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Following is the speech by Secretary for the Environment, Mr Edward Yau, at the Hong Kong Business Coalition on the Environment Luncheon on 䩕The Government-Business Environmental Partnership蒅today (November 24)
Jens-Erik (Olsen), Oscar (Chow), ladies and gentlemen,
Good afternoon. It gives me great pleasure to be here today to address the Hong Kong Business Coalition on the Environment (BCE) on the very important subject of government-business environmental partnership.
I would like to applaud the BCE for its commitment to the environment. At a time of economic blues, we too often hear suggestions that one should set aside environmental goals to speed up economic growth. Here at the BCE, I know I will be asked to speed up instead of hold back on our drive to improve the environment. As the coalition of environmental enthusiasts from Hong Kong﷿s major business chambers, the BCE has the insight to recognise that the environment is an impetus rather than a hindrance of economic growth. And this lays the foundation of our long-standing partnership.
Do we have a choice?
Before I go into today﷿s topic, let me say a few words about the 䩕inconvenient truth蒅 which we as government, business and individuals should seek to recognise. There is no doubt that climate change is happening and represents one of the greatest environmental, social and economic challenges facing the planet. The famous Stern report has made a compelling economic case for tackling climate change. That if the world sits back and does nothing, this could ultimately cost it the equivalent of 20% of GDP each year now and forever, compared to just 1% if we take action now.
Discussions are going on around the world on how to transit the economy in the wake of climate change. These range from the re-focusing of the economy towards investments in clean technologies, to green consumerism, as well as green jobs creation and poverty alleviation. The transformation of the world﷿s economy towards the direction of sustainability was taking place before the financial tsunami, and it is more likely to gather further momentum than lose steam as a result of the restructuring of the global economy triggered by the financial tsunami. So, the question for Hong Kong businesses is: can we afford to ignore the trend and lag behind in the green transformation?
Capitalising on the green business opportunities
According to the Chinese Academy for Environmental Planning , the estimated government expenditure on environmental protection during the 11th National Five Year Plan period will be more than 1.53 trillion yuan. Of this, 640 billion yuan will be used for water pollution treatment, 600 billion for air pollution abatement and 210 billion for solid waste treatment.
Closer to home, the Guangdong government will increase its overall investment in environmental protection under its 11th Five-year Plan, which amounts to 3% of the estimated GDP for 2010. According to the estimates by the Hong Kong Trade Development Council, Guangdong has earmarked 134 billion yuan for environmental investment projects . The estimated market size for environmental technology, goods and services to support the manufacturing industries in the PRD was about HK$40 billion in 2006. Taking into account the implementation of the environmental projects budgeted by the Guangdong government, it is forecast to grow to about $90 billion by 2018.
The huge investment on the mainland during the 11th Five Year Plan and after, will spawn tremendous business opportunities for businesses in Hong Kong. Let me give you some examples of our companies seizing the green business opportunities:
In the energy sector, a Hong Kong-based environmental service company has applied energy technologies ﷿upgraded pumps and fans ﷿ to coal-fired and gas-fired power plants in Jiangsu province. Through these simple solutions, they achieved a total annual electricity savings of 6.1 million kilowatt-hours (KWh) and reduced their client﷿s annual operating costs by US$375,000. The same company has entered a contract with one of China﷿s larger cement producers to upgrade its production line, which will bring annual operating cost savings of more than US$365,000.
Another international technology service provider in Hong Kong helped a brewery factory in Shenzhen achieve an additional 17% reduction in energy use through a technological solution that included heat recovery, biogas recovery, and efficiencies relating to motors, refrigeration and the use of compressed air.
In Hong Kong, environmental protection also presents a lot of business opportunities. This year, the Policy Address covered billions of dollar worth of capital works projects, including the sludge treatment facility, HATS and the district cooling system in Kai Tak. These have not taken into account the many energy saving initiatives as part of the efforts to combat climate change. A total of $450 million has been allocated to carbon and energy audits and the subsequent enhancement works.
In the important area of providing waste management infrastructure and services, the Government has, since the mid 1980s, been actively pursuing public ﷿private sector partnership in the procurement of world class waste management facilities for Hong Kong. Through the 䩕design-build-operate蒅 (DBO) contract model, we have attracted the best technologies and expertise, both local and overseas, in the provision of essential municipal services in a highly cost-effective manner. The cumulative capital investment of these waste management projects amounts to $12 billion to date, plus another $1.2 billion on operations annually.
To meet future waste disposal needs, we plan about $20 billion in capital investment on the next generation of waste-related projects. Citing one example, we are planning the first phase of Integrated Waste Management Facilities to be commissioned by the middle of the 2010's. The facilities will adopt advanced incineration with energy recovery as the core technology.
The Government﷿s role in driving infrastructural built-up is instrumental. Through the administration of public resources to achieve green policy goals, business opportunities are created. This is where government-business dialogues play an important role.
As Government, we are also mindful of the need to provide support for green technology development. In this connection, the Hong Kong Productivity Council and the Hong Kong Science Park are institutions to provide support for businesses. In addition, the Innovation and Technology Fund and, to a certain extent, the Environment and Conservation Fund also ensures that initiatives for industrial and academic research and development will get the financial backing they require to upgrade the capabilities of Hong Kong businesses.
Embracing green workflow
The second aspect where I see opportunities for close government-business collaboration is the adoption of environmental practice by businesses.
As a service-led economy that relies entirely on external energy supplies, a main plank of our strategy to combat climate change is to enhance our energy efficiency. In a recent survey by Forbes, Hong Kong was ranked the fourth most energy efficient economy among 75 economies in the world. Our energy intensity has dropped by 13% between 1995 and 2005. However, given that more than 60% of our greenhouse gas emissions are due to electricity generation and almost 90% of the electricity consumed is building-related, it is important to focus on the building sector.
Earlier this year we launched a 䩕Green Hong Kong?Carbon Audit蒅 campaign. About 40 organisations have become our 䩕Carbon Audit?Green Partners蒅 by agreeing to a Carbon Reduction Charter to carry out or to promote carbon auditing practices and to implement measures to reduce their carbon emissions, in particular for buildings.
As I mentioned just now, the Chief Executive announced in last month﷿s Policy Address that a total of $150 million was reserved to subsidise building owners to conduct energy-and-carbon audits on their buildings. Another $300 million has been made available to subsidise building owners to carry out energy efficiency projects. We will also adopt a comprehensive target-based environmental performance framework for government buildings, promote the concept of energy performance contracting in Hong Kong, and promote state-of-the-art energy-efficient designs and technologies through demonstration projects.
I would like to take this opportunity to call upon members of the BCE, if you have not already joined the carbon audit scheme, to consider taking part in the voluntary exercise. After all, there is also a bottom line consideration here. The energy saving potential of your organisation is often bigger than one may expect. I often cite this example of an award-winning company, which cut down as much as 80% of its electricity bill after taking part in an energy audit exercise. This, of course, is an outstanding example. But take a look at your work process. You will find that just by introducing some small habit changes, it will result in savings.
Being green citizens
Ladies and gentlemen, no matter you are an expatriate or a local Chinese, we all live in this city and hold the environment of Hong Kong close to our hearts. I can share the frustration on the seemingly lack of improvement in the quality of our environment, the hazy sky in winter, like what we see today, and the increasingly warm winter days not just in Hong Kong but across the world. I do not have a magic wand for an instant solution to the problem, but I believe that if we all play our little part in the global effort to combat climate change and improve the environment, we do not need a magic wand.
In just a few weeks, we shall be launching a consultation on the long overdue Air Quality Objectives review. The Government has taken a decision to adopt targets in stages giving due regard to the World Health Organisation﷿s guidelines in revising our air quality objectives. We hear the calls for us to take an aggressive step in adopting the WHO targets, but at the same time, we are keenly aware of the need to measure the impact on businesses and individuals, be it increased electricity tariff and more restricted movement for cars and trucks. I look forward to in-depth exchanges to enable us, the community as a whole, chart our way forward. I shall count on you, leaders of the business community, to take part in the discussion in the spirit of our close partnership as always.
Let me close by saying that the government-business partnership is one that we highly treasure. We must enhance our partnership to ensure that Hong Kong harnesses the waves of change in the transformation to a green economy. We must enhance our partnership so that our businesses remain competitive in the global market. And we must enhance our partnership to make sure Hong Kong remains an attractive destination for investors and talent from around the world.
Thank you.
Ends/Monday, November 24, 2008
Issued at HKT 15:53
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