Green Finance Advisor of Friends of the Earth (HK)
All other things equal people prefer to live in an environment with stable climate. In particularly, the younger generation wants to preserve the planet where their future depends on. The management of climate change and environment has become a key factor for companies, cities and countries to attract and retain talents. Despite making the 2050 carbon neutrality commitment, the Hong Kong SAR government is missing a detailed roadmap, policies, and financial support to achieve the goal.
Photo source: Environmental Protection Department
Based on the latest government report, 80% of Hong Kong emissions in
2020 came from two areas – power & energy industries and transportation. [1]
Before COVID, the share of emission
coming these areas was even higher at 84%. How Hong Kong sources its energy and
manages its transportation system are key considerations of its decarbonization.
Sadly, only a little progress has been made in both areas. As pointed out in the
Friends of the Earth (HK) Response to the 2022 Policy, there
is a lack of strong climate policies from the government to help Hong Kong
adapt and mitigate climate risks.
The total emission coming from transport has not been rising much since
2015. In fact, ones may argue that transport emissions already peaked in the late
90s. I believe a major contribution to this emission stability is our reliance
on railways, which deliver 41% of all trips on public transport of the city but
contributed only 3% of its transport emissions. Comparatively, private cars and
motorcycles, the major passenger transport emitters, generated 24% of our
transport emission. Buses and taxi contributed another 21% and 16%
respectively.[2]
Following the commencement of the MTR Sha Tin to Central Link earlier
this year, we could expect more passengers to switch to railways for daily
transport. This in turn will help reduce the overall emissions. There remains
room for MTR to expand its network. However, since our railway network has
already covered majority of our population. The marginal impact for future MTR
railway projects to emission reduction is likely to taper off.
The burden for emission cuts clearly goes to the rest of the
transportation system. We are glad to see more people driving electric cars or
hybrid vehicles but the running of diesel-fuelled buses and LPG-powered taxis is
a primary builder of climate risks of Hong Kong. To decarbonize buses, the
government needs to drive the transition to buses powered by electricity and
green hydrogen. In addition, the bus route rationalization, which has been
discussed for many years between the government and bus operators, should speed
up. Transport emissions can be materially reduced when road traffic is optimized.
Taxi plays a critical role in emission cuts in densely populated areas.
In Singapore, taxi companies have taken lead to commit to 100% cleaner energy
vehicles by 2040.[3] To the minimum the Hong Kong government should
consider setting time-bounded targets for conversion of all taxi to electric
vehicles or hybrid vehicles. Low emissions should also be included as a
criteria in the new license application and license renewal of taxi and other vehicles.
Freight transport is another area we need to slash emissions. The
Business Environment Council earlier this year published a report about
decarbonization of this segment.[4]
I recommend the Hong Kong government to seriously consider and implement
suggestions given in the report.
In the interest of space, I will discuss about the carbon footprint of
our power & energy industries in another time.
Everybody talks
about the Metaverse, but what exactly is the Metaverse? What does the Metaverse
have to do with ESG? In recent months, I have attended the annual conference
events of the Hong Kong Institute of Certified Public Accountants (HKICPA) and
the Royal Institution of Chartered Surveyors (RICS) to share the latest
developments in the Metaverse and its potential impact on the traditional
professions. The first question I was always asked: what is the Metaverse?
The definition of
the Metaverse varies, and its origin can be traced back to science fiction from
decades ago. In my opinion, the Metaverse consists of the following three key
elements: (1) immersive experience, (2) socializing activities, and (3) asset
ownership. First of all, with the development of hardware technologies, such as
data bandwidth and wearable devices, software and hardware applications of
Extended Reality (XR for short, including AR (Augmented Reality), VR (Virtual
Reality), MR (Mixed Reality)) began to emerge. The cost is lower and more
reasonable to retail users, reducing the threshold for mass adoption.
Second, it is about
socializing activities. From the current online “play-to-earn” games to
futuristic digital smart cities, the Metaverse focuses on improving the
well-being and productivity of human society through the combination of virtual
and physical worlds. Thirdly, it is the use of digital assets enabled by
blockchain technology as an economic model to incentivize the development of
the Metaverse. From Web1.0 era which transmission of information is one-way, to
Web2.0 where large social platforms own all the user data, we are progressing
towards a new economic model of Web3.0 that advocates the “creator
economy”.
In the “14th
Five-Year Plan”, the Chinese government lays down the plan to develop the
digital economy. Key industries include blockchain, internet of things, virtual
reality, and other essential components of the Metaverse. Since 2021, both the
national and local government levels have announced their Metaverse-related
development policies. To date, as many as 24 provinces and cities, including
Beijing, Shanghai, Guangzhou, Wuhan, Chongqing, etc., have announced their
Metaverse development policies.
Another major
national policy of China is to achieve carbon peaking by 2030 and carbon
neutrality by 2060. So, can the Metaverse technology help the grand goal of
carbon reduction? In his book “How to Avoid a Climate Disaster”, Bill
Gates emphasizes that everyone should have the chance to live a healthy and
productive life. It is unethical and impractical to ask backward countries to
give up using more energy to improve their lives. The solution should be to
invest in breakthrough technologies to achieve carbon neutrality.
The use of
blockchain and even metaverse technology to solve the climate crisis is no
longer just a concept, and many business cases have already been implemented.
The digital twin technology can model the whole process and perform sandbox
simulations. For instance, it has been applied in the real estate industry for
planning and design instead of making physical models, reducing carbon
emissions. Singapore, Boston, and San Francisco have established city-level digital
twins to analyze and plan urban development with real-time data, simulate
policy effects, and strengthen risk management capabilities to respond to
crises.
Cases in other
countries include NFT trading platforms to facilitate peer-to-peer trading of
renewable energy certificates and carbon credits. An Australian company called
Power Ledger uses the blockchain decentralization technology to try to innovate
the electricity trading market. For example, consumers can trace the source of
electricity production through the immutable ledger on the blockchain, so that
they can have a choice on clean energy. Its trading platform allows consumers
to conduct P2P buying and selling of solar power. Another company in South
Africa, The Sun Exchange, uses Bitcoin and other cryptocurrency technologies to
promote third-party investment in solar panels, and lends electricity to local
schools, retirement homes, and small and micro enterprises through its online
micro-leasing marketplace. Investors earn interest income from it, borrowers
obtain clean energy required for production, and the local environment achieves
carbon reduction, achieving a win-win-win situation.
Earlier, I attended
the HKUST 30th Anniversary Web3 Carnival, an alumni event of Hong Kong
University of Science and Technology. In his keynote speech, Professor Yang
WANG, Vice President of the university, pointed out that Hong Kong, as the most
international city of China, should take advantage of “One Country, Two
Systems” to become the sandbox and the bridge to the world for China’s
digital economy and the development of the Metaverse. Hong Kong needs to
develop the Web 3.0 digital economy as one of the key catalysts to address its
own social issues. The vision is to establish “Metaverse Hong Kong”
(MetaHK), striving to make Hong Kong a Metaverse-powered Smart City.
其他外國的案例包括建立類似NFT交易平台，促進可再生能源證書及碳排權點對點交易。一家叫Power Ledger的澳大利亞公司，利用區塊鏈去中心化技術，嘗試創新電力交易市場，例如消費者可以通過區塊鏈上不可篡改賬本追查電力的生產來源，令其對潔淨能源有所選擇。其交易平台可以讓消費者進行P2P買賣太陽能電源。另一個在南非的公司The Sun Exchange，利用比特幣等加密貨幣技術，促進第三方投資太陽能電板，通過其線上微租貸平台向當地的學校、老人院、小微企等借出電力。投資者從中獲取利息收入，借貸方獲取潔淨能源拓展生產所需，當地環境實現碳減排，達至三贏。
