How to tackle global warming has become a major challenge to the international community. Small as we are, Hong Kong is no exception to these challenges, and we have been taking proactive steps to reduce greenhouse gas emission.

Hong Kong is a relatively small emitter of greenhouse gases as we are a service economy without any energy-intensive industries. Hong Kong's local greenhouse gas emissions are at about 45 million tonnes CO2 equivalent per annum, which account for around 0.2% of global emissions.

Our level of greenhouse gas emissions per capita, at around 6.6 tonnes in recent years, is also considerably lower than most of the developed economies. As for electricity consumption, even though our electricity consumption per capita is at the low end among economies of a similar level of economic development, our total energy consumption has been increasing 1.3% annually on average between 1995 and 2005.

Our principal source of greenhouse gas emissions is power generation, which accounts for more than 60% of our total greenhouse gas emissions. In Hong Kong, more than 50% of the electricity is generated from coal burning.

To reduce greenhouse gas emissions from power generation, we have been promoting the reduction of coal and the increase in the use of natural gas in power generation. Since 1997, we have required all new power generation units to be powered by natural gas, a cleaner fuel for energy production with lower carbon dioxide emission compared with coal.

Notwithstanding, we should note that changing the fuel mix for power generation involves a number of important and complicated issues such as stability in power supply and electricity tariff and thus requires careful consideration.

Power companies must help clear the air

Apart from changing the fuel mix, we have also put in place measures to encourage contribution by the power companies. The new Scheme of Control Agreements signed between the Government and power companies in January this year have put greater emphasis on reducing the environmental impact of energy production.

Under the new agreements, the two power companies' rates of return are linked to their environmental performance. Various measures and incentives are also in place to encourage the power companies to increase energy efficiency and promote the use of renewable energies.

Under the new agreements, the power companies will enjoy a higher (11%) rate of return for their investment in renewable energy facilities. A bonus in the range of 0.01 to 0.05 percentage point in permitted return will also be offered depending on the extent of renewable energy usage in their electricity generation.

Taking account of the local situation, we believe that the most effective way for Hong Kong to control its greenhouse gas emissions is to enhance its overall energy efficiency.

Alongside some other 20 member economies, Hong Kong adopted the APEC Leaders' Declaration on Climate Change, Energy Security & Clean Development in September 2007, which calls upon APEC economies to achieve a reduction in energy intensity of at least 25% by 2030.

To underscore our commitment, the Chief Executive reaffirmed in the 2007 Policy Address that Hong Kong would endeavour to do its best to meet this required reduction in energy intensity. Achieving this goal will avoid emission of approximately 20 million tonnes of greenhouse gases every year in 2030.

We have been implementing energy efficiency initiatives on all fronts. The Government has been operating a voluntary Energy Efficiency Labelling Scheme for household and office appliances and vehicles since 1995. To date, the voluntary scheme covers 19 types of energy consuming products.

Based on the solid foundation built, we have put in place a mandatory Energy Efficiency Labelling Scheme by legislation last month. The first phase of the mandatory scheme covers room air-conditioners, refrigerating appliances and compact fluorescent lamps, which account for more than 70% of the annual electricity consumption in the residential sector.

Using energy-efficient products makes a big difference in terms of energy consumption. Take air-conditioners as an example. An air-conditioner of grade 1 energy efficiency level can save 30% energy compared to a grade 5 one.

We estimate that an electricity savings of 150 gigawatt hours per year can be achieved under the mandatory scheme. This will contribute to a monetary saving of $135 million in electricity bills and a reduction of 105,000 tonnes of carbon dioxide emission. Given such environmental benefits, we plan to gradually include other products in the mandatory scheme.

A recent Asia Business Council study showed that buildings account for around 30% of the world's total energy consumption. But in the Hong Kong context, buildings account for 89% of our electricity consumption, three times the world's consumption.

Enhancing building energy efficiency can help reduce electricity consumption and greenhouse gas emission. We are preparing to mandate buildings to follow a set of energy-efficiency guidelines with a view to bringing down their electricity consumption.

To this end, we have just completed a public consultation on the mandatory implementation of the building energy codes. It is estimated that the implementation of the proposals for new buildings will result in energy saving of 2.8 billion kilowatt hour in the first decade, which contributes to a reduction in carbon dioxide emission of 1.96 million tonnes. 

With the overwhelming support of the professional bodies and the general public, we are now preparing the relevant legislative proposal with a view to introducing it into the Legislative Council in 2009.

With our efforts on this front, it goes without saying that the Government has been taking the lead in reducing electricity consumption in its own premises. With the concerted efforts of bureaus and departments, the total normalised electricity consumption of the Government in 2006-07 has dropped by about 7% as compared to 2002-03, which is equivalent to an electricity saving of 148 gigawatt hours and a carbon dioxide emission reduction of about 103,600 tonnes.

Promotion of energy efficiency is certainly a key contributor to the reduction of greenhouse gases. But we would not overlook actions on other fronts. We have fully utilised landfill gas as fuel to help cut the use of fossil fuel in town gas production and reduce the emission of greenhouse gases, thus helping to improve the territory's air quality.

The landfill gas utilisation project at the North East New Territories landfill is one of the largest green energy recovery and re-use projects in the world. A 19-kilometre pipeline from Ta Kwu Ling to Tai Po was built to transmit the treated surplus landfill gas to the Towngas plant in Tai Po as an alternative heating fuel for town gas production.

The beneficial uses of landfill gas as fuel replacement in the Towngas production plant will help conserve a depleting natural resource - fossil fuel - as well as reduce the emission of greenhouse gases, an estimate of up to 135,000 metric tones of carbon dioxide, into the atmosphere.

We are also proud to have a large part of our territory well protected for conservation although Hong Kong is a densely populated city. More than 40% of our land is preserved as country parks or special areas.

This percentage is remarkable when compared with other cities at a similar stage of economic development. Our country parks are the core storehouses of Hong Kong's natural resources, which offer not only beautiful scenery, rural heritage, recreation and biodiversity, but also help compensate our carbon emission.

To strengthen co-ordination of efforts in tackling climate change across the Government, we have established an inter-departmental working group on climate change under the lead of the Environmental Protection Department.

The working group, comprising representatives from five bureaus and 16 departments, is tasked to co-ordinate and promote actions to address climate change and reduce greenhouse gas emissions.

Hong Kong has also been working closely with the international community for this cause. Apart from fulfilling our international obligations under the United Nations Framework Convention on Climate Change and APEC, Hong Kong has also joined the C40 Large Cities Climate Leadership Group.

Formed in 2005, C40 aims to promote collaboration among cities in the world to reduce greenhouse gas emissions and enhance energy efficiency. London, Tokyo, New York, Sydney, Beijing and Shanghai are among the participating cities, with whom we will join to combat climate change.

I am much encouraged by the enthusiasm and commitment demonstrated by our younger generation for the cause of the environment, from which I clearly know that the Government is not alone in countering the challenges of climate change.

I call for your action from now on - each and every small step counts, even just by switching off the unused computer and lights in our rooms, you can contribute to our planet.