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A model of
A “Hong Kong” model of sustainable
sustainable development development
Lawrence Wai Chung Lai, Kwong Wing Chau, Daniel Chi Wing Ho
and Frank T. Lorne 251
Department of Real Estate and Construction, University of Hong Kong,
Hong Kong, People’s Republic of China Received May 2005
Accepted December 2005
Abstract
Purpose – The purpose of this paper is to discuss a Coasian interpretation of a model of sustainable
development for Hong Kong that incorporates three segments, namely economy, society, and
environment.
Design/methodology/approach – The approach is analytical, using concepts of property rights
informed by Coasian neo-institutional economics and Yu’s ideas on the Schumpeterian process in
innovation.
Findings – First, the sustainable development criteria must be non-dictatorial, decentralized, and
compatible with market economics. The emphasis is contractarian rather than legislative or
administrative. Second, the essence of segment cooperation is to create a win-win situation rather than
an “integrated” rent seeking game, which will likely result in more values being created. Third, the
requirement that it be progressive over time implies that programs and policies that are duplicative
need to be avoided, and innovations are to be encouraged. Fourth, the requirement of satisfying only
two aspects of the three segments of cooperation implies a less stringent standard of making stepwise
improvements, and thus makes entrepreneurial efforts more likely. Last, the three segments of
cooperation, if practiced simultaneously and improved over time, can achieve most, if not all, the
principles in the Rio Declaration without aiming at a specific principle in the Declaration.
Research limitations/implications – This paper should focus on a “win-win” rather than a
mutually exploitative approach to public participation in sustainable development promotion.
Practical implications – This paper should assist policymakers and politicians in understanding
how sustainable development may be conceptually modelled.
Originality/value – The paper is the first paper that defines for Hong Kong a model of sustainable
development on the basis of Coasian economics, and contrasts it with other proposed models.
Keywords Sustainable development, Hong kong
Paper type Conceptual paper
Introduction
Inspired by the design of a logo adopted by the Council for Sustainable Development
(CSD), the purpose of this paper is to articulate a trinitarian “Hong Kong” model of
sustainable development that can satisfy certain objectives of sustainable development
in the long run without infringing upon the political, economic, and social constraints
of Hong Kong as a polity in China.
Although the term “sustainable development,” as popularly understood, was first
defined in the report Our Common Future (“Brundtland Report”) by the United Property Management
Vol. 24 No. 3, 2006
Nations’ (UN) World Commission on Environment and Development (1987) pp. 251-271
(the Brundtland definition), the first authoritative official set of UN principles of q Emerald Group Publishing Limited
0263-7472
sustainable development that represents the consensus reached by a large number of DOI 10.1108/02637470610660147
PM nations originated from the Rio Declaration made during the UN Earth Summit of 1992
24,3 (The United Nations Department of Economic and Social Affairs (DESA), 1992).
Since, then, many countries and local regions have adopted various versions of
sustainable development that each believe can most accurately capture the spirit of the
Rio Declaration, which was so sufficiently broad that indigenous efforts to define
sustainable development were not only permitted, but encouraged:
252 States have, in accordance with the Charter of the United Nations and the principles of
international law, the sovereign right to exploit their own resources pursuant to their own
environmental and developmental policies, and the responsibility to ensure that activities
within their jurisdiction or control do not cause damage to the environment of other States or
of areas beyond the limits of national jurisdiction (Rio Principle 2).
For any burgeoning new concept that can claim any significance, the stepwise
development of the concept is indicative of a serious endeavour behind it. If one looks
into the origin of the term “sustainable development” and its Brundtland definition
made in 1987, the Rio Declaration is merely a statement of intention. Both before and
after the announcement of the Rio principles, there have been substantial academic
work and concept elaboration across various disciplines centring on the theme
embedded in sustainable development. An example of a frequently cited milestone is
the work of Daly and Cobb (1989).
As a matter of government administration, sustainable development in Hong Kong
has an ancestry of a drive to environmental protection during the mid-1980s, in which
the Environmental Protection Department (EPD) was born. This fast growing
department (Lai and Fong, 2000, p. 28) was grouped with the Planning and Lands
Departments into the Planning, Environment and Lands Branch, which in turn became
the Planning, Environment and Lands Bureau after Hong Kong’s return to China in
July 1997. However, since 2000, the EPD was taken out of this bureau to be grouped
with food in 2000, and then with the Transport and Works Departments in 2002.
The first major government study to foster sustainable development, “sustainable
development for the 21st Century study” (SUSDEV 21), was commissioned in August
1997 and completed in August 2000. The study was managed not by the EPD, but by
the Planning Department. Out of SUSDEV 21 came the creation that was directly
placed under the Chief Executive – a Sustainable Development Unit (SDU) in
April 2001 to oversee an advisory CSD, established in March 2003. This comprised
appointed public and private members.
We can say that sustainable development in Hong Kong did not formally begin until
the commissioning of a study on the subject, SUSDEV 21, although there had been
laws, consultancies, and reports dealing with environmental issues prior to that study
(Mottershead, 2004b, pp. 90-5). However, the term could be detected in an internal
government paper from as early as 1993. Then, few people appeared to know what
sustainable development was or what it meant. This posed opportunities, as well as
dangers, for an appropriate institutional structure to emerge. The danger is greater in
the sense that many have stuck to their “deep green” interpretation of the Brundtland
definition and refused to accept its manifestation in the Rio Declaration[1]. Others, such
as Doyle (1998), condemned the Rio Declaration and the ensuing Agenda 21 outright as
endorsement of a globalised capitalist market economy.
What is the current position of the Hong Kong Government and the wider
community? A Hong Kong Declaration was made on February 26, 2004 in the Asia and
Pacific Leadership Forum (Leadership Forum) convened by China and the UN (Asia A model of
and Pacific Leadership Forum on Sustainable Development for Cities, 2004, para. 1). sustainable
The leaders who participated in the Leadership Forum thereby announced to the
world: development
We, the representatives of national and local governments, community groups, the scientific
community, professional institutions, business, and the United Nations and other
international agencies, having met at the Asia Leadership Forum on Sustainable 253
Development for Cities, reaffirm our commitment to the goals, targets and
recommendations contained in Agenda 21, the Programme for the Further Implementation
of Agenda 21 and the Johannesburg Plan of Implementation.
The Hong Kong Declaration specifies the following policy and action areas:
. leadership and local governance;
.
economic growth and job creation;
.
planning a better environment for urban housing and land use;
.
meeting basic social services;
.
increasing mobility; and
.
tourism and cultural heritage.
To bring our mission to fruition in Hong Kong, the HKSDF has endorsed and adopted a
localized version of the Goals of the US President’s Council on Sustainable Development
(italics added, http://hksdf.org.hk/mission.htm#objectives).
Likewise, other NGOs (e.g. The Hong Kong Council of Social Services) basically
support a vision for promoting sustainable development in Hong Kong, but
provide no specific definition of it[11]. World Wildlife Fund Hong Kong (WWFHK)
advocates conservation and a reversal of environment degradation, but has not
provided a specific definition for sustainable development.
One might wish to step back and ask: what is the ultimate objective of civil
involvement? According to King (2004, p. 259):
. . . A fundamental part of sustainable development is aiming towards a single objective and
active interaction between all stakeholders and parties concerned so that all needs are taken
into account” (emphasis added).
It cannot be said that this methodology of approaching sustainable development is
necessarily a good idea. Indeed, neither the HKSAR (Sustainable Development
Unit, Hong Kong Special Administrative Region, www.susdev.gov.hk/html/index.
htm) nor many other regions of the world may wish to endorse a single objective
of sustainable development to be their goal. Indeed, citing works of Hajer (1995),
Dryzek (1997),and Hills (2004, pp. 15-21) proposed to view sustainable development
as “an environmental discourse.” Facing what is called an “administrative
rationalism” of Hong Kong, Hills believed that a pragmatic interim solution is
required. Developing the theme mooted in Hills and Welford (2002), Hills argued
that SUSDEV 21 and the CSD notion of a “balance” between economy, society, and
environment should be replaced by the idea of “ecological modernisation” (EM) as
a transition to sustainable development. Hong Kong, hence, should move away
from its long established laissez faire “development principles.” Characterised by
Hills (2004, p. 40) “as a weak form of sustainable development”[12], this approach
“may well mirror current thinking within the Hong Kong Environmental
Protection Department” (Hills, 2004, p. 39). We agree with Hills as regards to the
need to be pragmatic about any proposal in respect of sustainability.
Hills suggested five reasons as to why EM is most suitable for Hong Kong:
(1) it does not call into question the continued existence of the capitalist system;
(2) “there is money in it for business,” as Dryzek (1997) and Hajer (1995) mentioned;
(3) ecological modernization says little about social justice and Third World
development;
(4) ecological modernization can provide a framework within which to develop A model of
partnerships between the public and private sectors (i.e. through cooperative sustainable
environmental governance); and
development
(5) EM is not concerned solely with industrial production, but with the
environmental efficiency of the economy as a whole (the author claims that it
is particularly suitable for problems related to Pearl River Delta’s integration).
259
To put Hill’s ideas in context, there is a need to note that EM is, in fact, a
transformation of the term “Environmental Modernisation” (eM), which was coined by
Michael Jacob of the Fabian Society (Jacob, 1999) and holds that a win-win approach is
feasible (Davoudi and Layard, 2001; Davoudi, 2001). eM (or EM) has, in fact, become
the prevailing model for planning institutions in Europe (Batty, 2003, p. 76):
Ecological modernisation argues that economic growth is not the enemy of sustainable
development; indeed economic growth is seen as necessary to achieve environmental
improvements and sustainability.
EM has been referred to as “green capitalism” (Connelly and Smith, 1999, p. 58) and
criticised for supporting liberal market economies and existing government structures
and failing to resolve the fundamental problem of a society driven by “wants” rather
than “needs” (Mottershead 2004c, p. 536). The means to attain win-win solutions,
according to Hajer (1996, p. 249), is “technical and procedural innovations.”
While a “Hong Kong” model of sustainable development probably cannot be
conclusively described, the theme it seeks could be most succinctly described by the
logo representing it, as adopted by the CSD. The logo is in the form of a circular ring
consisting of three segments labelled Economy, Environment, and Society (EES), with
arrows pointing in a direction that, at best, capture more of a sense of relationship
rather than a sense of causality, and, at worst, reflect a lack of direction!
The logo might have had its origins in the SYSDEV 21 Final Report of 2000, in
which sustainable development in Hong Kong entailed the following definition:
Sustainable development in Hong Kong balances social, economic and environmental needs,
both for present and future generations, simultaneously achieving a vibrant economy, social
progress and better environmental quality, locally, nationally and internationally, through
the efforts of the community and the Government (SYSDEV 21 Final Report, para. 5.3.2)[13].
But apparently, the idea for the logo originated from the planner, as its three key words
constituted the “planner’s triangle” (Batty, 2003).
Broadly interpreted, the circular ring of EES with a directional arrow could be a
three dimensional configuration with the arrow representing a progressive element of
time. That is to say, the aspiration to resolve the compatibility of EES in a region
should be viewed as a continuous and trinitarian effort, with whoever or whichever
country or region utilizing this model being required to do two things. First, a manager
of sustainable development must pay attention to how the three areas of cooperation
can be pursued simultaneously. Second, the manager must also note that cooperation is
to be repeated in different forms and in different projects over time[14].
Indeed, there may be different interpretations for the logo of Sustainable
Development of Hong Kong that the CSD may hesitate to make explicit. However,
an evasive political stand in this instance may generate false expectations in various
PM directions that consume self-dissipating resources. At least three interpretations could
24,3 be seen as plausible interpretative variations of the logo:
(1) that there should be a mechanistic balancing of the voices of the interest groups
representing the environment, society, and economy;
(2) that there is a one-way circular flow of causation from one to the next in either
direction; or
260
(3) that the three components are going in different directions independently of any
status quote starting point.
However, our proposed interpretation, as described in this paper, could arguably have
economic consequences more favourable than those of these three interpretations:
(1) Model (a), egalitarian pluralism in decision making as regards resource allocation,
as one possible way to particularise Mottershead’s idea of “interconnectedness” or
“integration of economic, social, and environmental considerations” (Mottershead
2004c, p. 537), would not only lead to a fall in overall efficiency and the ability to
generate wealth, but in the limiting case, may lead to a rapid collapse in the
environment (e.g. where the environment itself becomes a battleground).
(2) Model (b), a fatalist trap of lock in a cyclical succession of different emphasis in
terms of decisions made or outcome one at a time, which can be compared to the
Aristotelian cycle of “monarchy, democracy and tyranny” can only spiral down
(rather than spiral up) in terms of the total level of satisfaction for all three
components;
(3) Model (c), a divorce of endeavours, is worse than (b) due to conflicts of
objectives without any rule to resolve them. In other words, Model (c) is
equivalent to no models at all, as any thing, say, idea, or entity, will be perceived
as consistent with the model as long as it mentions the magic words implied by
E þ E þ S.
Indeed, sustainable development can be a journey, with the arrow denoting a circular
spiral of projects created over time. The logo, therefore, must be seen as a two
dimensional representation of something taking place over three dimensions. The three
elements of cooperation not only need to be practiced at the same time, but have to be
done better each time[15].
Although supportive of a developmental and human-centred approach and
endorsing of the CSD idea of securing economic, social and environmental dimensions,
the Hong Kong Declaration has many ambiguities and potential conflicts that need to
be resolved. The declaration urged for the implementation of actions “in a spirit of
partnership” through “a participatory approach” (para. 6). The idea of partnership
suggests the existence of win-win solutions. However, the idea of a participatory
approach, “participatory processes,” (para.17) and “community involvement” (para. 20)
may not always entail “a spirit of partnership.” The declaration also correctly pointed
out that fighting corruption is a major link in governance (para. 8).
However, the idea of providing “favourable fiscal and financial incentives” (para.17)
tends to produce an environment for arbitrary allocation of resources, and hence,
opportunities for rent-seeking activities or “obstacles and constraints to progress”
(para. 13). The most important issue is the lack of a clear model for organising various
goals and objectives that pertain to the environment, economy, and society. As far as A model of
economic growth and job creation are concerned, the idea is “the adoption of advanced sustainable
and appropriate technology” (para.15), but there is no reference to the possibility of a
spontaneous emergence of innovations. development
In order for the engine of sustainable development to get rolling, it may be
important to emphasize a certain uniqueness and creativity of the system that is
inherited from market economics. Such creativity is essential for tackling 261
location-specific sustainable development problems. As pointed out in the previous
section, sustainable development should not just be a set of old problems with new
clothes. In order for the concept to be useful and significant, policies and programs
coming out from sustainable development should increase total values in overlapping
generations, benefiting both present and future generations.
There are reasons to believe this interpretation of the “Hong Kong” model of
sustainable development can increase values (rents) rather than dissipate values (rents):
.
The sustainable development criteria are non-dictatorial, decentralized, and
compatible with market economics. The emphasis is contractarian rather than
legislative or administrative.
. The essence of segment cooperation is to create a win-win situation rather than
an “integrated” rent seeking game, which will likely result in more values being
created.
.
The requirement that it be progressive over time implies that programs and
policies that are duplicative need to be avoided and innovations are to be
encouraged.
.
The requirement of satisfying only two aspects of the three segments of
cooperation implies a less stringent standard of making stepwise improvements,
and thus makes entrepreneurial efforts more likely.
.
The three segments of cooperation, if practiced simultaneously and improved
over time, can achieve most, if not all, the principles in the Rio Declaration
without aiming at a specific principle in the Declaration.
Conclusion
Land use planning in Hong Kong under constitutional capitalism is a matter of 265
“planning by contract” predicated on a leasehold land system (Lai 1996, 1997a, b, c,
1998a, b, 2002, 2004, 2005) in which private development rights are allocated by sale.
As both land leases and capitalism are protected by the Basic Law, any model of
sustainable development for Hong Kong has to embrace these features. A “Hong Kong”
model of sustainable development can (and should) be articulated for the purpose of
raising citizen awareness and an overall appreciation of the concept of sustainable
development, and also to reduce transaction costs in policy development and
consultation in light of these constitutional constraints. For a Pearl River Delta
integration initiative, it is believed that the model so articulated has a better chance of
gaining consensus for across-the-border decision-making processes.
The model proposed by the authors is not so much a description of or prescription
for what sustainable development would or should look like. Rather, what we propose
is more about governance and institutional structure that would be conducive to
sustainable development. This is an attempted approach to a highly contested subject,
about which there are so many different viewpoints and conflicting values. What is
more, it is a developing subject that will benefit from continued rethinking and
innovations. By defining the model in terms of institutional structure rather than the
end result, the proposed model should help resolve some present conflicts, as well as
cater to future innovations. In this way, the model itself is “sustainable” even in the
midst of conflicting viewpoints, values, and interests as well as changing parameters.
In this way, the model may hopefully improve the quality of the current debate on
sustainable development and help suggest a solution that is, in a way, “out of the box.”
The Schumpeterian dimension of the model puts emphasis on innovation and new
ideas, rather than on confrontational politics, to resolve conflicts, with the market code
of “win-win” as the guiding principle. While the authors have not assigned a “subject”
to the verb “win,” in the proposed model, any subject has to be one who has some
property rights or entitlements, and thus could become a party to contract or
negotiation. This is not a claim to truth, but an invitation to debate, which, if well
substantiated with good arguments and data, would certainly raise the standards of
intellectual discourse on (and hence means to) sustainable development.
Notes
1. See Mawhinney (2002) for some definitions of this “deep green tradition.” See Beckerman
(1992, 1995, 2003) for a complete opposition approach, which denies that sustainable
development is meaningless. We hold that neither position is tenable, but space does not
permit a dedicated theoretical discussion here. Suffice it to say, as to be demonstrated in this
paper, sustainable development can be incorporated into a Coasian economic “model”
informed by Schumpeterian reasoning. This model can deal with both the need for
conservation and economic and social development. See Yu et al. (2000) and Lai and Lorne
(2003a, b, 2006a, b) for an economic characterisation of the idea of sustainable development.
PM 2. In Vancouver, Canada, for example, sustainable development charretes are run by
architectural guru Patrick Condon. The city of Vancouver and the greater region of
24,3 Vancouver retained such architectural consultants as the Sheltair Group to perform similar
tasks.
3. For definition, see Environmental Protection Agency (1991).
4. Those who studied and understood Irving Fisher’s Theory of Interest (Fisher, 1930) will
266 reject the concept of sustainable development in the Brundtland sense altogether. However,
Hirshleifer (1970) reviewed various schools of thought on interest rates and described the
zero interest rate condition as a special case that occurs in the longest of long shots.
5. Sensitivities on this inherited constraint of the system can be found in various governmental,
as well as non-governmental, discussions of the problems. The later endeavours, which
include discussions within academic circles, NGOs, casual conversations with citizens on the
subject, etc. will be further elaborated on in the next section.
6. Hong Kong traditionally operates pragmatically, and is not usually accustomed to such an
abstract conceptual characterization of the problem. However, on some hotly debated
specific policy issue, manifestations of this nature of the problem can be abundantly found.
See Lai and Yeung (2004) and the related papers and positions articulated regarding the
issue of preserving Victoria Harbour.
7. “The BCR (Bruntland) definition of sustainable development has, depending on the literature
reviewed, been the catalyst for somewhere between 200 and 500 other definitions around the
world” (Mottershead, 2004a, brackets added).
8. To some environmental activists who believe that the world is a zero-sum game, and that the
research objective stated here should be laughed at, we only have to pose to them a simple
architectural question: is it possible for a building to be constructed from the top floor?
The question would have been equally laughed at as being anti-gravitational – that is, until
a model has been built to show compatibility with the force of gravity.
9. According to a version prescribed by Ms. Loh, “Natural Capitalism” consists of the following
three principles: (1) eliminating the concept of waste by re-designing the economy, whereby
waste is reduced or eliminated at the production stage; (2) shifting the structure of the
economy from focusing on the processing of materials and the manufacture of things to the
creation of services, thereby discouraging the production of waste where no one is
responsible for it; and (3) reversing the destruction of the Earth with programmes for
restoration and investing in the Earth’s natural capital. The term may also be traced to a
book by Hawkins et al. (1999).
10. Mottershead was apparently ignorant of the existence of doctoral theses on sustainability
written on Hong Kong by Hong Kong students (Shulman and Shulman, 2001) or the
publications of her peers.
11. Christine Fang, Chief Executive of the HKCSS, is also a member of the Council of Sustainable
Development of the HK Government. She spoke at the Seminar in 2001 on “The Role of
NGOs: Releasing Goodwill and Building Partnership for Action” – a position that is
consistent with the model described in this paper.
12. As opposed to “strong sustainability” (Daly, 1991; Rees, 1990, 1999), “weak sustainability”
(Pearce et al., 1989; Pearce and Barbier, 2000) accepts the substitutability of resources.
13. This definition was heavily criticized by Mottershead (2004b, p. 103), who argued that
Hong Kong should have adopted a definition achieved by the Brundtland Report. Note,
however, the wording in the Digest of Meeting on April 1, 2003: the remark by the committee
was made under “Item 1 – Opening Remarks by the Chairman,” in which the wording of the
paragraph was: “Having considered the need for a ‘tailor-made’ definition of ‘sustainable
development’ for Hong Kong, members agreed to adopt initially the definition in the report of
the World Commission on Development and Environment. A more pressing issue was how A model of
to promote and implement sustainable development in Hong Kong” (italics added).
14. Aside from the formal statement of SUSDEV 21, there are many examples in which this
sustainable
interpretation has been manifested. The BEC, in its printed guideline for businesses in development
Hong Kong wanting to practice sustainable development, has emphasized the balance of the
three segments. Likewise, in various sustainable development related web sites, the implicit
approval of developing a win-win strategy between segments has been amply mentioned.
For example, see A Symposium on “Creating a Win-win Situation for the Environment & the
267
Economy,” July 27, 2004, Sponsored by Ethics in Contemporary China in Transition
Research Project, Governance in Asia Research Centre, The City University of Hong Kong.
15. Predictably, this interpretation of the meaning of sustainable development in Hong Kong
will be considered “inadequate” by environmental activists in the area. Indeed, activists
seemed to have a ravenous appetite (a la C. Loh) in that ALL existing sustainable
development features in Hong Kong are rated as “INADEQUATE” (p. 137)!
16. Compared to the LEED green building certification process in the US, which is a government
funded project (managed by the US Green Building Council) that deals with the green design
of private high rise buildings on a voluntary user-pay basis, BHHI is a university funded
programme that evaluates the health and hygiene of existing apartment buildings at no
direct cost to the community.
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Mottershead, T. (2004), “International sustainable governance”, in Mottershead, T. (Ed.),
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Corresponding author
Lawrence Wai Chung Lai can be contacted at: wclai@hku.hk