Moderate Emissions Reduction Measures To Lighten Impact of Kyoto Protocol

Taiwan has announced that it will hold to the rules of the Kyoto Protocol on greenhouse-gas emissions, even though it is not a signatory to the environment-protection pact. This commitment, however, is expected to pose significant challenges to the island's development policy, which gives priority to development of the manufacturing industry.

The Kyoto Protocol, which was signed in 1988, took effect on Feb. 16 this year upon ratification by Russia. The agreement requires 38 developed countries and the European Union to cut emissions of six types of greenhouse gases-carbon dioxide, methane, nitrous oxide, hydrogen fluoride, perfluorocarbons, and sulfur hexafluoride-by at least 5% from 1990 levels during the commitment period of 2008-2012.

The purpose of the protocol is to stop global warming. A report by the UN's Intergovernmental Panel on Climate Change (IPCC) claims that the density of carbon dioxide in the atmosphere soared to 379 parts per million (ppm) in 2004, up from 280 ppm before the Industrial Revolution in the 18th century. The report says that the increase is due to the mass consumption of fossil fuels, including oil, coal, and natural gas.

The report warns that if greenhouse gases are not controlled, average global temperatures will increase 1.5 to 6 degrees Celsius by 2100, compared with 1990 levels, causing sea levels to rise by 14 to 80 centimeters. In addition, drought-caused diseases, floods, and insects will boom in the middle of the century.

Taiwan knows very well that although it has not signed the Kyoto Protocol, it could face trade obstacles if its industries fail to meet the standards laid out in the agreement. The island's information technology (IT) product industry will likely bear the brunt of the difficulties, since Taiwan is one of the world's largest suppliers of such products.



Biggest Polluter



C.Y. Liang, a research fellow at Taiwan's Academia Sinica, worries that the booming development of the IT industry will make the island the world's largest producer of sulfur hexafluoride gas before long. This gas is a byproduct of IT-equipment manufacturing, and figures released by the Ministry of Economic Affairs (MOEA) indicate that it generates 22, 000 times as much carbon dioxide as the burning of the same amount of coal. From 1996 to 2002, Taiwan's carbon dioxide emissions rose by 41% while sulfur hexafluoride emissions soared 2.4 times.

Taiwan is already the world's 22nd-largest producer of carbon dioxide, contributing 1% of the global total. According to the Executive Yuan (Cabinet), in 2002 the island's energy use produced 240 million metric tons of carbon dioxide, accounting for 68% of all emissions of greenhouse gases in Taiwan-and the amount is predicted to quadruple between 2000 and 2010, unless the island changes its policy on emissions.

The MOEA, the Council for Economic Planning and Development (CEPD), and the Environmental Protection Administration (EPA) have decided to spend a total of NT$30 million (US$970, 000 at NT$31:US$1) during each of the next five years on the development of a strategy for alleviating the impact of the Kyoto Protocol on Taiwan's economic development. If the island meets the emissions-reduction requirements of the protocol, the MOEA estimates, its economic growth rate will drop by 0.5 percentage points.

The MOEA's study indicates that Taiwan needs to cut its carbon-dioxide emissions by 262.69 million metric tons by 2020 in order to remain at the 2000 level. A reduction of a single metric ton will cost at least NT$6, 529 (US$210), adding up to a total cost of NT$1.7 trillion (US$55 billion) over 15 years. That amount translates to 0.78% of national income each year.

The MOEA plans to hold a conference in June to work out a strategy for meeting the requirements of the Kyoto Protocol. At a preparatory meeting in March, energy experts stressed that Taiwan could not possibly meet the requirements under current economic conditions. They suggested that the island develop more nuclear power, which does not generate greenhouse gases.



Considering Nuclear Power



The Academia Sinica's Liang, along with Z.Y. Wu, vice president of the Taiwan Research Institute, urged the Executive Yuan to give serious consideration to the nuclear option. Liang noted that anti-nuclear sentiment has dominated the island's energy policy, leaving it excessively dependent on thermal power.

Wu pointed out that Taiwan produced 41% more carbon dioxide in 2003 than in 1990, and that the economy grew by only 2.5% in 2003, sharply down from the 1990 growth level of 5.5%. "If carbon-dioxide emissions reflect economic growth, " he asked, "then why has our growth rate declined while our carbon-dioxide emissions have increased?" Answering his own question, Wu says that it is because the government, led by the Democratic Progressive Party (DPP), has insisted on getting rid of nuclear power, reducing its contribution to total power generation from 11% in 1996 to 7% in 2003 while boosting the contribution of thermal power from 27% to 32% over the same period.

Mainland China, South Korea, and Japan all plan to boost the generation of nuclear power, Wu said, to meet the Kyoto requirements.

P.K. Kuo, a research fellow at the non-governmental National Policy Foundation (NPF), reports that the United States has extended the life of some nuclear power plants, and that Finland, South Korea, and Japan are planning to build new ones. Mainland China plans to add two nuclear power plants a year up to 2020. By that time, the International Atomic Energy Agency (IAEA) estimates, the world will have 60 new nuclear power plants, boosting its total to 500. Even Germany, whose conservative policy on nuclear power has been emulated by Taiwan, is thinking about revising its anti-nuclear stance.

About the possibility of building more nuclear generators in Taiwan, J.R. Yieh, minister without portfolio in charge of Kyoto Protocol affairs, insists that the island will add no new nuclear capacity but might prolong the service life of its three existing nuclear power plants. In addition, the government is considering the possibility of accepting applications for new thermal power plants.



Impending Power Shortage



Taiwan is in fact facing a power shortage, a problem that was compounded recently when the Legislative Yuan demanded that the Taiwan Power Company's NT$19.8 billion (US$640 million) budget for the purchase of power from private co-generation plants in 2005 be slashed. The legislators explained the co-generation now accounts for 22.60% of Taipower's total capacity, higher than the legal ceiling of 20%. In addition, co-generation costs NT$1.643 per kilowatt-hour, compared with just NT$0.17 per kilowatt-hour for nuclear.

Natural gas is another option, but it costs NT$2.4 to produce one kilowatt-hour in a gas-fired power plant, making it far more expensive than coal.

In view of the deadlock over what types of power plants should be used, Economics Minister Ho Mei-Yueh has instructed her ministry's Bureau of Energy to support programs for power efficiency and renewable energy beginning this year. The bureau hopes to improve the island's power efficiency at an annual rate of 1.2% per year, or a total of 16% by 2010. This would reduce the consumption of crude oil by 19.73 million kiloliters a year.

According to the plan, MOEA agencies that oversee the island's manufacturing industry are charged with accomplishing 30% of the planned reductions, while agencies charged with industrial and household use are to achieve 20%. The MOEA has working with private enterprises, research institutions, and other government organizations to set up a power-conservation team to help private enterprises, government organizations, and households to cut down on energy waste.

The government also plans to spend NT$3 billion (US$96 million) annually on the development of renewable energy. And, to reach the goal of boosting renewal energy use to 10% of Taiwan's total energy consumption by 2010 (in contrast to the current figure of 3%), the government has promised to buy electricity from private renewable-energy plants for NT$2 per kilowatt-hour.



The Power of Wind



As part of the government's policy of promoting renewable energy, Taipower recently announced plans to install 245 wind-power generators along the coast of Yunlin County in central Taiwan over a 10-year period at a total cost of NT$45 billion (US$1.4 billion). Formosa Plastics plans to add 21 wind generators to the four it currently operates on reclaimed land in an industrial zone in Yunlin County. Windmills produce no greenhouse gases, explain FPG executives, although the electricity they produce costs more than conventional thermal power.

To lighten the impact of emissions-reduction policy on the island's economy, the MOEA will adopt moderate reduction measures and will help industrial associations set up voluntary reduction goals. Manufacturers will be allowed to continue investing in steel and petrochemical plants so long as they can prove that their equipment uses the most advanced environment-protection technology. In spite of protests from environmental activists, therefore, the ministry approved plans by the FPG and the state-run China Petroleum Corp (CPC) to build a massive steel plant and petrochemical plant in the Yunlin offshore industrial zone.

A new regulation recently completed by the Environmental Protection Administration is designed to regulate gas emissions from major investment projects. The new regulation will be submitted to the Legislative Yuan for deliberation in the middle of this year.

Industrial emissions are not the only cause of global warming. Vehicle emissions are another factor, and the Ministry of Transportation and Communications (MOTC) is assessing a new fuel-tax proposal that would have the tax collected according to the amount of fuel used instead of the size of a vehicle's engine, as it is now. Adoption of the proposed change would encourage drivers to cut down on their fuel consumption, and thus on emissions.

The MOTC is also planning to slow the growth of automobiles and motor scooters on the island's streets and highways by reducing the number of vehicle licenses issued. The plan calls for keeping the total number of motorized two-wheelers under 13 million for the next eight years by keeping the annual rate of increase under 3%. (May 2005)