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Should some of China's carbon emissions be attributed to Hong Kong?

Climate-change scientists factor in trade as they seek equitable attribution of carbon dioxide emissions

PUBLISHED : Sunday, 18 November, 2012, 12:00am
UPDATED : Sunday, 18 November, 2012, 4:37am

Should Hong Kong share some responsibility for the mainland's CO2 emissions?

You may be puzzled by this question, as mainland China is now the world's largest emitter of CO2, but there is a valid argument for equitable attribution of CO2 emissions among countries and regions. This is a concept based on calculating emissions from international trade, a concept gaining traction among researchers in the climate-change field since 2008.

Take a look at the data from the International Energy Agency for territorial CO2 emissions of mainland China, Hong Kong and the United States between 2005 and 2009 and you can see some startling figures. There were increases in CO2 emissions in mainland China of 34 per cent and in Hong Kong of 17 per cent, while those in the United States decreased 10 per cent. For 2005, we can also estimate the CO2 emissions per capita to be about four, six and 20 tonnes, respectively.

Hong Kong's territorial CO2 emissions come mainly from the combustion of fossil fuels such as coal, petrol, diesel and natural gas in transport and industrial machinery, in millions of kitchen stoves and in producing a portion of its electricity. But Hong Kong should really be responsible for a fair portion of CO2 emissions in mainland China.

Over the years, Hong Kong has outsourced much of its manufacturing there. Numerous factories are owned by Hong Kong businesses. By necessity, Hong Kong imports the majority of its goods from the mainland and other countries.

China has been a factory not just for the US but for the world. Manufacturers of goods and services consume energy in their production processes. Energy is also consumed by other entities in the supply chain when they bring in the raw materials needed for production. Finally energy must be used in delivering the finished goods to destinations all over the world.

Since fossil fuels are still the world's primary energy source, CO2 is emitted wherever there are factories and whenever vehicles are moved. The point is: how should this kind of consumption-based CO2 emitted in a given country be treated when the goods and services it produces are exported to benefit those living in other countries?

China and the US, as parties to the UN Framework Convention on Climate Change (UNFCCC), annually report CO2 emissions within their borders. In 2006, the two nations shared the dubious distinction of being the world's two largest CO2 emitters. Since 2007 China has assumed that role, while US emissions have been in decline.

At the 2009 UNFCCC meeting in Copenhagen, China unilaterally pledged to set its 2020 target for CO2 emissions intensity - defined as the amount of CO2 emitted per unit of a country's gross domestic product - at 40 to 45 per cent lower than its 2005 levels. By comparison, the US pledged a 2020 CO2 emissions target of 17 per cent below its 2005 levels.

Keeping to its 2009 pledge, China has taken, and will continue to take, numerous effective measures to reduce CO2 emissions.

To Hong Kong's credit, its government in 2010 aligned its carbon-intensity reduction target to that of mainland China. Assuming that Hong Kong's GDP grows by 3 to 4 per cent a year, it will have to reduce its territorial CO2 emissions to 2005 levels by 2020.

Such intentions are admirable, but do they fairly account for a responsible attribution of CO2 emissions to Hong Kong? The answer may be no.

In a 2010 study that addressed equitable attribution of CO2 emissions among countries, Steven Davis and Ken Caldeira of the Carnegie Institution at Stanford University used 2004 world trade and CO2 emissions data to estimate that goods imported by the US from China caused about 0.4 gigatonnes of CO2 emissions in China's production processes. Put another way, the US in 2004 outsourced to China about 0.4 gigatonnes of CO2 in consumption-based production.

To put this number into perspective, China's 2004 national CO2 emissions were roughly 5.1 gigatonnes. Hence, roughly 8 per cent of China's CO2 emissions came from exports to the US.

Hong Kong's 2004 direct CO2 emissions were about 0.039 gigatonnes, not a large quantity; however, the CO2 emissions resulting from Hong Kong's imports from mainland China and other countries amounted to 0.082 gigatonnes, or about twice its territorial emissions.

If such consumption-based CO2 emissions should also be Hong Kong's responsibility, then Hong Kong's 2004 equitably aggregated CO2 emissions per capita would have been about 18 tonnes, about three times the six tonnes from direct emissions.

So who should own up to mainland China's CO2 emissions? Should Hong Kong remain sanguine about reducing its territorial emissions, despite the fact that it imports almost everything it consumes and that such consumption-based imports cause CO2 emissions elsewhere?

Hong Kong's awareness of CO2 emissions from its supply chain in mainland China may help drive down the level of consumption-based CO2 emissions in Chinese factories if Hong Kong plays the dual roles of responsible factory owner and influential customer, thus working proactively with the mainland to fulfil its 2009 UNFCCC pledge.

Also, mainland China intends to initiate a domestic carbon cap-and-trade pilot programme, with Shenzhen and Guangdong among the five cities and two provinces slated as participants. So should Hong Kong partner with Shenzhen?

Patrick Lui, a US trained scientist, is a co-founder of Savantas Policy Institute in Hong Kong and was a long-time staffer at Stanford University. He recently taught a summer course on climate change and energy at HKUST

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