Green Cities: Urban Growth and the Environment
As an aside I intend to write a full review of this text in the next week or so but for now I would recommend it to anyone interested in environmental economics but does not want to feel like they are reading a textbook or actually working. It has a Freakonomics for environmental economists feel to it but has more structure and a little more depth (which may unfortunately cost it some of the more casual non-economist readers).
This is the sort of issue that is covered in Green Cities - how local governments can use the greening of a city via green policies to attract high skilled workers who also tend to work in "clean" jobs, thus helping to create a virtuous circle for the area (and an increase in house prices). The well-educated and skilled workers then tend to vote for even greener politicians and policies. There are, as you can imagine, numerous ramifications and caveats along the way.
The article below however, also reveals what the “browning” of a city can do. I suspect that Hong Kong politicians now have pollution high on their list of things to address if they are not already doing so. The question is how much they can do about transboundary pollution from the nearby industrial regions in China?
Merrill Downgrades HK Office Sector, Cites Pollution
HONG KONG - Merrill Lynch is advising clients to sell Hong Kong office landlords in favour of Singapore's, saying the city's air pollution will prompt skilled talent to move further south.
"Buy Singapore office landlords, sell Hong Kong office landlords," the US investment bank said in a report. "The government in HK is relatively powerless to address the true causes until Beijing gets tough. It could be a long and choking wait that many could choose not to endure."
The long-term competitiveness of Hong Kong is in "some doubt" due to the poor air quality and potential exodus of highly skilled talent, especially from the financial service sector, who would chose to live elsewhere, the report said.
"Official policy fails to recognise, and ultimately respond, to the competitive threat from Singapore," Merrill Lynch said.
Merrill Lynch forecast a 5 percent decline in Hong Kong office rents in 2007 and downgraded the office sector.
It rated "sell" on Hongkong Land Holdings Ltd., Hysan Development Co. Ltd. and Great Eagle Holdings Ltd.
The bank said the Singapore companies it would pick included City Developments, Suntec REIT and CapitaCommercial Trust.
Singapore is set to benefit with the population likely to almost double over the next decade due to mass immigration, including from Hong Kong, leading to growing demand for housing and Grade A office, the US bank said.
The report said "this is a developed economy with developing standards of particulate contamination drifting down from the Pearl River delta" and the Hong Kong government estimated the clean-up costs would amount to HK$51 billion (US$6.5 billion).
Shares of Great Eagle gained 0.43 percent to HK$23.50 on Wednesday morning, Hysan was up 0.5 percent at HK$20.15 while Hongkong Land fell 2.7 percent to US$3.58.