The project has two objectives: first, to assess the amount of greenhouse gas reduction potential for different emission departments; and the second, to establish the mechanism that integrates greenhouse gas reduction plans and the emission trading scheme. In assessing the amount of greenhouse gas reduction, this project first clarifies the relevant authorities responsible for various industries, followed by the introduction to greenhouse gas inventory and certification system. Then we analyze the INDC (Intended Nationally Determined Contributions) of Taiwan and other major countries for similarities and differences, including greenhouse gas reduction targets, the expected contribution, the scope of carbon emissions origins, and the means of measurements. Then we present the emission reduction potential for various emission departments of Taiwan as well as the challenges to achieve the goals of our INDC. Thereafter we archive the evolution of our carbon reduction policies and legislation, national and industrial greenhouse gas inventory, registration, and inspection systems, together with the introduction to the means of emission calculations, carbon footprint certification, and the ISCC - International Sustainability ＆ Carbon Certification system. In establishing the mechanism that integrates greenhouse gas reduction plans and the emission trading scheme, first we discuss the relevance between emission reduction and emission allowance allocation, followed by a discussion of the deficiencies found in EU ETS as a lesson to be learned by our government. Then we studied the interplay between carbon price and trading volume of the EU emission trading scheme in order to clarify the influence of supply and demand on carbon price. Then we introduce the countermeasures to stabilize the fluctuations of EU carbon market price as a reference for our future market. Finally, we analyze the connection between emission allowance allocation and carbon price, and suggest a viable mechanism for the stability of the future carbon price in Taiwan as a government policy to promote the health of the carbon market.

GHG emission reduction, allowance allocation, emission trading scheme