Mostafa Monira Firdouse, Green Finance Advisor of Friends of the Earth (HK)
In
Last few months, there are number of efforts commenced to push Hong Kong’s
status towards of an international green finance center. The establishment of
the Greater Bay Area – Green Finance Alliance (GBA-GFA) is one of the key
pillars for Hong Kong becoming a global hub for green finance. Regulatory
authorities in Hong Kong are now working together to create and detail a
strategy for setting credible and consistent standards, in-order to support
green finance and sustainability practices globally, there must be consistent
measurements and metrics at the international level. The opportunities for Hong
Kong as a sustainable finance center are enormous.
Climate
change is high on the agenda at the Hong Kong Monetary Authority (HKMA) and
Asia where Hong Kong’s position as a hub for global investors – particularly
Chinese investors – stands to boost green engagement, according to Eddie Yue,
chief executive of the island’s central bank. To scale up the effort, HKMA has
adopted a three-phased approach to promote green and sustainable banking.
Looking
forward to see;
A common framework will be developed to assess greenness
baseline by 29 participant banks.
Hong Kong Exchanges (HKEX) would also bring more strength to the
government’s green targets.
New/innovative financial products will come to cater GBA investors.
Green Finance Advisor of Friends of the Earth (HK)
The heat we are having since late
April is suggesting that Hong Kong will have a very hot summer. Regardless of the
sceptics and denials of climate science by some people, our personal experience
easily confirmed that the change of climate is true without doubt. In Hong
Kong, the number of very hot days and very hot nights are trending up while the
number of cold days is trending down.[1]
The pace of the change, which has accelerated in the past few years, is most worrying.
That being said, as United States – the world’s second largest carbon emitter
– returned to the Paris climate accord, we
see more hope now for faster, tighter global coordination to tackle climate
change. More importantly, the new US administration under Biden has some promises
for greening its energy and transportation in the proposed US$2 trillion
infrastructure bill.
However, it is never easy to gain
bipartisan support for new bills and other measures for mitigating climate
change. This is particularly true under the political influence of the oil and
gas industry, which has been reluctant to decarbonize. Noticeably, fossil fuel
combustion accounts for 75% of the US greenhouse gas emission and oil and gas
contributes 69% of the country’s energy source. Given the firm economic and political bonding between the oil and gas industry and the
country, the Biden administration needs exceptionally strong willpower and bold
moves to advance climate change agenda.
According to the latest report from
the International Energy Agency (IEA), the world does not need any new development
of oil and gas fields in 2021 and beyond on our 2050 net-zero pathway. Between 2020
and 2050, oil and gas demand will fall 75% and 55% respectively. The supply of
oil and gas by 2050 will come only from a small group of low-cost producers. OPEC
has the clear cost advantage and is expected to supply more than half of
world’s oil by 2050, higher than its 34% market share for 2020. While some of
the existing US oil and gas companies could survive, we expect a lot more will
be closed, transformed or bankrupted. Based on this analysis, all oil and gas
companies should consider seriously their future under the 2050 net zero
scenario and adopt dramatic changes to their operation and business model.
We are glad to see commitments from the like of BP, which announced plan to cut production and transform its business to more clean-energy aligned. However, these plans are rare in the oil and gas industry. More companies have set targets of reducing emission intensity but not their total emission. Some companies such as ExxonMobil and Chevron are still considering new oil and gas projects and plan to increase production in the medium term. These oil and gas companies, which are in slow motion to climate change or have the “business as usual” mentality, will not only be self-destructing and but also result in significant cost to the future of human. Noticeably, a 2019 report showed that fossil fuel industry misled Americans about climate change.[2] Another report published on 13 May 2021 indicated how oil companies used language to make people blame themselves for climate change[3]. Now is time for the authorities of the US and other countries to hold oil and gas companies accountable for their costs to climate.
