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C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 000002 
 
SIPDIS 
 
STATE FOR EAP/TC, IO, OES/EGC, OES/ENV, OES/PCI, OES/STC, 
EPA FOR KASMAN, TROCHE AND HARRIS, DOE FOR INTERNATIONAL, 
COMMERCE FOR 4431/ITA/MAC/AP/OPB/TAIWAN 
 
E.O. 12958: DECL: 12/31/2019 
TAGS: SENV ECON ENRG EINV TRGY PREL TSPL TW XE
SUBJECT: TAIWAN CONSIDERS POST-COPENHAGEN PATHWAY 
 
REF: A. TAIPEI 1093 
     ¶B. TAIPEI 1453 
 
Classified By: AIT Acting Director Eric Madison for reasons 1.4 (b) and 
 (d). 
 
¶1. (SBU)  SUMMARY:  On December 30, Taiwan delegates to the 
Conference of Parties (COP) 15 meeting in Copenhagen gathered 
to discuss Taiwan's path forward in the fight against climate 
change.  Although Taiwan authorities were disappointed the 
island did not achieve observer status at COP-15, they have 
vowed to continue pushing for meaningful participation in 
international environmental organizations.  Participants at 
the December 30 meeting agreed that Taiwan should stick to 
its stated greenhouse gas (GHG) reduction goals, find a 
suitable mechanism to engage in trading carbon offsets, 
rationalize energy prices, and pass the Greenhouse Gas 
Reduction Act pending before the Legislative Yuan.  Points of 
contention included whether Taiwan should use 2008 as a base 
year for legislating GHG reductions, whether Taiwan should 
move clearly towards measurable, reportable, and verifiable 
economy-wide emissions targets, and whether Taiwan Power 
Company (Taipower) has hindered progress on alternative 
energy development.  Industry cooperation will be key to 
reaching Taiwan's GHG reduction targets, but debate over the 
best policies to reach those targets is likely to continue. 
END SUMMARY. 
 
------------------------------ 
THE RESPONSIBLE GLOBAL CITIZEN 
------------------------------ 
 
¶2. (SBU)  Taiwan's unique political status has prevented the 
island from being able to join most international 
environmental organizations, especially UN entities such as 
the United Nations Framework Convention on Climate Change 
(UNFCCC).  The Taiwan authorities have nonetheless taken 
action to harmonize domestic legislation and policies with a 
wide body of international environmental agreements to which 
the island cannot formally accede.  President Ma Ying-jeou 
and ministries charged with environmental management have 
taken the position that Taiwan, as a responsible global 
citizen, has a duty to address the problem of climate change. 
 The authorities have in the past argued that taking action 
to combat global warming also draws positive attention to 
Taiwan, shows the rest of the world that Taiwan is an engaged 
and active global partner, and gives Taiwan an issue that can 
be used to increase the island's international participation 
and assistance to others.  In the latter half of 2009, Taiwan 
publicly expressed its desire for expanded participation at 
the COP-15 meeting in Copenhagen, and enlisted the help of 
diplomatic allies to make its case for meaningful 
participation.  The Ministry of Foreign Affairs (MOFA) also 
made overtures to AIT for U.S. assistance and support (ref 
A). 
 
¶3. (C)  Although Taiwan's request to attend COP-15 as an 
"observer" was ultimately rejected by conference organizers, 
Taiwan officials and academics did attend the meeting under 
the umbrella of the island's official research incubator, the 
Industrial Technology Research Institute (ITRI), which COP-15 
organizers listed as an NGO hailing from Hsinchu China, as in 
previous years.  According to a MOFA official handling the 
island's UNFCCC campaign, the authorities here believe 
obstacles to Taiwan's participation in UNFCCC meetings are 
political rather than legal, and officials have vowed to work 
harder in the future to obtain meaningful (i.e., observer 
status) participation for Taiwan.  AIT has observed that poor 
interagency coordination between MOFA, Taiwan EPA, the Bureau 
of Energy, and other stakeholders, as well as a late start on 
 
TAIPEI 00000002  002 OF 004 
 
 
the application process to attend COP-15, weak organizational 
skills among those shepherding the process, and the absence 
of outreach to the PRC on this issue, were major factors 
hampering Taiwan's ability to make a compelling case for 
observer status in this year's meeting in Copenhagen. 
 
------------------------- 
PLANNING THE PATH FORWARD 
------------------------- 
 
¶4. (SBU)  The December 30 meeting was the first time members 
of the Taiwan delegation have conferred since returning to 
the island.  The purpose of the meeting was to discuss the 
future path of Taiwan's GHG reduction policies in light of 
COP-15.  Attendees and speakers at the meeting included 
Minister without Portfolio Liang Chi-yuan, an economist who 
covers a wide range of energy and climate issues for the 
administration, Taiwan EPA Minister Stephen Shen, former 
Foreign Minister Eugene Chien, who now operates a sustainable 
energy NGO, representatives from the Bureau of Energy, from 
Taipower, and prominent academics. 
 
¶5. (C)  Speakers covered a range of topics, and broad 
agreement was reached on the following points: 
 
- Taiwan strongly desires meaningful participation in future 
UN-related climate discussions.  Speakers felt Taiwan has 
much to contribute to the global discussion on this issue, 
and its exclusion from meetings does a disservice to both 
Taiwan and the rest of the world.  Speakers suggested better 
training for Taiwan negotiators, pointing out that the PRC's 
hard-nosed bargaining skills would be a useful model for 
Taiwan's MOFA to study.  They also urged Taiwan to explore 
cooperation with potentially sympathetic groups such as the 
UN's Alliance of Small Island States. 
 
- Taiwan will continue to pursue the GHG reduction targets 
already proposed by the administration (i.e. reduce to 2008 
levels between 2016-2020, to 2000 levels by 2025, and to 50 
percent of 2000 levels by 2050). 
 
- By January 31, 2009, Taiwan will detail nationally 
appropriate mitigation actions (NAMAs) that it will take to 
reduce GHG emissions.  This is in line with COP-15 
requirements for non-Annex I countries.  At the same time, 
however, the Executive Yuan will ask each ministry to propose 
measures for moving Taiwan towards fulfilling "economy-wide 
emissions targets for 2020" that are measurable, reportable, 
and verifiable, as required of Annex I countries. 
 
- Taiwan must engage in international cap and trade programs 
in order to meet its GHG reduction targets.  U.S. and other 
foreign experts visited Taiwan this year to provide training 
and case studies on their own experiences developing 
emissions trading programs.  Taiwan's inability to 
participate in UN trading platforms was a serious concern to 
the participants, who proposed alternatives that would have 
Taiwan choose one or multiple UNFCCC Annex-I countries as 
operational bases, and then establish proxy organizations to 
open accounts registered in those countries to acquire and 
manage carbon credits.  U.S. experts have criticized this 
plan as unwieldy and open to fraud (ref A). 
 
- The administration must rationalize Taiwan's artificially 
low energy and gasoline prices, and bring them in line with 
prices dictated by market forces.  Speakers noted that 
passing energy or carbon taxes would be difficult in Taiwan, 
and any such legislation would have to provide subsidies for 
low-income individuals and families. (Note: Taiwan's 
legislature shelved a proposed Energy Tax this past October 
 
TAIPEI 00000002  003 OF 004 
 
 
in the face of stiff corporate opposition.  Premier Wu 
Den-yih noted there was no "timetable" for an energy tax, and 
the central authority would not institute any such tax until 
the economy had "recovered." End Note.) 
 
- The Legislative Yuan (LY) should pass the Greenhouse Gas 
Reduction Act (GHGRA), which was initially proposed in 2006 
and has languished since then due to corporate opposition. 
The GHRA would codify emissions reduction targets, as well as 
a domestic reporting and verification system.  The LY was 
expected to pass the GHGRA in early 2010, after taking COP-15 
developments and mandates into account. 
 
¶6. (C)  Three further points, which highlight areas of 
contention or disagreement between the participants, were 
raised: 
 
- Some proposed reconsidering the use of 2008 as a base year 
for Taiwan's first GHG reduction target. Because of the 
global financial crisis, energy usage and GHG emissions in 
2008 were artificially depressed, and 2008 is therefore not a 
fair baseline for making future reductions. 
 
- Taiwan is moving to position itself between Annex I and 
non-Annex I criteria, as described in the third bullet point, 
above. Some participants, however, notably from Taipower and 
academia, argued that Taiwan should steer clearly towards 
non-Annex I criteria, and should put its own interests first, 
take advantage of its unique status as a non-UNFCC member 
unbound by international agreements, and avoid agreeing to 
measurable, reportable, and verifiable targets that could 
hamstring the island into undertaking costly GHG reduction 
actions without international support or participation (for 
instance in carbon trading programs). 
 
- Taipower took the strongest position against aggressive 
action to meet GHG reduction targets, which was not 
surprising considering Taipower's reliance on fossil fuels to 
generate electricity and earn money.  Taipower also operates 
the island's nuclear power plants, and clearly supported 
expanding nuclear power.  In fact, increasing the use of 
nuclear power received general support from all participants, 
but was not a focus of discussion at the meeting.  Taiwan EPA 
Minister Shen concluded the meeting by jokingly announcing 
that Taipower should be "disbanded" for being so unhelpful in 
promoting alternative energy development and carbon reduction 
policies.  He then struck a serious note and said that 
Taipower must take fresh view of energy production 
emphasizing GHG reductions. 
 
------- 
COMMENT 
------- 
 
¶7. (C)  Although some meeting participants asserted that 
Taiwan should not implement aggressive carbon reduction 
policies, EPA Minister Shen and Minister without Portfolio 
Liang came down on the side of those who advocated moving 
from NAMAs towards measurable, reportable, and verifiable 
economy-wide emissions targets (i.e., from non-Annex I 
criteria to Annex I criteria).  These two ministers' views 
will be influential as the administration moves forward on 
its GHG reduction agenda.  However, both Shen and Liang 
asserted that economic development remains Taiwan's top 
priority, and GHG reductions should not impede GDP growth. 
Considering that Taiwan's industrial sector accounts for 50.1 
percent of energy end-use in Taiwan (compared to 22.7 percent 
in the OECD and 27 percent globally), industrial buy-in will 
have to be a key component of a successful GHG reduction 
policy in Taiwan.  This reality is likely behind the Ma 
 
TAIPEI 00000002  004 OF 004 
 
 
administration's strong support for a cap and trade program, 
which would help industry meet capped emissions targets. 
Environmental NGOs and a growing number of academics here 
have begun criticizing cap and trade programs as little more 
than speculative bubbles, and maintain the administration 
should instead focus on implementing meaningful energy and 
carbon taxes, aimed primarily at industry.  The debate over 
how Taiwan should achieve its GHG reduction targets will 
continue, but for now the targets themselves are unlikely to 
change. 
MADISON