Towards a Better Hong Kong PATHWAYS TO NET ZERO CARBON EMISSIONS BY 2050 XIAOQIAN JIANG LAWRENCE IU J ROBERT GIBSON LAUREN CHAN WEE KEAN FONG ROMAN HENNING WRI.ORG.CN Towards a Better Hong Kong: Pathways to Net Zero Carbon Emissions by 2050 1 ACKNOWLEDGEMENTS This publication is a joint effort by HK 2050 Is Now, an initiative of the World Resources Institute (WRI), Civic Exchange, the ADM Capital Foundation, HSBC, the RS Group and the WYNG Foundation. We would like to express our gratitude to colleagues who provided timely and helpful advice, support and assistance during the preparation of this publication. Special thanks go to the following individuals and organizations for providing inputs and reviewing draft versions of this document: • Edward Chow, Hong Kong Productivity Council • Michael Edesess, Hong Kong University of Science and Technology • Lisa Genasci, ADM Capital Foundation • Tracy Wong Harris, Hong Kong Green Finance Association • Mak Kim Kong, Electrical and Mechanical Services Department • Victor Kwong, Hong Kong and China Gas Company Limited (HKCG) • Chiu-ying Lam, Individual Capacity • Edwin Lau, Green Earth • Tina Li, Hongkong and Shanghai Banking Corporation Limited • Debra Tan, China Water Risk • Chin-wan Tse, Environment Bureau • Agnes Wong, Environmental Protection Department • Jan Stempienm, Lantau Group • Jeanne Ng and Jim Taylor, CLP Hong Kong Limited • TC Yee, Hong Kong Electric Investments Limited (HKE) • Yan Yan Yip, WYNG Foundation • Fiona Lau, Berto Lee and John So, Civic Exchange • Juan Carlos Altamirano, Beth Elliott, Kelly Levin, Carlos Muñoz Piña, Katie Ross, Qianyu Shao (intern), Shailesh Sreedharan, Debbie Weyl, Wenyi Xi, Lulu Xue, Xiaoliang Yang, Mofan Zhang, WRI We are also grateful to Barbara Karni, Beth Elliott, Bill Dugan, Emily Matthews, Emilia Suarez, Joshua Dominick, Lawrence MacDonald, Romain Warnault, Ruiyun Dou, Rhys Gerholdt, Ye Zhang and Cheddar Media for providing editing, administrative and design support. We are pleased to acknowledge our institutional strategic partners, which provide core funding to WRI: the Netherlands Ministry of Foreign Affairs, the Royal Danish Ministry of Foreign Affairs, and the Swedish International Development Cooperation Agency. Funding from the ADM Capital Foundation, HSBC, the RS Group and the WYNG Foundation made this analysis possible. We appreciate their support. Design and Layout by: Harry Zhang [email protected] 2 WRI.org.cn TABLE OF CONTENTS III Foreword 33 Replace Town Gas with Zero- or Near-Zero Carbon Hydrogen V Executive Summary 37 Making Buildings More Energy Efficient 1 The Need for a Long-Term Deep 38 Summary of Policy Recommendations Decarbonisation Strategy 40 Set Targets, Track Performance/Benchmark 2 Global Climate Goals and the Role of Cities and Improve Transparency 4 Hong Kong’s Climate Policies 40 Tighten Policies and Regulations 41 Improve Energy Audits 7 Pathways to Deep Decarbonisation in and Increase Retrofitting Hong Kong 42 Improve Demand Management 8 Emissions Profile and User Behaviour 10 A Roadmap for Deep Decarbonisation 13 Emission-Reduction Gaps 45 Reducing Emissions from Mobility 15 Potential for Emissions Reduction 46 Summary of Policy Recommendations 16 Environmental Benefits of Deep Decarbonisation 46 Avoid Journeys 17 Economic Benefits of Deep Decarbonisation 49 Shift to Lower-Carbon Modes of Transport 18 Ensuring a Just Transition 54 Improve the Efficiency and Lower the Carbon Intensity of Mobility 21 Improving the Generation of Electricity 22 Summary of Policy Recommendations 59 Opportunities for More Ambitious 25 Expand Renewable Energy on a Large Scale Climate Action 27 Explore Sourcing More Nuclear Energy Regionally 60 Increasing the Reporting and Management 28 Generate Power from Zero- or Near-Zero of Carbon Emissions Carbon Hydrogen 60 Imposing a Carbon Price 28 Use Natural Gas with Carbon Capture 63 Reducing Emissions from the Waste Sector and Storage 66 Reducing Emissions from 28 Store Electricity International Travel 29 Optimize the Demand Response 70 Reducing Emissions through Lifestyle Changes 31 Reducing the Use of Piped Gas and Non-Transport-Related Liquified 71 Endnotes Petroleum Gas 72 Abbreviations 32 Summary of Policy Recommendations 32 Replace Town Gas and Non-Transport 73 Glossary Liquified Petroleum Gas with Zero-Carbon Electricity 73 References Towards a Better Hong Kong: Pathways to Net Zero Carbon Emissions by 2050 I II WRI.org.cn FOREWORD The central goal of the Paris Agreement is to "multiple wins" including significant economic limit global temperature rise to “well below 2°C and environmental benefits. This study shows above pre-industrial levels and to pursue efforts that by setting a net-zero emissions target to limit temperature increase to 1.5°C.” The latest and taking action now, Hong Kong will yield science shows that to achieve this goal, global HK$460 billion in new wealth. These actions greenhouse gas emissions need to be cut in half will also reduce local air pollution and its by 2030 and reach net-zero by around 2050. associated detrimental health effects, increase This transformation requires ambitious action residents’ life expectancy and save about 26,000 across all levels of government and sectors of lives by 2050. society—countries, states and provinces, cities, companies, investors and the public. But to achieve these benefits and reach net-zero emissions at a reasonable cost, action must be Cities will play a particularly crucial role in taken as soon as possible. This urgency is why achieving national goals and achieving net-zero our project is named "Hong Kong 2050 Is Now.” emissions because they make and implement many emission-reduction policies. Around Our report focuses on the solutions that the world, urban centers such as Copenhagen, offer Hong Kong the greatest potential for London, and New York are at the forefront emissions reductions: decarbonising electricity of ambition climate action by committing to and piped gas, building energy conservation achieving carbon neutrality. and transportation. In addition, the analysis considers waste management, international World Resources Institute is working with a travel and lifestyles as further opportunities for number of Chinese cities to rapidly decarbonise significant emissions cuts. by mid-century while achieving higher levels of economic growth and sustainable development. This research provides Hong Kong with a Hong Kong has the opportunity to be an roadmap to a brighter future. Now is the time inspiring example for the region by adopting to translate this research into objectives and and implementing a strategy to reach net-zero further translate the objectives into policy emissions like its counterparts in Europe and measures—and then ensure these policies are the Americas. fully implemented. This is a major undertaking that requires joint effort from all stakeholders New research by World Resources Institute and in Hong Kong—the government, private sector Civic Exchange proves that achieving net-zero and the public. Together we can achieve a better emissions in Hong Kong is within reach. It is Hong Kong: a city that is prosperous, healthy not only technically feasible but would offer and fully decarbonised. Li Fang Lisa Genasci Chief Representative, Board Member, Beijing Representative Office,WRI China Civic Exchange Towards a Better Hong Kong: Pathways to Net Zero Carbon Emissions by 2050 III IV WRI.org.cn EXECUTIVE SUMMARY HIGHLIGHTS To keep the Earth’s average temperature within 1.5oC of warming above pre- ▪ industrial levels, the world must be close to carbon neutral by 2050. Hong Kong, like other regions, must develop a concrete plan that can transform the city into a net zero emissions economy and society. The analysis presented in this report demonstrates that Hong Kong can reduce ▪ its carbon emissions by 90 per cent by 2050 relative to 2005 levels and offset the remaining 10 per cent which comes from hard-to-abate sectors. To progress towards a net zero emissions future, Hong Kong must begin ▪ planning and taking accelerated action now. It needs to adopt a significantly more aggressive decarbonisation target, with annual reductions of 6.6 per cent beginning immediately and continuing through 2050. The greatest potential for reducing emissions comes from improving electricity generation, ▪ making buildings more energy efficient and increasing the sustainability of mobility. A net zero emissions economy and society would provide Hong Kong with a ▪ cleaner, greener and healthier environment and yield substantial economic and social benefits. Projected reductions in air pollutants would increase life expectancy to the equivalent of about 26,000 lives saved by 2050, and cumulative economic benefits could amount to HK$460 billion. Towards a Better Hong Kong: Pathways to Net Zero Carbon Emissions by 2050 V Introduction Hong Kong is developing its own long-term decarbonisation strategy. The government In order to achieve the 1.5°C goal set by the kicked off a public engagement program in Paris Agreement on climate change, human June 2019 to collect public views; it is expected civilisation must achieve net zero emissions to announce the results later this year. It will by around 2050. The special report by the subsequently formulate a long-term decarbonisation Intergovernmental Panel on Climate Change (IPCC) strategy. This report analyses the feasibility of Hong on global warming of 1.5°C, released in October Kong’s reaching a net zero emission target in 2050 2018, concludes that human