() 10 Recommendations by HKIC to Promote Green Economy
(HONG KONG – 2 September 2009) Hong Kong Ideas Centre (HKIC) started an Environmental Protection Study in May this year to investigate ways of developing a green economy in Hong Kong, through studying Hong Kong’s environment-related industries, learning from the progress in other countries and regions and gathering ideas from various industries and experts. The report has been completed, with 10 recommendations on three areas: (1) setting up an SME Green Loan Fund to promote environmental protection among small and medium enterprises; (2) the government should take the lead in adopting and promoting environmental protection to drive the growth of green markets and (3) enhancing policies and measures for the development of green industries.
The government has introduced various environmental protection measures in recent years. It has also accepted the suggestion put forward by the Task Force on Economic Challenges to position the environmental industry as one of the six industries with growth potential in Hong Kong. HKIC welcomes and supports the government’s initiatives. But more strenuous efforts are needed in environment protection and creating business opportunities if the environmental industry and a green economy in Hong Kong are expected to grow to their full potential.
Setting up an “SME Green Loan Fund”
The first suggestion put forth by HKIC is the setting up of a $500 million SME Green Loan Fund by the government to provide interest-free loans to Hong Kong’s small and medium sized enterprises so that they can install or use environment-friendly facilities and technologies. On the one hand, it can enhance their capability of complying with relevant environmental legislations; on the other hand, the funding can assist SMEs in upgrading efficiency, saving energy, reducing pollution, improving production, service, and corporate image, resulting in an all-win situation.
The SME Green Loan Fund proposed by HKIC is different from the Green Financing Scheme co-run by the Hong Kong Productivity Council and local banks. The latter focuses on Hong Kong-invested factories in Mainland China while the former covers all local industries, including small-sized eateries like Hong Kong-style restaurants, congee or noodle shops and roast-meat diners (according to the Census and Statistics Department there are approximately 5,000 such eateries in Hong Kong), hair salons, small factories or food processing plants, local farming enterprises such as aquatic breeding farms, flower planters and organic farms etc. At the same time, loans made under the SME Green Loan Fund are not low-interest loans by banks; they are interest-free loans provided by the government.
For more than half a year, banks have been badly hit by the financial tsunami and have become very prudent in corporate lending. Loan terms and conditions can be so stringent that the funding schemes carried out through banks are actually not of much help for SMEs. There have long been examples of government-funded loan schemes including the Kadoorie Agricultural Aid Loan Fund, the Fisheries Development Loan Fund and the Film Development Fund.
The Government Should Take Lead in Promoting Environmental Protection
To effectively promote environmental protection, it is crucial that the government should play a leading role. By setting a good example, the government can drive the development of green industries in Hong Kong. It can also serve the purposes of raising public awareness of environmental protection to a much higher level, realizing the goal of sustainable development and at the same time enhancing Hong Kong’s environmental image among international communities.
The Chief Executive announced the expansion of the scope of green procurement after the last meeting of the Task Force on Economic Challenges in June 2009. HKIC recommends more comprehensive green purchasing and operation by the government. For example, all government departments should strictly enforce source separation of waste; the government should avoid using take-away bottled water; all newly-purchased government cars must be green and energy saving; the room temperatures and humidity of air-conditioned government buildings should not be lower than specific values; government buildings’ indoor lighting should be installed with automatic system and their outdoor lighting should include light-sensitive function; all indoor and outdoor lighting should be replaced with energy saving products; all government buildings, community centers and government schools should launch green roofs, etc.
To lower the immediate expenses, the government should consider cooperating with environmental consultants or engineering companies through performance contracts, under which these companies will pay for the installation of hardware and then share the savings from less energy consumption with the government.
Moreover, environmental consultants or engineering companies can provide “free” energy saving engineering services to commercial buildings in Hong Kong. Qualified small and medium sized environmental consultants or engineering companies can apply for loans under the SME Green Loan Fund to overcome related cash flow problems. HKIC also proposes strict environmental requirements in government tenders. The government should also provide more employment opportunities for local environmental consultants or engineering companies familiar with Hong Kong’s unique conditions to enhance their long-term development.
An Independent Environmental Protection Account
On the sources of funding, HKIC proposes the establishment of an independent account by the government to make sure that all environmental incomes (like sewage charges, construction waste disposal charges, relevant penalties and the environmental levy on plastic shopping bags launched recently) are directly used to promote a green city.
As the government has considered issuing bonds in recent years, HKIC suggests classifying some of the bonds as Green Bonds. Not only can it promote environmental awareness, but it can also raise funds to pioneer environmental protection and support the growth of the environmental industry in a more comprehensive and effective way.
Other Suggestions
HKIC’s proposals for environmental protection also include an environmental accreditation and award scheme set up by the government and trade associations, the establishment of an Environmental Information & Technical Support Centre, new legislations on promoting environmental protection efforts of public institutions (for example, public housing estates, the Hospital Authority, subsidized schools, universities etc), formulation of long-term plans for reducing greenhouse gases, direct subsidization to the recycling industry and education and manpower training for the environmental industry.
For the full version of the research report and proposals, please refer to HKIC website at www.ideascentre.hk
About Hong Kong Ideas Centre
Hong Kong Ideas Centre (HKIC) was set up in December 2008 by a group of people who love and care about Hong Kong. Its funding comes from donations. The motto of HKIC is Think and Build for the Future and its objectives include: (1) increasing Hong Kong’s competitiveness; (2) promoting the sustainable development of Hong Kong as a vibrant economy and community; and (3) improving the quality of life of Hong Kong citizens.
To collect ideas from different sources, HKIC holds various activities regularly, which include discussions and consultations, research, surveys, interviews, seminars, websites etc. HKIC looks forward to your participation.
Website: http://www.ideascentre.hk
Media enquiry: Carol Lee (Tel: 2696 -2969 / 9277-5272)