Climate Governance and Indigenous Peoples’ Carbon Rights in Taiwan: A Comprehensive Overview
Taiwan is currently at a crucial point in the establishment of carbon emission reduction systems, with relevant regulations undergoing intense discussion. This article by Hsin-Ju Li delves into the legal frameworks of carbon emission reduction in Taiwan, highlighting the carbon fee and carbon trading schemes. Moreover, it explores the integration of Indigenous peoples into these systems through the ‘consultation, consent, and benefit-sharing scheme’ and the ‘Indigenous carbon sinks’ proposed by legislators and activists.
### The Evolution of Climate Change Legislation in Taiwan
In response to international agreements such as the UNFCCC, Taiwan enacted the Greenhouse Gas Reduction and Management Act (GGRMA) in 2015. Subsequently, to align with the European Carbon Border Adjustment Mechanism (CBAM) scheduled for 2026, the GGRMA was amended and replaced by the Climate Change Response Act (CCRA) in 2023.
The CCRA sets a clear target for Taiwan to achieve net-zero emissions by 2050 and introduces carbon pricing schemes primarily aimed at mitigating the impact on businesses and economic development. However, the focus on economic aspects and the urgency of responding to CBAM have led to a legal framework for carbon emission reduction that may lack comprehensive and prudent consideration, as evidenced by ongoing debates and controversies surrounding the carbon fee and carbon trading systems.
### The Impending Carbon Fee System Implementation
The Climate Change Response Act authorizes the imposition of a ‘carbon fee,’ scheduled to commence in 2025, to alleviate the tariffs Taiwanese exporters will face under CBAM. This carbon fee scheme is positioned as a quick solution to the lack of social consensus on a ‘carbon tax’ after prolonged negotiations.
In Taiwan, akin to Germany, a ‘fee’ is a specific levy imposed for a particular purpose by a regulatory body, distinct from a ‘tax’ collected by the central government for incorporation into the national fiscal budget. The collected carbon fee under the CCRA will be allocated as dedicated funds solely for carbon reduction or climate adaptation initiatives, such as subsidies for the payers.
The proposed regulations outline that initially, the taxable entities will include power generators and large manufacturers emitting over 25,000 tons of carbon dioxide equivalent annually. This is estimated to affect approximately 550 companies, accounting for more than 70% of emissions in Taiwan, with the threshold expected to decrease gradually.
Criticism of the upcoming carbon fee scheme stems from concerns that the limited use of dedicated funds may hinder the development of carbon technologies and that excessive incentives for payers could contravene the polluter pays principle, potentially diminishing the actual effectiveness of carbon reduction efforts. The proposed carbon fee rate is projected to be around US$10 per metric ton of carbon emissions, significantly lower than the rate in the EU Emissions Trading System (ETS) at €85, resulting in Taiwanese manufacturers exporting to Europe still incurring tariffs under CBAM.
### The Emergence of the Carbon Trading System
In addition to the carbon fee, the CCRA also regulates the Emission Trading Scheme and empowers the Ministry of Environment to establish the Taiwan Carbon Solution Exchange (TCX). The TCX was inaugurated in August 2023, facilitating the first matchmaking of purchased verified international carbon credits with domestic companies in December of that year. The first domestic trade is anticipated to occur in late September 2024 following the enactment of relevant regulations, with only voluntary carbon credits tradable at this stage as the Cap & Trade scheme and allowances are yet to be implemented.
In the voluntary carbon market, the CCRA recognizes carbon credits from three project types: Voluntary Emission Reduction Project, Offset Project, and Early Action Project. Nevertheless, the acceptance of these carbon credits in global contexts remains uncertain due to increasingly stringent international verification standards.
### Ethical Considerations and Indigenous Carbon Rights
The CCRA includes provisions concerning Indigenous peoples, presenting opportunities for participation in carbon markets through mechanisms such as the ‘consultation, consent, and benefit-sharing mechanism’ and the potential for Indigenous carbon offsets. However, the absence of relevant legal frameworks raises concerns about the integration of Indigenous peoples into these systems effectively.
Recent developments within the Katratripulr Tribe in eastern Taiwan serve as a case in point. In Katratripulr et al. v. Ministry of Economy (2022), the Tribe contested permission granted to a third party to install solar photovoltaic power generation equipment on their traditional territory. The Court’s ruling revoking the permission highlighted violations of international agreements and the Constitution, prompting the Tribe to establish its own regulations and advocate for similar actions among other tribes.
The Tribe’s proactive approach, including conducting workshops to identify carbon sinks and potential credits on their traditional lands, signifies a burgeoning interest in Indigenous involvement in carbon markets. Legislative discussions on ‘Indigenous carbon sinks’ further underscore the growing attention to Indigenous carbon rights, sparking increased engagement in meetings and research on the topic.
While some are optimistic about the prospects of Indigenous carbon markets, critical aspects such as the recognition of Indigenous land rights and the necessity of ensuring ‘additionality’ in carbon credit generation are imperative. Additionality is key to ensuring that carbon credits are linked to new actions that surpass existing environmental efforts, thus providing genuine environmental benefits and preventing double counting of emissions reductions.
### The Need for Sustainable Climate Governance
As Taiwan navigates the complexities of international carbon reduction systems and the challenges posed by carbon tariffs, it is crucial to reevaluate the legal framework for carbon emission reduction to ensure long-term effectiveness. The current focus on economic considerations and the urgency to respond to international mandates may have led to a rushed and unstable legal framework, necessitating careful deliberation and revisions.
For a robust and effective legal system, the ultimate goal of carbon pricing should prioritize climate change mitigation over profit generation. Addressing issues such as the choice of a carbon fee over a carbon tax, the adequacy of the carbon fee rate, the balance of incentives for payers, ethical concerns surrounding carbon trading, and potential conflicts between carbon fee and trading schemes is essential for enhancing Taiwan’s carbon reduction efforts.
Likewise, in the pursuit of Indigenous carbon rights, establishing clear legal frameworks that recognize Indigenous land rights and uphold additionality principles is vital. Through thorough discussions and considerations of fundamental issues, such as Indigenous land rights, Indigenous peoples stand to benefit from economic incentives tied to carbon pricing initiatives.
In conclusion, Taiwan’s commitment to environmental justice and climate action is commendable, but a more nuanced and comprehensive approach to climate governance, inclusive of Indigenous perspectives, is imperative for sustainable and equitable carbon reduction efforts.
Hsin-Ju Li’s research provides valuable insights into the legal landscapes shaping Taiwan’s environmental justice and climate action initiatives, underscoring the importance of considering diverse perspectives in crafting effective governance frameworks.