Fri, Jan 02, 2009 page4

• FEATURE : Economics upstages the environment

  RHETORIC A National Chengchi University professor of public finance said the about-face over carbon emissions came as the Cabinet bowed to pressure from businesses

  • By Shih Hsiu-chuan / STAFF REPORTER
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  Economic crises have often marked the starting points of industries in transformation. This time around, the view that industries must adopt eco-friendly practices is a top priority for many world leaders as energy prices rise and climate change becomes an ever-increasing concern.

  Whether the environment has the highest priority in Taiwan is questionable in light of the country’s news media giving environmental issues a back seat to the global economic slowdown.

  According to the International Energy Agency, Taiwan’s per capita carbon dioxide emissions rose from 5.54 tonnes in 1990 to 11.41 tonnes in 2005, ranking the highest in Asia and 18th in the world.

  

  Environmental protection activists including Green Party Taiwan secretary-general Pan Han-shen, first right, release a joint statement at a press conference in front of the Legislative Yuan on Dec. 24, questioning the Cabinet’s draft greenhouse gas reduction act, which is being reviewed by the legislature.

  PHOTO: WANG YI-SUNG, TAIPEI TIMES

  While many countries have tried to cut emissions below the base year level of 1990 since the Kyoto Protocol was established in 1992, Taiwan doubled per capita emissions in the same period, four times higher than the average global growth rate.

  Last November, the journal Nature ranked Taiwan the 13th-largest carbon dioxide producer, up from 22nd place in 2006.

  The weekly also gave Taichung County’s Lungching (龍井) Township power plant top ranking in its top 25 carbon dioxide-emitting power plants worldwide, while the cogeneration power plant in Mailiao Township (麥寮), Yunlin County, and the Hsinta thermal power plant in Kaohsiung County’s Yungan Township (永安) were also on the list.

  The prospects for action looked good as both President Ma Ying-jeou (馬英九) and Premier Liu Chao-shiuan (劉兆玄) repeatedly touted energy saving and emissions reductions after assuming office in May.

  Actions since their inauguration, however, have made critics wonder if the promises were nothing but rhetoric.

  “Ma said a number of times during the campaign and after his inauguration that he would impose a tax on carbon emissions, which would be balanced by an income tax cut. But it turned out to be nothing but talk,” Green Party Taiwan secretary-general Pan Han-shen (潘翰聲) said.

  “A few months ago, Liu said he was not considering a carbon tax because of the sky-high oil prices. But now, oil prices have decreased and the [government-proposed] tax reduction bill passed [the legislature], while the carbon tax issue is still far from being taken seriously,” Pan said.

  One example of how green issues are slipping down the agenda was the government’s reversal of a decision that would have seen a tax on carbon imposed for the first time.

  Earlier this year, the Hualien County Council passed an Autonomy Act on Imposing Carbon Tax in Hualien County (花蓮縣碳稅徵收自治條例), aimed at plants that generate more than 10,000 tonnes of carbon dioxide per year from the use of coal, petroleum coke and fuel oil.

  The proposal was initially approved at a Ministry of Finance screening meeting in October, but later that month, the ministry overturned the decision, withholding its permission for the imposition of the new tax.

  Minister of Finance Lee Sush-der (李述德), who at first praised the proposal, saying “carbon tax was a good thing,” justified the reversal by saying “local governments are not entitled to impose the tax as it is a ‘state tax.’”

  In an article critical of political intervention in the Tax Reform Committee, Tseng Chu-wei (曾巨威), a National Chengchi University professor of public finance and member of the committee, said the about-face came as the Cabinet bowed to pressure from businesses.

  Tseng said the General Local Tax Act (地方稅法通則) allows a carbon tax to be charged by local governments.

  The committee was commissioned by the Cabinet to carry out an in-depth review of the current tax system and study tax reform issues within a year.

  A Cabinet official, who requested anonymity, said the Executive Yuan relayed its concern to the ministry over the matter, but he denied it was because of pressure from businesses.

  “A carbon tax is not an issue that can be dealt with alone, as it will bear on the economy ... Another problem with carbon tax is the potential for double taxation,” he said.

  The official said “green” taxes are not a Cabinet priority, but they will definitely be in the committee’s tax reform proposal, expected in June.

  “Unemployment is more urgent than anything,” the anonymous official said.

  But the reasons given for the delay in imposing a carbon tax sounded more like excuses to environmentalists.

  Lin Tze-luen (林子倫), an associate professor of political science at National Taiwan University, said he agreed that carbon tax should be charged by the central government and that the taxation system should be reviewed as a whole.

  “Given that offering low-carbon products and services is a global trend, rather than postponing imposing the price of carbon dioxide emissions on emitters, the government should have helped businesses adapt to incorporating environmental matters in production process to avoid trade sanctions that could be brought into post-Kyoto arrangements and to enhance competitiveness,” Lin said.

  What added to concerns over potential rises in emissions was that, in these times of hardship, there were signs the government was falling back on energy-intensive, polluting industries.

  In June, the Environmental Protection Agency gave conditional approval to an expansion proposal by Dragon Steel Corp, under which the company needed to reduce carbon dioxide emissions by 15 percent by 2014; it would otherwise be fined a carbon-reduction fee of NT$1.5 billion a year.

  Although it was the first case requiring a major development to pay a carbon-reduction fee, it was criticized as an “empty pledge” because the Greenhouse Gas Reduction Act (溫室氣體減量法) hasn’t been yet enacted.

  This month, the Executive Yuan established a task force to facilitate a cracker complex project by Kuokuang Petrochemical Technology (國光石化), which last year planned to shift the project overseas because of opposition from conservationists and fishermen in Changhua County.

  More recently, Liu promised Formosa Plastic Group could speed up its fifth-stage expansion proposal of a sixth naphtha cracker plant when he visited an industrial park in Mailiao, another long-term controversial project in light of the massive emissions generated by the group.

  Wang To-far (王塗發), a professor of economics at National Taipei University, said that steel, petrochemicals, concrete, paper and other high energy-consuming industries consumed one-third of Taiwan’s total energy, while creating less than 5 percent of the nation’s GDP in recent years.

  “Currently about half of the country’s carbon dioxide emissions comes from the industrial sector. The soon-to-be-built plants will make it even harder to achieve Ma’s emission reduction target,” Pan said.
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