Author／Wei-Tong, Wang, Assistant Research Fellow, RSPRC, NTU;

　          Chia-Wei, Chao, Postdoctoral Researcher, RSPRC, NTU

Translator／Hao-Wei, Wei

 

The Transformative Power of Cities

Currently, 50% of the global population lives in urban areas, and 80% of global GDP is generated in cities. In addition, cities account for 66% of global energy consumption and 70% of carbon emissions. It is therefore clear that cities play a key role in shaping the energy landscape. In 1990, when discussions on sustainable development were just started, the ICLEI (International Council for Local Environmental Initiatives) was founded by 200 local governments from across the globe. The ICLEI focuses on several issues, including carbon reduction, biodiversity and renewable energy, in order to promote local sustainable development. At the UN Climate Summit in 2014, Secretary-General Ban Ki-moon and Michael Bloomberg, the UN Special Envoy for Cities and Climate Change, launched the Compact of Mayors which called for public commitments to implement climate change mitigation strategies. This includes the sharing of targets, plans and implementation results by municipalities and local governments (Environmental Protection Bureau, New Taipei City, 2015). At COP 21 (The 21st session of the Conference of the Parties to the UNFCCC) in 2015, the Compact of Mayors successfully demonstrated the effectiveness of the collaborative actions that had been implemented up to the point (Yi-Yang Wang, 2016).

In addition to the aforementioned international associations, the Energy Cities project was jointly established by hundreds of local European authorities in 1990. Energy Cities considers cities to be a key role in the transition toward sustainable energy, and encourages the members to adopt localized sustainable energy strategies (Tzu-Lun Lin, 2005). So far, numerous governance strategies have resulted in successful cases of energy transition promotion by these local authorities.

Despite the ongoing global trend towards energy sustainability, US President Donald Trump withdrew from the Paris Agreement. This is in direct contrast to his predecessor President Obama’s signing of the agreement and enacting the Clean Power Plan. The Clean Power Plan set a target of reducing the United States’ carbon emissions by 26 to 28% of 2005 levels by 2025 (Energy Trend, 2017). As the US is consistently ranked among the world’s top emitters of carbon, and has traditionally played a leading role in the international community, President Trump’s withdrawal from the Paris Agreement has undoubtedly struck a blow to global initiatives regarding carbon reduction. Fortunately, the Mayors National Climate Action Agenda, comprised of mayors from several US cities, immediately stated after the withdrawal that they would continue investing in renewable energy, improving energy efficiency in commercial and industrial sectors, and buying and creating demand for electric vehicles in their continuing pledge to meet their cities’ climate goals and uphold the American commitment to the Paris Agreement.

The 21st century is considered by many to be the Century of the City, and decarbonization, as well as renewable energy and climate protection are integral elements of urban energy transition plans (WBGU, 2016: 23-24). Moving forward, an appropriate division of powers and responsibilities in governmental systems is essential. This article will therefore focus on the jurisdiction of energy governance as it relates to local and national governments. In addition, further analysis of the strengths, weaknesses, opportunities and threats that are present when local governments take charge of the promotion of energy transition is included. Finally, the challenges currently faced by local governments are reexamined, and international governance experiences can be referenced when seeking a breakthrough.

 

The Status Quo of Energy Governance by Local Governments in Taiwan

Currently, a total of 11 cities in Taiwan are members of the ICLEI. Of note is the ICLEI Kaohsiung Capacity Center, located in Kaohsiung in the south of Taiwan. The center helps cultivate the abilities of sustainable development of urban environment in East Asia by drafting decrees and policies, promoting environmental education, offering training courses and holding conferences. However, while the local governments actively support the international trend, the domestic actions are encountered with several systematic obstacles.

Taiwan adopts a balanced division of powers between the central and local governments. Chapter 10 of the Constitution describes the powers of the central and local governments, but there is no concrete article about the energy affairs. In reference to Article 111 of the Constitution, the matters should therefore fall within the jurisdiction of the central government if is national in nature; of the province, if it is provincial in nature; and of the county, if it concerns the counties. In the Energy Administration Act, it is stated that the central Competent authority shall administer the energy supply enterprise. In the Local Government Act, the self-government matters do not include the energy affairs. In addition, the local governments in Taiwan do not have any specific department or service in charge of the energy affairs. Instead, it is usually the Department of Urban Development or Economic Development in charge of energy affairs (Meng-Fu Chen, 2017: 1-3).

In 2015, Yunlin County government passed a self-governing regulation to ban factories from using bituminous coal and petroleum coke. However, the regulation was declared invalid by the Environmental Protection Administration (EPA), as it conflicted with the Air Pollution Control Act, which adopts a permission system on the usage of them (Wen-Tzu Chen, 2015). In the next year, Taichung City government also passed a regulation, but aimed to control the bituminous coal and petroleum coke instead of banning them. It was therefore not declared invalid by the central government (Wen-Tzu Chen, 2016). The aforementioned two cases have led to discussions and highlighted the controversies in the division of energy governance between local and central governments. In fact, the officials and academic communities have also not reached a unified conclusion yet on the interpretations of the decrees (Wen-Tzu Chen, 2016).

Outside those affairs specified by the law as belonging to the jurisdiction of the central government, the local governments still have the powers to formulate the local energy policies and plans. Some relatively successful local energy saving policies are as follows. New Taipei City has incorporated civic engagement to set up a local energy council and enacted participatory budgeting. The Energy Cloud Program of Kaohsiung City collects the data of electricity demand and supply and analyzes the local characteristics. Tainan City has budgeted to subsidize financing photovoltaic projects. Pingtung County makes use of local environment to implement the projects of Aqua Solar Farm and local power generation (Alliance for Promoting Energy Transition, 2016: 15-17).

As can be seen from the aforementioned examples, the energy governance of local governments in Taiwan is hindered by the political system and legal regulations. However, the local governments can still promote energy transition with various methods within the scope of authority, including modifying the decision-making system, budgeting subsidy, cultivating industry in green energy and increasing information accessibility. The potential governance energy of local governments in Taiwan should therefore not be underestimated.

 

SWOT Analysis of the Energy Transition Governance of Local Governments in Taiwan

After understanding the status quo of energy governance by local governments in Taiwan, it is necessary to further analyze the macroscopic factors and intrinsic advantages and disadvantages in order to enhance the governance power, which implement energy transition at the local level and lobby the central government to devolve more power. In this section, the SWOT model is utilized to analyze the strengths, weaknesses, opportunities and threats of energy transition governance of local governments in Taiwan (Table 1). The former two are internal factors and the latter two are from external environment. The strengths and opportunities are helpful to achieve the policy goals while the weaknesses and threats are harmful (Jun-Ying Huang, 2009: 6). As the practical situations are different for different local governments, listed here are only the general features which does not include the regional specific characteristics and executive details.

First of all, in terms of the strengths, the local governments and residents usually have stronger emotional bonding due to geographical relationships, which can more easily arouse interest among local residents to participate in public affairs. In addition, the stakeholders of local policies are usually local residents, which are of smaller scope, in contrast to the formulation of national policies, which has to take all citizens into consideration (Chang-Tay Chiou, 1999: 9). Within the system of balanced division of powers between the central and local governments, the local governments have the authority to adapt to local conditions, that is to say, the local self-governing body could formulate its overall plan according to the administrative region (Kuei-Hsiung Yao, 2015: 200-202).

The followings are the weaknesses of the local governments. Sustainable energy policy requires long-term planning; however, the rotation of elected officials might lead to policy U-turns. The local governments also lack a specific department or service in charge of the energy affairs and an overall planning and estimate, and related human resources when compared with the central government. Financially, the local governments in Taiwan generally have too much debts, and the level of self-financing is low as they rely too much on subsidies from the central government (Chong-Yuan Ling, 2013: 2). Moreover, the current measures concentrate on policy advocacy, without concrete mechanisms on incentives and penalties, resulting in the slow progress of energy transition. In addition, the actual measures are confined to energy saving in public institutions, while the civic engagement is lower (Alliance for Promoting Energy Transition, 2016: 11).

The local governments have great opportunities to promote energy transition under the current domestic and international situation. As mentioned in the beginning, the international society has recognized the important roles local governments could play in the energy transition process. Due to political factors, Taiwan is unable to participate in many international organizations. However, the local governments have more development space through learning from and interacting with cities from other countries (Yu-Chin Lee, 2015). In terms of the overall policy of Taiwan, there are four core values emphasized in the Framework of Taiwan's Sustainable Energy Policy: energy security, green economy, environmental sustainability and social justice (Ministry of Economic Affairs, 2017: 1-7). Table 1 summarizes the contents in the Framework related to local governance. The cooperation between local governments currently focuses on policies, crossing administrative borders and increasing regional competitiveness. Despite the obstacles which includes possible sectionalism and disagreement on resource allocation (Kun-I Liu, 2006: 2), it could be a breakthrough if the local governments learn from the strengths and weaknesses of each other in aspect of local energy governance (Alliance for Promoting Energy Transition, 2016: 12). The Formosa Petrochemical Corporation proactively had an estimation on planning to replace coals with natural gases for the independent power producers before the permission expired in June 2017, and Yunlin County thereby signed a memorandum with the company. If the industries proactively release the willingness of energy transition, the governments should take the opportunities to support and supervise on their actual actions (Yi-Chin Jiang, 2017).

 

Table 1    The contents in the Framework of Taiwan's Sustainable Energy Policy related to local governance.

Aspect	Guideline	Strategy
Green economy	To promote regional green energy application	Developing local green energy application plan and demonstration sites, cultivating local green energy industry in conjunction with local features
Environmental Sustainability	To maintain air quality	Strengthening and considering the responsibilities of local air pollution governance.
	To select appropriate site	The resource endowments and environmental protection should be taken into account during the construction of energy facility.
	To reach target of nuclear-free homeland	Promoting the decommissioning of existing nuclear power plants under the principles including assuring public’s right to know, participation of local communities, and adoption of internationally best practices.
	To establish a low carbon environment	Integrating local governments, utilizing local resources to create low carbon cities/villages, promoting low carbon community renovation plan and national energy saving carbon reduction movement.

Source: authors’ elaboration

Finally, Taiwan is lack of self-produced energy and relies much on imported and fossil fuel energy; therefore, stability and security must be assured during the transition process and a variety of supply must be constructed (Ministry of Economic Affairs, 2017: 1-3). However, the national energy policy is controlled by the central government. Although under the pressure that general public highly values the air pollution issue, the local governments have formulated self-governing regulations to control the energy supplier, yet the effectiveness still remain to be seen as the self-governing regulations cannot conflict with jurisdiction of the central government. For example, critics have pointed out that the self-governing regulation passed by Taichung City is not implemented effectively as it should be (Hsin-Hsin Hsu, 2017). In general, currently the local governments still focus on energy saving policy to reduce the demand. The resources provided by the central government are mostly one-time budgets, which is lack of consistent subsidy and support on manpower training, resulting in the difficulties for local governments to have long-term planning (Alliance for Promoting Energy Transition, 2016: 13).

 

Table 2        SWOT analysis of energy governance of local governments in Taiwan

	Helpful for achieving the objective	Harmful for achieving the objective
Internal factors	Strengths	Weaknesses
	Stronger emotional bonding between local governments and residents   The stakeholders of local policies are only local residents rather than all citizens The strategies could be developed adapt to local condition	Rotation of elected officials might have impact on long-term policy Lack of energy affairs department and related human resources Lack of experiences on overall planning Insufficient mechanisms on incentives and penalties Limited financial ability Low civic engagement
External factors	Opportunities	Threats
	International trend of energy transition by local governments Another breakthrough of Taiwan's diplomatic dilemma Central government promoting new energy transition policy Positive interactions between local governments Industries proactively release the willingness	Lack of self-produced energy Energy supply regulations of local government cannot conflict with jurisdiction of the central government The one-time subsidy from the central government cannot support long-term planning

Source: authors’ elaboration

 Current Challenges to Transition

The Taiwanese government announced the Framework of Taiwan's Sustainable Energy Policy in 2008, and have held the 3rd and 4th National Energy Conference in 2009 and 2015, respectively. After President Tsai Ing-wen took office in 2016, the government has proposed new energy policies and the 2025 nuclear-free homeland project. The above agendas all consider sustainability and low-carbon as core issues in future energy governance and have the energy transition policy and goals drafted by the central government. For the local governments, aside from complying with the overall policy objectives, they are also faced with challenges on target setting and achieving at the regional level.

The 2009 National Energy Conference resolved to establish low carbon cities. Afterwards, the plans to establish low carbon cities submitted by local governments were evaluated. The evaluated aspects included reducing targets and strategies and financial plans. Take the four low carbon demonstrating cities, New Taipei, Taichung, Tainan and Yilan as examples, two-stage reduction targets were proposed, respectively (Table 3). The EPA has also established the Service Platform for Greenhouse Gas Carbon Disclosure at City-Level in order to make public the calculation guidelines, hold educational trainings and demonstrate information. However, the current city inventories are voluntary and the published data are mostly emission portion by departments instead of the actual emissions, from which is difficult to evaluate the effectiveness of carbon reduction. According to the inventories in 2014, although results are different among cities, for all of them the energy-related category makes up the most of the emissions. Therefore, it is pressing to accelerate the energy transition in order to achieve the carbon reduction targets set up by the local governments. In the ranking of energy saving policies in 2015, the low carbon demonstrating cities of New Taipei, Tainan and Yilan ranked high for their performances in energy governance and policy highlights, while there is still room for improvement for Taichung.

 

Table 3        Comparisons among the low carbon demonstrating cities

The low carbon demonstrating cities		New Taipei	Taichung	Tainan	Yilan
1st-stage reduction target		Reduce greenhouse gas emission to 2008 level by 2016	Reduce emission to 10% lower than 2009 level by 2014	Reduce emission to 2005 level by 2020	Reduce emission to 2008 level by 2014
2nd-stage reduction target		Reduce emission to 20% lower than 2006 level by 2026	Reduce emission to 20% lower than 2009 level by 2020	Reduce emission to 2000 level by 2025	Reduce emission to 2002 level by 2020
Ranking of 2015 energy saving policy		1st	8th	5th	4th
Highlight of 2015 energy saving policy		Experts and citizens committee, Participatory Budgeting	N/A	Customers whose electricity consumption is above 800 kWh are required to install at least 10% of solar photovoltaic system	Make effective use of LEDs left from previous projects
Percentage of energy category in 2014 inventories (GWP year: 2007)	Energy - domestic and commercial usage	39.94%	16.16%	14.23%	8.07%
	Energy - industrial usage	33.39%	35.35%	62.79%	46.33%
	Energy - transportation usage	24.46%	14.34%	14.55%	6.98%
	Total	97.79%	65.85%	91.57%	61.38 %

Source: authors’ elaboration

Saving electricity is one of the important energy policies in Taiwan. Measures are required to address the increased demand for electricity during summer. The Ministry of Economic Affairs announced the Summer Months Electricity Saving Project in May 2017, with reducing electricity demand and peak load as the main focus (Bureau of Energy, 2017). According to statistics, low-voltage power consumption accounts for more than 50% of leak load. The low-voltage domestic and commercial consumers are difficult to reach by the central government, which urgently requires active administration of local governments. For local governments, several measures might be feasible to reduce the peak load, including (i) assisting and pushing the manufacturers to participate in the demand bidding program, (ii) requesting consumers from service industry who consume much electricity to suppress loading and adopt demand management, (iii) provide energy saving techniques and services to manufacturers with contract capacity higher than specific quantify, and (iv) cooperating with service industries in energy techniques to develop peak, short-term and long-term reducing strategy (Green Citizens' Action Alliance, 2017). Therefore, under the current condition that mandatory measures are still unavailable, the local governments should make more use of the strength that the stakeholders are more accessible to establish with them favorable cooperation relationships.

 

Future Pathways of Local Governments

As mentioned earlier, it is challenging for the local governments in Taiwan to make dramatic change in promoting energy transition due to the limitation that policies are drafted by the central government and the lack of resources and manpower. However, the trend in energy transition is already around the corner. Under the global trend, the local governments can benchmark against foreign cases and develop their own regional governance strategy. With more than twenty years of experiences, the Energy Cities have summarized three key elements to promote energy transition: devolution, divestment and democracy.

Devolution means to delegate the powers of providing public services from the central government to subnational or quasi-independent organizations, and to stop the monopoly of authority in energy supply either by the central government or giant enterprises. Shifting competences for energy supply from the central government to local governments helps achieve the re-municipalisation and get rid of the information asymmetry, profit-oriented policy and high fossil fuel subsidy caused by the monopoly of energy supply by enterprises (Energy Cities, 2016: 9-10). The difference between Taiwan and European countries is that Taiwan highly relies on imported energy, and the supply of self-produced energy is concentrated on the state-owned Taiwan Power Company. But in any case, amendment to the law is required if local governments do not have the authority and devolution is needed. After the amendment to Electricity Act in 2017, the local governments have been able to establish regional energy enterprises, administrate renewable energy and sell electricity to local consumers (Chin-ho Cho, 2017). However, the follow-up development still remains to be seen.

Divestment means to change the financial supporting system on unsustainable production and consumption model. Some practical measures include to sell the shareholdings in fossil fuel companies, to terminate the cooperation with financial institutions which have large investment on fossil fuels, to provide subsidies on house renovation, small-scale renewable energy projects and crowdfunding energy projects, and to levy the carbon tax and to establish emission trading schemes (Energy Cities, 2016: 6-7). However, the management of public funds such as Labor Pension Fund, Postal Savings Fund and National Development Fund does not belong to the authority of local governments. The idea of levying similar carbon tax has been proposed by a local government a few years ago but considered by the central government inappropriate (Li-Huei Hsieh, 2011). Therefore, in terms of divestment, what local governments in Taiwan can adopt currently would be to provide subsidies on regional energy-saving and energy-transition projects.

As information accessibility is enhanced by the development of technology, the pressure that the general public is expecting a reformation is also growing stronger. Democracy means that during the transition process government should break the traditional top-down approach and try to include the participation of stakeholders and provide the general public with more power and motivation to participate and form a public platform and establish long-term planning (Energy Cities, 2016: 3). More participation from stakeholders not only reflects the value of democracy but also enhance the area and effectiveness of local government in the field of energy transition. However, to transform from the top-down approach by local governments to multi-stakeholder participation, breakthroughs are required on multiple limitations and motivations should be created. Currently, Yunlin County has formed a working group on climate mitigation. In Chiayi City, a committee to promote renewable energy has been set up. New Taipei City has established committees to promote intelligent energy saving for the city. These examples show how general public could also participate in decision-making (Mu-Hsin Lin and Mao-Ting Ni, 2017). However, many other local governments have still not established organizations of such kind or only view the opinions from general public as references. Therefore, it would be the possible pathway for local governments in Taiwan at the current stage to extend such kind of organizations and at the same time ensure the effectiveness of empowerment and develop strategies to involve more stakeholders.

Reference 

1. Energy Trend. (2017). Trump withdraws from the Paris agreement, casting shadows on global carbon reduction actions. Tech News: https://technews.tw/2017/06/02/accord-de-paris-reduce-carbon-shadow/ Retrieval date: 2017/6/8.
2. Yi-Yang Wang. (2016). Local governments and COP21. NTU-RSPRC: http://rsprc.ntu.edu.tw/m01/climate-change-energy-transformation/445-local-government-cop21-2016-1021 . Retrieval date: 2017/4/13.
3. Chang-Tay Chiou. (1999). Strengthening the strategy and planning functionality of local governments. RDEC Bimonthly. 23(3): 26-34.
4. Yu-Chin Lee. (2015). 2015 ICLEI has ended. The 11 commitments of Seoul encourage cities to setup sustainable strategies. TEIA: http://e-info.org.tw/node/106609 . Retrieval date: 2017/5/2.
5. Chin-ho Cho. (2017). The benefits of the passing of the Electricity Act to the future energy transition of Taiwan. TIER: http://www.tier.org.tw/comment/pec5010.aspx?GUID=c3494c46-1673-4fa4-83a5-43b180be562c . Retrieval date: 2017/6/12.
6. Tzu-Lun Lin. (2005) The role of cities in post-Kyoto era: The key node of globalization and localization. TEIA: http://e-info.org.tw/special/wed/2005/we05061001.htm . Retrieval date: 2017/4/18.
7. Mu-Hsin Lin and Mao-Ting Ni. (2017). Widespread energy democracy? The development of local energy committee. NTU-RSPRC: http://rsprc.ntu.edu.tw/m01-3/energy-transformation/702-10606_20_local-energy-committee . Retrieval date: 2017/6/13.
8. Kuei-Hsiung Yao. (2015). Study on the System of Right of both Central and Local Governments in China. Journal of China University of Science and Technology. 61: 197-212.
9. Yi-Chin Jiang. (2017). Yunlin Country Government signs a memorandum with Mailiao Plant two days before the permission of raw coal is due. UDN News: https://udn.com/news/story/7314/2514161 . Retrieval date: 2017/6/9.
10. Chong-Yuan Ling. (2013). How to deal with current financial problems. Modern Public Finance. 26: 1-12.
11. Alliance for Promoting Energy Transition. (2016). Evaluation on energy conservation governance policies of cities in Taiwan 2015. Citizen of the Earth, Taiwan: https://www.cet-taiwan.org/info/news/2323 Retrieval date: 2017/4/18.
12. Hsin-Hsin Hsu. (2017). A scam? On the self-governance articles of controlling raw coals of Taichung City. Homemakers United Foundation: http://www.huf.org.tw/essay/content/3929 . Retrieval date: 2017/5/4.
13. Wen-Tzu Chen. (2015). Announcing the self-governance articles on forbidding raw coals and petroleum coke invalid. EPA slaps Yunlin in the face. TEIA: http://e-info.org.tw/node/109940 . Retrieval date: 2017/4/13.
14. Wen-Tzu Chen. (2016). Differences of forbidding and controlling raw coals between Taichung and Yunlin. TEIA: http://e-info.org.tw/node/116989 . Retrieval date: 2017/5/4.
15. Meng-Fu Chen. (2017). The energy governance system of central and local governments: the USA as an example. Knowledge database on energy: http://km.twenergy.org.tw/KnowledgeFree/knowledge_more?id=2034 . Retrieval date: 2017/4/13.
16. Jun-Ying Huang. (2009). Marketing for the Government: Concepts and Practices. Journal of Civil Service. 1(4): 1-24.
17. Environmental Protection Bureau, New Taipei City. (2015). First in Asia. New Taipei receives the badge from the biggest anti-climate change organization “Compact of Mayors”. New Taipei City Government: http://www.ntpc.gov.tw/ch/home.jsp?id=28&parentpath=0,6,27&mcustomize=news_view.jsp&dataserno=201510160008 . Retrieval date: 2017/4/17.
18. Ministry of Economic Affairs. (2017). Framework of Taiwan's Sustainable Energy Policy. Bureau of Energy: http://web3.moeaboe.gov.tw/ecw/populace/content/ContentDesc.aspx?menu_id=61 . Retrieval date: 2017/5/2.
19. Bureau of Energy. (2017). In response to the high peak of electricity consumption this summer, the Executive Yuan promotes the “2017 Summer Months Electricity Saving Project”. Bureau of Energy: https://www.moeaboe.gov.tw/ecw/populace/news/News.aspx?kind=1&menu_id=41&news_id=7703 . Retrieval date: 2017/6/1.
20. Green Citizens' Action Alliance. (2017). Suppressing electricity consumption peak cannot reply solely on emergency actions. Are central and local governments ready? Green Citizens' Action Alliance: http://www.gcaa.org.tw/post.php?aid=482 Retrieval date: 2017/6/1.
21. Kun-I Liu. (2006). Obstacles and Opportunities for Institutions: A Study on the Establishment of Partnerships among Local Governments in Taiwan. Taiwan Democracy Quarterly. 3(3): 1-33.
22. Li-Huei Hsieh. (2011). Kaohsiung plans to start carbon tax. Ministry of Finance says not appropriate. Newtalk: http://newtalk.tw/news/view/2011-07-28/16412 . Retrieval date: 2017/5/18.