Strict environmental rules hurting economy: MOEA

Local businesses are likely to relocate to other countries, dealing a blow to the domestic economy, if the legislature passes a law strictly regulating carbon dioxide emissions, Minister of Economic Affairs Steve Chen (陳瑞隆) said yesterday.

Chen made the remarks while briefing the legislature's Economics and Energy Committee on how to enforce environmental protection without adversely affecting industrial development.

Earlier this month the legislature passed the first reading of the Greenhouse Gas Reduction Act (溫室氣體減量法), which stipulates that the annual volume of greenhouse gas emissions should be reduced to 2005 levels of 250 million tonnes by 2025 to 2030.

The goal is very difficult to achieve, as local carbon dioxide emissions increase by an estimated 4 million tonnes per year even without major construction projects being carried out, Chen said.

Carbon dioxide emissions rose by an average of 5.85 percent from 1990 to 2005, which was faster than its average annual GDP growth of 5.36 percent, Council for Economic Planning and Development Vice Chairman Thomas Yeh (葉明峰) said.

The figures showed that the economy is still reliant on industries that produce heavy emissions, Yeh said.

The government started promoting voluntary reduction of carbon dioxide emissions among local enterprises in 2005 and has actively supported industrial restructuring, as well as measures to enhance energy efficiency and develop renewable energy resources, Chen said.

If the government enforces the act before related policies bear fruit, companies may be forced to downsize or relocate to other countries, which would also cut job opportunities and negatively impact on the economy, Chen said.

Taiwanese awareness of the importance of reducing greenhouse gas emissions has been on the rise since the Kyoto Protocol took effect in February 2005. Although Taiwan is not a signatory to the protocol, the government has said it would respond to the environmental call and carry out its so-called "no regret" policy.

Taiwan's carbon dioxide emissions account for about 1 percent of the global volume.

Although progress in and setting explicit goals for reducing emissions have been slow, the Environmental Protection Administration (EPA) has blocked several environmentally unfriendly investments.

Projects that have failed to pass the EPA's environmental evaluation committee include: Kuokuang Petrochemical Technology Co (國光石化科技) -- a NT$401 billion (US$12.04 billion) venture of state-run CPC Corp, Taiwan (台灣中油) to construct a several plants in Yunlin County; Formosa Plastics Corp's (台塑) proposal to build a steelmaking plant, also in Yunlin; and state-run Taiwan Power Co's (台電) proposal to build a power plant in Changhua County.

However, there is concern that these projects could pass following the replacement of EPA chief Chang Kow-lung (張國龍), an ardent environmentalist, during the recent Cabinet reshuffle.

The signs are not hard to read, as President Chen Shu-bian (陳水扁) told the Chinese National Association of Industry and Commerce (工商協進會) on Monday that "the government should review the environmental protection policy and should not make it too stringent as to force out enterprises."

Taiwan will have to clarify its position on greenhouse gas emissions soon, as APEC energy ministers are scheduled to meet in Sydney next week to discuss carbon emissions and how to secure energy supplies while reducing carbon emissions' impact on the environment.