[Event Review] 2022 Fubon Globalization Forum (Part Two): The Challenge and Practice of Just Transition Towards Net-Zero Transition

: 13 January 2023; Hits: 26374

[Event Review] 2022 Fubon Globalization Forum (Part Two): The Challenge and Practice of Just Transition Towards Net-Zero Transition

Author / Chien-Ming Hsu, Predoctoral Fellow, RSPRC
Co-author / Yun-Hsiang Lin & Jui-Ning Chang, Research Assistant, RSPRC
Proofread / Che-Chun Chen, Project Executive, RSPRC

　　Article　　Video　　Photo Gallery　　PDF Download　　2022 Fubon Globalization Forum (Part One)

In addition to the pandemic and wars, the impact of extreme weather is also being increasingly felt, and thus countries need to adopt more effective net-zero transition strategies. The Seventh (Annual) Fubon Globalization Seminar was hosted by the National Taiwan University (NTU), the Risk Society and Policy Research Center (RSPRC; hereinafter referred to as NTU RSPRC), Fubon Financial Holding Co., Ltd., and the Fubon Cultural & Educational Foundation, and co-organized by the Center for Sustainability Science of the Academia Sinica. In the context of the developments toward the target of net-zero emissions by 2050, the theme of the seminar was "Net-Zero 2.0X Transformation Acceleration—Toward a People-Oriented and Just Transformation." In the morning session, experts from Taiwan and abroad discussed how the process of net-zero transition could be accelerated through net-zero technology and international experience. In the afternoon session, in the area of "just transition," the NTU RSPRC, which had completed the first survey across Taiwan on awareness of a just transition in Taiwan's high-carbon and high-power-consumption industries, presented the industry's viewpoints and concerns, and Japanese and Korean scholars and central and local governments shared their experiences and responses.

The afternoon session of the press conference "A Survey on the Awareness of Just Transformation of Taiwan's High Carbon Emission Industries" was moderated by Kuei-Tien Chou, Director of NTU RSPRC, and Jui-Keng Wang, a postdoctoral researcher of NTU RSPRC, reported the important findings of the study. The survey was based on information released by the Bureau of Energy and Taipower. Taiwan's high-carbon-emission industries were screened under the following criteria: with a capital of NT$ 1 million or more, and five indices carbon emission intensity, electricity intensity, total carbon emissions, total power consumption, and the ratio of electricity bills relative to costs. A special feature of this survey is that it involves "small and medium-sized enterprises" that are facing the challenge of transition. Eventually, 15 industries were selected, and respondents at different job levels were surveyed. The survey was conducted by China Credit Information Service Ltd. from November 1 to 15, 2022, with a total of 533 successful samples of telephone interviews.

Figure 1 Kuei-Tien Chou, Director of RSPRC, NTU

Figure 2 David Walther, Postdoctoral Fellow of RSPRC, NTU

Director Chou said that the process of net-zero transition will have many social and industrial impacts, and that although such phenomena have not yet fully occurred, we should be prepared for them and find the right pathway to solve these challenges in our social context. In his presentation, researcher Jui-Keng Wang emphasized that the issue of just transition has been heatedly discussed around the world under COP27 and that many "just transition practices" have been initiated worldwide. Moreover, the Biden administration promoted the "Just Energy Transition Partnership" through the G7. Thus, an even wider area has been covered. Democracies such as Taiwan must pay attention to such an issue, because it is the foundation of social economy and governance and a key issue on the path to net-zero carbon emissions in the coming decades. From the list of initially screened industries, it can be observed that previously less mentioned industries may be affected, such as "fisheries" and "water supply industry," because of the difficulties in "sewage treatment" and "toxic water treatment," which may emit high amounts of methane and greenhouse gases.

In the survey, regarding the question "Do you understand the net-zero carbon emission policy?," as many as 66% of the respondents were not sure at all and 15.2% were not sure. Cross-analysis indicated that the fishery industry perceived a strong impact (50%) of the net-zero policy on future livelihoods, which is related to the current "offshore wind power" and "fishery and electricity symbiosis" of both ocean and inland aquaculture. This indicates that the government needs to strengthen communication, especially because the level of concern can rapidly rise if the impact occurs, even though these issues are not normally felt by the industry. "Ask respondents about the impact they believe the 2050 carbon reduction scenario with minimal use of fossil fuels would have on their jobs for the next 10 years," and their level of concern increased immediately by 9.2%, including those in the land transportation industry (36.2%), petrochemical industry (30.6%), steel industry (25.6%), power industry (20.8%), and fishery industry (16.7%).

Among the respondents, 74.9% believed that the carbon reduction policy would have an impact on gasoline and electricity tariffs. Further cross-analysis aspects revealed that: "Respondents are most sensitive to gasoline and electricity tariffs if they are supervisors with less than 10 subordinates in an enterprise (significantly different)." In other words, the feelings of the so-called junior supervisor or small supervisor are particularly evident. In terms of "household expenditure," 63.2% of respondents were aware of the impact of gasoline and electricity tariffs on household expenditure. Cross-analysis indicated that respondents are most sensitive to the impact of carbon reduction policy on electricity tariff if their household income is in the middle group. In terms of "low-carbon transportation," respondents already expected the impact of carbon-free transportation, but 35.7% believed that it would have no or minimal impact, and thus carbon-free transportation should still be actively promoted. However, it should be noted that 44.1% of the respondents were aware that the impact was somewhat to extremely large, exhibiting a polarization. Further analysis and clarification on how to transition is needed in the future.

The survey's questions on justice show that respondents are concerned about shifting responsibility and are demanding more "participation" instead of poor "communication," and that workers are demanding more compensation for damages than are enterprises. In terms of "distributional justice" (carbon reduction responsibility), middle and senior executives, responsible persons, and shareholders are more concerned about transferring the responsibility to employees (63.1%; significantly different). With respect to "procedural justice," 75% of the respondents said the government should work with industry and employees to find solutions. Researcher Jui-Keng Wang explained that during the in-depth field interviews, when "government communication" was mentioned, the respondents actually said: "No more communication. It does not work," because despite there being communication, it does not proceed smoothly. Therefore, the survey also indicated that 83.3% of the respondents agreed that there should be adequate communication and prior discussion of possible impacts and solutions before the policy is introduced. In terms of "restoration of justice" (level of compensation), respondents' perceptions of the level of compensation ranged from moderate to full compensation. Workers' compensation is slightly larger than that of enterprises, but the difference is not significant. However, most respondents hope that subsidies will be provided through a special law, just like the uniform standards and guidelines needed for pandemic relief. Although some ministries and commissions under the Executive Yuan (Taiwan) have already initiated meetings related to a just transition, the question is whether the authorities are responding from the perspective of a just transition or simply damage compensation. A similar situation is reflected in the issue of stigmatization in phasing out large, old diesel vehicles or two-stroke motorcycles. This survey also showed that 49.7–50.1% of respondents felt stigmatized by the press, government, or universities when they perceived their industry as a high-carbon-emission one. Researcher Jui-Keng Wang suggested that the best way to break this deadlock is to participate in advance and work together to arrive at a solution.

When presenting the policy implications and recommendations of this survey, Director Kuei-Tien Chou cited the yellow vest movement in France and the diesel truck issue in Taiwan in 2018, both of which have created a sense of relative deprivation among the public in the midst of transition. Therefore, the survey also indicated that people and industries are eager to understand and participate more, which is also a long-standing deficiency in Taiwan. Therefore, what was presented in the data were the right to know, the right to participate, communication, middle-income groups, gasoline and electricity tariffs, compensation, and stigmatization for people's reference. Director Chou further emphasized that Taiwan's energy transition is too slow and that it is trapped in the brown economy with low electricity, gasoline, and water prices. It will be greatly impacted when it faces the global demand for an extremely rapid transition and green transition of the supply chain, including net-zero transition, the EU carbon tariff, and the contents of Taiwan's draft climate change response law.

However, he also believed that the government's current "leading" strategy (supporting industries in building their carbon reduction capability) to reduce carbon emissions is going in the right direction, and in the future it needs to take stock of carbon emissions in the industrial supply chain and provide guidance to reduce emissions. Another focus is the need to identify vulnerable groups, reassess the basic needs of the disadvantaged, and achieve social redistribution through a carbon tax, rather than a carbon fee as currently proposed, to compensate the disadvantaged. The aforementioned middle-income groups also need attention in terms of policy. Director Chou suggested that the public sector should work together with universities, non-profit organizations, and local groups to build a multi-dimensional, multi-network, and multi-level industrial and social transition mechanism in various regions across Taiwan to create a new social, circular economy, and production model so as to solve the problems and challenges due to net-zero carbon emission targets with a new ecosystem, and eventually to "strengthen communication, participation, and profit-sharing" mechanisms.

In response to an on-site question on the measurement basis on which high-carbon-emission or key industries should be prioritized when supplying green power, Director Chou said that the top focus is still on the lack of green power, and the second is the detailed design of the policy. Ya-Ting Kuo, a post-doctoral researcher at NTU RSPRC, said that the survey, conducted in cooperation with Business Weekly, showed that industry is also aware of this and that the inclusion of more industries will help to promote renewable energy if the government further communicates the need to lower the threshold of electricity consumption for large consumers in the future. In response to an on-site question regarding the industries examined, researcher Jui-Keng Wang said that the survey screened the industries based on the total amount of greenhouse gas emissions; hence, the livestock industry was not included this time, while semiconductors were included in the electronics industry. Regarding the identification of low- and middle-income populations and energy poverty, Director Chow believed that the energy poverty survey should be conducted by the government, while researcher Ya-Ting Kuo said that it is difficult for the actual income survey to reveal energy poverty, and that relevant perception surveys can be conducted in the future. With respect to the topics in the draft climate change law on just transition, indigenous tribes, farming and fishing villages, to green cockroaches in southern Taiwan, Director Chou responded that the government needs strategies and more social science research and investigation and that it is still necessary to strengthen the inter-ministerial coordination framework to respond to the issues in the future.

Figure 3 Ya-Ting Kuo, Postdoctoral Fellow of RSPRC, NTU

The press conference was followed by a comprehensive panel discussion on "Challenges and Practices in International Just Transformation," moderated by Ma-Li Yang, President of Global Views Monthly, with Japanese and South Korean scholars and representatives from the National Development Council and industrial unions in Taiwan. First of all, Sun-Jin Yun, Professor of Environmental Studies at the Graduate School of Environmental Studies at Seoul National University, presented "The Road to 2050 Carbon Neutrality and Challenges for a Just Transition in South Korea." She pointed out that the carbon neutrality transition will also lead to social changes and that some people will refuse and others will encounter difficulties, so people will ask the government to protect their jobs and livelihoods. In the wake of the pandemic, the South Korean government proposed the K-Green New Deal, and the Moon Jae-in administration also proposed a carbon neutrality policy and set up a carbon neutrality committee, as she mentioned in the morning session, as well as the initial three scenarios and the two final scenarios. The committee has a subcommittee on just transition and has established five principles, one of which, the just principle, is related to just transition.

Figure 4 Sun-Jin Yun, Professor at Gratuate School of Environmental Studies, Seoul National University

She believed that what is important now are the goals for 2030, hoping that the industrial sector will gradually reduce carbon emissions, as the energy sector and industry are priorities. Notably, seen from the global trend, South Korea's carbon emissions have grown 2.7 times from the 1990 level, higher than the global average annual compound growth rate of 1.7%, and ranked 9–11th in the world. If we compare Taiwan, Japan, and South Korea, the per capita carbon emission of Taiwan is higher than that of Japan, while the cumulative carbon emission of Japan is higher than that of Taiwan. While the proportion of carbon emissions from the energy sector in South Korea has reduced, it is still as high as 87%, and up to 60% is attributed to industry, and 50% is attributed to industry after conversion to electricity; the problem lies in the amount of emission reduction required of each industry. She first cited the location and closure plans of coal-fired power plants as examples. The coal-fired power plants in Chungcheongnam-do in the west of South Korea are needed to supply electricity to Seoul. The Moon Jae-in administration wanted to close 18 coal-fired power plants by 2030, which, however, will cost a substantial number of workers their jobs and hit the local economy hard. Another affected industry is the automotive industry, which requires less labor when switching from gasoline to electricity; moreover, electric vehicles entail fewer parts and repairs, thus impacting the surrounding industries. There were around 1.9 million workers in South Korea's auto industry in 2018, many of whom are likely to lose their jobs in the future. She then noted that South Koreans of all ages and genders, from uninformed to informed, feel the need to delay the transition of coal-fired power plants and the automobile industry to comply with the just transition principle, which is a current dilemma. The issue of just transition is already listed in the established statute and framework. The sub-committees under the second Carbon Neutrality Committee were reduced from eight to four, of which the Just Transition Committee remains one. The current just transition has been much discussed, and yet careful planning is inadequate, so it needs risk and impact assessment, legal protection, and more funding.

Gregory Trencher, Associate Professor of the Graduate School of Global Environmental Studies at Kyoto University, shared his views in "Pursuing a Just Transition in Japan: The Case of the Power Generation and Road Transport Sector." He began by pointing out that "just transition" is not a term used in Japan's relevant policy documents, but related concepts have actually been discussed, such as the development of PV and the transition of the electric vehicle industry, and that there are three important reports from academia, NGOs, and industry‒government‒academia networks that have examined the just transition in Japan. These reports point to the auto industry as being important, as 200,000 workers will be affected, particularly in the Tokai region.

Figure 5 Gregory Trencher, Associate Professor at Graduate School of Global Environmental Studies, Kyoto University

He went on to cite the transition of PV and automobile industries as examples. From the perspective of Japan's energy mix, it is hoped that within 10 years the proportion of fossil fuels will be reduced by increasing the proportion of renewable energy to 36–38% and nuclear energy to the level prior to the Fukushima disaster. Japan's PV industry has grown considerably, but it is expected to generate 800,000 tons of waste by 2030. Japanese government surveys indicated that most manufacturers have no plans or budgets for waste disposal. This abandonment of solar panels is similar to Japan's past experience with abandoned gas stations, and thus currently Japan has amended the law to require manufacturers to allocate funds to deal with it. Another problem with PV developments is that PV plants are often erected on hillsides, affecting the ecology, environment, and safety of the community, and yet they are not considered to provide benefits and employment opportunities for the community. The Japanese central and local governments therefore require the erection of solar panels to be handled by an EIA. Second, the Japanese government will ban the selling of fuel vehicles by 2035, but this was challenged by the president of Toyota, who openly opposed the government's policy, exaggerated the extent of labor unemployment, and launched a propaganda campaign to discredit the government, emphasizing that the enemy is "carbon," not fuel engines. Since Japan's gas stations are declining as a result of the aging population and increasing fuel efficiency, it is hoped that they will be transformed into complex energy hubs in the future. The Japanese government also hopes to shift human resources and manufacturers in the gasoline vehicle industry to the electric vehicle industry through educational training and subsidies, launching programs such as the Ministry of Economy, Trade, and Industry's Mikata Project and the Green Growth Strategy. Finally, he pointed out that while the current concept of a just transition mostly refers to labor and industry, it is also important to note that other industries and non-labor communities may also be affected by renewable energy, considering the environmental impact and the burden of waste management that future generations will face.

After the Japanese and Korean scholars shared their views, Keh-Her Shih, Deputy Minister of the National Development Council, and Pin-Yan Yeh, Director General of the Kaohsiung City Federation of Industrial Unions, shared their views and joined the panel discussion together. Deputy Minister Keh-Her Shih's presentation was titled "Challenges and Practices of Just Transition—Taiwan's Experience." He began by pointing out that the four strategies of the Net-Zero Pathway released by the National Development Council on March 30, 2022, included the Just Transition, which was also included in Articles 6 and 8 of the Climate Change Response Act and is currently under consideration by the Legislative Yuan. Legislators who have followed the issue for a long time, including Shen-Han Hung, also proposed amendments to the framework for a just transition. The new version of the 12 pathways will be published this month (December). In addition to the responses from the ministries and commissions under the Executive Yuan (Taiwan), as Prof. Trencher pointed out, the exit of the nuclear and petrochemical industries and the issue of how small and medium enterprises can transition need to be considered. He further pointed out that the narrow definition of just transition remains work- and employment-oriented, but its broad definition includes issues such as labor and employment, industrial transition, regional development, people's livelihood and consumption, and government governance.

Deputy Minister Shih believed that we can learn from previous experiences, for example, problems similar to the impact of new policies on labor and industry, which can be found in the WTO and trade liberalization process. There are many tools available for a just transition, such as green employment models, economic assessments, risk assessments, and EIA. A framework that includes labor and employment, industrial transition, regional development, people's living consumption, and government governance implies a people-oriented transition, which naturally poses a considerable challenge to the administration, and thus the input of academia and the business sectors will be of great help. Further, the framework also needs to take into account the investors and shareholders, inclusiveness, and the profit-sharing structure, not just the cost. He concluded by citing the Scottish government, the "Carbon Free & Electric Vehicles," and "fishery and electricity symbiosis" in Taiwan as examples to illustrate that each country's just transition has its own particular challenges. While the government currently remains in its early stages and it has been difficult to ensure citizen participation from the past to the present, it is hoped that there will be more discussions of the perspective of a just transition and that a committee on a just transition will be established with the goal of leaving no one behind.

Figure 6 Keh-Her Shih, Deputy Minister of National Development Council

Pin-Yan Yeh, Director General of the Kaohsiung City Federation of Industrial Unions, shared his experience of living in Kaohsiung. Kaohsiung's air quality has long been affected by the industrial structure. He took the explosion at Dalin Refinery of CPC Corporation, Taiwan, as an example: In addition to the various problems caused by the plant in the past, the Dalin Po area has suffered greatly. While the quality of life in Dalin Po is poor, residents' right to live and work would be affected if they were to move away from the village. From the perspective of a just transition, reasonable work, poverty eradication, and sustainable development are what is needed in Dalin Po. He cited the case of the downgrading of the Dashe Industrial Park to a "type B" industrial zone. In 2018, the Kaohsiung municipal government sent the downgrading case to the Ministry of the Interior and then did not follow up on it. The union asked the government not to downgrade the park but to decide whether to relocate or close the plant. Thus, the absence of consensus in the consultation entails the participation of stakeholders in a just transition. He thus provided us with some food for thought. While the Dashe Industrial Park involves different manufacturers, it is still helpful to draw on the experience of communication with and assistance to workers during the smooth closure of the plant by CPC Corporation, Taiwan, in the past. He believed that while there is consensus that transition is important, employees should also be considered. Another case is the transition of electric motorcycles, where KYMCO, headquartered in Kaohsiung, and its downstream manufacturers also encountered similar problems.

Figure 7 Pin-Yen Yeh, General Secretary Of Kaohsiung City Confederation of Trade Unions

During the question-and-answer and discussion sessions, Professor Sun-Jin Yun pointed out that the best solution to net-zero targets and unemployment is to prepare a social service network, such as job training, and that social dialogue and social consensus are also needed. She emphasized that transitioning will hardly be successful if we merely look at the cost, so we need to look at a larger vision to achieve change and innovation. Unlike past changes in the type of energy use, the current energy transition is a targeted, intentional transition, and therefore requires planning for how to accommodate those who will be affected. Professor Trencher agreed that the current transition is different from the previous ones in that it is targeted and is experiencing a major impact from environmental factors. He believed that the Japanese government has released a clear message to the market, but Japan's own industrial culture may not adjust its structure rapidly, and the international transition trend may also put pressure on Toyota and other manufacturers. Deputy Minister Keh-Her Shih said that the National Development Council has a plan for a just transition committee, which will be divided into two major parts: one is the government's inter-ministerial coordination mechanism and the other is the social sector, including industry, government, academia, and stakeholders. The inclusion of technical sectors will also be discussed. He also believed that horizontal communication within the administrative branch in the transition has become faster, but more discussion and dialogue are still needed to ensure the efficiency of information exchange and to consider the spatial and territorial planning issues mentioned by Japanese and Korean scholars, as well as to review the applicability of the existing social security mechanism. Director General Pin-Yan Yeh pointed out that the current transition entails higher uncertainty and a longer period than before. Management may understand it better, but labor may know less about it. Moreover, the current labor‒employee relationship and labor structure are different from those in the past, which will pose greater challenges.

President Ma-Li Yang concluded the comprehensive panel discussions of the Fubon Globalization Seminar. Through the speaker's analysis and response, we already know where the challenges currently are and where the goals are. With respect to future practice, attention and communication from people from all walks of life are required to promote a truly people-oriented and accelerated net-zero transition.