The Hong Kong government is able to independently formulate its own environmental policy and handle issues related to environmental protection and sustainable use of the city’s resources. However, local environmental NGOs have warned that the city is on track to miss its self-imposed waste reduction targets this year. What has been done to mitigate emissions and waste in Hong Kong, and what are the government’s plans moving forward?
On June 22, the Hong Kong Environment Bureau announced that it was abandoning a long-delayed bill on a mandatory waste disposal charging scheme, citing a lack of time to complete the legislative process and ending a decade-long campaign. The bill would have enacted a new and differentiated rubbish bag system in the city, charging households for their waste according to the bags’ sizes. The bill was expected to be an important step towards Hong Kong meeting its intended municipal solid waste reduction target of 40% per capita by 2022. While the target remains in place, Hong Kong-based NGO and environmental advocacy group Friends of the Earth, believes that without the amendment bill it will be exceedingly difficult for the city to meet its goal.
The abandonment of the waste management amendment bill is to some degree emblematic of the Hong Kong government’s modus operandi regarding environmental policy. Hong Kong’s status as a special administrative region means that the city is not beholden to climate laws and policies enacted by the central government on the mainland. Additionally, the Paris Agreement does not address subnational entities such as Hong Kong, meaning that there is minimal policing of and accountability for Hong Kong’s environmental policy. Lawmakers are therefore able to nimbly navigate around domestic regulations and international agreements to implement policy. This creates the conditions for a bureaucratic system that often sees policy proposals fade into irrelevance due to political litigations and contesting priorities.
Emissions in Hong Kong
Considering the economic output of Hong Kong, the city is a relatively low emitter in a global context, with 40.7 million tonnes of emissions in 2017, comparable to Norway’s in the same year. However, the unique nature of Hong Kong’s economy masks some of the realities of the city’s emission rates.
Hong Kong’s economy and population are reliant on highly-emitting activities that occur beyond its borders, including the production of imported agricultural and industrial products. Due to the absence of heavy industry, combined with a very dense population, most of Hong Kong’s emissions are caused by electricity generation, which accounted for 65.4% of emissions in 2017.
Other major emitting sectors include transport, representing 17.8% of emissions and waste management at 6.9%. Accordingly, most of the territory’s policies have been shaped in response to these sectors.
Hong Kong’s Climate Action Plan 2030+ and Environmental Policies
Hong Kong’s high degree of autonomy in crafting environmental legislation has allowed the city to impose its own climate targets separate from China’s. Hong Kong’s Climate Action Plan 2030+, established in 2017, targets a 65-70% reduction in carbon intensity by 2030 from 2005 levels. It is important to note that environmental plans and policies in Hong Kong have been made with carbon intensity reduction targets in mind, not overall emission reductions. Carbon intensity refers to a metric that compares emissions with economic output.
Hong Kong has adopted various policies and measures to meet these targets. In terms of its energy use, the city plans to augment its capacity for natural gas use and, to a lesser extent, continue development of renewable energy sources to largely phase out coal use by 2030. In 2015, natural gas provided Hong Kong with 27% of its electricity requirements. It is expected to replace coal and account for well over half of Hong Kong’s electricity generation by 2030. Meanwhile, renewable energy contributed only around 0.7% of Hong Kong’s total energy consumption in 2017. The city’s climate action plan estimates the realisable potential of renewables in Hong Kong to account for around 3-4% of its total energy consumption, although refrains from defining these figures as official targets to achieve by 2030.
As the highest per capita emission rates in Hong Kong are tied to electricity use, the government has implemented specific schemes to encourage the private sector’s transition towards renewables. The Environment Bureau has enacted a feed-in tariff scheme, which allows consumers who install solar panels or wind turbines on their property to sell any energy they produce to power companies at a rate five times higher than the normal electricity tariff rate. The concept behind the policy is that the private sector will be incentivised to continue investing in the city’s transition towards a renewable energy infrastructure.
To increase the number of electric vehicles on the road, the government has implemented a variety of relevant policies. For private buyers who purchase EVs, first registration tax rates are waived. For firms and enterprises, the tax concessions are even higher. The city also aims to increase its railway network to reach 75% of inhabited areas and 85% of work opportunities by 2031.
To handle the issue of waste management, the Hong Kong government has invested in the modernisation of many of the territory’s waste management plants with new waste-to-energy technology. An example is the opening of an Organic Resources Recovery Centre that employs innovative biological treatment methods to turn food waste into usable resources such as compost products, or directly into energy sources such as biogas.
Carbon Pricing Market in Hong Kong
The Climate Action Plan 2030+ makes no explicit mention of a carbon pricing policy, despite its acceptance by the global community as among the most cost-effective methods to achieve decarbonisation. In 2019, researchers from the Worcester Polytechnic Institute in the US collaborated with Business Environment Council, a Hong Kong-based NGO, on a study to evaluate the feasibility of a carbon pricing system in Hong Kong.
Researchers worked with focus groups from various sectors to discuss whether and how a carbon pricing system in Hong Kong might work. The conclusion was that more downstream sectors, including infrastructure and construction, were open to the idea of an emissions trading system, although not in favour of a carbon tax. Conversely, less flexible upstream sectors such as energy and transportation industries were opposed to any carbon pricing policy. The study concluded that a carbon pricing system would not be sustainable for the territory’s utility and energy production companies, given Hong Kong’s limited amount of available terrain to pursue renewable energy projects, and a lack of public control over political decisions as to where the city sources its energy from.
An option proposed in the study was to integrate Hong Kong with China’s emerging national emissions trading scheme, although most participants resisted this idea on the basis of not wanting to be reliant on the mainland for their energy needs.
A carbon pricing system in Hong Kong would be effective if implemented in certain sectors, although would likely be unsustainable if enforced across the economy. In areas such as infrastructure development, building efficiency and small businesses, a carbon trading system would be helpful in advancing Hong Kong’s decarbonisation goals. For upstream energy providers, the conditions do not seem to currently exist for a functioning carbon pricing system. Other tactics, such as carbon offsets, might be more feasible in the short term.
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Shortfalls of Hong Kong’s Environmental Plans
Hong Kong achieved a reduction in carbon intensity rates of 34% in 2017 when compared to 2005 levels, even with a rising population and GDP. However, these positive figures hide the shortfalls of Hong Kong’s environmental policies, which have proven to be more outdated and unambitious than claimed.
Firstly, the Hong Kong Environment Bureau’s decision to plan with carbon intensity reduction targets in mind rather than absolute emission reduction targets belies the significant financial muscle of Hong Kong’s high-performing economy. Carbon intensity reduction targets are useful for developing economies where the survival of growing businesses is a key component of sustainable growth. In Hong Kong, where high-emitting sectors of the economy are dominated by well-established and financially secure corporations, the use of carbon intensity reduction targets seems outdated.
Secondly, Hong Kong has placed the onus of transitioning towards renewable energy on the private sector. The feed-in tariff scheme encourages consumers and private firms to incorporate renewables into their energy consumption, although the reality is that Hong Kong as an entity has no plans to end its reliance on fossil fuels, even past 2030. While the city plans to phase out coal, the current plan is to replace it with natural gas, another fossil fuel source that, while less dirty than coal, delays the city’s transition to a green energy grid.
In the aforementioned study on the potential effectiveness of a carbon pricing market in Hong Kong, all participants agreed that the government lacked sufficient transparency in making its environmental initiatives known to the public. Many were unaware of the feed-in tariff scheme or how to procure renewable energy certificates. Participating businesses claimed that, were the government more transparent about carbon offsets and trading programmes were more accessible to the public, they would be very open to incorporating these tactics into their business models.
On the topic of Hong Kong’s reluctance to commit to a 100% green energy transition, Professor Johnny Chan, Chair Professor of Atmospheric Science at City University, says, “The biggest problem is that there is no strategy to reduce carbon beyond switching from coal to natural gas; there is no integrated energy policy for saving and using green energy; there is a lack of coordination and strategy.”
An option is to cooperate more closely with the mainland’s Guangdong province that borders Hong Kong. While Hong Kong’s businesses have voiced opposition to the idea of becoming more reliant on China for resources, the city already receives over 70% of its water supply from Guangdong, and is responsible for consuming around 80% of the energy produced by the Daya Nuclear Power Plant in Shenzhen. Due to the availability of space, infrastructure and existing policy, Guangdong’s energy sector is ideally placed to assist Hong Kong’s in augmenting its share of renewable energy use.
Pursuing higher degrees of cooperation with the mainland in the energy sector could potentially increase Hong Kong’s dependency on China and limit local employment. However, Hong Kong’s energy sector can make use of its significant financial resources to pursue joint-venture projects that allow Hong Kong actors a degree of managerial control and investment security over operations. Hong Kong’s terrain and political system are not conducive to rampant domestic growth of renewables, or a general carbon pricing policy. Rather, a combination of local and regional initiatives must be taken. Increasing imports of clean energy from China, combined with direct consumer decarbonisation incentives and a carbon trading system for downstream economic sectors, could bring Hong Kong to net carbon neutrality.
International Accountability to Strengthen Environmental Policy in Hong Kong
The inescapable contradiction of Hong Kong’s environmental policies is that the city is under no legal obligation to create them. As the Paris Agreement does not explicitly address subnational entities, Hong Kong’s status is more of a footnote to China’s more emphatic push towards a green economy. While Hong Kong has taken some tentative steps to enact more transformative environmental policies, these actions have largely been of a more utilitarian nature, hanging on the coattails of mainland China’s transition.
Speaking of the Hong Kong government’s role in mitigating climate change, Assistant Professor Benoit Mayer of the Chinese University of Hong Kong’s Faculty of Law says, “Clearly, Hong Kong is failing to take on its international responsibilities. The government has failed to recognise the urgency of decreasing greenhouse gas emissions.”
Currently, there is a lack of political will in Hong Kong to approve strong environmental action, due to a lack of international legal obligations as well as a current plethora of social issues to be managed. The waste management amendment bill that was abandoned by lawmakers this summer is a stark example of the shortfalls of Hong Kong’s legislative process.
If the political will emerges, Hong Kong can pursue its own international emission mitigation pacts. The government can create its own legal obligations and environmental accountability through cooperative action with other subnational entities and large cities. If policymakers can be motivated to produce strong environmental policy, and Hong Kong can increase its capacity for clean energy through accords with neighbouring entities, carbon neutrality becomes a markedly more attainable goal. At the moment, Hong Kong’s environmental policy is stagnating, with a government seemingly content to act as an opportunistic follower of the mainland’s trends. However, given the financial strength and international recognition of Hong Kong, the city could become a regional leader in environmental policy action.