MR CHAN KIN-POR (in Cantonese): Thank you, President. I am very grateful to Dr TAN Yueheng for proposing today’s motion and will support his motion.
In the past, I have spoken on many occasions about Hong Kong’s green development, so today I will focus my speech on the development of voluntary carbon markets (“VCMs”). Global warming has become increasingly serious in recent years, leading to extreme weather in many countries. In order to cope with global warming, various countries have set their carbon reduction targets since the signing of the Paris Agreement. Our country is striving to achieve carbon neutrality by 2060, while Hong Kong has also set the target of carbon neutrality by 2050.
VCMs were created under the trend of carbon reduction. Units of greenhouse gas emissions are bought and sold in carbon markets. Buyers purchase carbon credits to neutralize or compensate for their carbon dioxide emissions. VCMs have huge development potential. For example, Tesla, the US electric car manufacturer, earned US$1.4 billion last year from selling carbon credits, accounting for a quarter of the company’s total earnings.
The Green and Sustainable Finance Cross-Agency Steering Group jointly established by the Hong Kong Monetary Authority and the Securities and Futures Commission recommended that Hong Kong should develop into a regional carbon trading centre, including the development of a global high-quality voluntary carbon market and establishing the Guangdong-Hong Kong-Macao Greater Bay Area Unified Carbon Market in line with Mainland policies. As a matter of fact, Hong Kong mainly focuses on the service industry, so carbon emission is not a major issue for us. However, there is a huge demand in the Mainland. It is estimated that RMB100 trillion of capital is required to achieve carbon neutrality by 2060. Hence, Hong Kong can leverage its status as an international financial centre and act as a bridge between the international community and the country. Since environmental protection is a common aspiration of both the country and the international community, the latter is willing to cooperate. So, Hong Kong has the potential to become a regional green finance hub.
Although the national emissions trading system has been established in the Mainland last year, there are limitations on the quota and the industry. There are also many restrictions on international participants. As pointed out in today’s original motion, Hong Kong may cooperate with the China Emissions Exchange (Guangzhou) and the Guangzhou Futures Exchange to promote the establishment of the Guangdong-Hong Kong-Macao Greater Bay Area Unified Carbon Market. I also agree with Dr TAN that a timetable should be drawn up for the development of VCMs so as to strive to start the work as soon as possible. In fact, the Hong Kong Exchanges and Clearing Limited has taken an important step in the establishment of an international carbon market in Hong Kong by setting up the Hong Kong International Carbon Market Council and inviting many well-known enterprises, such as Tencent and HSBC, to join the council, with a view to exploring the development opportunities of a regional carbon market.
Emphasizing on international standards is the cornerstone of Hong Kong’s status as an international metropolis. At present, VCMs around the world are largely unregulated, resulting in varying quality of carbon credits in the market. Hence, if Hong Kong is to establish a carbon exchange, standards and regulatory mechanism with higher certainty must be adopted in order to avoid being influenced by market policies, build the confidence of credit buyers and establish a high-quality carbon credit exchange. In addition, since the carbon market in the Mainland mainly deals with spot trading, Hong Kong may develop a carbon derivative market to tie up with the actual development of the national carbon market.
President, the development of a carbon exchange in Hong Kong can kill two birds with one stone. It can not only contribute to the country by helping it deal with carbon emissions properly, but also promote green finance for Hong Kong. Therefore, the Government and relevant organizations should put forward specific measures as soon as possible, so as to expedite the development of a carbon exchange and avoid missing the opportunity.
Thank you, President.