ENG-2018 — Page 292

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The Environment

surge and heavy rain brought by Mangkhut caused the most serious and extensive damage to Hong Kong in the recent three decades, since Ellen in 1983.

Climate Change

Long-term Decarbonisation Strategy

The Paris Agreement applies to the HKSAR. Pursuant to the agreement, the HKSAR will formulate and communicate by 2020 a long-term decarbonisation strategy up to 2050. In 2018, the government invited the Council for Sustainable Development to conduct a public engagement exercise in 2019 so as to tap and gauge community views on developing the strategy. Hong Kong is also involved actively in international cooperation and exchange on climate action. The city is a member of the C40 Cities Climate Leadership Group, where it also sits on the Steering Committee.

A set of nine carbon audit guidebooks, covering different types of premises, is provided by the EPD to help bureaus, departments and the private sector carry out carbon audits. Bureaus and departments started conducting carbon audits on major government buildings in 2017-18 and will disclose their audit results. For the private sector, the EPD operates a Carbon Footprint Repository to encourage regular carbon auditing. As at December, more than 80 listed companies had shared their carbon management experiences and practices on the repository's website. The government also works with Hong Kong Exchanges and Clearing Limited to promote carbon audits among listed companies.

Energy

Electricity

The Hongkong Electric Company, Limited (HK Electric) supplies electricity to Hong Kong Island and the neighbouring islands of Ap Lei Chau and Lamma. CLP Power Hong Kong Limited (CLP Power) supplies Kowloon and the New Territories, including Lantau and several other outlying islands. The electricity supply to consumers is 50 hertz alternating current, while the voltage is 220 volts single-phase and 380 volts three-phase.

Both power companies are investor-owned. The government monitors them through mutually agreed Scheme of Control Agreements. These require the companies to seek the government's approval for certain aspects of their development plans, including projected basic tariff levels, to ensure the continued supply of reliable, safe and efficient electricity at reasonable prices. The agreements do not give the companies any exclusive rights to supply electricity. They are not franchises, nor do they define a supply area for either company or exclude newcomers to the market. The companies receive a return on their average net fixed assets at the permitted rate of return specified in the agreements.

Post-2018 Scheme of Control Agreements, which the government signed with each power company in 2017, reduce the permitted rate of return from 9.99 per cent to 8 per cent and carry a term of about 15 years, up to 2033. Other key terms of the agreements include introducing mechanisms to encourage the companies to further promote energy efficiency and conservation and renewable energy, improving the charging arrangement for fuel costs, improving incentive and penalty schemes on the companies' operational performance, and

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