New law to cut greenhouse gases in Taiwan

This article was published by the Taiwan Headlines on September 22, 2006. It features the draft "Greenhouse Gas Reduction Act" in Taiwan, which was recently approved by the Executive Yuan. The bill will impose quota restrictions on CO2 emissions by Taiwan's enterprises. It will also allow trading in CO2-emission quotas. Most significantly, the bill will allow the reduction of emissions, achieved by companies before the quotas are implemented, to be credited to their accounts for trading or use with new investment projects.

The proposed legislation marks a major step forward in environmental protection in Taiwan. Indeed, it has made Taiwan the third country in the world to formulate such a law, after Japan and Switzerland. The bill is particularly significant in view of the fact that Taiwan is currently not a signatory to the Kyoto Protocol, which is designed to regulate the emission of greenhouse gases worldwide.

The bill is an indication of the Taiwan government's determination to reduce CO2 emissions. However, so far, it provides only a framework for reductions, without specifying emissions quotas or an implementation timetable. These details will be set in the near future, depending on how the situation in the rest of the world goes.

Nonetheless, the bill clearly stipulates that emissions controls will be imposed after the establishment of mechanisms for checking greenhouse-gas emissions. The government also needs to establish systems for the registration and verification of CO2 emissions, for the allocation of emission quotas, and for the trading of quotas. Eventually, implementation of emissions controls will be carried out gradually and in stages.

According to the bill, the quota system will provide for the setting of ceilings on CO2 emissions per unit of output in every category of industry. Every enterprise in Taiwan will be allocated an emissions quota. This will force manufacturers to upgrade their technology and improve their manufacturing processes in order to cut emissions.

Furthermore, the Environmental Protection Administration will set an overall CO2 emissions quota for Taiwan. Meanwhile, quotas for individual industries will be set by the regulatory agencies for those industries, such as the Ministry of Economic Affairs and the Ministry of Transportation and Communications.

Finally, the Environmental Protection Administration will also set up a trading center for emissions quotas. This will allow enterprises that have reduced their emissions below their quotas to sell the excess to other enterprises that have not been so successful in cutting greenhouse gases. Even before the new program is implemented, enterprises will be allowed to propose reduction plans for regulatory approval. Reductions below the quota ceilings can then be traded or used in carrying out new investment projects after the program is in place.