Hence, our near-term goal is to reduce roadside air pollution and our first targets are high-emission vehicles - diesel commercial vehicles (such as trucks, school buses and tourist coaches), franchised buses, LPG taxis and minibuses.

The most worrying roadside pollutant are the particulates - PM10 and PM2.5 (or particles that are 10 and 2.5 micrometres in diameter or less, respectively) - that arise from combustion in diesel engines. They can penetrate deeply into lung tissues, causing cardiopulmonary disease. The World Health Organisation recently confirmed that diesel particulates are also carcinogenic.

Our key solution deals with the 88,000 diesel vehicles in Hong Kong that do not meet the newer Euro IV emission standards. They make up about two-thirds of the total number of 128,000 diesel vehicles on our roads. Pre-Euro vehicles are now at least 18 years old, and emit 34 times more particulates than the Euro V models; even a Euro III vehicle emits five times more particulates.

The government has set aside HK$10 billion to provide subsidies to the owners of these outdated vehicles. They can either surrender their vehicle under a "cash for clunker" scheme or get a higher amount to replace their old vehicles with new ones. We offer the flexibility of a dual scheme because trade representatives say some owners may not wish to replace their vehicles - some may want to reduce the size of their fleet while others may wish to retire altogether.

The plan is to get these 88,000 polluting vehicles off our roads by a certain time - pre-Euro and Euro I vehicles by January 2016; Euro II vehicles by January 2017; and the rest by January 2019.

Some have said the subsidies were too generous, and that the phasing out would take too long. The truth is, the government is prepared to spend the money to improve public health, and it recognises that the trade needs time to replace such a large number of vehicles. For the plan to succeed, it needs to be feasible.

We have begun discussions with the trade on the details of the scheme. We will also legislate for a maximum life of 15 years for new diesel vehicles, as many other jurisdictions have done.

Another problem we face is the unusually high levels of nitrogen dioxide at our roadsides. There are two main causes - franchised buses and LPG vehicles.

While older franchised buses had particulate filters fitted to them some years ago, their nitrogen dioxide levels need to be lowered if we are to reduce the overall pollution. Fitting a selective catalytic reduction device on Euro II and III buses would enable them to perform like Euro IV and V models. Bus fleets in Europe have done similar retrofits successfully.

The Hong Kong government is proposing to fund the capital cost of these devices and for the franchisees to absorb the operating and maintenance costs. This scheme is estimated to cost HK$550 million and will take about two years to complete.

LPG vehicles are cleaner than diesel vehicles but a large amount of nitrogen dioxide can be emitted if their catalytic converters are defective. This is precisely the problem in Hong Kong. Local studies have shown that many owners of taxis and minibuses are not replacing the devices when they should. An agreement has been reached for the government to cover the cost of new devices on a one-off basis but for the trade to pay for future replacements.

There are currently about 18,000 taxis and 4,350 minibuses, 66 per cent of which are powered by LPG. For vehicles such as these, which cover a high mileage, the catalytic converter needs to be replaced about every 18 months. This scheme will cost HK$150 million and should be completed by 2014.

The above three schemes are end-of-pipe solutions. Other solutions are also needed. For example, the chief executive's policy address called for bus routes to be rationalised. A successful reorganisation of bus numbers, routes and networks should result in shorter travel time, easy interchanges and good service, which will also improve roadside air quality.

The policy address also called for adjustments to cross-harbour tunnel fees, which will improve usage efficiency and relieve congestion.

Yet other solutions require planning changes, such as creating low-emission and pedestrian-only zones. We also have a series of measures to reduce shipping emissions. Hong Kong is a busy port for large oceangoing vessels, river trade vessels as well as local craft, such as ferries and hydrofoils.

Together, their emissions of the three major air pollutants - that is, sulphur dioxide, nitrogen oxides and respirable suspended particulates - now exceed those of our power plants.

The policy address proposed mandating a fuel switch at berth for oceangoing vessels, and for onshore power equipment to be built at the new Kai Tak Cruise Terminal. Indeed, our longer-term focus is to work with the mainland so that emissions can be controlled in all the waters of the Pearl River Delta. It's clear from research that significant public health benefits would be reaped from such a move.

To further reduce air pollution, we will explore further reducing local coal-fired electricity generation by about 2020, as well as deepening collaboration with Guangdong, particularly on how to deal with the thorny challenge of regional smog.

We accept that much more needs to be done, and will continue to strive to reduce the public health risk.