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, Holland, European Union，etc.). This research also explores the research results of some key research institutions (such as EMF, MIT, AIM, WorldScan, GREEN; 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 in this study combining energy, technology and economic components 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 the CO2 emission baseline forecasting. This project sets up the energy -environmental- economic model that accords with requirement of sustainable development and environment policy to assess the flexibility mechanism of the mitigation of greenhouse gas emissions according to the UNFCCC and Kyoto Protocol. In 2006, this study tries to set up the basic framework of the Taiwan energy economic integrated model. The project broadly reviews the situation, trend and researches of domestic and foreign countries’ experiences about energy and mitigation policies of greenhouse gas emission. Moreover, this study analyzes domestic and foreign countries’ energy situation and compares domestic and foreign countries’ energy supply and demand situation at present and their future trends. This study also introduces IPCC 's and FCCC 's international well-known models, e.g., EMF, MIT and JISEEF models. The CEEP in US and its cooperative 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 significant effect for Korea to set up its energy and environment policies. The result of JISEEF is valuable for this study in helping to set up the model and database. This study makes a soft link between TAIFEM-E model and JISEEF model, then forecasts the baseline of Taiwan and carries on five kinds of policy simulations. 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, and may just accord with the decresing demand for Kyoto Protocol gradually. On the other hand, there are no official BAUs in Taiwan. This study put together those results from different domestic CO2's baseline forecasting in order and compare with their simulation results. The simulation results of five kinds of policies demonstrate that voluntary reduction from different electricity sectors will reduce 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 expected to increase by 99% in the future its impact on real GDP is only 0.1%. It demonstrates that the negative impacts are very limited; on the contrary, the positive effects are enormous. According to the baseline forecast in this study, the total CO2 emission at 2030 is 65.59 billion tons. Simulation results show that we can reach 34.59% and 68.26% reduction of 0.17 billion tons respectively, which is the voluntary reduction amount from the conclusion of the Taiwan’s Second National Energy Conference. The mitigation results are significant. Accompanying with the restructuring of energy prices, the introduction of renewable energy, adjustment of energy structure and installment capacity of power sector, and etc., Taiwan probably does not need to levy carbon tax. It also means from this research that carbon tax is the last means to reach our goals. This shows that it is still the last resort to control the carbon dioxide emission with the carbon tax.

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