Heading down an unsustainable path?

By Christine Loh

Hong Kong is a city of 1,100 sq km (425 sq miles) with a population of 6.85 million. Its overall environmental condition is adversely affected by activities in its immediate neighbourhood, the Pearl River Delta of Guangdong province,¹ which has an area of over 40,000 sq km (15,500 sq miles) and a population of around 35-40 million people, including a large migrant worker pool employed in export manufacturing. Indeed, it is no longer possible to look at Hong Kong's environment without understanding the close economic relations between the city and its surrounding region. Likewise, Hong Kong cannot survive environmentally without collaboration with its neighbours in a clean-up campaign.

The beginnings of such cooperation have already started. However, much more must be done and with a greater sense of urgency if both Hong Kong and the delta region are to avoid seriously damaging economic and public health consequences.

The two areas have a symbiotic relationship that lets Hong Kong act as the "front shop" focusing on higher value activities in export manufacturing (producer services) while the delta is the "rear factory" focusing on production. Of Hong Kong's 2004 exports worth US$260 billion, a full US$242 billion were re-exports.² The export total for the delta was US$182.43 billion, equal to 95% of the total for all of Guangdong Province and 30% of the total for Mainland China.³ Since the 1980s, with the gradual opening up of the delta to outside investments, it has become China's major export-manufacturing zone. The bulk of the investment comes from Hong Kong, and Hong Kong businesses remain the largest source of foreign direct investment in Mainland China today. They employ an estimated 10 million workers across its immediate border, most of them in export production or providing support services such as transportation and shipping.⁴ Taiwan businesses are also large investors in the region. The Hong Kong container port (Kwai Chung) ranked 1st in the world in 2004 in terms of tonnage (21.984 million TEUs ) and the Shenzhen container ports (Shekou, Chiwan and Yantian) ranked 4th in the same year (13.615 million TEUs⁵). This small geographical area, therefore, has more marine activity than any other comparable body of water in the world.⁶ The daily number of barges and trucks moving goods within the delta, as well as to and from Hong Kong, is truly staggering. It has been estimated that half the electric power used in the region goes towards export manufacturing. Not surprisingly, pollution arising from these activities has had a significant impact on air and water quality, as well as on biodiversity. Moreover, rapid urbanization and infrastructure construction add pressure to the overall environmental and ecological health of the entire region.

Air Quality

Hong Kong's air quality problems must be viewed regionally. Regardless of how one chooses to measure it, air quality has deteriorated significantly and a government study released in 2002 found that 80% to 95% of regional pollutants originated in Guangdong.⁷ A significant part of those emissions are derived from Hong Kong investments across the border in export manufacturing and logistics activities. Therefore, though the pollution sources are physically located in Guangdong, they are intimately connected to Hong Kong capital and management. Two of the most significant pollutants are fine particulate matter (PM10 and PM2.5)⁸ and ozone (O3). Recent studies show that significant portions of fine particulate matter are secondary in nature (i.e. derived from sulphur dioxide (SO2), nitrogen oxides (NOx) etc). For the layman, the ever increasing number of poor visibility days is the most obvious indicator of worsening air pollution. Figure 1 shows the number of hazy days affecting Hong Kong for each month from 1977 to 2004.⁹

It can be clearly seen that the number of poor visibility days per month has increased substantially over this period and has climbed from 15 days to 28 days per month between 1998 and 2004.¹⁰ Another way to understand the extent of the deterioration is to look at the increasing level of air pollutant concentrations. In 2004, all the Hong Kong air monitoring stations except one (in a remote area) reported annual average PM10 concentration above Hong Kong's Air Quality Objectives, or AQOs. This is true even though the city's standards are much more lax than those of the United States, the European Union and Australia, causing local health experts to question their usefulness for protecting public health. In terms of PM2.5, for which neither Hong Kong nor Mainland China has an AQO, levels are about three to four times the annual mean concentration standard in the United States-dangerously high from a public health perspective.

Figure 1: Hazy Day, Hong Kong 1977-2004

Air pollution is mostly a result of fuel combustion. Electric power generation in Hong Kong (mainly from coal but some from natural gas and nuclear power) and in the delta (mainly coal), plus industrial combustion of high sulphur fuels, dominates SO2 emissions and contributes significantly to NOx and particulate emissions. Due to a power shortage in the delta, 90% of its factories use their own generators to power manufacturing, often burning low quality and even adulterated fuels.¹¹ This has had a significantly negative impact on air quality in the whole region over the past four years in particular. Transportation produces the bulk of the NOx and volatile organic compounds (VOC), while solvents also release significant quantities of VOC. Roadside pollution is particularly worrying, especially in such dense urban districts as Central and Causeway Bay in Hong Kong, where tall buildings hinder air circulation at street level. This means that exhaust gases emitted from vehicles are poorly dispersed, seriously affecting pedestrians, homes and schools.

Water Quality

Guangdong is a heavy user of water [footnote 12], and it also supplies 80% of Hong Kong's water under contract between the respective governments.¹² Thus Hong Kong's water supply and quality also must be seen as a regional issue. Hong Kong's water is drawn from the Dongjiang River, a tributary of the Pearl River, and is delivered to Hong Kong via a system of pumping stations and aqueducts from the Dongjiang to the Shenzhen Reservoir before being piped to a reception point in Hong Kong. Early signs of concern about Dongjiang water quality first arose in 1993 when Hong Kong authorities found that it did not meet China's own required standards.¹³ Subsequently, it became clear that water quality had been deteriorating since 1989 due to increased discharge of untreated sewage into the river basin.¹⁴ In addition, there also have been large amounts of agro-chemicals and industrial pollution discharged into the Dongjiang.¹⁵ Furthermore, Guangdong is surprisingly undeveloped in terms of collecting rainwater, despite a good potential for creating catchment areas and reservoirs to collect more water during the rainy season.¹⁶

Persistent complaints from Hong Kong led the Guangdong authorities in 1998 to relocate the water intake to a point further upstream where the quality was considered better, as well as to install a bio-nitrification plant in the Shenzhen Reservoir to reduce the ammonia content and increase dissolved oxygen. Hong Kong also agreed to provide Guangdong an interest free loan to defray part of the cost of constructing a long, concealed aqueduct to carry water from the Dongjiang to the Shenzhen Reservoir to protect water quality, although this did not prevent or reduce pollution in the delta itself.¹⁷ Unabated public concern in Hong Kong led to Hong Kong and Guangdong forming the Advisory Committee on the Quality of Water in 2000, shortly after which it was acknowledged that almost all test results on both raw and treated drinking water had exceeded the World Health Organization's recommended standards. Public concern became acute when it became known in June 2000 that Shenzhen was completing its own pipeline to draw water even further upstream than Hong Kong's intake point. Indeed, other cities in the delta also sought permission to draw water further upstream.

As for water pollution inside Hong Kong, it was only in 1992 that the government announced it would invest in a major sewage system to treat outflows from some of the most densely populated areas into Victoria Harbour. Stage 1 of the Harbour Area Treatment Scheme began operation in 2001 with good results. In other words, before 2001, Hong Kong's magnificent harbour was used as a large public lavatory. Stage 2 is now under consideration and is expected to go ahead in the foreseeable future after extensive public consultation.

Biodiversity

Hong Kong supports an amazing array of plant and animal life despite its small size because its unique climate and topography enable a wide range of flora and fauna to exist. Despite this richness, Hong Kong's ecosystem is depleted, reflecting the continued and rapid encroachment of development on the natural environment. The development of new towns in previously rural locations, such as Tung Chung on Lantau Island, and Tin Shui Wai in the northern New Territories, plus the spread of large infrastructure projects all over the city, as well as building major transport infrastructure connecting the city to the delta region, have redistributed the urban population to previously remote areas. The Hong Kong administration is considering how to develop the border area next to Shenzhen, which under British rule was a buffer area, and therefore not developed. The result is that Hong Kong's natural habitat areas are quickly disappearing. Those that remain, including protected sites such as Country Parks, are threatened by pollution. Across the border, much of the region is now urbanized and this also has a negative impact on biodiversity and the natural ecosystems there.

Observations

Hong Kong's long-term survival is at risk unless the Pearl River Delta and Guangdong Province as a whole are able to end their current phase of high energy and heavy resource-driven unsustainable development and get onto a sustainable path. The high number of hazy days in Hong Kong has already given the city international notoriety. The residents of the region are also facing significant health risks, particularly for vulnerable groups such as children, the elderly and those who already have health problems. This will require the region to reconsider how to transform the "front office, back factory" model of development into a much more efficient area of production and services provision since high levels of pollution are in reality a sign of gross inefficiency. The signs of over-capacity and inefficiency are abundantly clear from just looking at the deterioration in air and water quality, as well as the depletion of biodiversity. Other important areas, such as waste reduction, indoor air pollution, marine pollution and poor building design, are not addressed in this paper.

The low-cost manufacturing model is deceptive. External costs arising from destruction of the environment and the consequent impact on public health in the longer term have not been included. These are set to rise in the years to come. The loss of visibility across the entire region also has economic consequences. The almost permanent haze enveloping Hong Kong has been the subject of negative international media attention and may well make travellers think twice before deciding to visit. The loss of a beautiful view will likely also have a negative impact on property prices. Furthermore, multinational companies and even international schools are reporting difficulty in enticing global talent to relocate to Hong Kong because of its deteriorating environmental conditions. This will have an impact on Hong Kong's human resource development.

In recent years, authorities from Hong Kong and Guangdong have made slow but important progress in their effort to regulate air and water qualities. In 2002, they agreed on a best-effort basis to reduce regional emissions of four major pollutants by 2010, using 1997 data as the baseline.¹⁸ This first collaborate effort is important in setting the stage for long-term cooperation. For now, there are two challenges: firstly, the reduction targets only will allow Hong Kong to meet its already weak air quality objectives, and secondly, since 2002, regional pollution has in fact become much worse due to the burning of low quality and adulterated fuels by thousands of delta factories as they offset the lack of reliable grid power. The increase in the number of delta area vehicles burning low quality fuel also has impacted the problem. Furthermore, the substantial concentration of shipping in port areas of Hong Kong is affecting the health of those who live nearby.

A recently announced second collaborative effort is the public release of air pollution monitoring data from various stations in Hong Kong and the Pearl River Delta so that people can track air quality for themselves. This is likely to bring more public pressure on authorities on both sides of the border to work harder at improving air quality. There is a wider significance as well. Air pollution data has long been regarded as a state secret on the mainland. However, with information now being released for a large part of Guangdong, this may well be the beginning of China becoming more relaxed about releasing environmental data publicly.

As for trans-boundary water pollution, apart from the Advisory Committee on the Quality of Water Supplies formed in 2000, efforts have been made to jointly regulate the Shenzhen River bordering the Hong Kong and Shenzhen, and relevant authorities are developing a joint water quality model for the Pearl River estuary, to be available by 2006. These various ad hoc collaborations allow officers from both sides of the boundary to work together and build the trust and framework needed to develop the long-term institutional capacity necessary for the region to be properly regulated with a much higher level of environmental protection.

However, the key to a new sustainable path is for governments, businesses and environmental experts to agree on how to make that transition. Taking air quality, for example, would require the region's manufacturers to play an active part in designing processes that use energy more efficiently, to invest in both cleaner fuels and technologies, and for authorities to set effective fiscal incentives to drive transformation. The authorities in Hong Kong and Shenzhen must also ensure they run their ports as cleanly as possible, such as by demanding that vessels burn much cleaner fuels when cruising within the ports. For this to happen, greater political will is necessary. Cross-border, multi-party collaborative projects which focus on regional capacity building are one way to begin building the much needed political support amongst stakeholders which include the various government authorities. Perhaps one day soon the region will have to establish something similar to the Southern California Association of Governments, a metropolitan planning agency authorized to deal with problems that no single authority can handle successfully on its own. It may also have to establish something equivalent to the California Air Resources Board to manage air quality. It is sobering for Hong Kong and delta authorities to reflect upon the human resource that must be developed and put in place if they are to emulate the California model. The California Air Resources Board has approximately 1,000 employees, including 400 specialists. The region still has some way to go to create its own expert team of air quality scientists, regulators and policy-makers.

Summary

While the opening of the Pearl River Delta for export manufacturing since the 1980s has brought rapid economic growth to both Guangdong and Hong Kong, it has also brought the need for urgent rectification of the region's serious environmental degradation. Air quality has deteriorated rapidly, especially over the last few years when a severe energy crunch resulted in the widespread use of low quality fuels to keep factories and vehicles running. Water quality has also been impacted by heavy water pollution from industrial as well as municipal sources.

The region's pro-growth orientation has put infrastructure development and export production ahead of environmental protection. In view of the intimate economic and social relations between Hong Kong and Guangdong, which share the same air and watershed as well as ecological fabric, their next development phase must put the region on a sustainable path through lowering their resource usage, especially of energy and water. Only by doing this can they reverse a clearly adverse trend that their economic activities are having on ecology and public health. Sustainable development will require the authorities to cooperate much more deeply. From Hong Kong's perspective, it is simply not possible for its environmental condition to improve substantially without improvements in its immediate neighbourhood. There are signs that Hong Kong people's demand for a clean-up may well spur more rapid addressing of environmental issues across the region as a whole.

About the Author
Christine Loh is the CEO of the Hong Kong non-profit think tank, Civic Exchange. She was a member of the Hong Kong Legislative Council from 1992 to 1997, and again from 1998 to 2000. Ms. Loh chaired its Environmental Affairs Panel, and has long experience in both local and international environmental issues. A lawyer by training, she spent 15 years in the private sector before focusing on politics. She writes extensively on sustainable development, political reform, political economy and Hong Kong's relations with China.

Notes

• ¹ The PRD includes: Dongguan, Foshan, Guangzhou, Huizhou, Jiangmen, Shenzhen, Zhaoqing, Zhongshan and Zhuhai. It excludes the portions of Huizhou and Zhaoqing not part of the official definition of the PRD Economic Zone. The respective Special Administration Regions of Macao and Hong Kong are geographically, meteorologically, ecologically and culturally very much a part of this region. Guangdong Province has a total area of just under 180,000 sq km (68,680 sq miles) and 86 million people. Guangdong provides China's largest export value (32.3% of national total). »
• ² This makes Hong Kong the world's 11th largest trading economy and the 10th largest exporter of commercial services. »
• ³ Enright, Scott & Associates, "The Greater Pearl River Delta", Invest Hong Kong, 3rd Ed, October 2005, at pg 8. Report available online at: http://www.investhk.gov.hk/doc/InvestHK_GPRD_Booklet_English571.pdf. »
• ⁴ Federation of Hong Kong Industry, "Made in PRD - The Changing Faces of HK Manufacturers", report of November 2002, at pg. 7. »
• ⁵ TEU refers to 20 foot equivalent tonnage and is a standard measurement in the container shipping business. »
• ⁶ Total port cargo throughput in 2004 for Hong Kong was 220,879 tons, including seaborne cargo and river trade cargo. On average some 220,000 ships visit the Hong Kong port each year. »
• ⁷ HKSAR Government and Guangdong Provincial Government, Study of Air Quality in the Pearl River Delta Region, 2002. »
• ⁸ PM10 and PM2.5 are particulate matter with aerodynamic diameter of less than 10 micron and 2.5 micron respectively. The smaller the particulates, the more harmful they are to human health as they can penetrate deeper into the lungs. For a detail study, see Lisa Hopkinson, Air Pollution: Particulate Matter Standards in Hong Kong and the Pearl River Delta Region, November 2004, Civic Exchange www.civic-exchange.org/publications/2004/airpollutionpm.pdf »
• ⁹ Hazy days are defined as days with visibility reported to be less than 8 km and where the relative humidity is less than 80%. The latter ensures that the visibility reduction is not due to rain or fog. »
• ¹⁰ Figure 1 shows that between 1978 - 1988 there were 2 to 5 poor visibility days, increasing to 5 to 10 days by 1998-1993, to 10 to 15 days by 1994-1998. Source: Hong Kong University of Science and Technology. »
• ¹¹ Civic Exchange, Dealing with Hong Kong's Air Quality Problems: New Policy Direction - Using Cleaner Fuels, July 2005, www.civic-exchange.org/publications/2005/cleanfuel-e.pdf, p. 7. »
• ¹² Since the 1960s, Hong Kong has had an agreement with the Guangdong government to buy water from the Dongjiang, which is also the major source of water for Shenzhen and Guangzhou. Hong Kong's own source for clean water is derived from rainfall collected from catchment areas within its own boundary. »
• ¹³ Under contract, Guangdong had to supply water to Hong Kong in accordance with Class 2 specifications of China's 1983 national surface water quality standards. »
• ¹⁴ South China Morning Post, 11 April 1997. »
• ¹⁵ Usage of clean water for agriculture in Guangdong accounts for about 60% of total water usage, and the balance is split equally between industrial and domestic/municipal usages. »
• ¹⁶ Cheung Chi-fai, "Thirst for options", South China Morning Post, 27 October 2005, p. A18. In contrast, Hong Kong has 17 reservoirs with a total storage capacity of over 500 million cubic meters that equates to about 6 months of supply. »
• ¹⁷ The aqueduct was completed in 2003. »
• ¹⁸ Regional Air Quality Management Plan outlined various control measures to achieve the targets. »

01/01/2006