Ladies and Gentlemen,
On behalf of the Democratic Party, I would like to share our view on how to tackle the MSW problem in Hong Kong. We generally support the Policy Framework for the Management of Municipal Solid Waste issued by the government, but there is plenty of room for improvement. Following is a number of suggestions:
1) The targets of the Government Policy Framework should be more progressive.
2) More items should be included in the Producer Responsibility Scheme (PRS).
3) The Integrated Waste Management Facilities (IWMF) with incineration as the core technology should only be considered as the last resort.
4) MSW charging should be given a much higher priority in the task list, Green Tax can be an effective and efficient strategy before going for incineration.
Bolder steps have to be taken in Government Policy Framework
Several milestone set out in the Government Policy Framework are not controversial. We believe that the pace to increase the recovery rate and to introduce MSW charging is too slow and too conservative.
First, according to the framework, the amount of MSW produced will, supposedly, be reduced mildly by 1% per annum from now to 2014. As the amount of MSW we are producing has already exceeded our past estimation, this target will only have limited contributions in waste avoidance and minimization. The government must set a more progressive target.
According to the framework, it takes 8 years to increase the recovery rate of MSW from the existing 40% to 50%. In fact, in most developed countries, the recovery rate is already up to 60%. We will still be lagging far behind even after we achieve this target. We understand that this waste recovery measure is not controversial at all and the government can expedite the plan substantially. For example, the EcoPark which has been planned for years seems to take forever to materialize. We hope the EcoPark can be in operation by the end of this year.
My second point is that the Integrated Waste Management Facilities in the Government Policy Framework actually means incineration. Beside the issue of high operational costs of incineration at the moment, this approach is still controversial even among green groups. The adoption of IWMF runs contrary to the other measures in the Policy Framework. If we will go for incineration at the end of the day, then, only the capacity of the incinerator matters. People will then ask why we have to go through the agony of reducing, recovering and reusing the wastes. We do believe that material becomes waste only when they are put in the wrong place and we do not know what to do with them.
Therefore, the Democratic Party urges the government to stress strongly on both the Avoidance and Minimization strategy and Reuse, Recover and Recycle strategy. Incineration should only be considered as the last resort in resolving our MSW problem.
We also noted that, a Product Responsibility Scheme, or PRS is one of the major proposals in Government Policy Framework that puts electronic appliances, vehicle tyres, plastic bags, packaging materials and a number of other solid wastes under the scheme. Avoidance of waste generation and reducing wastes are the best waste control strategies. To this end, Democratic Party urges the government to cover more consumer products into the PRS, such as cosmetic containers and furniture, and put more focus on the use of economic incentive in the PRS.
Green tax is indispensable in our overall strategy
The government has yet to fully adopt other means to achieve the policy objective. We suggest the government to make better use of economic incentives as measures. In fact, the European countries found an effective and efficient solution for environmental policy, that is, the green tax. European countries, especially the Scandinavian countries, were pioneers in implementing the green tax. Some of them have introduced the green tax since early 90s. Now, every member of the Organization of Economic Cooperation and Development (OECD) has adopted some kind of green tax according to their own situations.
The essence of the green tax is similar to sin tax. The sins here refer to behaviors or products that are harmful to our environment. Other taxes are commonly levied on something good to society, such as employment, investment or even consumption. But the green tax is levied on polluting materials, products and behavior.
One of the important goals of the green tax is to preserve choices for our citizens. Under an effective green tax regime, people can choose to pay or not pay through their own behavior. Another important feature of the green tax is to achieve dynamic efficiency. Simply put, in order to avoid paying the green tax, people will reduce as much as possible the use of environmentally harmful products.
That is why economic incentives driven by the green tax can be a more effective measure in achieving the policy goals than commands-and-controls measures, such as the PRS. The green tax can often be implemented in combination with other policy instruments. We urges the government to put more focus on the use of economic incentives in the PRS.
Hong Kong people are pragmatic. Price implication based on pollution level will quickly encourage people to switch to environmental-friendly products in order to avoid such taxes. If adequately designed and implemented, the green tax approach will achieve good results in Hong Kong. We should be cautious with the following issues when planning the green tax.
Green tax helps ensure the polluter-pays principle
First, the green tax should follow the polluter-pays-principle as far as possible, in order to enforce the price signals through market mechanism.
Second, the purpose of the green tax is not to increase fiscal revenue, but to help ensure that polluters take into account of the cost of pollution on the environment when they make production and consumption decisions. We can achieve this by either ear-marking the green tax revenue for environmental protection, or adopting the revenue-neutral principle by cutting other taxes (such as salary tax) or government fees, or both.
Tax is always unwelcome by the public. The green tax is generally introduced together with other alleviating measures in many countries. Subsidies can be provided to the affected parties such as low income households. Reduction of other taxes became a standard practice when introducing green tax in many countries although the details of the reduction were different. This strategy might make it easier to get political support for green tax from the affected parties, which was the key to success for the green tax reform.
As I go on, you may find more resemblance of our proposal to the recent government proposal on Goods and Services Tax (Sale Tax). I admit, there are similarities between the two. In fact, we published our proposal long before the government did. The Democratic Party is the first political party in Hong Kong suggesting the government to adopt green tax reform back in 2001. The most significant difference between the two is that taxing pollution will improve our environment whereas taxing goods and services may hurt our economy.
Conclusion
Hong Kong is one of the most open and free market economies in the world. We believe that the green tax is a better solution for solving the environmental problems. We urge the government to re-consider and implement green tax in its future measures.
In conclusion, we must address the waste problem in a holistic manner. I have been making a number of suggestions on tackling MSW:
1) In the Government Policy Framework, the targets of waste avoidance and recovery should be more progressive.
2) More items should be increased in the Producer Responsibility Scheme (PRS), such as cosmetic containers, and furniture.
3) Green Tax Reform introduce a price signal that helps ensure the polluter-pays principle.
4) Incineration is controversial and should only be considered as the last resort.
Today is a rare opportunity for us to share our view, and I wish the Democratic Party will have closer contacts with all of you on environmental affairs in the future. Thank you.
