Clean energy has entered the global mindset, particularly since the recent Copenhagen Conference. Yet, although clean energy has become a goal and a policy priority of many governments, including China which showed its commitment to address climate change at the Conference, the practice of it remains uncommon.

As Asia's world city, according to government claims at least, Hong Kong should embrace clean energy. While the government has reiterated its endorsement of it, in policy and government practice there has been little implementation of it. Local pollution is getting worse and no longer are we able to blame it all on the mainland cities north of the Shenzhen River. There has been a consensus that a major source of local pollution is the unclean coal firing power generation by the duopoly of the local electricity industry. The government has requested they make improvements, but to no avail, reflecting perhaps the current administration's lack of determination and commitment. On a broader basis, neither has there been any medium or longer term plan(s) made for the adoption of clean energy in Hong Kong. The fact that many mainland cities have become more environmentally aggressive in city planning and development makes this a priority item on the agenda.

Fortunately, the Central Government has not forgotten Hong Kong. In the recently signed Guangdong-Hong Kong Framework Agreement on Cooperation, it is stipulated, and it is thus becoming mutually obligatory, that the Guangdong government will increase the supply of natural gas and clean electricity from nuclear power plants to Hong Kong, where coal-firing power plants will be gradually phased out.

The Central Government has long approved the supply of electricity to Hong Kong, not only from the existing nuclear power plant at Daya Bay, which is partly owned by one of Hong Kong's electricity firms. However, the government has refused to allow liberalization of the local electricity market for the importation of electricity from mainland sources, probably to protect the duopoly. The result has been high electricity charges stemming from diseconomies of scale and monopoly rent-seeking, coupled with the reluctance of the duopoly to clean-up their power-generation operation. Consequently, both society and the economy suffer. Given the extensive building up of nuclear, clean and other power generation capabilities in Guangdong and neighboring provinces, mainland sources should be able to provide Hong Kong in the coming years with enough supply.

With the stipulation in the framework agreement, the Guangdong government is now obliged to push for changes in Hong Kong. Of course, the local duopoly may find ways to frustrate this: charging even higher prices for clean electricity and delaying the phasing out of coal-firing facilities. Local user communities and organizations, political, environmental or otherwise, should use the framework agreement stipulation as a starting point to fight both pollution and the duopoly's unreasonable profits; and ultimately, to abolish the duopoly altogether.

The author is head of China Business Centre, Hong Kong Polytechnic University.

(HK Edition 05/07/2010 page1)