The Kyoto Protocol came into force in February 2005. Taiwan is not a Annex I country of the Protocol and hence not obliged to reduce its emission level in phase I. However, it is expected that Taiwan would be subject to the reduction requirements for the next phase, given that Taiwan’s emission level amounts to 1% of the global level and ranked #22 in terms of the total emission level by country. The list of greenhouse gases as defined by the Kyoto Protocol includes 6 gases with CO2 accounting for 75% of the global greenhouse emission. In the case of Taiwan, the CO2 emission accounts for over 3/4 of the total greenhouse gas emission. In the medium term, Taiwan will need to comply with the Kyoto Protocol and mitigate its CO2 emission level. Failing to fulfill its obligations, Taiwan may face sanctions by the international community damaging its long term growth prospects.
Further, as a strong supporter for sustainable global developments, Taiwan has to take proper measures to fulfill its responsibility as a global citizen.
This paper simulates the effects of CO2 mitigation policy options (CO2 tax and demand side management) on dispatch and pricing and the level of Co, emission, based on the Regional and Real-time Pricing System (RRPS). The simulation results show that the imposition of CO2 tax would only substantially increase the price of electricity without corresponding reduction in the emission level. Load management could also contribute to CO2 reduction. However, load shifting from peak periods to off-peak periods could actually increase CO2 emission. It is crucial that when implementing DSM the government takes account of its impact on energy, economy and environment and in particular the impact on CO2 emission.
