Abstract
The post-Kyoto Protocol era has seen a transition to focus on the development of a renewable energy (RE) market as a primary instrument to reduce greenhouse gas (GHG) emissions worldwide. This paper analyses the development of GHG reduction and RE market in China, Japan, and Taiwan that are geographically proximate but socioeconomically diverse, and each plays a different but significant role in the world’s economy. By deploying a consolidated model incorporating the key components of market drivers underlying the goal of achieving GHG reduction, we threaded through the policy- and market-instruments implemented for each of the case studies over the past 20 years using the model. One commonality is that subsidiary schemes in the form of feed-in tariffs have served as an effective policy tool to boost the growth of renewable energy installations, though the worsening financial burden renders this path unsustainable. Over-reliance on feed-in-tariff schemes may have also impeded the liberation of an energy market pivotal to the success of elevating RE portfolio through trading mechanisms. What followed were the implementations of renewable energy certificate (REC) systems that have experienced various roadblocks leading to failures of the certificate market. By understanding the paths engaged in each of the cases, a conceptualized strategy depicted by the consolidated model is proposed to show the links between a renewable market and a carbon market. The framework would expedite the trading of RECs and carbon credits to accelerate the attainment of GHG emission reduction goals.
Highlights
The ozone layer depletion and global warming are two separate but intertwined events, scientifically and politically, with colossal global implications as both events have been widely perceived as realistic threats to humanity
The success of the “Montreal Protocol” finalized in 1987 to reduce the emission of chlorofluorocarbons—the major group of ozone-depleting substances—which has been scientifically proven to be effective in mitigating ozone layer depletion [1,2], has paved the way to how the United Nations founded Intergovernmental Panel on Climate Change (IPCC) to slow down the effects of global warming by reducing the emissions of greenhouse gases (GHGs)
Outside of the commonality of both Protocols being a product of the concerted and unprecedented international endeavors to alleviate grave environmental concerns on the global scale, the Kyoto Protocol has proven to be a much more complicated process than the Montreal Protocol, stemming from wider political and socioeconomic impacts associated with the reduction of the six designated groups of GHGs, the emission of CO2, which is inherently bound to the generation of carbon-based energy
Summary
The ozone layer depletion and global warming are two separate but intertwined events, scientifically and politically, with colossal global implications as both events have been widely perceived as realistic threats to humanity. The success of the “Montreal Protocol” finalized in 1987 to reduce the emission of chlorofluorocarbons—the major group of ozone-depleting substances—which has been scientifically proven to be effective in mitigating ozone layer depletion [1,2], has paved the way to how the United Nations founded Intergovernmental Panel on Climate Change (IPCC) to slow down the effects of global warming by reducing the emissions of greenhouse gases (GHGs). This effort culminated in 1997 with the conclusion at the third conference of the United Nations Framework. The carbon market eventually collapsed when it was flooded with issued carbon certificates without foreseeable buyers, and would not recover because of the lack of clarity on the long-term prospect of the market [9], despite the UNFCCC’s rescue attempt by extending the validity of the Kyoto Protocol for three more years
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