As the threat of climate change rises, Hong Kong could shine as a regional green finance hub
| South China Morning Post
| Dr. Jeffrey Hung | Friends of the Earth (HK) Senior Programme Manager
Climate change is currently the most serious environmental threat facing humanity. A recent study revealed that the sea level could rise by 2 metres before the end of the century at the current rate of carbon emissions. By then, 1.8 million sq km of land would be lost and more than 180 million people would lose their homes. Hong Kong, a subtropical coastal city which frequently suffers extreme weather, will bear the brunt of urban flooding.
In response to climate change, most countries have agreed to limit global warming to within 2 degree Celsius or a more stringent 1.5°C over pre-industrial levels by 2100 under the Paris Agreement. Signatories are required to submit their nationally determined contributions by 2020 and update their carbon reduction commitments every five years. Developed countries are also committed to jointly contributing at least US$100 billion a year by 2020 to support developing countries.
Globally, green finance is growing rapidly to support climate mitigation and adaptation efforts. UN Environment proclaimed 2016 as "the Year of Green Finance”. Hong Kong has great potential to become a regional green finance hub as we have a well-established legal system, deep capital liquidity and a robust regulatory regime and financial infrastructure.
Thankfully, Hong Kong has started to take action. This year, it became the first Asian signatory to the Green Bond Pledge. In addition, the Hong Kong Monetary Authority in May launched three key measures to promote sustainable banking and green finance.
As one of the largest emitters of greenhouse gases, China has emerged as a key player in the green bond market after the Paris Agreement. According to Climate Bonds Initiative, China became the second largest green bond issuer in the world after the United States, accounting for 18 per cent of global green bond issuance.
Green finance is also a national strategy, as highlighted during the 19th National Congress of the Communist Party in 2017. Climate change is imminent and no one will be immune from climate risks.
The world needs large-scale financing to support the global commitment to climate action. The government should seize the opportunities created by the development of the Greater Bay Area and transform Hong Kong into a leading regional green finance hub.