1、,Assessing Chinas Energy and Environmental Outlook : Can Hong Kong Play a Key Role?,By Patrick CheungJuly 9, 2007,In-house Discussion with Vision 2047 Foundation Members,2,Issues to be Discussed,Will China continue to rely on fossil fuels for its energy consumption, only more of them? Will the air g
2、et 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?,3,Characteristics of Chinas Energy Consumption,DemandContinuing urbanization (40 to 70% ?) and industriali
3、zation Growing service economy Personal wealth increase, e.g. car ownership,SupplyLimited domestic production of oil and natural gas Nuclear/Alternative energy development helpful only at the margin Abundant coal resource,Impact on Energy UseLight products demand growth, e.g. gasoline, jet fuel, die
4、sel, etc. Imports of liquid fuels to increase Strong electricity demand growth Unprecedented power generation capacity additionsCoal use dominant and swing fuel,China will continue to rely on fossil fuels to drive its economy Total potential emissions to increase substantially,4,Primary Energy Consu
5、mption to 2030 EIA Reference Case,5,Primary Energy Consumption to 2030 EIA Reference Case (contd),6,Primary Energy Consumption to 2030 EIA Reference Case (contd),7,Energy Intensity Pattern (2004 Data),0,100,200,300,400,10,20,30,40,(000),Energy Use Intensity (BTU/$GDP (2000),Per Capita Energy Consump
6、tion mm BTU / person,x China,x India,x South Africa,x Ethiopia,x Bangladesh,x Nigeria,x South Korea,Denmark,x Hong Kong,x Japan,x Germany,Norway x,Canada x,x USA,x,x Russia,8,Chinas Energy and Environmental Quandary,Ever greater Dependence on fossil fuels,CHINA,Insatiable energy demand to sustain ec
7、onomic growth,Worrying impact onair qualityCO2 emissionsresource cost which could stifle growth,Transformational ChallengeHow to increase economy wide energy use efficiencyHow to create and implement comprehensive solutions to clean upair quality and reduce CO2 emissions,9,Standards / - Lax standard
8、s Regulations - Tightening standards increase cost- Lack comprehensive policy/regulatory frameworkTechnology - Stock turnover- Adoption of best practices- Technology transfer- CostEnforcement - Difficult to monitor diffused sources of emissions, e.g. electricity shortage induced micro-generation- Ec
9、onomic competition- Corruption- Competence,Chinas Transformational Obstacles,Fuel input,Combustion Process / Equipment and Delivery,OutputEnergyEmission,10,Transformation of a Complex System,Wealth CreationAffordabilityFinancibility,Blue Sky China,Technology Transfer,Economic Re-structuring,Shared V
10、alues - Will to implement,Knowledge basePolicies and regulationsSystem management,11,The opportunity set is huge.,Now,Future,Chinas Objective,X,X,High,Low,High,Quality (value added),Quantity (Energy Input),Now,Future,Value added,Raw Energy Cost,And improving quality is inherently high - value addedT
11、echnology drivenInformation basedService economyManaging complexityCross-border facilitation,12,Hong Kongs 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
12、Kong excels : Equipment/Project financing Capital raising Emissions or carbon tradingOpportunity set is largely a sophisticated service sector which can leverage Hong Kongs soft and hard infrastructure and professional services culture.,13,Hong Kong not necessarily centre of gravity for this opportu
13、nity setLimited 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.,Initial thoughts on what Hong Kong can doBuild critical mass of thought leadership Quality think tanks U
14、niversity funded research Strengthen/ Create related university departments Centre for seminars and conferences Widespread education to create shared valuesIdentify potential niches of opportunities, e.g. Urban planning Environmental consulting Air quality monitoring Regulatory policies PRD environm
15、ental systems management Energy projects and equipment financing Carbon and emissions trading?,China itself likely to become More pro-active and organized“Its their own problem” International pressures directly felt Top government initiatives likely to create large support infrastructure R&D and sub
16、sidies available,But, its not an automatic slam dunk either.,14,Chinas 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 commercial opportunities exist in this transformational challenge.Hong Kong will need to work hard to play a meaningful role.,Conclusions,
