US embassy cable - 05TAIPEI1072

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 001072 
 
SIPDIS 
 
STATE FOR EAP/RSP/TC, NP/NE FOR ALEX BURKART, EP/ESC/IEC 
PLEASE PASS TO AIT/W 
 
E.O. 12958: DECL: 02/19/2015 
TAGS: ECON, ENRG, KNNP, SENV, PREL, TW 
SUBJECT: TAIWAN'S "GREEN" PARTY PICKS ECONOMICS OVER THE 
ENVIRONMENT 
 
REF: A) 2005 TAIPEI 00846 B) 2005 TAIPEI 00490 C) 
     2002 TAIPEI 03912 D) 2005 TAIPEI 00490 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C)  Summary.  The Kyoto Protocol coming into force on 
February 16th has led Taiwan's policy makers to espouse a 
renewed commitment to work on reducing greenhouse gas 
emissions within Taiwan.  However, the Kyoto Protocol is not 
driving changes in Taiwan's environmental policies.  Taiwan 
has failed to take any concrete action to reduce its carbon 
emissions since Kyoto's inception in 1990.  Now it has 
tentatively approved two large-scale development projects, 
which could lead to a 10 percent annual increase in Taiwan,s 
already high emissions.  As noted in ref A, the Chen 
Administration is simply using the Kyoto Protocol to spin its 
decision to step back from its opposition to nuclear power in 
"pro-green" terms.  End Summary. 
 
Background 
---------- 
 
2. (SBU) Taiwan is not a member of the United Nations and 
therefore did not sign the United Nations Framework 
Convention on Climate Change (UNFCC) at the United Nations 
Conference on Environment and Development in Brazil in 1992. 
Nonetheless, the UNFCC did lead the Taiwan Executive Yuan 
(EY) to spend much of the 1990s thinking about how it might 
reduce its greenhouse gas emissions.  During the 1990s 
Taiwan's Environmental Protection Administration (TEPA) went 
so far as to draft a law to require that Taiwan reduce 
emissions.  The draft law was comprehensive and included 
options Taiwan could use to achieve its greenhouse gas 
targets including emissions trading schemes, carbon taxes and 
joint implementation projects.  Despite this paper exercise, 
no concrete actions were taken, and the law was not 
introduced to the Legislative Yuan, debated, or passed. 
 
Kyoto Discussion Halt under Chen 
--------------------------------- 
 
3. (SBU) Despite the Democratic Progressive Party's strong 
pro-environmental roots, even a discussion of the 
environmental objectives embodied in the Kyoto Protocol came 
to a standstill with the election of the President Chen 
Shui-bian in 2000.  Lowering greenhouse emissions clearly 
took a back seat to the Administration's efforts to fulfill 
its commitment to the Democratic Progressive Party's (DPP) 
core value of making Taiwan nuclear free.  As a result, since 
1990 Taiwan's carbon dioxide emissions have continued to 
rise.  Taiwan's annual carbon dioxide emissions have grown at 
a faster rate than its economy and are now twice what they 
were in 1990.  Currently, Taiwan's GDP is the world's 19th 
largest and its carbon dioxide emissions are the world's 23rd 
highest. 
 
Anti-nuke Rhetoric Softens as Kyoto Protocol enters into 
Force 
--------------------------------------------- ------------ 
 
4. (SBU) In January 2005, Nobel Prize Laureate and Taiwan 
Academia Sinica President Lee Yuan-tseh publicly stated that 
the Chen Administration's "Nuclear Free Homeland" policy 
might need to be postponed until 2050 in order for Taiwan to 
meet emissions requirements under the Kyoto Protocol.  This 
marked the first pro-nuclear public statement by a high-level 
public figure since President Chen took office in 2000. 
 
5. (C) Since Lee Yuan-tseh's January statement, several top 
level government officials have come out publicly in favor of 
completion of the Fourth Nuclear Power plant (as reported in 
ref A).  To ascertain whether those statements reflected the 
beginning of a more serious internal debate about the pros 
and cons of nuclear energy or a true policy shift towards 
moderation in its nuclear energy stance, on March 3, AIT Econ 
Chief and ESTOFF met with Yeh Jiunn-rong, Chairman of the EY 
Research, Development and Evaluation (RDEC) Commission. 
Until recently, Yeh was the head of the EY Nuclear Free 
Homeland Commission.  Prior to joining the Chen 
Administration, Yeh was a law professor linked to 
environmental NGOs.  As Chairman of the EY Nuclear Free 
Homeland Commission (established in the fall of 2002), Yeh 
was largely responsible for codifying Taiwan,s nuclear free 
homeland ambitions into Taiwan,s Basic Environmental Law 
(reported in ref c) and for a proposal to decommission each 
of Taiwan,s three existing nuclear power plants seven years 
earlier than originally scheduled. 
 
6. (C) During AIT's March 3 meeting, Yeh confirmed a definite 
policy shift towards moderation in the Chen Administration's 
anti-nuclear policies.  He openly stated a firm commitment to 
completing the Fourth Nuclear Power Plant and implied that 
the talk about the early decommissioning of the first three 
nuclear plants was just rhetoric.  Instead of discussing 
Taiwan,s &nuclear free homeland8 policies in terms of 
phasing out nuclear energy, he defined them as a commitment 
not to build a fifth nuclear power plant.  To make clear that 
the Chen Administration is in no way abandoning its 
anti-nuclear goals, however, he noted that Taiwan's nuclear 
free homeland is legally binding and irreversible.  Yeh 
conceded that Taiwan's nuclear free policies would need to be 
applied incrementally so as not to harm Taiwan,s economy. 
 
7. (C) With respect to the Kyoto Protocol, Yeh claimed that 
the Chen Administration had recently revived latent efforts 
to work toward reducing greenhouse gases.  He noted that both 
the Kyoto Protocol and Taiwan's Nuclear Free Homeland 
obligations would be the primary foci of a National Energy 
Conference that would be held in June.  When asked a direct 
question, Yeh did not deny that one of the underlying 
purposes of the conference would be to openly support 
completion of the Fourth Nuclear Power Plant. 
 
Development Projects At Odds with Kyoto Goals 
--------------------------------------------- 
 
8. (U) Despite thse expressions of public support for the 
Kyoto Protocol, on January 25, the EY approved New Taiwan 
Dollars (NTD) $505.3 billion (USD 16.6 million) for 
development projects.  The approval paves the way for the 
Formosa Plastics group to build its steel plant in Pingtung 
County and for the China Petroleum Corporation (CPC) to 
co-invest with several petrochemical businesses to construct 
a petrochemical science and technology park in Yun-lin County 
(which would include Taiwan's 8th Naptha Cracker plant). 
 
9. (u) Formosa Plastic's steel plant and CPC's 8th Naptha 
Cracker Plant both would lead to drastic increases in 
Taiwan's already high CO2 emissions and reduce Taiwan's 
ability to meet potential Kyoto obligations.  Assuming both 
the new steel plant and the 8th Naptha Cracker plant are 
built, it is estimated that their combined emissions will 
reach 24 million tons of CO2 per year.  This would represent 
at least a 10 percent increase to Taiwan's current annual CO2 
emissions of 240 million tons. 
 
10. (c) As a result, on February 16, the day the Kyoto 
Protocol took effect, several environmental groups took to 
the streets to protest both of these projects.  Taiwan's 
Environmental Protection Agency is also concerned.  It is 
claiming that it is necessary for environmental impact 
assessments (EIA) to be conducted prior to breaking ground. 
Several MOEA contacts, however, have revealed that a cabinet 
level decision has been made to exclude an evaluation of 
carbon emissions from the EIAs.  They suggest that approval 
for these projects to move forward is imminent. 
 
11. (C) Comment.  Shortly after those demonstrations, EY 
Energy Commission contacts informed AIT that Wang Yung-ching, 
chairman of Taiwan's largest industrial conglomerate, Formosa 
Plastics Group was trying to make a deal that he provide the 
financing to save Taiwan High Speed Rail (THSR) from its 
financial difficulties (ref D) in exchange for permission to 
build his steel plant.  At almost the same time the EY 
approved the budget to build the steel and 8th Naptha plants 
waiving a carbon-emissions EIA, Wang declined requests to 
invest in THSR.  It is safe to conclude that once Wang got 
his authorization, he was no need to provide THSR financing. 
End Comment. 
 
Conclusion 
---------- 
12. (c) Both Formosa Plastic Group's steel plant and CPC's 
8th Naptha Cracker plant will make meeting Kyoto targets and 
timetables impractical.  The Chen Administration did not 
include any discussion of greenhouse gas emissions in its 
nuclear free homeland policies, publications or conferences 
over the past three years, indicating that global warming has 
not been a major concern for this Administration.  Now, talk 
of reducing carbon emissions has coincided with the approval 
of development projects, which could lead to a 10 percent 
increase in Taiwan's already high emissions.  These 
developments call into question the Chen's Administration's 
sincerity about wanting to reduce carbon emissions.  What is 
more, they support ref A's conclusion that the Chen 
Administration is simply using the Kyoto Protocol to spin a 
step back from its opposition to nuclear power in pro-"green" 
terms. 
PAAL