDYHEHHQPDGHVROHO\IRU
VSHFXODWLYHUDWKHUWKDQSURGXFWLYHSXUSRVHV
)'RHVIRUHLJQLQYHVWPHQWLQDJULFXOWXUH
OHDGWRMREFUHDWLRQ"
7KH SURPLVH RI MRE FUHDWLRQ LV RIWHQ WKH DUJXPHQW
SUHVHQWHGE\LQYHVWRUVJRYHUQPHQWVDQGLQWHUQDWLRQDO
LQVWLWXWLRQV WR FRQYLQFH ORFDO FRPPXQLWLHV RI WKH
EHQHÀWVRIIRUHLJQLQYHVWPHQWLQDJULFXOWXUH%HFDXVH
RIWKHODUJHUROHDJULFXOWXUHSOD\VLQ$IULFDQHFRQRPLHV
WKH VHFWRU KDV JUHDW SRWHQWLDO DV D GULYHU RI WKHLU
HFRQRPLF GHYHORSPHQW DQG MRE FUHDWLRQ $FWLYLWLHV
VXFK DV VWRUDJH WR UHGXFH SRVWKDUYHVW ORVVHV DQG
WR JHW WKH EHVW IURP PDUNHW RSSRUWXQLWLHV DV ZHOO
DV LQYHVWPHQWV LQ YDOXHDGGHG SURGXFWLRQ VXFK DV
SURFHVVLQJ VHHP SDUWLFXODUO\ UHOHYDQW WR PDNH WKH
PRVWRIWKHWUHPHQGRXVSRWHQWLDORI$IULFDQDJULFXOWXUH
,PSURYLQJVPDOOKROGHUSURGXFWLYLW\DQGSURGXFWLRQLV
DOVRHVVHQWLDOIRUDVHFWRUODUJHO\GHSHQGHQWRQIDPLO\
IDUPV
<HW WKH PDMRULW\ RI ODQG GHDOV LQYHVWLJDWHG E\ WKH
2DNODQG,QVWLWXWHRIIHUEDVLFZDJHODERXUHPSOR\PHQW
PRVWO\ORZSD\LQJSRVLWLRQVZKLFKSUHVHQWDQXPEHU
RI GLVDGYDQWDJHV 2IWHQ LW LV XQFOHDU KRZ PDQ\
MREV ZLOO EH FUHDWHG RU ZKHWKHU WKRVH MREV ZLOO
RIIHU IDLU FRPSHQVDWLRQ IRU ORFDO IDUPHUV· ORVW ODQGV
DQG OLYHOLKRRGV )XUWKHUPRUH PRGHUQ DJULFXOWXUDO
VFKHPHV DUH KLJKO\ PHFKDQL]HG DQG SURYLGH
UHODWLYHO\ IHZ RIWHQ VKRUWWHUP VHDVRQDO MREV 7KHUH
LVQRLQGLFDWLRQWKDWLQYHVWRUVDUHVHHNLQJWRPD[LPL]H
ORFDO HPSOR\PHQW RU WKDW JRYHUQPHQWV DUH JLYLQJ
SULRULW\WRMREFUHDWLRQ2QWKHFRQWUDU\LQYHVWRUVRIWHQ
ÀQG VFDODEOH PHFKDQL]HG DJULFXOWXUH WR EH PRUH
PDQDJHDEOH DQG JRYHUQPHQWV OXUH WKHVH LQYHVWRUV
E\ SODFLQJ IHZ RU QR OLPLWV RQ H[SDWULDWH ZRUNHUV ,W
DSSHDUV WKHUHIRUH WKDW ORIW\ HPSOR\PHQW FODLPV
PDGHE\LQYHVWRUVJHQHUDOO\DUHQRWVXEVWDQWLDWHGE\
DFWXDO MRE FUHDWLRQ RU E\ MREV WKDW EULQJ VLJQLÀFDQW
GHYHORSPHQW EHQHÀWV ,QGHHG HYLGHQFH VKRZV WKDW
ODUJHVFDOH DJULFXOWXUDO LQYHVWPHQWV SURYLGH PLQLPDO
EHQHÀWV WR ORFDO FRPPXQLWLHV DQG WKLV VKRXOG EH
WDNHQLQWRFRQVLGHUDWLRQE\GHYHORSPHQWSUDFWLWLRQHUV
DQG SROLF\PDNHUV ZKHQ HYDOXDWLQJ WKH OHJLWLPDF\
RI ´UHVSRQVLEOHµ DJURLQYHVWPHQW 7R WUXO\ VSXU MRE
FUHDWLRQ KRVW JRYHUQPHQWV ZRXOG QHHG WR HVWDEOLVK
LQYHVWPHQWDJUHHPHQWVWKDWFRQWULEXWHWRUDWKHUWKDQ
GHWUDFWIURPORFDOOLYHOLKRRGRSWLRQV
2DNODQG ,QVWLWXWH·V HYLGHQFH LV VXSSRUWHG E\ RWKHU
ÀQGLQJV LQFOXGLQJ D VWXG\ E\ WKH :RUOG %DQN
ZKLFK IRXQG VFDQW HYLGHQFH WKDW IRUHLJQ
ODQG LQYHVWPHQW ZDV FUHDWLQJ PDQ\ ORFDO MREV 7KH
UHTXLUHPHQWV IRU ODERXU YDU\ JUHDWO\ DPRQJ FURSV
DQG SURGXFWLRQ V\VWHPV VXFK WKDW FURS FKRLFH DQG
RUJDQL]DWLRQ RI SURGXFWLRQ ZLOO KDYH IDUUHDFKLQJ
LPSDFWVRQWKHSRWHQWLDOIRUDJULFXOWXUDOLQYHVWPHQWWR
FUHDWHHPSOR\PHQW$KDPDL]HSODQWDWLRQLQ
WKH'HPRFUDWLF5HSXEOLFRIWKH&RQJRIRUH[DPSOH
FUHDWHGRQO\MREVSHUKHFWDUHZKLOHDVXJDUFDQH
SODQWDWLRQ JHQHUDWHG MREV SHU KHFWDUH 7KH
:RUOG %DQN UHSRUW IRXQG MRE FUHDWLRQ LQ (WKLRSLD WR
EH VLPLODUO\ OLPLWHG ZLWK DQ DYHUDJH RI MREV
KDLQFDVHVZKHUHÀJXUHVZHUHSURYLGHG7KHUHSRUW
QRWHG ´7KH SDWFK\ GDWD WKDW DUH DYDLODEOH VXJJHVW
WKDWLQYHVWPHQWVFUHDWHIDUIHZHUMREVWKDQH[SHFWHGµ
&RPSDULQJ WKHVH ÀJXUHV ZLWK WKH ODERXU LQWHQVLW\ RI
IDPLO\ IDUPV VPDOOKROGHU VR\EHDQ SURGXFWLRQ IRU
H[DPSOH FUHDWHV MREVKD ² QHDUO\ HLJKW WLPHV
PRUH MREV WKDQ WKH MREVKD FUHDWHG E\ ODUJH
VFDOHVR\EHDQSURGXFWLRQ
$OVR DFFRUGLQJ WR WKH :RUOG %DQN ZDJH ODERXU
LQFRPHLVWRWLPHVORZHUWKDQWKHLQFRPHRIWKH
DYHUDJHVPDOOKROGHU0RUHRYHUDVPHQWLRQHGHDUOLHU
PRVWDJULFXOWXUDOZDJHODERXUSRVLWLRQVDUHVHDVRQDO
7KXV WKH LPSUHVVLYH QXPEHU RI SRVLWLRQV .DUXWXUL
FODLPVLWZLOOFUHDWH²DVPDQ\DVWR²LQ
(WKLRSLDLVPLVOHDGLQJLQWHUPVRIDFWXDOHPSOR\PHQW
FUHDWLRQIRUORFDOGHYHORSPHQW
$ ODUJH ERG\ RI UHVHDUFK VXSSRUWV WKH QRWLRQ WKDW
VPDOO IDUPV DUH PRUH SURGXFWLYH ELRGLYHUVH DQG
VXVWDLQDEOH WKDQ ODUJH LQGXVWULDOVW\OH SODQWDWLRQV
)XUWKHUPRUH LQ WHUPV RI ORFDO SHRSOHV· ZHOOEHLQJ
VPDOOVFDOH DJULFXOWXUH RIIHUV D QXPEHU RI EHQHÀWV
,Q WKH ÀUVW SODFH WKH SURGXFWLRQ RI JRRGV E\ VPDOO
IDUPV LV UHODWLYHO\ OHVV FDSLWDOLQWHQVLYH PHDQLQJ
WKDW PRUH ODERXU LV XVHG WR SURGXFH HDFK XQLW RI
WKHJRRGWKDQWKDWE\ODUJHIDUPV7KLVLPSOLHVWKDW
VPDOOIDUPVHPSOR\UHODWLYHO\PRUHODERXULQFOXGLQJ
UXUDOXQVNLOOHGODERXUWKDQGRODUJHIDUPVDQGWKXV
SURYLGH PRUH JDLQIXO OLYHOLKRRG RSWLRQV IRU ORFDOV
6HFRQGO\ VPDOO IDUPV KDYH KLJKHU RXWSXW SHU ODQG
XQLW EHFDXVH WKH\ XWLOL]H WKHLU ODQG PRUH HIÀFLHQWO\
JURZLQJ PXOWLSOH FURSV DQG WKHUHE\ LPSURYH ORFDO
IRRGVHFXULW\6PDOOIDUPVDOVRDUHPRUHSURGXFWLYH
EHFDXVH RI WKHLU UHODWLYHO\ KLJK FRQFHQWUDWLRQ RI
ODERXU SHU KHFWDUH FRPSDUHG ZLWK ODUJHU IDUPV
$GGLWLRQDOO\ EHFDXVH WKH KRXVHKROG SURYLGHV PRVW
RI WKH ZRUNIRUFH WKH FRVWV RI VXSHUYLVLRQ DUH ORZ
VLQFHKRXVHKROGODERXULVJHQHUDOO\VHOIVXSHUYLVLQJ
LQHIIRUWDQGGLOLJHQFH
/DVWO\ VLQFH VPDOO IDUPV XWLOL]H UHODWLYHO\ PRUH
ODERXUSHUODQGXQLWWKH\GLVWULEXWHDUHODWLYHO\ODUJHU
SURSRUWLRQ RI WKHLU SURÀWV UHYHQXHV DQG RXWSXW WR
WKHLUODERXUHUV7KHDYHUDJHIDUPVL]HIRUFURSEDVHG
IDUPLQJ LQ 0DOL LV MXVW KD DQG RQH WKLUG RI WKH
IDUPKRXVHKROGVFXOWLYDWHOHVVWKDQKD7R
SXWWKLVLQSHUVSHFWLYHWKHDUHDFRYHUHGE\WKHUHFHQW
ODUJH ODQG GHDOV LGHQWLÀHG E\ 2DNODQG ,QVWLWXWH·V
75$'($1'(19,5210(175(9,(:
UHVHDUFK LQ 0DOL FRXOG VXVWDLQ FRQVHUYDWLYHO\
IDUPIDPLOLHV²ZHOORYHUKDOIDPLOOLRQSHRSOH
,QVWHDG WKDW ODQG LV QRZ FRQFHQWUDWHG LQ
WKHKDQGVRILQYHVWRUVZKRDUHSODQQLQJWRHPSOR\
RQO\DIHZWKRXVDQGSODQWDWLRQZRUNHUV
*'RHVLQYHVWPHQWLPSURYH
IRRGVHFXULW\"
0RVWRIWKHFRXQWULHVWDUJHWHGE\LQYHVWRUVVXIIHUIURP
IRRG LQVHFXULW\ 7KRXJK WKH IRRG VHFXULW\ DUJXPHQW
LV RIWHQ SXW IRUZDUG E\ JRYHUQPHQWV DQG LQYHVWRUV
LQ VXSSRUW RI ODUJHVFDOH DJULFXOWXUDO LQYHVWPHQWV
2DNODQG ,QVWLWXWH·V UHVHDUFK ÀQGV OLWWOH DVVXUDQFH
WKDWWKRVHLQYHVWPHQWVKDYHLPSURYHGIRRGVHFXULW\
,Q PDQ\ FDVHV ORFDO IRRG IDUPV DUH VROG LQ RUGHU WR
PDNHURRPIRUWKHFXOWLYDWLRQRIH[SRUWFRPPRGLWLHV
LQFOXGLQJ FURSV IRU ELRIXHOV DQG FXW ÁRZHUV 0DQ\
RI WKH ODQG OHDVHV LGHQWLÀHG DUH IRU WKH SURGXFWLRQ
RI DJURIXHOV ,Q 0DOL KDOI RI WKH LQYHVWRUV ZLWK ODUJH
ODQG KROGLQJV LQ WKH 2IÀFH GX 1LJHU LQWHQG WR JURZ
FURSV IRU DJURIXHOV VXFK DV VXJDUFDQH MDWURSKD RU
RWKHU ROHDJLQRXV FURSV 6LPLODUO\ LQ 0R]DPELTXH
PRVW RI WKH LQYHVWPHQWV DUH LQ WKH WLPEHU LQGXVWU\
DQGDJURIXHOVUDWKHUWKDQLQIRRGFURSV)RRGFURSV
UHSUHVHQWHG RQO\ KD RI WKH KD WKDW
ZHUH DSSURYHG IRU DJULFXOWXUDO LQYHVWPHQWV EHWZHHQ
DQG
+$UHSODQWDWLRQVPRUHSURGXFWLYHDQG
SURÀWDEOHWKDQVPDOOVFDOHIDUPV"
$QRWKHUDUJXPHQWSXWIRUZDUGLQIDYRXURIODUJHIDUPV
LVWKDWWKH\DUHVXSSRVHGO\PRUHSURGXFWLYH+RZHYHU
KHUHWRRWKH2DNODQG,QVWLWXWH·VLQYHVWLJDWLRQVFRQÀUP
WKH H[LVWHQFH RI D ODUJH ERG\ RI SUHYLRXV UHVHDUFK
ZKLFKVKRZVWKDWLQPDQ\LQVWDQFHVVPDOOIDUPVDUH
PRUH SURGXFWLYH WKDQ ODUJH SODQWDWLRQV ,Q 0DOL IRU
H[DPSOHZKHUHWKHV\VWHPRIULFHLQWHQVLÀFDWLRQKDV
EHHQ DGRSWHG DORQJ WKH 1LJHU 5LYHU QHDU 7LPEXNWX
IDUPHUV KDYH EHHQ DEOH WR DWWDLQ \LHOGV RI WR WRQVKD\U RU DQ DYHUDJH RI WRQVKD\U ZKLFK LV
PRUH WKDQ WZLFH WKH FRQYHQWLRQDO LUULJDWHG ULFH \LHOG
LQWKHDUHDDQGPRUHWKDQWKHIRUHFDVWVRIWKH0RXOLQ
0RGHUQHGX0DOLRQHRIWKHPDMRULQYHVWRUVLQODUJH
VFDOHULFHSURGXFWLRQ7KHVPDOOVFDOHYLOODJHEDVHG
LUULJDWLRQ VFKHPHV LQYROYH SORWV RI MXVW KD RI
ODQGVKDUHGE\DVPDQ\DVIDUPHUVWKXVHDFK
KRXVHKROGKDVDFFHVVWRRQO\RQHWKLUGRIDKHFWDUH
<HWIURPWKDWSLHFHRIODQGWKH\DUHDEOHWRHDUQ
7KH5ROHRI&KDQJHVLQ/DQG8VH
² PRUH WKDQ GRXEOH WKH DYHUDJH DQQXDO SHU FDSLWD
LQFRPHRI
,IWKHULFHLQWHQVLÀFDWLRQVFKHPHZHUHWREHUHSOLFDWHG
VXFFHVVIXOO\ LQ WKH 2IÀFH GX 1LJHU KD RI
VXFK VPDOOVFDOH LUULJDWLRQ VFKHPHV FRXOG SURYLGH
OLYHOLKRRGV IRU IDUPHUV DQG GUDPDWLFDOO\
LQFUHDVHULFHSURGXFWLRQDQGUHYHQXHV
,3ODFLQJVXVWDLQDEOHDJULFXOWXUDO
GHYHORSPHQWLQWKHSURSHUFRQWH[W
5HVHDUFK FRQGXFWHG E\ WKH 2DNODQG ,QVWLWXWH
GHPRQVWUDWHVWKDWDUHQHZHGIRFXVRQDJULFXOWXUHLV
FUXFLDOIRURYHUFRPLQJWKHFXUUHQWFULVLVRIZRUOGKXQ
JHULQWKHFRQWH[WRIFOLPDWHFKDQJHDQGIRUSURYLGLQJ
OLYHOLKRRGV WR IDUPHUV ZKLOH HQDEOLQJ GHYHORSLQJ
FRXQWULHVWRPHHWWKH0LOOHQQLXP'HYHORSPHQW*RDOV
+RZHYHU WKH ,QVWLWXWH·V UHVHDUFK DOVR VKRZV WKDW
LQYHVWPHQWLQDJULFXOWXUHGRHVQRWQHFHVVDULO\WUDQVODWH
LQWRIRRGVHFXULW\RUOLYHOLKRRGVIRUVPDOOKROGHUIDUPHUV
ZKRIRUPWKHEXONRIWKHZRUOG·VSRRU$VSRLQWHGRXW
E\2OLYLHU'H6FKXWWHU8QLWHG1DWLRQV6SHFLDO
5DSSRUWHXURQWKH5LJKWWR)RRGWKHLVVXHLVQRWRQH
RIPHUHO\LQFUHDVLQJEXGJHWDOORFDWLRQVWRDJULFXOWXUH
EXWUDWKHU´WKDWRIFKRRVLQJIURPGLIIHUHQWPRGHOVRI
DJULFXOWXUDO GHYHORSPHQW ZKLFK PD\ KDYH GLIIHUHQW
LPSDFWVDQGEHQHÀWYDULRXVJURXSVGLIIHUHQWO\µ
75$'($1'(19,5210(175(9,(:
5HIHUHQFHV
$QJHZ::LO\/$&RWXOD/DQG7D\ORU0)LQGLQJVRIWKHJOREDOFRPPHUFLDOSUHVVXUHVRQODQGUHVHDUFKSURMHFW
3DSHUFRPPLVVLRQHGE\,,('&,5$'DQG,QWHUQDWLRQDO/DQG&RDOLWLRQ5RPH$YDLODEOHDWKWWSZZZFLUDOIU
$QVHHXZ:%RFKH0%UHX7*LJHU0/D\-0HVVHUOL31ROWH.7UDQVQDWLRQDO/DQG'HDOVIRU$JULFXOWXUHLQWKH
*OREDO6RXWK5HSRUWIRUWKH/DQG0DWUL[3DUWQHUVKLS&'(&,5$'*,*$*,=,/&%HUQ0RQWSHOOLHU+DPEXUJ
$YDL