Achieving environmental goals in a competitive electricity market?: Post-colonial Hong Kong, public choice and the role of government

Abstract

This paper critically assesses the discourse of electricity market liberalization in Hong Kong, China and makes policy recommendations from an environmental perspective. For both economic and environmental reasons, local advocates urge for an immediate opening of the electricity market currently monopolized by two private companies. Their neglect of the fact that a competitive green power market is a function of adequate public support in the form of market demand may place the environmental agenda at a disadvantage. Given that environmental issues are yet a dominant concern in this growth-oriented economy, a new facilitative role of the government is of particular importance to prevent the market from being dominated by short-term, rational economic behaviours. Mild changes with an emphasis of a transformation in the roles of different players, which the government is hesitant to initiate, are suggested.