Amid growing public concern and mounting scientific evidence prompting governments to address global warming, the pressure is building for Hong Kong and the mainland to implement emissions trading schemes to improve air quality. By turning air emissions into a tradeable, scarce commodity, emissions trading schemes have proliferated in the US, the EU and Canada.
Hong Kong, which has been described as the freest market in the world, is also struggling to push through a localised pilot scheme involving the neighbouring Pearl River Delta region to trade pollutants such as sulphur dioxide in an effort to improve regional air quality, which regularly more than doubles US standards for fine-particle air pollution.
The scheme, with high-level official support, has been hailed as a cost-effective, flexible way to encourage power companies to cut emissions and restore our blue skies. The idea sprouts from the economic principle that money should flow to areas where clean-up costs are much cheaper and emissions reductions are therefore easier and faster to achieve, provided the neighbouring area falls under the same air shed.
After all, one of Guangdong's largest coal-fired power plants in Shajiao spent only US$200 million to install scrubbers to clean polluting gases, whereas CLP Power could spend many billions of dollars to achieve the same.
But implementing such a scheme, particularly when it involves cross-boundary co-operation between Hong Kong and different city and provincial authorities on the mainland, will require huge efforts to overcome institutional barriers and build mutual trust and a belief in the common interest.
'It is possible to design a scheme which would take into account the differences in development, pollution and economic systems,' said Charlotte Streck, director of Brussels-based Climate Focus and a legal expert on environmental issues who visited Hong Kong last month. 'However, it would be crucial that the governments of Hong Kong and Guangdong work extremely well together and that both have an interest in the success of the system.'