Under the background of Kyoto Protocol, Taiwan’s non-nuclear policy and its strong commitment to sustainable development, this project aims to study the practices and policies that combine energy, environment and economics (3E) of some major countries (including America, Japan, Korea, the United Kingdom, Germany, etc.). This research also explores the research results of some key research institutions (such as EMF, MIT; Energy & Environmental Policy, University of Delaware; the Centre of Policy Studies of Monash University) and tries to find a way to promote international cooperation with them. How to mitigate greenhouse gas emissions and to set up the impact assessment is one of the key goals of this analysis. The assessment model combining energy, technology and economics estimates the macroeconomic effect and the trend of CO2 emission that are caused by the interaction among national macroeconomics, industrial economy, environment policy, energy and industrial restructure from 2005 to 2030, namely predicts the CO2 emission baseline. This project sets up the energy environmental model that accords with requirement of sustainable development and environment policy to assess the elasticity scheme of the mitigation of greenhouse gas emissions according to the UNFCCC and Kyoto Protocol. The research period of this project is scheduled on 2005 and 2006. In 2005, the outcome of TAIGEM-E model is the main achievement of this research; later on, this study tries to set up the Taiwan energy economic integrated model in 2006. The first chapter of this project mainly outlines research background, goals and research approaches. The second chapter broadly reviews the situation, trend and researches of domestic and foreign countries’ experiences about energy and mitigation policies of greenhouse gas emission. The third chapter analyzes domestic and foreign countries’ energy situation and compares domestic and foreign countries’ energy supply and demand situation at present and their future trends. The fourth chapter introduces EMF, MIT and JISEEF model. The CEEP in US and the relative research institutes in Korea develop the JISEEF model. Researchers of the JISEEF model develop the analytic path among energy, economics and environment, and its results have huge effect for Korea to set up its energy and environment policies. The result of JISEEF is valuable for this study helping to set up the model and database. The fifth chapter introduces the dynamic CGE (computable general equilibrium) model in Taiwan, named TAIGEM-E (Taiwan General Equilibrium Model – Energy), which is derived from the Australian MONASH model. The TAIGEM-E model was originally belonged to top-down model; however, it has transformed itself to combine energy substitute, CO2 emission baseline forecasting, and technical bundles of twelve latest power-generating technologies as a multi-input, multi-output and multi-sector macroeconomic model. This model has been applied both to Taiwan baseline forecast and to CO2 emission forecast many times, and it has received highly appraised in Taiwan society. Once again, one important character of this model is that it has incorporated technical bundles of twelve latest power-generating technologies that could use bottom-up approach to depict the power-generating behavior of Taiwan electricity sector. Depending on Taiwan’s Greenhouse Gas Mitigating Drafting Law and some mitigation policies this model combines top-down and bottom-up approaches for policy simulation and economic assessment. It also predicts Taiwan’s CO2 emission baseline from 2005 to 2030 in order to help the Environmental Protection Administration to make its decision. The sixth chapter presents the simulation results of this research. According to the baseline forecast, Taiwan’s economy will reach the stage of maturation, which will force Taiwan to have much efficient arrangements or reduction for its CO2 emission and energy consumption. Based on Taiwan’s Greenhouse Gas Mitigating Drafting Law, the conclusions of the Second National Energy Conference, and foreign countries’ mitigation experiences required by the Kyoto Protocol, Results of those eight simulations in this research demonstrate that there are great potentials for Taiwan to reduce its CO2 emission. The instruments adopted at this research are lifting energy efficiency, reducing energy density, raising electricity prices and levying carbon taxes. Voluntary reduction from different electricity sectors will lessen CO2 emission and does not have negative effects on real GDP. With incentives for voluntary reduction at hand, industries and individuals choose the following approaches to reach the CO2 reduction goals: new energy saving technologies for industrial production, housing energy saving programs and purchasing green buildings for individuals, and etc. In the long run it is very helpful for Taiwan economy since Taiwan will decrease its dependence on foreign oils import and cut production cost. Resources will be efficiently reallocated to the most productive goods. However, even though electricity prices are lifting from 49% to 99% in the future its impact on real GDP is only 0.1%. It tells that the negative impact is very limited; on the contrary, the effect is enormous.

Kyoto Protocol, Greenhouse Gas Mitigation, TAIGEM-E, Energy Structure, Industrial Structure, Macro-economy