Sustainable Living Hong Kong

The Wall Street Journal Asia weekend edition reviewed the Porsche Cayenne S Hybrid, proclaiming “Porsche takes a big step into being green.”  Just how big a step is that?

The Cayenne is a top-of-the line SUV which would normally be called a gas guzzler/emblem of conspicuous consumption. By using hybrid technology in the engine and adding electronic controls to cut fuel drain, the Cayenne hybrid achieves a 25-30% improvement in fuel economy, or around 23/26 MPG city/highway (9-10 litres per 100 km).  Porsche also boasts that the Cayenne hybrid reduces CO2 emissions to “just 193 g/km”.  This is significant, given that any other car with an engine larger than 4 litres will normally emit well over 200 and sometimes 300 g/km CO2.  These figures appear to be significant improvements indeed.

But, before you run out to buy the car in order to brush up your green credentials, do consider several factors which are conveniently disregarded in the WSJ write-up.

First, the environmental impacts of a vehicle include not just the fuel economy and CO2 emissions while operating, but the CO2 emissions and resources consumed in production.  The auto industry largely reports only on the CO2 emissions from their own facilities, but given that most auto parts have been outsourced to third party suppliers, it’s clear that a lot is excluded a priori.  Even under these conditions, the CO2 emitted in the auto brand’s own facilities is estimated to account for 15-20% of the auto’s total CO2 emissions over a life of 15 years.   The Cayenne Hybrid is five tons of steel –even a rough counting of the emissions from components and manufacturing come to much higher than just 20%.

Second, while the hybrid model emissions are an improvement upon the baseline 6-litre model, 193 g/km CO2 is still very high.  The EU is considering legislation which would put a cap on CO2 emissions of just 120 g/km for the majority of passenger vehicles. Non-hybrid sedans emit between 100 and 150 g/km.  Automakers argue that larger vehicles deserve a higher cap, which may be true when applied to buses and vans, but in the consumer segment, there are good reasons why choosing an SUV (over a sedan) is not a necessity, but rather an environmentally poor choice which should bear costs.

The US is the largest SUV market in the world, and it’s no surprise that US autos emit an average of 255 g/km CO2, compared to 130.8 g/km for Japan and 140 g/km for Europe.  Bringing these numbers down significantly requires that people steer clear of environmentally bad choices like SUVs, rather than looking to make marginal improvements on bad choices.  But this would be bad for Porsche, so they just don’t mention it. Indeed, any company that benefits from an economy in which rising consumption is good and in which happiness is defined in terms of possessions, would lose if it told consumers the truth about their choices.

Thus, we are subject to a constant stream of misinformation that peddles a fundamentally unsustainable product as something clean and green.  Don’t buy it.

With all the discussion about property prices and the many problems it spawns – such as the rising gap between the rich and the poor, mental illness and overwork from living in pint-sized apartments and spending hours in a metal tube getting to and from work, disillusionment amongst youth at the prospect of never owning their own home—it is worthwhile to step back and ask:  just how bad is the situation?  Is it all huff and politicking, with various interests using property as a way to advance their own agendas?

It’s always a good idea to start with facts.  The  Economist looks at “fair value” of property in major economies, which is based on comparing current ratio of house prices to rents, with its long-term average.  In other words, this will tell us how much the current situation is out of line with the long term.

The chart shows that prices in Hong Kong have risen the 2nd most globally on a year-on-year basis, exceeded only by Singapore.  But on a fair value basis, Hong Kong’s property is extremely overvalued, again ranking 2nd.  Hong Kong’s fair value reading is 53.6, with 0 being fair value, i.e. Hong Kong property is at 53.6% above its fair value.  And despite the much reported rise in Singapore property prices, prices are just 20.3% above long term trends.

We already know that Hong Kong’s residential property prices are already among the world’s highest—exceeded only by Monaco and London. What the Economist chart tells us is that things are getting worse, and that we are hitting the extremes of our own trends.

But this is not a “political” blog; so does it have anything to do with sustainability?

One of the keys to a sustainable society is that its citizens feel that what they give is justly in line with what they get, or at least that they have the prospect of reaching such a stage; and that the economic and ecological products of this relation can be sustained over time.  So long as high property prices end up disenfranchising more and more people, we should “call a spade” and say that the trend is unsustainable.

Hong Kong’s double whammy is that most of the building are also environmentally unsound in construction and operation, while producing no economic benefit to society at large (though they do produce profit for a small number of operators).  We need both environmental and economic sustainability.  In Hong Kong’s property market, we get neither.

The South China Morning Post recently discovered that the largest developers are getting bigger and cornering the market for new flats (see an extract of the original article here). Although the article is hardly news to the large numbers of Hong Kongers who work hard, pull down a good salary, and still can’t buy a decent-sized flat, it is nice that it is given such prominence – a front-page billing–  since it does stand as stark evidence that the government’s effort “to respond to the aspirations and the needs of our citizens” is yielding limited results and may even be counter-productive.

Today the paper followed up with an editorial in which it analysed the situation correctly, in that our high property prices are due to the government’s land policy but which produces high property prices which then cascade through the rest of the economy and function like an indirect tax on the population.  The editorial also mentions that the government’s land policy also places disproportionate power (and profits) in the hands of the real estate sector.

As a solution, the SCMP proposes that the government increase the supply of land and sell it off in smaller parcels, thereby enabling more developers to bid to create competition in the property market. Here I realised that the SCMP should just stick to news. Does anyone really believe that the smaller property firms are less single-minded than the larger firms?  If anything, the smaller firms would have less “reputation” at stake and would therefore be more likely to cut corners, renege, and generally engage in unsanitary behavior.   That explains why China chooses to close 2000 small mills and steel plants, rather than persuade them to abide by national policy when they lack incentives and resources. Consolidation can actually clean things up.

In essence, property developers operating under a single fixed framework will vary only incrementally in their actions. It’s like arriving at the airport in the US and seeking a rental car.  There are 10 firms, but surprisingly, they all offer more or less the same package because they operate under the same framework and conditions.  Would adding an 11th or expanding counter space change the nature of the game? Buyers probably would not notice the difference.

Without changing the policy framework and rules of the land policy, expanding supply and changing the nature in which it is sold off will have only a marginal impact on the pricing and availability of flats. Solutions to this problem will only come by admitting that the current system does not provide for the “aspirations and needs of our citizens” and then fixing it, both from a supply and demand point of view, while not undercutting those who have already become homeowners.

First up must be to end the high-land price policy — gradually – and for the government to fund itself from sources more common for an advanced industrial society, namely income.  Having to pay more income tax isn’t as bad as it sounds:  if you only had to pay 15% of your income on housing, rather than 35%, wouldn’t you be glad to cough up a few extra dollars for the government?  First, you would end up ahead. Second, the government is actually obliged to do something useful with the money, whereas the property developers just pocket it as profit. So those gains come back to you indirectly.

Second must be to force speculators to pay the social costs of their speculation – in the form of tax on short term flipping (meaning less than 3-5 years) and greater rights for tenants.

Third would be to end the biases in government which have produced policies that further entrench the power of the real estate developers, such as the Urban Renewal Authority partnership programme, the mainland investors scheme , and the like.

It seems that enough people in positions of power know that the current land/property system is failing.  The key is whether they will have the political will to overcome vested interests, and do what is right for the majority of people in Hong Kong.

The Commerce and Economic Development Bureau (CEDB) has just started a public consultation on potential legislation to enhance consumer protection.  To enhance consumer protections, the Department proposes that under new legislation (for consideration in 2010-2011), unfair trade practices such as “bait and switch”, misleading omissions, aggressive sales tactics, and phishing (collecting money with no intention to deliver service) be prohibited and punishable by law.

Great ! you say.  With so much supposed pressure on property developers to be honest, one might be forgiven for thinking that the government is finally backing its rhetoric with the force of regulation.

Wrong again. The mooted legislation has already excluded finance, property development, and professional services – three of the most egregious offenders of the above tactics—from consideration, with the supposed excuse that these sectors are otherwise regulated by statutory bodies.

What justifies an exlusion a priori?   If the above tactics are so bad, shouldn’t they be punishable and forbidden across the board regardless of which department is responsible for enforcement?   And if those statutory bodies are doing their jobs, these unfair practices shouldn’t be allowed at all, and so forbidding them in another legislation would not really make a difference or add to anyone’s workload.

Or is this simply another vehicle that can be used to fry the small trader, while much greater offenses are quietly settled and suppressed after months of “investigation”?

Submit your views to the CEDB by October 31 by post (to Level 29, One Pacific Place, 88 Queensway, Hong Kong), fax (2869 4420), or e-mail (cpr@cedb.gov.hk).

When we pointed out Hong Kong’s lack of an integrated sustainability strategy, we may be accused of speaking loosely.  Technically, Hong Kong does have a “first sustainable development strategy” published in 2004 under the Sustainable Development Unit, under then Chief Secretary Donald Tsang’s office.

The document, put together after input by key government departments and a range of “advisors” defined a broad-based sustainability strategy as comprising just three areas of action:  solid waste management, renewable energy development, and urban living space.  Even within this narrow scope, the strategy failed to define more than a few short-term moving targets.  The SDU was then re-cast as the Council for Sustainable Development, which has, since then, published reports on “progress” on the three areas and conducted numerous public engagement exercises.

For all the good intentions, nearly 7 years on, we’re basically back where we started, although we have many more studies to tell us where that is.

That you may have trouble placing these groups is not surprising.  Indeed public policy that challenges vested interests in Hong Kong is subject to the same marginalisation.  By putting all the sustainability concerns into one committee, the government has effectively gotten them out of the way:  the Council can come up with ideas that can be ignored.

In the same way, mandating that the EPD advocate single-handedly for environmental concerns is also fruitless because it gives other departments the go-ahead to ignore these issues in their work. The EPD operates at the fringes of policy whereas the other bureaus — Transport, Home Affairs, even the URA — have concrete (!) agendas, power and resources.

Those active in business will tell you corporate sustainability will fail unless the concern is embedded across and within a company’s operations – particularly at the level of strategy and design.  If sustainability remains in the “CSR” department, it will languish as a fringe concern.  The government needs the same treatment, and it must be led from the top.

As a side point, we can look at Singapore’s Inter-Ministerial Committee on Sustainable Development (IMCSD), which published Singapore’s sustainable development blueprint in 2009, a substantive, comprehensive document for the short and long term.

The IMCSD is co-chaired by the Minister for National Development and the Minister of Environment and Water, and although it has just three other members, they are all “heavy hitters”:  finance, transport, and trade and industry.  Clearly, Singapore understands that sustainability is about competitiveness and requires policy with teeth and environmental leadership.  Further, the committee’s compact structure mitigates against free-riding and compels each of the members to commitment and action.

Singapore is not perfect, but on sustainability, there’s no contest.  How will this affect our future?

The April 2010 issue of  architecture and design magazine Perspective Monthly contains a transcript of its annual Green Roundtable, which brought together five local professionals to discuss Hong Kong’s progress towards becoming a sustainable city.  There are different views on the roles of the government, the private sector, and consumers in creating the movement towards a sustainable community.  This is surely an important debate, but one that will be in vain unless we can agree on what the goal is.

The roundtable pointed out that one of the glaring absences in Hong Kong is the lack of a master, integrated plan for a sustainable city.  For a city of this size and wealth, Hong Kong’s lack of a strategic vision in sustainability may be exceptional. Not only do we lose the opportunity to openly discuss what we want as a community going forward – thereby clearing space for bureaucrats to create their own visions together with their various friends and interest groups—but we also lose the chance to question whether the current institutions are sufficient to get us there. Singapore, KL, Seoul and most of the major metropolises in China have it — where does that leave Hong Kong?

More about the magazine and a preview of the current issue is available here

I know a middle-aged couple who ran a sports shop in Causeway Bay with the help of an assistant who, but for this job, would probably have to work as a lowly-paid cleaner or security guard.

It was a small shop but the location was good and they made enough to pay their daughter’s school fees. There was nothing glamorous about the assistant’s job but it was more stimulating than a cleaner’s or a caretaker’s: he had the autonomy to offer discounts and enjoyed interacting with customers.

But, like so many small entrepreneurs in Hong Kong, they fell victim to a greedy landlord who hiked their rent so much they couldn’t afford to stay put anymore. Having run the business all their lives and their daughter being still in school, they had no option but to try and set up shop somewhere else. Now they’re continuing the business in an upstairs corner of a bookshop where customer traffic is low. For how long will they survive there? Who knows.

In political circles right now there is so much talk about government support for so-called ’social enterprises’ to help the poor, ’social enterprises’ being defined as those whose primary aim is not the production or sale of goods or services but the provision of employment opportunities for the disadvantaged.

Actually, you know, enterprising Hong Kongers don’t need this kind of help at all. Look at the little shops selling trinkets, desserts, cult fashion and what-nots in side alleys and back streets. Or the computer technician or part-time domestic helper whose services you hear about from a friend or communal notice board. They do just fine, thank you very much, so long as landlords don’t force them to close by hiking their rent and governments don’t tear down their premises in the name of urban renewal – and go on to hand the space to well-off developers and chain stores. Nor do they need employment created for them; they will find their own, so long as the rent is reasonable and they’re allowed, for example, to buy new hawkers’ licences, which the government stopped issuing in the 1980s, in the hope they’ll die out.

Basically, all they need is an environment in which businesses big and small can thrive, rather than one that fosters a widening wealth gap then decides to treat them like people in need of hand-outs.

Incidentally, if you’re in Causeway Bay and would like to support the said middle-aged couple determined to run their own little business, you can find their sports shop/corner on the 2/F of the Xinhua Book City, at the junction of Leighton Road and Morrison Hill Road (next to the Canal Road flyover with the petrol station underneath). They stock big sizes for expats and are happy to entertain a bit of bargaining too.

This is what happens in centres of culture. There is an exhibition. Regardless of the status of the artist or the venue, there’ll be a steady stream of visitors, young and old, rich and not-so-rich, taking a look. Doesn’t matter if they’re Rembrandts; if the works are second-rate, they’ll know. Equally, the artist may have a modest reputation, but if the works are top-notch, they’ll know too. They may not agree with one another, but they’ll enjoy the debate, and they’ll walk off to parks and buildings where sculptures and paintings form the backdrop to play and work. Art is part of life.

This is what happens in Hong Kong. There is an exhibition. Whose? Picasso. Wah….and the schools pack their kids off to stare and sketch. Zhang Daqian. Ah…. and the older moneyed class dutifully troop off – where else? – to the auction. (Nowadays, of course, financial types and China’s nouveau riche troop off to the auction too, to buy the works of some contemporary Chinese artists.)

Irene Chou. Er…. who? She’s a respected if not high-profile artist, now 83, whose works have made it into places like the British Museum, but on the Saturday afternoon I visited the exhibition, the venue was deserted.

Don’t get me wrong: there is an art scene – of sorts – in Hong Kong. Go to the city’s very own SoHo and you’ll see quite a few galleries lining the streets. But by and large they cater to a tiny segment of the population, namely the professional middle class with a taste for art to decorate their spacious living rooms. The middle-class middle-class mum and pop who, along with little Amy and Johnny, live in a typical Hong Kong flat that even Lilliputians may find claustrophic, though, may go right through life without ever encountering something that resembles art. (Although mum and Amy may share a passion for Hello Kitty paraphernalia.)

Valiant are the local artists who do their best to cultivate the scene and inspire each other at venues like Cattle Depot, but without immersion in an artistic environment that offers constant contact with quality work or the feedback of knowledgeable patrons, they exist in a vacuum, their growth stunted. Imagine being an artist in a place where a 18th century painting of Cupid and Psyche, which appeared on the cover of a translated book on classical mythology, was deemed by the censors to be pornographic.

So does the government think the West Kowloon Cultural District is a field of dreams where, if it builds it, the patrons will come? Here’s a request for the authorities’ consideration: set aside just 1% of the HK$19 billion it wants for building the hardware, and invest it in cultivating the software, improving arts education in schools, commissioning public art works from both local and international artists, giving scholarships to local artists to study and work in cultural centres around the world, and organising a professionally curated biennale that involves venues and communities all over town.

Culture doesn’t translate into 40 hectares of land. Yes, it may well be that the cultural district will increase interest in the arts, but isn’t it a big ask? The arts venues can be self-sustaining, without relying on the old cross-subsidy-with-rent model, if funds are invested in cultivating the public’s taste for the arts and giving local artists an opportunity to become world-class.

At a talk I gave on sustainable development recently, a gentleman observed during the Q&A that, to achieve sustainability, he’d like to see energy consultants being available to audit businesses and provide a clear picture of their energy performance.

Actually, although there aren’t many, energy consultants are available to provide just the kind of service this gentleman was looking for. The problem for businesses that really want to be sustainable is not energy or environmental performance (the economic aspect can be trusted to be well taken care of, or they wouldn’t be successful as businesses in the first place), but social impact, which is why CSR, or corporate social responsibility, has become such a buzzword.

Just how problematic the social dimension of sustainability is may be gauged from some of the issues highlighted by CSR Asia on the one hand and the sort of activities carried out by companies touting their CSR credentials on the other. While the former reports child labour and unpaid wages, what the latter do range from encouraging employees to do volunteer work to community programmes that revolve around their products.

Such programmes do often serve a purpose, even though their ultimate function is to heighten brand awareness rather than cater for a community’s most urgent needs. The problem is, it’s easy to choose activities that suit a corporate, rather than social, agenda, because the social dimension is difficult to measure. If an energy audit comes back saying your water consumption is fine but you’re wasting far too much electricity, you can’t then be justified in spending money on water conservation without doing something about your lights and air-conditioning.

With social impact there are no hard figures in watts and tonnes to help with decision-making. Yes, surveys can be carried out, but their efficacy depends on the design of the survey, as well as the subjective opinions of the respondents. As we all know, we can get totally different answers to the same question just because it’s framed differently.

The other challenge is the issue of stakeholders. Businesses on the whole have no problem engaging those within their organisations and others in their supply chain, but the community is a different matter. A business’s social impact is quite obvious in the case of, say, a hydroelectric plant built in the middle of a forest populated by indigenous tribes. It’s less so if we’re talking about a bustling city, where the stakeholders, it may be argued, seem harder to define.

Hence we have this classic from a typical Hong Kong developer whose dense, high-rise residential developments are among those criticised for creating a wall effect that blocks natural air flow in districts. Yet, if you ask them about CSR, they’ll readily tell you that they run a mental health scheme, an elderly fund and scholarships for students. If you live in a mid-rise building next to their development and find yourself breathing foul air and cranking up the air-conditioner to make up for the lack of natural ventilation, would you say the developer has fulfilled their CSR?

It’s a vibrant neighbourhood. The buildings, all four to six storeys high, are neat if a bit old and tired. The flats inside are spacious and airy. Along with the little shops and restaurants on the ground, they form a living, breathing, organic streetscape that no designer can hope to contrive no matter how hard they try.

Alas, the area has been slated for “urban renewal”. You know that all the buildings need are some minor structural repairs and a fresh coat of paint. But no: according to the redevelopment plan, everything within the site, highlighted by a thick line on the impersonal map, is to be demolished, to be replaced by a single, large-scale complex with flats and shops that will be much too expensive to be affordable to the existing residents, some of whom have been there for generations. No monetary compensation will buy back the social network they’ll lose.

You sigh; another neighbourhood is about to succumb to the wrecking ball. Maybe your parents or relatives or friends live there, and soon they’ll be moved to some strange place where they know no one. The buildings in question may not have any historical value per se, but as Hong Kong embraces the concept of “collective memory”, it becomes clear that these structures and these lives are so intertwined that to destroy one is to destroy both, and along with them the soul of a whole community.

Ah, but here comes a call from the client: he’s going to bid for the right to develop this site, and the architect is asked to come up with a design that will fit all the right buzzwords.

If you’re the architect, what would you do? Do you join the residents and fight the quixotic fight? Or do you take up the rotring and start making rough sketches of the fanciful design that will help your client sell his bid?

Unless you’re an academic who can make your opinions known without jeopardising your work, the answer is most likely the latter. More than anything, in Hong Kong, where amalgamated plots are geared towards the resources of the big developing firms, an architect tasked with designing such a project faces a powerful client who can either offer or deny commissions that are big enough in number and size to ensure whole architectural firms either sink or swim.

Is there any way the profession can avoid such a dilemma? Is it enough to trust the academics to speak out while those working in the industry go on designing, sometimes ignorant of the impact of a project, sometimes in opposition to that inner voice that tells them: this isn’t right? Is there anyway to preempt this dilemma?

For those concerned about making a living, revitalising existing buildings may not be as glamorous as creating a new scheme from scratch, but it is challenging work that fits in with the concept of sustainable development. After all, in addition to the destruction of a harmonious neighbourhood, demolition creates a lot of waste.

One designer firm proved its worth when an enlightened developer hired it to redesign a block of serviced apartments – with the provision that, in order to reduce waste, the designer must work with existing fittings and finishes that were still in good condition. It was a tall order, but the firm did it. By changing the light fittings, the interior illumination was dramatically changed so that the same space looked entirely different. And instead of relaying the floor, the worn carpets were simply removed and the timber flooring underneath reconditioned.

The trouble is, it takes an enlightened developer to realise such a project, which is rare indeed. Although sustainable development calls for social factors to be taken into consideration in any scheme, the sad fact in Hong Kong is that the community is routinely ignored. Since mutual engagement is ruled out, protest becomes the only means by which the community can make its feelings known.

Is there a mediating role that architects and other building professionals can fulfil here? Meeting the community’s aspirations doesn’t necessarily mean a loss of business; just a change in business practice. Naturally, everyone’s comfortable with operating the same old way, but times they are a changing, and as the Queen’s Pier protest shows, a new way of doing things is called for if conflict, rather than harmony, is not to become the order of the day.