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Date: March 24, 2009
Subject: Taiwan must shift to green tech manufacturing and research to secure long-term energy, economic, and political wealth
“Taiwan does not have substantial domestic energy resources and must import the vast majority of its needs.”[i] At the same time, Taiwan is suffering environmentally as a major greenhouse gas (GHG) emitter, and financially as the global markets crisis continues to place a severe toll on Taiwan’s export-dependent economy. However, Taiwan has a successful history of adapting its dominant manufacturing sector to new markets. Steering the nation’s human capital towards renewable energy manufacturing and innovation is a reasonable goal, and will allow Taiwan to secure its energy, economic, environment, and political standing in the world.
The Island Curse: A Trade-Dependent Economy and Energy Supply
Taiwan is almost totally dependent on imports for its energy. Most energy imports are in the form of crude oil and petroleum products (49% of total imports), coal (32%) and liquefied natural gas (10%). Taiwan’s three nuclear plants are also reliant on fuel imports from abroad.[ii] Taiwan is the sixth-largest importer of liquefied natural gas (LNG) in the world and increasingly resorting to LNG imports to meet power generation demand and to meet lower emissions goals.[iii] But Taiwan is simply dependent on global trade for nearly all of its economic activity, not just in energy. “Taiwan is one of the world’s most export-dependent economies, making many high-tech gadgets for Western consumers, so it has been battered by the slump in global demand. Exports plunged by a record 44% in the year to January 2009.”[iv]
Learning from the Past: Necessity is the Mother of Taiwan’s Reinventions
By its physical isolation and limited territory, Taiwan really has no escape from its resource-dependency. But this has never stopped the nation before in its rise to one of Asia’s top economies. In its infancy in the 1940s, Taiwan had an agrarian economy based on sugar and rice. Rapid industrial development in the 1950s was followed by an exports boom in cheap manufactures in the 1960s and 1970s. In the 1980s, Taiwan began to focus more on capital- and technology-intensive industries, particularly electrical goods and chemicals. Taiwan is now one of the world’s largest producers of computer-related products, particularly semiconductors and liquid crystal display (LCD) units.[v] Under the previous, centrally-commanded but capitalism-driven government, Taiwan’s leaders have constantly shaped the nation’s manufacturing focus to remain competitive with changing global demand. It is time for Taiwan to reinvent herself again.
Buy Brown, Sell Green, Get Greener
Taiwan is stuck with importing oil and natural gas, so it might as well figure out how to make its stockpiles last longer. Taiwan is also stuck with importing raw material and equipment from overseas[vi], but Taiwan’s strength is using those imports to mass-produce value-added products for sale, so it might as well figure out how to capitalize on the next big market – green energy. Investment in green energy technology will satisfy many of these goals at the same time. Taiwan’s leadership must steer its research parks and universities to target select industrial sectors:
Growing empirical evidence suggest that spawning salmon populations provide measurable nutrient flows back to riparian forest systems, further complicating the dilemma of optimizing harvest management of both timber and fisheries in salmon-rearing watersheds. Such a co-dependent relationship between these two high-value resources begs reconsideration of existing resource management strategies, where frequently timber production is prioritized. Here, I review recent research on salmon benefits to forest growth, all of which focus on the Pacific Northwest region of North America and the endemic timber and salmon species. Additionally, I consider the implications from this ecological co-dependency for existing timber harvest and conservation payment policies. As an example, I apply them to the findings by Zorbrist and Lippke (2007) on Oregon and Washington riparian timber harvesting limits for fish protection, whose economic analysis predict that such restrictions decrease soil expectation value for small landowners.
Keywords: ecosystem services, salmon, marine-derived nutrients, forestry economics
Submitted as an economics course term paper on 2008/12/14. This report has not been published in a peer-reviewed journal.