China's rapid economic development has increased its need for energy and pushed the "Chinese energy strategy" to an unprecedented level of complexity. The energy issue will certainly be a key focus in the country's future economic development policy.
Taiwan also faces a desperate shortage of energy, as 99 percent of its oil is imported. However, China's new energy strategy of "an international diversification of oil sources" will surely cause oil prices to rise over the long term. In response to that trend, the government should take the following measures.
To begin with, it should pay close attention to China's energy strategies of "oil supply diversity" and "emergency strategic reserves" and study whether such strategies would affect the nation's oil supplies.
Further, the government should mirror what the Office of the US Trade Representative (USTR) has done and form an agency responsible for trade talks. The agency should be able to use Taiwan's massive foreign reserves to seek cooperation with international energy companies, improve drilling techniques and promote energy exploration and production to serve the needs of national economic development.
The government should also reward and push companies to research and develop renewable energy and power-saving technologies -- such as solar power -- and avoid excessive energy demand by creating more economical products.
The fourth nuclear power plant should be completed and the feasibility of delaying the retirement of the three other nuclear power plants should be studied unitl renewable and solar energy sources become available. The delayed retirement could reduce reliance on thermal power plants and oil while decreasing the production of carbon dioxide.
Finally, the current low-pricing policy for oil has not only distorted the industrial sector -- leading to the expansion of high consumers of energy -- but also affected efforts at energy conservation and the development of renewable sources of energy.
The government should respect market mechanisms and adjust the industrial structure appropriately.
Kuo Kuo-hsing is an associate professor in the Graduate Institute of International Trade at Chinese Culture University.
TRANSLATED BY EDDY CHANG
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