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FT: Hong Kong’s air quality blighted by fumes from road and sea

by Demetri Sevastopulo, for the Financial Times:

When Beijing residents visit Hong Kong, they sometimes quip that the territory is like a breath of fresh air, especially in winter when the Chinese capital can be bathed in extremely hazardous smog for days on end.

While most Hong Kongers can understand that feeling – having seen countless images of mainland cities wrapped in smog – they are far from happy with their own air quality.

According to the Hedley Environmental Index, compiled by the University of Hong Kong, the territory had 69 clear days – when the levels of five pollutants complied with World Health Organisation guidelines – last year. The pollution cost the economy an estimated HKD40bn ($5bn) in healthcare costs and lost productivity.

Hong Kong had all of 69 clear days last year. (AFP)

“Our air quality could be much better … and that’s what we are striving for,” says Christine Loh, an environmental activist who became Hong Kong’s undersecretary for the environment about a year ago.

While the pollution has the greatest effect on Hong Kong’s 7m citizens, the government is also worried about the effect on the former British colony’s ability to retain foreign business and remain a key financial capital.

According to the Hong Kong General Chamber of Commerce’s survey of business prospects for 2013 – released in 2012 – about 40 per cent of respondents said the government was doing a “poor” job tackling the air quality issue, while another 50 per cent said its performance was “average”.

David O’Rear, the chief economist at the chamber, says that, while companies complain about air quality, there does not appear to be much effect on business.

But others, including recruitment groups, say the pollution can influence people’s decision whether to move to Hong Kong.

“A major factor is whether they have children” says Richard Boden, a principal at Heidrick & Struggles, the executive search firm. “People are willing to put themselves through the pollution but, when children are involved, preconceptions about the severity of the pollution can be difficult to overcome.”

But he adds that pollution in Beijing and Shanghai tends to help Hong Kong because, by comparison, its air was of reasonable quality.

While the government has received poor marks for its handling of the environment, this year it unveiled a new “clean air plan” that has received generally positive reviews. Regina Ip, head of the New People’s party, says the government should be applauded.

“To the foreign community, there are two key issues, air quality and international school places,” says Mrs Ip. “On air quality, the government is actually doing a lot … I think we should be seeing improvements slowly. Naturally, the exogenous factor, air from the Pearl River Delta, we can’t control.”

Ms Loh, who has been instrumental in pushing the new environmental measures, says Hong Kong faces several hard challenges that need to be addressed to reduce the health burden on the population.

Hong Kong suffers from high background pollution – much of which emanates from the manufacturing region of the Pearl River Delta across the border in Guangdong – in addition to high roadside pollution.

“In the densest urban areas, we have a street canyon trapping effect so, even when we have better or lower pollution in the ambient air, at roadside it’s highly undesirable every day,” says Mr Loh.

The government is setting aside US$1.5bn to help replace of 80,000 of the 120,000 diesel vehicles in Hong Kong and to fit buses and taxis with devices to help reduce their emissions of nitrogen dioxide and nitric oxide.

The territory also inhales high emissions from cargo ships, a particular challenge because the port – the third-largest container port in the world – is close to a densely populated part of the city across the harbour in the New Territories.

To tackle the problem, the government is poised to bring in legislation to force cargo ships and other ocean-going vessels to switch to a cleaner fuel with lower sulphur content when they berth in Victoria Harbour.

Hong Kong is also working with Guangdong, including Shenzhen which has the second-largest container port on the mainland, to get mainland authorities to frame regulations that would require ships to use cleaner fuel – something that ships are already required to do in the US and Europe.

“We’ve talked about this to our regional neighbours,” said Ms Loh, “and we’ve talked to the national authorities [in mainland China], so, in a way, we are promoting an idea with a larger vision.”

Ms Loh says that the Hong Kong business community is supportive of the measures that the government is taking.

Alex Trott, who is the head of Accenture’s financial services practice in Hong Kong, thinks the jury is out: “There has been a lot of discussion, but the question is how quickly action can be taken.”

17 Nov 2013

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