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2008 Hong Kong Government Budget

Chance To Cut Tobacco Sales Squandered 

Feb 29, 2008 – SCMP

Wednesday’s budget was a shocking indirect declaration from the government that it does not care about the health of our society.

Firstly, Financial Secretary John Tsang Chun-wah, failed to raise tobacco taxes, now for the eighth year in a row, making these taxes less than any other developed country. Had he doubled the tax rate, in order to be closer to the World Health Organisation guidelines, the government would have sent a message that it wants to reduce youth smoking by 32 per cent. There is a direct correlation between the reduction in smoking uptake rates and the price of cigarettes. Similarly, it would have resulted in an estimated drop of 20 per cent in adult smokers, and would have generated HK$2.5 billion in new revenue which could have been used for health, welfare and the environment.

In fact, failure to raise the price of tobacco is a direct contravention under the terms and conditions of the WHO’s Framework Convention on Tobacco Control. China is a signatory to this framework, and our government is obliged to follow this doctrine. Our own Dr Margaret Chan Fung Fu-chun, director-general of the WHO, said that “this is now one of the most widely supported treaties in the history of the United Nations. This is primary prevention at its best”.

Secondly, the government’s plan to subsidise electricity rates by HK$1,800 per household is a move that blatantly snubs the environment and runs counter to our leadership’s moral obligations to protect it. This sends the message that consumers can use even more electricity and not worry about conservation, efficiency or price impacts which should come with a properly-designed electricity pricing system based on peak demands. One would be hard-pressed to find any administration in the world today that would dare to be seen to encourage more energy consumption. Instead, these funds could have been used to create a modern, forward-looking energy policy.

The budget has demonstrated that the government has little consideration for our health. It is thus not hard to understand why our air quality objectives have not been revised in 20 years. The government’s failure to uphold its civic obligations has now further eroded its ability to convey trust. This confidence is greatly needed in order for our community to believe that something is being done to improve our environment.

Douglas Woodring, chairman, environmental committee, American Chamber of Commerce

Guangdong To Boost Green Efforts

By Liang Qiwen (China Daily)
Updated: 2008-01-19 10:34

Guangdong will attach more importance to protecting the environment and saving energy during its industrial development, deputies to the ongoing provincial people’s congress said on Friday.

“Guangdong saw its GDP soar 14.5 percent last year. However, we are under growing pressure because we must control per unit of GDP energy consumption,” Li Miaojuan, director of the Guangdong provincial development and reform commission, said.

Euro III vehicle emission standards will be implemented in the Pearl River Delta to aid protection efforts, she said.

“The standards will be implemented in Guangzhou on May 1, and then extended to the Pearl River Delta on July 1.

“The whole province will have to observe the standard by the end of next year,” Li said.

Several other measures will also be introduced, she added.

For example, the commission is planning to close down all small thermal power plants and a number of cement and steel-making plants before the end of the year.

Power plants with a generating capacity of more than 125,000 kw will also be desulfurized this year, she said.

Also, due to the potential threat of a coal crisis, the province is speeding up construction of nuclear power and recycled energy sources.

More plants will install online pollution surveillance systems, congress deputies said.

Li Qing, director of the Guangdong environmental protection bureau, said: “The air quality in the province last year was worse than in previous years.”

Discounting drought and other natural factors, vehicle emissions are the main reason for the poor air quality.

Deputies said they hoped the implementation of the Euro III standards will help improve the situation.

Li Qing said on Friday that the environmental protection authority has built up an air surveillance network that covers the whole of the Pearl River Delta and Hong Kong. A similar system has also been developed for monitoring river water quality.

In Guangdong, 149 factories that have a record of releasing large amounts of pollutants into the river, have installed the online surveillance system.

The bureau intends to install the same system in more factories this year.

Li Qing said about 6 billion yuan ($830 million) will be spent in the coming years on reducing pollution in the river.

Higher Transport Costs For Cleaner Air

Survey finds Hong Kong people willing to pay higher transport costs for cleaner air

The Associated PressPublished: December 17, 2007

HONG KONG: Hong Kongers would be willing to pay higher transport costs if it means breathing cleaner air, according to a survey published Monday, as the city’s dazzling skyline was once again shrouded by a thick, dirty haze.

The survey was released to coincide with a summit called by the government to discuss the deteriorating air quality in the bustling financial hub and how to tackle it.

Hong Kong’s skies are often heavily polluted by its two coal-burning power plants, marine and road traffic and factories over the border in mainland China, fueling concerns that tourists and investors may shift their attention to cleaner cities like Singapore.

Pollution monitoring stations in Hong Kong registered a “high” pollution reading Monday, meaning that regular exposure over months or years could cause long-term health effects.

A week earlier, downtown Hong Kong and some other areas recorded “very high” levels, prompting the government to advise people with heart and respiratory illnesses to stay at home.

Anthony Hedley, professor of community medicine at the University of Hong Kong, said cleaning up the city’s air was a “medical emergency.”

More than 75 percent of 82,000 people surveyed said they would happily pay higher transport costs if it meant the thousands of buses, taxis and minibuses clogging Hong Kong’s roads used cleaner fuel.

It also revealed that 42 percent supported a road tax system under which drivers are charged more for heavily polluting vehicles.

The money could be used to subsidize greener vehicles and public transport, the survey, commissioned by the government’s Council for Sustainable Development and carried out by the University of Hong Kong, found.

Speaking at the summit, Hong Kong leader Donald Tsang vowed to consider the council’s findings when formulating a long-term plan for cleaning up the air.

“We firmly believe if Hong Kong’s economy is to maintain a sustainable growth, it is necessary to improve our air quality, provide a quality living environment to attract investors and talent to stay in Hong Kong,” Tsang said.

Hedley, however, said the government needed to act fast as residents were already paying a heavy price for poor quality air, citing an earlier study that found that pollution contributes to 1,600 deaths in the city each year.

“The longer they delay, the more difficult it’s going to be to turn around. It’s already far too late,” he said.

The latest survey was conducted over the last five months, with responses collected via a dedicated Web site, through written submissions and face-to-face questioning at seminars and other events.

No margin of error was given as the survey was not based on a random sampling.

Pollution In Hong Kong: Between The Smog And The Deep Blue Sea

EC Newsdesk – 13th July 2006

Air pollution in Hong Kong is drawing noisy protests, but cutting the region’s huge consumption of dirty electricity – not least through residents’ passion for air conditioning – is a gargantuan ambition, writes Sam Chambers

Three years ago more than half a million Hong Kong residents took to the streets to protest against perceived infringements of civil liberties by Beijing’s chosen leader for the former British colony, the now departed Tung Chee-hwa.

Today, politics is widely being disregarded in favour of protesting against the state of the air that Hong Kongers breathe.

A recent university study showed that Hong Kong is blanketed in smog on average 28 days a month.

For a long time, the rise of the Pearl River Delta as the manufacturing centre of the world – accounting for one third of China’s total exports – was cited begrudgingly and helplessly by Hong Kongers as the reason for their dirty air.

Now, armed with greater information on local firms – especially the two coal burning utilities, Hong Kong Electric and China Light and Power – the population is increasingly making its irritation heard.

One movement, Lights Out Hong Kong, wishes to create a public protest that will put the democracy marches into the shade.

The organisation, founded just two months ago, intends to ask the general public to turn off their residential and office lighting on 8 August at 8pm for three minutes.

Another organisation, Clean The Air, shows clearly how much Hong Kong is to blame for its own predicament.

Seventy per cent of roadside pollution comes from dirty vehicles and 50% of Hong Kongers live near a road. Half of Hong Kong’s pollution comes from the two power plants, and one third of the electricity they produce is used for air conditioning. Hong Kong has the coldest offices in the world.

Wrapping up warm

A survey released this spring by Dr Deng Shiming of The Hong Kong Polytechnic University indicated that most Hong Kong people like to have icy bedrooms, with 55% of those polled keeping their bedroom temperature as low as 22°C, far below the 25.5°C recommended by the government.

And 20% of those polled refrigerated their bedrooms at 20°C or below. But such wintry temperatures failed to provide comfort for the occupants – as 25% of those surveyed said they woke up at night shivering.

The study also found 50% of the respondents covered themselves with “air-con quilts” while having the air-con blasting.

Shiming, associate professor at the Department of Building Services Engineering, says: “Wrapping up in air-con quilts in summer is absurd. By choosing lighter coverings we can easily raise the bedroom temperature by up to 4°C without compromising our thermal comfort.”

Coal and cars

Greenpeace has made continued demonstrations against CLP, one of the two power station operators.

In 2005, CLP made HK$11.3 billion [£774 million] in profit, much of it from coal-powered electricity generation. The external cost of its coal-related business across Asia-Pacific this year rose 4% to HK$31.1 billion. The negative cost of the Castle Peak Power Station to the society is HK$13.5 billion,” says Chow Sze Chung, air pollution campaigner at Greenpeace.

Chows adds that 46,100 tons of sulphur dioxide were emitted as a result of CLP’s coal-burning in 2005.

“Sulphur dioxide will cause diseases in respiratory system, such as asthma and bronchitis, and is also a source of acid rain. All these external costs will inevitably damage the environment and poison Hong Kong people’s health,” he says.

A spokesperson for CLP maintains that as a result of fuel diversification and the installation of various scrubbers at its power plant, “between 1990 and 2005, CLP has reduced emissions of NOx, SO2 and particulates by 40% to 80%, despite an 80% rise in electricity demand during the period”. A move towards natural gas will further drive down emissions.

CLP’s counterpart, Hong Kong Electric, opened the SAR’s first wind turbine this year, up the hill from the coal-fired power station it operates on Lamma Island.

The gesture has been widely derided as a PR stunt with next to no effect on long-term improvement of the air quality of the region, since no further wind turbines have been mooted. CLP, meanwhile, has a set a renewable energy target of 5% by 2010.

Sam Chambers is a journalist based in Hong Kong.

Pall Of Gloom Over Hong Kong

Jun 17, 2006 – By Kent Ewing – Asia Times Online

HONG KONG – After years of economic gloom following the Asian financial crisis of 1987 and the handover to Chinese rule in the same year, this city’s economy is booming again.

With gross domestic product (GDP) growing 8.2% in the first quarter of the year and government coffers overflowing with a surplus expected to be at least US$1.2 billion, Hong Kong officials should be exhorting the city’s 7 million people to let the good times roll as the ninth anniversary of the handover from British to Chinese rule approaches on July 1.

What, then, is everyone so worried about?

Fortune magazine’s famously provocative 1995 article “The death of Hong Kong” turned out to be a false prediction. But as mainland China’s economy continues its extraordinary rise and Hong Kong strains to keep up, the marginalization of this once-undisputed hub of Asia looms as a distinct possibility, despite its current prosperity.

Ironically, the most urgent threat to Hong Kong’s competitiveness – the city’s increasingly foul air – is intimately tied to the phenomenal growth on the mainland, particularly in the Pearl River Delta in neighboring Guangdong province. This is where more than 70,000 largely unregulated Hong Kong-invested factories belch poisonous pollutants into the air on a daily basis.

While the factory owners have become rich as a result of the low labor and manufacturing costs in the region, their once-beautiful city has become a sick patient in need of emergency care. Although there are other contributing factors – automobile emissions and lack of concern by the two privately owned local electricity suppliers, Hong Kong Electric and China Power and Light – there is a general consensus that the bulk of Hong Kong’s pollution creeps over the border from the factories in the delta.

Chinese authorities always hoped that manufacturing in Guangdong would combine with Hong Kong’s superb financial and service industries to create a gateway to China for a flood of foreign capital, and the formula has worked brilliantly – except that it is now hard to breathe.

The problem has become so acute that it is no longer just green groups and fringe politicians who are harping about it. The city’s international business class has chimed in, urging the Hong Kong government to develop a more coordinated anti-pollution strategy with mainland officials.

Speaking recently for the International Business Chamber, which represents overseas chambers of commerce in the city, Jens-Erik Olsen expressed the business community’s recruiting fears, which are directly related to Hong Kong’s unhealthy environment.

“We are going to tell the government that we [Hong Kong] are no longer attractive to professionals,” he said, “because they do not want their children to live in Hong Kong.”

Olsen was speaking in the aftermath of the release of a survey on living conditions in 257 cities worldwide conducted by ECA International, a global human-resources organization. ECA International shocked Hong Kong people with its recommendation that companies recruiting expatriates to work here should offer them a 10% hardship allowance in addition to their basic pay and other perquisites.

The survey showed concern about food scares, infectious diseases such as severe acute respiratory syndrome (SARS) and bird flu, as well as worries about the typhoon season that buffets the city every year. But it was definitely Hong Kong’s polluted skies that tipped the scales toward “hardship”.

While the survey ranked Hong Kong in the top five cities for Asians within Asia, the city fell below its arch-rival, pristine Singapore, as well as three Japanese cities: Kobe, Yokohama and Tokyo. What’s more, on a global scale for Asians living abroad, Hong Kong dropped from its 20th slot last year to 32nd this year.

According to study released this month, the city’s choking air quality is costing Hong Kong 1,600 lives and nearly US$258 million in health-care costs and lost productivity each year. The study – carried out by a team of experts from the University of Hong Kong, Hong Kong University of Science and Technology, Chinese University and think-tank Civic Exchange – found that Hong Kong’s air pollutants exceeded World Health Organization standards by 200%.

So, as alarm bells ring, one of the city’s most pressing problems has been largely unaddressed. True, there has been much talk about air pollution over the past several years, but very little action has been taken by the Hong Kong government, which on this issue is a prisoner of the very economic growth on the mainland that is supposed to ensure its future.

Beyond the health concerns associated with pollution, there are other problems gradually undermining Hong Kong’s competitiveness. The city’s rapidly aging population and shrinking birth rate are also major concerns. Government data for 2004 show a fertility rate of 0.93 child per couple, giving Hong Kong the second-lowest birth rate in the world, behind only its smaller neighbor, Macau. This rate is expected to improve slightly – to 0.95 – by 2008 and then plateau at around 0.99 in 2018 and beyond.

At the same time, research done by accounting firm CPA Australia projects that, by 2033, 24% of Hong Kong’s population will be older than 65, whereas that age group represents just 10% at present. And by 2033, those aged 55 and above will rise from 20% of the population to 38%.

Unspoken conclusion: at a time when Hong Kong will need to attract youth and professional talent from the outside more than ever before, the city may become an increasingly unpopular option for those it is so keen to welcome.

Hong Kong’s more geriatric future also has profound implications for the city’s budget and business-friendly low-tax regime. This year’s boom surprised even Financial Secretary Henry Tang – who, after years of deficits – had set a modest goal of a balanced budget. Now Tang finds himself with at least a US$1.2 billion surplus in the kitty and faces mounting calls for tax cuts, which he has dismissed as hasty and ill-advised.

The financial secretary is no doubt worried about how Hong Kong’s narrow revenue base, which depends on a tax system that requires billionaires to pay less than 20% of their income and is heavily reliant on land sales in a territory of only 1,100 square kilometers, can meet the city’s future financial needs.

When you do the math, it is clear that the current tax scheme will be stretched beyond the breaking point as the city ages and health-care costs rise in the heavily subsidized and heavily used public sector. As of now, public health care in Hong Kong is one of the best medical deals in the world; for example, emergency care is virtually free for Hong Kong residents once you discount the hospital entry fee of US$13.

Add to that the cost of reforming Hong Kong’s outdated, elitist educational system, which currently allows only a third of its students to go to university (in comparison with 80% for the United States and much of Europe), and then official anxiety, despite this year’s plump surplus, starts to make sense.

Most economists and officials concede the need to widen the tax base, and a sales tax is the option most frequently mentioned. But any additional tax – especially a regressive sales tax – is not popular among Hong Kong people, and with a chief-executive election coming up next March, the government clearly lacks the political will to enact any significant reform. (Witness the bevy of proposals for much-needed health-care reform that were just this month delegated to the back burner.)

This brings us to perhaps the most intractable of Hong Kong’s problems – its uniquely awkward (if evolving) political system. The catchphrase of the handover – “one country, two systems” – promised that Hong Kong would retain its treasured autonomy and rule of law. But, at least in its present state, the handover arrangement has turned into a recipe for political paralysis.

While the Basic Law, Hong Kong’s mini-constitution, promises full democracy to the city within 50 years of the 1997 handover, Beijing has shown no eagerness to implement this provision any time soon. What Hong Kong has instead is a 60-seat Legislative Council (Legco), half of whose members are directly elected, and a chief executive – currently the very popular Donald Tsang – who is a virtual appointment of the central government in Beijing. (An 800-member Election Committee actually “elects” the chief executive, but that committee is largely controlled by Beijing.)

Most of the legislators are affiliated with political parties, but the chief executive is barred by the constitution from any political affiliation. Although the pro-Beijing Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) has become a reliable ally, otherwise the current arrangement has made Legco a permanent opposition to the central authority represented by the chief executive’s office and thus served to hinder, if not stall outright, important legislation and government projects.

Recent examples of the political standoff include the impasse over a proposal to create a West Kowloon cultural district, which Legco critics charge would simply be sweetheart deal for property developers disguised as a cultural project, and the prolonged wrangling over a plan to build new government offices on prime, harborfront land at a cost of about US$657 million.

The chief executive’s most stinging memory of what he regards as Legco intransigence, however, is surely the humiliating defeat in the council last December of a limited package of democratic reforms that he had personally championed.

Tsang’s predecessor, Tung Chee-hwa, was forced to withdraw national-security legislation that was clearly a priority for Beijing because of opposition in Legco, not to mention a 500,000-strong demonstration in the streets on July 1, 2003, the sixth anniversary of the handover. As it turned out, the failure of the National Security Bill was the beginning of the end for the deeply unpopular Tung, Hong Kong’s first post-colonial leader, who resigned his office under further pressure in March 2005.

Tsang, a much abler and more politically adroit chief executive than Tung, enjoys his current popularity (estimated at 70% by a recent University of Hong Kong poll) and has learned from the political bruising he suffered last December. He does not want to go through another rough-and-tumble in Legco over tax or health-care reforms ahead of next year’s election. And on Hong Kong’s most urgent problem – pollution – his hands are tied by the mainland.

Hong Kong, then, is currently going nowhere on major concerns that will have an important impact on its long-term competitiveness. Despite the pundits’ doom-laden prophecies for the city after the handover, however, Hong Kong’s continued pluck and vibrancy cannot be denied. The city has beaten back an economic crisis, SARS, bird flu and the political ineptitude of its first Chinese leader.

Hong Kong has a proven track record of reinventing itself. What makes the job harder this time is that, as the city scrambles for a new identity, the motherland – to whose future it is now forever wed – is undergoing its own massive transformation. As usual, with another handover anniversary just around the corner, Hong Kong does not know whether to celebrate, protest or both.

Kent Ewing is a teacher and writer at Hong Kong International School. He can be reached at kewing@hkis.edu.hk.

Earth Day 2004

Earth Day 2004

South China Morning Post Editorial
Friday April 23 2004

Facts on pollution must get public airing

Earth Day brought distressing news about the quality of the air we breathe. First was the warning from a Chinese University researcher that a confidential government-commissioned study shows Hong Kong is paying a high public health cost for its relatively weak air quality standards, especially in regard to particulate matter – emissions small enough to damage lungs and other organs.

Then there was the revelation by our largest power producer, CLP Power, that emissions of sulfur dioxide and nitrous oxide particles have increased dramatically over the past year – thanks in large part to soaring demand from Guangdong and increasingly heavy reliance on coal.

These findings confirm what many of us already knew from just looking out our windows in recent months: despite reductions in certain readings over the past few years, more must be done.

To begin with, the Environmental Protection Department should release the study on the link between air quality and public health without delay. If fine particulates and other pollutants are found in higher concentrations than deemed acceptable in cities overseas – and if they pose a hazard to our health – the public has a right to know. Such information cannot justifiably remain confidential.

Once the facts are known, there can be consideration of whether existing standards need to be revised and how any higher requirements could be met.

The CLP report raises different issues, some of which are best addressed on a region-wide basis. Demand from factories on the mainland soared last year. Coupled with restricted supplies of gas, this meant a heavy reliance on coal and increased pollution. CLP hints at continued reliance on coal in the immediate future and plans to install equipment for filtering the rising level of pollution.

But the efforts should not stop there. Sales to mainland customers have translated into higher profits for the company. More of that income should now be reinvested in expanding pilot projects on renewable energy. Small experiments in wind and hydropower and renewable cell energy have up to now been only tokenistic; now there is a need – and an opportunity – to make them a bigger priority, at little risk to CLP’s bottom line.

Of course, any discussion of the air pollution problem has to acknowledge that Hong Kong-invested companies play a large part in running the factories behind the surge in regional power demand. Likewise, the health effects from coal-fired power plants and diesel-fuelled cars are felt on both sides of the border. It is hoped that policymakers will see the need to put the finger-pointing of recent years behind them and find ways to co-operate on reducing pollution throughout the region.

Our environment officials are beginning to make some progress on convincing Guangdong to improve or close the oldest and most-polluting of its coal-burning electricity plants. But as a region we are very far from finding a way to balance rapid economic development with the equally important project of clearing our skies.

Until a truly effective mechanism for co-operating on regional air quality is set up, the least Hong Kong can do is lead by example and ensure that we do not make matters worse for the delta’s inhabitants. This should include being at the forefront of developing alternatives to coal as an energy source. It also could include more co-operation on improving filtering technology at mainland power plants and raising standards on diesel used in cars, buses and trucks. Last, it should involve frank discussion on the connection between air pollution and health. For that to happen, the findings of the Chinese University study must be released.