Short-term Impacts of the 'Total-Load-Control' Policy on CO2 Emissions: A Case Study in Taiwan

Following the 1997 Kyoto Protocol, CO2 emission control has become one of the most important issues in the debate surrounding methods of limiting greenhouse gas emissions. Whilst there are, in fact, many economic and non-economic instruments available for use in implementing the Kyoto Protocol’s basic commitments on CO2 emission control, the aim of this paper is specifically to simulate the short-term impacts of the ‘total-load-control’ policy. The paper develops an energy/environmental computable general equilibrium (CGE) model at different periods (1991 and 1996) to simulate the effects of the ‘total-load-control’ policy on CO2 emission control in Taiwan. Even with the adoption of a policy with a uniformly reduction rate of total CO2 emissions for the next 20 years, the empirical evidence of this paper demonstrates that inconsistencies exist in the prospective results with regard to the short-term impacts on industries and national economy. Energy production industry and final demand sector will have seriously negative impacts compared with other energy-intensive industries. This may disappoint those engineers and policy-makers who strongly favor the idea of a ‘total-load-control’ policy, but they may not have considered the automatic adjustment effect, which is already in-built in this economy.