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 Shaw Research Fellow, Institute of Economics, Academia Sinica President, Taiwan Association of Environmental and Resource Economists March 6, 2015

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 2

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 3

Energy > 98% Mineral > 80% Food > 70% A Brief Introduction to Taiwan 4 Geographical Feature Population: 23 millions Square measure : 36,000 km² Population density: 624 person/km² Energy Imported

Economic growth has become more modest since the late 1990s 5 US Dollar Source: DGBAS, Executive Yuan, R.O.C. ％ The Economy

The contribution of the industrial sector to GDP reached a peak of 44.8% in Industry Structure Source: DGBAS, Executive Yuan, R.O.C.

Industrial sector & non-energy use accounts for primary energy consumption 7 Source: Energy Statistical Annual Reports, Bureau of Energy, Ministry of Economic Affairs, R.O.C. Total Domestic Energy Consumption (by Sector) Energy Structure Energy Sector Own Use Services Industrial Residential Transportation Non-energy use Agriculture (energy products used as raw materials, i.e., petroleum derivatives)

Source: Yearbook of Industrial Production Statistics the Republic of China; AREMOS Taiwan Economic Statistical Databank System Year Pollution- intensive industries Pollution-intensive Industries’ Share of Taiwan’s Manufacturing Output 8

Low tax burden rate might make the nation difficult for sustainable development in the long run 9 Source: Ministry of Finance, R.O.C. Fiscal Sustainability

Zero population growth will occur between 2019 to population projection Population(million) Population growth rate(thousandth) Population growth rate Actual population High projection Medium projection Low projection (year) TFR=Total fertility rate High (TFR=1.4 person) Medium(TFR=1.1 person) Low (TFR=0.8 person) zero 2019~2026 Population peak 23.5~23.6 million people Source: National Development Council, R.O.C Population Projection

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

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 12

MSW Quantity and Disposal Rate Rate of w aste properly processed and recycling rate (%) Amount of waste disposal per capita per day (kg/day/ca)

Review of MSW Management ~ Producer Ext Producer Responsibility Introduced in the law Per-Bag Trash Fee in TaipeiFood Waste RecyclingReducing at SourceMandatory Garbage Sorting/Recycling

Restriction on Plastic Bags and Disposable Tableware Waste reduction Restriction on Excessive Packaging Restriction on mercury-containing batteries Banned Mercury Thermometers

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 Batteries Vehicles 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

Mandatory Garbage Sorting/Recycling Separating 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 Per-Bag Trash Collection Fee in several citiesPer-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

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 22

Water Bill and Consumption Annual water bill trend Water bill and water consumption (per person per day) (2006) NTD/cubic meter liter UKNetherland Singapore Germany French Denmark Taiwan Tokyo US Seoul

Petrol Price and Consumption Annual petrol price trend high-grade petrol price (March, 2015) NTD/L kloe

Electricity Bill and Consumption Annual electricity bill trend Electricity bill compare, 2013 NTD/kWh year Watt

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 26

Definition and Four Key Aspects of “Green Economy” 27

Basic Principles of The (draft) Green Economy Policy Framework for Taiwan 1.Development must go beyond GDP 2.Give priority to creating an environment that enables the transition to a green economy 3.Propose policies that address underlying issues, not short-term strategies aimed at surface-level problems 4.Emphasize inclusive, democratic, participatory, accountable, transparent, and stable governance 5.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 industries 7.Create more decent jobs and rebuild the middle class 8.Take account of economic efficiency, social equity, and protection of the disadvantaged during the transition process 28

Vision and Objective VisionVision Toward a green economy that recognizing the limits of environmental resources, enhancing intergenerational and intragenerational equity, improving prosperity and happiness of the people. ObjectiveObjective To lay a solid foundation for the transition to a green economy through integrated policies addressing underlying issues. 29

30 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

31 Some important policy recommendations

32

Thank you for your attention ! 33