Motion Debate on "Endeavouring To Improve Air Quality" (7 December 2005)

MR JAMES TIEN (in Cantonese): Madam President, after the discussion on a relatively controversial political issue just now, here comes this motion that brings us back to a question of more relevance to people's livelihood.

Madam President, I actually proposed a similar motion a year ago, on 15 December 2004. Some colleagues might probably ask: Why should this question be raised again? First of all, I would like to give Members an account on this. It is all because of a motion debate held last year on improving air quality, on which an overwhelming consensus was reached, and the 10 to 20 additional recommendations made by colleagues through their amendments. The motion was even jokingly likened to a Christmas tree. Anyway, it is already December, and Christmas is drawing near. It does not matter even if the motion resembles a Christmas tree. As it occurs to me that some questions require enhanced co-operation with Guangdong Province, I cannot help asking this question: Should extra efforts be made after a consensus has been reached by Members of this Council?

After consideration, I put forward a proposal in a meeting of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) in March this year with the support of 92 Hong Kong members of the CPPCC National Committee. The contents of the proposal were actually very similar to those of the motions already passed by this Council, including all of the endorsed amendments. In the middle of this year, the 92 Hong Kong members and I received a positive response from the State Environmental Protection Administration of China with respect to the proposal on "Collaborating in tackling cross-border air pollution". The recommendations made in the proposal are now consolidated into five points in this motion. After detailed discussion between the State Environmental Protection Administration of China and the Guangdong Environmental Protection Agency, it was considered that the tasks in these five areas are attainable. Given their indication that efforts will be made, we shall wait and see how they will go about it.

On two other occasions when the CPPCC held its meeting in Hong Kong, I tried to find out what could be done to follow up the matter in the circumstances. Should the secretariat of the CPPCC follow up the matter on our behalf? Although we received the reply that there would be co-operation, it is nonetheless a good thing for us to remind and urge both parties every year by continuing to follow up this issue in Hong Kong to ensure that the Hong Kong Government and the Guangdong Provincial Government will strive to deliver on their undertakings. The secretariat of the CPPCC may probably worry, despite the undertakings made by the environmental protection authorities in China and the CPPCC, whether Guangdong Province or the State Environmental Protection Administration of China should be held accountable should the undertakings fail to be honoured. Should that happen, will the matter be left unsettled? If we in Hong Kong act as a reminder from time to time, the Hong Kong Government will be able to follow up the matter in the light of the positive response from the environmental protection authorities, thus ensuring what has been promised can at least be accomplished.

Madam President, here I have to say a few words on our general discussion. First, endeavouring to achieve as early as possible the emission reduction targets for 2012 regarding the four types of pollutants. In this respect, we do worry that some targets agreed to be achieved in 2011 might not be realized in 2011 and have to be postponed until 2012. The reply from the environmental protection authorities, indicating that the target might be achieved in 2010, is quite positive. Given that this direction has been proposed, I hope the Government will actively work with the Guangdong environmental protection authorities. It is certainly impossible for this task to be commenced in 2007, 2008 or even 2009. If it is not commenced now, the desirable result can definitely not be achieved by the expected date.

Second, expediting the formal commissioning of the Pearl River Delta (PRD) monitoring network to ensure that the same emission standards are adopted by the two places. I have also noted that the two places are still divided over the standards, which have to be discussed in detail by the SAR Government and Guangdong Province. If different indicators are adopted, it will be very difficult to conduct unified testing, though both places might insist that their targets have been reached.

Third, regarding the emissions trading pilot scheme, we are certainly referring to the feasibility of implementing emissions trading by the two power plants. The Government also understands this point and work in this respect is being undertaken. Madam President, insofar as this point is concerned, I note that one thing must be done here in Hong Kong. This is also what the power companies must actively tackle. They may even discuss with the Economic Development and Labour Bureau issues concerning this in conjunction with the expiry of the Scheme of Control Agreement (SCA) in 2008. It is now 2005. I wonder what the contents of the new agreement to be signed in 2008 will be. Will it be necessary for the two issues to be discussed jointly? The emissions trading pilot scheme might need to accomplish this.

Fourth, the mainland authorities have agreed to provide business operators who have installed air pollution control systems in their plants in the PRD Region with tax relief on depreciation of the relevant systems. This certainly has nothing to do with the Hong Kong Government. Neither is the territory required to permit manufacturers to enjoy tax relief for their investments on the Mainland. If the manufacturers can enjoy tax relief on depreciation of their machinery on the Mainland, I hope the Government can take follow-up actions to ensure that Guangdong Province can really provide tax relief for the benefit of the factories.

The last point, proposed by the State Environmental Protection Administration of China itself, requires the environmental protection authorities of Guangdong Province to maintain close co-operation with the State Environmental Protection Administration of China to promote the prevention and control of regional air pollution. Although Guangdong Province attaches great importance to the air pollution problem, it does not have much money to spend as it is required to hand over its tax revenue to the Central Authorities. From another angle, they may think that Hong Kong should provide more assistance as it is not required to hand over any of its surplus to the Central Government.

Furthermore, can manufacturers, many of whom are from Hong Kong, be encouraged to make better complementary efforts? Of course, all manufacturers, particularly those from Hong Kong, will argue that, wherever they invest, they have to abide by its domestic legislation and maintain their competitive edge. As domestic legislation requires that such standards be adopted, the standards cannot be raised simply because the manufacturers are from Hong Kong. In other words, the manufacturers should not be required to use better quality fuels or better facilities, which will otherwise result in higher costs. The competitive edge of Hong Kong manufacturers will be undermined should their neighbouring factories be operated by local people or state enterprises.

Actually, investors must respect the law of the places where they invest. It is impossible to require them to do so while abiding by the law of their place of origin. From this angle, I consider their arguments reasonable. Such being the case, we can simply not require them to adopt higher standards. I hope Guangdong Province can understand that everyone must be treated equally. If it is required by law that higher quality diesel must be used, then we cannot require factories in Hong Kong to pay higher costs in using a better quality fuel while allowing factories on the Mainland to use a more inferior fuel.

Another more complicated issue concerns the pollutants emitted by vehicles on the Mainland. As Members are aware, the pollution problem caused by the fuel used on the Mainland is much more serious than that in Hong Kong. I do understand that, for a country of this size, if mainland manufacturers, like Hong Kong manufacturers, are required to use low sulphur fuel, their costs will increase enormously. Furthermore, as pointed out by some of them, even if a better fuel is used in Shenzhen, there is no way to bar the entry of vehicles from Dongguan or other places. Nor is it possible to require a more expensive and better quality diesel be used in the entire Guangdong Province and disallow vehicles from other provinces and cities from entering the province. I do note that there are concrete difficulties on these fronts. Even the State Environmental Protection Administration of China considers it quite difficult to achieve this target at this stage.

The Liberal Party is quite disappointed with the overall response. Notwithstanding this, we will still request the mainland authorities to achieve these five targets. We certainly hope that they can meet the targets by all means. Moreover, we will continue to encourage them to make efforts in other areas. To me, this approach is acceptable. If they are required to accomplish too many tasks in one go, they will simply end up in failure. At present, coupled with the improving economic situation and growing industrial development on the Mainland, the livelihood of the general public has also been improved.

Even if some of the power consumed is generated by better fuels, the power supply is still inadequate to support some old factories. New demands from the public, such as those for domestic consumption, commercial activities, restaurants, and so on, have expended all the power generated. It is simply impossible for manufacturers to close down backward or highly-polluting old power plants. If these patched-up power plants are required to use better diesel, they will definitely refuse on the ground that other power plants are not required to do the same and that doing so will undermine their competitive edge. For these reasons, I consider it impossible for these problems to be resolved for the time being.

Most importantly, I hope today's motion can gain the support of this Council so that we can support the Government and Guangdong Province continuing their efforts in following up the five tasks they have promised to accomplish. As for the tasks they have yet promised to undertake, other colleagues may perhaps express their views on ways to urge the Government to continue with its effort.

On the domestic front, since last year, the Government has taken the initiative to make some efforts in turning off idling engines. Even the Chief Executive has encouraged government vehicles to turn off idling engines by all means. However, in the absence of statutory regulation, pure encouragement will not be very effective on private cars. Neither will the Liberal Party propose adopting a sweeping approach in dealing with other legislative proposals.

For instance, we consider that some places ought to be exempted from the smoke ban. By the same token, we feel that the requirement of turning off idling engines should apply to private and government vehicles only. As for vehicles driven by professional drivers, such as minibuses, taxis queuing for passengers, it is simply impossible to require them to turn off their idling engines whereas they might need to turn on their engines again within a minute or half.

Furthermore, more pollutants will probably be emitted too. I therefore consider it reasonable for these specific trades to be granted exemption by the Government.

Another quite controversial issue concerns the regulation of tourist coaches. In our opinion, it is inadvisable for these coaches to be exempted. For instance, after a tourist coach has carried a full load of tourists to a shopping arcade for shopping nearby, the driver must not keep the engine idling when the passengers will not return to the coach until an hour later, for this will lead to smoke emission. Similarly, tourist coaches carrying tourists to the peak for sightseeing should not keep the air-conditioning systems of the vehicles running for one whole hour for no good reason. Tourists should appreciate the pollution problem confronting Hong Kong too. Their purpose of coming here is to admire our beautiful city. What they want to see is a clear sky with white clouds rather than a sky filled with noxious smog. This is why I consider it feasible for the Government to introduce legislation in this regard.

As Members of a parliamentary assembly, we are obliged to seriously reconsider every demand made by the two power companies, which are prepared to spend a considerable sum of money, amounting to hundreds of millions of dollars or over a billion dollars, on additional emission treatment facilities. If these companies are prepared to install these facilities in order to fulfil their responsibilities and yet they are not allowed to make a return according to the rate of return, they will lack the financial incentive to install the facilities. In our opinion, so long as their investments are helpful to power generation and environmental protection, they should be allowed to make a profit under the SCA - the rate of return now stands at 13.5%. Of course, we should discuss the new rate of return to be determined in 2008.

Madam President, I so submit. Thank you.

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MR JAMES TIEN (in Cantonese): Madam President, I am not going to respond again as Mr Jeffrey LAM has already responded to Miss CHOY So-yuk's amendment, which is supported by us. Although Mr Albert CHAN holds that the Christmas tree has been dressed up in excessive decorative lighting, every Member has his or her right to do so.

We examined the feasibility of Mr SIN Chung-kai's amendment when it was proposed. We have also consulted business operators through the Economic Affairs Department of the Liaison Office of the Central People's Government in the HKSAR on the idea of setting up a matching grant fund with donations from the business sector. Mr SIN Chung-kai's amendment has sought to include this point as item (f) after the five items set out in the original motion under the sub-heading "On the co-operation between Hong Kong and Guangdong". By including this item under the sub-heading, he should mean that the donations from the business sector include those from Guangdong and Hong Kong manufacturers. However, does he mean that the Guangdong Provincial Government also has to make matching contribution or only the Hong Kong Government is required to do so for he has included the proposal of using the Government's matching grant fund to improve the equipment in the PRD in the same paragraph? This point is ambiguous as it is included under "On the co-operation between Hong Kong and Guangdong" instead of "On the local front".

The Mainland has not yet set up any fund of this sort to assist any endeavour. Mainland factories, whether set up by Hong Kong people or mainlanders, simply do not have such ideas in tackling the air pollution problem. Moreover, the motion passed last year merely required them to take certain actions without mentioning anything in this respect. Given that they have accepted items one to five, we should let them try every possible means to accomplish these five items first. If a new item, newly introduced this year but not mentioned last year, is included today, they will probably encounter enormous difficulties in implementation. This will be quite difficult to achieve in concrete terms.

Conceptually, what sort of people in the Hong Kong business sector are we referring to if Hong Kong business operators are required to make donations, given that some businessmen do not own any factories on the Mainland? Is every member of the business sector in Hong Kong required to donate to help mainland business operators? Yet, mainland factories may or may not be operated by Hong Kong people. Will any business sectors be willing to do such thing? Some people might agree if the donations were used to ameliorate Hong Kong's air pollution problem. Furthermore, I believe the Government will have reservations about this proposal. Requiring the Hong Kong Government to make matching contribution to every $1 for dealing with mainland affairs could lead to serious or trivial consequences. Although the number of factories set up by Hong Kong people on the Mainland is enormous, not all factories on the Mainland are set up by Hong Kong businessmen. Earlier in the debate, some Members also mentioned Taiwanese and mainland manufacturers.

Should the Hong Kong Government use the Hong Kong taxpayers' money to provide matching assistance to all mainland factories?

The last sentence of Mr SIN Chung-kai's amendment, namely "establishing a dedicated committee to manage the fund", if retained in the amendment, sounds like requiring mainland officials to manage the fund jointly with Hong Kong officials. But yet, the Mainland simply does not have this mechanism. I therefore hold the view that this proposal is still infeasible in the prevailing circumstances.

For the abovementioned reasons, the Liberal Party opposes Mr SIN Chung-kai's amendment. Thank you, President.