For both Hong Kong and the Mainland, the environment is not a standalone policy, but an inseparable part of our sustainable development strategy for a better tomorrow. We all recognise that the environment and development are two sides of the same coin, and how to strike the right balance is instrumental to how best we can take our societies to the next level.

Environmental problems, in particular air pollution, respect no borders; and policies and remedies that tackle them have to go beyond the administrative boundaries if they are to be effectively implemented. This calls for inter-governmental collaboration, a key to unlock the problems.

The collaboration between Hong Kong and Guangdong Province in environmental policies and practices is testimony of how the two governments can work together as we face common challenges arising from our respective environmental problems.

Using our cooperation on air pollution, let me elaborate. First, our collaboration is premised on the common wish to tackle the problem of air pollution that prevails in the common air shed that we both live under.

Back in 2002, the Hong Kong Government established a bilateral binding agreement with the Guangdong Provincial Government. We both pledged, among other things, to commit to a reduction target to bring down our level of four major pollutants - sulphur dioxide (SO2), nitrogen oxides (NOx), volatile organic compounds (VOCs) and respirable suspended particulates (RSP), by a substantial percentage between 20% to 55% by 2010, using 1997 as the base year.

This is by no means a small target but a tall order for our respective governments and societies, not just in terms of the targets of reduction that we have set for ourselves, but more so in setting such targets against the backdrop of a fast developing region that has been experiencing robust industrial, commercial and infrastructural growth, as well as a rapid pace of urbanisation and population expansion, and ever-rising aspirations for better city living.

The bilateral agreement is more than a piece of paper; it is a working mechanism that brings about a platform of collaboration. In addition to the targets we have set, it provides for the development of a common air monitoring system that has been subsequently established in both jurisdictions.

It enables both sides to draw up a more comprehensive inventory checklist on our respective sources of pollution, enabling us to better size up the problems and to formulate policy options.

The agreement allows the collaboration to move forward with time as we sit together regularly to stock take and review progress. Our recent mid-term review has given us a clearer picture on the extent of the air-pollution problems and enables us to map out even more stringent action plans to tackle the new and emerging problems that we face.

While the agreement does not prescribe a full recipe of solutions to the diverse problems that both governments encounter in our respective territories, it sets a clear direction and milestones against which we draw up our respective policies and programmes.

Let's look at our side of the house - the 2010 targets we have set under the bilateral agreement imposes a target for Hong Kong and we have taken that as our short- and medium-term policy targets. As a result, we have also translated that into targets that we have set for tackling our major sources of emissions, power generation. The emission-control levels we have been setting for the two power companies in Hong Kong are in line with our achievement of these targets.

Since the signing of the agreement, we have been able to develop and refine our policies and programmes, bringing about a gradual reduction in three out of the four pollutants, allowing us to move towards meeting the goal we have set. In brief, our emission of NOx, VOC and RSP, measured at source, have achieved reductions between 23% and 48% between 1997 and 2007.  

The remaining pollutant, SO2, which comes largely from coal-fired power generation, has surged over the years but the trend of increase has been kept down to an increase of 12% compared with 1997 figures, and it will be reversed sharply in the next two years as we have set quite a demanding target for the power companies.

To quote some figures for reference, the emission level we have set for the two power companies by 2010 will be 25,000 tonnes as compared with 65,000 tonnes in 2006. Achieving this would bring us into full compliance with the 2010 targets we set under the Hong Kong - Guangdong agreement.

As we look over to the Guangdong side, the recent mid-term review we have jointly conducted revealed that in overall terms, pollutant levels in 2003 have remained marginally higher than the 1997 base-year figures. A closer look at the individual sets of figures further revealed that while actions to reduce industrial pollution have yielded progress, emissions arising from metropolitan development, for example, vehicular emissions, remain a great challenge.

These stocktaking exercises have also provided channels for the two governments to review our plans and programmes and enabled us to put our heads together for newer and firmer additional actions to better fulfil the targets. We are grateful to see a list of additional measures that the Guangdong Government is drawing up.

Behind the annual meetings and mid-term review mechanisms, there has been a substantial amount of constructive dialogue at the professional level between the two governments. I see my team now travels very frequently between Hong Kong and Guangzhou and I also see a greater transparency of information, especially over the air-monitoring system established in the region, which I am sure are the fruits of professional collaboration under this mutual agreement.

Our collaboration also diverts resources and expertise in addressing the problem at source. The recently launched Hong Kong - Guangdong joint scheme on clean production is a good example. The scheme is one that is targeted at Hong Kong owned/invested factories in the Pearl River Delta.

With the dedication of $93 million voted for the project and the Hong Kong Productivity Council as the technology partner, we are trying to help 1,500 Hong Kong factories to do clean production. Through the dollar-for-dollar matching fund and the technical input of HKPC and other associated environmental engineering agencies, we have opened a new door for our expertise to be put into place in cleaning up industrial pollution in the PRD.

One of the requirements - for participating factories to share and showcase their success - will further enhance the confidence and commitment of entrepreneurs in clean production, and create new opportunities for environmental engineering industries - a multiple-win situation.

Talking about opportunities, we see the Hong Kong - Guangdong collaboration as a platform for deepening the economic as well as policy cooperation between the two places. As we work vigorously towards meeting the 2010 targets, let's not lose sight of bringing the collaboration to the next level.

Clearly, as we look ahead, we have to start thinking about longer-term collaboration beyond 2010. We have to enlarge our collaboration from pollution control and consider other developmental issues, including energy policies. It also brings up the question as well as the challenge of how to make Hong Kong, Guangdong and the wider PRD a greener region of China.

I am sure the Hong Kong - Guangdong collaboration is more than the agreement itself but a launching pad for greater and more interactive cooperation and with this spirit, I have been working with our counterparts in the province.

I am sure this is not a closed shop for officials but a wider platform for government, business, and the wider community as it is the common vision of a better, cleaner and greener environment that drives our momentum and binds our commitment.