Measuring Hong Kong's performance on the Arcadis global sustainability index - what are the lessons for the Hong Kong 2030+ vision and strategy?

1. © Arcadis 2016
HONG KONG 2030+ AND
THE SUSTAINABLE CITIES
INDEX - SMART OPTIONS
FOR A “SMART CITY”
March 7, 2017 1
The data in this report was commissioned by Arcadis from the Centre for Economic and
Business Research (CEBR)
Incorporating feedback from the first report published in 2015, Arcadis and CEBR have
sought to create a more indicative global picture of urban sustainability in 2016 through
including an additional 50 cities to the ranking and incorporating seven new indicators of
sustainability to the Index. Future reports will seek to follow the same methodology and
allow year on year comparisons to be made.
Presentation to the Hong Kong Green
Strategy Alliance
25th February 2017
Dr Jonathan Beard

2. © Arcadis 2016 07 March 2017 2
Introduction
The Arcadis 2016 Sustainable
Cities Index examines 100
global cities on three dimensions
of sustainability: people, planet
and profit, reflecting overall
social, environmental and
economic performance
respectively.
 Builds upon “Hong Kong 2030”
 Updates the territorial development strategy to
guide planning, land and infrastructure
development, and the shaping of the built and
natural environment of Hong Kong beyond 2030
 Study scheduled for completion by 2018
 6-month public engagement started end of 2016
Lessons learned, common themes

3. © Arcadis 2016 07 March 2017 3
As a framework it recognizes many of the issues which need addressing. A well thought through
document.
However:
 It’s extremely difficult to obtain balanced and informed consultation without articulating the
Economic and Social benefits – rigorous quantitative assessment is needed; it is even
more difficult to develop smart policy options without this assessment
 As 2030+ is a planning document it doesn’t address the major influencing factors such as Land
taxes, Consumption Taxes, Public Procurement etc. These and many others are all important
in the sustainable delivery of this plan
 For example...

4. © Arcadis 2016 07 March 2017 4
Meeting Hong Kong’s Housing Needs
 Population growth
 Less people per household so increasing demand for housing
 Ageing society
 Report advocates “Buffer and reserve to deal with contingencies”,
but what is the economic trade-off?
2014-based Population Projections Domestic Household Projections

5. © Arcadis 2016 07 March 2017 5
East Lantau MetropolisNorthern New Territories
 ELM is presented as part of a possible solution to future housing needs
Main Proposals

6. © Arcadis 2016 07 March 2017 6
 1,000 hectares, housing for 400,000-700,000 people (260,000 units), plus CBD,
supporting infrastructure, transport connections, etc. slated for completion
~2040s
 Hong Kong’s population projected to peak at 8.22 mil in 2043 (now 7.3 mil), then
fall to 7.81 mil in 2064.
 Number of households, 2.43 mil in 2014, is projected to peak at 2.93 mil in 2044,
then drop to 2.91 mil in 2049….just as ELM is coming on stream
 ELM is a long-term option – is it the best answer to an urgent, pressing need?
 What about: better use of brownfield, small house policy, measures to reduce
land-banks and force / incentivise developers to build?
 2030+ does not currently present an economic assessment of the various
options, such that the public can understand the trade-offs – the forthcoming
sustainability assessment could address this, but it needs to offer more than
CASET and / or visual scoring.
Assessing the ELM Option

7. © Arcadis 2016 07 March 2017 7
 HKSAR Government has shown an admirable commitment to consultation, but
timing is critical
 Too early in the policy making process, means the options presented are too
vague – specifically the economic and social pros and cons
 Too late in the process, means the public is presented with a narrow suite of
engineering options / alignments with little variation
 Better use must be made of economic assessments, before a commitment is
made to a specific option - use economics as (one) tool to inform decision
making, rather than to endorse
 Improve our Sustainability Assessments – move beyond CASET
 Improve our assessment of intangibles: contingent valuation (survey-based
economic technique for the valuation of non-market resources), is barely used
in Hong Kong…
“Smart” consultation

8. © Arcadis 2016 07 March 2017 8
A notable
exception:
Using
Contingent
Valuation to
Support
Decision
Making
http://www.harbourbusinessforum.com/en-us/report_hvs

9. © Arcadis 2016
SUSTAINABLE
CITIES INDEX
2016
March 7, 2017 9

10. © Arcadis 2016 07 March 2017 10
The 2016 Arcadis Sustainable Cities Index ranks 100 global cities on three
dimensions of sustainability: people, planet and profit, representing social,
environmental and economic sustainability to offer an indicative picture of the
health and wealth of cities for the present and the future.
The research shows that cities around the world are not effectively balancing
these three pillars of sustainability.
In order to improve their sustainability, city leaders are encouraged to put
people at the heart of their sustainability plans and use the Index to help them
learn from similar cities across the world.
Our advice is not to get transfixed on rankings – it’s more important to
understand the underlying trends and work out how to come up with solutions
and actions that are right for that particular city in question

11. © Arcadis 2016
EDUCATION
literacy rate | university rankings | share of
population with tertiary education
HEALTH
life expectancy | obesity rate
DEMOGRAPHICS
dependency ratio
INCOME INEQUALITY
gini coefficient
AFFORDABILITY
consumer price index | property prices
WORK-LIFE BALANCE
average annual hours worked
CRIME
homicide rate
ENVIRONMENTAL RISKS
natural catastrophe exposure
GREEN SPACES
green space as % of city
ENERGY
energy use | renewables share | energy
consumption per $GDP
AIR POLLUTION
mean level of pollutants
GREENHOUSE GAS EMISSIONS
emissions in metric tonnes (per capita)
WASTE MANAGEMENT
solid waste management (landfill vs recycling)
DRINKING WATER & SANITATION
access to drinking water and improved
sanitation (% of households)
TRANSPORT INFRASTRUCTURE
congestion | rail infrastructure |
airport satisfaction
ECONOMIC DEVELOPMENT
GDP per capita
EASE OF DOING BUSINESS
ease of doing business index
TOURISM
international visitors per year,
absolute and per capita
CONNECTIVITY
mobile connectivity | broadband connectivity |
importance in global networks
EMPLOYMENT
number of people employed as a
% of city population
SCI2016
32 INDICATORS OVER 3 PILLARS OF SUSTAINABILITY*
March 7, 2017 11*multiple sources – see SCI2016 bibliography
Measures social performance
including quality of life
Assess business environment &
economic health
Captures “green” factors like
energy, pollution & emissions

12. © Arcadis 2016
THE TOP 50
07 March 2017 12
16
45
412
48
7
Asian
City
Key
Hong Kong sits at # 16
Only 6 Asian cities make it into the top 50 - Singapore and Seoul excel.

13. © Arcadis 2016
GLOBALLY WE’VE BEEN SAYING THERE IS A NEED FOR
CITIES TO PUT PEOPLE AT THE HEART OF SUSTAINABILITY
07 March 2017 13
CITIES,
PEOPLE AND
SUSTAINABILITY
CREATING A
SENSE OF
COMMUNITY
BALANCING
PEOPLE AND
PROFIT
BALANCING
PEOPLE AND
PLANET
BUILDING A
RESILIENT CITY
ASSESSING A
CITY’S
ECOSYSTEM
We believe this is especially important for Hong Kong

14. © Arcadis 2016 March 7, 2017 14
HONG KONG
World class infrastructure and a great place for
“Ease of Doing Business”,
This however is increasingly affected by issues
with the political system that prevent timely
decision making
Compared with global peers in the people sub-
index, Hong Kong faces significant challenges in
work-life balance, affordability and wealth gap.
It has to find solutions to housing and social
infrastructure issues affecting both its young and
its increasingly aging population. It needs to
improve its “liveability” and ensure it can attract
and retain the talent that is vital to the city’s
future.
These factors have to be among the city’s top
priorities if it’s to ensure a brighter, more
sustainable future for its people.
The City cannot ignore the challenge that it
needs to maintain its relevance to China and
re-establish itself as “Asia’s World City”
(a 21st century version!)
OVERALL
RANKING
16
PLANET: 29
PEOPLE: 81
PROFIT: 2

15. © Arcadis 2016 07 March 2017 15
Indicator Sub indicator Description
Hong Kong
Value
World
Leading
value
Singapore
Value
World
Leader
Demographics Dependency ratio Ratio of those of not of
working age to those of
working age
36 17.5 36.9 Abu Dhabi
Education
(composite
measure)
Literacy Share of age 15 and
over who have ever
attended school
99.0% 99.8% 96.5% Warsaw
University rankings Cumulative points in QS
rankings (4th)
446.7 696, 618, 531,
510, and 447
188 Paris, London,
Boston,
Seoul, and
Hong Kong*
Share of
population with
tertiary education
Share with a degree 29.7% 82.6% 56.0% Seattle
Income Inequality Gini coefficient Gini ranges from 0
(perfect equality) to 1
0.54 24.8 0.46 Copenhagen
Work-life balance Average annual
hours worked
Hours worked per year 2606 1473 2587 Hamburg
Crime Homicide rate per
100,000 population
Homicide rate 0.4 0 0.8 Zurich
Health
(composite
measure)
Life expectancy Life expectancy 84 83.8 82.3 Hong Kong
Obesity (share of
obese population)
% of population between
18-64 obese
20.8% 3.3% Tokyo
Affordability
(composite
measure)
Consumer Price
Index
Price of a uniform basket
of goods in $
2435 677 1660.6 Bengaluru**
Property prices Average monthly local
rent in USD
2590 181 2676.4 Kolkata
People: KPI Data for Hong Kong
Selected Discussion Points
Ageing Demographics:
How to ensure:
• The environment can adapt quickly enough to support
(housing, health, facilities etc.)
• We develop an economy in which “the 3rd age” can still
contribute
Education: We score well but schools access is hampering
ability to attract best talent into the city
Work Life Balance: our working hours are 1000 hours longer
a year than Hamburg. Can we become an economy which
works smarter not longer?
Income inequality: The city should seek to ensure the
natural and Built environment supports all regardless of wealth
Housing: The most emotive subject!
• Average wage to house price ratio (x15) is almost double
the next highest in the world (Vancouver).
• A case in point: When a 40 year old highly qualified
professional will never be able to afford to buy their own
home in the city they were born in, the city is not
sustainable
• The size of units being planned is not sustainable for family
life
Health: The obesity rate is worrying trend and has significant
consequences on public services, productivity etc.

16. © Arcadis 2016 07 March 2017 16
Indicator Sub indicator Description
Hong Kong
Value
World
Leading
value
Singapore
Value
World
Leader
Environmental risks Natural catastrophe
exposure
Number of types of
disasters exposed to
6 0 Several cities
are not exposed
Energy
(composite
measure)
Energy use Quadrillion but per capita 1.66926E-07 5.3705E-09 0.00000058 Nairobi
Renewables mix Share of renewables in
total electricity generation
1% 79% 2% Wellington
Energy Consumption
per $ GDP
BTU per $ GDP (2005
USD prices)
5528 3009 16010 Copenhagen
Green spaces Green space share of
total city space
Green space share of total
city space
66.7% 66.7% 47.0% Hong Kong
Air pollution Mean level of
pollutants
Annual mean, ug/m3 29 4.3 17 Vancouver
Greenhouse Gas
emissions
Emissions in metric
tonnes (per capita)
Emissions of greenhouse
gases in tonnes of carbon
dioxide equivalent per
capita
5.4 0.3 7.4 Nairobi
Waste
management
(composite
measure)
Solid waste
management (landfill
vs recycling)
Percentage of solid waste
recycled
45 99% 47 San Francisco
Share of wastewater
treated
Share of wastewater
treated
98% 100% 100% N/A: many
treat 100%
Drinking water
and sanitation
Access to drinking
water (% of
households)
Percentage of households
with access to improved
sanitation
100% 100% 100% N/A: many
provide 100%
Access to improved
sanitation (% of
hholds)
Percentage of households
with access to improved
sanitation
93% 100% 100% N/A: many
provide 100%
Planet: KPI Data for Hong Kong
Selected Discussion Points
Consumption!! Water! Waste! Electricity!
Water:
• Our wider water index scores HK low on
sustainability: There is a direct correlation between
low water charges and high consumption
• Bottled Water: How many bottles do we use a day
when we have excellent potable water supplies?
Renewables mix:
• We have low %: due to geography and historic
technology. China has now signed up to global
treaties. HK is likely to have to follow.
• Do we want to be a truly innovative, green, smart
city? If so let’s address
Greenhouse Gas Emissions:
• Good progress but need to do more re building
electricity consumption especially for residential
Waste Management:
• We do well on recycling though our solutions are
infrastructure based. Our consumption is much
higher than the likes of Seoul and Tokyo.
• The IWMF delay is reflective of difficulties in
making decisions. Our competitors act faster. How
much waste has gone to landfill as a consequence?
Green Space:
• HK is blessed with natural space but our urban
space needs enhancing. Quality not just quantity

17. © Arcadis 2016 07 March 2017 17
Indicator Sub indicator Description
Hong Kong
Value
World
Leading
value
Singapore
Value
World
Leader
Transport
infrastructure
(composite
measure)
Congestion TomTom score
modelled from
commuting times
29.5% 10% 33.0% Indianapolis
Rail infrastructure Network length (km)
per capita
0.0000241 0.0000617 0.0000276 Zurich
Airport satisfaction SkyTrax World
Airport Awards 2016
5 1 1 Singapore
Economic
development
GDP per capita GDP per capita in
USD
57244 93849 66864 Macau
Ease of doing
business
Ease of Doing
Business Index
Doing Business
(distance to frontier)
83.7 87.3 87.3 Singapore
Tourism Number of
international visitors
per year, as a share of
the overall city
population
International visitors
as % of population
382% 2606% 100% Macau
Connectivity
(composite
measure)
Mobile connectivity Percentage of
households using
mobiles
74.6% 96.0% 82.0% Copenhagen
Broadband
connectivity
Percentage of
households
accessing internet
from home
237% 237% 156% Hong Kong
Importance in global
networks
Scale from
"Sufficiency" to
"Alpha++"
Alpha + Alpha++ London
Employment Number of people
employed in city as a
share of the overall city
population
Percentage of
working-age
population working
52% 79% 65% Kuwait City
Profit: KPI Data for Hong Kong
Selected Discussion Points
Transport: Integration needs to be much better
Congestion
• 3% growth in cars per annum is unsustainable. Road
pricing looked at many years’ ago, but not
implemented…why so timid? Toll booths????
• New roads will always clog up unless you charge for them.
• We need to make and encourage the city to be more
walkable (see obesity)
• We under utilize the ability transportation potential of the
harbour – water taxis
• EVs? Are we pricing / regulating for the most efficient
outcomes?
Rail: great investment but have you ever tried to get to CBD2
on the MTR in rush hour??? Not sustainable.
Ease of doing business: Worrying trends within the KPI re
the “administrative burden”. These undermine HK’s USPs
over competitors
Smart City
• Smart is part of the solution not the silver bullet
• It is not just about technology – “smart regulation” is
critical
Innovation: As a starter…we need to address way of rent
hikes strangling entrepreneurs, and support markets
Employment: 52% already much lower than Singapore: We
need to create an economy to accommodate the “3rd age”
Tourism: Currently a world leader but what does a
sustainable future look like for tourism: we can’t rely on retail.

18. © Arcadis 2016 07 March 2017 18
Wrap: 2030+ & Hong Kong Sustainability
The two most important considerations
(1) Liveability
(2) Ensuring Relevance
Liveability: For a world leading city the People KPIs are too low. Great cities require great people. We
must develop, attract and retain the best talent. Liveability is critical across many other initiatives – for
example, too often discussion of “innovation” focuses solely on ICT, science parks / Lok Ma Chau
Loop….but we need an holistic approach that links to air quality, schools (developing talent but also as an
attractor), competition, etc.
Relevance: Ensure we remain relevant regionally and globally and don’t end up as just another Chinese
City. The competition is fierce and are we truly being honest about what we need to do to stay ahead of the
pack. Hong Kong has made amazing progress: rapidly moving from a 3rd world city, to a vibrant 1st world
metropolis with an active civic society – this is a massive advantage if we use it properly.
Current policy challenges are nuanced, complex and affect a variety of often competing stakeholders:
“There’s no ribbon cutting ceremony for sorting our air pollution”.

19. 7-3-2017 19
T +852 2263 7300
M +852 9859 4360
E jim.sheerin@arcadis.com
Arcadis
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392 Kwun Tong Road
Kwun Tong, Kowloon
Hong Kong
JIM SHEERIN
Thank you – any questions?
T +852 2263 7300
M +852 6095 8434
E jonathan.beard@arcadis.com
Arcadis
38/F AIA Kowloon Tower
Landmark East
100 How Ming Street
Kwun Tong, Kowloon
Hong Kong
DR JONATHAN BEARD
Head of Transportation & Logistics, Asia
Urban Development & Policy Director, Pearl River Delta

20. © Arcadis 2016
2017
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