U.S. - China Issues

11 May 2007

U.S. Envoy Encourages Hong Kong Businesses To Fight Pollution

Consul General offers U.S. approaches to improve air quality, increase profits

By Nadine Leavitt Siak
USINFO Staff Writer

Washington -- Businesses, not government, should take the lead in cutting pollution, says U.S. Consul General James Cunningham.

"You can cut pollution at the same time as you grow your business.  Don't wait for government to force you to do it," Cunningham told the Chinese General Chamber of Commerce in Hong Kong May 11.

Cunningham said Hong Kong businesses can draw on the experience of the United States to promote a cleaner environment and economic growth.  As an example, he described how the California ports of Long Beach and Los Angeles instituted a Clean Air Action Plan in 2006 to curb port-related air pollution from trucks, ships, locomotives and other equipment.  Cunningham said the plan involved "innovative actions," such as having container ships use electrical shore power while at dock instead of running their engines; promoting the use of cleaner distillate fuels in California waters and retrofitting diesel engines on shoreline vehicles.

"These steps are having positive effects in reducing pollution, particularly the low-altitude pollutants that people breathe on the streets and in their homes," Cunningham said. "This program is one of the boldest air quality initiatives by any port and there may be lessons here for Hong Kong and other ports around the globe," he continued.

"We in the United States have learned that government and private industry must work together to address deteriorating air quality," he said.  He encouraged members of the Hong Kong business community to pursue public-private partnerships to improve public health and encourage increased energy efficiency while also promoting profit-making.

POLLUTION PREVENTION AND ENERGY EFFICIENCY

To illustrate this point, Cunningham provided an update on a market-based financing model that encourages investment in pollution-reducing improvements to manufacturing and energy production called "P2E2" (for "pollution prevention" and "energy efficiency").  This model emerged from the U.S.-China Joint Commission on Commerce and Trade.

The P2E2 initiative uses loan guarantees from the Asian Development Bank or International Finance Corporation, as well as credits from the U.S. Export-Import Bank, to facilitate loans by Hong Kong commercial banks to firms that wish to upgrade their facilities in the mainland by purchasing environmentally friendly equipment.

P2E2, Cunningham said, "is based on success stories in the United States."  He cited a P2E2-style upgrade at a chemical plant in Michigan that achieved $5.3 million in new cost savings after one-time expenses of $3.2 million. The project helped a producer of plastic wrap and industrial chemicals increase its efficiency and reduce its pollution through installing refrigeration equipment, using cleaner reactants and recycling solvents.

"This is the kind of concrete 'real world' work that can be done here in China," Cunningham said.

In fact, Cunningham said, there are approximately 30 projects under way in China using P2E2 technologies, and the Asian Development Bank and other international sources plan to make available up to $800 million in new loan guarantees and loans to Hong Kong commercial banks by fall to increase the number of these projects. 

Among the projects already under way in China that Cunningham cited is Focus Energy Limited, a Hong Kong-based company providing environmental services that has applied P2E2 technologies (i.e. upgraded pumps and fans) to coal-fired and gas-fired power plants in Jiangsu province to achieve a total annual electricity savings of 6.1 million kilowatt-hours and a reduction in operating costs of $375,000 -- all while reducing carbon dioxide emissions by 5,528 tons of carbon dioxide per year.

"This type of sustainable economic growth will bring near and long-term benefits across China," Cunningham stressed, and business leaders in Hong Kong "can make an immediate difference in helping to bring sustainable environmental and economic solutions to the region."

"We still have much to do in the United States," he admitted, "[b]ut, by virtually any measure, the air we breathe now in the United States is cleaner than at any time since we started monitoring air quality. ... The U.S. experience shows that investment in the environment need not be incompatible with economic returns for companies and society, including the enormous cost-savings benefits of improved public health and increased productivity."

The full text of Cunningham's remarks is available on USINFO.

For more information on U.S. policies, see Environment and Hong Kong.

(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)