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Civic Exchange

Basic Law Sets Out Obligation To Public Health

Jul 04, 2008 – SCMP

Christine Loh Kung-wai is right to say that Hong Kong’s 20-year-old air quality objectives do not adequately protect public health (“Smoke screen”, June 26), but she is wrong about one thing. The problem is not that Hong Kong’s environmental laws do not mention public health.

Article 39 of the Basic Law requires the government to implement the provisions of the International Covenant on Economic Social and Cultural Rights through Hong Kong law. Article 12 of the covenant imposes a duty on governments to take steps to secure the highest attainable standards of public health for everyone, including progressively improving all aspects of environmental and industrial hygiene.

By undertaking to tighten its air quality objectives to ensure proper protection of public health in line with the principles recommended by the World Health Organisation, our government is belatedly doing what the Basic Law requires.

The Basic Law does not tell the government what standards to adopt, but the fact that the duty to adopt health-based environmental standards is contained in a UN covenant has important implications. Because Beijing has ratified the covenant, it provides a common legal framework for Hong Kong and Guangdong to set appropriate air quality standards for the affluent Pearl River Delta region.

It also means that the international community is entitled to compare the government’s air quality objectives to international standards and decide whether Hong Kong deserves the title of Asia’s World City.

David Renton, Repulse Bay

Earth’s The Limit

Updated on Jul 03, 2008 – SCMP

There are planetary boundaries that should not be crossed otherwise the Earth’s functions tip and go into overdrive, creating inhospitable conditions for humans. This is the conclusion of some of the world’s most eminent scientists who gathered for two days at Tallberg in Sweden last week, at which I had the chance to join their deliberation. Indeed, there is evidence tipping has already occurred in the case of global warming arising from the burning of fossil fuels, as the Arctic sea ice is showing signs of melting much faster than expected.

The warming of the planet will lead to not only rising sea levels but also climatic changes all around the globe affecting temperatures, rainfall, and the frequency and magnitude of storms, floods and droughts, which will affect food production and create many other threats such as disease and displacement.

To fix the problem, humans must reduce emissions of greenhouse gases that warm the atmosphere. This means we have to burn much less fossil fuel: coal, oil and gas. The Kyoto Protocol, a multilateral treaty, was designed to reduce greenhouse gas emissions to avert “dangerous” climate change. The world’s governments are in the process of renegotiating the agreement and it is recognised that substantial reductions are necessary. The question is just how much is needed.

So far, reduction levels are based on how much humans can bear in light of existing economic and social structures. The Stern Review, a report commissioned by the British government and published in 2006, set the range at between 450 to 550 parts per million (ppm) of greenhouse gas concentration in the atmosphere, and Lord Stern, a noted economist, is in the process of tightening the level. However, scientific evidence now shows the upper boundary of what the planet can bear is just 350 ppm. This is why there is now a growing effort to bring the most updated scientific insights to the world’s governments for a new climate change treaty.

If we were to use the planets’ limits of tolerance as a base for deliberation and negotiation, it should bring a very different set of results than if we continued to base it on what politicians can live with and their perceptions on what industries and vested interests can bear. The planet is in fact not a willing negotiating partner. Exceeding nature’s physical boundaries will only threaten the survival of humans and other species.

Greenhouse gas concentration is already at 385 ppm and set for 560 ppm before the end of this century. Scientists fear that if sharp reductions are not made soon enough, it will only lead to faster tipping of boundaries, in particular oceans becoming more acidic as they absorb more greenhouse gases, which kill corals and other sea life. Overfishing for human consumption exacerbates the threat to marine ecosystems.

To change tracks, Dr James Hansen of the Nasa Goddard Institute of Earth Sciences, has proposed that there be a concerted effort to reduce and then phase out the use of coal. He has called for no more new coal-fired power plants to be built in the US. Other scientists, who have added their voice to the call, have also emphasised the need to protect and manage forests much better since deforestation lessens the Earth’s ability to absorb carbon dioxide, the main greenhouse gas.

There is a realisation that nations, in particular China and India, whose main fuel is coal, need to continue to develop and that climate change strategies must be seen as part of their overall economic development strategy. After all, many sectors and jobs will be affected. Brazil and Indonesia are also key players as they have some of the world’s largest forests needing protection.

Science is delivering a sobering message for all governments. Climate negotiators must keep abreast of the latest research and respect the limiting realities of nature that cannot be exceeded. They must be informed of these boundaries and respect them in deliberations on how to move speedily towards a new order that enables humans to live within safer thresholds.

Christine Loh Kung-wai is chief executive of the think-tank Civic Exchange

cloh@civic-exchange.org

Air Pollution vs. Allergies and Respiratory Illnesses

Choke hold

Hong Kong’s increasingly polluted air could be to blame for more allergies and respiratory ills than we realise

Hazel Parry – Updated on Jun 30, 2008 – SCMP

It may start with a few sneezes and a runny nose, progress to a cough and then turn into a full-blown hacking wheeze. At first you may think you’re suffering from a chest infection brought on by a cold, but when the cough fails to show signs of abating two weeks later, you consult your doctor. The problem: Hong Kong’s bad air. You’re suffering an allergic reaction to pollution.

The smog that regularly cloaks our skyline is getting worse, and it’s not only annoying tourists who make the trip up Victoria Peak only to see nothing and driving businesses to other Asian cities, it is also interfering with the quality of life and the general health of people who work and live in the city.

A recent report by the think-tank Civic Exchange claimed poor air quality was responsible for 10,000 premature deaths and 440,000 hospital bed days a year in the Pearl River Delta, at a cost of 6.7 billion yuan (HK$7.6 billion) annually.

And it’s not just the very young, old or those with existing respiratory problems such as asthma who are paying the price for pollution. Ear, nose and throat experts claim they are seeing an increasing number of seemingly healthy people seeking help for problems of the upper respiratory system caused by pollutants in the air they breathe.

Some are suffering in silence – blaming their symptoms on colds, stress or being overtired, and letting the problem affect their life, sleep patterns and working day. They may be dangerously self-medicating or dosing themselves with cold remedies. Others are seeking help from their GPs, only to find there’s little they can do.

The Civic Exchange report claims pollution is behind 11 million doctor visits a year. A separate study by the Chinese University of Hong Kong published in 2005 found a significant link between people making first visits to their GPs with upper respiratory tract problems on days of increased pollution. This led the researchers to conclude that “air pollution, besides affecting at-risk populations [those with existing problems], also affects the relatively healthy population.”

The Chinese University study monitored more than 300,000 consultations from 13 participating GP surgeries across Hong Kong between 2000 and 2002 to assess the risk of less serious or short-term effects of pollution on health (as opposed to the serious effects, which require hospitalisation). Researchers say about three-quarters of the consultations were first visits for new health problems – and of those, two thirds were for respiratory disorders. They also found that as the concentration of pollutants such as ozone and nitrogen dioxide in the air increased, the greater the number of first-time visits there were for upper respiratory disorders.

“Although these illnesses are minor in nature with minimum long term effects on health, they represent a substantial proportion of overall morbidity in the community,” the study concludes, adding that the problems are a financial drain on Hong Kong in terms of escalating medical costs and loss of productivity.

According to ear, nose and throat (ENT) expert John Woo Kong-sang, in most cases an allergy to pollution manifests itself as rhinitis or rhino-sinusitis – inflammation of the mucous membrane lining of the nose or sinuses – causing symptoms such as runny noses, sneezing and coughing. A sore throat, phlegm, loss of smell, watery or itchy eyes are also common reactions to pollution.

Woo, an honorary clinical associate professor in the department of otorhinolaryngology at Chinese University, estimates that patients with allergic rhinitis or rhino-sinusitis account for about 30 to 40 per cent per cent of cases at the ENT clinic, up from about 10 to 15 per cent a decade ago.

“We don’t know for sure whether the increase is due to the growth in population in Sha Tin [the area the clinic serves], but judging from the number of people turning up at our clinics, I am quite sure the problem has become worse as pollution has grown worse, and it is affecting the health of the population in general,” he says.

Woo says the nose, as the air filter for the lungs, is the first to suffer from exposure to pollution. “When it’s working properly, the nose filters out about 90 per cent of pollutants. But when you have a lot of pollutants in the air, it has to work harder,” he says.

In people with allergic tendencies who have become sensitised to pollutants, a slight increase in pollution may be too much for the nose to bear, resulting in an allergic reaction – the inflammation and all the symptoms which come with it.

“You may think you have a cold and the symptoms may be the same. But the difference is that an infected condition, even without treatment, is self-limiting. It may last one or two weeks and then you get over it,” says Woo. “With allergic rhinitis, the symptoms will linger on.”

It’s the lingering nature of the symptoms that distinguishes an allergy from a cold, and which eventually leads many people to their GPs. Likewise, it’s the fact that symptoms occur year-round that makes many experts believe the problem is more likely to be pollution than pollen.

Respiratory specialist Lam Bing, an honorary assistant professor at the Faculty of Medicine at the University of Hong Kong, says rhinitis is known to affect about 20 to 30 per cent of the world’s population.

A recent report by the multi-centred International Study into Allergies and Asthma in Childhood claims that although cases of asthma appear to have reached a plateau, rhinitis is on the rise.

“I would say in Hong Kong the number of people with rhinitis is a similar number to the worldwide figure,” says Lam. “If you were to ask people a simple question such as, `Do you suffer from nasal discharge, blockage or congestion in the morning?’ you would probably find many people suffer some kind of complaint.”

“It’s a common problem, but many people ignore it. Especially as a typical feature of rhinitis is that the symptoms are worse in the morning but gradually improve during the day, so people tend to think they can cope with problem. If they have a sore throat they think it’s because they have talked too much or that it’s an infection.”

To what precise extent pollution is to blame for the growing number of minor respiratory problems is difficult to say because of the lack of research, says Lam, although studies have also shown that people living nearer highways have far more chance of developing respiratory problems than those living in urban areas.

Johnny Koo Tak-ching is in no doubt pollution is partly to blame for Hong Kong’s worsening coughs, sniffles, sneezes and sore throats. He’s an ENT expert at a private clinic in Central, the majority of whose patients are expatriates who move from city to city in their work.

“Those patients who have long-term rhinitis, sinusitis and nasal polyps get worse when they’re working in a city with higher pollution. They can tell which city has the worst pollution by how bad their symptoms get,” he says.

“They feel much better in places like the Mediterranean and some northern Chinese cities, such as Harbin, but feel worse when they move to places like Shanghai, Beijing and Hong Kong. Singapore is better than Hong Kong, and Kuala Lumpur is better than Singapore.”

The bad news for everyone living and working in central Hong Kong is that there’s little we can do while pollution remains a problem.

Antihistamines, which reduce allergic reactions, can alleviate itching and sneezing, steroid-based nasal drops can reduce some of the inflammation and clear the nose, and pain killers provide relief for a sore throat. But all of these treatments only address the symptoms and not the cause, and, in the long term, nasal allergies can lead to nasal polyps, which may require surgery.

Koo says: “Reduce your exposure to very polluted areas. If you know you’re going to a more polluted area, then start the preventive medicine for the allergy before you go. If you have minor symptoms such as throat discomfort or more phlegm, keep an eye on your health, drink more water and take some vitamin C, and you should be fine.

“However, if symptoms last more than a week, you had better see a doctor to see if there’s a more serious problem.

“Unfortunately, my impression is, generally, there is no escape – unless you move to another country that’s less polluted.”

Koo’s observation is reflected by the experience of Elaine Tse, who has suffered from a sore throat that has persisted for months despite the installation of a HK$12,000 air purifier in her home. “Nothing was working, so I went to the ENT specialist, who stuck a camera up my nose and down the back of my throat,” she says. “He asked me if I’d visited any toxic plants in China. I hadn’t, of course. He concluded that it was allergies to the pollution and gave me antihistamines.”

That conclusion was borne out when Elaine took a trip to Australia. “After just 24 hours the sore throat went away,” she says. “Now I am back in Hong Kong, it’s back again.”

Smoke Screen

Updated on Jun 26, 2008 – SCMP

A certain amount of government spin is inevitable, but it is also time for officials to improve the message. The worst thing is to obfuscate and hope the public won’t see the fudge. A member of the public recently showed me a letter she had written to environmental protection officials, together with their reply. She asked why public health isn’t the government’s top priority, in terms of air pollution control. The writer said it was intolerable that the government had not accepted World Health Organisation air quality standards for Hong Kong.

The reply noted that the administration had appointed consultants to draw up a new set of standards and devise a plan to meet them. It would be finished by the end of the year. Most importantly, it said, the government was determined to tighten the standards “to ensure proper protection of public health, in line with the principles recommended by the WHO”.

A careful reading shows that the government did not commit itself to adopting WHO standards. The concern among public health physicians and air quality experts is that the administration will not, in fact, adopt such standards, for fear of being unable to meet them any time soon. Hong Kong is unique among developed economies in having extremely lax air quality standards, referred to as air quality “objectives”. Indeed, a mistaken understanding of what the WHO standards are about has led to officials denying themselves a powerful instrument to improve air quality.

The WHO standards are based on the best available data and indicate the health risks arising from air quality. If met, the standards correspond to a level that can be said to represent a lower risk, and the pollutant levels show what authorities around the world should strive for. There is, in fact, no real argument over the standards, which were reviewed before being published as recommendations globally in 2006. The real question is why they should not be adopted.

The fact is the Hong Kong government has never made public health the raison d’etre for air quality management. The empowering legislation to control pollution does not mention public health, unlike its equivalent on the mainland, in the United States and Europe. Thus, the Air Pollution Control Ordinance needs to be amended. The government-appointed consultants should make a clear recommendation in this regard. Otherwise, they will have to explain why Hong Kong remains an exception, and how it is going to clean itself up. In truth, public health needs to become a legal requirement to get officials to act.

Once protection of public health is the goal, our officials would have to devise policies to get us there, over time. The public understands that merely resetting standards will not improve our air. It is, however, the necessary first step. The WHO also recognises this. So, governments need to devise air improvement plans in phases.

Officials would have to explain how each proposed measure would work and what improvements could be expected. They would have to track results, so that adjustments could be made to ensure their initiatives delivered the expected results. The WHO guidelines are there to remind everyone of the level of risk the community faces when they are not being met.

By linking health outcomes to air-pollution-control initiatives, our officials would have to be more directly accountable for their decisions and actions. It would not be enough to push one initiative at a time – such as, say, a ban on idling engines. Information would have to be provided about what such an initiative could be expected to achieve. And maybe, even when all the initiatives are taken into account, officials may find that it still isn’t enough to reduce the health risk. That would provide pressure to do more.

Yes, there would be additional costs, but Hong Kong is a rich city, and it is time officials dropped their developing-economy mindset and joined the developed world.

Christine Loh Kung-wai is chief executive of the think-tank Civic Exchange. cloh@civic-exchange.org

We Must Act To Curb Pollution Caused By Port

Updated on Jun 24, 2008 – SCMP

Your leader on the Civic Exchange report, describing the burden of pollution which results from Hong Kong’s port operations (“Take pollution fight to region’s ports”, June 18), contrasts with the stereotyped comments of the deputy director of marine (“Use policies on fuel tax to lower port pollution: study”, June 18).

He offers only caveats on the costs of the transition from the current use of polluting fuels to an essential and effective air quality management strategy. There are many reasons why he could have publicly recognised that a rapid solution to this problem was imperative for all marine activities in Hong Kong.

Why does he feel it necessary to take this line when there is even strong support from the shipping industry itself to clean up?

For years, all government departments voicing a view on pollution issues have, as a reflex, given primacy to the relatively minor operational and economic aspects of the transition to cleaner fuels rather than the fact that emissions of sulfur dioxide, and toxic metals such as nickel from heavy residual oil, kill hundreds and damage the health of thousands each year.

We also showed this month that the external costs paid by the general population for pollution amount to a major cause of environmental injustice and that burning dirty fuel is a false economy (“Young and old pay high price for bad delta air”, June 12).

We should remind ourselves that, overnight, on June 30 to July 1, 1990, Hong Kong permanently restricted the territory-wide landside use of fuels to those with not more than 0.5 per cent sulfur content.

The operational and economic turbulence was minimal in all sectors burning fossil fuels. Annual deaths fell by 600 a year, mainly from heart and lung diseases, and there were health gains at all ages, especially in children. Unfortunately, that event 18 years ago was the last significant impact on air concentrations of pollutants in Hong Kong. Today, almost 4 million people are affected by the plumes created from intensive dirty port activities, with predictable health impacts. We need an intersectoral approach to pollution abatement in our shipping channels and ports as an urgent public health priority.

Anthony J. Hedley, department of community medicine, school of public health, University of Hong Kong

Hong Kong’s Carbon Trading Move

Hong Kong’s carbon trading move too little, too late: analysts

22nd June 2008

HONG KONG (AFP) — Hong Kong has joined the international carbon trading structure with a promise to slash emissions, but analysts say the move will fail to produce any serious reductions in greenhouse gases.

“It is a bit of an impotent gesture and is about four years too late,” said Shane Spurway, head of carbon banking at Fortis Bank.

In a low-key press release sent out just before a public holiday weekend earlier this month, the city’s Environmental Protection Department said it had set up the legal framework to allow projects that could sell on their reductions in carbon emissions.

“These projects will help further reduce Hong Kong’s greenhouse gas emissions,” a spokesman for the department said in the statement.

But experts doubt that the belated decision will help reduce harmful carbon dioxide (CO2) emissions.

Spurway said the projects that could have benefited from the early introduction of the scheme had already been planned and so would not be able to gain carbon credits under the Clean Development Mechanism (CDM).

The mechanism, which was set up by the international community in Kyoto, Japan in 1997 and came into force in 2005, aims to reduce greenhouse gas emissions by creating a worldwide cap and trade system.

Developed countries, mainly in Europe, place a limit on the amount of gases factories can emit. To meet their obligations, the polluting industries can either reduce their own emissions or buy carbon credits from people who have made reductions, often in the developing world.

The reductions in the poorer parts of the world are easier and cheaper than the developed world and so have attracted the most investment.

China has been the biggest beneficiary, according to the World Bank which says it now produces more than 70 percent of all the world’s CDM projects, targeting such heavily-polluting industries as cement and chemicals.

Until now, Hong Kong has been unable to access financing for such projects, meaning that completed landfill or power station projects have been less profitable.

The delay in agreeing the scheme has meant any projects already planned are ineligible, as schemes must prove they would only take place with the extra investment, the so-called “additionality test”.

China Light and Power, a major Hong Kong energy firm with operations across the world, said there were no plans to begin CDM projects in Hong Kong.

“While we welcome the government’s announcement on CDM, right now we do not have any projects that would use it,” a spokeswoman told AFP.

Hong Kong and China Gas Company, which operates major landfill projects in Hong Kong which may have benefited from an earlier adoption of CDM, declined to comment.

Christine Loh, from think tank Civic Exchange which has been a vocal critic of Hong Kong’s environmental record, said the move showed that business, so often the driver of policy here, was finally getting interested in the issue.

“The financial community can see carbon trading getting to a level where the world is talking about it. They can see the new assets of the future — clean air and clean water,” she said.

Both Loh and Spurway said a more significant step by the Beijing and Hong Kong governments would have been to allow Hong Kong companies operating in China to benefit from carbon-related finance to cut emissions.

Currently, Hong Kong companies are treated like foreign enterprises in China. If they want to instigate schemes that would create carbon credits, they have to set up a joint venture with a Chinese firm, which many are unwilling to do.

“You have something like 90,000 Hong Kong-owned factories (in China), but because of the joint-venture requirement, they are probably a bit reticent to set up there,” said Spurway.

The Hong Kong General Chamber of Commerce welcomed the government’s move, saying it would “enable Hong Kong to contribute directly to the global effort against climate change”.

But it added that it hoped Hong Kong companies would be able to get greater benefit from carbon reduction activity in China.

Hong Kong has faced strong criticism from campaigners for its environmental policy on issues ranging from the appalling air pollution to the failure to ban plastic bags.

Business groups have argued the poor air quality, blamed on the thousands of factories just across the border in China’s manufacturing hub, is damaging the city’s ability to attract top managers and compromising its position as an international finance centre.

Change of Tack HK Shipowners Are At Forefront Of A Battle For Tighter Emissions Curbs

Sarah Monks, SCMP – Jun 19, 2008

In an unusual reversal of roles, a global industry – shipping – is pressing international regulators for tighter controls over its toxic emissions. And Hong Kong owners have been in the vanguard, campaigning for earlier use of cleaner fuels by the world’s 60,000 ocean-going merchant ships.

The International Maritime Organisation (IMO) stunned itself and the world in April when its normally fractious members agreed to tighten emission caps by 2020 for sulfur oxides (SOx), nitrogen oxides (NOx) and other pollutants. The revised caps, which the IMO is expected formally to adopt in October, would end shipping’s dependence on the dirtiest, cheapest fuel – residual oil, a tar-like refinery waste product.

“We are embarked on a very positive journey in the next 10 years that will see a massive decrease in toxic air emissions from ships,” said Arthur Bowring, managing director of the Hong Kong Shipowners Association (HKSOA), which has 160 members. “We have set ourselves an obligation. We now have to live up to that and meet that as an industry. If it hadn’t been for Hong Kong and Intertanko [the London- and Oslo-based International Association of Independent Tanker Owners] the IMO’s revisions would have been minor changes.”

The IMO’s intended new cap for sulfur content in fuel is 3.5 per cent (from the present 4.5 per cent) after January 1, 2012, falling steeply to 0.5 per cent from 2020. The limits in specified emission control areas would be 1 per cent in less than two years (from 1.5 per cent now) and fall to 0.1 per cent from 2015.

Thus, in a little over a decade, the world’s merchant ships are expected to have switched from the residual oil they have burned for nearly a century to a cleaner distillate, which is closer to truck diesel and jet fuel than it is to refinery waste.

“We dream of clean engine rooms and engineers in clean boiler suits,” said Mr Bowring. “We can’t wait to get to global distillate fuel grade so we can fill up our ships with a consistent quality fuel just like we fill up our cars.” He pointed to present difficulties for ships carrying multiple grades of fuel and aiming to meet different emissions regimes. Switching fuels at sea is a potentially dangerous procedure, with a risk of engines stalling in busy shipping lanes. Failure to use the right fuel could lead to costly sanctions such as ship detention.

Mr Bowring said the maritime industry, which accounts for about 90 per cent of world trade, realised some years ago that it must shift to a proactive mode in tackling public concerns about marine emissions.

Emissions have risen as seaborne trade has more than doubled in less than 20 years. Emissions have also been linked to deaths and heart diseases in places close to heavy marine traffic.

“You’ve got to be proactive. You can’t hide behind the regulations and the legislation and wait until you are forced,” said Mr Bowring. “And it’s very clear to us that our industry has to contribute to the reduction of pollution in the Pearl River Delta.

According to the Environmental Protection Department’s air pollutant inventory, marine emissions are the second-largest source (5 per cent) of sulfur dioxide in Hong Kong, after electricity generation (89 per cent). They are the third-largest source (18 per cent) of NOx, after electricity generation (44 per cent) and road transport (23 per cent).

Mr Bowring said self-interest had been a powerful reason for the industry’s change of tack as it was better for the industry to develop its own regulations via the IMO, a UN agency, than be vulnerable to a patchwork of conflicting local regulations that would make sea transport less efficient.

In 2005, the HKSOA stepped on to the international stage with aggressive proposals to switch to cleaner fuel. Mr Bowring said it was a natural role for Hong Kong, as the city was the world’s fourth-largest centre for owning, operating and managing ships.

“Asia is not known for being outspoken. Hong Kong is willing to be outspoken. That’s the nature of Hong Kong,” said Mr Bowring. “It gives us great leverage and we’ve used it for a number of maritime issues in addition to marine emissions, such as bulk carrier safety standards and fatigue at sea. We’re willing to go out on a limb over issues and go on the world stage and be seen as a voice for Asia.”

The HKSOA lobbied unsuccessfully at the IMO for even tighter caps and a faster switch to global distillate that would eliminate the need for special emissions control areas but the world’s maritime administrators, including Hong Kong’s Marine Department, preferred “a compromise solution”, said its deputy director, Patrick Chun Ping-fai.

“Although I think people might appreciate their [HKSOA’s] argument … it appeared to us that their proposal would not be feasible or viable after taking into account various considerations, in particular the impact on the shipping community and also the ability of the oil refineries industry to provide a very-low-sulfur-content fuel to ships all over the world,” Mr Chun said.

The eventual April amendment to the IMO convention, known as MARPOL Annex VI, has a compromise clause to review the fuel supply situation in 2018, with an option to postpone the adoption of global distillate until 2025.

“We’ve dug a hole for ourselves here,” said Mr Bowring. “The burden is on us to find a solution with the refineries. They will have to switch from supplying about 380 million tonnes of residual oil to supplying the same amount of distillate. They will probably need new refineries and to upgrade existing refineries to create the capacity.”

He predicted that distillate would be twice as expensive as residual oil, though the impact on transport costs would be marginal as fuel was a relatively small factor in the end consumer price.

The IMO’s intended final sulfur-content levels were “a leap rather than a step”, said Douglas Rait of specialist maritime firm Lloyd’s Register. “It remains to be seen exactly how the fuel oil supply industry will react, what type and composition of fuel oils will be produced to meet the requirement, and what means will be necessary to assess their key characteristics on delivery,” added Mr Rait, global manager of the firm’s fuel-oil-bunker analysis and advisory service.

A spokeswoman for ExxonMobil Hong Kong, a major fuel supplier, said the company would be ready for the global changeover to 0.5 per cent distillate by 2020 and supplies would be ensured. A Shell Hong Kong spokeswoman said the IMO proposals provided flexibility for reaching the revised emission reduction levels.

Demand for cleaner marine fuel needs to rise sharply by 2020 to spur refineries to invest in its production, said Mr Bowring. A key HKSOA strategy was to press for an emissions control area for Hong Kong and Pearl River Delta waters, with cleaner fuel a requirement for entry.

“If we have a PRD emissions control area at 0.1 per cent it will instantly reduce the SOx and particulate matter from all ships going into one of the world’s largest shipping areas. It will also guarantee refineries a distillate market by ramping up demand,” he said.

Various port authorities would need to work together to create a regional emissions control area. But the Environmental Protection Department says they “have different priorities and considerations in terms of the implications that such a move may have on their port activities and businesses”.

Another hurdle to justifying an IMO-approved emissions control area is the prior need to show that equivalent efforts are being made to reduce pollution from factories and other land-based sources.

“The Guangdong authorities have already put a lot of effort into reducing air pollution,” said the Marine Department’s Mr Chun. “It will be very difficult to convince industry in the area to put in even more efforts to reduce air pollution if they want to make this a sulfur emissions control area.”

He noted, too, the challenges in convincing local fishermen, barge operators and related interest groups about the need for measures that imply higher fuel costs or require them to upgrade their engines. They had already been given an extended grace period to comply with IMO emissions caps that took effect in Hong Kong this month.

The Environmental Protection Department believes there are options other than an emissions control area for reducing pollution from ships. “For instance, we have set up an interdepartmental working group to examine the feasibility of local ferries using ultra-low-sulfur diesel, including conducting a trial,” it said in a statement. It was also in talks with its Guangdong counterparts.

For the co-founder and chief executive officer of policy think-tank Civic Exchange, Christine Loh Kung-wai, reducing marine and port emissions is “low hanging fruit” for the government. “You have the shipping companies and even the terminal operators ready to change, and some of the local craft operators also want to do something.

“The shipowners operate global businesses and are keenly aware of reforms taking place at other ports. They know their ships have to operate at higher environmental levels at ports in Europe and North America, and they can do the same in Hong Kong. They want to do it, which is driving them to ask for a level playing field so laggards do not benefit.”

Civic Exchange this week released a report, titled Green Harbours, which recommends reducing emissions from the marine and port sectors in Hong Kong and Shenzhen. It notes that governments and industry players in Hong Kong and the Pearl River Delta have taken steps such as encouraging the use of low-sulfur fuels, using electricity to power port machinery and reducing fuel consumption.

Ms Loh said the government had to play a “convening role” for the industry as a whole. “Something like requiring ships to slow down within Hong Kong waters is doable tomorrow – it will save fuel and reduce emissions,” she said.

Adoption Of WHO Standards Urged

Mary Ann Benitez – Updated on Jun 12, 2008 – SCMP

Hong Kong should quickly adopt World Health Organisation standards on air quality in light of its enormous impact on people’s health, a Civic Exchange study says.

Hospital bed-days, lost productivity and doctor visits associated with polluted air cost 1.8 billion yuan (HK$2.03 billion) a year in the Pearl River Delta, HK$1.1 billion in Hong Kong and HK$18 million in Macau, the study said.

Civic Exchange chief executive officer Christine Loh Kung-wai said: “One thing that the government does not do here is to link health and control of air pollution.

“You and I know that bad air pollution means it’s bad for our health, but what we are not able to do is to understand that in much greater depth,” she said. “By doing long-term health tracking and studies to track effectiveness of policies – that is the only real way to inform policymakers whether any of the initiatives that they roll out are having a beneficial impact on public health.”

She welcomed a review of the 20-year-old Air Quality Objectives that the government said would be completed by next year.

“The question is whether they will tighten [air quality standards] to WHO standards and then announce measures and a time frame … to reach them, or set looser standards,” she said.

Anthony Hedley, chair professor of the department of community medicine at the University of Hong Kong, said: “From the public health point of view, we regard the adoption of WHO guidelines an absolute imperative and priority.”

Ms Loh added: “The problem has been the government feels that if it’s a standard they set, they have to pass it. But they are forgetting that even other societies have not necessarily met the WHO guidelines, but they use it as a measure of public health risk and … therefore to come up with measures to reduce air pollution.”

Alexis Lau Kai-hon, an atmospheric scientist at the University of Science and Technology, said revising regional objectives in line with WHO guidelines “would provide powerful drivers to improve air quality and public health.”

Coming Clean

Updated on Jun 12, 2008 – SCMP

Extraordinarily, Hong Kong has yet to make an explicit policy link between air quality and public health. We all know that air pollution affects our health yet, in public policy terms, the weighting towards our well-being is missing. This must change, otherwise the government will never quite get its priorities right about environmental protection and its duty to improve air quality, so that it no longer poses a daily threat to people. The same can be said of Guangdong, one of the wealthiest parts of the country; health gains from social and economic development will otherwise be compromised.

Research released yesterday using data from 2006 shows that air pollution levels were attributable to 10,000 deaths in Hong Kong, Macau and the Pearl River Delta, with 94 per cent of these occurring across the border. Moreover, air pollution is responsible for some 440,000 annual hospital bed-days and 11 million outpatient visits annually throughout the whole region. Industrialised areas such as Guangzhou and Foshan suffer from very high levels of sulfur dioxide, which is associated with cardiovascular and respiratory disease, and death. These figures could be lowered with improved air quality; these premature deaths and illnesses are avoidable.

The cost of these hospital bed-days, lost productivity and doctor visits associated with the impact on people’s health amounts to 1.8 billion yuan (HK$2.03 billion) a year in the delta, HK$1.1 billion in Hong Kong and HK$18 million in Macau. Adjusted for differences in gross domestic product, the health-related monetary costs of air pollution in the delta are seven times higher than those in Hong Kong. These represent only the economic losses, and do not take into account pain and suffering, or put a value on life. Research also shows the lack of local studies in the delta, Hong Kong and Macau on air pollution and health. The public and government policymakers will still not fully understand the impact of poor air quality on health without long-term studies that measure the total years of life lost to air pollution. Conducting studies that provide feedback essential to evaluate the effectiveness of air pollution control measures will help governments shape policy. If public health was a policy priority, we would invest more in health-related research.

It is now indisputable that smoggy days have increased dramatically over the past two decades. Although some pollutant types and sources have decreased, others have remained steady or increased. This is particularly true in the delta’s industrial areas. Only with frequent reviews of air pollution data and an evaluation of policy measures will it be possible to devise appropriate strategies. The authorities need to review regional emissions data for last year, as satellite information indicates that conditions have worsened since 2003.

Authorities in the delta, Hong Kong and Macau can exercise leadership by tightening air quality standards. Replacing the existing piecemeal approach with a total air quality management framework focused on public health is the first step. It has proved successful in controlling emissions elsewhere in the world.

Taking collaborative action before Hong Kong and Guangzhou host the East Asian and Asian Games in 2009 and 2010, respectively, will allow the region to take advantage of lessons learned from Beijing’s attempts to improve air quality for the Olympics, and for the region to position itself as a leader in fighting air pollution. A powerful short-term measure would be to use cleaner fuels not only in vehicles and ships but also in factories using power generators. This won’t be easy at a time when energy prices are high, but policymakers must spell out the damage to people’s health if they are to rally support for change.

This is the right time for such a change. National policy is shifting towards environmental protection; Hong Kong and Guangdong, as the wealthiest parts of the country, should be the first to make an explicit health link.

Christine Loh Kung-wai is chief executive of the think-tank Civic Exchange. cloh@civic-exchange.org

Carbon Emissions Trading Platform

Pollution solution

Asia could benefit from having its own trading platform

Amanda Lee – Updated on Jun 10, 2008 – SCMP

As the global war on pollution intensifies, major corporations are paying greater attention to a multitrilliondollar business which aims to cut back on carbon emissions.

Several countries are signing emissions trading agreements with big polluters. These schemes place a limit on the amount of greenhouse gases companies can produce, forcing heavy polluters to buy credits from firms that pollute less – thereby creating financial incentives to fight global warming. Now, Hong Kong wants to get in on the act and, at the beginning of this year, the Hong Kong Exchanges and Clearing (HKEx) said it wanted to offer Certified Emission Reduction (CER) futures and options as a hedging tool. The announcement was met with enthusiasm by both environmentalists and businesses.

And how much could this be worth? In a workshop last month, held by Hong Kong-based think-tank Civic Exchange at the Hong Kong Stock Exchange, Ian Johnson, a speaker and chairman of research company IDEAcarbon, said the global carbon market could be worth €500billion (HK$6.15trillion) by the year 2020.

Mr Johnson said that the biggest player was the United States and the biggest emissions trading organisation was the Chicago Climate Exchange. The exchange comprises non-Kyoto signatories, corporations with a corporate social responsibility (CSR) perspective and individuals looking to cut their carbon footprint.

What’s more, investment banks, such as Goldman Sachs, are looking to profit from trading carbon futures in the same way as any other commodity.

The voluntary market, including contracts traded over the counter and on exchanges, was worth a total of US$331million last year. Mr Johnson also said the most common over-the-counter transacted projects include those that are related to renewable energy, energy efficiency, methane destruction, forestry land-based projects and CO2 emissions.

Roger Raufer, an independent consultant who is an adviser to the HKEx on carbon emissions trading, says: “It is very important for Asia to have its own platform.” However, he adds that there are many questions about whether China, one of the world’s biggest polluters, should be allowed to purchase credits from the United States. In short, if an exchange is to be established, Asia has to create its own demand.

Demand is strong in Europe, where carbon credits are traded on the Oslo-based Nord Pool and the European Climate Exchange.

A spokesman at the HKEx declined to comment on the results of the exchange’s consultation on the feasibility of establishing an emissions trading platform. The HKEx said in January, in addition to working on a platform for structured products and exchange-traded funds (ETFs), it would seek to partner with an overseas exchange to build a trading/clearing platform for trading in carbon, which would include greenhouse gas allowances and credits.

Research from the Civic Exchange notes that a large proportion of emission allowances are traded by private negotiation. More than half of all European Union Greenhouse Gas Emission Trading Scheme permits are traded over the counter, according to the think-tank.

Other than the Chicago Climate Exchange and European Climate Exchange, there is the Australian Climate Exchange and the Montreal Climate Exchange, which was formed when the Chicago Climate Exchange joined with the Montreal Exchange in order to create the first environmental-product market in Canada.

There seems to be some demand in Asia, particularly from airlines that want to fulfil CSR. Angus Barclay, general manager at Cathay Pacific’s international affairs department and a panellist in the Civic Exchange workshop, says the airline supports carbon emissions trading. Apart from buying credits globally, Cathay Pacific was one of the first airlines to launch a carbon offset scheme, available to all passengers who travel on Cathay Pacific and Dragonair flights.

The scheme, FLY Greener, which was launched at the end of last year, is voluntary for passengers who can either pay in cash or with their Asia Miles.

Cathay Pacific also matched passenger contributions for the first three months from when the scheme was launched. It only costs a fraction of the ticket price for passengers.

A spokeswoman at the airline says that the response is encouraging. “It would be too soon to mention the take-up rate at this stage. The response is reasonably positive for a newly launched scheme,” she says.

“Of course, our aim is to have as many passengers as possible take up the opportunity to participate in the programme. We will be promoting this through many channels to ensure that our passengers are aware of this programme, and our staff are available to assist them to understand how it works.”

HSBC is among the first global banks to buy carbon credits to cover the pollution it generates from its office buildings, and jetting its executives around the world.

A spokeswoman says that although the bank will consider buying credits in Asia, it has been purchasing these in Europe. Other than ETFs and structured products, fund managers, such as Schroders, have launched various funds that invest in companies which work in areas that respond to climate change. Schroders says climate change is going to be the biggest investment theme in the next 20 years.

Investment bank Barclays Capital launched a carbon emission index at the end of last year which tracks the performance of carbon credits associated with the world’s major greenhouse gas emissions trading schemes: the EU Emissions Trading Scheme (EU Allowances) and the Kyoto Clean Development Mechanism, a CER.

It’s no surprise that other investment banks have jumped on the bandwagon. Societe Generale has also launched its own version of carbon emission indices. Merrill Lynch and UBS say they are working on developing these indices.

Globally, policymakers have been encouraging the development of carbon exchanges. Europe has the European Union Greenhouse Gas Emission Trading Scheme and other exchanges to trade carbon.

The US has agreed to take part in emission trading and there are commitments from all presidential candidates. The same cannot be applied in Asia, according to Mr Raufer.

He says although China has established some domestic pilot emission schemes, so far these have not been entirely successful because the mainland initially focused on acid rain.

Trading carbon credits

The Chicago Climate Exchange has established its own reduction commitments. A total of six greenhouse gases are included. Each contract represents 100 tonnes of CO2 or the equivalent.

The contracts are exchange offsets and exchange allowances which are issued to members.

Methane destruction, soil-carbon sequestration, reforestation, renewable energy and CDM-eligible projects are examples of eligible offset projects. Source: Civic Exchange