Such a model, developed by bringing neighbours to round-table talks on mutually beneficial issues, could be used to good effect in the Pearl River Delta, Mr Ekelund says.

The Sars crisis has helped to underline the importance of direct lines of communication, shared health information and even tough standards on hygiene, food production and animal rearing.

Mr Ekelund's advice is echoed by the views of Dr Mans Lonnroth, managing director of Mistra, the Swedish Foundation for Strategic Environmental Research, and former secretary of Sweden's National Environment Ministry.

Dr Lonnroth was due to speak at a conference on sustainable development in Hong Kong scheduled for April, but it was cancelled when the Sars crisis unfolded.

'The symposium was to discuss how such co-operation between Guangdong, Macau and Hong Kong can be organised,' Mr Ekelund says.

Some of the complex issues on the agenda included examining how multi-jurisdictional agreements can set targets, and what kinds of policing powers are available to ensure compliance.

At the time the regional Baltic Sea pact was hammered out, in the mid-1990s, Sweden had to deal with a high percentage of imported pollution, because the country is downstream and downwind from most of its neighbours.

With European Union integration also on the horizon, legislators were challenged to set regional guidelines while keeping international issues in the picture.

One of the more interesting proposals implemented was a system of incentive schemes under which producers of toxic gases would be penalised and those who produced energy more efficiently would be rewarded.

Using a 'freebate' system, producers of toxic emissions are taxed and the monies passed on to good producers, according to their individual contribution to overall energy production.

Another proposal, now being implemented throughout the EU, uses an emissions trading system for the greenhouse gas carbon dioxide. When put into practice it is expected to lead to gradual reductions in greenhouse gas emissions and assist the EU to meet the limits agreed to in the Kyoto Protocol.

A third proposal, first implemented in Germany, was to extend a manufacturer's responsibility for a product over its entire life cycle. This encouraged industries to create systems for collecting and recycling used goods, including newspapers, scrapped cars and packaging and construction waste.

Sweden has also gone a long way to 'greening' the taxation system. This was accomplished by adjusting the tax-collection system away from taxation on personal income to a system based on energy consumption.

Reduced personal taxes were replaced by taxes on emissions, transportation and energy. Sweden taxes fertilisers, national air transport, batteries, carbon-dioxide emissions, sulphur content in fuels, nitrogen dioxide emissions and petrol.

'We have a model for co-operation that is working,' Mr Ekelund says.

The total revenue of all eco-taxes account for 4 per cent of Sweden's gross national product, or twice the revenues of the former federal income tax.

The United Nations states that Sweden has one of the highest living standards in the world. The Human Development Index (which ranks 173 countries according to life expectancy, education and income per person) ranked Sweden second, behind Norway.

Mr Ekelund says Sweden is willing to help Hong Kong establish a comprehensive cross-border environmental plan, hopefully with Swedish environmental firms playing a role.

'Hong Kong people will realise that, while business is one thing, the living environment is very important,' Mr Ekelund says.

'Perhaps attitudes will change with development in the Pearl River Delta. And Hong Kong's role is very important. As I see it, Hong Kong is becoming more integrated with business in the delta. It is working hard on its integration.'

He praised Hong Kong for its fast response to the Sars problem, but pointed out that a long-term approach to an integrated environmental plan would be more cost-effective, especially as costs are estimated to exceed HK$100 billion.