SUBMERGED IN SEA AND SMOG
Hong Kong’s pollution woes intensify
By Courtney Siu

Hong Kong underwater? Laughable. And yet it is potentially a very real scenario according to a recent report by CLSA, “Boomtown to Gloomtown: The Implications of Inaction,” which says that a six-meter rise in sea levels would mean property portfolio losses of US$15 bn for Henderson Land, US$12 bn for Wharf, and US$11 bn for Hongkong Land, among others. Most of Central and Kowloon would be underwater, and the MTR and the airport would both be lost.

A build-up of greenhouse gasses, primarily from transport and electricity generation (in Hong Kong, as in most places, carbon dioxide, or CO2, is the main culprit) is causing previously frozen stores of ice and water to melt, resulting in rising sea levels. A six-meter rise would occur if half of Greenland and half of Antartica melted, says the report. If this seems implausible, then consider a September study of perennial arctic ice – ice that remains year-round – by NASA’s Jet Propulsion Laboratory in California, which showed a 14% reduction, or about 730,000 square kilometers – 18 times the previous annual rate – of the Arctic Ice Cap in 2005. Melting of the Arctic Ice Cap accelerates warming because oceans absorb, rather than deflect, heat from the sun. A warming of just two to three degrees centigrade would raise sea levels by 25 meters, the report quotes Dr James E Hansen, Director of the Goddard Institute of NASA, as saying.

If all this seems too distant in the future to worry about or to burden shareholders with high costs, consider the immediate impact pollution is having on Hong Kong – difficulty attracting and retaining talent. Indeed, a survey concluded in June by AC Nielsen on behalf of the American Chamber of Commerce in Hong Kong found that around 80% of the 140 executives it polled knew someone who was either considering leaving or had already left because of Hong Kong’s poor air quality. Ninety-five percent were concerned about pollution’s long-term impact on themselves and their own families, while half knew people who declined offers to come to Hong Kong because of its air quality. Hong Kong Immigration Department statistics support these figures: a decline of 14% was seen in the number of American, British, Australian, and Canadian expatriates coming to Hong Kong between 2004 and 2005, as judged by their arrival and departure records.

More worrying, the American Chamber of Commerce survey also found that foreign investors may be looking elsewhere. Nearly 80% of the survey respondents saw Hong Kong losing its attractiveness for foreign investors as its physical environment deteriorates, and nearly 60% said that the worsening conditions could impact their own company’s investment in Hong Kong. Other, difficult-to-measure factors, adds the CLSA report, that could have an impact on Hong Kong: depressed property prices, and acid rain damage to buildings and other assets. In another survey, by ECA International last spring on the top expat destinations to live and work, Hong Kong fell to a category where a hardship allowance may be required by expats considering a move to the special administrative region (see “Oh, Say Can You See”, May 2006).

Hong Kong’s government has taken some action to clear the air, primarily in reducing vehicular emissions. But the CLSA report points out that there is a lot more that can be done. Among its suggestions: invest in subway and rail ahead of adding more roads; work with Shenzhen and Dongguan to encourage the use of cleaner fuels in those nearby Chinese cities; and outline fuel-mix targets for Hong Kong-based power producers.

The government should also adopt international standards that reflect the true severity of the problem. Hong Kong’s air quality objectives are well below those of the US and European Union. And even these are under scrutiny following the WHO’s tightening in September of its guidelines, which are set with only health in mind, disregarding their potential economic or political impact.

The frequently occurring reading of “high” pollution levels in Hong Kong is considered extreme or severe in other countries – Hong Kong’s particulate levels surpass those of Los Angeles, New York, Paris, and London, and exceed the WHO’s guidelines on average, by 200%. Dr Sarah Liao, Secretary for the Hong Kong Environment, Transport and Works Bureau was quoted by the CLSA report as saying: “It would be pointless to apply stricter air quality standards that no one can satisfy. The public should be more practical. It will be laughable if air quality standards are set too high to reach.” Ironically, the government’s planned harborside headquarters would be among the first to suffer the effects of the rise in sea levels.