Edward Yau demonstrates two environmentally-friendly pencils rolled from old newspapers. As the biggest buyer, the government supports the environmental industries from the demand side.

Environmental protection is a major policy objective of the Hong Kong SAR government. Since environmental industries are identified as one of the six key economic areas by the Task Force on Economic Challenges, the government is striving to take the environmental industries forward through policy implementation.

In an exclusive interview with China Daily, Secretary for the Environment Edward Yau said at the outset that environmental protection is not in itself a sector. Yet there exist in every sector bountiful business opportunities related to environmental protection, within what is commonly known as the green economy.

The 2009-10 Policy Address has outlined business prospects for environmental industries, he said, while the implementation of the environment policy can be viewed from four perspectives.

First, the government is adopting a green procurement policy as the first and major step to push environmental industries by doubling the number of green items on the procurement list to over 60 items.

The most notable example is motor vehicles. "From the car used by the chief executive to departmental cars, the government vehicles are environmentally-friendly ones," said Yau. "The car being used by the chief executive is a hybrid car, while cars used by the other principal officials are more environmentally-friendly than cars of the same kind in terms of clean fuel and low emissions."

Moreover, the recently purchased government vehicles are all hybrid cars. "As a major buyer of hybrid cars, the government stands at the very forefront of green procurement ahead of the private sector," he said.

As to the newly added items of the green procurement list, they include computers, telecommunication appliances and furniture, on top of existing items such as office appliances, paper and stationery.

Yau further highlighted a kind of environmentally-friendly pencil that is being used by government departments.

"Given the government is the biggest buyer of this kind of pencil, it provides the manufacturer with a very huge business opportunity and helps the environmental industries from the demand side. As long as there are choices available, the government always chooses the environmentally-friendly products," he said.

Second, as the government promotes the use of electric vehicles in Hong Kong, it at the same time encourages intake and application of electric vehicle technology from foreign countries.

The technology used by the local manufacturer of MyCar to build electric vehicles is imported from Europe, he noted. It is a kind of environmentally-friendly technology suitable to Hong Kong, but it will take three to five years before the technology is used extensively in the local car-building industry.

Recently, he went to Japan to see for himself the latest electric car technology.

"I went there because vehicles with the steering wheel on the right hand side are used in Japan just as they are in Hong Kong," he said. "The government is taking a big step ahead in the intake of electric car technology. If the electric car-building sector flourishes, it will also benefit he automobile components sector."

Yau further said the use of electric cars can proceed in tandem with city planning in Hong Kong. If the use of electric vehicles is extended to public transport and transportation services, it will greatly help improve the air quality in Hong Kong.

Third, cross-boundary cooperation saw approval of over 330 projects enabling Hong Kong manufacturers operating in the Pearl River Delta region to upgrade their production by way of cleaner or greener methods over the past two years.

The HK$93 million scheme helps Hong Kong manufacturers improve their emission and sewage systems, he explained, thus making their production flow smoother and more environmentally-friendly.

The scheme also gives rise to another profession - environmental consultants, who help the manufacturers reduce wastage and streamline their production costs, he said. As an international city, Hong Kong is in a very good position to channel new environment technology into the mainland.

"After a cycle of 30 years, this is perfect timing for the some 60,000 Hong Kong manufacturers upgrade their production pattern by saving energy, reducing emissions and posing fewer hazards to the environment," said Yau. "If the mainland or PRD authorities are doing the same as Hong Kong manufacturers to protect the environment, they will spur greater demand for services for the emerging environment consultants."

Last but not the least, the Clean Development Mechanism (CDM), formulated by the United Nations, will encourage technology transfer and help countries reduce greenhouse gas emissions.

"The CDM is a new breakthrough exceeding the existing policy framework because it encourages investment in the research and development of new environmental technology such as renewable energy," he explained.

So far, about 1,800 CDM projects have been approved, with one-third of them being carried out in the mainland.

"The CDM projects bring about very huge business opportunities, knowing that their aggregate value is up to US$18 billion per annum," he disclosed.

"So since the start of the year, we have been striving to have Hong Kong companies carry out CDM projects on the mainland. This is a fast-emerging opportunity, like a door that opens to technology transfer, financial input and financial products (for example, carbon trading) in line with Hong Kong's position as an international financial centre.

"It also highlights the fact that today the environmental industries are no longer confined to stipulated sectors, nor are they singular trades or singular industries. In fact, the environmental industries are penetrating into various sectors and have very great potential waiting to be explored," he explained.

In summing up, the environment minister said the four aforesaid aspects are the guiding principles of the development of the environmental industries in this year's policy address, alongside government incentives to encourage the industries.

Without doubt, these four aspects have a deeper meaning and overriding needs, he commented.

"Being the overall development trend of Hong Kong, these four aspects, which involve a great deal of cross-boundary cooperation, are of a higher level than just giving money for the industries to do something," he said.

(HK Edition 10/30/2009 page4)