The "Glasgow Climate Pact" was agreed at the 26th United Nations Climate Change Conference (COP26); The European Union, the United States, as well as Taiwan's neighboring countries including Japan and South Korea, have one after another proposed climate change response and economic transformation strategies, and countries around the world have also successively announced net zero admissions as national transformation targets. According to the update to the COP26 NDC Synthetic Report as well as the latest report from the Guardian (UK), the scientific community generally believes that COP26 falls far short of action (We are not on course). The Risk Society and Policy Research Center of National Taiwan University (hereinafter referred to as the RSPRC) believes that: The government must grasp the moment when the "Greenhouse Gas Reduction and Management Act" is to be amended and renamed the "Climate Change Response Act" so as to continuously implement policy communication with society and enterprises, so that the world can see the determination and perseverance of Taiwan to face the climate crisis jointly with the international community. It can also allow Taiwan to grasp the opportunity of social and industrial transformation at the level of national economic strategy, as well as create employment opportunities and share economic results.

 

Private enterprises should follow the trend in net zero transformation and establish alliances for mutual assistance and cooperation

Taiwanese enterprises should follow the trend in international net zero transformation, establish carbon reduction pathways, and implement carbon pricing internally in order to facilitate adjustment in the competitive relationship with other countries or regions in terms of carbon tariffs; while the financial sector, manufacturing industry, and various enterprises should establish a climate-related financial disclosure mechanism in order to respond to climate disasters and domestic and foreign transition risks, and open up external supervision and inspection. On the pathway to net zero emissions, small and medium enterprises can also learn from the EU establishing a research and development alliance to share research and development costs and jointly construct knowledge. In addition, the financial sector should actively develop green financing and related industries in order to grasp various opportunities for net zero transformation.

 

A roadmap for net zero carbon emissions for all sectors to save energy and reduce carbon simultaneously should be established

Taiwan is currently amending the Electricity Act to require the electricity supply enterprise to reduce carbon emissions by the electricity discharge coefficient, mainly aimed at energy-related sectors for the control of carbon emissions. However, after the power consumption and energy-related sectors are allocated to various sectors, all sectors in Taiwan are in need of significant carbon reduction, including power, manufacturing, residential and commercial, transportation, agriculture and other sectors. The government should follow the example of other countries in the world to establish a roadmap for carbon reduction in various sectors by 2030 and 2050. The Executive Yuan's working circles on the pathway to net zero emissions should check and revise relevant policies and regulations as soon as possible regarding the carbon reduction pathway for various sectors, and come up with a forward-looking net zero strategy so that the society can comply and respond.

 

A pathway to reduce carbon emissions by 2030 in step with the world should be drawn up

In response to one of the important conclusions of COP26, countries in the world need to submit a carbon reduction target of 45% by 2030. According to the 2015 Executive Yuan "Intended Nationally Determined Contribution" (INDC) report, Taiwan was originally scheduled to reduce carbon emissions by 20% by 2030. This will inevitably require major revisions and will be quite challenging. It is necessary to bring together the government, enterprises, and all walks of life to agree on this direction.

 

The government should adjust the organization in climate governance, amend laws and revise policies in net zero transformation

The draft "Climate Change Response Act" announced by the Executive Yuan incorporates "Net Zero Emissions by 2050" as well as "Carbon Tax and Fee Mechanism" into the law for the first time. However, Taiwan is accustomed to the brown economic development model and has not transformed into a society of the low-carbon economy and common good. One of the main reasons lies in the lack of an effective organization on climate governance to guide. The "Climate Change Response Act" should, taking account of the experience of various countries in climate and energy transition, incorporate the provisions of setting up the "Climate Change Committee" as an important review organization for climate science and governance, mainstream the policy for the net zero transition, and integrate the amendments to laws related to various sectors.

 

Carbon pricing, taxation, and fee mechanisms should be implemented one after another

The carbon pricing stipulated in Article 26 of the draft "Climate Change Response Act" should be adjusted accordingly following closely the international trend. For example, according to the World Bank data, the carbon price on the EU Emission Trading System (ETS) in 2020 was in the amount of US$ 50 per ton to avoid the lack of control efficiency due to excessively low carbon fees; Article 5 of the same Act falls short of the relevant carbon tax mechanism; and the sunrise clause of the carbon tax should be added thereto and be implemented in conjunction with the carbon fee mechanism. How to set appropriate pricing of the carbon fee as well as advance the collaborative mechanisms for the carbon fee and carbon tax is a pivotal implementation plan for Taiwan to respond to the international trend. In addition, the RSPRC affirms the carbon tariff (fee) mechanism stipulated in Article 27 of the Act.

 

The green infrastructure strategy should be established and relevant budget bills should be formulated

Green budget bills that are internationally representative have been released one after another. For example, the EU has the Sustainable Europe Investment Plan over the period to 2030; the United States has a bipartisan Infrastructure Investment and Job Act in the amount of US$ 1.2 trillion as well as the budget plan in the amount of US$ 3.5 trillion respectively; South Korea has the budget bill of Green New Deal 2.0.; and Japan has the Green Growth Strategy over the period even to 2050. Although Taiwan's forward-looking infrastructure plan includes green energy industries and the circular economy, it lacks an overall strategy for the green infrastructure as well as related budget bills.

 

Risks of socio-economic transformation to respond to impacts from net zero transition should be accessed

The key issues at COP26 include phased reduction of coal-fired power generation, agreements to the reduction of methane, establishment of a global carbon market, and the EU's upcoming "Carbon Border Adjustment Mechanism" (CBAM), etc., which will have a huge impact on the companies in our country. The government should speed up the proposing of corresponding impact assessments on the social, economic, and industrial transformation, extensively discuss the content of the assessments with all walks of life, and formulate response strategies so as to establish a forward-looking social operating track.

 

With stakeholders being affected by the net zero transition, the government should ensure the just transition

In the process of Taiwan's net zero transformation, it is necessary to ensure that when traditional energy sources disappear or existing industries are transforming, laborers and stakeholders who are adversely affected can be protected by a fair transformation mechanism to provide laborers and stakeholders with relevant social and economic assistance. A just transition will more fairly distribute costs and benefits of the net zero transition to ensure that affected laborers, stakeholders, and communities receive social supports, and enterprises create employment opportunities as well as contribute to economic growth. Therefore, the government should formulate a carbon tax mechanism to establish a just transformation fund for the redistribution of social finance.

 

Transformation requires social consensus, and the government should actively implement policy communication

The government should release a science-based social and economic risk assessment report in order to win widespread support from the society. At the moment of social change out of the net zero transition, it is necessary to ensure that the government, enterprises, and stakeholders have a sufficient public information foundation to conduct in-depth social dialogues and discussions. Although the government has established work circles for the pathway to net zero emissions, it needs a strategy for policy communication in net zero transition as well as timely disclosure of policy development plans in order to obtain a collective consensus of the Taiwanese society, which is conducive to the promotion of the net zero transition policy and the implementation of laws.

The RSPRC emphasizes at the end of this statement that: According to statistics, Taiwan is the world's 8th high carbon society in the carbon emissions per capita for a population of 10 million or more in 2019; the greenhouse gas emissions from the manufacturing sector in 2018 accounts for approximately 52% in our country's overall sectors; and the emissions from the top 30 manufacturing industries account for approximately 86% in our country's manufacturing sector. Although the government has announced its policy to reach the net zero emission target by 2050, the fundamental work of relevant scientific evaluation, administrative control, and policy communication still needs to be reviewed and actively invested therein by all walks of life in Taiwan. The government should promote the "mainstreaming in net zero transition policy" in various ministries, departments and their corresponding agencies, conduct social communication from the bottom up, as well as propose and guide amendments to the law with clear policy and timetable. Taiwan certainly has no time to wait. The government should invite and gather all sectors of the society to jointly participate in climate legislation and net zero transformation so as to plan a green economy strategy and move towards a forward-looking climate-resilient country.

Risk Society and Policy Research Center, National Taiwan University

November 15, 2021

 

Press contact: Shun-Wei Wang / Assistant Researcher at RSPRC

Phone: (02)3366-3366#55814

Fax: (02)2365-7409

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Press contact: Yu-Jung Lin / Project Executive at RSPRC

Phone: (02)3366-3366#55706

Fax: (02)2365-7409

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