HKEJ Column | June 10th, 2010 |

Published in HKEJ ” Professional Eye” on 10th June 2010

Albert LAI
The Professional Commons

Introducing “Green Tax” is a global trend, which is normally based on two basic principles. The first principle is, polluters should be held responsible for any externalities arising from product production process or their consumption pattern; and the second is the money generated from the tax should be reinvested in environmental improvement. The benefit of such a tax is two-fold — using price disincentive to discourage polluting behaviours; and increasing   investment to create a “virtuous circle” in betterment of the environment.

Recently, the Government has launched two public consultations in relation to environmental policy, i.e. “A new Producer Responsibility Scheme for Waste Electrical & Electronic Equipment” and “Air Quality Objectives Review,” in a bid to extract extra contribution from the public. The revenue collected will be used to cover the cost in recycling waste electrical and electronic equipments, as well as in the usage of more eco-friendly energy for power companies and    bus companies. Nevertheless, if we probe underneath these ostentatious policies, we will see that the rationale behind them is not only an abuse of the “polluter-pays” principle, but also a reflection of the knotty problem for the HKSAR Government concerning collusion with the business sector.

Wastes piling-up but to no worries of the businessmen

In the past few years there has been an upsurge of industrial and commercial waste, whereas a gradual decrease was recorded for domestic waste. This vividly manifests that the existing waste reduction strategies targeting at individual consumers are definitely lagging behind the times and out of focus. From 2002 to 08, an increase of 70% was recorded for daily disposal of commercial waste in various landfills, amounting to 2,280 tones. A staggering increase of 90% was also recorded in industrial waste in the corresponding period, amounting to 1,092 tonnes. An overall waste disposal combining both sectors accounted to an absolute increase of 1,469 tonnes per day. This can be attributed to the growing trend of extravagant consumption in these sectors, which ranges from the enormous amount of inches-thick IPO prospectus copies, disposable utensils, cutlery, foam plastic food containers, to excessive packaging. Studies after studies have been conducted in the past years but nothing recommended by these study reports was put into policy actions.

Although daily disposal of domestic waste, at about 65%, still constitutes the main source of municipal solid waste, its total amount has actually dropped by 20% in recent years, from 7,519 tonnes in 2002 to 6,081 tonnes in 2008. Unfortunately, the general public’s collective achievement in waste reduction is totally offset by horrendous increase in the industrial and commercial sectors. Against this background, it is unfair for the proposed environmental levy to be targeted at the general public, while the business sectors are let off the hook.

For instance, only bulky household appliances, computer products and “other household appliances” are included in the proposed regulation. Amongst them, only computer products being used in industrial and commercial sectors will be subjected to the proposed regulatory regime. In fact, office equipments such as photocopier, facsimile machine, paper shredder and hot/cold water dispensers are exempted. The business sector need not be responsible for the recycling of these products.

Levy that defies the principle of justice

Taking things to a larger perspective, it can be seen that the Government has always ignored the impact of manufacturers and service providers on consumer behaviour. It has never targeted waste reduction policies on “upstream links” such as production procedures or material productions; only   imposing new environmental levy at the consumer end. Cronyism is evident in this case.

Even worse, the Government has refused to designate the revenue collected from environmental levies for environmental investment purposes. For instance, the total revenue from plastic bag levy after its first year of operation is expected to reach HK$27 million and be classified as general tax revenue. Ordinary citizens do not have any say on whether any amount would be used for the betterment of the environment.

It is apparent that the proposed levies on waste electrical and electronic equipments, as well as the existing levy on plastic bags, are consumer-targeted and have thus become a kind of de-facto Goods and Services Tax (GST). As such, it is a levy that violates the basic principles of “Green Taxes”.

The imposition of environmental levy should not deviate from the principle of social justice. On the surface of the ‘polluter-pays’ principle, every single citizen, even the under-privileged, is required to pay for his shares of pollution without exemption. The proposed levy is so stringent that there are no remedies at all through social welfare schemes (e.g. “Fruit Money” and CSSA) for the underprivileged. Many countries where GST or other value-added taxes have been imposed, basic commodities and utilities are always granted exemption. The HKSAR Government, however, appears to be moving the opposite way round, insisting that all people, regardless of affordability, are subjected to levy payment on “equal basis”. What will appear as a result of this levy is a de-facto regressive tax that puts an extra burden to the most vulnerable groups of the society.

‘NIMTOO’ – a bureaucrat’s motto that puts people’s health in jeopardy

In the consultation paper on Air Quality Objectives Review, Hong Kong citizens are asked whether they are willing to pay more for their electricity bills and public transport for the sake of improving air quality. Again, the rationale behind is the “user-pays” principle. The Government is conveying a very clear warning message to the people of Hong Kong that “if you don’t pay the extras, you are doomed to suffer chronic diseases like asthma, heart diseases or even pre-mature death. The Government has nothing to do about this.”

This is a logic that defies the basic role of the Government — to safeguard public health, and its fundamental social commitment in public resources relocation. Exorbitant traffic expenses have already posed a heavy burden to those living far away from the city centre. Cross-district traffic subsidy, with its limited coverage, is depriving the working poor living in the distant regions of their right to live a healthy life. The new levy is anticipated to make their situation worse. It is utterly inconceivable why Government attempts to dodge its responsibility from safeguarding public health.

In fact, the Government knows only too well that only one-tenth of the investment being thrown into the Express Rail Link project is more than enough to establish a fund worth HK$6 billion to replace the 2,000 Pre-Euro and Euro I buses still roaming the roads of Hong Kong. By doing so, it is possible to save several hundred lives, as well as several billion dollars in medical cost every year. Instead, Tsang’s administration, with fiscal reserve amounted to thousands of billion of dollars, is only interested in conducting feasibility studies one after another, and launching superficial public engagement exercises willy-nilly. This can only be explained in terms of the administration’s NIMTOO – Not In MY Term of Office – symptom.

These days, the SAR Government governs in the straitjacket of monopoly by the special-privileged. In the light of this, what the Tsang’s administration leaves behind for Hong Kong will be nothing more than a flawed environmental policy that blatantly favors businesses.

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