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December, 2015:

Green financing gaining “unstoppable momentum”

More money than ever is being invested in projects that build climate resilience in communities and cities around the world. The global agreement to be inked in Paris this week should give climate financing another boost.

With more money than ever before invested in low carbon and climate resilience projects, there is “unstoppable” momentum for green financing in helping the world cope with the effects of climate change, experts said on Wednesday.

Speaking at a panel held at the sidelines of the United Nations climate change talks in Paris, Barbara Buchner, senior director of U.S. think tank Climate Policy Initiative, noted that more than US$391 billion was invested in 2014 in climate projects, a 18 per cent jump from 2013.

Most of the money was for projects surrounding renewable energy, energy efficiency and sustainable transport, she added.

But while this is a huge amount, it still falls short of what is needed to help vulnerable regions and countries cope with the effects of climate change.

The International Energy Agency (IEA) said last month in a report that US$16.5 trillion is needed from 2015 through 2030 to achieve the global goal of limiting temperature rise to below two degrees Celsius. That works out to just over US$1 trillion a year.

Experts speaking at the panel said the good news is that the ramping up of climate financing is “unstoppable” because of the national commitments that more than 190 countries have made ahead of the climate change talks this week.

“The momentum is unstoppable,” said Tessa Tennant, founder for Call to Action on Climate Finance, a worldwide group of global climate finance and responsible investing organisations including non-profit groups Climate Bonds Intiative, CDP and Ceres.

“Even if there isn’t a strong deal, there is still a way for the financial industry to work with governments because they don’t necessarily want to wait for some magic global moment. They want to get working now,” she added.

Among the groups shifting funds towards clean technology are pension funds controlling billions of dollars. One of them is California Public Employees’ Retirement System (CalPERS), one of the world’s biggest pension funds.

Divya Mankikar, head of environmental, social and governance (ESG) integration of CalPERS, said that the US$300 billion fund with assets on six continents is transforming its portfolio into a low-carbon one.

“One way we are doing that is talking to our portfolio companies to push them towards low-carbon growth,” she said. “Another way is advocacy with regulators. We need them to scale back fossil fuel subsides and put a price on carbon, so we engage with them constantly.”

It is also actively looking for large climate-related projects to invest in but the main challenge is finding projects that fit its risk profile and tolerance.

Pelletier said the bank has been pooling climate-related infrastructure projects of all sizes and matching them with prospective institutional investors such as pension funds and corporate investors. This is where banks are playing a key role, said Virginie Pelletier, head of sustainable investment and finance at French lender BNP Paribas.

Its Tera Neva initiative, established with partners European Investment Bank, is a 500 million euros fund to invest in green projects. It is been fully subscribed.

“This shows the growing interest among investors for solutions that not only give financial returns but also have a positive impact on the environment,” Pelletier said. ”This is the direction the industry is heading.”

China’s long-awaited C02 market to cover 10,000 firms

Nationwide system on course to be the world’s biggest when it launches in 2017, official says

China’s long-awaited nationwide carbon market will cover as many as 10,000 firms and regulate nearly half of the country’s total emissions once launched in 2017, a senior official said on the sidelines of the Paris climate talks yesterday.

Jiang Zhaoli, vice-head of the climate office of the state planning agency, the National Development and Reform Commission, said China’s carbon market would become the world’s biggest, and its targets would be higher than those set by the state “in order to guarantee it had sufficient effect”.

“When the market begins in 2017 it will already have almost 10,000 firms,” Jiang said. “After 2020, the size will be bigger and will involve more enterprises.”

The market would cover 31 provinces, six industrial sectors and 15 sub-industries, and would involve 4 billion tonnes of annual carbon emissions at its launch, amounting to almost half of the country’s total, he said.

President Xi Jinping pledged during his visit to the United States in September that China would roll out a nationwide carbon trading scheme by 2017, building on the seven regional pilot markets first introduced in 2013.

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Jiang’s comments suggest the market will begin more ambitiously than expected.

Previous estimates from market designers suggested it would regulate 3-4 billion tonnes of carbon dioxide a year by the end of its first phase in 2020.

While China has included the promotion of “market mechanisms” in its pledges to combat climate change, they remain controversial and were unlikely to be included in a final agreement in Paris, said Su Wei, China’s top climate negotiator, at a briefing in Paris on Saturday.

As far as market mechanisms are concerned, we think the market could play a very important role in achieving actions to mitigate and adapt to the impact of climate change

Su Wei, China’s top climate negotiator

“As far as market mechanisms are concerned, we think the market could play a very important role in achieving actions to mitigate and adapt to the impact of climate change,” he said.

“But as to whether there is going to be inclusion in the text of the Paris agreement, we think that that is not the priority,” Su said.

“There are a lot of different views about whether we should rely more on non-market mechanisms … and I don’t think that sort of difference should stand in the way of having a successful outcome in the Paris [climate] negotiations.”

China’s central government pledged last year to peak carbon output by around 2030, reduce dependence on fossil fuels, and offer help to poor countries adapting to the impact of global warming.

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CLP’s Stance on Climate Change

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Power companies have gathered nearly HK$5.7 billion by overcharging – report

CLP Power Hong Kong Limited (CLP) and The Hong Kong Electric Company Limited have overcharged for electricity and fuel costs to the tune of nearly HK$5.7 billion, Apple Daily reported.

Excluding CLP’s special rebate of more than HK$1.2 billion in August this year, the two power companies still have more than HK$4.43 billion in Fuel Clause Recovery Accounts and Tariff Stabilization Funds – with Hong Kong Electric accounting for HK$2.1 billion and CLP for HK$2.3 billion. The surpluses could allow 320,000 Island customers and 420,000 Kowloon households to be supplied with free electricity for a year.

Tariffs paid by customers are composed of the basic tariff based on a standard cost of fuel required for electricity supply, and a fuel cost adjustment to cover any fuel costs above or below the standard cost already included in the basic tariff. Fuel cost adjustments are proposed every year. If the power company overestimates the fuel cost and hence overcharges its customers, the surplus will automatically go into the Fuel Clause Recovery Account (FCA). For instance, CLP charges its customers 27 cents per unit this year. However, the actual fuel price was 24.6 cents in October. In other words, customers paid a surplus of 2.4 cents per unit.

Paul Poon Wai-yin, Managing Director of CLP Power, said in July that the FCA was designed to “mitigate the cost impact of significant fuel cost fluctuations” and “has served its purpose to stabilise tariffs” for customers.

Prentice Koo, Assistant Manager in Climate Policy and People of the World Wide Fund For Nature Hong Kong, told Apple Daily, “For every payment made per unit of energy, customers are actually contributing to the FCA.”

CLP has been overestimating the fuel cost since 2013. The FCA balance of CLP has HK$1.60 billion while that of Hong Kong Electric had HK$1.41 billion in June – highest in ten years.

Electricity in Hong Kong is supplied by two investor-owned companies – CLP and The Hongkong Electric Company Limited. The two power companies are currently regulated through Scheme of Control Agreements, giving neither of them any exclusive rights over the supply of electricity. The agreements will expire in 2018.

According to the agreements, the permitted rate of return of the power companies is 9.99% of their average net fixed assets. Any excess of revenue over the rate is transferred to a Tariff Stabilization Fund. Therefore, the fund serves as a buffer for the company’s return.

Hong Kong Electric had HK$678 million in its Tariff Stabilization Fund in June this year, while CLP had $HK$749 million.

Koo said, “For power companies, it is best if there is money in the fund. This is because when companies underestimate the fuel_ cost, money can be withdrawn to compensate for inadequate profits.” He also said that for Hong Kong Electric, the sum of money in both the FCA and Stabilization Fund is HK$2.08 billion in total. If each household consumes 400 units of energy a month, the sum of money is enough to pay for 320,000 households’ tariffs for a year.

CLP told Apple Daily that fuel costs are difficult to estimate as international fuel prices are volatile, and even if there was a positive balance in its FCA, CLP would not make a profit from it.

Last month, the Hong Kong and Kowloon Trades Union Council submitted a petition calling for more competition and suggested the government review the profit scheme in the electricity market.


Is Oil & Gas the New Tobacco? Fossil Fuel Divestment Movement Reaches New Milestone

The growing campaign for divestment from the gas, oil and coal companies reached a new milestone today. Executive Director May Boeve announced more than 500 institutions representing over $3.4 trillion in assets have now made at least a partial commitment to divest from fossil fuels. In France, 19 cities have just endorsed divestment, including Lille, Bordeaux, Dijon, Saint-Denis and Île-de-France. Last week, the French National Assembly adopted a resolution encouraging companies and local authorities not to invest in fossil fuels. Over the past few months, the global fossil fuel divestment movement has claimed a number of victories; Uppsala, Sweden and Munster, Germany divested from fossil fuels and the London School of Economics abandoned its holdings in coal and tar sands.


This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We are broadcasting live from COP21, the United Nations Climate Summit, here in Paris, France. We begin looking at a new milestone in the growing campaign for divestment from the gas, oil and coal companies that are fueling climate change. May Boeve, Executive Director of, made the announcement just before our broadcast today.

MAY BOEVE: We are very pleased to be announcing the new commitments to divest from fossil fuels and before I announce them to all of you, I just want to, once again, remind everyone what this movement for divestment is all about. We are here for a historic summit on climate change, and the divestment movement is about something quite simple: if it’s wrong to cause climate change, it’s wrong to profit from causing climate change. And the divestment movement has taken off all over the world with this as its rallying cry.

So without further a do, today we are announcing that as of today, total divestment commitments have passed the $3.4 trillion mark, that is $3.4 trillion of assets under management now Fossil-free. That includes a combination of different types of commitments, both commitments to full divestment, which we define as divestment from coal, oil, and gas, and also partial divestment, which includes one of those fuels or some other combination.

Now, I also want to say that because there are varying degrees of level of disclosure with these commitments, we don’t have the exact total of amount divested, but do know that standard portfolios contain around 3.7% of fossil fuels. But the point here has never been exactly how much is pulled out in that way. That is why we measure the total amount of assets. That’s for simple reason. A growing number of investors representing a growing amount of capital do not want to be associated with this industry any longer. It is a rogue industry. And that is what these commitments represent. It demonstrates that investors are taking climate risk extremely seriously.

So to close, I just want to highlight some of the commitments themselves. Over 500 institutions have committed to divest, that includes, just today, 19 cities here in France, including Bordeaux, Saint-Denis, and Dijon. The French Parliament has endorsed divestment. And between last September, when we announced the $2.7 trillion mark, and today, Uppsala became the largest city in Sweden to divest from fossil fuels, Münster became the first German city to divest, Melbourne, Australia, second-largest city committed, and the London School of Economics, another primary institution — we have someone to speak to that here. They have committed to divest.

So we’re really seeing a surge of commitments. It’s very exciting. And to close, I just want to say thanks to all the people who helped make all of these commitments possible. This movement works because it is powered by tens of thousands of individuals who are powering these commitments forward. So we thank you, all of you who fought for divestment, and who will fight for reinvestment of where those resources go. Thank you.

AMY GOODMAN: That’s May Boeve of

Biomethane from Organic Wastes Could Quadruple by 2021

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Biomethane Availability and Usability

Utilization of green energy has progressed tremendously over the last few decades. However, many renewable and environmentally friendly sources of energy pose a challenge when it comes to availability or usability, or both. Solar energy for instance can be successfully harnessed only in regions which have a high amount of sunshine, wind turbines can be used to generate electricity only in areas with sufficient amount and power of the wind, etc. which makes their usability largely limited to regions which have ideal geographical or/and weather conditions. Biomethane production, on the other hand, has no such limits. On the contrary, methane which is derived from organic matter and is equivalent to fossil fuel derived methane when it comes to both chemical structure and usability can be produced just about everywhere.

Biomethane is produced by anaerobic digestion (bacterial breakdown in absence of oxygen) of organic matter such as organic household waste, dead animal and plant material, manure, slurry, sewage and other organic materials which are found in large quantities on literally every step all over the world. The usability of anaerobic digestion of organic matter for power generation was discovered many years ago, however, biogas plants were not economically feasible due to relatively low cost of natural gas and other fossil fuels just a few years ago. But due to highly unstable fossil fuel prices, fears that peak oil has already been reached and the potentially catastrophic effects of global warming, the interest in sustainable and environmentally friendly sources of energy has increased dramatically in the recent years. Renewable energy, however, accounts for a small part of the total global energy output.

This is partly related to the fact that efficient technology for power generation from alternative sources of energy has been developed only recently but it is partly also related to limited availability/accessibility to green sources of energy. But the percentage of global energy that is generated from renewable and environmentally friendly sources of energy is steadily rising also thanks to biomethane. It provides a stable and efficient source of energy to regions which do not have the ability to generate power from solar energy, wind power, etc. Biomethane production requires only collection of organic waste material and construction of biogas plants which are very simple in technological terms and relatively inexpensive in comparison to other green power generation facilities of comparable power output.

Usability is another great advantage of biomethane besides availability. Since it is identical to fossil fuel derived methane, it can be used for space heating, water heating, cooking, etc. but it can also be used for electricity generation and if compressed, as fuel for vehicles. Burning biomethane produces the same amount of carbon dioxide and other greenhouse gases as burning the conventional natural gas. But in contrary to the latter, biomethane does not increase the greenhouse effect and global warming because its utilization produces the same quantity of greenhouse gases as if organic matter would be left to decompose in nature.

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Uruguay makes dramatic shift to nearly 95% electricity from clean energy

In less than 10 years the country has slashed its carbon footprint and lowered electricity costs, without government subsidies. Delegates at the Paris summit can learn much from its success

As the world gathers in Paris for the daunting task of switching from fossil fuels to renewable energy, one small country on the other side of the Atlantic is making that transition look childishly simple and affordable.

In less than 10 years, Uruguay has slashed its carbon footprint without government subsidies or higher consumer costs, according to the country’s head of climate change policy, Ramón Méndez.

In fact, he says that now that renewables provide 94.5% of the country’s electricity, prices are lower than in the past relative to inflation. There are also fewer power cuts because a diverse energy mix means greater resilience to droughts.

It was a very different story just 15 years ago. Back at the turn of the century oil accounted for 27% of Uruguay’s imports and a new pipeline was just about to begin supplying gas from Argentina.

Now the biggest item on import balance sheet is wind turbines, which fill the country’s ports on their way to installation.

Biomass and solar power have also been ramped up. Adding to existing hydropower, this means that renewables now account for 55% of the country’s overall energy mix (including transport fuel) compared with a global average share of 12%.

Despite its relatively small population of just 3.4 million, Uruguay has earned a remarkable amount of global kudos in recent years. It enacted groundbreaking marijuana legalisation, pioneered stringent tobacco control, and introduced some of the most liberal policies in Latin America on abortion and same-sex marriage.

Now, it is being recognised for progress on decarbonising its economy. It has been praised by the World Bank and the Economic commission for Latin America and the Caribbean, and the WWF last year named Uruguay among its “Green Energy Leaders”, proclaiming: “The country is defining global trends in renewable energy investment.”

Cementing that reputation, Méndez – formerly the country’s national director of energy – has gone to this week’s UN talks with one of the world’s most ambitious national pledges: an 88% cut in carbon emissions by 2017 compared with the average for 2009-13.

There are no technological miracles involved, nuclear power is entirely absent from the mix, and no new hydroelectric power has been added for more than two decades. Instead, he says, the key to success is rather dull but encouragingly replicable: clear decision-making, a supportive regulatory environment and a strong partnership between the public and private sector.

As a result, energy investment – mostly for renewables, but also liquid gas – in Uruguay over the past five years has surged to $7bn, or 15% of the country’s annual GDP. That is five times the average in Latin America and three times the global share recommended by climate economist Nicholas Stern.

“What we’ve learned is that renewables is just a financial business,” Méndez says. “The construction and maintenance costs are low, so as long as you give investors a secure environment, it is a very attractive.”

The effects are apparent on Route 5 from Montevideo to the north. In less than 200 miles, you pass three agroindustrial plants running on biofuel and three windfarms. The biggest of them is the 115MW Peralta plant built and run by the German company, Enercon.

Its huge turbines – each 108 metres tall – tower over grasslands full of cattle and rhea birds.

Along with reliable wind – at an average of about 8mph – the main attraction for foreign investors like Enercon is a fixed price for 20 years that is guaranteed by the state utility. Because maintenance costs are low (just 10 staff) and stable, this guarantees a profit.

As a result, foreign firms are lining up to secure windfarm contracts. The competition is pushing down bids, cutting electricity generating costs by more than 30% over the past three years. Christian Schaefer, supervising technician at Enercon said his company was hoping to expand and another German company Nordex is already building an even bigger plant further north along route five. Trucks carrying turbines, towers and blades are now a common sight on the country’s roads.

Compared to most other small countries with high proportions of renewables, the mix is diverse. While Paraguay, Bhutan and Lesotho rely almost solely on hydro and Iceland on geothermal, Uruguay has a spread that makes it more resilient to changes in the climate.

Windfarms such as Peralta now feed into hydropower plants so that dams can maintain their reservoirs longer after rainy seasons. According to Méndez, this has reduced vulnerability to drought by 70% – no small benefit considering a dry year used to cost the country nearly 2% of GDP.

This is not the only benefit for the economy. “For three years we haven’t imported a single kilowatt hour,” Méndez says. “We used to be reliant on electricity imports from Argentina, but now we export to them. Last summer, we sold a third of our power generation to them.”

There is still a lot to do. The transport sector still depends on oil (which accounts for 45% of the total energy mix). But industry – mostly agricultural processing – is now powered predominantly by biomass cogeneration plants.

Méndez attributed Uruguay’s success to three key factors: credibility (a stable democracy that has never defaulted on its debts so it is attractive for long-term investments); helpful natural conditions (good wind, decent solar radiation and lots of biomass from agriculture); and strong public companies (which are a reliable partner for private firms and can work with the state to create an attractive operating environment).

While not every country in the world can replicate this model, he said Uruguay had proved that renewables can reduce generation costs, can meet well over 90% of electricity demand without the back-up of coal or nuclear power plants, and the public and private sectors can work together effectively in this field.

But, perhaps, the biggest lesson that Uruguay can provide to the delegates in Paris is the importance of strong decision-making. As has been the case at countless UN climate conferences, Uruguay was once paralysed by a seemingly endless and rancorous debate about energy policy.

All that changed when the government finally agreed on a long-term plan that drew cross-party support.

“We had to go through a crisis to reach this point. We spent 15 years in a bad place,” Méndez said. “But in 2008, we launched a long-term energy policy that covered everything … Finally we had clarity.”

That new direction made possible the rapid transition that is now reaping rewards.

Small nations, renewable giants

Uruguay gets 94.5% of its electricity from renewables. In addition to old hydropower plants, a hefty investment in wind, biomass and solar in recent years has raised the share of these sources in the total energy mix to 55%, compared with a global average of 12%, and about 20% in Europe.

Costa Rica went a record 94 consecutive days earlier this year without using fossil fuel for electricity, thanks to a mix of about 78% hydropower, 12% geothermal and 10% wind. The government has set a target of 100% renewable energy by 2021. But transport remains dirty.

Iceland has the advantage of being a nation of volcanoes, which has allowed it to tap geothermal sources of 85% of its heating and – with the assistance of hydropower – 100% of its electricity. This has made it the world’s largest green energy producer per capita.

Paraguay has one huge hydropower dam at Itaipu, which supplies 90% of the country’s electricity.

Lesotho gets 100% of its electricity from a cascade of dams that have enough spare capacity to export power to South Africa.

Bhutan’s abundant hydropower resources generate a surplus of electricity that accounts for more than 40% of the country’s export earnings. But over-reliance on one source can be a problem. In the dry season, it has to import power from India.

• This article was amended on 4 December 2015. An earlier version described Ramón Méndez as Uruguay’s national director of energy; he was formerly, but Olga Otegui now holds that post.

Tax Me, Says Exxon Mobil, in Declaring Support for Climate Talks

Exxon Mobil Corp., a favorite target of global warming activists, said Wednesday that it’s hopeful for a deal out of the climate-change talks in Paris and still thinks the best solution is a tax on carbon pollution.

As the United Nations negotiations moved into a third day, the world’s biggest oil explorer said in an blog post that it supports “meaningful action to address the risks of climate change” as long as it preserved access to the reliable and affordable energy.

“The long-term objective of climate-change policy should be to reduce the risks of serious harm to humanity and ecosystems at minimum societal cost, while recognizing shared humanitarian necessities,” Exxon Mobil General Counsel Ken Cohen wrote in the post.

In the run-up to the Paris talks that began Nov. 30, Exxon has been under heavy assault by environmentalists and politicians who say it misled the public by promoting uncertainties about climate science. New York State’s attorney general has subpoenaed company records about its research going back decades, and U.S. Secretary of State John Kerry, in a Rolling Stone interview published Tuesday, said Exxon’s actions would amount to “a betrayal” of humanity if it’s found to have suppressed knowledge about climate risks.

Revenue-Neutral Tax

Exxon has said it made its research public and did nothing wrong. The Irving, Texas-based explorer takes climate change seriously and has taken steps to reduce its own emissions, Cohen said in today’s post.

The most effective solution would be a revenue-neutral tax on greenhouse gas emissions, Cohen wrote, reiterating a position Exxon has held for years.

“Instead of subsidies and mandates that distort markets, stifle innovation, and needlessly raise energy costs, a carbon tax could help create the conditions to reduce greenhouse gas emissions in a way that spurs new efficiencies and technologies,” he said.

“The revenue-neutral carbon tax could be a workable policy framework for countries around the world.”

Long a hard-line opponent to climate-friendly carbon limits, Exxon began to soften its outlook and embrace the need to curb greenhouse gases in 2006 when Rex Tillerson succeeded Lee Raymond as chairman and CEO. The company’s $35 billion takeover of XTO Energy in 2010 was inspired in part by expectations that stricter climate rules would spur natural gas demand as a replacement for dirtier coal.

A New and Simple Source of Green Power: Water

Professor Jimmy Yu is associate director of the Institute of Environment, Energy and Sustainability at CUHK.

Professor Jimmy Yu is associate director of the Institute of Environment, Energy and Sustainability at CUHK.

Solar power is one of the most promising forms of creating “green” energy. But could we take the process a step further and generate other kinds of energy using the sun’s rays?

CUHK Professor Jimmy Yu Chai-mei believes he has found the answer. By using chemicals such as cadmium sulfide and, separately, simple elements such as red phosphorus, the chemist has produced promising results in generating energy by splitting water molecules using sunlight.

Water splitting does not occur in the absence of catalysts. Professor Yu has been examining ways of expediting that process by adding a photocatalyst that will speed up the decomposition of the water molecules to produce hydrogen, functioning much as chlorophyll in a plant, using sunlight to induce a chemical reaction. The hydrogen can then be stored and used in power plants or as fuel for vehicles.

Red phosphorous acts as a catalyst to speed up the decomposition of water molecules to produce hydrogen, which can then be used in power plants or as fuel for vehicles.

Red phosphorous acts as a catalyst to speed up the decomposition of water molecules to produce hydrogen, which can then be used in power plants or as fuel for vehicles.

Hydrogen power holds plenty of potential because it contains no carbon. On combustion, water molecules are formed, which are harmless to the environment. That makes it preferable to typical fossil fuels, which do contain carbon and so in combustion form greenhouse gases such as carbon dioxide.

There are hundreds if not thousands of materials that can function as photocatalysts. Titanium dioxide can act as a photocatalyst – but it only works when irradiated with ultraviolet light.

Professor Yu has discovered that adding the semiconductor cadmium sulfide, a highly active catalyst, into the equation allows the titanium dioxide to extend its photo-response to the shorter bandwidths of visible light.

Subsequently Professor Yu and his team have also shown that red phosphorus, the most stable and commonly found of three forms of that element, can help break up water. Phosphorous makes up around 0.1 percent of the Earth’s crust, so there are hundreds of billions of tons of it that can be extracted fairly easily and cheaply. “It is always available, that’s the beauty of it. It will never be used up,” says Professor Yu.

Put red phosphorus into water at room temperature and expose it to sunlight, and you will see bubbles of hydrogen forming. “We were the first people to observe that property of red phosphorus,” Professor Yu says.

The chemist sees that as the most elegant method of inducing photocatalysis, using a stand-alone element rather than a compound. “Simple is beautiful,” Professor Yu says. It marks the first time a single element had been used as a photocatalyst. “That’s as simple as you get.”

Thanks to the finding, Professor Yu made the ranks of the “World’s Most Influential Scientific Minds” in 2014, as compiled by Reuters.

Now the challenge is to scale up the process. So the chemist hopes engineers can take those findings and achieve sustainable clean energy production.

“We are hardly at a commercial scale yet,” Professor Yu says. But he hopes his laboratory experiments can inspire others. “We hope to offer some possible solutions.”

by Alex Frew McMillan

Hong Kong must stop burning money on subsidising households’ electricity bills

What was supposed to be a one-off measure during times of embarrassing riches has now become a permanent fixture of city’s budget

The government’s electricity subsidy has always been understood to be a temporary “sweetener”. But, having lasted almost eight years, it’s looking like permanent recurrent expenditure to many people. That’s why finance officials recently told the Legislative Council that after four rounds of the subsidy scheme, it could not be extended for “an unreasonably long period”.

The current round is set to end in June next year. The government is preparing the public not to expect this scheme to continue beyond that date.

Some lawmakers have criticised the government for being miserly. But the government is right to end the subsidy. In fact, it should not have allowed the scheme, which costs a whopping
HK$22.3 billion, to continue for so long.

It is a wasteful subsidy in every sense of the word. Introduced in 2008 and continued thereafter, it was prompted by an embarrassment of riches from the government’s massive budget surpluses. But it is a short-sighted quick fix, a confession by our officials that they have no better ways of spending valuable public resources than to hand out money.

Another reason is that those in charge of public finance hate to commit to any substantial recurrent spending items, so they prefer one-off handouts or sweeteners, which may be extended for a period of time but called off whenever it suits them.

The scheme has benefited 2.5 million people, regardless of the economic status of their households. Why should well-off and rich families receive a subsidy for which they have absolutely no need? The subsidy would have been more justified if it had targeted lower-income groups.

The electricity subsidy scheme not only shows the government’s lack of imagination at social betterment; worse, it encourages people to use more electricity at a time when we should be conserving power and using more alternative and environmentally friendly energy sources.

Every year, we produce massive amounts of waste without an adequate or effective recycling regime. We waste millions of tonnes of food, and use immense amounts of water just to flush toilets. Instead of educating the public about the virtues of conservation, energy-saving and going green, the government, in effect, tells people to consume more electricity from coal-burning plants. This is not the message we want to send to the next generation. It’s time to end the subsidy.

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