Opinion, GIFT: SCMP
The recent news that Hong Kong has launched a new form of international emissions trading to help the city fulfill its obligations under the Kyoto Protocol comes, literally, as a breath of fresh air for local companies, says Thomas Tang.

In particular, the latitude extended to Hong Kong projects for acceptance under the Clean Development Mechanism, (CDM) through exemptions of government fees and relaxation of ownership conditions on the sale of certified emission reduction credits, should –in theory- make investing in clean energy projects all the more attractive to Hong Kong companies.

But the rush may take a while to materialise. The CDM was originally a proposal for developed economies to find ways of offsetting unavoidable carbon emissions by buying certified emission reduction credits from clean energy projects in developing economies.

Hong Kong is far from being a developing economy. The role of energy policy has much less to do with reducing global warming than ensuring energy security. The benefits of projects like wind, hydro and solar power would be questionable, given the exorbitant costs of projects in a small environment like Hong Kong.

The city, therefore, needs a much smarter way to capitalize on the CDM and exhibit global responsibility. The mechanism could serve as the long-awaited incentive for property developers to embed energy efficient and energy reduction designs in new and existing buildings, to comply with carbon credit requirements.

This is one obvious route, but the bigger bang for the special administrative region’s buck could lie in using the mechanism to tackle one of its perennial problems – transport.

Clean transport strategies employed in cities throughout the world have paid dividends in terms of reduced congestion, better air quality and much nicer living environments. Places like London, Stockholm and Singapore have adopted traffic measures like road pricing to achieve significant reductions in vehicles on their roads.

The city of Curitiba in Brazil has been a model of how robust transport planning has enabled its inhabitants to enjoy efficient public transport but still maintain the independent advantages of private vehicle ownership, showing that the best of public and private transport systems can co-exist.

Hong Kong’s opportunity surely lies in using its highly efficient public transport system linked to strategic measures like road pricing and converting more stress to pedestrian use that would yield obvious reductions in carbon by removing vehicles from the roads. With the backing of the National Reform Development Commission in Beijing, whose role is to screen national CDM projects, it is a huge opportunity to use market forces to bring a welcome change to Hong Kong’s environment.

Rail, bus and tram companies would be able to run their businesses and get carbon credits for their investments. Imagine the MTR Corporation being able to partially finance and operate a new line from carbon credit trading. And having to build fever roads must make sense to the government, as well as taxpayers.

Last year’s stakeholder – engagement exercise on achieving better air quality for Hong Kong, run by the Council for Sustainable Development, showed an overwhelming public response in support of measures such as road pricing to provide cleaner air for Hong Kong, to help resolve our much publicized pollution problems.

With this need to improve the environment, the CDM opportunity must look even more attractive both politically and commercially. It just needs Hong Kong companies and policymakers to be hold and not just engage in hot-air debates, and to actually start selling the idea.

Dr. Thomas Tang is executive director of the Global Institute For Tomorrow.