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Following is the speech by the Chief Executive, Mr Donald Tsang, at "Business for Clean Air", a Joint Conference of Project CLEAN AIR and Action Blue Sky today (November 27):
Mr (David) Eldon, Professor Lam (Kin-che), Mr (James) Graham, Mr (Alex) Fong, ladies and gentlemen,
I am exceedingly pleased to officiate at today's "Business for Clean Air" Joint Conference. This is an extremely timely event signifying the business community in Hong Kong's commitment to improving our air quality.
Your topic this morning is Hong Kong's air quality. I would like to talk about what we are doing in the Government to improve it, and what more can be done by all of us in this regard, particularly among people in this room.
We have seen dramatic media reports lately about people at big companies fleeing Hong Kong's nasty air for cleaner cities in the region. While I am fully aware that we need to improve our air quality, I also think we have to keep the problem in perspective.
In terms of the quantity of air pollutants, Hong Kong ranks at neither the top nor the bottom of the world table. Rather, we are at a level comparable with such cities as Tokyo, Seoul, Barcelona and Los Angeles. Meanwhile, foreign investment continues to pour into our city. Unlike others, we do not try to attract trade and investment by offering special tax, land or financial incentives. We believe that Hong Kong's best incentive lies in the quality of our overall business environment. And we have been proven right. In the World Investment Report of this year, issued by the UN Conference on Trade and Development, Hong Kong retained its position as Asia's second largest destination for foreign direct investment, with our FDI rising to US$35.9 billion last year, the largest being the whole of Mainland China.
Not only that, but since 1997, the number of overseas companies with regional operations in Hong Kong has grown by over 50%. We now have well over 3,800 overseas companies with regional operations, confirming Hong Kong as the most popular place in Asia to establish a base. Hong Kong also has Asia's second largest stock market. So far this year, it ranks second in the world in IPO funds raised, behind only London, which we are overtaking as well.
When I was in Paris and Brussels earlier this month, both French President Chirac and Belgian Prime Minister Verhofstadt personally asked me to look into expansion of the French International School in Hong Kong to accommodate the growing demand for places there because there are more French-speaking businessmen coming to Hong Kong and settle.
So, ladies and gentlemen, while we have anecdotal stories that some businessmen are quitting Hong Kong, there is also ample evidence that foreign talent and investment continue to flow into our city in much greater numbers than those who leave. That has been the phenomenon in Hong Kong since time immemorial.
This is not to say that we do not have a problem. We certainly do. Our air quality is not acceptable. And we are acting to fix it.
The Action Blue Sky campaign that I launched this summer has an important mission. It is to draw the attention of people from all walks of life to the air pollution problem, and to make them aware that the solution requires action and participation from themselves. It is a consciousness-raising campaign, and we have seen a positive response. Schools have adopted green measures to cut down their electricity consumption. Businesses and citizens have joined competitions to save energy and reap amazing savings. Drivers have been more conscious about turning off idling engines while they wait in their cars.
There are still dissenting voices, however. Some still challenge the Government on the need for more draconian measures. Some car users complain that their vehicles turn into a sauna when the engine is turned off. Some shopping arcade managers refuse to raise the air-conditioned temperature to 25.5 degrees Celsius for fear of losing customers, although that is recommended by the administration. And many people have yet to be convinced that their personal sacrifice can indeed improve our air quality. Is it not somebody else's business or, better still, is only the Government's responsibility?
Some critics have urged the Government to adopt immediately the World Health Organisation's latest air quality guidelines, which were published last month. But the WHO itself notes that national air quality standards will vary according to the approach adopted for balancing health risks, technological feasibility, and political, social and economic considerations. The WHO recognises, and I quote, "that when formulating policy targets, governments should consider their own circumstances carefully before adopting the guidelines directly as legally based standards".
It is in this spirit that we recently announced our plan to commission a comprehensive 18-month study on Hong Kong's air quality objectives in early 2007 in the light of what the WHO has recommended. The study will be overseen by a representative and authoritative steering committee. The public will be engaged to devise a practicable long-term air quality management strategy.
All these divergent views reflect the mixed attitudes of our community. My administration's job is to forge a community consensus to tackle the problem. The business sector, represented here today, is one of our target stakeholders.
First of all, I congratulate you on drawing up the Clean Air Charter. The six bullet points cover a wide spectrum of activities. If duly followed, the Charter will bring significant improvement to our air quality. It requires signatories to identify relevant standards of emission, review their own performance relative to those standards, and make solid plans to meet them on a voluntary basis.
The Charter requires continuous monitors for large and medium emitters and regular disclosure of their total emissions, energy and fuel use. This sunshine policy for business is commendable and will build mutual trust in the community, as well as inculcate better understanding of pollution control by the business sector.
Energy saving can be achieved by conservation and by improving efficiency. Do not underestimate the energy consumed by air-conditioning. It constitutes one-third of Hong Kong's total energy consumption. A three-degree Celsius hike in the air-conditioned indoor temperature can save as much as HK$1 billion a year. That is why we have promulgated the adoption of 25.5 degrees in all air-conditioned Government premises.
The Clean Air Charter also requires businesses to adopt special measures to cut pollution on bad air days. The experience of other cities shows that this may involve special arrangements for working from home to avoid travelling, cutting air-conditioning and lighting by half, encouraging car pooling, using only public transport, adopting flexible working hours to smooth out peak traffic, and reducing the total number of vehicles on the streets. We know these are measures that will impact people's lives and routines, and impose inconvenience.
The Council for Sustainable Development will soon conduct an exercise to engage the public and forge some consensus on whether such measures should be adopted in Hong Kong on days when the API is expected to be high. The support of business will be vital to the success of this engagement process.
The Government has agreed to sign the Charter as the largest employer in Hong Kong. We are serious about doing the best we can. In addition, we will continue to institute policies, review air quality objectives, and introduce legislation on pollution control. I am pleased to learn that we have the full support of the retail sector in controlling VOC in products, as well as mandatory energy efficiency labelling for the three most commonly used household electrical appliances. The relevant bills are expected to reach the Legislative Council by next year.
Separately, we are making every effort to reduce emissions from all sources. We will see nearly half of the petrol stations fitted with vapour recovery systems by early 2007. Private car owners will enjoy a tax concession of up to $50,000 if they go for an environmentally friendly car with low emission and high fuel efficiency.
Most franchised buses will retrofit their Euro II or above buses with continuous regeneration traps, while new buses will be asked to adopt the best commercially available environmental technologies as far as possible. Other commercial diesel vehicles of pre-Euro or Euro I models will benefit from a new subsidy scheme totalling HK$3.2 billion when they are scrapped or replaced by Euro IV models.
In contrast, upgrading the entire franchise bus fleet to Euro IV standard overnight ¡V we are doing it gradually anyway - will cost passengers $20 billion. Mandating passenger ferries to switch to cleaner fuel would require fare hikes of up to 130% to cover the additional fuel cost. So there¡¦s always a balance to be made. We know the benefits to be reaped but must realise the cost to all concerned. Not only to the Government, but to the consumer, the travelling public at large. A balance must be struck. We are a civilised community. We can talk these things over and find the best option for ourselves. The alternative would probably be the failure of all ferry operators but one, if we really want to mandate this new system without allowing them the raised fares. Either way, 150,000 passengers would suffer. Some commuters may find such fare increases unbearable. They have a right to be heard. This is exactly what we will do with the forthcoming review of our Air Quality Objectives.
Many of you have business operations in the Pearl River Delta (PRD). You are fully aware of the joint air quality management plan that the Guangdong and SAR Governments are pursuing. We have set ambitious targets for 2010, and both sides are working hard to reach them. All signs are we are doing exactly what we have pledged. Guangdong is accelerating adoption of higher motor vehicle emissions standards and fuel standards. Over 10,000 megawatts of coal-fired generating units in the PRD have been retrofitted to reduce sulphur dioxide emissions by more than 150,000 tonnes each year. Two oil-fired power plants were converted to use natural gas this year. The first generating units designed for natural gas have started operating, and more are coming along. Meanwhile, highly polluting cement plants are being closed down, and thousands of tonnes of particulates are being eliminated.
About 80,000 enterprises with Hong Kong connections are operating in the PRD and the rest of Guangdong Province. Given this large number, we are developing a pollution-reduction pilot scheme. We intend to target commonly used small emergency generators, which produce disproportionately large quantities of black smoke and other pollutants. The Government has sponsored the Hong Kong Productivity Council to develop a prototype scrubber that can remove some of the pollutants from the exhaust, and to help factories install the device on their emergency generators. The prototype is being tested now. A conservative estimate is that it should be able to remove 50% of the pollutants. We urge all users of small generators to install this device once it is formally introduced.
It is well known that the lion's share of Hong Kong's air pollution comes from commercial and industrial activities in the PRD. With the strong presence of our business community there, I am sure that the intervention can help reinforce the work we have been pursuing with Guangdong at the governmental level. In concrete terms, that means our businesses should adopt the same high environmental standards for their PRD operations as they do in Hong Kong. If every Hong Kong company working in the PRD were to sign and abide by the Clean Air Charter, it would clean up most of the polluting operations.
We acknowledge the concerns of foreign executives in Hong Kong who worry about their children's health. This is natural and only right. All responsible parents share these concerns ¡V local and expatriates alike. But let me ask the companies that employ these executives: When investing in the PRD, have you done your environmental due diligence? Are you factoring environmental considerations into your manufacturing, procurement, merchandising and investment activities in the PRD? We cannot separate Hong Kong's air from the PRD's air. And we have no right to complain about Hong Kong's air quality if we ourselves pollute the Pearl River Delta. But also we have to look at these things in perspective too, on this point on the emigrating or departure of foreign executives from Hong Kong. We know that air quality in Hong Kong is not pristine pure as in some Scandinavian cities or in the North and South Poles. We know our food may not be 100 per cent safe. And this is accepted. And we know our neighbours may not be as developed as some other countries. But you have to look at the problem in the round. In the final analysis, the health of the people is measured by how long they live, and this is where it counts. The life expectancy in Hong Kong is among the highest in the world. As far as men are concerned, in last year's count men lived to 78.8 years ¡V life expectancy ¡V the longest in the world. Longer than in Japan. Our women lived to 84.4 years, second only to Japan. If you go to the United States for instance, the average life expectancy is four years shorter. In the UK it is two years shorter. If you go to Singapore, similar things happen. So, while we have to continue to complain about air quality, while we complain about the impurity in our food, all these things are relative. Every other country faces the same problem. At the end of the day, looking at what we have achieved for the health of our people, you can come to only one conclusion ¡V we have the most environmentally friendly place for people, for executives, for Hong Kong people, to live. We are not complacent. We are going to improve, but just consider what I have just said.
Ladies and gentlemen, I wish you a successful Business Leaders Forum this morning. The challenge ahead is daunting. We will succeed, but only if all of us give it our best effort. We will certainly succeed more quickly. Improving the environment must be everybody's business.
Thank you very much.
Ends/Monday, November 27, 2006
Issued at HKT 14:18
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