In addition to the change of temperature and precipitation, we also consider ozone concentrations. Although the ozone layer in the upper atmosphere is beneficial, preventing potentially damaging electromagnetic radiation from reaching the earth's surface, ozone in the lower atmosphere is an air pollutant with harmful effects on the respiratory systems of animals and will burn sensitive plants. The increase in ozone is of further concern because ozone present in the upper troposphere acts as a greenhouse gas, absorbing some of the infrared energy emitted by the earth. Quantifying the greenhouse gas potency of ozone is difficult because it is not present in uniform concentrations across the globe. However, the most widely accepted scientific assessments relating to climate change (e.g., the Intergovernmental Panel on Climate Change Third Assessment Report) suggest that the radiative forcing of tropospheric ozone is about 25% that of carbon dioxide. However, tropospheric ozone is a short-lived greenhouse gas, which decays in the atmosphere much more quickly than carbon dioxide. Because of its short-lived nature, tropospheric ozone does not have strong global effects, but has very strong radiative forcing effects on regional

Environmental Change and Economic Growth in Taiwan 79

The data in this study are mainly collected from the 30 observation stations of the Central Weather Bureau (CWB), and the Directorate-General of Budget, Accounting and Statistics.

In this subsection, we will investigate the relationship between environmental changes and economic development in Taiwan and its four major cities. Taipei City has been considered the cultural, economic and political center of Taiwan; it is also the largest city in northern Taiwan. Taichung City, a city of mixed commercial and industrial activities, is the largest city in central Taiwan. Kaohsiung, the largest city in southern Taiwan, has been the heavy industry center of Taiwan. Hualien, located in eastern Taiwan, is the smallest of the four

From Figure 2.1, it is obvious that the mean temperature in Taiwan increased during the period of 1952-2010. For example, it was 22.75ºC in 1955, 23.14 ºC in 1975, 23.25 ºC in 1995, and 23.73ºC in 2005. However, the standard deviation of 12 months per year is smaller (Figure 2.2). It can be further explained by the trends of the maximum and minimum temperatures (Figure 2.3). The figures also indicate that the maximum mean monthly temperature (Tmax) and the minimum mean monthly temperature (Tmin) increased in Taiwan, and that the rate of increase for Tmin was higher than that for Tmax. Thus, TDiff decreased significantly (Figure 2.4). In most areas in Taiwan, Tmin increased more than Tmax, inducing an obvious reduction in TDiff and a smaller variation (standard deviation)

scales.

**4.2 Trend and Correlation Analyses**

A Preliminary Look at the Relationship Between

over the past years.

cities, and agriculture is its major economic activity.

According to the analysis in the Statistics of Climate Changes in Taiwan, recently published by the Central Weather Bureau (CWB), the average temperature in Taiwan of the last 100 years has increased 0.8ºC, with an increase of 1.2ºC in flat area, 1.4ºC in urban area, 0.9ºC over western suburban area, 1.3ºC in eastern suburban area, 0.6ºC for mountain area, and 1.1ºC at outlying islands. In urban areas, the increased minimum temperature (2.1ºC) is three times that of the area's maximum temperature (0.7ºC), which indicates that the increase of night-time temperature is greater than in day time. In terms of the season, the amplitude of temperature increase is larger in spring and autumn.

There are slight changes in the trend of precipitation in the last 100 years in Taiwan. Northern flat area appears to have more rainfall, especially in autumn; while southern Taiwan and mountain area get less rainfall, especially in winter. A decrease in raining hours indicates that the precipitation intensity (precipitation per unit time) has increased. Except in mountain area, the number of days with precipitation over 30 mm has increased over the last 100 years.

#### **4. Empirical Design**

#### **4.1 Interest of Data**

The purpose of this study is to understand how and to what extent environment changes affect economic growth in Taiwan. The indicators of environment changes used in this study include temperature, precipitation and ozone level (O3).

The existing literature provides significant amounts of evidence that the change of temperature and rainfall will affect economic output.15 Such evidence also suggests that climate change should affect economic growth. If climate change affected only the level of economic output, for example, by reducing agricultural yields when temperature rises (precipitation falls), this would imply that subsequent temperature decreases (precipitation increases) – due, for example, to stringent abatement of emissions – should return the GDP to its previous level. But this is not the case if climate change affects economic growth. Koubi et al. (2010) provide the following two reasons. First, economic growth will be lower even if GDP returns to its previous level because of forgone consumption and investment due to lower income during the period of higher temperature (lower precipitation). In addition, as long as countries spend some resources to adapt to climate change, they incur opportunity costs in terms of not spending these resources on R&D and capital investment. This has negative effects on economic growth. Moreover, given the short time-series data used in existing research on climate effects on economic conditions, even slightly persistent effects on the level of output will impact on the sample mean of growth. That is, using economic growth rates will also capture the effects on GDP levels. But using the level of GDP instead of its growth rate may miss the effects on the growth rate. For these reasons we concentrate on climate change effects on economic growth.

**15** For instance, Mendelsohn et al., 1998; Mendelsohn, Dinar & Williams, 2006; Nordhaus & Boyer, 2000; Tol, 2002; Deschenes & Greenstone, 2007.

According to the analysis in the Statistics of Climate Changes in Taiwan, recently published by the Central Weather Bureau (CWB), the average temperature in Taiwan of the last 100 years has increased 0.8ºC, with an increase of 1.2ºC in flat area, 1.4ºC in urban area, 0.9ºC over western suburban area, 1.3ºC in eastern suburban area, 0.6ºC for mountain area, and 1.1ºC at outlying islands. In urban areas, the increased minimum temperature (2.1ºC) is three times that of the area's maximum temperature (0.7ºC), which indicates that the increase of night-time temperature is greater than in day time. In terms of the season, the

There are slight changes in the trend of precipitation in the last 100 years in Taiwan. Northern flat area appears to have more rainfall, especially in autumn; while southern Taiwan and mountain area get less rainfall, especially in winter. A decrease in raining hours indicates that the precipitation intensity (precipitation per unit time) has increased. Except in mountain area, the number of days with precipitation over 30 mm has increased over the

The purpose of this study is to understand how and to what extent environment changes affect economic growth in Taiwan. The indicators of environment changes used in this study

The existing literature provides significant amounts of evidence that the change of temperature and rainfall will affect economic output.15 Such evidence also suggests that climate change should affect economic growth. If climate change affected only the level of economic output, for example, by reducing agricultural yields when temperature rises (precipitation falls), this would imply that subsequent temperature decreases (precipitation increases) – due, for example, to stringent abatement of emissions – should return the GDP to its previous level. But this is not the case if climate change affects economic growth. Koubi et al. (2010) provide the following two reasons. First, economic growth will be lower even if GDP returns to its previous level because of forgone consumption and investment due to lower income during the period of higher temperature (lower precipitation). In addition, as long as countries spend some resources to adapt to climate change, they incur opportunity costs in terms of not spending these resources on R&D and capital investment. This has negative effects on economic growth. Moreover, given the short time-series data used in existing research on climate effects on economic conditions, even slightly persistent effects on the level of output will impact on the sample mean of growth. That is, using economic growth rates will also capture the effects on GDP levels. But using the level of GDP instead of its growth rate may miss the effects on the growth rate. For these reasons we

consumption

**15** For instance, Mendelsohn et al., 1998; Mendelsohn, Dinar & Williams, 2006; Nordhaus &

amplitude of temperature increase is larger in spring and autumn.

include temperature, precipitation and ozone level (O3).

concentrate on climate change effects on economic growth.

Boyer, 2000; Tol, 2002; Deschenes & Greenstone, 2007.

last 100 years.

**4. Empirical Design 4.1 Interest of Data**

In addition to the change of temperature and precipitation, we also consider ozone concentrations. Although the ozone layer in the upper atmosphere is beneficial, preventing potentially damaging electromagnetic radiation from reaching the earth's surface, ozone in the lower atmosphere is an air pollutant with harmful effects on the respiratory systems of animals and will burn sensitive plants. The increase in ozone is of further concern because ozone present in the upper troposphere acts as a greenhouse gas, absorbing some of the infrared energy emitted by the earth. Quantifying the greenhouse gas potency of ozone is difficult because it is not present in uniform concentrations across the globe. However, the most widely accepted scientific assessments relating to climate change (e.g., the Intergovernmental Panel on Climate Change Third Assessment Report) suggest that the radiative forcing of tropospheric ozone is about 25% that of carbon dioxide. However, tropospheric ozone is a short-lived greenhouse gas, which decays in the atmosphere much more quickly than carbon dioxide. Because of its short-lived nature, tropospheric ozone does not have strong global effects, but has very strong radiative forcing effects on regional scales.

The data in this study are mainly collected from the 30 observation stations of the Central Weather Bureau (CWB), and the Directorate-General of Budget, Accounting and Statistics.

#### **4.2 Trend and Correlation Analyses**

In this subsection, we will investigate the relationship between environmental changes and economic development in Taiwan and its four major cities. Taipei City has been considered the cultural, economic and political center of Taiwan; it is also the largest city in northern Taiwan. Taichung City, a city of mixed commercial and industrial activities, is the largest city in central Taiwan. Kaohsiung, the largest city in southern Taiwan, has been the heavy industry center of Taiwan. Hualien, located in eastern Taiwan, is the smallest of the four cities, and agriculture is its major economic activity.

From Figure 2.1, it is obvious that the mean temperature in Taiwan increased during the period of 1952-2010. For example, it was 22.75ºC in 1955, 23.14 ºC in 1975, 23.25 ºC in 1995, and 23.73ºC in 2005. However, the standard deviation of 12 months per year is smaller (Figure 2.2). It can be further explained by the trends of the maximum and minimum temperatures (Figure 2.3). The figures also indicate that the maximum mean monthly temperature (Tmax) and the minimum mean monthly temperature (Tmin) increased in Taiwan, and that the rate of increase for Tmin was higher than that for Tmax. Thus, TDiff decreased significantly (Figure 2.4). In most areas in Taiwan, Tmin increased more than Tmax, inducing an obvious reduction in TDiff and a smaller variation (standard deviation) over the past years.

Figure 2.1. Trend of Temperature Figure 2.2. Variability of Temperature

Figure 3.1. Temperature Trend in Taipei Figure 3.2. Temperature Trend in Taichung

Environmental Change and Economic Growth in Taiwan 81

Figure 3.3. Temperature Trend in Kaohsiung Figure 3.4. Temperature Trend in Hualien

precipitation (Figure 4.3 – Figure 4.4).

A Preliminary Look at the Relationship Between

As for precipitation, the main stream of the northward-moving Kuroshio Current passes up the eastern coast of Taiwan, thus bringing in warm and moist air. Summer and winter monsoons also bring intermittent rainfall to Taiwan's hills and central mountains. Figure 4.1 indicates that the mean monthly precipitation in Taiwan also increased from 1952 to 2010, at an average of 163.4 millimeters (mm) per month. However, unlike the trend of temperature, the variability of monthly precipitation per year has become larger (Figure 4.2). More importantly, the minimum monthly rainfall has not changed too much in the past 50 years; therefore, the variation mainly comes from the variability of the maximum monthly

From Figure 5.1 – Figure 5.4, we can see that the mean precipitation was much higher in northern (Taipei) and eastern Taiwan (Hualien) but lower in southwest Taiwan (Taichung and Kaohsiung). More rain falls in the mountains than in the plains, on the east coast than on the west coast, and on the windward side of hills than on the leeward (sheltered) side. The north has rain all year round while the south is rainy in summer and dry in winter. In winter, when the northeastern monsoon system is active, the north is constantly visited by drizzle while the south remains dry. However, in summer when the southwestern monsoon comes in force, afternoon thunderstorms and typhoons carry heavy rains to central and southern Taiwan. This intensive and concentrated summer rainfall, which constitutes up to 80% of annual precipitation, often causes flooding and landslides. As northern Taiwan has

Figure 2.3. Temperature Extremes Figure 2.4. Gaps of Temperature Extremes

In addition, interesting patterns were observed among different regions and cities. The mean monthly temperature was higher in southern Taiwan than in northern Taiwan, and lower at higher altitudes than at low altitudes (Figure 3.1 – Figure 3.4). Besides, the rates of Tmax increase in rural regions (e.g., Hualien 5.09%, 1952-2010) were greater than those in urban regions (e.g., Taichung, 3.18%, 1952-2010), but the rates of Tmin increase in rural regions (e.g., Hualien 5.71%, 1952-2010) were lower than those in urban regions (e.g., Taichung, 6.88%, 1952-2010). In comparison to the urban regions, Tmax increased more significantly in rural regions. Thus, the trends of Tmax and Tmin in Taiwan were not only associated with global warming, but also with local climate change; in addition, human activities also played considerable roles. Lai and Cheng (2010) argue that urban development influences local climate by changing the land-surface characteristics. For example, compared to rural areas, an urban area is characterized by lower wind speeds, fewer hours of sunshine, lower visibility, larger turbidity and a higher daily mean temperature. It is also a fact that the amount of anthropogenic greenhouse gas concentrations has increased steadily in the past 40 years, which in turn has very likely caused the global average temperature to increase rapidly.

Figure 2.1. Trend of Temperature Figure 2.2. Variability of Temperature

Figure 2.3. Temperature Extremes Figure 2.4. Gaps of Temperature Extremes

In addition, interesting patterns were observed among different regions and cities. The mean monthly temperature was higher in southern Taiwan than in northern Taiwan, and lower at higher altitudes than at low altitudes (Figure 3.1 – Figure 3.4). Besides, the rates of Tmax increase in rural regions (e.g., Hualien 5.09%, 1952-2010) were greater than those in urban regions (e.g., Taichung, 3.18%, 1952-2010), but the rates of Tmin increase in rural regions (e.g., Hualien 5.71%, 1952-2010) were lower than those in urban regions (e.g., Taichung, 6.88%, 1952-2010). In comparison to the urban regions, Tmax increased more significantly in rural regions. Thus, the trends of Tmax and Tmin in Taiwan were not only associated with global warming, but also with local climate change; in addition, human activities also played considerable roles. Lai and Cheng (2010) argue that urban development influences local climate by changing the land-surface characteristics. For example, compared to rural areas, an urban area is characterized by lower wind speeds, fewer hours of sunshine, lower visibility, larger turbidity and a higher daily mean temperature. It is also a fact that the amount of anthropogenic greenhouse gas concentrations has increased steadily in the past 40 years, which in turn has very likely

caused the global average temperature to increase rapidly.

Figure 3.3. Temperature Trend in Kaohsiung Figure 3.4. Temperature Trend in Hualien

As for precipitation, the main stream of the northward-moving Kuroshio Current passes up the eastern coast of Taiwan, thus bringing in warm and moist air. Summer and winter monsoons also bring intermittent rainfall to Taiwan's hills and central mountains. Figure 4.1 indicates that the mean monthly precipitation in Taiwan also increased from 1952 to 2010, at an average of 163.4 millimeters (mm) per month. However, unlike the trend of temperature, the variability of monthly precipitation per year has become larger (Figure 4.2). More importantly, the minimum monthly rainfall has not changed too much in the past 50 years; therefore, the variation mainly comes from the variability of the maximum monthly precipitation (Figure 4.3 – Figure 4.4). 3.1 sunshine, in

From Figure 5.1 – Figure 5.4, we can see that the mean precipitation was much higher in northern (Taipei) and eastern Taiwan (Hualien) but lower in southwest Taiwan (Taichung and Kaohsiung). More rain falls in the mountains than in the plains, on the east coast than on the west coast, and on the windward side of hills than on the leeward (sheltered) side. The north has rain all year round while the south is rainy in summer and dry in winter. In winter, when the northeastern monsoon system is active, the north is constantly visited by drizzle while the south remains dry. However, in summer when the southwestern monsoon comes in force, afternoon thunderstorms and typhoons carry heavy rains to central and southern Taiwan. This intensive and concentrated summer rainfall, which constitutes up to 80% of annual precipitation, often causes flooding and landslides. As northern Taiwan has more rainy days than the south, the variability of rainfall slightly increases as it moves toward the south.**16**

Tropospheric ozone (O3) is a global air pollution problem and an important greenhouse gas. In large areas of the industrialized and developing world, ground-level O3 is one of the most pervasive of the global air pollutants, with significant impacts on human health, food production and the environment. Economic losses for South Asia are estimated to be in the region of US\$ 3.9 billion per year for 4 staple crops (wheat, rice, soybean and potato) in Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka. The largest losses are found in India (US\$ 3.1 billion), Pakistan (US\$ 0.35 billion) and Bangladesh (US\$ 0.4 billion).**17** Figure 6.1 – Figure 6.5 show the O3 concentrations in Taiwan and its four main cities from 1998 to 2010. The trend of O3 concentrations also shows increases in Taiwan. Additionally, the average parts per million (ppm) of O3 concentrations increases as it moves toward the south, whereas the least developed eastern area, Hualien, has the lowest O3 concentrations.

Figure 5.1. Precipitation Trend in Taipei Figure 5.2. Precipitation Trend in Taichung

Environmental Change and Economic Growth in Taiwan 83

Figure 5.3. Precipitation Trend in Kaohsiung Figure 5.4. Precipitation Trend in Hualien

The correlation analyses of environmental changes and economic growth are presented in Table 3 – Table 7. From Table 3, we can find that the correlation coefficient of temperature and economic growth is negative (-0.469), implying that these two variables are negatively correlated. It still remains the same if we only focus on the agricultural sector (-0.354) or the manufacturing sector (-0.226). However, the variability of temperature shows positive values as well. As we mentioned earlier, since the variation of temperature becomes smaller as time goes by, it could be the reason why we observe this outcome. If we look at the results in different areas, with the exception of Taichung city, the three other main cities also have an

inversely correlated relationship between temperature and economic growth (Table 4).

Temperature -0.469 -0.354 -0.226

(St. D) 0.212 0.453 0.193

Table 3. Correlation Coefficients of Temperature and Economic Growth in Taiwan

Agricultural, forestry, fishery and husbandry sectors

(1952-2010) (1982-2009) (1982-2009)

Manufacturing sector

Overall Economy

A Preliminary Look at the Relationship Between

Variability

Figure 4.1. Trend of Precipitation Figure 4.2. Variability of Precipitation

Figure 4.3. Precipitation Extremes Figure 4.4. Gaps of Precipitation Extremes

**16** http://twgeog.geo.ntnu.edu.tw/english/climatology/climatology.htm

**17** http://seiinternational.org/mediamanager/documents/Publications/Climate/food\_secu rity\_ozone\_climate\_policybrief.pdf.

more rainy days than the south, the variability of rainfall slightly increases as it moves

Tropospheric ozone (O3) is a global air pollution problem and an important greenhouse gas. In large areas of the industrialized and developing world, ground-level O3 is one of the most pervasive of the global air pollutants, with significant impacts on human health, food production and the environment. Economic losses for South Asia are estimated to be in the region of US\$ 3.9 billion per year for 4 staple crops (wheat, rice, soybean and potato) in Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka. The largest losses are found in India (US\$ 3.1 billion), Pakistan (US\$ 0.35 billion) and Bangladesh (US\$ 0.4 billion).**17** Figure 6.1 – Figure 6.5 show the O3 concentrations in Taiwan and its four main cities from 1998 to 2010. The trend of O3 concentrations also shows increases in Taiwan. Additionally, the average parts per million (ppm) of O3 concentrations increases as it moves toward the south,

whereas the least developed eastern area, Hualien, has the lowest O3 concentrations.

Figure 4.1. Trend of Precipitation Figure 4.2. Variability of Precipitation

Figure 4.3. Precipitation Extremes Figure 4.4. Gaps of Precipitation Extremes

**17** http://seiinternational.org/mediamanager/documents/Publications/Climate/food\_secu

**16** http://twgeog.geo.ntnu.edu.tw/english/climatology/climatology.htm

toward the south.**16**

rity\_ozone\_climate\_policybrief.pdf.

Figure 5.1. Precipitation Trend in Taipei Figure 5.2. Precipitation Trend in Taichung

Figure 5.3. Precipitation Trend in Kaohsiung Figure 5.4. Precipitation Trend in Hualien

The correlation analyses of environmental changes and economic growth are presented in Table 3 – Table 7. From Table 3, we can find that the correlation coefficient of temperature and economic growth is negative (-0.469), implying that these two variables are negatively correlated. It still remains the same if we only focus on the agricultural sector (-0.354) or the manufacturing sector (-0.226). However, the variability of temperature shows positive values as well. As we mentioned earlier, since the variation of temperature becomes smaller as time goes by, it could be the reason why we observe this outcome. If we look at the results in different areas, with the exception of Taichung city, the three other main cities also have an inversely correlated relationship between temperature and economic growth (Table 4).

Table 3. Correlation Coefficients of Temperature and Economic Growth in Taiwan and

On the other hand, the correlation coefficients of precipitation have some differences from those of temperature analyses. First, in Table 5, the correlation coefficient of precipitation and economic growth is negative (-0.365), implying precipitation level is negatively correlated to economic growth; and it still remains a negative sign in the agricultural sector (-0.343) and the manufacturing sector (-0.281). Second, variability of precipitation is inversely correlated to economic growth (-0.42), indicating that higher variability of rainfall is more likely to come with lower economic growth. Third, except for Kaohsiung City (south), the results still indicate that higher precipitation level and variability are negatively related to economic growth in three other major cities in Taiwan (Table 6). Furthermore, the correlation analyses of ozone concentrations are shown in Table 7. It also demonstrates that ozone level and economic growth have negative correlation in Taiwan, and in the four

Environmental Change and Economic Growth in Taiwan 85

Overall Economy Agricultural, forestry, fishery

Precipitation -0.365 -0.343 -0.281

Table 5. Correlation Coefficients of Precipitation and Economic Growth in Taiwan

Precipitation -0.157 -0.176 0.154 -0.03

(St.D) -0.147 -0.369 0.129 -0.19

Table 6. Correlation Coefficients of Precipitation and Economic Growth in Four Major Cities

O3 -0.195 -0.241 -0.083 -0.017 -0.018

From the correlation analyses above, we can conclude that the temperature, precipitation and ozone concentrations are inversely correlated to economic growth in Taiwan. In

Table 7. Correlation Coefficients of Ozone and Economic Growth in Taiwan

(St. D) -0.42 -0.376 -0.429

and husbandry sectors

(1952-2010) (1982-2009) (1982-2009)

Taipei Taichung Kaohsiung Hualien (North) (Central) (South) (East)

Taiwan Taipei Taichung Kaohsiung Hualien

(North) (Central) (South) (East)

the correlated

Manufacturing sector

different major cities.

A Preliminary Look at the Relationship Between

Variability

Variability

Note: The study periods are 1999-2009

Note: The study periods are 1999-2009.

Figure 6.2. Trend of Ozone in Taipei Figure 6.3. Trend of Ozone in Taichung

Table 4. Correlation Coefficients of Temperature and Economic Growth in Four Major Cities Note: The study periods are 1999-2009.

Figure 6.2. Trend of Ozone in Taipei Figure 6.3. Trend of Ozone in Taichung

Figure 6.4. Trend of Ozone in Kaohsiung Figure 6.5. Trend of Ozone in Hualien

Temperature -0.061 0.118 -0.214 -0.309 Variability (St. D) 0.117 -0.132 0.053 -0.234

Table 4. Correlation Coefficients of Temperature and Economic Growth in Four Major Cities

Taipei Taichung Kaohsiung Hualien (North) (Central) (South) (East)

Figure 6.1. Trend of Ozone Concentrations

Note: The study periods are 1999-2009.

On the other hand, the correlation coefficients of precipitation have some differences from those of temperature analyses. First, in Table 5, the correlation coefficient of precipitation and economic growth is negative (-0.365), implying precipitation level is negatively correlated to economic growth; and it still remains a negative sign in the agricultural sector (-0.343) and the manufacturing sector (-0.281). Second, variability of precipitation is inversely correlated to economic growth (-0.42), indicating that higher variability of rainfall is more likely to come with lower economic growth. Third, except for Kaohsiung City (south), the results still indicate that higher precipitation level and variability are negatively related to economic growth in three other major cities in Taiwan (Table 6). Furthermore, the correlation analyses of ozone concentrations are shown in Table 7. It also demonstrates that ozone level and economic growth have negative correlation in Taiwan, and in the four different major cities.

Table 5. Correlation Coefficients of Precipitation and Economic Growth in Taiwan

Note: The study periods are 1999-2009

Table 6. Correlation Coefficients of Precipitation and Economic Growth in Four Major Cities

Note: The study periods are 1999-2009.

Table 7. Correlation Coefficients of Ozone and Economic Growth in Taiwan

From the correlation analyses above, we can conclude that the temperature, precipitation and ozone concentrations are inversely correlated to economic growth in Taiwan. In correlation

[6] Homer-Dixon, T. & P. Gizewski (1998). The Case of Pakistan, in Homer-Dixon, T., Blitt, J., (Eds), Ecoviolence: Links Among Environment, Population, and Security. Rowman

Environmental Change and Economic Growth in Taiwan 87

[7] Homer-Dixon, T. (1999).Environment, Scarcity, Violence, Princeton, NJ: Princeton

[8] Hou, J. (2000)From Dual Disparities to Dual Squeeze: The Emerging Patterns of Regional Development in Taiwan Berkeley Planning Journal, Vol.14, No.1, pp.4-22. [9] House of Lords (2005). The Economics of Climate Change, HL Paper 12-I, Select

[10] Hsu H. H. & C. T. Chen (2002). Observed and Projected Climate Change in

[11] Koubi, A, T. Bernauer, V. Kalbhenn,& G. Ruoff (2010), Climate Change, Economic

[12] Lomborg, B. (2001).The Skeptical Environmentalist: Measuring the Real State of the

[13] Lai, W. L. & W. L.Cheng (2010). Air Temperature Change Due to Human Activities in Taiwan for the Past Century, International Journal of Climatology, Vol. 30, No. 3, pp.

[14] Mendelsohn, R., W. Morrison, M. Schlesinger & N. Andronova (1998). Country-Specific Market Impacts of Climate Change , Climate Change, Vol. 45, No.3, pp. 553-569. [15] Mendelsohn, R., A. Dinar & L. Williams (2006).The Distributional Impact of Climate Change on Rich and Poor Countries, Environment and Development Economics,

[16] Mendelsohn, R. (2009). Climate Change and Economic Growth, World Bank Working

[17] Nordhaus, W. & J. Boyer (2000).Warming the World: The Economics of the Greenhouse

[18] Roson, R. & D.V. Mensbrugghe (2010). Climate Change and Economic Growth: Impacts and Interactions , Department of Economics, University Ca' Foscari of Venice Research

[19] Stern, D. I. (1996). Economic Growth and Environmental Degradation: The Environmental Kuznets Curve and Sustainable Development, World Development,

[20] Simon, J. L. (1998). Lebensraum: Paradoxically, Population Growth May Eventually End

[21] Shein, K. A., A. M. Waple, M. J. Menne,& J. C. Christy (2006). State of the Climate in

[22] Schubert, R., H. Schellnhuber, N. Buchmann, A. Epiney, R. Grießhammer, M Kulessa, D. Messner, S. Rahmstorf & J. Schmidt (2009). Climate Change as a Security Risk, German Advisory Council on Global Change (WBGU) Flagship Report. Earthscan

[23] Tol, R. (2002). Estimates of the Damage Costs of Climate Change-Part II: Dynamic Estimates, Environmental and Resource Economics, Vol. 21, No.2, pp.135-160.

Wars, Journal of Conflict Resolution, Vol.33, No.1, pp.164-180.

2005, Bulletin of the American Meteorological Society, 87: S6–S102.

Committee on Economic Affairs 2nd Report of Session 2005-06, London.

Taiwan.Meteorology and Atmospheric Physics, Vol. 79, No. 1, pp. 87-104.

Growth, and Civil Conflict, Climate Change and Security, pp.21–24

World, Cambridge: Cambridge University Press.

and Littlefield, Lanham, pp.147-200.

A Preliminary Look at the Relationship Between

University Press.

432–444.

Paper 60.

Vol.11, No.2, pp. 159-178.

Paper Series, No. 2010\_07.

Vol. 24, No.7, pp.1151-1160.

Publications Ltd.: London.

Effect, Cambridge, MA: MIT Press.

addition, not only the level, but also their variability has the same inverse correlation to economic growth.

#### **5. Conclusion**

Understanding the impacts of environmental changes on the nation's economy is, obviously, of paramount importance for both the mitigation of environmental change and the development of adaptation policies. This is a preliminary study to investigate how the environment in Taiwan has changed in the past years, and how it is related to economic growth in Taiwan. This study, first, collects a set of long-term data of temperature, precipitation and ozone concentrations in Taiwan and its four major cities. By observing the data, we find that the temperature in Taiwan significantly increased during the period of 1952-2010; however, the temperature variability within a single year becomes smaller. On the other hand, the mean monthly precipitation in Taiwan also increased during the same period, but unlike the temperature, the variability of monthly precipitation becomes larger. More importantly, the minimum monthly rainfall has not changed significantly in the past 50 years; therefore, the variation mainly comes from the variability of the maximum monthly precipitation. Besides, the trend of O3 concentrations also shows an increase in the past years, and the O3 level increases as it moves toward the south in Taiwan. minimum

The correlation analyses demonstrate that the level of temperature, precipitation and ozone concentrations are negatively correlated to economic growth in Taiwan. Furthermore, the variability of precipitation is also found to be inversely related to the economic development, but we do not find the same result for temperature variability. Therefore, from this study, although environmental changes are shown to be inversely related to economic growth in Taiwan, the temperature, precipitation and ozone concentrations seem to have their own different ways to affect economic growth, not only from their level but from their variability. In order to investigate how and to what extent these environmental changes influence the economic development in Taiwan, a more comprehensive econometric model is suggested in the future.

#### **6. References**

addition, not only the level, but also their variability has the same inverse correlation to

Understanding the impacts of environmental changes on the nation's economy is, obviously, of paramount importance for both the mitigation of environmental change and the development of adaptation policies. This is a preliminary study to investigate how the environment in Taiwan has changed in the past years, and how it is related to economic growth in Taiwan. This study, first, collects a set of long-term data of temperature, precipitation and ozone concentrations in Taiwan and its four major cities. By observing the data, we find that the temperature in Taiwan significantly increased during the period of 1952-2010; however, the temperature variability within a single year becomes smaller. On the other hand, the mean monthly precipitation in Taiwan also increased during the same period, but unlike the temperature, the variability of monthly precipitation becomes larger. More importantly, the minimum monthly rainfall has not changed significantly in the past 50 years; therefore, the variation mainly comes from the variability of the maximum monthly precipitation. Besides, the trend of O3 concentrations also shows an increase in the

past years, and the O3 level increases as it moves toward the south in Taiwan.

The correlation analyses demonstrate that the level of temperature, precipitation and ozone concentrations are negatively correlated to economic growth in Taiwan. Furthermore, the variability of precipitation is also found to be inversely related to the economic development, but we do not find the same result for temperature variability. Therefore, from this study, although environmental changes are shown to be inversely related to economic growth in Taiwan, the temperature, precipitation and ozone concentrations seem to have their own different ways to affect economic growth, not only from their level but from their variability. In order to investigate how and to what extent these environmental changes influence the economic development in Taiwan, a more comprehensive econometric model is suggested

[1] Aggarwal, P. K. (2003)Impact of Climate Change on Indian Agriculture, Journal of Plant

[2] Bächler, G. & K. R. Spillmann (1996). Environmental Degradation as a Cause of War,

[3] Deschenes, O. & M. Greenstone (2007). The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather, American

[4] Dell, M., B. F. Jones & B. A. Olken (2008). Climate Shocks and Economic Growth: Evidence from the Last Half-Century, , National Bureau of Economic Research,

[5] Dell, M., B. F. Jones& B. A. Olken (2009). Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates, American Economic Review Papers and

Regional and Country Studies of Research Fellows. Zürich: Verlag Rüegger.

economic growth.

**5. Conclusion**

in the future.

**6. References**

No.14132.

Biology, Vol.30,No.2, pp.189–198.

Economic Review, Vol.97, No.1, pp.354-385.

Proceedings, Vol. 99, No.2, pp.198-204.

**6**

Liang-Feng Lin

*Taiwan*

**Low-Carbon Pilot Tour and Municipal**

*Department of Accounting, National Chengchi University*

**Government Investment: Taiwan's Experience**

In the 1980s the carbon-mitigation strategy of Taiwan focused on the recycling of community waste (Chang and Chang, 1993). In the 1990s and 2000s the strategy shifted to reducing the Green House Effect and introducing low-carbon energy technologies such as wind power, solar power, gas, biomass energy, and other reusable energies. Many policies tried to encourage businesses to development reusable energies such as tax deductions or subsidies. Many researches attempted to evaluate the policy effectiveness of the reduction of the various types of pollution, and most of results found that the reduction effects were not as good as the policy claimed or expected (Lee, 1996, Lee, 2003,Wang, 1999). In recent years, the government has tried to embed green construction, green life and green transportation into people's lives.

The first low-carbon region case developed by the central competence government is Penghu Island. The Ministry of Economics in Taiwan announced a project in November 2010 that Penghu Island was to be established as a low-carbon island and would become a worldwide benchmark of a low-carbon island. The project expects to be completed in 2015. The estimated achievements include (1) reusable energy comprising 56% of all energies, which will more than Penghu's total non-reusable power, and (2) CO2 emissions will be 50% less than the 2005s level, which averaged 2.1 tons per person a year (Council of Economic

Penghu was chosen as a low-carbon island because many researchers found that Penghu to be an excellent place to develop wind power (Lee, 2003, Taipower, 1996, Lin, 2010, Council of Economic Planning and Development, 2010). The government is going to invest 8 billion NT dollars (€20 million). However, Penghu is just starting the process, and no solid results

The idea of a low-carbon energy region in Taiwan is quite new and undeveloped. Most of the studies related to low-carbon life or area assessments focus on carbon emission reduction (Lee and Huang, 2004, Chang, 2008), and the effectiveness of different types of pollution control (Chen, 1992, Huang, Lee, and Jhuang, 2007). Many studies also attempt to provide policy suggestions (Lin, 2010, Lee, 1995). Studies related to Penghu as a low-carbon island focus on either technical skills (Lee 2003, Lee and Huang, 2004, Huang 2009, Huang,

Lee and Zen, 2006) or related policy solutions (Wang, 2006, Huang).

**1. Introduction**

Planning and Development, 2010).

have yet emerged.

## **Low-Carbon Pilot Tour and Municipal Government Investment: Taiwan's Experience**

Liang-Feng Lin *Department of Accounting, National Chengchi University Taiwan*

#### **1. Introduction**

In the 1980s the carbon-mitigation strategy of Taiwan focused on the recycling of community waste (Chang and Chang, 1993). In the 1990s and 2000s the strategy shifted to reducing the Green House Effect and introducing low-carbon energy technologies such as wind power, solar power, gas, biomass energy, and other reusable energies. Many policies tried to encourage businesses to development reusable energies such as tax deductions or subsidies. Many researches attempted to evaluate the policy effectiveness of the reduction of the various types of pollution, and most of results found that the reduction effects were not as good as the policy claimed or expected (Lee, 1996, Lee, 2003,Wang, 1999). In recent years, the government has tried to embed green construction, green life and green transportation into people's lives.

The first low-carbon region case developed by the central competence government is Penghu Island. The Ministry of Economics in Taiwan announced a project in November 2010 that Penghu Island was to be established as a low-carbon island and would become a worldwide benchmark of a low-carbon island. The project expects to be completed in 2015. The estimated achievements include (1) reusable energy comprising 56% of all energies, which will more than Penghu's total non-reusable power, and (2) CO2 emissions will be 50% less than the 2005s level, which averaged 2.1 tons per person a year (Council of Economic Planning and Development, 2010).

Penghu was chosen as a low-carbon island because many researchers found that Penghu to be an excellent place to develop wind power (Lee, 2003, Taipower, 1996, Lin, 2010, Council of Economic Planning and Development, 2010). The government is going to invest 8 billion NT dollars (€20 million). However, Penghu is just starting the process, and no solid results have yet emerged.

The idea of a low-carbon energy region in Taiwan is quite new and undeveloped. Most of the studies related to low-carbon life or area assessments focus on carbon emission reduction (Lee and Huang, 2004, Chang, 2008), and the effectiveness of different types of pollution control (Chen, 1992, Huang, Lee, and Jhuang, 2007). Many studies also attempt to provide policy suggestions (Lin, 2010, Lee, 1995). Studies related to Penghu as a low-carbon island focus on either technical skills (Lee 2003, Lee and Huang, 2004, Huang 2009, Huang, Lee and Zen, 2006) or related policy solutions (Wang, 2006, Huang).

center tries to combine the promotion of a low-carbon lifestyle with a city tour. It helps local stores to support low-carbon operations. The famous tea industry and its distinctive scenery of mountains and creeks give Pinglin tremendous potential to promote the tourism industry. The low-carbon tour allows tourists to enjoy the beautiful natural local scenery and the town's ample cultural assets; at the same time, it also helps them understand the ecological environment of Pinglin. The most important thing is that the tour boosts the local

Low-Carbon Pilot Tour and Municipal Government Investment: Taiwan's Experience 91

According to estimates of the Environmental Protection Agency of New Taipei City, a trip from the city to Pinglin creates at least 23 kilograms of carbon per person19. Based on the

tour guides and ecological narrators relate the history and humanities of Pinglin. 2). Seasonal and local foods: The PDMG encourages tourists to consume items from green mark stores (low-carbon stores). The stores provide only seasonal and local

3) Carbon coupon: The PDMG also came up with the idea of a carbon coupon in 2009. Consumers use the coupon at green mark stores, whereupon the stores donate 10% of their sales to the "Tree Planting Fund" (TPF). The concept of the carbon coupon comes from the zero carbon emission tour. According to estimates, by taking the public commuting transportation to Pinglin , walking and biking around the district, then purchasing items at green mark stores, a tourist can approximately reduce about 19 kilograms of carbon emissions per person. In order to neutralize the full 23 kilograms of carbon emissions on the tour, the extra 4 kilograms of reductions will come from planting trees. Therefore, the Pinglin low-carbon pilot tour has also been labeled the "zero carbon tour," since the TPF will use donations to plant trees in

4). There are other low-carbon designs for pilot tours. To further reduce carbon emissions, in 2011 the PDMG built the first solar energy environmental public lavatory in Taiwan. The lavatory uses 6 solar photovoltaic cells, with maximum power generation of 1200 KWh. The estimated carbon reduction is 756 kilograms per year (Chen, 2011). Starting from the current year of 2011, the tour decided to provide a "free electric motor bike service" to offer tourists a free test ride on an electric motor bike to tour the city. Besides the free test ride, the PDMG also built an electric motor bike recharging station, which uses solar photovoltaic technology to generate power. The station is free to

foods; styrofoam disposable dishware and plastic bags are prohibited.

1). Walk, bike and commute: The PDMG designed the tour for every Wednesday and Saturday. On Highway 9 at 35.5 kilometer a road block has been set up; only buses with 10 or more persons are allowed to enter the district. Upon entering the district, the PDMG provides a free transfer bus to the Pinglin Tea Industrial Museum and to the entrance of the Jingualiao Community, the major scenic site of the tour. The Jingualiao Community extends along the Jingualian Creek is provided with a fish and ferns observation path where visitors are only allowed to walk, bike, or take the 14-seat electric motorcar. Local

above idea, the low-carbon pilot tour in Pinglin was designed as follows:

certain areas in Pinglin to reduce carbon emissions.

encourage those who use electric motor bikes to visit Pinglin.

http://www.cardu.com.tw/news/detail.htm?nt\_pk=27&ns\_pk=10724

19 Huang, J. T., 2011, Card News,

economy without damaging the local environment.

On the other hand, New Taipei City18 is the first municipal government to promote a lowcarbon pilot tour in its jurisdiction districts. Pinglin District, a declining mountain city under the jurisdiction of New Taipei City, was the first city to promote a low-carbon pilot tour (LCPT) in 2008. The next year Shuangxi District, a long ignored coal-mining city adjacent to Pinglin, also introduced a similar pilot tour. After promoting such tours for several years, both cities started to enjoy the benefits of the LCPT. The benefits include an increasing number of tourists, economic growth, increased job opportunities and a reduction of carbon emissions. Unlike Penghu's low-carbon island project with billions (NT\$) in investments, the New Taipei City Municipal Government invested very little to achieve a great performance. Therefore, the paper tries to analyze how the low-carbon tours work for both cities in relation to the infrastructure and investments of the municipal city to design and promote the tours. The success of LCPT not only has revived declining cities but has also been effective in raising the awareness of local residents and nonlocal tourists of environmental sustainability while inculcating the idea that creating a green city does not require a huge investment on the part of the municipal city government. The rest of the chapter is organized as follows. Sections II and III introduce Pinglin District and Shuangxi District, low-carbon pilot tours and the benefits from the tours. Section IV concludes the paper.

#### **2. Pinglin District and the low-carbon pilot tour**

#### **2.1. Area introduction**

Pinglin District, a 173.83 square kilometer town, is the third largest district of New Taipei City. The town used to be a very important midpoint between Taipei and Yilan going back to the Ming Dynasty. Although mountain ridges in this area resulted in twisting and winding roads, Pinglin still served as an important hub to deliver products from the eastern part to the western part of Taiwan. In addition to its important transportation position, Pinglin is also famous for its Wensan Tea and its beautiful views. However, after 2006, the opening of Highway 5 connected Yilan and Taipei to full traffic, a reduction of travel time from Yilan to Taipei of almost 3 hours. The highway suddenly changed the city from a major hub city to a minor tourist attraction. Pinglin is located upstream of Peishi Creek, the residential water source for the Taipei area; therefore, its city constructions have been subject to restrictions since 1987. The declining economy, a decreasing number of tourists, and limited construction opportunities forced many young people go elsewhere to find better jobs. kilometer

#### **2.2. The Low- carbon pilot tour in Pinglin**

On 2006 June 16, just the second day after Highway 5 opened to full traffic, the once busy traffic of Pinglin suddenly became quiet. As the old saying goes, "a crisis is a turning point." Pinglin is a prime example. In 2008 December 19th, New Taipei City and the Pinglin District Municipal Government (PDMG) designed the first new carbon pilot tour in Taiwan and officially established Pinglin's Low-Carbon Tour Service Center (Wu, 2008). The service

18 New Taipei City was formerly referred to as Taipei County which was renamed as New Taipei City since 2011. In order to simplify the description, the paper uses New Taipei City and does not use Taipei County. The same rule applies to Pinglin and Shuangxi.

On the other hand, New Taipei City18 is the first municipal government to promote a lowcarbon pilot tour in its jurisdiction districts. Pinglin District, a declining mountain city under the jurisdiction of New Taipei City, was the first city to promote a low-carbon pilot tour (LCPT) in 2008. The next year Shuangxi District, a long ignored coal-mining city adjacent to Pinglin, also introduced a similar pilot tour. After promoting such tours for several years, both cities started to enjoy the benefits of the LCPT. The benefits include an increasing number of tourists, economic growth, increased job opportunities and a reduction of carbon emissions. Unlike Penghu's low-carbon island project with billions (NT\$) in investments, the New Taipei City Municipal Government invested very little to achieve a great performance. Therefore, the paper tries to analyze how the low-carbon tours work for both cities in relation to the infrastructure and investments of the municipal city to design and promote the tours. The success of LCPT not only has revived declining cities but has also been effective in raising the awareness of local residents and nonlocal tourists of environmental sustainability while inculcating the idea that creating a green city does not require a huge investment on the part of the municipal city government. The rest of the chapter is organized as follows. Sections II and III introduce Pinglin District and Shuangxi District, low-carbon pilot

Pinglin District, a 173.83 square kilometer town, is the third largest district of New Taipei City. The town used to be a very important midpoint between Taipei and Yilan going back to the Ming Dynasty. Although mountain ridges in this area resulted in twisting and winding roads, Pinglin still served as an important hub to deliver products from the eastern part to the western part of Taiwan. In addition to its important transportation position, Pinglin is also famous for its Wensan Tea and its beautiful views. However, after 2006, the opening of Highway 5 connected Yilan and Taipei to full traffic, a reduction of travel time from Yilan to Taipei of almost 3 hours. The highway suddenly changed the city from a major hub city to a minor tourist attraction. Pinglin is located upstream of Peishi Creek, the residential water source for the Taipei area; therefore, its city constructions have been subject to restrictions since 1987. The declining economy, a decreasing number of tourists, and limited construction

On 2006 June 16, just the second day after Highway 5 opened to full traffic, the once busy traffic of Pinglin suddenly became quiet. As the old saying goes, "a crisis is a turning point." Pinglin is a prime example. In 2008 December 19th, New Taipei City and the Pinglin District Municipal Government (PDMG) designed the first new carbon pilot tour in Taiwan and officially established Pinglin's Low-Carbon Tour Service Center (Wu, 2008). The service

18 New Taipei City was formerly referred to as Taipei County which was renamed as New Taipei City since 2011. In order to simplify the description, the paper uses New Taipei City

and does not use Taipei County. The same rule applies to Pinglin and Shuangxi.

tours and the benefits from the tours. Section IV concludes the paper.

opportunities forced many young people go elsewhere to find better jobs.

**2.2. The Low- carbon pilot tour in Pinglin**

**2. Pinglin District and the low-carbon pilot tour**

**2.1. Area introduction**

center tries to combine the promotion of a low-carbon lifestyle with a city tour. It helps local stores to support low-carbon operations. The famous tea industry and its distinctive scenery of mountains and creeks give Pinglin tremendous potential to promote the tourism industry. The low-carbon tour allows tourists to enjoy the beautiful natural local scenery and the town's ample cultural assets; at the same time, it also helps them understand the ecological environment of Pinglin. The most important thing is that the tour boosts the local economy without damaging the local environment.

According to estimates of the Environmental Protection Agency of New Taipei City, a trip from the city to Pinglin creates at least 23 kilograms of carbon per person19. Based on the above idea, the low-carbon pilot tour in Pinglin was designed as follows:

19 Huang, J. T., 2011, Card News,

http://www.cardu.com.tw/news/detail.htm?nt\_pk=27&ns\_pk=10724

#### **2.3 Investment by the municipal government**

The total Final Accounts for Pinglin District was NT\$ 564.13 million (13.43 million) in 2010 (New Taipei City Final Accounts, 2010), which ranks 20th of the 29 districts in New Taipei City. However, to promote the low-carbon pilot tour, New Taipei City invested very little in related activities. Pinglin has been the water source for Taipei since 1987, and since then the district has seen limited construction projects. All riverside constructions and bike trials use ecological engineering methods, most of which were completed before 2008. The budget for ecological engineering was NT \$15 million (0.36 million) per year (Wu, 2009). The largest single investment was the solar energy public lavatory which cost NT\$ 20 million. Because of the success of the LCPT, Pinglin won the gold medal for environmental demo community in 2010, and received subsidies from the Environmental Protection Administration. The PDMG received about NT\$7 to NT\$9 million in subsidies for promoting the low-carbon pilot tour from the New Taipei City Municipal Government. Table 1 lists the related investments. The table indicates that the total expenditures of the LCPT comprised approximately 4.5% of total budget expenditures of Pinglin, which in turn only comprised about 1.21% of New Taipei City's total expenditures for 29 districts.

Unit: NT Thousand

**2.4. Benefits from the LCPT**

green-life believers.

also include self-guided tourists. b Tree Planting Equivalent

**3.1. Area introduction**

Table 2. Summary of Benefits from Pinglin LCPT

**3. Shuangxi District and its low-carbon pilot tour**

The Environmental Protection Administration of New Taipei City found that the LCPT created the following benefits for Pinglin. The tour attracted 25,460 persons in 2008, and approximately 400,000 persons in 2009 and 2010 in total (with an average of 25,091 per month). In 2008 the tour created NT\$7 million in economic benefits and NT\$410 million in 2009 and 2010 in total. In 2008 Pinglin District hired 49 staff members for the activities and 80% of them are from the local community; in 2009 and 2010 the tour provided 52 job opportunities for local citizens. In 2008 carbon emission reduction was 48,762 kilograms (equivalent to the planting of 10,000 trees a year), but the number increased to 7,536,248 kilograms (equivalent to planting1,545,027 trees a year) in 2009 and 2010. Table 2 summarizes the benefits from the LCPT (New Taipei City Low Carbon Life Net, 2011).

Low-Carbon Pilot Tour and Municipal Government Investment: Taiwan's Experience 93

Pinglin District also was awarded by the Environmental Protection Demo Community from Environmental Protection Administration and NT\$2,000 in subsidies. Besides those tangible benefits, the biggest intangible gains are the increased awareness of environmentalism of the residents, according to District Major Chao-Qin Wang. Within three years the residents have changed from resisting the tour to supporting the tour; from environmental skeptics to

Tourists 25,460 persons 400,000 (25091 per month) Economic Benefits NT \$7,000,000 NT \$410,000,000 Job Opportunities 39 52 each year Carbon Emission Reductions 48,726 Kg 7,536,248 Kg

a The first year numbers only include those who registered for LCPT, and the other years

Shuangxi District means "two creeks"-- Pinglin creek and Mudan creek, both of which pass through the city. The district is located on the outskirts of Taipei City. The natural environment is not affected by over-development of the metropolitan area, and therefore the district still has ample green resources. The district used to be famous for coal mining in the 1970s, but the industry had been in decline for a long time, and the population decreased from 50, 000 in 1970 to 9,000 in 2006. Like Pinglin, Shuangxi has also been affected by the construction of Highway 5. After the highway opened to traffic in 2006, Shuangxi became even less important than before. However, the low development of the district also became a turning point for developing Shuangxi as an eco-city and a green tourism district. Shuangxi completed a loop bike trail and constructed a bicycle rental station to serve as a

10,000 TPEb a year 1,545,027 TPE a year

Itemsa 2008 2009 and 2010 in Total

**\***Pinglin District ranks 20th of 29 districts of New Taipei City in total expenditures and its budget comprised only 1.21% of total expenditures.

Table 1. Pinglin District Pilot Tour Related Expenditures in 2010

#### **2.4. Benefits from the LCPT**

92 Low-Carbon Policy and Development in Taiwan

The total Final Accounts for Pinglin District was NT\$ 564.13 million (13.43 million) in 2010 (New Taipei City Final Accounts, 2010), which ranks 20th of the 29 districts in New Taipei City. However, to promote the low-carbon pilot tour, New Taipei City invested very little in related activities. Pinglin has been the water source for Taipei since 1987, and since then the district has seen limited construction projects. All riverside constructions and bike trials use ecological engineering methods, most of which were completed before 2008. The budget for ecological engineering was NT \$15 million (0.36 million) per year (Wu, 2009). The largest single investment was the solar energy public lavatory which cost NT\$ 20 million. Because of the success of the LCPT, Pinglin won the gold medal for environmental demo community in 2010, and received subsidies from the Environmental Protection Administration. The PDMG received about NT\$7 to NT\$9 million in subsidies for promoting the low-carbon pilot tour from the New Taipei City Municipal Government. Table 1 lists the related investments. The table indicates that the total expenditures of the LCPT comprised approximately 4.5% of total budget expenditures of Pinglin, which in turn only comprised

Unit: NT Thousand

**2.3 Investment by the municipal government**

about 1.21% of New Taipei City's total expenditures for 29 districts.

Items Final Accounts % Note

Pinglin Final Accounts for 2010 564,135 100.00%

New Taipei City Final Accounts for 2010\* 76,507,090

Table 1. Pinglin District Pilot Tour Related Expenditures in 2010

budget comprised only 1.21% of total expenditures.

Ecological Engineering Construction 15,000 2.66% Per Year Low-Carbon Pilot Tour 8,000 1.42% Per Year Solar Energy Public Toilet 2,000 0.35% 2011 Other Operating Expenses for LCPT 100 0.02% Per Year

**\***Pinglin District ranks 20th of 29 districts of New Taipei City in total expenditures and its

The Environmental Protection Administration of New Taipei City found that the LCPT created the following benefits for Pinglin. The tour attracted 25,460 persons in 2008, and approximately 400,000 persons in 2009 and 2010 in total (with an average of 25,091 per month). In 2008 the tour created NT\$7 million in economic benefits and NT\$410 million in 2009 and 2010 in total. In 2008 Pinglin District hired 49 staff members for the activities and 80% of them are from the local community; in 2009 and 2010 the tour provided 52 job opportunities for local citizens. In 2008 carbon emission reduction was 48,762 kilograms (equivalent to the planting of 10,000 trees a year), but the number increased to 7,536,248 kilograms (equivalent to planting1,545,027 trees a year) in 2009 and 2010. Table 2 summarizes the benefits from the LCPT (New Taipei City Low Carbon Life Net, 2011).

Pinglin District also was awarded by the Environmental Protection Demo Community from Environmental Protection Administration and NT\$2,000 in subsidies. Besides those tangible benefits, the biggest intangible gains are the increased awareness of environmentalism of the residents, according to District Major Chao-Qin Wang. Within three years the residents have changed from resisting the tour to supporting the tour; from environmental skeptics to green-life believers.

a The first year numbers only include those who registered for LCPT, and the other years also include self-guided tourists.

b Tree Planting Equivalent

Table 2. Summary of Benefits from Pinglin LCPT

#### **3. Shuangxi District and its low-carbon pilot tour**

#### **3.1. Area introduction**

Shuangxi District means "two creeks"-- Pinglin creek and Mudan creek, both of which pass through the city. The district is located on the outskirts of Taipei City. The natural environment is not affected by over-development of the metropolitan area, and therefore the district still has ample green resources. The district used to be famous for coal mining in the 1970s, but the industry had been in decline for a long time, and the population decreased from 50, 000 in 1970 to 9,000 in 2006. Like Pinglin, Shuangxi has also been affected by the construction of Highway 5. After the highway opened to traffic in 2006, Shuangxi became even less important than before. However, the low development of the district also became a turning point for developing Shuangxi as an eco-city and a green tourism district. Shuangxi completed a loop bike trail and constructed a bicycle rental station to serve as a

Unit NT Thousand

Items Final Accounts % Note

Shuangxi Final Accounts for 2010\* 405,164 100.00%

29 Districts Total Final Accounts for 2010 76,507,090

Table 3. Shuangxi District Pilot Tour Related Expenditures in 2010

total expenditures of Taipei City.

**3.4. Benefits from the LCPT**

Ecological Engineering Construction 15,000 3.70% Per Year Low-Carbon Pilot Tour 7,000 1.73% Per Year Other Operating Expenses for LCPT 80 0.02% Per Year

Low-Carbon Pilot Tour and Municipal Government Investment: Taiwan's Experience 95

\*Shuangxi ranks 25th of 29 districts in total expenditures and only comprised 0.53% of the

The Environmental Protection Administration of New Taipei City found that the LCPT created the following benefits for Shuangxi. The tour attracted 6,280 tourists in 2009. and 7,509 persons in 2010(Environmental Protection Administration, 2010). According to the Tourism Bureau's estimation, each tourist spent on average NT \$1,019 per day in Taiwan; therefore, the LCPT of Shuangxi promoted NT \$6,949 thousand and NT \$7,652 thousand in economic benefits for the years 2009 and 2010, respectively. The tour created 15 job opportunities in 2009 and 19 in 2010. Carbon emissions were reduced by 44,807 Kg and 54,673 Kg in 2009 and 2010, respectively, which is equivalent to planting 9,188 and 12,095

Items 2009 2010 Touristsc 6,820 persons 7,509 persons Economic Benefits (thousand) NT \$6,949 NT \$7,652 Job Opportunities 15 19 Carbon Emission Reductions 44,807 Kg 54,673Kg

c. The number of tourists includes only those who registered for the LCPT; unregistered

In 2008 Pinglin, a mountain city in decline, became the first city in Taiwan to promote a lowcarbon pilot tour. The following year Shuangxi, a long ignored coal mining city located near Pinglin, also introduced similar activities. After promoting such tours, both cities immediately started to enjoy the benefits of a low-carbon life style. The benefits include a growing tourism, improved economic growth, an increased number of job opportunities and a reduction of

tourists are not included. The same is true for other statistics presented in the table.

Table 4. Summary of Benefits from Shuangxi LCPT

**4. Conclusion**

9,188 TPE a year 12,095 TPE a year

trees a year, respectively. Table 4 summarizes the benefits derived from the tours.

healthy walking path and bike riding along the ancient trial of Ma-Zhu Keng in 2008. Shuangxi began introducing "Low-Carbon Pilot Tours" from Pinglin in 2009.

#### **3.2. Low-carbon pilot tour design**

Unlike Pinglin, which, as a relatively isolated city could only be reached by Highway 9, Shuangxi is accessed by highways 2C, 102, 106 and a railroad. The tour is designed as follows:

#### **3.3. Municipal government investment**

The total final account for Shuangxi District was NT\$405.164 million (€9.647 million) in 2010 (New Taipei City Final Accounts, 2010), which ranked 25th of the 29 districts of New Taipei City. The Shuangxi District started building an eco infrastructure in the years from 2006 to 2008. The loop bike trial and healthy walking path along with the ancient trial of Ma-Zhu Keng were completed during that period. The New Taipei City District Government provided only NT\$ 15 million per year for each district. The "Two Creeks, Two Irons and Law-Carbon Tours" received around NT \$700 million in subsidies from the City Municipal Government per year. Therefore, the tour-related expenditures were minimal. Table 3 indicates the related expenditures. The tour-related expenditures comprised only 5.45% of total expenditures, which comprised only 0.53% of New Taipei City's total expenditures for 29 districts.

Unit NT Thousand

\*Shuangxi ranks 25th of 29 districts in total expenditures and only comprised 0.53% of the total expenditures of Taipei City.

Table 3. Shuangxi District Pilot Tour Related Expenditures in 2010

#### **3.4. Benefits from the LCPT**

94 Low-Carbon Policy and Development in Taiwan

healthy walking path and bike riding along the ancient trial of Ma-Zhu Keng in 2008.

Unlike Pinglin, which, as a relatively isolated city could only be reached by Highway 9, Shuangxi is accessed by highways 2C, 102, 106 and a railroad. The tour is designed as

1). Two Creeks, Two Irons and Low-Carbon Tours: The tour slogan is "Two Creeks, Two Irons and Low-Carbon Tours". Two Creeks refers to the name of Shuangxi. Two Irons refers to a railroad trip to Shuangxi and a bike ride here to reduce carbon emissions. Those wanting to go on such a tour need to register on the Internet. Tour capacity is 202 persons. The Shuangxi District Municipal Government (SDMG) integrates the railway and the bike trail and holds a series of events to promote a happy and healthy low-carbon lifestyle. The local tour guides and ecological narrators combine the history and the humanities of Shuangxi District in providing

2). Happy Farm. The SDMG designated some farms as Happy Farms. Within the farm, each 10 square meters is considered one unit; tourists can be adopted by a person or group to plant vegetables using an organic approach. The tourists can pick up local vegetables on a Happy Farm or purchase vegetables and fruits from local produce

3). Green Mark Restaurants and Stores. Tourists can have their local vegetables prepared form them at green mark restaurants. In these restaurants, tourists need to prepare their own dishware. (styrofoam disposable dishware and plastic bags are prohibited). All food waste from restaurants are recycled as compost. Similar to Pinglin, the green mark stores only sell local products, do not provide plastic bags,

4). The Shuangxi Low Carbon Tour Center provides tourists with low-carbon tour program planning, answer inquires on the bike and electric motor rental service

The total final account for Shuangxi District was NT\$405.164 million (€9.647 million) in 2010 (New Taipei City Final Accounts, 2010), which ranked 25th of the 29 districts of New Taipei City. The Shuangxi District started building an eco infrastructure in the years from 2006 to 2008. The loop bike trial and healthy walking path along with the ancient trial of Ma-Zhu Keng were completed during that period. The New Taipei City District Government provided only NT\$ 15 million per year for each district. The "Two Creeks, Two Irons and Law-Carbon Tours" received around NT \$700 million in subsidies from the City Municipal Government per year. Therefore, the tour-related expenditures were minimal. Table 3 indicates the related expenditures. The tour-related expenditures comprised only 5.45% of total expenditures, which comprised only 0.53% of New Taipei City's total expenditures for

Shuangxi began introducing "Low-Carbon Pilot Tours" from Pinglin in 2009.

visitors with an enjoyable "Healthy and Low-Carbon Tour."

centers to promote the local economy.

and strictly require garbage to be recycled.

**3.3. Municipal government investment**

29 districts.

station, and consulting services for low-carbon meals.

services

**3.2. Low-carbon pilot tour design**

follows:

The Environmental Protection Administration of New Taipei City found that the LCPT created the following benefits for Shuangxi. The tour attracted 6,280 tourists in 2009. and 7,509 persons in 2010(Environmental Protection Administration, 2010). According to the Tourism Bureau's estimation, each tourist spent on average NT \$1,019 per day in Taiwan; therefore, the LCPT of Shuangxi promoted NT \$6,949 thousand and NT \$7,652 thousand in economic benefits for the years 2009 and 2010, respectively. The tour created 15 job opportunities in 2009 and 19 in 2010. Carbon emissions were reduced by 44,807 Kg and 54,673 Kg in 2009 and 2010, respectively, which is equivalent to planting 9,188 and 12,095 trees a year, respectively. Table 4 summarizes the benefits derived from the tours.

c. The number of tourists includes only those who registered for the LCPT; unregistered tourists are not included. The same is true for other statistics presented in the table.

Table 4. Summary of Benefits from Shuangxi LCPT

#### **4. Conclusion**

In 2008 Pinglin, a mountain city in decline, became the first city in Taiwan to promote a lowcarbon pilot tour. The following year Shuangxi, a long ignored coal mining city located near Pinglin, also introduced similar activities. After promoting such tours, both cities immediately started to enjoy the benefits of a low-carbon life style. The benefits include a growing tourism, improved economic growth, an increased number of job opportunities and a reduction of

[11] Huang, J., 2101/10/05, Card News,

Nankang, Taiwan.

Taiwan, April 27-30, 2009.

Change in 2009, Taiwan/ Taipei.

Home Penghu Seminar,37~55.

Empirical Test, Hu Ltd. Taipei.

[21] New Taipie City 2010 Budget, 2011,

Foundation, Taipei.

[22] New Taipie City Low-Carbon Life Net, 2011,

http://www.cepd.gov.tw/m1.aspx?sNo=0014489

Hotel, Taipei, Taiwan.

15, Issue 2.

http://www.cardu.com.tw/news/detail.htm?nt\_pk=27&ns\_pk=10724

Industrial Developmen, Taiwan Watch Vol.6, No.2 Summer, 52-60

[12] Lee, C. J., and Huang, Y. C., 2004, Renwerable Energy Policy and Green House Effect of

Low-Carbon Pilot Tour and Municipal Government Investment: Taiwan's Experience 97

[13] Lee, C. M., C. H. Huang, and U. Zen , 2006. "Optimal Integration of Carbon Tax and Subsidy for Renewable Energy Development." Paper presented at the 2nd International Conference on Environmental History, November 8-10, 2006, Academia Sinica,

[14] Lee, C., 2009, Energy Saving and Carbon Risk Reduction Assessment in Energy Intensive Industries in Taiwan, IDMC, 3DSA, Asia Display, Taipei International Center,

[15] Lee, C., and H. Liu , 2009, Assessment of GHGs Decoupling and Electricity Cost by Low-Carbon Energy Technology Development in Taiwan, The 15th International Joint Seminar on the Regional Deposition Processes in the Atmosphere (RDPA) and Climate

[16] Lee, S., 2003, The Perspective of Renewable Energy In Penghu, Build a New Ocean

[17] Lee, T., C. M. Lee, and C. Tseng, 2005, "International Emissions Trading Approach to Meet the Kyoto Protocol: The Implications of Trading Hot Air," selected paper presented at 28th Annual IAEE International Conference, June 3-6, 2005, The Grand

[18] Lee, T., C. M. Lee, and C. Tseng, 2009, International Emissions Trading Approach to Meet the Kyoto Protocol: The Implications of Hot Air, Energy Studies Review,Volume

[19] Lee, Y. C., 1995, Environment Attitude and Environment Behavior: Theory and

[20] Lin, C. W., 2010, Green Energy Development: Establishing a Clean and Low-Carbon Island, Council of Economic Planning and Development News,

http://www.finance.ntpc.gov.tw/web66/\_file/1051/upload/selfpage/30255/1-5.xls.

http://www.epd.ntpc.gov.tw/web66/\_file/1150/upload/news/lowco2/result05.html.

[24] Wang, T., 1999, Industrial Development, Energy Utilization and National Land Planning, Cross Century National Land Planning Seminar, National Pespective

[25] Wu, C., 2009, The Experience of Promoting Taipei County's Ecological Engineering,

[23] TaiPower, 1996, Evaluation of the Penghu Wind Power Generation Plan.

http://eem.pcc.gov.tw/eemadm/files/product\_1/ws\_29/01.doc

carbon emissions. Unlike Penghu's low-carbon island project with its billions dollars of investments, the New Taipei City Municipal Government invested very little to achieve a solid performance. Pinglin and Shuangxi, in promoting low-carbon pilot tours, not only have effectively turned around their declining economies but are also contributing to the sustainability of their homeland. The tours not only teach tourists that low-carbon activities can be fun; they also help residents understand how low-carbon activities can be integrated into their lives. Moreover, from the tours, we have learned that environmental sustainability does not require major investments. Both cities made use of minimal investments to achieve maximum benefits for their local economies and environments.

Once Pinglin began promoting low-carbon pilot tours in 2008, many other cities came to offer similar tours. In 2011 the Tourism Bureau planned 20 low-carbon routes in coordination with the Taiwan Tourist Bus Travel Service. The travel service is designed for tourism planning and the design of bus services. From the major attraction of the Taiwan Train Station, a high-speed train shuttles passengers to popular tourist attractions in Taiwan. This is a positive response to a new low-carbon life.

#### **5. References**

[1] Chang, Y. C., 2008, Low-Carbon Community: New Sustainability Development Indicators, Tai Ta E-News, January,

http://www.delta-foundation.org.tw/epaper/080115/epaper\_080115.htm#a1

[11] Huang, J., 2101/10/05, Card News,

96 Low-Carbon Policy and Development in Taiwan

carbon emissions. Unlike Penghu's low-carbon island project with its billions dollars of investments, the New Taipei City Municipal Government invested very little to achieve a solid performance. Pinglin and Shuangxi, in promoting low-carbon pilot tours, not only have effectively turned around their declining economies but are also contributing to the sustainability of their homeland. The tours not only teach tourists that low-carbon activities can be fun; they also help residents understand how low-carbon activities can be integrated into their lives. Moreover, from the tours, we have learned that environmental sustainability does not require major investments. Both cities made use of minimal investments to achieve

Once Pinglin began promoting low-carbon pilot tours in 2008, many other cities came to offer similar tours. In 2011 the Tourism Bureau planned 20 low-carbon routes in coordination with the Taiwan Tourist Bus Travel Service. The travel service is designed for tourism planning and the design of bus services. From the major attraction of the Taiwan Train Station, a high-speed train shuttles passengers to popular tourist attractions in Taiwan.

[1] Chang, Y. C., 2008, Low-Carbon Community: New Sustainability Development

[3] Chen, W. S., 1992, Blue Sky Again, Pullution Control Status, and Prevention Strategy in

[6] Environmental Protetion Administritation, 2010, Two Creeks, Two Irons and Low-

[7] Huang, C H., 2009, "Measurement of Energy Efficiency in Taiwan and Its Relevance to CO2 Decoupling." Invited paper presented at the Workshop on Innovations in Energy

[8] Huang, C. H. , C. Yang, H. Lin, and H. Su ,2006, "The Impact of the Oil Price Shock on CO2 Emissions and the Adoption of Renewable Energy." Paper presented at the

[10] Huang, C. H., C. M. Lee, and F. C. Jhuang, 2007, Pollution Prevention Investment and Innovation Behavior under Carbon Emission Trading Scheme, Taiwan Economic

International Conference on Regional Carbon Budgets, August 16-18, Beijing. [9] Huang, C. H., 2007, "Double Dividend Hypothesis: Results from the Energy Tax Initiative in Taiwan." Invited speech presented at the National Institute for

http://www.delta-foundation.org.tw/epaper/080115/epaper\_080115.htm#a1 [2] Chang, Z., and N. Chang, 1993, Evaluation of the Local Enviornmental Protection Administritation Waste Recycleing Performance, Environmnental Protection

http://travel.mtaipei.tw/index\_m.php?ptype=news\_view\_from2&id=20844.

http://<IP_ADDRESS>/science/content/1992/00060270/0004.htm

maximum benefits for their local economies and environments.

This is a positive response to a new low-carbon life.

Indicators, Tai Ta E-News, January,

Administration, 154 Research Paper.

Carbon Tours." New Taipei City.

Review, Vol. 35:1, 87-114.

Taiwan, Journal of Science, June, Vol 270,

[4] Chen, Y., 2011, "The First Public Restroom in Pinglin."

[5] Council for Economic Planning and Development, 2010, http://www.cepd.gov.tw/m1.aspx?sNo=0014489.

Efficiency. Stanford University, California, February 17-18.

Environmental Studies, March 1, Tsukuba City, Japan.

**5. References**

http://www.cardu.com.tw/news/detail.htm?nt\_pk=27&ns\_pk=10724

## *Edited by Li-Fang Chou and Liang-Feng Lin*

Taiwan a typical small Asian country with few energy resources is well known for its high-tech industry in the last 20 years. However as a member of the global village Taiwan feels the responsibility to reduce carbon emissions. The book tells you how Taiwan transforms itself from a high-tech island to become a low carbon island. The book address Taiwan's low-carbon developmental policies of the past 10 years, applies an econometric approach to estimate Taiwan's sector department CO2 emissions, shows how environmental change affects the economic growth of Taiwan, and provides two successful examples of low-carbon pilot regions in Taiwan. Stephen Shen, the Minister of the Environment Protection Agency of Taiwan, believes that the book arrives at the right time, because this is the time to educate the people of Taiwan, about the necessary action for achieving a low carbon society.

Photo by Sean Pavone / iStock

Low Carbon Policy and Development in Taiwan

Low Carbon Policy and

Development in Taiwan

*Edited by Li-Fang Chou and Liang-Feng Lin*