Creating a Market for Clean Air: The Air Pollution Control (Amendment) Ordinance 2008

Abstract

The Air Pollution Control (Amendment) Ordinance 2008 was passed in July 2008. This ordinance establishes an emissions trading scheme to facilitate pollution reduction by the two electricity generation companies operating in Hong Kong. This article analyses the features of this scheme from a legal and regulatory perspective, and advances three claims. First, the regulatory authority plays a significant coordination and oversight role, which may be necessary to steer the market and to ensure the environmental integrity of the scheme. This underscores the need to be cautious of claims of the cost-effectiveness and administrative ease of emissions trading, particularly in the context of trading across jurisdictions which differ in environmental quality, laws and enforcement. Secondly, the environmental effectiveness of the emissions trading scheme is questionable given the size of the market. Finally, this article draws parallels between the Hong Kong scheme and the Kyoto Protocol’s Clean Development Mechanism and argues that an independent regulatory body is essential to guarantee due process and environmental integrity.