TAIWAN'S "GREEN" PARTY PICKS ECONOMICS OVER THE

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 001072 SIPDIS STATE FOR EAP/RSP/TC, NP/NE FOR ALEX BURKART, EP/ESC/IEC PLEASE PASS TO AIT/W E.O. 12958: DECL: 02/19/2015 TAGS: ECON ENRG KNNP SENV PREL TW SUBJECT: TAIWAN'S "GREEN" PARTY PICKS ECONOMICS OVER THE ENVIRONMENT REF: A) 2005 TAIPEI 00846 B) 2005 TAIPEI 00490 C) 2002 TAIPEI 03912 D) 2005 TAIPEI 00490 Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) ¶1. (C) Summary. The Kyoto Protocol coming into force on February 16th has led Taiwan's policy makers to espouse a renewed commitment to work on reducing greenhouse gas emissions within Taiwan. However, the Kyoto Protocol is not driving changes in Taiwan's environmental policies. Taiwan has failed to take any concrete action to reduce its carbon emissions since Kyoto's inception in 1990. Now it has tentatively approved two large-scale development projects, which could lead to a 10 percent annual increase in Taiwan,s already high emissions. As noted in ref A, the Chen Administration is simply using the Kyoto Protocol to spin its decision to step back from its opposition to nuclear power in "pro-green" terms. End Summary. Background -------------- ¶2. (SBU) Taiwan is not a member of the United Nations and therefore did not sign the United Nations Framework Convention on Climate Change (UNFCC) at the United Nations Conference on Environment and Development in Brazil in 1992. Nonetheless, the UNFCC did lead the Taiwan Executive Yuan (EY) to spend much of the 1990s thinking about how it might reduce its greenhouse gas emissions. During the 1990s Taiwan's Environmental Protection Administration (TEPA) went so far as to draft a law to require that Taiwan reduce emissions. The draft law was comprehensive and included options Taiwan could use to achieve its greenhouse gas targets including emissions trading schemes, carbon taxes and joint implementation projects. Despite this paper exercise, no concrete actions were taken, and the law was not introduced to the Legislative Yuan, debated, or passed. Kyoto Discussion Halt under Chen -------------- ¶3. (SBU) Despite the Democratic Progressive Party's strong pro-environmental roots, even a discussion of the environmental objectives embodied in the Kyoto Protocol came to a standstill with the election of the President Chen Shui-bian in 2000. Lowering greenhouse emissions clearly took a back seat to the Administration's efforts to fulfill its commitment to the Democratic Progressive Party's (DPP) 
core value of making Taiwan nuclear free. As a result, since 1990 Taiwan's carbon dioxide emissions have continued to rise. Taiwan's annual carbon dioxide emissions have grown at a faster rate than its economy and are now twice what they were in 1990. Currently, Taiwan's GDP is the world's 19th largest and its carbon dioxide emissions are the world's 23rd highest. Anti-nuke Rhetoric Softens as Kyoto Protocol enters into Force -------------- -------------- ¶4. (SBU) In January 2005, Nobel Prize Laureate and Taiwan Academia Sinica President Lee Yuan-tseh publicly stated that the Chen Administration's "Nuclear Free Homeland" policy might need to be postponed until 2050 in order for Taiwan to meet emissions requirements under the Kyoto Protocol. This marked the first pro-nuclear public statement by a high-level public figure since President Chen took office in 2000. ¶5. (C) Since Lee Yuan-tseh's January statement, several top level government officials have come out publicly in favor of completion of the Fourth Nuclear Power plant (as reported in ref A). To ascertain whether those statements reflected the beginning of a more serious internal debate about the pros and cons of nuclear energy or a true policy shift towards moderation in its nuclear energy stance, on March 3, AIT Econ Chief and ESTOFF met with Yeh Jiunn-rong, Chairman of the EY Research, Development and Evaluation (RDEC) Commission. Until recently, Yeh was the head of the EY Nuclear Free Homeland Commission. Prior to joining the Chen Administration, Yeh was a law professor linked to environmental NGOs. As Chairman of the EY Nuclear Free Homeland Commission (established in the fall of 2002),Yeh was largely responsible for codifying Taiwan,s nuclear free homeland ambitions into Taiwan,s Basic Environmental Law (reported in ref c) and for a proposal to decommission each of Taiwan,s three existing nuclear power plants seven years earlier than originally scheduled. ¶6. (C) During AIT's March 3 meeting, Yeh confirmed a definite policy shift towards moderation in the Chen Administration's anti-nuclear policies. He openly stated a firm commitment to completing the Fourth Nuclear Power Plant and implied that the talk about the early decommissioning of the first three nuclear plants was just rhetoric. Instead of discussing Taiwan,s &nuclear free homeland8 policies in terms of phasing out nuclear energy, he defined them as a commitment not to build a fifth nuclear power plant. To make clear that the Chen Administration is in no way abandoning its anti-nuclear goals, however, he noted that Taiwan's nuclear free homeland is legally binding and irreversible. Yeh conceded that Taiwan's nuclear free policies would need to be applied incrementally so as not to harm Taiwan,s economy. ¶7. (C) With respect to the Kyoto Protocol, Yeh claimed that the Chen Administration had recently revived latent efforts to work toward reducing greenhouse gases. He noted that both the Kyoto Protocol and Taiwan's Nuclear Free Homeland obligations would be the primary foci of a National Energy Conference that would be held in June. When asked a direct question, Yeh did not deny that one of the underlying purposes of the conference would be to openly support completion of the Fourth Nuclear Power Plant. Development Projects At Odds with Kyoto Goals -------------- ¶8. (U) Despite thse expressions of public support for the Kyoto Protocol, on January 25, the EY approved New Taiwan Dollars (NTD) $505.3 billion (USD 16.6 million) for development projects. The approval paves the way for the Formosa Plastics group to build its steel plant in Pingtung County and for the China Petroleum Corporation (CPC) to co-invest with several petrochemical businesses to construct a petrochemical science and technology park in Yun-lin County (which would include Taiwan's 8th Naptha Cracker plant). ¶9. (u) Formosa Plastic's steel plant and CPC's 8th Naptha Cracker Plant both would lead to drastic increases in Taiwan's already high CO2 emissions and reduce Taiwan's ability to meet potential Kyoto obligations. Assuming both the new steel plant and the 8th Naptha Cracker plant are built, it is estimated that their combined emissions will reach 24 million tons of CO2 per year. This would represent at least a 10 percent increase to Taiwan's current annual CO2 emissions of 240 million tons. ¶10. (c) As a result, on February 16, the day the Kyoto Protocol took effect, several environmental groups took to the streets to protest both of these projects. Taiwan's Environmental Protection Agency is also concerned. It is claiming that it is necessary for environmental impact assessments (EIA) to be conducted prior to breaking ground. Several MOEA contacts, however, have revealed that a cabinet level decision has been made to exclude an evaluation of carbon emissions from the EIAs. They suggest that approval for these projects to move forward is imminent. ¶11. (C) Comment. Shortly after those demonstrations, EY Energy Commission contacts informed AIT that Wang Yung-ching, chairman of Taiwan's largest industrial conglomerate, Formosa Plastics Group was trying to make a deal that he provide the financing to save Taiwan High Speed Rail (THSR) from its financial difficulties (ref D) in exchange for permission to build his steel plant. At almost the same time the EY approved the budget to build the steel and 8th Naptha plants waiving a carbon-emissions EIA, Wang declined requests to invest in THSR. It is safe to conclude that once Wang got his authorization, he was no need to provide THSR financing. End Comment. Conclusion -------------- ¶12. (c) Both Formosa Plastic Group's steel plant and CPC's 8th Naptha Cracker plant will make meeting Kyoto targets and timetables impractical. The Chen Administration did not include any discussion of greenhouse gas emissions in its nuclear free homeland policies, publications or conferences over the past three years, indicating that global warming has not been a major concern for this Administration. Now, talk of reducing carbon emissions has coincided with the approval of development projects, which could lead to a 10 percent increase in Taiwan's already high emissions. These developments call into question the Chen's Administration's sincerity about wanting to reduce carbon emissions. What is more, they support ref A's conclusion that the Chen Administration is simply using the Kyoto Protocol to spin a step back from its opposition to nuclear power in pro-"green" terms. PAAL