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The efforts of Taiwan to achieve NDC target: an integrated assessment on the carbon emission trading system

  • Yi-Hua Wu
  • Hancheng DaiEmail author
  • Yang XieEmail author
  • Toshihiko Masui
Original Paper
  • 36 Downloads

Abstract

In this paper, we adopt a computable general equilibrium model to investigate the impacts of achieving Taiwan’s target of nationally determined contributions (NDC). We consider two types of scenarios: one implemented with the emission trading system (ETS) and the other designed under cap without trade. Our findings suggest that Taiwan’s NDC target is achievable in two policies but with different economic costs. On the one hand, ETS reconciles the demand and supply for emission allowances. More participants in the ETS increase the chance that a buyer can match the seller; moreover, the carbon price is lower. On the other hand, in the cap-without-trade scenario, industrial sectors have to pay higher prices for emission allowances if there is no market for emission–allowance exchanges. Furthermore, we find that the initial distribution of free emission allowances affects not only sectoral emissions but also GDP loss. In 2030, the GDP loss ranges from 1.8 to 2.2% in the cap-without-trade scenario and around 1.8% in the ETS. Therefore, the ETS helps achieve Taiwan’s NDC target with a lower economic loss. Taiwan, an independent energy system isolated from other countries or regions, can achieve its NDC target with the launch of ETS.

Keywords

Emission trading system AIM-CGE NDC Taiwan 

Notes

Acknowledgements

This study is funded by the Natural Science Foundation of China (51861135102, 71690245, 71704005, 71690241), the Startup Research Fund of College of Environmental Science and Engineering at Peking University, and the Environmental Research and Technology Development Fund (S-12-2 and 2-1402) of the Ministry of the Environment, Government of Japan. The authors are grateful for the comments from anonymous reviewers of this paper.

Supplementary material

11069_2019_3660_MOESM1_ESM.docx (137 kb)
Supplementary material 1 (DOCX 136 kb)

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Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  1. 1.Department of EconomicsNational Tsing Hua UniversityXinzhuTaiwan
  2. 2.College of Environmental Sciences and EngineeringPeking UniversityBeijingChina
  3. 3.School of Economics and ManagementBeihang UniversityBeijingChina
  4. 4.Center for Social and Environmental Systems ResearchNational Institute for Environmental Studies (NIES)TsukubaJapan

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