Hong Kong, 8 December 2020 – Establishing a dedicated Cross-Agency Body and improving building rating systems is key to driving effective policy change in the building sector towards net zero carbon emissions by 2050, according to two reports released today.
The recommendations are included in two reports released under a collaboration between HK2050 is Now, led by Civic Exchange, and the Greater Bay Area Green Finance Alliance (GBA-GFA) led by Hong Kong Green Finance Association (HKGFA).
Chief Executive Carrie Lam’s recent policy address has set an ambitious target for Hong Kong to achieve carbon neutrality before 2050. Dramatically improving Hong Kong’s building energy efficiency is key to achieving carbon neutrality for the city, according to a HK2050 is Now report released in June.
According to the “Decarbonising Hong Kong Buildings: Policy Recommendations and Next Steps” report, a dedicated cross-agency body should be formed with members from relevant bureaus and be responsible for coordinating all incentives and regulations necessary for the buildings sector to achieve net zero by 2050. Members should include, but not limited to, the Environment Bureau, the Development Bureau, the Transport and Housing Bureau, and the Financial Services and the Treasury Bureau.
“To achieve the carbon neutrality goal, Hong Kong must develop a concrete and operational plan to transform the city into a zero-emission economy and society. These plans should cover key sectors such as energy, building, and transportation,” said Dr. Ma Jun, Chairman and President of Hong Kong Green Finance Association, “The Green Building Project aims to develop a roadmap for decarbonising the building sector in the region using green finance instruments. In Hong Kong, buildings account for 90% of electricity consumption and 60% of greenhouse gas emission, reducing energy consumption of the building sector is therefore crucial for achieving our carbon neutrality goal.”
“The green buildings industry presents the biggest low-carbon investment opportunity in the region – an additional US$18 trillion in Asia by 2030,” said Ms. Tracy Wong Harris, Project Lead of the Green Building Project and Deputy Secretary General, Hong Kong Green Finance Association. “Innovative sustainable finance and effective energy efficiency policies are the core enablers which require leadership and collaborations across both public and private sectors.”
To develop a comprehensive building decarbonisation roadmap, other key steps are also necessary to establish a policy priority and policy instruments. The building sector also needs to:
- Improve regulatory tools;
- Incentivize the markets by realigning existing incentives to focus on energy efficiency requirements, introduce carbon trading and mandate corporate climate-related financial disclosure;
- Influence behavioural change by reinforcing the Feed-in Tariff Scheme and implementing carbon tax and tariffs;
- Build capacity through public sector procurement.
“We need a comprehensive policy environment accompanied by effective benchmarking,” said Mr. Evan Auyang, Chairman of Civic Exchange, the independent think tank that commissioned the report. “with the recent green finance trend and the HKSAR’s plan to issue green bonds with a total value of HK$66 billion in the next five years, the future of green building is promising.”
The second report released today “Green Building Rating Systems Energy Benchmarking Study” extends insights into whether existing Green Building Rating Systems are sufficient in pushing deep decarbonization.
This highlights that the energy aspects of performance-based rating systems, such as EDGE and NABER, contribute a significantly higher percentage to the overall certification, compared to scoring-based rating systems. It also summarizes that improving energy efficiency and incorporating renewable energy strategies can help buildings reach net zero. Lastly, most of the rating systems do not validate the actual operational energy performance of new buildings before certification.
“The energy benchmarking report suggests that energy saving requirements at all levels are crucial for the building sector to move towards net zero. Incentives must be tied to decarbonization and rating systems should be recognized by the international green finance bodies in order to attract more investments,” said Dr. Ma Jun, “We are only at the beginning of a long journey towards carbon neutrality. HKGFA is committed to mobilizing more resources from the financial community in Hong Kong, the Greater Bay Area, and Asia to support green and low carbon transformation of our economy. We look forward to working with all of you to build a green financial system that will work for net zero.”
Based on the findings of these two newly published reports, in 2021, the collaboration will conduct pilot projects to speed up decarbonization in the building industry using innovative green finance, implement a roadmap to engage policy makers and extend out the green building project to the Greater Bay Area.