(Corrects story published April 16 to attribute car prices to website in 13th paragraph.)
April 16 (Bloomberg) -- Hong Kong is one of the best places in the world to do business. As long as you don’t breathe.
Toxic air caused 3,279 premature deaths last year in the city that means “fragrant harbor” in Chinese, contributing to more than 5.5 million doctor visits in the metropolis of 7.2 million, according to an index developed by the University of Hong Kong’s School of Public Health.
A 35 percent surge in private-car registrations in the past decade is confounding the policy makers who want cleaner air without the license restrictions and congestion charges imposed by rival financial centers London and Singapore. Even other Chinese cities such as Beijing and Shanghai are trying to clear pollution by curbing vehicles.
“Hong Kong has always attracted the best and brightest talent from around the world,” said Peter Levesque, the chairman of the city’s American Chamber of Commerce. “Today, however, top international talent must consider the downside health risks associated with its poor air quality. That’s bad for business, and bad for Hong Kong.”
Air pollution contributed to HK$39.4 billion ($5.1 billion) in direct, indirect and intangible costs in 2012, according to a 2013 paper prepared by the University of Hong Kong public-health specialists. That sum is about 2 percent of its economy.
The World Health Organization concluded last month that tainted air is the worst environmental-health risk. Pollution contributed to killing 7 million people in 2012, one in eight fatalities, more than the total that succumbed to AIDS, diabetes and road injuries combined, the Geneva-based WHO said March 25. Forty percent of those were in the western Pacific region, which is dominated by China.
The number may be more in the Central and Causeway Bay sections of Hong Kong island -- where banks and companies like JPMorgan Chase & Co. and Walt Disney Co. have regional headquarters and where roads weren’t built to accommodate today’s traffic.
Nitrogen dioxide, mostly from vehicles, inflames the lining of the lungs and increases the likelihood of respiratory problems. Roadside concentrations of that pollutant reached a record high last year in Central, according to advocacy group Clean Air Network.
The smog becomes thick and eye-stinging on days with lighter winds, especially at gridlocked intersections.
“Central is like a canyon, with tall buildings on both sides making it difficult for air to disperse,” said Hung Wing-tat, associate professor of civil and environmental engineering at Hong Kong Polytechnic University. “Then you’re breathing in dirtier and dirtier air day after day.”
Granted, Hong Kongers aren’t alone in coping with filthy air. Earlier this month, London was shrouded in haze; Paris in March cracked down on drivers and made its transport system free as a cloud of pollution hung over the city.
In Hong Kong, which Bloomberg ranks as the best place in the world to do business, the worsening pollution is tied to economic inequality.
It’s the most expensive city to own or rent a home, according to a survey of 12 financial centers released this month by Savills Plc, a London-based property company. Hong Kong’s best-selling car model in 2012 was Mercedes-Benz’s E-Class, said Namrita Chow, a Shanghai-based IHS Automotive analyst. The vehicles start at HK$512,000, according to the luxury car brand’s local website.
Hong Kong has the third-most vehicles per kilometer of road -- after Monaco and the United Arab Emirates. Cars dominate major links at peak times even though most people use mass transit, according to a study from the Worcester Polytechnic Institute in Massachusetts, supported by the environmental group Friends of the Earth. While 90 percent of residents rely on public transport to commute, buses accounted for no more than 7 percent of vehicles on Central’s Connaught Road at rush hour and 30 percent in Causeway Bay, the study found.
Average bus journey times have increased 17 percent in the past six years, according to data from The Kowloon Motor Bus Co. (1933) Ltd., one of the city’s main operators. It said 99 percent of its routes took longer to complete.
The bottlenecks have a direct economic cost. Ask Leung Kwong-hung, a taxi driver who works the 5 a.m. to 5 p.m. shift. Every hour he spends stuck in gridlock causes a 25 percent loss in revenue.
“When it’s bad, many of us would rather park our cab and have breakfast than brave the traffic,” he said.
“I’ve seen so many more private cars on the roads these two years -- especially the Mercedes and Bentleys,” Leung said. “There are so many cars on the roads that they’re congested eight out of 10 hours. Before work, lunch time, tea time, after work -- so what’s their point?”
The city’s chief executive, Leung Chun-ying, has staked his legacy on cleaning up the air, though his options are few.
Efforts to move businesses to more remote secondary business districts have seen slow progress. Widening roads in areas hemmed in by the sea is difficult since filling in Victoria Harbor is limited by law.
“Our topography is unique in the sense that our city center is a harbor and where others have ring roads we have mountains,” said Paul Zimmerman, a councilor for the city’s Pokfulam district.
The Transport Department says it gives priority to rails. It’s adding five lines by 2020, putting 70 percent of the population in the railway radius upon completion, agency spokeswoman Josephine Wong said.
Wong added that the department expects the traffic situation in Central and Causeway Bay to improve after a new road, running along the north shore of Hong Kong island, opens in 2017. The government may explore the possibility of charging a toll in Central at that time, she said.
On March 1, the Environmental Protection Department began offering HK$11.4 billion in government subsidies to encourage drivers to replace old diesel vehicles, which it said should cut levels of nitrogen oxides by 30 percent.
As of March 27, the department received more than 1,800 applications for replacement subsidies, for around 2 percent of eligible vehicles, Christine Loh, the undersecretary for the environment, said in an e-mail. Her department also will begin using mobile sensors to track vehicles with high emissions later this year, she said.
Controlling the most noxious vehicles was more cost-effective in tackling roadside pollution than controlling the number of vehicles, said Zhi Ning, assistant professor at the City University of Hong Kong’s School of Energy and Environment, citing his own research.
The impact can’t come fast enough.
“There are days when I just don’t want to breathe,” said Maria Felsgaard-Hansen, 29, a Dane who starts her daily commute from Causeway Bay. “There’s no escaping it when it blows in your face every time you cross a street.”
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