1

Third Runway Stakeholder Forum Report WWF–Hong Kong

The Third Runway Stakeholder Engagement Forum and Workshops

in response to the Airport Authority Hong Kong’s

Public Consultation

This document provides a rough transcript of the discussions held during the forum and workshops. It is not intended to be exhaustive, but to provide a sufficient level of detail for the insights shared to be captured, and to inform subsequent discussions.

PROGRAM DETAILS Date: 29th August, 2011 (Monday) Time: 9:00 – 17:30 Venue: (A) Morning Session (Seminar & Panel Discussion): Auditorium, 1/F, Duke of Windsor Social Service Building (B) Afternoon Session (4 Workshops & Panel Sharing): Rooms & Auditorium, 1/F, Duke of Windsor Social Service Building Address: Duke of Windsor Social Service Building, No. 15 Hennessy Road, Wanchai, Hong Kong RUNDOWN Topic Time Speaker

Dr. Alan Leung Conservation Manager, WWF-Hong Kong. He introduced the threat maps and analysed concerns on Chinese White Dolphins, fisheries and EIA.

Environmental Research and Sustainable Development for the third Runway

09:40-10:05

Dr. William Yu Head of Climate Programme at WWF-Hong Kong. He explained aviation emissions in detail.

2

Economic and Environmental Plan of the third Runway

10:05-10:30

Representative from AAHK

Non-Environmental aspects of the third runway

10:30-10:55

Dr. Hung Wing Professor at the Department of Civil and Structural Engineering, The Polytechnic University of Hong Kong. He examined the threats and opportunities in terms of transport development strategy and implications of social costs.

Responsible investment (SROI) the UK experience.

10:55-11:25

Mr. David Theiss Economics Researcher at the New Economic Foundation (NEF), UK. He leads NEF’s work on infrastructure and social return on investment. He shared his experience of London’s Heathrow Runway 3 project and the New Analysis Framework for Projects SROI. Also, he evaluated data transparency and how stakeholders can be engaged. His experience is extremely relevant to the current situation at Hong Kong International Airport.

Convergence of Economics and Ecology --- Prosperity with Environmental Care

11:25-12:25

When Economic Development Meets Environmental Impact

Ecological Cost Quantification, CBD, EIA

14:20-14:45

Mr. Mike Kilbum Head of Environmental Strategy, Civic Exchange. He analyses Ecological Cost Quantification, the Convention on Biological Diversity, Environmental Impact Assessment and the way forward.

3

Workshop session: Convergence of Economic and Environmental Concerns

Topic Time Panelists I. Operational Efficiency and Job Employment

Ms. Audrey Eu, Legislator, Civic Party Mr. Stephen Wong, Finance Expert, CAN member Representative from Hong Kong Ideas Centre Representative from AAHK

II. Air Quality and Noise Issues

Ms. Joanne Ooi, CEO, Clean the Air Network (CAN) Mr. So Shiu Shing, District Councilor Mr. Thomas Choi, Senior Environmental Affairs Officer, Friends of the Earth Representative from AAHK

III. Marine Conservation--- Dolphins and Fisheries

Dr. Alan Leung, Conservation Manager, WWF-Hong Kong Dr. Paul Shin, Professor, Environment Science and Management, City University of Hong Kong Mr. Thomas Tue, CEO, Eco Association Representative from AAHK

IV. Aviation Emissions Issues

14:45-15:45

Dr. Alice Chow, Hong Kong Institute of Education Dr. Mark Watson, Head of Environmental Affairs, Cathay Pacific Mr. Prentice Koo, Senior Campaigner, Greenpeace China Representative from AAHK

Panel Sharing 15:55-17:15

Solutions from Each Workshop Sharing with District Councillors Ms. Christine Fong, Sai Kung District Councilor Mr. Paul Zimmerman, Southern District Councilor

4

ORGANIZER WWF-Hong Kong CO-ORGANIZERS Civic Exchange Governance in Asia Research Centre (GARC), City University of Hong Kong SynergyNet SUPPORTING ORGANIZATIONS The Department of Social Sciences, The Hong Kong Institute of Education Designing Hong Kong Energy & Environmental Policy Research Unit, Department of Management Sciences, City University of Hong Kong The APEC Centre, Department of Economics and Finance, City University of Hong Kong The Australian Chamber of Commerce, Hong Kong and Macau The Canadian Chamber of Commerce in Hong Kong The Chartered Institution of Water and Environmental Management Hong Kong (CIWEM HK) The Green Institute BROAD OBJECTIVES OF THE FORUM To increase the public’s awareness of social cost and benefit analyses in the context of the third runway expansion of Hong Kong airport To engage different stakeholders in the investigation of the current expansion proposal from social, economic and environmental aspects To build a platform that facilitates debate and discussion based on scientific research with an aim to facilitating the decision-making process and reaching consensus To enhance a paradigm shift in the concept of development and build an initial sustainable planning framework for large infrastructure projects

5

Forum Opening Remarks Dr William Yu, Head of the Climate Programme at WWF-Hong Kong welcomed the participants, and talked about how there were a broad range of people attending: 8 professors, 8 environmental experts, 4 legislators, 4 industry experts and 260 people in the audience. Disclaimer: The content of this report is a summary written by third-party note-takers on-site. There is a possibility that the note-takers were not able to cover every detail of every discussion that took place in each session, nor able to record the exact expression of the original speakers. Session 1: Responsible Investment for Society - Cost and Benefit Analysis for Infrastructure 9:30-9:40 Welcoming Remarks -Mr. Trevor Yang, Chairman WWF-Hong Kong Mr. Yang began by emphasizing that WWF supports sustainable development; and explained how the Third Runway proposal is an emotive issue that has drawn diverse opinions from different quarters, most of which have been widely reported in the press. These reports have served to heighten the debate, but also to polarize opinions. The full text of his introductory remarks can be found below: Message from the Chairman The Third Runway proposal is an emotive issue that has drawn diverse opinions from different quarters, and they have been widely reported in the press. Whilst these reports have served to heighten the debate, they also polarize attitudes whereas we really need to understand what the implications are in order that the community can come to an educated decision based on objective data. WWF–Hong Kong supports sustainable development. WWF-Hong Kong supports in principle any measure that augments the maintenance and enhancement of Hong Kong’s competitiveness. Since our founding in Hong Kong in 1981, we see it as our role to engage different sectors in the pursuit of environmental conservation solutions amidst an ever-developing metropolis.

6

Fundamentally, WWF–Hong Kong is a science-based organization and therefore proper research is at the core of everything we do. And in the case of a potential Third Runway, we are still lacking pertinent data, without which we are unable to assess the full long-term environmental impact as well as the associated costs. Although the Airport Authority has released eight reports so far, proper analyses as regard carbon emissions and costs are still not available. Now, whereas the Airport Authority has said that unless there is consensus over the development of the Third Runway, to produce full reports on all the relevant areas will be too costly, WWF-Hong Kong believes that like many financial decisions in our own lives it is better to have proper research and forecasts in place before a final conclusion is drawn. Is it not so that we all look at options, financial implications, contingency plans and so on when it comes to dealing with our own money? Should not the same principle apply, therefore, in the case of the public purse? Through this Forum and these Workshops, WWF-Hong Kong wishes to facilitate discussions, which hopefully lead to consensus as to how we move forward. We have invited 43 experts to speak and other stakeholders to attend. Among them is a representative of The New Economic Foundation, a UK economic think tank, to talk about the new concept of Social Return of Investment (or SROI). SROI looks at the true environmental, social and economic costs of a development project, and was applied to the analysis of London Heathrow Runway 3 expansion. In conclusion then, as a world-class city that holds a leading position in the region in not only economic but also social, environmental and cultural development, might it not be time for us to take a fresh approach when assessing major infrastructure projects? Might it not be time for Hong Kong to have a holistic Sustainable Development Policy? I look forward to a balanced evidence-based debate today. Thank you.

7

9:40-10:05 Environmental Research and Sustainable Development for the Third Runway Threat Maps, Chinese White Dolphins and Fisheries and EIA -Dr. Alan Leung, Conservation Manager, WWF-Hong Kong Dr. Leung began by stating that AAHK have provided a great deal of information on the economic benefits of the airport expansion; the direct benefits of employment, the indirect benefits to those who supply goods and services, and the induced benefits of the project to the wider society. Although there may be potential losses associated with these benefits, these were not discussed. The costs presented in AAHK’s reports were solely the construction costs. Environmental issues were presented in the technical reports, but these issues have no costs associated with them, and no monetary figures were given. Nor were carbon emissions or pollution mentioned on the list of issues. AAHK have said they will conduct an Environmental Impact Assessment (EIA), but do EIAs provide estimates of costs? The Hong Kong government rejected the proposed Tonggu Channel Dredging project for Shenzhen Port in 2005 for failing to adequately evaluate the environmental impacts to the Chinese White Dolphin (CWD) – will this happen again? Over the past 20 years, there has been 2,000 hectares of reclamation in CWD habitat, and their numbers and declining significantly. Approximate numbers according to AFCD are between 75-158 individuals. Further proposed works include the Hong Kong-Zhuhai-Macau Bridge (HZMB), the boundary crossing facility associated with the bridge, reclamation works at Tung Chung New Town, and the north Lantau logistics park; many more threats than just the third runway. Dr. Leung presented WWF-Hong Kong’s recently-drawn threat map to illustrate these threats, stating that the cumulative impact of the threats is important to consider. Threat Map http://www.wwf.org.hk/en/news/press_release/2011_press_release.cfm?4801/Multiple-development-works-in-the-western-waters-will-encompass-4000-ha

8

Dr. Leung stated that although the recent trawling ban in Hong Kong waters has been passed, all the reclamation in the CWD habitat will offset the benefits of the ban.

Dr. Leung quoted the British Airports Authority, which was published on their website under the ‘Aviation and Sustainability’ section: “growth should not be met at any cost”. He said that WWF is not against development, but Hong Kong needs sustainable development; development which includes an analysis of the social and environmental costs of a project. He ended by saying that the estimated $HK 136 billion cost of the project is “just the start”. We need to examine more than just the construction costs of the project. Aviation Emissions and Sustainability Issues -Dr. William Yu, Head of the Climate Program, WWF-Hong Kong Dr. Yu began by restating that WWF-Hong Kong supports sustainable development, and also supports maintaining Hong Kong’s competitiveness. He said it was important to engage different sectors. Dr. Yu stated that there were a number of issues with the consultation documents provided by AAHK. There were 8 reports released two months into the consultation process, totaling over 2,000 pages. In the public document there were two sentences devoted to the CWD, stating that the impacts on the dolphins would be ‘manageable’; whereas the consultant’s report took 5 pages to describe the impacts; which was quite a discrepancy. Furthermore, in the public report there were two designs presented, while the consultant’s report presented four designs. Dr. Yu began to ask questions: which of these plans are the public expected to agree with? Will there be further changes to the plans, because all changes have impacts. What facilitates decision making? What does the public want to know? What are the parameters of the project? Dr. Yu said that it was clear that the public does care about being given all the information on this project, and cited WWF-Hong Kong’s signature campaign. Will Hong Kong have to wait until the EIA to know the full story? Emissions-wise, Dr. Yu cited a lack of emissions data provided on flight operations at HKIA; AAHK only provided emissions data from airport operations. No carbon costs were calculated. Once again, the public want to see the total costs.

9

He had a number of questions for AAHK:

1. How: How do we mitigate the total emissions from Hong Kong’s aviation industry?

2. What: What does achieving carbon-neutral growth in 2020 mean for

emission reductions in the years before? Does it mean business as usual?

3. After carbon neutrality, will offsets allow for continued aviation

emissions? Dr. Yu presented some figures, the data for which was sourced from other agencies in the Asia-Pacific Region (APAC), given the lack of data forthcoming from AAHK. The addition of a third runway would increase emissions from the HKIA by 75%. There will be an expected drop in Hong Kong’s Greenhouse Gas (GHG) emissions by 36% by 2030, but the increase in aviation emissions will cut this drop. The net result is that the third runway will add approximately 5 million tonnes of CO2 to Hong Kong’s emissions. Recently, governments around the world have started putting a price on carbon emissions. China has investigated the carbon tax system and explored a carbon tax of 9.5RMB per tonne of carbon emitted. The Australian government has proposed a tax of AUD23 per tonne of CO2. Using a rough calculation, the cost of this increase in carbon would be between 3 billion and 59 billion HKD. Who will pay for this? These additional emissions will offset the energy saving efforts of the public. WWF is asking for more detailed analysis on these impacts, including detailed information on CO2 emissions and more information on the impacts to fisheries. WWF want these numbers quantified and turned into dollar figures. Dr. Yu concluded by stating that this can only be achieved through a transparent and holistic approach, using evidence-based research.

10

10:05-10:30 Economic and Environmental Plan of the Third Runway - Mr. Howard Eng, Executive Director, Airport Operations, AAHK Mr. Eng began by stating that this consultation period was about the Master Plan for the airport. It was not a consultation on the third runway. He said master planning is an important process, which helps planners look at the future of the airport. It is a long process: planners are not looking at something which we need today, but which we will need in 20 years. AAHK have produced two Master Plans already: one for the year 2020, and one for the year 2025. In the 2025 Master Plan, the possible need for a third runway was mentioned. Mr. Eng said that AAHK have talked to various NGOs about becoming sustainable as an airport. Furthermore, AAHK encourage NGOs to ‘talk to us early’; hence his presence at the forum. AAHK want to make it clear that ‘they are listening’; and are willing to listen to the results of this forum and incorporate suggestions. He said that AAHK are looking at two main points. 1. When do we run out of capacity and then what happens? 2. We have found a way to build a third runway, but we are not building it yet. He went on to describe that AAHK’s first priority is safety because “aviation is a 100% industry”. If a passenger was told that the chances of their flight landing safely were 60% or 80%, they would not board the aircraft. The International Civil Aviation Organization (ICAO) is run by the United Nations and strives for consistency around the world. Given that AAHK has found a way to build a third runway, “do we or do we not explore the option of a third runway?”. They have conducted a preliminary environmental assessment. The transport secretary said that this is “the first step in a long journey” and that “development and the environment are not mutually exclusive”. AAHK initially looked at 15 alignment options, which they then grouped into three ‘families’; based on far, medium, and near spacing of the runways: ranging between 2240 metres apart, to 1525 meters apart to 380 meters apart.

11

This led to 18 differentiated layouts, not all of which were explored in detail, which were then narrowed down to four options, divided between development to the west of the existing airport platform, or development to the north. Mr. Eng stated that one cannot simply talk about ‘building a runway’ - the associated taxiways, aprons, passenger concourses etc. must also be built. And these structures must all be efficient, so as to minimize impacts on the ground. Mr. Eng emphasized that AAHK knows that there will be an impact of any expansion, but that they are looking at ways to minimize it; thus, the four options were narrowed down to the one with the least impact. Since then, the plans have been re-evaluated in order to further minimize the impact of reclamation in the best way; the proposed area of reclamation decreased from 880 hectares to 650. The four options were named P1, P2, R1 and R2. R1 was determined to have the lowest weighted impact. Regarding the reclamation process, Mr. Eng said that there will be no piling and no dredging, and that they will use the ‘Deep Cement Mixing’ method (DCM) to minimize impacts. He stressed that nothing has been decided yet, that AAHK are asking “is this the direction we want to go in”. Mr. Eng also stated that AAHK have looked at air quality measurements and preliminary data indicates that air quality levels will be exceeded in various places; but these are all on the runway. AAHK are actively looking at mitigation measures, they want to become one of the greenest airports in the world. Mr. Eng reiterated that this will be a long process. It took three years to produce the Master Plan report. After this, there will be another report produced, which will then go to the AAHK board. All told, if it is approved, it will be 11 years before the third runway is operational. The EIA process will run 9-15 months, during which time they will be constantly refining the plans, constantly trying to address concerns, and constantly trying to mitigate the effects. Mr. Eng concluded by saying that AAHK want to address concerns, AAHK want to mitigate the impacts, and AAHK want to listen.

12

10:30-10:55 Policy Aspects and Competitiveness of the Third Runway -Dr. Hung Wing Tat, Professor, Department of Civil and Structural Engineering, the Polytechnic University of Hong Kong Dr. Hung opened by stating that so far there have been a lot of questions, but not so many answers. Regardless, he wants to look forward rather than argue about what is right and what is wrong. He stated that the HKIA is crucial to Hong Kong, Hong Kong’s development and to Hong Kong’s position in the world. This is an opportunity for us to lead in efficiency and in the planning process. He wondered what the next stage is, stating that a detailed strategy is needed with a mission and vision (which is not simply driven by demand), clear goals and objectives, detailed options and committed, concerted effort. Regarding the vision, Dr. Hung quoted a Japanese proverb, which states “vision without action is a daydream, but action without vision is a nightmare”. He said currently, this process is tending towards ‘action without vision’. He stated that rather than addressing questions that will give us a world-leading international airport, with the best connections, low carbon footprint and user-friendliness; right now, the Master Plan for the airport only addresses the runway capacity issue demand. He said that AAHK’s goals at the moment are not clear. The goals should be to strengthen Hong Kong and the PRD’s transportation system, to improve competitiveness of HKIA so as to maintain the most efficient international airport and to actively pursue energy saving and emission-reducing goals, including the implementation of carbon offsets, and to actively maintain ecologies, including the implementation of ecological, conservation and plantation projects. Dr. Hung continued that the options for the airport have not been properly discussed. He asked: “what’s happening in the Pearl River Delta (PRD) airspace?”. The answer is: it’s congested, air traffic is uncoordinated, and there is a lack of dynamic communication. Cathay Pacific (CX) is unhappy with this situation: one third of the aircraft movements into HKIA are CX aircraft. At the moment, planes must be at 5,000 meters when they cross into Zhuhai airspace. This translates into longer flying times. Dr. Hung said CX has said that having to fly a longer circuit has resulted in 80 thousand tonnes of extra emissions.

13

In 2009, the Civil Aviation Authority (CAA) shortened the flight path in Hong Kong airspace, but the wider problem has existed since 2004, and there are currently no prospects of significant improvement. HKIA needs to increase capacity, and also to lead the world in planning by not “being wishy washy”. Dr. Hung stated that Hong Kong needs to integrate itself with the wider transportation plan for the PRD. He said that High Speed Rail (HSR) is the key to green transportation. China sees the need for travel, but they do not want to have a “flight-centred model” like the U.S. China’s heavy investment in HSR is designed to replace the excessive flights that occur in the U.S. Dr. Hung said that if the third runway is built, it will meet HKIA’s demand by 2030. But what then? Is there a longer term plan? He said we need to integrate better with the HSR plan. Currently the connection from the airport to the HSR link being built in Kowloon is a ‘disaster’. “There is no plan” he said. He went on to say that the government should be facilitating a choice of flights in the PRD cluster; saying that there is no reason to be competing with Shenzhen airport. Dr. Hung concluded this section by saying that while HKIA is an eco-friendly airport, it is by no means a leader. Citing the solar panels at the airport in Barcelona to the Wind Turbines at East Midlands airport in the U.K. He also said that HKIA is not banning loud or dirty aircraft. Finally, Dr. Hung outlined the ‘committed, concerted efforts’ he referred to earlier. He outlined the following suggestions:

• a taskforce should be formed to pursue PRD airport cluster development.

• high emission, high noise aircraft should be banned from HKIA • airlines should pursue new routes • the sustainable development concept needs to be pursued, as right

now the proposal is not balanced - the proposed benefits to the economy are $900 billion HKD, 79,000 jobs will supposedly be created, but the environment has not been considered at all..

• low noise zones need to be imposed • the marine environment needs to be preserve • AAHK needs to guarantee that 70 percent of the project sum will be

guaranteed to local firms

14

Finally, Dr. Hung stated that if Hong Kong is willing to invest $100 billion in the airport expansion; Hong Kong should also be willing to invest another $100 billion in the environment. Dr. William Yu introduced the next speaker by saying that we need a new paradigm shift, and we need to create a new balance between economic, environmental and social considerations. 10:55-11:20 Social Return on Investment (SROI) - The U.K. Experience Mr. David Theiss, Economics Researcher, The New Economic Foundation (NEF), U.K. Mr. Theiss began by saying that he was here to talk about responsible investment and responsible infrastructure development. The NEF is a U.K.-based think-tank challenging mainstream thinking, based on the principle that “real wealth is well-being”. Mr. Theiss stated that he was not here to “take a position” on the need for the third runway. He launched his discussion by stating two facts: 1. The global economy exists in a bounded ecology 2. Governments have spending limits. Thus, decisions must allocate resources wisely; however there are two main problems. The first is measurement: economists can only measure what they can quantify. Measurability equals value. The second problem is one of engagement: often, key stakeholders are excluded from important decisions, while external parties are included. This results in poor resource management, which in turn leads to a “three-way crunch” in terms of finances, the environment and resources. Thus, good decisions on infrastructure projects are key. With the case of Runway 3 at Heathrow Airport, the government put the economy first, and therefore focused on a single stakeholder, i.e. the economy. The Heathrow expansion became a polarized debate, but nobody focused on what the airport expansion would actually cost. Mr. Theiss presented a simple formula for SROI: SROI is equal to the value of benefit divided by investment. He said that SROI is more than just a number, it is both a technique and a set of principles.

15

He presented a simple plan for determining the SROI of an infrastructure project: 1. Establish the scope of the project and identify the stakeholders 2. Map the outcomes 3. Give those outcomes a value 4. Evaluation 5. Calculate the ratio 6. Report and take the value forward Mr. Theiss then presented some figures from the Runway 3 project. He said that the UK Government had determined the expansion of Heathrow would boost the economy by 5.5 billion pounds. However, the NEF’s SROI analysis determined that the economy would LOSE 5 billion pounds. He said that large infrastructure projects can destroy more value than they create. He explained how NEF determined their figure: NEF first re-ran the Department for Transport (DFT)’s model, checking the costs carefully and taking a more cautious view. NEF then modeled estimates of the community impact, and based on the model they came up with a net present value figure for 4 billion pounds. Other calculations were then made, based on the reduced benefits to users, the impact of demand on lower growth, the higher than expected oil prices and the high carbon costs; along with other “costs” including the cost of surface congestion, the cost of noise, the cost of pollution and the cost of community blight. These costs were multiplied by the number of households affected and finally, a central net result of negative 5 billion pounds was arrived at. Mr. Theiss gave an example of how the “cost of noise” was determined: Mr. Theiss said that environmental costs are consistently underestimated in project proposals. Turning to the example of Heathrow’s relevance to Hong Kong, Mr. Theiss stated the following: 1. It is possible that the consultation documents’ core assumptions are optimistic, citing specifically the projections of oil prices and GDP growth. 2. Community impact costs have not been quantified. 3. The data have not been comprehensively collected nor transparently presented. He concluded by saying that often, the supporters of expansion assume that the costs are smaller than the benefits and thus that a project is affordable. He said there needs to be a higher burden of proof placed on these projects before they are approved.

16

11:20-12:20 Panel Discussion (morning session) Dr. William Yu and Professor Martin Painter, Moderators Convergence of Economics and Ecology - Prosperity with Environmental Care -When Economic Development Meets Environmental Impacts Dr. William Yu introduced the panel guests. Mr. Albert Lai - Chairman, The Professional Commons Mr. Lai kicked off the discussion by answering the question “is the EIA process sufficient for such a large-scale project?” Mr. Lai stated that he will answer the question using data from AAHK’s own report; highlighting two pieces of evidence. In terms of the air quality assessment report, one of the key assumptions being made in NOx assessment of this project hinges on the emissions levels in the PRD; and that the emissions will be controlled by 2030, using the PRD 2020 plan. Recently, a report was leaked stating that the level of emissions in the PRD is 5-10% higher than the level announced by the government. This is a worrying trend, as AAHK’s consultation document is based on this official data which says that the emissions levels will improve in the future, but this is a dubious assumption and this is not happening. Mr. Lai’s second point was related to the cumulative impact of Air Quality and of noise. Using AAHK’s consultant’s report, it is clear that in spite of all mitigation measures being taken to meet Air Quality (AQ) Objectives the airport alone will not be able to meet these objectives. In order for HKIA to meet these NOx targets, takeoffs and landings have to be reduced by 59% after the third runway is built. So to meet AQOs in Tung Chung, the airport can only be used at 40% capacity. capacity at the airport must drop. These questions cast doubt on the validity of everything in the Environmental Impact report. If we are not looking at the holistic picture of all the emissions in the area, then there is no hope that AQOs can be met. We are now facing the environmental limits to growth, and unless drastic measures are taken with all the infrastructure development in the entire area, then there is a fairly major problem.

17

Dr. Andy Cornish - Director, Conservation, WWF-Hong Kong The moderator, Professor Martin Painter, asked Dr. Cornish what WWF’s stance on this project was. Dr. Cornish stated that WWF is not against this project, however, he had two concerns. First, with the impacts of the project, and second, with the procedures used to evaluate megaproject like this, specifically with the over-reliance on the EIA ordinance to ‘solve all of our environmental problems’. Dr. Cornish stared that currently, Hong Kong’s advisory committee cannot advise on whether a project is suitable or not; it can only state whether the environmental impacts of a project are acceptable or not. There is an assumption that all environmental impacts can be mitigated, but that is not the case, and with the third runway we don’t know if this is possible, because we don’t have enough details. He also stated that the EIA process is not infallible, and stated the example of the EIA on the Hong Kong-Zhuhai-Macau Bridge project, and how it did not predict a drop in dolphin numbers. Dr. Cornish concluded by saying the EIA process does not look at environmental costs, and for megaprojects like this it’s an important part of the process. We need to know the environmental cost side of the equation, it is a crucial piece of information that will help society know whether a project constitutes sustainable development or not. WWF has no preconceived notions as to whether an SROI study would come out in the red or the black, but they need to have a balanced view. Dr. C.K. Law - Associate Director, Aviation Policy and Research Centre, The Chinese University of Hong Kong Dr. William Yu posed a question to Dr. Law - saying that Dr. Law has raised multiple concerns about the third runway, but in a recent article he still came out in support of it. What is Dr. Law’s reasoning? Dr. Law began by saying that his Centre published a report in 2007 urging the construction of a third runway at HKIA. He said it was both urgent and vital to sustain Hong Kong’s position as an international aviation centre. Dr. Law stated that his figures show that HKIA is directly responsible for 7.5 percent of Hong Kong’s GDP and 7 percent of Hong Kong’s employment.

18

He said that each additional flight into HKIA contributes 400,000HKD to the economy, and thus an increase in capacity to 600,000 flights per year will bring in an extra $80 billion HKD annually. Without this influx of money, Dr. Law said, Hong Kong’s economy would be deprived, both of these earnings and also of new employment. He stated that AAHK have used ‘various assumptions’ to determine that the second runway at HKIA would reach its ultimate capacity by 2017 at the earliest and 2019 at the latest. He called on the government to make an urgent commitment. Other than underlining his strong support for the third runway, he had some major concerns, noting that the consultation process should be conducted by the Hong Kong government, not by AAHK. Firstly, because AAHK have been criticized for having a vested interest in the project, and their integrity has been questioned; and secondly, because this development involves so many different policy issues and AAHK cannot provide enough satisfactory answers, thus the EPD and the Environment Bureau should be involved. Citing the case of Heathrow’s Runway 3 expansion, Dr. Law explained that that consultation process was run by the U.K.’s Department For Transport, likewise for Frankfurt’s airport, while in Hong Kong, the airport was privatized by the government. Dr. Law said that all social costs of any expansion should be quantified before making a final commitment to the project, and any necessary mitigation and compensation measures should be done early and done well. Dr. William Yu added that WWF invited various members of the government to speak at the forum, but their response was that this is still in the initial consultation process. Or perhaps it was not convenient for them to attend. {He said that the government is not involved because they are not required to be - this is still the preliminary consultation process. However - at what stage does the social impact process begin? After the EIA process starts, is it too late?} Mr. David Theiss - Economics Researcher, NEF, U.K. Professor Painter asked Mr. Thiess about the process of economic evaluation: at what stage does the social impact assessment take place, and is it too late to do that once an option has been chosen? Mr. Theiss began by answering the question above, he said the social impact analysis process should begin as soon as possible, and if the costs have not been taken into consideration, then the consultation process should be halted.

19

He cited the example of the U.K. current High Speed Rail 2 (HSR 2) project. He said the government tried to perform a standard cost/benefit analysis, but the NEF urged them to ask “what are the alternatives?” Mr. Theiss said that first, the objectives of a project need to be clearly determined, and then ways to connect these objectives need to be thought about. One possibility that had not been thought about was ‘can we reduce the need to travel?’ He cautioned that SROI is a tool to evaluate a single project, not to help choose between a number of projects. If Hong Kong really wants to balance its economy and its environment, then Hong Kong needs to explore ways of making that happen. Mr. Theiss wondered what came first - the success of HKIA or the success of Hong Kong’s economy, and he wondered how the two are related. He closed by reiterating that evaluating the alternatives to a project was paramount. Ms. Emily Lau - Legislator, Democratic Party Dr. William Yu asked Ms. Lau as a legislator, what can be done at this stage? Ms. Lau said that Hong Kong needs to focus on long term development, and on striking the right balance. Ms. Lau said that AAHK has so far not been forthcoming with information. They only released the consultants’ reports to legislators on August the 8th, and then initially AAHK proposed only putting the reports in the LegCo Library, not releasing them electronically. There was simply no time to adequately digest the 2,000 pages of information. She went on to say that AAHK needs to listen better, to ‘switch into listening mode’ and that this project is too big for AAHK to handle on its own. Ms. Lau’s colleagues sent a letter to AAHK on July 22nd stating a number of questions on reclamation and the environment, but as yet she has not received a response. She said there needs to be another round of consultations on this project, which need to be led by the Hong Kong government this time; as AAHK are not qualified to answer some of these questions.

20

She said she is aware that some people are asking “will Hong Kong lose out if this project does not go ahead?”, but that others are worried about Hong Kong’s environment being damaged - we need to find the right balance. She also spoke of the need to negotiate with the People’s Liberation Army (PLA) about airspace rights, and stated that the Chief Executive has so far not been effective in this regard. Ms. Lau concluded by saying that the second of September cannot be the end of the consultation process, that it was just the end of this ‘very inadequate phase’ and that AAHK should “do it again”. She hopes that all participants will remain fully engaged with the process. Dr. William Yu pointed out that there were a number of LegCo members and District Councillors in the audience. He then said that it was Mr. Eng’s turn to ‘defend, explain or clarify’ AAHK’s position on the difficult questions that have so far been raised. Mr. Howard Eng - Executive Director, Airport Operations, AAHK Mr. Eng stated that AAHK had heard a number of diverse views from the community. He said that this consultation phase would be over on September 2nd, and that if Option Two was decided on, then the real work will begin. There will be a lot more work to be done and studies to perform. A lot more engagement will be done with technical groups, community groups and various stakeholders. Mr. Eng stated that AAHK want to make HKIA one of the greenest airports in the world, and they are engaging with green groups about how to make this happen. He said AAHK don’t talk “about how green we already are”. He cited the example of the Copenhagen airport, which is currently engaged in a drive to encourage 10 or 12 percent of airport users to travel to the airport on public transport. At HKIA, that figure is over 90 percent. In other ways, though, we are behind. However AAHK are committed to finding ways to make HKIA greener. AAHK is using seawater in its air conditioning plants, and are constantly looking for ways to improve their energy efficiency at mid-field. He said that AAHK are not just talking, they are doing. They will hold discussions, take feedback on board and then improve on things in a process of continuous improvement. He said this is not the end of the engagement process, if Option 2 is selected, this is only the start. Ms Lau then opened a lively discussion session by saying that Option 2 should not be selected. There needs to be more engagement and more consultation before any announcements, and if “in October you come out and announce that Option 2 has been selected, there will be a big uproar in the community”.

21

Mr Albert Lai said he had no problem with Mr. Eng advocating the third runway, but the biggest problem as he saw it was AAHK’s conflict of interest. On one hand AAHK are the advocates of a particular option, but on the other they are hosting the public consultation process. This is why many people have said the government needs to do the consultation. He said that AAHK has to do a lot of soul-searching about “data accuracy and intellectual honesty”. He said there are many loopholes in the documents, and many misleading claims. For example, according to AAHK the economic benefits - the Net Present Economic Value is over 900 billion HKD. But standard methodology dictates that social and environmental costs are always deducted from the NPEV figure. This is simple ‘ABC’ economics. But AAHK’s consultants’ document deducts nothing at all, while claiming this enormous economic benefit, which is “the most misleading claim you can ever have”. Mr. Lai brought up another figure ‘hidden’ in one of the consultant’s documents. He said that Option One [the “two runway system”] has an estimated internal rate of return (EIRR) of 623%, which Option Two [the third runway] has an EIRR of 32%. This means that if we adopt the first option, Hong Kong will gain a lot more than having the third runways. He said these important figures have been hidden. Mr. Lai believes that if we put this money ‘to better use’, Hong Kong will gain much more than it would with a third runway; and that people should be aware of these important figures. An audience member Tanya stated that she was both surprised and disappointed by Mr. Eng’s responses earlier. She also expressed that ‘we all want the administration to take the lead in this process’, and said that she was disappointed by the fact that AAHK makes it extremely difficult to ask for extra information: her requests were turned down and she was directed to the technical report. She expressed surprised at the fact that the 4,000 page consultants’ reports were only released two months into the consultation process - with less than a month left. She said told AAHK if they believe this project is important to Hong Kong, then they must prolong the consultation period. She received a reply one week previously, and that AAHK had refused saying that “there was an urgent need to build consensus.” Surely the basis of such consensus to ensure that the right choice has been made. She said that the consultation period should run for three months from August the 8th, that being the date when AAHK first uploaded all the documents. She expressed that AAHK should speak to the Hong Kong government and request them to take the lead on this project, and provide us will all the costs, as the experts here today have requested.

22

12:20-12:45 Questions from the Floor The discussion was then opened up to include the audience members. One gentleman expressed concern about the increased in airborne particulates, in particular small particles of 10 microns or 2.5 microns which stick in the human lung and cannot be expelled. He said that an HKU study conducted between 1996 and 2006 had determined that 1,200 deaths were directly attributable to respirable particulates. He said that this far, EPD has done nothing to improve the situation, because they are using a different standard than the WHO. He wanted to know a) why, when people are dying, is Hong Kong doing nothing about this and b) if AAHK has linked the pollution increase to an increase in mortality rate. The gentleman felt this was an issue that must be addressed, and that the third runway project could not go ahead without it being addressed. District Councillor Zimmerman expressed the view that society these days wants everything “more and better”. He wanted to know two things: a) if the noise pollution from the airport can be better distributed over Hong Kong and b) what are the real costs of the airport project? He wanted to know what the impact on our transportation infrastructure would be - how many new railways will be needed to meet the increase in passengers, and how many lanes highways will have to be expanded by. The airport itself will cost 136 billion HKD, but what about the High Speed Railway that will link to it. What is the real cost? Is it 500 billion, if you include air pollution, fisheries, road and rail costs? AAHK should provide this figure before we go to the EIA process. A gentleman from the audience commented to Mr. Theiss that it was interesting how the NEF study concluded that the Heathrow expansion would result in a ’disbenefit’ of 5 billion pounds. He stated that if the third runway was not built, much as dolphins swim to another part of the sea, air passengers will choose another airport; thus people in other cities will have the disbenefit. He wanted to know if the ‘disbenefit’ to other cities has been included into the SROI? Mr. Theiss implied that the fact that SROI only focuses on one investment at a time is a disadvantage, and that it was a shame that the “disamenity” of other London airports was not considered.

23

He concluded by stating that all London airports are now under a runway expansion moratorium, and that airports are now looking at ways to preserve their status without expansion - they are focusing on ‘solutions for the 21st century’, and that a greater focus on the costs has changed the way people think about aviation expansion. Mr. Lai answered the question about health impacts by saying that currently, the EIA process does not require a health assessment. Based on projections, he said that the third runway at HKIA would affect approximately one million people and could result in an increase of 300 deaths per year. This figure is not in any of the consultants’ documents, nor is it required by the EIA process. Mr. Lai said that AAHK needs “to go beyond” the EIA process. He thinks that the EIA process is inadequate and what is really necessary is a regional strategic EIA that looks at the cumulative impacts of all the infrastructure projects, the bridge and the incinerator - EIAs for both projects specifically state that they do not include impacts from any other concurrent projects. As such, the public will never have a full picture of our environmental costs if we allow the system to go on ‘business as usual’. William Yu invited Lee Wah-Ming to share his thoughts. Mr. Lee stated that legislators need to listen, rather than make long speeches. He feels the administration needs to be pushed to conduct another consultation. He said LegCo only had heard from a ‘business panel’, comprised of travel-related businesses, who all ‘put their hands up’ for the third runway. He said green groups were a minority voice. He said there needs to be another panel where other groups present their views. He said that so far the feedback has been very one sided, with 70-75 percent in favour of the third runway. He thinks the government should launch a second phase and he reiterated that September 2nd should not be the decision date. He said that with this consultation, “AAHK can just count the numbers and have a simple, simple outcome and just say ‘okay go ahead with the third runway and then we’ll do the EIA, but no matter what the outcome of the EIA we’ll still go for a third runway’ and that’s the scary part of this consultation.” Ms. Audrey Eu, Legislator for the Civic Party then took the floor. She asked how the forum got its title? She wondered if we had all fallen into the ‘trap’ of seeing the third runway as a foregone conclusion. She said it seemed to her that Option One was discarded before the consultation process even began, and now everybody is ‘talking about a third runway’. She said extending the consultation period was not enough, because nobody is sure what question is being asked. The question being asked needs to be open-ended question - ‘what are the advantages and disadvantages’ - and an open-ended consultation.

24

Ms. Eu said that consultations in Hong Kong ‘only talk about the dollar sign’ and then after the decision has been made, then all the green groups can come out and oppose the decision. She said that green groups are ‘always painted into the corner as the opposition’, when in fact these questions should have been dealt with during the consultation process. Thus, she felt the forum should be retitled. She felt strongly that AAHK should open talks with the Hong Kong government and hold another consultation, one that is open-ended and that does not have a foregone conclusion. Dr. Law said that in 2007, a Chinese University study estimating carbon dioxide and nitrous oxide emissions from the airport was made. However, the study received no support from AAHK and the major airlines, and so the results were not reasonable. He said that he wanted support to perform a better study. He said to Mr. Theiss that in the NEF report on Heathrow’s Runway 3, the DFT did estimate the social costs of the project. The sole reason NEF’s results were different from DFT’s was because NEF’s economic forecast was more pessimistic. Mr. Theiss replied that the NEF figure was less because they asked “what if the economy doesn’t perform as well as the DFT estimated” [or indeed hoped.] He cited the over-optimistic oil price used in the study as an example. He said that the DFT oil price used was 53.50 USD per barrel. The NEF used a higher price, which is still lower than it is now. Mr. Theiss said that to generalize, “when prices increase, you buy less”. He said that for a wealthy person, the flight is often only 1 percent of their travel budget; whereas for a middle class person, the flight will be 25 percent of the budget. When prices increase, many lower-income people will fly less. He stated the need to “future proof” infrastructure projects, saying that when oil prices increase, travel will decrease. Mr. Lai wanted to know about transfer passengers at HKIA. He stated that 30 percent of current traffic at the airport is transfer passengers. He asked “is this good for Hong Kong? How does Hong Kong benefit?”. He asked “are there any benefits to the local economy? Or do the benefits go to external parties?”. He said that passenger flow figures need to be investigated, and the level of detail of the reports increased.

25

Ms. Lau stated that Hong Kong is an international city and an aviation hub. She talked about the PRD, stating that Guangzhou airport is planning for a 5th runway, while Shenzhen airport is planning for a third. She wanted to know if Hong Kong is an equal partner in this relationship - “do we have the leverage to compete? Will we be marginalized?”. She pointed out that Hong Kong’s competitors are ruthless. The moderator, Mr. Painter, said that it seemed that the consensus was that the consultation process has been flawed from the outset and that things “seemed to be moving in one direction”. He wanted to know how we can reform the whole infrastructure process. A young gentleman from the audience stated that the third runway has a lot of support, but also generated a lot of questions. He wondered “at what point do the costs overwhelm the need for a third runway?” Dr. Law responded that first, we need to run a cost/benefit analysis, and second, that these costs need to be estimated in a highly scientific way. He stated that the NEF’s calculations in the Heathrow report estimated carbon costs to be 70 percent of the construction costs of the project. Dr. Hung Wing Tat then raised two points. First, he said the “noise question” needed to be addressed. He said that, in cases of noise pollution, either the aircraft or the flight path had to be banned. He pointed out that there is currently only one flight path ban in Hong Kong, and that is over Disneyland. Second, Dr. Hung had a question about balance. He asked “how much is a life worth?” He said all numbers are debatable; but whatever the costs, they need to be offset equally. He said the airport project costs should be doubled, and with that money he could “create a paradise for the dolphins”. Dr. Cornish asked what AAHK needs to do next. He said it was nice that they had conducted this public consultation, and pointed out that it was non-statutory. He pointed out that no carbon costs were made available and that the public wanted to know more. He cited a WWF-Hong Kong petition calling for more information that at the time had over 5,500 signatures. Mr. Cornish said that these analyses must be made available before the public can make a decision. Dr. Yu asked Mr. Eng if AAHK would be willing to conduct a SROI analysis. Mr. Eng replied that at the moment, AAHK were solely conducting a consultation on the airport Master Plan. He was unsure about the extent of any ‘social study’. He said this was new ground and did not know whether a study of this type should be included or excluded. He reiterated that at the moment, “there is no project on the table”.

26

================ Afternoon Session Ecological Cost Quantification, Convention on Biodiversity, Environmental Impact Assessment and the Way Forward -Mr. Mike Kilburn, Head of Environmental Strategy, Civic Exchange Hong Kong is a Convention on Biodiversity signatory, but what role does the Hong Kong government play? Mr. Kilburn began by stating his pleasure at the diversity of attendees at the forum, and saying it was clear that there was broad community interest in this issue. He said that Hong Kong is a signatory to the Convention on Biodiversity, but found it interesting that the Hong Kong government only announced this fact to green groups, and not to the general public. He said that under the convention, Hong Kong has clear responsibilities. Target 14 of the convention states that “ecosystems will provide essential services”. Mr. Kilburn asked “is clean air an essential service?” He answered the question with an unequivocal “yes”. He reiterated a question from the Forum’s morning session: “is the third runway a foregone conclusion? No, it is not.” Mr. Kilburn said that the consultants’ report made a number of assumptions about Air Quality (AQ), assumptions which were wrong. He said thus far that measures the Hong Kong government has taken to improve air quality have not necessarily worked. An EIA conducted by AAHK shows that AQO at the airport does not meet the current AQO target. The government is now proposing new AQO measures, and the current AQO at the airport will not meet these - extremely low - standards. The Hong Kong government estimates that 15 percent of our air pollution comes from Hong Kong and the other 85 percent comes from the PRD. Mr. Kilburn asked “what protects public health?” He answered his own question by stating it is the World Health Organization (WHO)’s Air Quality Guidelines. He stated categorically that with a third runway, emissions will go up, and despite the government saying that we must ‘strike a balance’, this balance results in the environment being badly screwed.

27

He went on to describe the current Air Pollution Control Ordinance as a ‘toothless dinosaur’. The regulations were originally imported from the U.K. and were designed to control smoke. However, Air Quality Objectives (AQOs) are a statutory limit, and any project that will exceed these limits cannot be approved; even if the government wants the project to be approved. The current AQOs do not protect the public’s health, and HKU has data to prove this. The Chief Executive has promised to set new AQOs, with a NOx limit of 40 micrograms per cubic metre. This is a very difficult target to reach. Mr. Kilburn reminded the audience that right now, Hong Kong’s bad air is threatening the HZMB project and the third runway, meaning that businesses have a very real impetus and a vested interest in cleaning up the air. He then proposed a number of solutions: 1. A multi-sector taskforce for action needs to be set up immediately, including AAHK, the Transport Bureau, the Chief Secretary and other high level government members, and polluters. This taskforce is essential if AQ is to meet AQOs and therefore, it is essential to the approval of the third runway. 2. The Marine Sector are asking to be regulated, and are taking the lead. The government needs to respond to this. 3. A low-emission zone needs to be set up at the airport and north Lantau, requiring all vehicles to use Euro IV fuel. 4. All old vehicles should immediately be retired. 5. Inspection and maintenance of vehicles needs to be tightened. Mr. Kilburn said that one dirty vehicle emits as much pollution as 20 clean vehicles. 6. Major sources of NOx emissions need to be reviewed. 7. The replacement of franchised buses needs to be accelerated. During the audience question time a question was raised about the ‘deal with the devil’ - that Mr. Kilburn said that currently he is in favour of the third runway because it can lead to an improvement in AQ. He said he is ‘looking for the drivers of change’, and that Civic Exchange is currently neutral on the third runway, but that they are not neutral on pollution. Seven million doctor visits a year in Hong Kong are caused by pollution; and there needs to be change.

28

A member of the audience, Mr David Newbury from the Hong Kong Airline Pilots Association spoke up at this point, saying that HKIA is now approaching its operational capacity. This is leading to inefficiency and thus creating waste. He said the third runway would actually make things more efficient and reduce fuel burn. He described the ideal situation, where a plane pushes back from the stand, taxis, takes off, climbs and flies to its destination in the shortest time possible. This leads to minimum fuel burn. At the moment, a more common situation is that his aircraft pushes back and is eighth in line for takeoff, and ends up waiting in line for 20 minutes burning 4 tonnes of CO2 per hour before taking off. He said he had flown in from Rome that morning, and had had to fly an extra 100 miles on approach to Hong Kong, not because of bad weather, but because there were 8 aircraft waiting to land in front of him. Mr. Newbury said that an efficient airport will lead to less CO2 and less noxious chemicals emitted on the ground at the airport. If there was a third runway right now, there would be a huge decrease in emissions. Mr. Kilburn replied by saying ‘building a third runway was not a way to address pollution problems’, as one issue he is particularly concerned with is the number of vehicles serving the airport, and with a third runway that figure will only go up. Another audience member pointed out that not having a third runway would simply shift the burden of air traffic and thus pollution to other cities. From a holistic view, the third runway is ‘neither here nor there’ in terms of air pollution. Mr Kilburn replied that every city has the option to impose its own air pollution standards and Hong Kong is now actively cooperating with other regional governments on air pollution. He said ‘we cannot not take action because the polluters will go somewhere else, it’s not a viable or responsible attitude for our own population.’ The audience member pointed out that surely it was better for Hong Kong to collaborate rather than compete with other airports in the PRD region, and Mr. Kilburn agreed.

29

14:45-15:45 Breakout into Group Discussions Session II: Convergence of Economic and Environmental Concerns The speakers and the audience went their separate ways for the next hour and divided into four workshops, each discussing one specific topic of the third runway proposal. Workshop I: Economic Prospects and Financial Feasibility Presentation Mr. David Theiss (introduced earlier) was the first to speak, giving a brief presentation entitled “Evaluating economic, environmental and social concerns in infrastructure: Implications for Hong Kong’s third runway”. structured as follows: 1. Four keys to analyzing the feasibility of a project, 2. The challenges to getting value for money, 3. The implications for Hong Kong’s third runway and 4. Conclusions. Mr. Theiss listed the four keys to analyzing the prospects and feasibility of building the third runway. They are the evaluation of alternatives, stakeholder engagement, assumptions of economic impact and value of environmental harm. In terms of the evaluation of alternatives, he equated this with going back to ‘first principles’, in this case, looking at the national transportation objectives. This has not happened in Hong Kong’s case, and thus the only considerations being addressed are those related to aviation. This is analogous to the situation in the U.K. with the HSR analysis, where the government only looked at rail-associated concerns. Mr. Theiss said that good cost/benefit analyses look at alternatives. More robust analyses consider alternative investment plans and look at ‘what might happen next’. This reduces uncertainty, adds more value and raises benefits. Mr. Theiss’ presentation pointed out that alternatives to the infrastructure investment should be considered to elevate debate. The usual practice is a cursory evaluation of improvements to the existing type of infrastructure. In order to have a more robust analysis, alternative investment plans should be

30

considered to increase economic competitiveness and people should work toward establishing a dynamic multi-modal transport plan. By doing so, uncertainty surrounding the need of primary option will be reduced and the Net Present Value (NPV) of social benefit in absolute terms can be increased. The allocation of benefits will also be broadened. He then went on to discuss stakeholder engagement, asking “whose benefits and costs ‘matter?’” He said that there is often only top-down consultation, and a public comment process that asks a small number of leading questions and several un-published appraisal sessions. A better analysis should instead consist of the following: conducting a discussion-based set of consultations, democratizing the process, identifying and involving a wide-array of stakeholders, and publishing the results. These measures should elevate stakeholder engagement, since they establish standing, allow constructive interaction between groups, create buy-in, reduce NIMBY (Not in My Backyard) fallout and produce value sets that matter to the wider public. As for assumptions of economic impact, Mr. Theiss said that essentially “different costs matter differently to different people”. He cited the ‘person on the street’ example, saying that they are likely to “[not] care about the speed of transport, but care more about seeing their friends more, or getting to work on time”. A more robust analysis would incorporate distributional measures into cost-benefit analysis (CBA), account for the marginal elasticity of income and benefits to different groups of people, and input economic losses in other sectors due to agglomeration into the value function. A robust analysis should challenge economic impact assumptions as aviation is not a public good and GDP is not an effective indicator of social well-being. Finally, in terms of environmental harm, the common practice is that CBA simply does not include the costs of environmental damage and assumes complete substitutability between man-made and natural capital. He said that “as long as the man-made capital has value, natural capital doesn’t matter”. To improve the analysis, we should use stakeholder engagement process to conduct non-market valuation exercises, rely on cautious assumptions, and incorporate price for environmental harm into the costs section of CBA. Quantifying environmental harm can enhances the debate as it gives a working proxy value for arguments concerning the intrinsic value of nature. Essentially, Mr. Theiss said that we need to “invest in the present without harming the future.” Skipping section two owing to time constraints, Mr. Theiss moved directly on to the implications for Hong Kong’s third runway discussion. Saying that “we can never know the outcome, but we want the best possible information”, he

31

pointed out two implications for HKIA. The first is that AAHK’s economic assumptions may be optimistic, given that their figures are over-optimistic. Passenger figure assumptions can be very uncertain but the AAHK has assumed optimistic volumes. Mr. Theiss calculated that the economic benefits will drop by 42% if passenger flows in 2030 are 15% less than AAHK anticipated. The second implication was that AAHK’s data were not comprehensively collected or transparently presented. At the community level, stakeholder consultation should be robust enough to incorporate community values. At the scientific level, input from an EIA should be a concurrent part of the process to evaluate the positive and negative impacts. In addition, the costs and benefits of the third runway expansion should be clearly and transparently communicated to the public. Mr. Theiss was then out of time, and the conclusion section was also skipped. Panel Discussion Ms. Audrey Eu Ms. Eu began by saying that she often wants to support the government, simply because it takes a lot of energy and pressure to say ‘no’. She restated that it seems that the third runway is already a foregone conclusion. She said that the government is more often wrong than right. She cited the example of the Central Airport Express Station. Based on faulty figures, the station was built too large, and 50 percent of the station’s capacity remains unused. She stated that these numbers are always wrong. In terms of HKIA, there is now less number of flights than originally planned for. She also mentioned the benefit and the cost of building the third runway. Looking at the benefit side, she questions the assertion that each flight brings in $400 thousand HKD. She said that currently there seem to be no downsides to the project and that the projections are “too rosy”. Cost-wise, Ms. Eu stated that in addition to the cost of building, there is also the social/ecological cost and the extra health issues people suffer. She has no fixed conclusion as to whether the third runway should be built. Mr. Sam Kung Mr. Sam Kung, President of the Management Sciences Alumni Association of City University of Hong Kong, talked specifically about HSBC’s preliminary financial analysis of the third runways Net Present Value and Internal Rate of Return. He concluded that given the capital required for the projects, both

32

options (the two-runway and three-runway system) are simply not commercially viable on a purely financial basis. Mr. Stephen Wong Mr. Stephen Wong, former UBS Executive Director and Adjunct Lecturer at the Chinese University of Hong Kong, said that any projections are just an estimate and are inherently uncertain. Mr. Wong was surprised at AAHK’s cost-benefit projections. He said the estimated cost of building the third runway is HK$100 billion while the benefit is anticipated to be HK$900 billion. Mr. Wong questioned the possibility of having benefits 9 times of the cost. He also pointed out that the GDP of Hong Kong is HK$1.7 trillion. Thus, the estimated benefit of the third runway is equivalent to half of Hong Kong’s GDP. He said that this figure was ludicrous and that a reality check was needed. In order to achieve a benefit that size, the project would have to directly grow Hong Kong’s economy by two or three percent per year. Mr. Wong questioned the wisdom of using GDP as a benchmark, he said “why not use a happiness index, or a new index?” He said if the new runway could sustain a growth rate of point five to one percent of GDP growth then the project would make sense. Mr. Wong concluded by stating that no investment is certain and there are no risk-free investments. He warned that airport investment will always have a risk component. Floor Discussion The discussion was then opened to the floor. One question came from a staff member of Friends of the Earth Hong Kong. She stated the sense of helplessness felt by the NGO sector regarding this project. She wondered if the SROI model has government backing, and what it would take to bring this to Hong Kong. Mr. Theiss responded to her, saying that SROI is grounded in proven economic techniques. He said the tool itself is not valuable, but what the tool is assessing. He said that the Heathrow case is very much applicable to the current scenario at HKIA, and estimated that it would cost between 500 and 700 thousand pounds to perform an SROI analysis on the third runway. Another gentleman stated that he was concerned that AAHK was going to “make this project happen regardless”. He wanted to know how much Hong Kong’s GDP increased after the new HKIA was opened in 1998. He wanted to know how much the second or the third runway might contribute to the GDP.

33

Mr. Wong responded that the benefit would be dependent on China. If China’s economy goes into a hard landing, all the investment will be gone. It was added that even if China’s economy continues to grow, risks still exist. The flight arrangement to Taiwan was given as an example: the more Taiwan is connected with China, the less HKIA will be used. Mr. Theiss continued the discussion by saying that AAHK’s figures sound impressive, but they need to be put into context for the ‘person on the street’. He said AAHK’s figures are too rigid, and assumes a steady 3.2% GDP growth rate across the board, with passenger growth tied to that figure. This is fundamentally flawed. He said a scenario-based approach was needed, with a large number of different scenarios explored. Another member of the audience raised a question about the price tag we put on endangered species like the dolphins. He wanted to know what price would affect decision-making. Ms. Eu replied that, like freedom of expression, the price tag is ‘priceless’; while Mr. Theiss replied that the risk of not attaching a price on something like the dolphins is that they then get excluded from the debate. Workshop II: Air Quality & Noise Issues Presentation Dr. Alexis Lau, Division of Environment, Hong Kong University of Science & Technology Dr. Lau ‘s presentation was mainly concerned with the air quality (AQ) impact of the Hong Kong International Airport (HKIA) based on a study performed by himself and his colleagues. His presentation was divided into three parts: results of the analysis of AQ impacts from HKIA between 2006 and 2009; a projection of these AQ impacts beyond 2010; and suggestions for HKIA and the government for improvement. The objective of Dr. Lau’s study was to quantify the relative importance of HKIA-generated air emissions and regional air emissions on North Lantau by using new data from Air Quality Monitoring Stations around the airport and other available and relevant information obtained between March, 2006 and February, 2010. In 2004, the AAHK set up two AQ monitoring stations (AQMS). An off-airport AQMS was setup on Lung Kwu Chau (LKC) in March, 2006. LKC is located to the northwest of the airport and is not connected to major urban areas, thus Dr. Lau believed that the background pollution concentration could be effectively captured.

34

The results of the analysis of the AQ impact indicated that all four stations had similar emission figures. The Tung Chung station recorded a lower SO2 concentration than that of the Lung Kwu Chau station, which indicated that the source of SO2 lay much further beyond the airport. The study also concluded that the largest contribution was associated with nitrogen oxides (NO, NO2, NOx); that the contribution to pollution at Tung Chung by the airport is estimated to be approximately 7 percent for NO2 and around 20 percent for NO. For CO, the airport was found to be having a small but observable impact of between 3 and 5 percent. For SO2, O3 and Respirable Suspended Particulates (RSPs), the airport was found to have negligible impact. Dr. Lau also performed an attribution study to clarify the source type and source location of the pollutants detected around the airport. The results indicated that around 17 percent of the NO2 emissions were from the local area. A larger percentage of NO2 emission originated from other parts of Hong Kong excluding Tung Chung. These sources included marine sources, point sources and other motor vehicles, all of which contributed to the increase in NO2 in the Tung Chung area. Regarding the projection of the AQ impacts beyond 2010, Dr. Lau attempted to predict the percentage change of the contribution of NOx in Tung Chung by using only a change in aircraft movements but assuming no change in any other sources. However, he believed that a more holistic study was needed, taking into consideration the increase in air traffic and associated activities (traffic and construction) during construction and for actual operations, and also incorporating realistic changes in emissions from other sources around the airport in Hong Kong and the PRD. To conclude, Dr. Lau suggested that AAHK needs to be open and transparent in sharing its air quality monitoring data, as this allows the public to assess the overall impact of the airport on AQ. He also encouraged AAHK to consider adopting additional emission reduction measures, described by the industry in a forum held in early August. Dr. Lau advised the government to push harder for the adoption of control measures (particularly traffic demand management measures and other NOx control measures) identified in the AQO review in 2009, as these measures could substantially reduce the overall NOx emissions throughout Hong Kong. Panel Discussion Ms Joanne Ooi, CEO, Clean the Air Network (CAN) Ms Ooi congratulated the AAHK for being open in consulting early and widely. However, she thought the all the analyses conducted needed to be vigorously tested with many counter-examples, especially those including public health experts, academic and medical professionals. She strongly encouraged

35

AAHK to initiate an analysis of the corresponding, incremental health impacts resulting from the third runway in a transparent, auditable, fact-finding and research process. Ms. Ooi mentioned that the airport defended itself against allegations of the high level of recurring exceedences at various air sensitive receiver locations by claiming that the commercial buildings in those areas were enclosed by air filtration equipment which could minimize the high increases in additional pollution. However, Ms. Ooi doubted AAHK’s claim, since no public health experts have ever demonstrated that breathing clean, safe air indoors during working hours is sufficient to lessen the health impact of breathing polluted air outside. Finally, Ms. Ooi argued that the assumptions made on the 2030 pollution levels were not realistic, as they were based exclusively on ZHMB EIA and did not take into account of the overall increase in traffic. She concluded by saying that this methodology might be understating the amount of NO2 produced. Ms. Lee, District Councilor of Tuen Mun Ms. Lee had doubts about the consultants’ reports, specifically relating to the increase in mortality rate. She said AAHK claimed that after the third runway is built, the mortality rate will increase by one percent. However, the U.K.’s NEF suggested that the mortality rate might increase by as much as 30 percent, after the increase in power stations and industrial zones in Hong Kong is taken into consideration. She had various questions about the impact of CO2, who will protect our health, and concerns for the issues of noise pollution. Mr. Sam Tsoi, Director, Consulting, Arup (AAHK’s consultant) Mr. Tsoi gave the audience more information about the air quality assessment that was conducted by Arup. He made clear that what the audience had heard so far was only a preliminary assessment. This was not a complete EIA, but AAHK has promised to carry out a complete EIA when the time comes. Mr. Tsoi stated that based on the preliminary scenario, the level of emission of NO2 and RSPs would meet the current AQOs. However, he admitted that they might not be able to meet the proposed new AQOs in a few locations. He explained the preliminary EIA assessment of the overall AQ projection in detail. AQ is comprised of 3 components: the ambient contribution (emissions far away from the airport); the airport (done by scaling up the activity of the airport on the existing 2 runways layout to estimate the potential impact); and proximity infrastructure (including only traffic projections based on the master plan 2030 activity).

36

Floor Discussion

Dr. Alexis Lau Dr. Lau echoed Ms. Ooi’s suggestion that medical professionals and health experts should be involved in the process of analysis, as this could give people a better understanding of the health impacts of the third runway expansion and would also be beneficial to studies on Hong Kong’s future environment. He also brought up the misconception that an increase in activity will lead to an increase in concentration. He used an example from California to explain this: There are more cars now than there were in California in the 1970s, but the air pollution was much worse then. The degree of pollution depended highly on the emissions of an individual car instead of the number of cars. Dr. Lau thus concluded it was possible to have increased activity at the airport while emitting less air pollution. He said this would require AAHK and the government to agree on a series of mitigation measures at the airport and around Hong Kong. He saw the expansion as a good tool to work with the government to achieve reduction in emissions as well as to achieve sustainable development. A member of the audience suggested that the discussion should focus on conservation rather that mitigation measures. Another audience member from the Hong Kong Airline Pilot Association stated that he believed that aviation is not the biggest contributor to emissions in Hong Kong and people should first target the main contributors. He also brought out that aircraft were cleaner than cars in terms of emission. Justin Chang from Ma Wan thought that there had not been much discussion on aircraft noise. He said most data of the aircraft noise reports were provided by AAHK. He found this problematic. For instance, in one report, it was assumed that all aircraft were Boeing 777s, the quietest aircraft in the world, but in fact only a small percentage of aircraft in Hong Kong airspace are 777s. He felt that the report was unfair and thus found it hard to believe. Mr. Chang also criticized AAHK for not keeping its commitment to perform a noise analysis once a year. Ms Ooi responded that the government had to tighten the AQO now, as it is the best weapon to fight pollution with. It is therefore important for the public to look at all the potential mitigation measures now. Another audience member raised questions about the exceedence of the AQOs. Mrs. Tsoi replied by stressing that their preliminary air quality assessment showed that emissions complied with the current AQO except for an area within the airport platform. They have also performed a preliminary

37

comparison between the new proposed AQOs and identified potential exceedence areas. Ms. Lee responded to the question raised by the resident of Man Wan by criticizing the Airport Authority for falsely stating that Ma Wan was outside the NEF 25 area, which was suitable for living. She was therefore skeptical about the HKIA report. She also raised concerns for coming infrastructure projects in Hong Kong such the building of new incinerators. Workshop III - Marine Conservation – Dolphins & Fisheries Presentation Dr. Samuel Hung, Chairman, Hong Kong Dolphin Conservation Society Dr Samuel Hung said the issue related to the third runway is the saturated capacity on the existing runways, however few concerned that the environment has also been fed up. We are the one to make a decision that makes a better future. The building of the Chek Lap Kok Airport has already destroyed a lot of dolphins, forcing the dolphins to leave their original habitats. The construction of Chek Lap Kok Airport sparked the first discussion about dolphins, it was regarded as the first wave of development, and the reclamation has done a lot of damages to the dolphins’ habitat. The threats faced by Chinese White Dolphins (CWD) include 1) coastal development. It will destroy their habitats; 2) water pollution. The contaminants disposed will go into dolphins’ bodies; 3) underwater noise. Dolphins rely heavily on sounds to communicate, and their behavior has already been changed due to the noise created during dolphins watching activities. Data shows that the number of dolphins has been declining, from around 160 in 2003 to less than 80 in 2010. The third runway construction will be the biggest reclamation project since Environmental Impact Assessment Ordinance (EIAO) was implemented. The Hong Kong government only mentioned some part of the facts about the third runway project, and they promised to work with green groups. However, the AAHK has downplayed the impacts of the third runway to the environment. They changed the categories of DPSE values from low dolphin density to no dolphin density, in an attempt to minimize the habitat loss. Besides, the location of the proposed third runway is only 0.75km away from the Lung Kwu Chau Marine Park, and the government did not acknowledge the public about this fact. On the other hand, the social structure of dolphins can be divided into western and northern cluster, and they formed a traveling corridor in-between the two cluster. The new runway is located at the centre of the dolphins’ traveling

38

corridor, and the reclaimed land overlaps with the northern cluster’s habitat. In addition, other proposed activities around Lautau, like the Lautau Logistic Park, will also draw cumulative impacts to the dolphins there. About the ways forward, Dr Samuel Hung questioned whether AAHK is able to come up with a solution without government’s involvement. He emphasized the importance to reveal the cost of the runway, and he urged the public not to wait for the AAHK or the government to tell us about the impacts of a new runway. Dr. Alan Leung, Conservation Manager, WWF-Hong Kong Dr Alan Leung said we should protect the biodiversity in Hong Kong. The Hong Kong government should take some role here, a more proactive role, not only in the case of the third runway but for any future development plan. For example, as CWD do not appear only in Hong Kong water but around the Pearl River Delta (PRD) and extend to the west, the government should have some collaboration with PRD to do something. Dr. Anne Kerr, Environment Director, Mott MacDonald HK (AAHK’s consultant) Dr Anne Kerr is the consultant of AAHK on assessment. Her main study is on the environmental impact, potential effect on marine, water quality and hydro quality of the third runway. A desktop study by EIA in 2006 will be updated next year, more assessment will be done to the changes in hydro pattern. A mass planning will minimize the reclaim area and loss of habitats yet no work has been done to minimize the impact and disturbance to the sea. There will be some modification of construction methods during the construction of the third runway. At this moment, only initial assessment has been done and preliminary solutions have been discussed, more assessment will be done through EIA. Lastly, there will be collaboration of all stakeholders to discuss and find out the best solution. Dr. Paul Shin, Professor, Environment Science and Management, City University of Hong Kong Dr Paul Shin searched that the total sea area in Hong Kong is around 5000 hectares, and reclaiming 600 hectares means more than 10% is removed. More importantly, the impact of the removal is larger than these 10%; seabed will go, mangrove will go, and these will lead to disappearance of some marine life, and thus affect the amount of food sources for dolphins. Mr. Thomas Tue, CEO, Eco Association Mr. Thomas Tue organized dolphins watching tour for students, and through these tours he hopes that the students can see the wild dolphins and teach them how to protect the environment. He would do the dolphin watching with lowest impact, like stop the boat very far away from the dolphins, and teach the students to be quiet and be careful of the noise made by their steps. The students sometimes see the downside of the sea: water pollution, garbage

39

found in the sea, dolphins with broken fins or with some skin diseases. He also mentioned that he used to be able to see 10 to 16 dolphins each time during the tour, but in these two years he can see only 10, in maximum. He suggested that the third runway project should not be realized until we can find a solution to the problems aroused. Floor Discussion One attendant mentioned that AAHK should mediate the problem, back to the previous condition, or even better than before. Besides, AAHK cannot just mediate, but the solution should be part of the runway project, they cannot be divorced. Dr. Anne replied that the third runway is not yet a project; it is a master plan only. They are evaluating the possible merits and demerits right now. They will compare the environment implication of the third runway with the study of EIA, and from engineering prospective. The project will go through steps by steps. If reclamation must be done, they will examine what to avoid and mediate between the possible options. Another attendant asked how the construction of third runway could compensate the impact to the environment, or would it be able to offset the damage it does to the environment. Besides, there is no local data about the possible impact of the construction; the data now available are from other places. Workshop IV: Aviation Emissions Issues Dr. William Yu - Head of WWF-Hong Kong’s Climate Program Dr. Yu gave a presentation on the aviation emissions issues that will be raised by the proposed third runway. He elaborated on the current carbon emissions situation, aviation emissions projections for 2030 and the cost of aviation emissions. Dr. Yu pointed out that the carbon output in 2010 was historically high. The climate issues would affect human’s survival if we do not reduce the carbon emissions in 2011. Dr. Yu also mentioned that 60% of Hong Kong’s total ecological footprint in 2007 came from the carbon footprint. He stated that the problem of carbon emissions was an important factor in climate change. He thought that all sectors had the responsibility to cut down their footprint. However, aviation emissions should be the main focus regarding the 3rd runway proposal. Regarding aviation emissions projections for 2030, Dr. Yu referred to a study performed by WWF-Hong Kong to discuss the additional emissions that will be brought by the 3rd runway. The research estimates the aviation emissions

40

that in-bound and out-bound passenger and cargo flights between Hong Kong and 14 regions in Asia Pacific. The projections of the aviation emissions that will be generated with and without the 3rd runway in 2030 were highlighted. Dr. Yu pointed out that there would be a 5.3 million tonnes emission difference in 2030 between the existence and inexistence of the 3rd runway. The 5.3 million tonnes of the aviation emissions were said to be equivalent to the carbon emissions generated by residential energy consumption for almost one year. In terms of the cost of aviation emissions, Dr. Yu suggested that the research implied that there would be a 40% increase in Hong Kong’s total emissions in 2030 if a 3rd runway is built. He emphasized that 14 regions in Asia Pacific but not long-haul flights were included in the calculation. Then Dr. Yu mentioned the price of AUD23 per tonne of carbon and the carbon tax of RMB9.5 per tonne of carbon dioxide proposed by the Australian government and China respectively. Dr. Yu stated that the carbon price of the carbon generated by aviation emissions could be up to 59 billion for 22 years in total from 2008 to 2030. Dr. Yu reminded the public to think about who should be responsible for paying the carbon emissions in Hong Kong and to understand that the total cost of building a 3rd runway includes environmental costs. Near the end of the presentation, Dr. Yu raised the issue of how the government can achieve the proposed Carbon Intensity Reduction Target for Hong Kong. Dr. Yu mentioned that the government had asked the public to save energy, but the effort of the public would be offset by the additional emissions from the 3rd runway. Dr. Yu stated that some additional emissions in the transportation sector implied the need of a carbon emission decrease in other sectors. He suggested that the government should play a role in monitoring the change in carbon emissions. He also raised the question that why the transportation sector should be helped when the growth of the other sectors would be suppressed. Dr. Alice Chow Dr. Alice Chow, a Post-doctoral Fellow in the Department of Social Sciences of Hong Kong Institute of Education, explored the question that if aviation emissions issue was a missing climate change agenda of Hong Kong. Dr. Chow mentioned that aviation emissions in Hong Kong and China in 2007 were about five times higher than those in 1990 while road transport emissions were only three times higher than before. She also indicated that 11.86 million tonnes of carbon dioxide emissions were emitted by the Hong Kong International Airport in 2008. Dr. Chow also used her own carbon footprint calculated using the WWF Carbon Calculator 2.0 to show that one long-haul flight would double one’s personal carbon footprint. She concluded

41

with the question that if aviation emissions should be put higher on the climate change agenda. Mr. Prentice Koo Mr. Prentice Koo, a Senior Campaigner of Greenpeace China, shared his own experience with AAHK. Mr. Koo said that AAHK has approached him two years ago and asked him what he thought if AAHK were going to build a 3rd runway. Mr. Koo said on behalf of Greenpeace that they would want to see an accurate and honest carbon emissions projection of the 3rd runway. However, the projection is still not available. Mr. Koo thought that this was not only a problem of feasibility but also the willingness of AAHK. He believed that carbon dioxide emission is the key to the issue of whether a 3rd runway should be built. Dr. Mark Watson Dr. Mark Watson, Head of Cathay Pacific’s Environmental Affairs, mentioned that Cathay Pacific did have a responsible footprint. Dr. Watson mentioned that the fuel efficiency improvement would be significant in the coming years. He emphasized that airlines were not just burning fuels and generate emissions but were providing service to people from flying from one point to one point and that this service added values to the society. Dr. Watson also pointed out from a chart that Cathay Pacific had decreased fuel burn for each passenger and cargo carried in the past decade. At the end, Dr. Watson stated that Cathay Pacific welcomed ideas on social cost, economical cost and environmental issues. Mr. John Lamond Mr. John Lamond is the General Manager of Safety, Security, Business Continuity and Environmental from the Airport Authority Hong Kong. Mr. Lamond shared what AAHK had done in addressing the emissions issue, mainly on the airport facilities daily operation. He stated that the consultation would be ongoing and they would continue to seek people’s opinions. Mr. Lamond thought that there was really a need to build the 3rd runway and they needed Hong Kong Government’s environmental permit. Lastly, he highlighted that the Hong Kong International Airport had a leading position among the world in managing carbon emissions. Floor Discussion A gentleman from the audience asked Mr. John Lamond, the representative of AAHK, how they would manage the additional carbon emissions. Mr. Lamond replied that the AAHK had devised a total emissions model between now and 2030 and its work focuses on ground operation. The focus would go back to

42

the airlines and airlines should be responsible for that. He also said that it was hard to get an agreement at this stage, but it would be possible in the future. Dr. Mark Watson added that the aviation emissions are not confined to one locality and thus difficult to regulate, calling for global emissions trading. He stated that Cathay Pacific had set up mitigation and adaptation fund and called for the inclusion of aviation emissions into emissions targets at the United Nations’ climate negotiation. The mediator of the workshop, Dr. Paul Harris (Chair Professor of Global and Environmental Studies, Hong Kong Institute of Education) raised the issue about the seriousness of the aviation emissions issues. Dr. Mark Watson from Cathay Pacific suggested that people had to be realistic and rational, while acknowledging that climate change is one of the most pressing issues. It is true that the aviation industry has some kinds of impact. However, it also connects population and brings about economic and social benefits. Mr. Koo from the Greenpeace pointed out that it was not only about the 3rd runway but the whole airport development. He thought that unnecessary passenger travel shall be minimized and called on the AAHK to initiate policies on the software side and not to have the most optimistic projections. Dr. William Yu from WWF-Hong Kong raised a few questions about fuel efficiency. From 1980s to 2000s, there was improvement in fuel efficiency. However, after that, the progress was slower. Dr. Yu suspected that if fuel efficiency improvement would help bringing down the emissions and what concrete amount of carbon emissions can be reduced. For example, in terms of biofuel, he doubted how fast the technology could be developed and how extensive could the technology be applied on flights. He also mentioned that airlines had to pay for additional emissions by 2020 and he asked a provoking question that if that would be fine to continuously produce additional emissions if one is willing to pay. Instead of waiting for compromise at global negotiation, the aviation industry shall take the lead in combating global emissions. The final question on ecocentric was raised by the audience. The issue of whether we are relying too much on technology was raised. Dr. Mark Watson from Cathay Pacific mentioned that Cathay Pacific was trying to influence its 21,000 employees in Hong Kong. Dr. Watson also mentioned the sustainability concept that Cathay Pacific is trying to incorporate in its entire operation.

43

15:55-17:20

Panel Sharing: Solutions from Each Workshop Workshop I Solutions Moderator: Dr. Li Kui Wai, Director, APEC Study Centre, Associate Professor, Department of Economics and Finance, City University of Hong Kong Dr. Li announced that the participants in Workshop I had agreed not to agree on anything. He summarized the major points of the workshop as follows: 1. We need to determine the basis of evaluation. If we do not do this, we will not know who wins and who loses. 2. Nobody has a crystal ball, and thus everything is an estimate. 3. Are the consultants’ reports transparent? They are difficult to digest. If the government is making things so difficult for the public, how can we make a proper decision? 4. The cost of the project is over $100 billion HKD, the benefit is over $900 billion HKD. Is this real? 5. Will the funding for the airport be public or private? 6. What price do you put on the lives of the dolphins? You cannot, they are priceless. Dr. Li said that this workshop raised more questions than it answered. He concluded with a question of his own: if we were asked to vote now on whether the Great Wall of China should have been built, what would we say? Workshop II Solutions Moderator: Mr. Mike Kilburn, Head of Environmental Strategy, Civic Exchange Mr. Kilburn summarized the main points of the workshop as follows: 1. A study determined that SO2 pollution was not being produced by the airport, but NO2 pollution was a big problem. 2. AAHK is to be congratulated for conducting an early and broad consultation. 3. The major concerns are for public health. 4. AAHK’s noise studies lack credibility. 5. Arup’s data are preliminary, but it may not be possible to meet the new AQOs 6. Ma Wan was not in the zone of influence, but needed to be. He went on to present these solutions for AAHK:

44

1. Mitigate impacts before the project begins. Do this early and prove that you can do it. 2. HKIA can be a driver for Hong Kong, and this can result in a win-win situation for everyone. 3. The Hong Kong government is so far a silent - and absent - partner in this process. Mr. Kilburn concluded with a personal message for the Chinese government: we want the PRD to develop in a cleaner and greener way. Public opinion matters: a state-approved project, the Hong Kong Zhuhai Macau Bridge, has been stopped by a little old lady in Tung Chung. Workshop III Solutions Moderator: Dr. Nora Tam, Chair Professor, Department of Biology and Chemistry, City University of Hong Kong Dr. Tam summarized the main points of the workshop with a stark fact: In 2003, the measured dolphin number was 158, in 2010, that number was 75. The reason for this drop is the cumulative impact of a number of development projects. Other points from the workshop are as follows: 1. The government needs to conduct an integrated EIA on the western waters. 2. 650 hectares of sea is a huge amount, given that the total area of Hong Kong waters is comparatively small. 3. Hong Kong is committed to protecting biodiversity, but how can we do that if there is no habitat left? 4. The proposed third runway overlaps with the dolphin corridor and is very close to Sha Chau and Lung Kwu Chau marine parks. Dr. Tam concluded with a question: without a mitigation plan, how can we pick the least harmful option? She stated that the impacts of the project will be huge, and will need government involvement, as AAHK cannot handle this on their own. Workshop IV Solutions Moderator: Professor Paul Harris, Chair Professor of Global and Environmental Studies, Hong Kong Institute of Education. Dr. William Yu, in place of Professor Harris summarized the main points of the workshop as follows: 1. Aviation emissions have increased 500 percent since 1990, while road

45

emissions have increased 300 percent. 2. Hong Kong people travel a lot, and rich people travel even more. 3. 12 million tonnes of carbon dioxide were emitted by HKIA in 2008 4. One longhaul flight doubles a person’s carbon footprint. Dr. Yu stated that Mark Watson from Cathay Pacific admitted that yes, aviation emissions have an impact; but that airlines do not just exist to produce emissions, they are adding value to society. Mr. Watson also said that we need to look at the problem in planetary terms, as aviation emissions go everywhere. Dr. Yu said that John Lamond from AAHK stated that AAHK pledged to reduce CO2 by 25 percent by 2015. He also reminded the audience that the third runway could not proceed without the Hong Kong government conducting an EIA. Finally, Dr. Yu summarized the main points of the panel discussion as follows: 1. Airlines need to take care of the emissions they produce from flying their airplanes. 2. Any CO2 tax should be fair, but at the moment, many countries have different regulations. 3. Climate change will certainly result in an increase in mortality, so should we still fly places for pleasure? We need to be realistic and remember that flying is not a sin. 4. IATA are asking for a 1.5 to 2 percent increase in efficiency per year, and by 2020 all airlines will have to pay for their emissions. District Council Members Discussion Ms. Christine Fong, Sai Kung District Councilor Ms. Fong’s succinct presentation hinged on one point: that this consultation has not been fully or properly conducted. Simply: three months is not enough time to allow all stakeholders to have a thorough discussion. The fact that complicated consultants’ reports were only released on August 8th meant there was not enough time to process the data in them. She said that the overlap of short-haul flights within the PRD needs to be reduced. There should be less competition between airlines in the region. While she has no stance on the third runway at the moment, she feels that there is much work to be done in terms of ‘sharing’ between China and Hong Kong. There needs to me more time spent on this process.

46

Mr. Paul Zimmerman, Southern District Councilor Mr. Zimmerman suggested that we could before we consider expanding the airport, we should first enhance it. We should fix the existing infrastructure first. He also made a comparison between the populations of the PRD and the population of Europe. He said there are 100 million people in the PRD and 100 million in Europe: how many more runways does Europe have? Mr. Zimmerman went on to say that an increase in air travel is inevitable, and people will fly more. He believed that the number of flights would increase, but we had to consider how it the number was going to rise and how we were going to respond to it with the appropriate infrastructure. He felt that the Hong Kong public deserves a proper airport master plan, one made from the community’s perspective instead of the airport’s. He also expressed doubts about where the projected $900 billion HKD in revenue was going to come from. “It wouldn’t be from transit passengers”, he said, “all they leave us are their emissions”. Mr. Zimmerman then wondered if the benefits came from cargo flights. He pointed out that cargo aircraft are more polluting, and also that cargo is trucked to Hong Kong from Guangzhou and then flown out as ‘re-exports’. He said this process does not benefit the people of Hong Kong, it only benefits businesses. He concluded by saying that the costs of this project will be much greater than AAHK has advertised: not only do we have the actual construction costs ($136 billion), but other costs, which he ‘pulled out of a hat’: the costs of air pollution ($80 billion), noise pollution ($25 billion), increased road and rail infrastructure ($10 to $100 billion) and the costs of logistics centres ($10 to $100 billion). He said “this is not a $100 billion choice, this is a $200 to $500 billion choice. Dr. Andy Cornish Dr. Cornish then summarized the results of the workshops and the forum so far. He said there were a few voices who were very much for in favour of the third runway, but nobody saying they were absolutely against it. He also pointed out that there were lots of calls for more information. He said that everyone agreed that this project will have major impacts, and that AAHK cannot handle a project of this size. “Where is the government?” Dr. Cornish asked. There has been no input whatsoever from the AFCD or the EPD yet, and we need those government agencies to get involved sooner rather than later. He also asked why the Master Plan only goes to 2030, when this should be looked at on a longer time frame.

47

17:20-17:30 Q and A session Dr. Hung Wing-tat said that he would interpret the results of this discussion in this way: it is clear that AAHK has not lived up to the expectations of most attendees, and that people want the government to launch a much better engagement. He said that if AAHK interpreted the consultation findings as ‘a few people agreed and nobody objected, then they would decide to go ahead with the third runway. Dr. Hung said that demand is huge; there are a lot of developing cities in the world. The markets are there for the airline business. With 3 or even 4 runways, we can fill them up. We expect to travel more now, our children travel now and everyone wants direct flights. But: how much is enough? Will this be the last reclamation? How many runways are enough? We need to be clear: where is the government leading us? He repeated: vision without action is a daydream, action without vision is a nightmare, and Hong Kong is heading into a nightmare. Mr Zimmerman replied that Hong Kong currently handles 80-90 percent of traffic in the PRD, but AAHK is shooting for 30 percent - how much of this traffic do we want to retain? And how much will this cost us? Justin, a gentleman from Ma Wan, said he is subject to serious aircraft noise, but the government says this is within acceptable levels: what can he do? Times have changed and the government has to respond to this complaint now. Historically HKIA has been excellent, but they have not had to pay any penalties regarding noise emissions. He concluded by saying that every [mitigation] has to take place before the runway is built, and before the permanent damage is done. Ms Eu wondered ‘what’s next?’. She said “it’s easy to say yes, but hard to say no”, and that AAHK has a lot of support. Mr. Kilburn said he could not support the project without more information. It is impossible to mitigate loss of habitat. He said that the playing field is not level, and that once again, green groups are being portrayed as breakers of harmony and obstructors, when all they are trying to do is create a level playing field. Bad process is a reason to stop a project.

48

Dr. Tam commented that it is too early to say yes or no to this project. As an academic, she feels the technical reports are too complicated; but as far as she could tell, there was nothing in the report on a smaller expansion option or what happens if there is no expansion. She feels that we will have to talk about the third runway soon, but not yet. We are looking at the airport in isolation, when it needs to be seen in a transportation context, and looked at holistically. Right now HKIA is chasing “any old business at any old price” A gentleman from the audience said that cooperation between PRD airports will not be possible, and that HKIA needs to build more runways just to keep our slice of the airspace. Guangzhou airport managers know this, that’s why they’ve planned for five runways. AAHK know we need to expand to stay competitive and are lying to us. Another gentleman wondered why nobody was talking about safety. Finally, a self-described expert on Horseshoe Crabs said that he had read the reports and that “every area was flawed or had facts missing”. He wondered why AAHK were not using fact-based planning. “If you don’t have the facts, you can't make a plan”.

49

Wrap Up Dr. Yu wrapped up the day with a few comments. He stated that the public has changed. Today, we have more opinions, we have more knowledge and we have more influence. He thanked AAHK for their participation, and hoped that the attendees at the forum would relay our messages to their company. Dr. Yu said that we all agree that the economy is important and that the environment cannot be ignored. This forum is about adjusting the process. So what’s next? A change. We need a new framework to help the public. We need to know the social and environmental costs of infrastructure projects, but we also need to look at the economy in a different way. The new models are out there, so let’s use them. He concluded by asking again where the Hong Kong government were and by saying to AAHK: “the public want more information. They need data and they need facts. Please don’t say that we support the third runway: We do not. Respect public opinion.” Dr. Yu asked us to imagine that it is 2030, and we are now looking back. What decision do we want to make?

The opinions expressed at the forum do not necessarily reflect the views

of WWF If you find that the content of this report contains any discrepancies with the original discussion, please inform WWF-Hong Kong. Email Address: wyu@wwf.org.hk