apgn climate workshop 5

8/9/2019 APGN Climate Workshop 5

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The Fallacy of energy conservation

and carbon reduction

-A Critique on Taiwans National

Plan of Energy Tax and EmissionTrading

Chia-Wei Chao ()

Coordinator of Climate and Energy PolicyGreen Citizen Action Alliance


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Outline

Carbon Flow within Asia and Taiwan

Delusion of carbon trading

The Energy Tax in Peril Conclusion


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The Trend of Total CO2 Emissions from the Consumption of Energy among

Primary Asia & Oceania emitters

The rate of emissions growth in the AP

region is much higher than the world

average (230% VS 140%)

Only Japan and New Zealand have

achieved a stable state.

The rate of increase in Taiwan ranks 4th

among primary emitters.


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Carbon Debt or Carbon LoanEmission (kt) Footprint (kt) Ratio

Hong Kong 3.89E+04 1.03E+05 2.65

New Zealand 3.07E+04 3.85E+04 1.25

Japan 1.31E+06 1.60E+06 1.22

Korea, South 4.94E+05 5.11E+05 1.03

Australia 3.41E+05 3.34E+05 0.98

India 1.36E+06 1.26E+06 0.93

Indonesia 3.21E+05 2.97E+05 0.93

Taiwan 2.58E+05 2.01E+05 0.78

China 5.10E+06 3.95E+06 0.77

Thailand 2.68E+05 2.02E+05 0.75

Malaysia

1.74E+05 1.06E+05 0.61

United Kingdom 5.55E+05 8.08E+05 1.46

USA 5.80E+06 6.50E+06 1.12

Adapted from Davis and Caldeira (2010) Consumption-based accounting of CO2 emissions PNAS


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The Pledge of Taiwan Government (1)

Emission Reduction Targets :

- 2020 : to the 2005 level

- 2025 : to the 2000 level

- 2050: 50% below 2000 level

Renewable energy Promotion Target :

- 15% of the installed capacity by 2025 (8 % in

2007)

Energy Efficiency Target- 2025: Reduce Energy Intensity to 50% below

2005 level


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The Pledge of Taiwan Government (2)

Energy

EfficiencyNatural Gas

Nuclear Power

Carbon Credit

Other Measure

Government: There is no

way to cut carbon

emission !

The Development Projects

from Energy Intensive

Industries


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Delusion of carbon trading


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Emission Trading Scheme in Taiwan

Stage I Stage II Stage III

Cap

and

Trade

Emission

Performance

Standards and

offset

voluntary

inventory

registering and

reduction

mandatory

inventory auditing,

registering and

voluntary reduction

SpecificEmission

Source

Existing and NewEmission Source

Allowance allocatedto Emission SourceObject VoluntaryAction

Offset Pledge

during EIA

review

2. Foreign Certified Credit- Voluntary ETS

-- CDM

1. Domestic Carbon Credit- Early Action Certification

- Domestic Offset Project

Credit- Domestic Offset Project

- CDM

- Credit certified by post-

Kyoto Scheme

Allowance OffsetCarbon Neutrality

Before

GHGs Reduction Bill (Draft )

Purchase Offsets

when EPS cant

be met

After 2020


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The Controversies

Beyond the Can we trade the sky argument

Carbon Trading in Taiwan = greenwashing !

The role of ETS in the overall GHG policy

The Devil is in the details The defects of ETS

proposal


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Carbon Trading in Taiwan

= Greenwashing by Government

The Carbon Oligopoly

Four Companies (Taipower, Formosa Plastic, China

Petroleum, China Steel) emit over 85% of Taiwans CO2

emissions.

Reforming energy and industrial policies reduce emissionsmore effectively and maximize co-benefits

Petroleum exports are 40% greater than domestic

consumption

Substantial reductions will only occur after 2020

Dont wait for the invisible hand.

We need direct policy intervention!


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The Devil is in the details

Free Allocation 85% of allowances are allocated by grandfathering

Loose Offset

50% of offset credit can be purchased from foreign countries.

Early Actions bring Hot-Air

Energy Intensive Industries claim 4 MT CO2 was reduced

voluntarily from 2004 to 2008.

Electronics Industry claims there will be 24 MT CO2-eq in

reductions from 2006 to 2010.


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Energy Tax in Peril


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Why Taiwan needs an Energy Tax

ENERGY SUBSIDIES BY FUEL IN NON-OECD COUNTRIES, 2007

Taiwan

Billion USD

Adapted from THE GLOBAL SUBSIDIES INITIATIVE, Achieving the G-20 Call to Phase

Out Subsidies to Fossil Fuels, POLICYBrief, October 2009,


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Why Taiwan needs an Energy TaxEnergy Intensity (BTU/USD)

Energy per Capita (TOE/person)

0.240.140.27Sri Lanka

0.310.190.35Philippines

0.350.210.39Vietnam

0.380.230.43India0.470.280.53Indonesia

0.790.480.88Mongolia

1.330.811.48China

1.340.811.50Thailand

2.191.332.45Malaysia

3.652.214.08Hong Kong

3.982.414.45Japan

4.512.735.04Korea,

4.692.845.24Taiwan

4.842.935.41New Zealand

6.664.047.44Australia

11.366.8912.70Singapore

x A&Px World2007


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Unfortunate fate of the Energy Tax

The First National Conference on Energy (1997) : Reviewingthe defects of Energy-Related Fees and Taxation.

Since 2005 there has been a consensus on Energy Tax

expressed in national conferences on the environment, energy,

or economic development.

There were three draft bills proposed in the Legislative Yuan in

2006.

Presidential Candidates from DPP and KMT all pledged to

promote an energy tax in 2008.

The Tax Reform Commission suggested instituting an EnergyTax from 2011.

However the Executive Yuan declared the real energy and

carbon tax belongs to long-term policy.


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Framework of Green Tax Reform

Energy & Environmental Tax

Energy Tax Environmental Tax

GasolineDiesel

Fuel Oil

Kerosene

LPG

NuclearPower

CO2 Air

pollution

Water

pollution

Ocean

pollution

Soil &

Groundwater

NOx

SOx

VOC

Coal

Natural Gas

Gasoline

DieselFuel Oil

Kerosene

LPG

Fee becomes a

Tax

750NTD/ton CO2

Increase to

Average Price of

Japan and Korea

Treat Nuclear

as Natural Gas


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Effect (1)

Increase RatioPrice (NTD)

18%3.05(per kWh)Electricity-

Household

26%2.30(per kWh)Electricity- Industry

100%36 (per L)Diesel

80%40 (per L)Gasoline

Tenth year of Taxation1. Price

2. GHG mitigation and Energy Conservation

46 Million TonsCO2 Mitigation

> 9 Billion LitersEnergy Conservation

Comparing to BAU


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Effect (2)

Social Equality- Subsidy for the poor will increase 2.2 billion NTD

- Tax Burden on the working Class will decrease 200

billion NTD

Industrial Structure

- Negative Impact : LPG Supply, Petrochemical, OilRefinery, Textile, Fishery

Generating Co-benefit of GHG mitigation


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Controversies

Energy & Carbon Tax VS Green Tax Reform

Carbon Tax rate

- Industrial Group : 400 NTD/Ton CO2

Should we tax Nuclear Energy- Government prefers to exempt nuke from

taxation

Revenue distributed to Industry

- Government plans to use revenues to subsidizeindustry.


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Conclusion Each nation should formulate GHGs mitigation policy

according to their Carbon Flow

Exportation of energy intensive goods is the main driver

of GHG emission in Taiwan, industrial and energy

policy reform would be the real and critical answer, cap-

and-trade only distracts from our efforts on mitigation.

Promoting Green Taxation Reform combats the

environmental crisis and social inequality at same time.


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Thanks forYour Attention

apgn climate workshop 5

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