Innovation is as much about setting an example for others to follow as coming up with new ideas. Hong Kong's water management has certainly been innovative, overcoming the obstacle of finding enough water for a large population living in a city with insufficient natural resources to adequately meet its needs. The world's first reservoirs carved from the sea, sea water for flushing, desalination for a brief time and, crucially, a supply agreement with Guangdong until at least 2030, provide a model for governments elsewhere in China and developing countries throughout Asia. In keeping with our position, we should also be leading the way in conservation and sustainability.

Unfortunately, our city has a poor record for saving water. Our per capita usage is among the highest in Asia and among developed economies; in 2009, it was 371 litres a day, compared with 311 in Seoul and 308 in Singapore. Fresh rather than recycled water is splashed around for cleaning floors and watering plants. There is little, if any, thought of climate change and the droughts that affect the region, the rationing that was commonplace until little more than a generation ago or the shortages that regularly plagued our city until the mid-1960s.

That is in large part due to overly-generous subsidies that mean we pay between half and one-sixth of what Europeans and North Americans are charged by their governments. Tariffs have remained largely unchanged since 1995 and half of households pay less than HK$25 a month, and 17 per cent nothing. Fresh water, 80 per cent of which comes from the Dongjiang in Guangdong, costs HK$7 per cubic metre including treatment. Yet for each quarter, households get the first 12 cubic metres used for free and are charged just HK$4.16 per cubic metre for the next 31 cubic metres, HK$6.45 for the next 19 and for consumption of more than 62 cubic metres, HK$9.05.