The COP23 in Bonn, Germany has just finished. Participating countries have reached the consensus on the implementing mechanism including the content of rulebooks and forming the global stocktake. The importance of pre-2020 greenhouse gas (GHG) reduction action was also stressed, with a hope that the emission peak will be reached in 2020. The Environmental Protection Administration (EPA) has also proposed a draft of GHG Reduction Action Plan in Taiwan (hereafter the Reduction Plan), proposing the GHG reduction targets in 2020 and 2025, carbon budgets for different sectors and concrete policy measures.
According to RSPRC's analysis, compared to the past GHG reduction policy, the Reduction Plan this time has the following three features.
1. Nuclear-free Homeland and carbon reduction targets are given attention at the same time.
After DPP took office, the government has proposed a goal for energy transition by 2025 which natural gas will account for 50%, coal 30% and renewable energy 20% of total energy generation. For the past one and half year, not only the achievability has been questioned, it has also been pointed out that during the transition process, the percentage of coal-fired power generation will increase, which is unfavorable for GHG reduction and improving air pollution. In the Reduction Plan this time, it can be seen that under current planning, the percentage of coal-fired power generation can already be reduced to 43% by 2020. By setup of renewable energy and increase of natural gas, the achievability of reduction of coal-fired power generation to 30% by 2025 is clearer. Detailed comparison between the planning during KMT era and the current one shows that the emission of power system can be lower by about 30% (see Appendix for detailed calculation). Therefore, if the energy transition can be implemented, the win-win-win scenario of Nuclear-free Homeland, improving air pollution and GHG reduction can be achieved.
2. Innovation of policy instruments
In the Reduction Plan, the two policy instruments of (i) avoiding improper subsidy on fossil fuel and (ii) promoting carbon risk exposure of investment portfolios of enterprises and public funds, which are highly valued from international experiences, are included in Taiwan's climate policy for the first time.
3. Strengthening the responsibility of residential and commercial sectors on energy transition
The past GHG reduction policies mostly focused on reducing carbon emission in power generation system and industrial sector. However, according to the most updated statistics on carbon emission and energy, the increase of energy consumption of residential and commercial sectors has become the main factor of the increasing emission. In the Reduction Plan, the reduction percentage of residential and commercial sectors is 2.6%. In terms of contribution, it will be the highest by 2020 and accounts for 69% of total reduction. In addition, several policy measures which have never implemented before are now included, such as the Energy Performance Certificate (EPC), disclosure of building energy performance, loan program for energy efficient building renovations, and regional integration of energy. It can be seen that the authority concerned has realized the responsibility of residential and commercial sectors on energy transition.
Although there are already the aforementioned breakthroughs in the Reduction Plan, inspection into the main sectors of emission shows that the evaluation indices and the policies are still not enough for achieving the long-term carbon reduction target.
1. Manufacturing sector
Manufacturing sector accounts for 52% of Taiwan's GHG emission. The evaluation indices for the manufacturing sector is to reduce 43% the energy intensity by 2020 compared with 2005 and 50% by 2030. However, actually in 2015 the energy intensity has already reduced 34% compared with 2005. From 2008 to 2014, there was already a 3.9% annual reduction in energy intensity, so the target can be achieved without further policy introduced. Also, there are no regulatory measures for carbon reduction such as expanding the energy efficiency standard for energy consuming industries. Instead, most policy instruments are incentive measures.
2. Residential and commercial sectors
The proposed evaluation indices include envelope load for new buildings, electricity efficiency for public sector, and to develop building energy database by 2025. However, according to analysis done by an internationally renowned thinktank, to achieve Paris Agreement goals, OECD countries have to reach 5% of floorspace renovated per year and new buildings after 2020 have to be zero-energy buildings. For example, Germany has also planned to double the floorspace renovation rate in the Climate Action Plan 2050. The evaluation targets proposed currently have a gap between the carbon reduction requirement. As existing residential houses in Taiwan are on average 28.9 years old, more than 45% of houses will have to renovate and reconstruct within next 20 years. Therefore, in addition to the promotion of Energy Performance Certificate, the promotion of low interest loan for energy saving renovation and fee waivers for improving heat insulation should also be considered in order to enhance energy efficiency of old buildings.
3. Transportation sector
The evaluation indices for transportation sector includes the increase of traffic volume of public transport, sales volume of electric motorcycles, and to raise the fuel standard of new cars. However, to achieve Paris Agreement goals, the sales of electric motorcycles should account for 15% to 20% by 2020 and the traffic volume of public transport should be doubled by 2025. In comparison, the current evaluation indices on public transport include only to increase 7% of traffic volume by 2020 compared with 2015 and 20% by 2030, which is not only a gap compared with Paris Agreement, but also lower than the target of achieving 30% by 2030 proposed in the 2012 White Paper on Transportation Policy. In terms of low carbon fuel mobility, despite the target to achieve sales volume of 88 thousand electric motorcycles, which has already been listed on the 14+N Strategy for Air Pollution Control, there isn't any further plan. Moreover, there is no Transit-oriented Development in the promotion strategy, and it is therefore unable to suppress the demand on private vehicle mode resulted from new residential and commercial development.
In addition to the aforementioned insufficiencies of each sector, the RSPRC also proposes the following suggestions on the inter-sector policies listed in the Reduction Plan.
1. Establishing a mechanism for integrating different sectors to exert the synergy of the Reduction Plan, the national spatial planning and the White Paper on Energy Transition.
It is highly relevant between the Reduction Plan, the national spatial planning and the White Paper on Energy Transition. For example, the regional planning in national spatial planning has an influence on raising public transportation, and the effectiveness of energy saving policy in the White Paper on Energy Transition determines whether the carbon budgets can be implemented. However, the current Reduction Plan does not utilize the strategy of spatial development in the national spatial planning and the policy instrument of guidelines on land use to strengthen public transport and enhance promoting low carbon urban living environment. In terms of the promotion strategy on residential and commercial sectors, it can be seen that due to the convenience of jurisdiction, only those belong to the Ministry of the Interior (MOI) are included. Enhancing the energy efficiency of electrical equipment, which is crucial for energy consumption of residential and commercial sectors, are classified as energy sector.
2. Avoiding carbon lock-in effect.
Although promoting carbon risk exposure of investment portfolios of enterprises and public funds has been included in the Reduction Plan, the carbon risks of the energy source and natural gas development program of state-owned enterprise are neglected. The construction of power plant and natural gas unloading facilities during this period will cause the carbon lock-in effect. Therefore, an evaluation mechanism on carbon risks of major development projects should be established to avoid the carbon lock-in effect.
3. Accelerating the management and institutional capacity building.
The deadlines for establishing management and institutional capacity in the Reduction Plan are all 2025. For example, policies including (i) the enactment of a cap-and-trade program, (ii) establishing authorities and manpower responsible for climate change at both the central and local governments, and (iii) integrating and reviewing the effectiveness of energy and GHG reduction-related funds are all set to finish by 2025. Under this schedule, the authorities are deprived of the opportunities to control the emission, such that the annual reduction rate of emission cannot increase from 0.2% during 2016 to 2020 to 1.7% during 2020 to 2025. The Executive Yuan (EY) has been promoting the National Master Plan on Energy Conservation and Carbon Reduction since 2010, and there are also already 11 local governments joining the ICLEI. Therefore, in terms of establishing the management and institutional capacity, the target should be rescheduled to 2020 in order to match the pathway of carbon reduction and achieve the commitment for long-term GHG reduction.
NTU-RSPRC
November 23, 2017
