2006年2月24日 星期五

Paying the price for distorted incentives


The city is moving towards the dawning of a new electricity market in 2008 - or so the government tells us. But will this be an era in which the perverse incentives of the past - arising from an obsolete regulatory regime that has cost the public dearly - are reversed?


Any regulatory framework for public utilities creates operational incentives for the market players. Yet, when these incentives are not consistent with the prevailing social objectives, the purpose of regulation is lost. Such incentives invariably lead to an awkward situation, where the corporate behaviour of the utilities comes into conflict with the public interest.


Sadly, this is what has happened in Hong Kong 's electricity sector: despite major shifts in the economic structure and public expectations, the regulatory framework under the scheme of control arrangement has remained largely unchanged over the past four decades.


Under that agreement, the city's two power companies are allowed to earn a return on assets of 13.5 per cent plus an additional 1.5 per cent return on shareholder equity. In practice, this translates into an annual return on equity of over 25 per cent after debt financing. The two power companies responded to these powerful incentives and adjusted their corporate behaviour accordingly.


One may argue that their behaviour is entirely rational - though not exactly likeable - for sophisticated market players. Yet, such corporate behaviour produces odd distortions that are obvious on three fronts.


First, resources are allocated to areas where they generate negligible marginal gains. For instance, the reserve capacity for power generation of the two companies has fluctuated between 30 and 40 per cent in recent years - far above the international standard of 20 per cent.


Furthermore, although power-sharing links between the two companies have been in place for many years, they are used only in emergencies. This exposes the rationale behind building such overcapacity: more power-sharing would deprive both companies of the chance to expand their own generating capacities.


Second, neither company seems to have much concern for resource efficiency. Many cities adopt a sliding tariff to encourage customers to use less power during peak hours, shifting to low-demand periods of the day. The purpose is to get a more consistent level of power use during the day. This is, however, a non-issue in Hong Kong .


If Hongkongers could be persuaded to endure higher indoor temperatures - or simply dress more cooly during a few of those summer days when we hit peak demand levels - we would avoid annual increases in peak load.


That would delay, or even avoid, the need for new power plants.


Hongkongers find no joy in energy conservation. The more we conserve electricity, the less efficient the power supply system becomes: then power companies demand higher tariffs to maintain their permitted return on assets.


Third, the regulatory framework also encourages the failure to account for the external cost of environmental pollution. According to the department of community medicine at the University of Hong Kong , the direct medical costs attributable to air pollution amounted to $1.3 billion in 2002.


The preliminary government proposal for a new regulatory regime does not seem to recognise the huge costs that Hong Kong business and consumers have paid in the past.


The litmus test for the new regulatory regime is whether it can create for the power companies incentives that are aligned with our long-term social objectives - fair for all stakeholders, healthy for the environment and efficient for our economy.


Albert Lai Kwong-tak is vice-chairman of the Civic Party.


(Originally Published in South China Morning Post, 2006-4-24 , p. A15 )


 


 

2006年2月13日 星期一

社會公義:新興的發展議題

「民主、法制是社會和諧的基礎。如果一個社會的財富只集中在少數人手裏,那是不公道的,也是不會持久的,社會也不會穩定。要實現社會公義,就要把社會公義提到制度上來看待。」 說這話的不是一個社會運動街頭鬥士,而是在本月走訪日韓的溫家寶總理。


儘管香港與中國內地平均的經濟發展水平並不一致,但弔詭的是:在全球一體化格局下,我們同樣面對嚴峻的貧富差距和社會不公的問題。


更加弔詭的是:溫總理明確指出必須通過制度改革來解決社會公義的問題。曾特首卻在上月的特首辯論中語帶激憤地表示,突顯貧富不公等同宣揚階級鬥爭。除非你相信溫總理會跑到日韓宣揚階級鬥爭,否則只能懷疑曾特首的管治思維與國際思潮完全脫節。


單從反映貧富差距的堅尼係數來看﹙數字越高、差距越大﹚,香港是零點五二五,內地則稍高於零點四。香港的貧富懸殊遠甚於內地。


固然、判斷貧富差距不應該只以堅尼系數作為單一指標。但是、只要再檢視一些宏觀現象:低收入人口的比例持續上升,三份一的老年人口生活於貧窮線下,四份一的兒童生活於清貧家庭,甚至中產階層的收入也有向下流動的趨勢,我們便不能不憂心貧富懸殊對社會發展的影響。


其實、近年來很多社會上引起爭議的議題均牽涉到社會制度是否公平的根本課題。


例如、中小企業面對激烈競爭,生存空間愈趨狹窄,卻缺乏公平競爭法的保障,大企業的壟斷行為無所顧忌。缺乏公平競爭的市場環境,已經變成窒礙經濟發展的因素:個人創業的意欲減低,創意萎縮,消費者的權益卻得不到保障。長遠來說,只會使香港推行知識型經濟的願景變成一紙空談。


就連市民最貼身、往往牽涉一生積蓄的物業買賣,空談多年也未能就銷售面積落實保障買家的定義,發水樓層出不窮。消費者和地產商只能在一個不對稱的球場上對拼,公平制度又從何談起?


即使是空氣污染等環境問題,其實也是一個社會公義的議題。試想、個人健康最受空氣污染影響的是什麼人口?日夜在路邊擺賣、呼吸汽車廢氣的小販和推銷員;在工廠區邊緣的住宅人口;在一些偏遠的污染地區、例如元朗、天水圍和東涌的居民。每年香港因為空氣污染而提早死亡的人口約有一千六百名,難道弱勢社群和貧窮社區不是首當其衝嗎?


改變不公義的制度不是一場零和遊戲。弱勢社群得到更好的保障,享有更佳的發展機會,不但能促進社會和諧,更可以加快社會整體的可持續發展。我們倚靠自由市場的無形之手創造財富,但必須同時以政府的有形之手保障弱勢社群的最低生活水平,並維持一個公平的競爭體制。


不管是商業特權或政治特權,都是破壞社會公義的元兇。改革進步只會損害少數特權份子的免費午餐,這是階級鬥爭嗎?


溫總理要求把社會公義提到制度上來看待,特區的領導班子是否能夠不負所托?