Newsletter
EPA DRAFTS GREENHOUSE GAS REDUCTION BILL
The Kyoto Protocol sets targets for 38 industri-alized countries and the European Union to re-duce their emissions of six greenhouse gases (GHGs) to, on average, 5.2% below the 1990 levels during the period 2008–2012. The Kyoto Protocol took effect on 16 February 2005. The GHG reduction targets defined by the Protocol apply only to those industrialized countries that have signed and ratified the Protocol. Although not a party to the Kyoto Protocol, since Taiwan's GHG emissions account for almost 1% of the worldwide total, it may still become a target for regulation in the next round of reduction efforts.
In response to the Kyoto Protocol, the Envi-ronmental Protection Administration recently approved a draft Greenhouse Gas Reduction Act. If passed by the legislature, the Act will require central government agencies responsible for set-ting national policies for the energy, industrial, transportation, residential, and commercial sec-tors to review and adjust their GHG emission policies at regular intervals. The proposed Act will also require annual audit, registration, and verification of the quantities of GHGs emitted by enterprises that are designated by the EPA as GHG emission sources. Such enterprises' aver-age annual GHG emissions will have to comply with GHG emission standards.
GHG emissions will be subject to total quantity controls. The actual emissions of an enterprise that is allocated a emission quota must not ex-ceed its quota. If expansion of an enterprise's facilities, or changes in its equipment, will cause its emissions to exceed its quota, the enterprise must first access a trading platform designated by the EPA, in order to purchase additional carbon emission quota to cover its needs. Thus, carbon dioxide emissions will become tradable financial products.
The proposed Act will impact industries that are high consumers of energy, such as petrochemi-cals, iron and steel, shipbuilding, cement, metals, and electronics. Such industries should upgrade their technology in order to reduce their CO2 emissions. If they are unable to upgrade their technology, and need to purchase additional carbon quotas by trading, this will increase their operating costs and reduce their market com-petitiveness.