Policies for Transitioning to a Green Economy: Experiences from Taiwan POLICY DIALOGUE ON A...

Policies for Transitioning to a Green Economy: Experiences from Taiwan

POLICY DIALOGUE ON A TRANSITION TO A GREEN ECONOMY FOR SOUTHEAST ASIA, 6th – 7th March 2015, Ho Chi Minh City, Vietnam

Daigee ShawResearch Fellow, Institute of Economics, Academia Sinica

President, Taiwan Association of Environmental and Resource EconomistsMarch 6, 2015

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Contents

•Taiwan experiences in greening the economy• A brief introduction to Taiwan • A success story: solid waste reduction and recycling• A failure story: pricing of water, petro and electricity

• The (draft) Green Economy Policy Framework for Taiwan

• Sustainable transition to a green economy – Why and How?• Definition and Four Key Aspects of Green Economy in the (draft) Green Economy

Policy Framework for Taiwan• Basic Principles, Vision and Objective of the (draft) Green Economy Policy

Framework for Taiwan• The Structure of the (draft) Green Economy Policy Framework for Taiwan• Some important policy recommendations

Taiwan experiences in greening the economy• A brief introduction to Taiwan • A success story: solid waste reduction and recycling• A failure story: pricing of water, petro and electricity

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4

Energy > 98%Mineral > 80%Food > 70%

A Brief Introduction to Taiwan

Geographical Feature

Population: 23 millionsSquare measure : 36,000 km² Population density: 624 person/km²

Energy Imported

Resource conservation and recycling are important to Taiwan’s sustainable development

5

Economic growth has become more modest since the late 1990s

US

Dol

lar

0

5000

10000

15000

20000

25000

-4

-2

0

2

4

6

8

10

12

14

162013 GDP per capita, 20,952

2013 GDP Growth Rate, 2.09

GDP per capita & GDP Growth Rate

Source: DGBAS, Executive Yuan, R.O.C.

％

The Economy

6

The contribution of the industrial sector to GDP reached a peak of 44.8% in 1986

IndustryStructure

Source: DGBAS, Executive Yuan, R.O.C.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Agriculture; 1.33%

Industry; 35.56%

Services; 60.58%

GDP Composition by Sector

7

Industrial sector & non-energy use accounts for primary energy consumption

Source: Energy Statistical Annual Reports, Bureau of Energy, Ministry of Economic Affairs, R.O.C.

Total Domestic Energy Consumption (by Sector)

EnergyStructure

Energy Sector Own Use

Services

Industrial

Residential

Transportation

Non-energy use

Agriculture

(energy products used as raw materials, i.e., petroleum derivatives)

8Source: Yearbook of Industrial Production Statistics the Republic of China; AREMOS Taiwan Economic Statistical Databank System

19811983

19851987

19891991

19931995

19971999

20012003

20052007

20092011

20130

5

10

15

20

25

30

35

40

45

Basic Metal

Non-metallic Mineral Products

Chemical Products

Chemical Material

Petroleum & Coal Products

Pulp Paper & Paper Products

e.g., steel

e.g., cement

e.g., petrochemicals

e.g., dye

Year

Pollution-intensive industries

Pollution-intensive Industries’ Share of Taiwan’s Manufacturing Output

9

Low tax burden rate might make the nation difficult for sustainable development in the long run

Taiwan

Austria

Belgium

Canad

a

Denmark

France

German

y

GreeccIta

ly

Ice la

nd

South

Korea

Norway

Singa

poreSp

ain

Sweden

Switz

erland

U.S.10

15

20

25

30

35

40

45

50

12.8

28.330.8

26

47.1

28.3

23.2 23

30.933.3

20.2

32.6

13.7

21.1

34

21.118.9

Source: Ministry of Finance , R.O.C.

FiscalSustainability

10

Zero population growth will occur between 2019 to 2026

population projectionPopulation(m

illion)

Popu

latio

n gr

owth

ra

te(t

hous

andt

h)

Population growth rateActual population

High projection

Medium projection

Low projection

1981 1991 2001 2011 2021 2031 2041 2051 2061(year)

TFR=Total fertility rate

High (TFR=1.4 person)

Medium(TFR=1.1 person)

Low (TFR=0.8 person)

zero

2019~2026Population peak23.5~23.6 million people

Source: National Development Council, R.O.C

PopulationProjection

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Life expectancy rising, while risk for chronic diseases and population of disabled elderly increase

According to the 2013 National Well-being Indicators in Taiwan• Life expectancy at birth: 79.5 years ( Japan 82.7;

South Korea 81.1 )• Self-reported health: 79.5% respondents regard their

health condition as good /very good

HealthStatus

Source: 2013 National Well-being Indicators, Directorate General of Budget, Accounting and Statistics (DGBAS), Executive Yuan, R.O.C.


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MSW Quantity and Disposal Rate

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0

50

100

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

60.17

76.97

99.99

5.88

55.01

0.863

1.143

0.387

Recycling rate including recyclable waste, food waste and bulky item

Rate of properly processed waste

Disposal per capita per day

Rat

e of

was

te p

rope

rly

proc

esse

d an

d re

cycl

ing

rate

(%

)

Am

ount

of

was

te d

ispo

sal p

er c

apit

a pe

r da

y (k

g/da

y/ca

)

Review of MSW Management

200220001987 1991 2001 2005~61997 2004

Ext Producer Responsibility Introduced in the law

Large Incinerators

Four-in-One Recycling

Program

Per-Bag Trash Fee in Taipei

Food Waste Recycling

Reducing at Source

Zero-Waste Policy

Mandatory G

arbage Sorting /Recycling

Sustainable Material

Managem

ent

2011

1984

1990 2004

Dumping Sanitary Landfills

IncinerationResource Recycling Resource Circulating

1997

Restriction on Plastic Bags and Disposable Tableware

Waste reduction

Restriction on ExcessivePackaging

Restriction on mercury-containingbatteries

Banned Mercury Thermometers

Toxicity MinimizationWaste Minimization

Establish resource recycling systems

Resource recycling management fund

Payment

Resource recycling fee rate review

committee

Resource recycling

management fund committee

Auditing and certification

group supervisor committee

Managing duty and budget

Subsidy

Auditing and certification

group

Manufacturers, importers, and sellers of objects or containers

Recycling responsibility

Resource recycling plant (treatment industry)

Recycling and clearance (recycling industry)

Local government Community and

school Private groups Retail sales

Recycling system

Extended Producer Responsibility Program since 1987

Mandatory Recycling Category

Containers

iron, aluminum, glass, paper, plastic and pesticide containers

E-waste Light bulbs

BatteriesVehicles

automobiles, motorcycles, tires and car batteries

electronic products and household appliances

dry cell, button cell battery

Food Waste Recycling

70% for pig feed after thermal treatment

30% composting at private or public facilities

Animal feedPlant compost

Trash

Mandatory Garbage Sorting/RecyclingSeparating garbage into 3 categories

Keep trash off the ground

– A warning will be issued for the first non-compliance. A penalty of

NT$1,200 -6,000 will be imposed on the second violation.

Per-Bag Trash Collection Fee

“Pay-by-Household Water Usage Trash Collection Policy” is implemented in other districts: NT$4/ton of household water consumed.

• Per-Bag Trash Collection Fee

in several cities– Taipei, New Taipei, Taichung

– Pay as you throw

– Per-Bag trash collection fee (NT$ 0.36/L)

– Waste volume 67%down, recycling

volume 48%up

Cradle to Cradle• Redesign products for

complete recycling, technically or biologically

• Redesign, a crucial factor for achieving zero waste and complete resource recycling


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Water Bill and Consumption

• Annual water bill trend

• Water bill and water consumption (per person per day) (2006)

NTD/cubic meter

NTD/cubic meter

liter

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080

2

4

6

8

10 10.62 10.66 10.71 10.73 10.73 10.77 10.72 10.77 10.8 10.84

50 100 150 200 250 300 350 400 4500

20

40

60

80

100

120

140

160

180

200

61.6 55.6

30

89.799.5

181.7

10.84

65

19.38.24

UK Netherland

Singapore

Germany French

Denmark

Taiwan

Tokyo

US Seoul

Petrol Price and Consumption• Annual petrol price trend

• high-grade petrol price (March, 2015)

NTD/L

2007/3/1

4

2007/5/3

0

2007/8/1

5

2007/10/3

1

2008/1/1

6

2008/4/2

2008/6/1

8

2008/9/3

2008/11/1

9

2009/2/4

2009/4/2

2

2009/7/8

2009/9/2

3

2009/12/9

2010/2/2

4

2010/5/1

2

2010/7/2

8

2010/10/1

3

2010/12/2

9

2011/3/1

6

2011/6/1

2011/8/1

7

2011/11/2

2012/1/1

8

2012/4/4

2012/6/2

0

2012/9/5

2012/11/2

1

2013/2/6

2013/4/2

4

2013/7/1

0

2013/9/2

5

2013/12/1

1

2014/2/2

6

2014/5/1

4

2014/7/3

0

2014/10/1

5

2014/12/3

10

5

10

15

20

25

30

35

40

95

NTD/L

kloe

Taiwan Japan South Korea

Singapore US Canada Germany Italy Spain UK Franch0.00

2.00

4.00

6.00

8.00

10.00

12.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

1.83 1.72 2.18

13.24

2.56 2.98

1.36 1.07 1.39 1.10 1.23 2.56

Price Before tax Cons. Per cap

Electricity Bill and Consumption

• Annual electricity bill trend

• Electricity bill compare, 2013

NTD/kWh

NTD/kWh

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2.57 2.58 2.54 2.53 2.53 2.59 2.63 2.70 2.91 2.95 2.94 2.97 3.12

1.89 1.85 1.83 1.82 1.82 1.88 1.93 2.12

2.46 2.46 2.45 2.62 2.80

Light ball Electricity

year

Watt

Taiw

anChina

Mexico

Malaysi

a

South Korea US

Norway

Israe

lChile

Hungary

Singa

pore

Turke

y

Fran

ce

Poland

Finlan

d

Switz

erlan

d

Swed

enCzec

h

Luxe

mbourg

Greece UK

Japan

Netherl

ands

Philippines

Belgium

Austria

Portuga

l

Irelan

dSp

ain Italy

German

y

Denmark

0

2

4

6

8

10

12

14

0

500

1000

1500

2000

2500

3000

Household Industry annual cons. per cap

The (draft) Green Economy Policy Framework for Taiwan• Sustainable transition to a green economy – Why and How? • Definition and Four Key Aspects of Green Economy in the (draft) Green Economy Policy Framework for

Taiwan• Basic Principles, Vision and Objective of the (draft) Green Economy Policy Framework for Taiwan• The Structure of the (draft) Green Economy Policy Framework for Taiwan• Some important policy recommendations

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Definition and Four Key Aspects of “Green Economy”

Respect planetary boundaries

Society that lives within the

self perpetuating limits of its environment

(Coomer, 1979)

Requires the conservation

and enhancement of

the resources base (Bruntland,

1987)

Inter-generational equity, justice and

externality

Concern of future

generations (Bruntland,

1987)

Desire to ensure lasting and

secure livelihoods

(Barbier, 2013)

Intra-generational equity

Elimination of poverty and deprivation (Bruntland,

1987)

Enhance the equity of income

distribution

Revive the middle-class

Improve human well-beings and life quality sustainably

Seeks alternative

indicators to measure human welfare in place

of GDP

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Basic Principles of The (draft) Green Economy Policy Framework for Taiwan1. Development must go beyond GDP2. Give priority to creating an environment that enables the transition to

a green economy3. Propose policies that address underlying issues, not short-term

strategies aimed at surface-level problems4. Emphasize inclusive, democratic, participatory, accountable,

transparent, and stable governance5. Attach importance to the limits of its environment and natural

resources and planetary boundaries and the internalization of externalities

6. Advance the greening of all industries7. Create more decent jobs and rebuild the middle class8. Take account of economic efficiency, social equity, and protection of

the disadvantaged during the transition process

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Vision and Objective

• Vision• Toward a green economy that recognizing the limits of

environmental resources, enhancing intergenerational and intragenerational equity, improving prosperity and happiness of the people.

• Objective• To lay a solid foundation for the transition to a green

economy through integrated policies addressing underlying issues.

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Sectoral policies

Urban areas and buildings

Transportation

Agriculture

Environmental protection

Tourism

Forestry

Ocean and

fishery

Energy

Manufactures

Man-made capital

Natural capital

Human capital

Macro-policies

Water resources

Institutional capital

Social capital

The Structure of the (draft) Green Economy Policy Framework for Taiwan

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Green fiscal reform, including eliminating environmental-unfriendly subsidies in terms of macroeconomic policy instruments, i.e., exchange rate and interest rate

Establish an institution for promoting and protecting the rights of future generations, such as electing or appointing representatives of future generations in the congress and various institutions

Enhance intergenerational justice through healthy national finance, and a system of exchange rate, tax rate and interest rate that does not bias against future generations

Some important policy recommendations

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Some important policy recommendations

Establish a sustainability assessment system for policies and public projects

Require businesses to be responsible for the protection of environmental quality and labors’ welfare

Establish systems of payment for ecosystem services (PES)

Extend producers’ responsibility from cradle to cradle

Apply total quantity control in various fields, such as water, land, energy, infrastructure, etc.

Thank you for your attention !

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