The threat of global warming is real and we all have an obligation to concentrate on environmental issues. We also have an opportunity to promote environmental initiatives as one way to revive our economies that are struggling to cope with the current global economic crisis.

First, environmental initiatives will cut costs for companies. Energy-saving strategies will also reduce electricity bills in homes, schools and offices at a time when we are all trying to make our dollars go a little bit further.

Secondly, creating green jobs will help to ease rising unemployment levels around the world, including here in Hong Kong. Green design, research and development, innovation, sales, construction and more all have the potential to create jobs and opportunities. Our people have the talent and the motivation to form a formidable "green collar" workforce.

For us, effective regional co-operation is vital in tackling environmental issues. Our nation is focused on this effort from various angles. These include energy conservation, adopting new technologies and raising public awareness and participation.

The Central Government in Beijing announced its National Climate Change Programme two years ago. This set out general objectives in addressing climate change up to 2010, including a substantial reduction of energy intensity.

So where does Hong Kong fit into this?

Our city is committed to reducing energy intensity by 25% by 2030, using 2005 as a base. It is estimated that some 20 million tonnes of greenhouse gases could be avoided each year after 2030 by achieving this target.

Our Chief Executive, in his Policy Address last year, outlined his vision for a low-carbon economy in Hong Kong. He also highlighted our commitment to work with the Guangdong Provincial Government in achieving a green and quality living environment in the region. This cross-boundary co-operation covers areas such as renewable energy, cleaner production techniques, conservation, scientific research and the introduction of electric vehicles.

Our common vision is to turn the Pearl River Delta Region into a cluster of high-tech, low-pollution and low-energy-consumption cities. The "Shenzhen-Hong Kong Innovation Circle" is one way we can achieve a brighter future for our region through co-operation.

Under the "Innovation Circle" initiative, US firm DuPont recently opened its new R&D centre for solar energy technology at the Hong Kong Science Park. The Parks Corporation has also proposed establishing a Green Tech Cluster at the Science Park. Our aim is to be a green example for the rest of our region.

Power generation is a major source of air pollution and greenhouse gas in our region. In Hong Kong an estimated 60% of greenhouse gas emissions are related to power generation. In response, we are working on introducing cleaner fuels as a priority.

Last year, we signed a Memorandum of Understanding with the National Energy Administration to ensure a long-term and stable supply of nuclear electricity as well as natural gas. This will reduce our reliance on coal for generating power.

At the same time, we are encouraging our two companies that generate power to reduce pollution. Last year, when we signed the new schemes of control agreements with them, we linked the permitted rates of return to their environmental performance. In other words, their profitability depends on how clean their operations are.

Moving from electricity generation to consumption. Almost 90% of our electricity is used on buildings.

To make our buildings more energy-efficient, we have introduced voluntary Building Energy Codes. And we will soon be introducing legislation to make these Codes mandatory.

We have also set up a programme to conduct energy and carbon audits on buildings. So far, more than 60 organisations have agreed to become our "Carbon Audit Green Partners". These include major private developers, professional bodies, universities, non-profit organisations and other commercial sectors. They have all agreed to a Carbon Reduction Charter to either carry out or to promote carbon audits, and take necessary steps to reduce emissions.

We have provided a total of $450 million to subsidise building owners to conduct energy-cum-carbon audits and energy-efficiency projects.

We believe increasing energy efficiency of our existing building stock is equally important as adopting greener standards in new buildings. We also believe that the government should take the lead in this. Carbon audits are being carried out at a number of government buildings. This will also apply to the new Central Government Complex at Tamar.

We have also identified a new school and the Kai Tak Government Offices as energy efficiency demonstration projects. These will serve as examples for private buildings to adopt environmental designs and techniques.

On the subject of "green" buildings, we are grateful for the valuable work of various bodies such as the HK-BEAM Society, Business Environment Council and the Professional Green Building Council.

These organisations, together with the Construction Industry Council, will soon launch the Hong Kong Green Building Council. The council will raise awareness of "green" buildings among the community and promote international co-operation on this important topic.

Going beyond individual buildings, we are increasingly carbon-conscious in developing new areas. These include the Kai Tak Development at the old airport site I just mentioned. This development will include the city's first district cooling system for more efficient air conditioning. We estimate that the system will use up to 35% less energy than conventional systems.

Another exciting area for "green" building technology is the West Kowloon Cultural District. We are encouraging designers to come up with innovative as well as environmentally friendly designs for the Master Layout Plan for the Cultural District.

My final point today is about public transport. Hong Kong has a huge advantage in this area. The compact nature of our city and extensive public transport network is a great energy-saver.

There are more than 11 million passenger journeys made on public transport every day, or 9 out of every 10 passenger journeys made in the city every day. This includes over 4 million daily trips on the mass transit railway. We are continuing to expand the rail network both within Hong Kong and for cross-boundary connections.

At the same time, nearly all of our taxis run on liquefied petroleum gas. We also have substantial tax incentives for companies and individuals to change to hybrid and more fuel-efficient vehicles. There are similar incentives to encourage the use of cleaner Euro V diesel and phase out Pre-Euro and Euro I diesel commercial vehicles.

We also intend to be a forerunner in Asia in introducing zero-emission electric vehicles. We have made a promising start and we look forward to the results from our ongoing tests in this area. Although one electric vehicle today may not make much difference, just imagine what a fleet of electric taxis, buses or private cars could do for our environment in the future.

I have outlined some of our strategies in working towards a city based on high efficiency in energy and low carbon emissions. I have also highlighted the importance of co-operation with our neighbours in providing a green and clean living environment for our current and future generations.

I look forward to hearing your views on establishing a low-carbon economy.

Chief Secretary Henry Tang gave this address at the International Conference on "Planning for Low Carbon Cities" at Noah's Resort in Ma Wan.