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Speech by SEN at Opening Session of Business Summit on Climate Leadership 2010 (English only)

     Following is the speech by the Secretary for the Environment, Mr Edward Yau, at the Opening Session of the Business Summit on Climate Leadership 2010 today (November 1):

Peter, Director General Yang, distinguished guests, ladies and gentlemen,

     It is indeed a great honour to address this occasion, and I think you have picked a very timely slot for talking about this subject for three different reasons. Firstly, of course, it is timely to focus on climate change at the moment when we have rolled out our climate change strategy and action plan. We are engaged in this three-month consultation with a view to drawing up Hong Kong's agenda in tackling climate change - something which we take very responsibly, as caring and responsible global citizens.  

     Secondly I think this is also timely, because this particular week, could be called a climate change week - because today's event actually kicks off a whole week's programme.  Towards the end of the week we have the C40 event hosted by Hong Kong, where we will be receiving between 30 and 40 major city mayors and their delegations - who are all coming to Hong Kong to talk about how cities can contribute in combating climate change.

     It is also a very timely juncture because Hong Kong people are recognising that climate change is their prime concern, as revealed by a survey commissioned by HSBC last week. One in four people in Hong Kong recognise that climate change is a prime concern. So I think this is the perfect time to talk about this subject.

     But before we talk about strategy and action, I think it would be useful to recap some of the figures which form the basis of our discussion.

     So first, what sort of emission levels are talking about in Hong Kong? How do we compare with other cities? In terms of total emission, Hong Kong's total greenhouse gas emission is at a level of about 42 million tonnes, which accounts for about 0.1% of the global emission, which puts us slightly smaller than our share of the world population.  

     On a per capita basis, greenhouse gas emission for Hong Kong is about 6 tonnes, which is slightly lower than the 7 tonnes per capita per year world average.  This figure compares favourably with some other cities, say Singapore, 9 tonnes; UK and Japan, 10 tonnes; the US, four times our level, 23 and Australia, 26. But this is not a figure that we can boast about because Hong Kong as a major city, we believe that there is a lot of scope for us to do even better, particularly at a time where the whole world is fighting to suppress greenhouse gas emissions.

     In Hong Kong, I must agree with the survey commissioned by HSBC that there is increasing recognition that Hong Kong is a vibrant, modern metropolitan city, and we have a great responsibility to join the whole world in mapping out a more progressive target in bringing down our greenhouse gas emissions.

     So in the consultation document I mentioned, we have reviewed our target and are proposing to bring down our carbon intensity by 50% to 60% by the year 2020. This target exceeds the 40% to 45% carbon intensity reduction pledged by the Central Government last year in Copenhagen. This aggressive target is by no means an easy target, but an ambitious target that at least commensurates with Hong Kong's economic status as an affluent, modern, vibrant city aspiring to be a much less carbon-intense metropolitan city.

     Of course the challenge, on the one hand, is how to set a target which is achievable and also sufficiently aggressive to lead Hong Kong into the next decade. The major challenge is how to translate this target into action. In this regard, we are talking about both demand side and supply side management. Since we rolled out the consultation document, much focus is on the supply side, because we have mapped out, in 10 years' time, how the energy mix would need to be changed. A lot of discussion is focusing on whether we should bring in more nuclear power, or should there be better scope for renewable energy. But there is a common consensus that the current pie of our energy supply is not sustainable, because we are still counting on over half of our energy coming from coal-fired generation, which is filthy, which is high carbon, which in any case needs to be replaced, because many of these plants should face their retirement. The challenge is how to take this opportunity to suppress fossil fuel, in particular coal-fired generation, and replace it by anything which is non-fossil, cleaner and lower carbon.

     But I think simply focusing on the supply side would omit a very big opportunity, because without behavioural changes, without demand side changes, I think the carbon battle would only be half fought. I think Hong Kong is a city where a lot of behavioural change could drive further changes, and that is why in the consultation document we have mapped out a strategy where we focus on what we are good at.

     In Hong Kong's carbon footprint, a lion share of our carbon actually come from the energy sector. So while tackling the supply side, there is in fact tremendous scope for us to work towards a more efficient energy consumption, because 90% of our energy is being consumed in buildings, where we work, where we live, and the Hong Kong  skyline speaks for itself. So how to tackle the demand side would not only be a remedial strategy, but also it brings out opportunities.

     What we intend to bring about in 10 years' time is not just to bring down the carbon intensity, but also hopefully with the achievement of the package of proposals, we would be able to bring down our actual carbon emission. In our calculation, if we are able to achieve the 50% to 60% carbon intensity target by 2020, the actual greenhouse gas emissions in 10 years' time will be down from 42 million tonnes to between 28 and 34 million tonnes, which is one fifth or one third reduction in actual terms. This would also bring our per capita carbon level from the current 6 tonnes down to 3.6 to 4.5 tonnes, which would put us in a much favourable condition.

     Now a lot of people would ask: how do we translate these targets into business opportunities? I am not a businessman, so I am the least qualified to address this topic, but I am sure there will be other speakers speaking on this very point.

     But let me quote Lord Stern, whom I understand, will address the occasion later. In his article to the South China Morning Post last week, he mentioned and, let me quote, "The sharp cuts in greenhouse gas emissions that are required should not be seen narrowly as a burden; the transition to low-carbon growth presents immense economic opportunity. This is a new industrial revolution, and history shows that the first few decades embody great innovation and creativity, with investment flowing to the pioneers."  

     I believe that the first mover in fact stands to gain more, and I think that is the very basis why this summit is so important with business leaders coming around searching for opportunities which can take advantage when we go for a low-carbon economy.

     If I am asked to share a few pointers on where we should be going in translating this low-carbon strategy into business opportunities, I would say in the case of Hong Kong, certainly, pointer number one will be energy efficiency. As I have mentioned, we have 90% of our energy consumed in buildings. There is every scope in areas where we work and live. There could be a lot of low-hanging fruit whereby simply changing lighting equipment, air conditioning, all the ways buildings are being designed and retro-fit, there could be scope for improvement. And actually in the last 18 months, we have seen the success of a Government subsidy scheme whereby we provide a dollar-for-dollar matching for retrofitting energy installations in buildings and the scheme has now brought over  4,000 buildings on the queue of improving their electrical installations. That scheme alone has in fact triggered business opportunities of over $400 million in the last 18 months.  I think that figure will be doubled, I hope, in the next two years.

     In the process, we also trained up a lot of energy auditors or transformed engineers from electrical installations to efficiency operators. I think energy efficiency is clearly one very clear way where we can work together.

     Pointer number 2 would obviously be clean fuels, because renewable energy is a very big area that presents a lot of opportunities. This does not confine itself to the energy production sector but also to vehicles, including EV, where electricity can be a driving force for vehicles in the future, and also cleaner fuel, for instance, biodiesels.

     If I am asked about the third pointer, I would say it is a general direction that we should look within our professional area as well as look beyond our boundary. I put this two together in the context where Hong Kong is in fact a place where we can stand to gain a lot by people looking from within. And if you look at the business sectors in Hong Kong, I think we are good not just in a single profession, but in a way where Hong Kong is in fact a professional service centre for the entire region. I think the biggest opportunity available to businessmen is to look from within, from where you stand.

     When we talk about climate change or low-carbon development, we are not confining this only to the professions of, say, engineers or environmental scientists. We are talking about going green as a management decision, as a business decision. It is an inventory decision as well as a procurement decision. So in fact in every step of the management and business process, there would be scope for making a greener option. If that greener option is available, I think, the proprietor, the senior management or whoever is making business decisions would stand a chance of fulfilling this obligation as well as finding this opportunity.

     I say that we should also look beyond our boundary because Hong Kong is closely connected with the Pearl River Delta and the entire nation in economic, social and also technology collaboration. The fact that we are the biggest investor in the Pearl River Delta in fact provides us with an opportunity where we can also make changes to this region. I think that accounts for why the Government has been working very hard in the last couple of years in not just providing remedial actions in tackling all sorts of environmental problems in the region, but also starting to build a consensus whereby the Pearl River Delta area together with Hong Kong could be the greenest part of the nation. And with this very important vision in mind, we are working together with the Pearl River Delta, Guangdong and Macao in finding the appropriate space in the 12th Five Year Plan for this vision to be incorporated in the national policy agenda. And we believe that this will further open up a much bigger market for any technology, any business initiative that can turn the region greener.

     All in all, tackling climate change is not just an obligation. It is also an opportunity. While corporations will talk about corporate social responsibility, at the same time, I think, what we are seeing in the world here today provides tremendous opportunities for us to join hands in tackling climate change.

     In government policy, what we need to drive changes is in fact public opinion. The HSBC survey confirms that the local community is ready. In the business world, it is the consumer who drives changes to the product and I think the global market is seeing waves of change where people do look for greener products. In the entire business world as well as the political world, we all look for successful examples where we can drive our momentum. And I believe Hong Kong is the place and I think you have come to the right place - so please help us to kick off this very important summit for Hong Kong.

     May I congratulate the organiser and hope this summit will be a fruitful and constructive one. Thank you.

Ends/Monday, November 1, 2010
Issued at HKT 18:59


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