Better use of public funds for a sustainable Hong Kong

The Financial Secretary recently revealed that Hong Kong's economy has been impacted by various factors, including geopolitics, supply chain pressure, high inflation, tightening monetary policy, and the sustained impact of COVID-19. The economy is expected to experience a negative growth of 3.2% this year. Yet, economic downturn is not the only challenge that Hong Kong is currently facing. Climate change, air pollution and waste crisis also pose serious threats to the health and livelihood of Hong Kong citizens. With the first budget of the current government to be announced in February, Friends of the Earth (HK) urges the government to be forward-looking and make better use of public funds to promote sustainable development in Hong Kong.

Climate mitigation and adaptation are vital and indispensable

Climate change threatens people all over the world. In recent years, Hong Kong has been affected by varying degrees of extreme weather. For example, in 2018, Super Typhoon Mangkhut hit Hong Kong head-on, causing over 400 injuries and a direct economic loss of $4.6 billion. In order to cope with climate change, the government must actively develop local renewable energy and strengthen cooperation with the mainland and other cities to import clean energy by means of dedicated power lines.

Australian company plans to bring solar power to Singapore (Image source: Global Construction Review)

Since Hong Kong is surrounded by the sea, it is more susceptible to extreme weather. The government must allocate more resources to strengthen coastal flood control and urban flood drainage infrastructure to enhance climate resilience. Meanwhile, the government should make efforts to accelerate low-carbon transition among businesses and develop Hong Kong as an international carbon market. This can be achieved by setting a price for carbon emission through carbon tax or carbon trading mechanisms, which effectively incorporates environmental cost into economic cost.

Carbon pricing dashboard (Image source: The World Bank)

Improve urban planning to enhance air quality

The HKSAR government released the "Clean Air Plan for Hong Kong 2035” in 2021, which sets targets and plans for improving air quality, but unfortunately, the blueprint lacks concrete measures. Regarding roadside air pollution, given that 90% of the emissions come from public and commercial vehicles, the government must tighten its targets to accelerate the electrification of public transport and commercial vehicles and allocate resources to explore the development of hydrogen vehicles.

How a hydrogen bus works (Image source: eCity)

In terms of transportation policy, the government should impose electronic road pricing on busy roads and provide economic incentives for low-carbon commuting. Hong Kong can also make reference to the successful experience of Singapore and introduce a vehicle quota system to curb the uncontrolled growth of vehicles. For urban planning, the government needs to facilitate walking and cycling as viable modes for commuting in the long run, making Hong Kong a more accessible, people-oriented and bicycle-friendly society.

Electronic Road Pricing system in Singapore (Image source: The Straits Time)

Reduce waste at source and promote circular economy

The Environmental Protection Department released the "Monitoring of Solid Waste in Hong Kong 2021” report at the end of last year, in which the per capita MSW disposal rate per day hit 1.53 kg—the highest since records began in 1991. This clearly reflects the failure of government's waste reduction policy. Friends of the Earth (HK) urges the government to implement the municipal solid waste charging by this year to promote waste reduction at source with economic incentives.

Composition of MSW disposed of at landfills in 2020 and 2021 (Image source: EPD)

Many of the municipal wastes can be reused as valuable resources. Instead of relying on end-of-pipe treatment measures like incineration, the government needs to invest more resources to upgrade and transform the recycling industry, assisting enterprises to turn waste into treasure. The government should also expand the scope of producer responsibility to require polluters to bear the cost of waste disposal. At the same time, the government must speed up legislations to control single-use plastics to protect the natural environment.

Develop green finance to achieve low carbon transformation

Green finance is growing rapidly and now recognised as an essential tool in addressing climate change and various environmental crises. We are pleased to see the government completed its first green bond issuance this year, raising an all-time high of over $44.9 billion. As an international financial centre with a robust financial infrastructure, a liquid capital market and a business-friendly environment, Hong Kong must seize the development opportunities in the Greater Bay Area to promote Hong Kong as a regional green finance hub.

In fact, financial and environmental policies can greatly complement each other. According to the United Nations, environmental industries such as renewable energy, clean transportation and green buildings can not only promote global economic growth, but also create enormous investment and employment opportunities. The government must commit more resources in nurturing local talents to enhance Hong Kong's competitiveness in low-carbon transformation.

CESGA and Executive Certificate in ESG Analysis & Green Finance Valuation (Image Source: FoE (HK))

Friends of the Earth (HK) is committed to nurturing green financial talents. The CESGA programme which we actively promote, and our Executive Certificate in ESG Analysis & Green Finance Valuation have been approved as one of the Eligible Programmes under the Pilot Green and Sustainable Finance Capacity Building Support Scheme. We will continue to strive our best to nurture green financial talents for Hong Kong and promote low-carbon and sustainable economic transformation.

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