AssessingChinasEnergyandEnvironmentalOutlookCan.pptVIP

Assessing China’s Energy andEnvironmental Outlook :Can Hong Kong Play a Key Role? By Patrick Cheung July 9, 2007 Issues to be Discussed Will China continue to rely on fossil fuels for its energy consumption, only more of them? Will the air get even dirtier? Can China transform itself to be much more energy efficient and cleaner? What are the challenges and opportunities? Can Hong Kong play a meaningful role in this transformation? Primary Energy Consumption to 2030EIA Reference Case Standards / - Lax standards Regulations - Tightening standards increase cost - Lack comprehensive policy/regulatory framework Technology - Stock turnover - Adoption of best practices - Technology transfer - Cost Enforcement - Difficult to monitor diffused sources of emissions, e.g. electricity shortage induced micro-generation - Economic competition - Corruption - Competence Hong Kong’s advantages are visible. Adapt in traditional cross-border facilitation role. Preferred base for foreign companies in energy and environmental sectors. Financing will be a key part, at which Hong Kong excels : Equipment/Project financing Capital raising Emissions or carbon trading Opportunity set is largely a sophisticated service sector which can leverage Hong Kong’s soft and hard infrastructure and professional services culture. But, it’s not an automatic slam dunk either. Hong Kong not necessarily centre of gravity for this opportunity set Limited energy economy Its internal problems less complex Energy not a dominant sector No technology base Little thought leadership on policies, regulation, research, knowledge base, etc. China’s energy demand will continue to increase substantially and will continue to rely on coal and oil for its needs. China faces an uphill battle to become more energy efficient and clean up its environment, while sustaining economic growth. Wealth creation and creating the capability and will to manage complex solutions are pivotal. Huge commerc