A. Investment in Sustainability

1      We invest billions of dollars in public funds each year to make Hong Kong greener and more sustainable. In 2008 the Environment Bureau (ENB) and Environmental Protection Department (EPD) had a combined recurrent expenditure of more than $2.6 billion. We have also earmarked more than $13 billion to extend landfills and develop sludge treatment facilities over the next few years and $11 billion to build Stage 2A of the Harbour Area Treatment Scheme. A breakdown of our annual expenditure is shown below.

ENB Expenditure in 2008

EPD Expenditure in 2008 (excluding major infrastructure works)


B.  Economic Impacts of Our Policies and Programmes

1.     Apart from our investment in sustainability, we also subscribe to the polluter pays principle, which requires polluters to help pay towards the cost of cleaning up and preventing pollution. We use financial tools as a 'stick' to discourage unsustainable practices, and as a 'carrot' to promote better technologies and practices, as described below.

Polluter Pays Initiatives

2.     Sewage charges are a prime example of the application of the polluter pays principle. Domestic charges are being increased gradually over 10 years with a target of meeting about 80 per cent of the operating costs of sewage services in Hong Kong by 2017-18. A Trade Effluent Surcharge is imposed on businesses with more polluting wastes. This was adjusted in 2008 in recognition of some operators' efforts to control their pollution, resulting in lower charges for more than 90 per cent of accounts and higher charges for the rest.

3.     Waste charges are also being developed to help reduce waste loads and recover the cost of treatment and disposal. We already charge for construction and chemical waste, and in late 2008 we began a Baseline Study on commercial and industrial establishments to collect information for developing municipal solid waste charging options. To discourage waste arisings in the first place, we have introduced producer responsibility schemes (see Environmentally Sound Waste Management for details); in December 2008 a 50-cent levy on plastic shopping bags was proposed and is awaiting Legislative Council approval.

Increases in domestic household Sewage Charges 2008 - 2017

Charge Rate

(HK$ / m3)

1.4.2017 onward

Financial Incentives

4.     Financial incentives can encourage operators to adopt greener technologies and practices. Our motor vehicle emissions control programme has a $3.2 billion programme to help vehicle operators switch to less polluting vehicles, and in 2008 we also offered concessions on the first-registration tax for buyers of environment-friendly commercial vehicles. Cleaner production by Hong Kong factory operators in the Pearl River Delta region is promoted through a $93 million fund to raise awareness and offer advice and technical support to encourage and facilitate the adoption of cleaner production technologies and practices. We also offer financial support to the wider community to initiate environmental activities and those which can enhance public understanding of sustainable development and encourage its day to day practice, through the Environment and Conservation Fund and the Sustainable Development Fund.

Electric cars are exempted from the first registration tax for vehicles.
Energy and the Economy

5.     An economy as successful and dynamic as Hong Kong's needs a safe, reliable and efficient energy supply at reasonable prices to sustain itself. The Government's energy policy aims to achieve that goal, while at the same time minimising the environmental impacts from the use and production of energy.

6.     In 2008 we finalised New Scheme of Control Agreements with the power companies which link their return with emission performance, and we completed a public consultation on the proposed mandatory implementation of the Building Energy Codes which would achieve more efficient, and hence cost-effective, use of energy by buildings (see Greener Energy Management for details).