Over the past few weeks we have seen a succession of debates flaring up in Taiwan about how to balance economic development with environmental protection. The Suhua Highway improvement project, for example, is still very much a contentious issue. Of course, the health of the economy is important if a country is to develop, but this should not come at the expense of the environment. Certainly, a growing number of people are coming around to this way of thinking.
For a long time now, many domestic companies have been exploiting natural resources here in Taiwan for their own benefit, reaping huge profits, and have not been expected to take responsibility for the environment and the damage that has resulted. There has been no compensation forthcoming for anyone on the wrong end of this environmental damage, however. This has led to clashes between the two parties, the perpetrators and those affected, and these confrontations are getting more fierce as time goes on.
In the past few months alone disasters such as the pollution from the Formosa Plastics Group’s sixth naphtha cracker and the fire at the Nan Ya Plastics Corp plant have had locals up in arms, and this is a waste of social resources. One side is making profits, and the other side is frustrated that they are seeing no benefits while being adversely affected. There has to be some kind of improvement, some balance struck, if we are to achieve sustained economic growth. We would do well to follow the lead of countries that have implemented a form of ecological compensation mechanism (ECM).
The underlying principle of an ECM is to have a positive -operation mechanism in which external costs to the local ecology are absorbed, those who profit from exploiting ecological resources are held to account, those who harm the ecology pay compensation and those who protect it are awarded a reasonable amount of indemnity. This ECM could be adopted as a new model for managing ecological resources.
Ecological compensation measures are being adopted in many countries in various guises. The first is through direct public expenditure, where the government makes payments to the owner of the affected land and any other providers of ecological services on that land. This is the most common model of ecological compensation.
The second is through a quota transaction system, in which the government sets a limit on the amount of destruction or pollution permissible within a given ecological system, and a company operating within that area either keeps within the limits or makes available the resources for a third party to engage in environmental conservation initiatives to mitigate the harm caused (like carbon emissions trading schemes).
A third possibility is private payments by non--governmental organizations or voluntary contributions from companies to support people working in environmental conservation projects.
Finally, there is eco--certification, with third-party certification bodies passing environmentally friendly -products. This certification provides consumers with a basis on which to decide whether they want to buy a given product. An example of this would be the EU eco-label system.
At present, the ecological compensation in most countries comes in the form of governments allocating public finances to leverage economic incentives or market forces to encourage environmentally friendly activity.
Once this system is in place, it is possible to compensate people affected by polluting accidents as soon as possible, which has the added effect of keeping protests to a minimum. Related legislation in Japan, for example, deals mainly with compensation for harm derived from pollution.
The success or failure of the compensation mechanism process rests on how the standards are set. The most commonly adopted model internationally is the EU’s “opportunity cost” format, which basically entails deciding the level of compensation depending first upon the benefits and harm caused and then setting different levels of compensation according to local legislation as it applies in specific areas.
The US uses a different model, in which the amount is set according to the conservation services provided within a given ecological system. The former is the more practical, the latter being fairer and more just.
The cost of implementing an ECM is met mainly through government subsidies and the imposition of ecological taxes, green taxes, green funds and carbon emissions trading, all of which require legislation to set their parameters.
To make sure the compensation policy objectives can actually be achieved, some things need to be put in place first. In addition to a scientific evaluation system, there needs to be a mechanism to ensure the system is strictly enforced.
In some countries strict monitoring systems are in place to enforce measures aimed at reforesting previously cultivated land and returning farmland to pastures.
In the US, if farmers living on land that falls within the Conservation Reserve Program (CRP) refuse to participate in the program, the government will cancel the support farmers usually enjoy and retract their right to participate in US Department of Agriculture (USDA) Commodity Programs.
Our own government could learn something from this. Implementing an ECM will also be good for the development of a low-carbon economy and for alleviating the problem of land subsidence.
We can expect the environmental protection versus industrial development debate to continue in Taiwan and there is even the chance that it could lead to social problems.
The authorities need to step up their efforts if they are going to improve the situation and create an ECM as soon as possible. This will mean clearly setting out local compensation standards, implementing the regulations and legislating for a comprehensive ECM policy. Then Taiwan can keep up with other countries and strike the right balance between industrial and commercial development and ecological conservation, and prevent Taiwan being held back by economic stagnation.
Du Yu is a member of the Chen-Li Task Force for Agricultural Reform.
TRANSLATED BY PAUL COOPER
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