The Government announced the “2020-21 Budget” today. Climate change is happening and getting worse. Hundreds of governments around the world have declared emergency state of climate emergency in 2019. Extreme weather events are becoming more frequent; heat-related illnesses and vector-borne diseases are becoming more common. Hong Kong Government must adopt emergency response to climate change. Friends of the Earth (HK) [FoE (HK)] welcomes the HK$200 million Green Tech Fund to support R&D and the application of decarbonisation and green technologies.
At the same time, FoE (HK) is disappointed that the Government has not devoted a sufficient budget for promoting green finance. Hong Kong is one of the world’s major financial centres, but lags behind in terms of its green finance commitment. Hong Kong is placed 35th according to the latest Global Green Finance Index. Simon Mak, CEO of Friends of the Earth HK said, “To build up the green finance market in Hong Kong, the Government needs to issue a series of green bonds with different durations of different terms. Our recommendation is for the government to issue these bonds at frequent intervals to build up the capital market.”
An ounce of prevention is worth a pound of cure. We propose the following recommendations to build a healthy and sustainable environment for Hong Kong.
Expedite Green Finance Development
The Government should formally endorse and promote recommendations by the Task Force on Climate-related Financial Disclosures (TCFD), and require major asset owners to fully adopt the “Principles of Responsible Ownership” by the Securities and Futures Commission (SFC). Main Board-listed companies and banks should publish ESG reports aligning with TCFD recommendations and the Government needs to develop an open-access management information system to store, manage, and analyse the ESG data submitted.
The Financial Services & Treasury Bureau (FSTB) should support and fund green finance training and education. New specialised programmes on green finance need to be created and elements of green finance and sustainability should be incorporated into existing courses in Universities and Business Schools.
There is a need for better policy coordination. The government should appoint a Green Finance Commissioner under the Financial Secretary Office (FSO) to provide leadership and oversight to speed up the development of green finance industry in Hong Kong.
In addition to providing incentives to develop new green financial products such as green mortgages and ESG-linked exchange traded funds, the Government should work with the Insurance Authority (IA) and the Mandatory Provident Fund Schemes Authority (MPFA) —to require insurers and pension funds to incorporate ESG factors into investment decisions and trustee approval.
Encourage Green Transportation
Both the HK$80 million earmarked fund to electrify green public light buses and the HK$2 billion pilot subsidy scheme for the installation of electric vehicle (EV) charging infrastructure in private residential estates are welcomed. The Government should also continue to provide financial incentives for commercial EVs, with decarbonising public transportation as the ultimate goal. The Government also should explore the potential of developing a hydrogen economy to replace fossil fuels as a transport fuel.
Improve Energy Efficiency
Energy saving plays the key role on reducing carbon emissions. The lion’s share of electricity generated in Hong Kong goes to meeting building energy demand. More than 3,600 buildings in the city are over 50-years old with varying energy performance. We urge the Government to expedite the transformation of the city’s electricity grid into a smart grid, providing real-time feedback to grid operators and end-users to enhance energy efficiency. The Government also should provide incentives to help building owners to adopt energy-efficient designs and technologies and retrofit existing buildings.
Adapt Climate Change
Hong Kong is particularly susceptible to flooding and storm surges as a coastal city. The Government must allocate more resources to ramp up coastal defence infrastructures and adopt sponge city designs. Healthcare capacity needs to be expanded as well to tackle heat-related illnesses and vector-borne diseases as they become more common. At the same time, climate change will make the world less water secure. The Government must develop alternative sources of freshwater other than Dongjiang water, such as water reclamation and desalination.
Support Waste Management
The volume of municipal solid waste going into the landfills continue to be on the rise. The Government must allocate resources including financial incentives to upgrade the local recycling industry. As the same time, they should establish materials recovery facilities throughout the 18 districts in Hong Kong to support clean recycling.
Photo source / 圖片來源: HK01