Background
The releases of carbon dioxide, methane, nitrous oxide, chlorofluorocarbons (CFCs), sulfur hexafluoride (SF6), perfluorocarbons (PFCs) and hydrofluorocarbons (HFCs), known as greenhouse gases, through human activities since the industrial revolution have been blamed for causing the rise in the Earth’s surface temperature in the past century. If this global warming trend continues, increased frequency of extreme weather events, rising sea level, expanding deserts, and various adverse social and economical changes are likely to occur as a result.

The most important anthropogenic greenhouse gas is the carbon dioxide released through burning of fossil fuels, mostly in the developed countries in North America, Europe, Australia, and East Asia, for the purpose of power generation. Energy efficiency programs have been actively implemented and promoted as an important part of national climate change plans in these countries, in order to decrease the carbon dioxide emissions from energy consumption.

To mitigate the effects of climate change, the US government promulgated the “Climate Change Action Plan” in 1993, which includes the cooperation of Environmental Protection Agency (EPA), Department of Energy, Department of Agriculture and the private sector in initiating various voluntary partnership programs to reduce the greenhouse gas emissions. US EPA is also actively promoting such programs as Energy Star, Clean Energy, Methane and Climate Wise, as part of the “Voluntary Pollution Prevention Program”. Of the various voluntary programs implemented so far, the Energy Star program is by far the best known and most effective program.

The Energy Star program was introduced by the USEPA in 1992 as a government-backed voluntary program in order to reduce the carbon dioxide emissions through energy efficiency measures. The program promotes voluntary partnerships with manufacturers of energy efficient products, and seeks to identify these products through the use of Energy Star logo. At present, there are 38 products in the categories of appliances, heating/cooling, home electronics, office equipment, lighting and miscellaneous products in the program. It is hoped that consumers’ increased use of Energy Star labeled products can result in energy savings and reduced emissions of carbon dioxide, which will in turn improve the environmental quality.

Besides in the US, the Energy Star program is also being implemented in Canada, Japan, Taiwan, Australia, New Zealand and the European Union. With the exception of programs in Canada and Australia, which include additional categories such as home electronics, all other countries include only the office equipment category in their respective Energy Star program.
Overview of Energy Star Program in Taiwan.

In 1990, Taiwan emitted 113.5 million metric tons of carbon equivalent (MMTCE) of greenhouse gases, 34% of which come from power plants. During 1990 to 1999, the emissions increase at an average annual rate of 6.8% and reach 204.8 MMTCE (yearly per capita emissions of 9.3 tons) in 1999, the percentage of emissions from the power plants also increased to 39%. Such a rapid increase in greenhouse gas emissions from energy sector underscores the need to promote energy efficiency measures in Taiwan.

Over the past decade, Taiwan has also become a major producer of computer equipment on the global market, and leads the world in production of computer, scanner, printer and fax machine products which are widely used in both the residential and industrial sectors. Increasing the energy efficiency of computer equipment is thus seen as an important part of Taiwan’s energy efficiency program.

With the above considerations in mind, the ROC-EPA introduced the ENERGY STAR program to Taiwan through the “Sino-US Environmental Technology Cooperation Agreement Implementation Measures No. 4”, which it signed with the US-EPA in July 1999. The seven products (computer, monitor, scanner, printer, fax machine, copier and multifunction device) in the office equipment category were also selected as the priority targets for implementation.

Since the program opened for application in July 2000, 12 manufacturers have been approved for use of Energy Star logo worldwide under the Taiwan Energy Star program. The present goals of the program are to expand the certification and promotion of Energy Star in the office equipment category, increase market share of energy star labeled products and Taiwanese’s awareness of Energy Star logo, in order to reduce carbon dioxide emissions, demonstrate Taiwan’s commitments to mitigate global warming and actively participate in international environmental cooperation activities.

*Associate Researcher, Environment & Development Foundation

International Development of Energy Star Program
Ming-Shen Lai*

Introduction

Energy Star program is a voluntary energy efficiency program introduced by the US EPA in 1992. The program initially covered only the information technology products, such as the computers and monitors. In 1995, the program was expanded to include products outside the information technology category, such as transformers, heating/cooling equipment and building performance standards. US EPA began the cooperation with the Department of Energy in promoting Energy Star in 1996, products in the categories of boiler, insulation and home electronics were subsequently added to the program. At present, the program includes 38 products in the appliances, heating/cooling, lighting, office equipment, and others products categories, as well as energy efficiency and performance standards for offices, buildings, homes, schools, hospitals, and retail stores.

Achievements

As of 2001, the implementation of Energy Star program in the US has resulted in the savings of 80 billion kWh in electricity. Over 13,000 products from 1200 manufacturers now carry the Energy Star logo and 40% of Americans are reported to recognize the Energy Star logo.

Of the various greenhouse gas emissions reduction programs implemented by the US government, the Climate Protection Partnerships (CPP) program, which includes the Energy Star program, is of great importance. In 2001, CPP achieved a 38 MMTCE reduction of greenhouse gas emissions; over half of that reduction (19.7 million metric tons) could be attributed to Energy Star program. Out of the 19.7 million metric tons reduction, 16.6 million metric tons are from the commercial/residential sector (55% through use of energy star products, 45% from building energy improvements), while only 3.1 million metric tons are from the industrial sector. Monitor product is the single most important product in the program, as savings from this product alone account for 40% (3.6 million tons out of 9.2 million tons) of all energy star products savings.

Future Trends

Based on the above observations, the following findings can be inferred for the future development of US Energy Star program: 1. Market share of certain categories appears to have reached saturation, for example 95% of monitors on the market now carry the logo; 2. Performance of New Home category can be improved, as only 27, 000 new house units in 2001 (less than 2% of all new home constructed) are Energy Star qualified; 3. More work needs to be done to improve the energy efficiency of industrial sector, as only 3.1 million metric tons of emissions reduction were attributed to industrial sector in 2001.

At present, the US Energy Star program is working on three areas: 1. Continue to promote existing product categories and develop/revise existing product specifications; 2. Continue to promote building/new home energy efficiency standards, and related efficiency improvement tools; 3. Develop and promote energy performance standards in the industrial sector, starting from the automobile assembly industry and brewery industry.

International Development of Energy Star Program

The governments of Australia, Canada, European Union, Japan, New Zealand and Taiwan have introduced Energy Star program to their countries through entering agreements with the US EPA. However, most countries introduced only the office equipment category of the program, while leaving the buildings and industry energy performance standards alone. This phenomenon can be explained in part by the fact that many electronics products are universally marketed and accepted throughout the world, while energy performances of buildings and industries vary greatly on a regional basis. As discussed above, the future growth of US Energy Star program will likely be heavily dependent on the improvements made in the industrial and building areas, if the international Energy Star program is not able to introduce or develop its own building or industrial energy efficiency program, it will be difficult to find a future growth area once the office equipment category has reached saturation.

The ease of implementing Energy Star program in these countries may vary, however, the difficulty shared by all national programs in finding new product categories is the same. As the US program was established over ten years ago, and most easy target products have been included, it will be increasingly difficult to find new product areas which can provide significant savings with little efforts. Energy Star program, like all other energy efficiency programs and eco-labeling programs will eventually be facing the predicament of find new growth areas. Improvements in energy performance of buildings and industries may be the next growth areas, as in the case of the US, they however may or may not hold true in other countries. Authorities responsible for energy efficiency programs in these countries will have to decide whether to incorporate potential reduction areas such as the buildings or industries into Energy Star program or into other programs.

*Contract Researcher, Environment & Development Foundation

Achievements of Energy Star Program in Taiwan

Implementation of Energy Star program in Taiwan resulted in savings of 150 million kWh of electricity and 5 million NT dollars (about 140 thousand USD) in utility bills in 2002 alone. Over 40% of Taiwanese recognize Energy Star logo and 53 products from 12 manufacturers are using Energy Star logo on their products.

Reduction of carbon dioxide emissions amounts to 130 thousand metric tons (kT) carbon equivalent in 2002 due to the Energy Star program, all from office equipment category which includes computer, monitor, scanner, printer, fax machine, copier and multifunction device. The bulk of the reduction comes from monitor (98.9 kT, 76%) and computer (20.8 kT, 16%) products.

Challenges and Opportunities of Climate Change
Robert Shih*

With increasing global industrialization, human activities continue to influence the earth’s climate by releasing greenhouse gases in the atmosphere, resulting in a heat-trapping effect that has elevated the global temperature by about 0.6 oC during the past century. According to the latest assessment by the Intergovernmental Panel on Climate Change, the global temperature will rise by about 1.4 to 5.8 oC by the year 2100, with the mean sea level expected to rise 9 to 88 cm, causing flooding of low-lying areas and other damages. Taiwan, like many other island countries, is particularly vulnerable to the impacts of global warming. In addition to the threat of rising sea level and the increasing intensity and frequency of extreme weather events such as typhoon, global warming would also affect regional food security, water resources, human health, and economic conditions, among other things. It is a problem that touches every part of the world and many aspects of life, and therefore its solution would require a cooperative effort by the international community.

International Negotiation on Climate Change

The concern over global warming was recognized at the First World Climate Conference held in 1979. Subsequent scientific research and rounds of negotiations led to the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, and the treaty entered into force in 1994.

The series of climate negotiations culminated in 1997 with the adoption of the Kyoto Protocol, which requires the developed countries to collectively reduce greenhouse gas emissions by at least 5% below the 1990 level. The commitment period for the reduction target is set for the years 2008 to 2012. Since the developed countries are responsible for most of the greenhouse gases that have accumulated in the atmosphere, they are first required to reduce their emissions.

Although the United States has decided not to ratify the Kyoto Protocol, other countries led by the European Union and Japan are moving ahead for its implementation. Intense negotiation during the past two years has completed the rules for implementing the Kyoto Protocol, setting the stage for its entry into force. So far, it has been ratified by 107 countries, including 28 developed countries accounting for 43.9% of emissions, still short of the 55% threshold required for its entry into force. Russia, accounting for 17.4% of emissions, is expected to ratify by the end of this year, thus bringing the Kyoto Protocol into force.

Climate Change and Energy Efficiency

Based on a recent assessment by the International Energy Agency, residential electrical appliances account for 30% of electricity consumption and 12% of greenhouse gas emissions in developed countries, and the demand is projected to grow 13% by 2010 and 25% by 2025. In order to meet their commitments to reduce greenhouse gas emissions, many developed countries have implemented measures to increase energy efficiency as one of the most cost-effective options. The additional costs of more efficient appliances can be offset by the savings in operational costs over the life of the appliance.

In the European Climate Change Programme, one of the newly proposed directives would establish ambitious energy efficiency targets through minimum efficiency requirements for end-use equipment sold and used in the EU market, including domestic appliances, lighting equipment, compressors, pumps, building components, etc. Such standards would be complementary to the labeling of products and voluntary commitments by industries. In Japan, where energy efficiency labeling is already mandatory and implemented through the Top Runner Programme, a new labeling system has been established to allow comparison between products, as well as new efficiency targets for home electrical appliances.

In the United States, the Energy Star program was established in 1992 with the mission to reduce greenhouse gas emissions. Now it has become the largest, most successful, voluntary energy efficiency programs in the world, covering over 30 types of products and adopted by at least seven other countries, including Australia, Japan, Canada, EU, Mexico, New Zealand, and Taiwan. As energy efficiency standards and labeling become more prevalent around the world, the demand for energy efficient products will likely rise, as well as the need for international cooperation to make such standards, labeling, and test procedures more transparent.

Emergence of Carbon Market

In addition to the anticipated growth in the energy efficiency market, a new carbon market is emerging as a result of the Kyoto Protocol, which has established three market-based mechanisms for developed countries to meet their commitments. Two of the mechanisms, international emissions trading and joint implementation, involve trading and emissions reduction projects among developed countries. The third mechanism, the clean development mechanism (CDM), allows developed countries to take on reduction projects in developing countries and use the credits created to meet their reduction commitments, with the aim to promote sustainable development in developing countries as well.

Although the Kyoto Protocol has yet to enter into force, Parties to the UNFCCC have agreed to a prompt start of the CDM with eligible projects starting in 2000 and have established most of the rules governing the operation of the CDM. So far, most of the 37 projects likely to be submitted for approval are carried out by the Prototype Carbon Fund (PCF) of the World Bank and the Certified Emission Reduction Unit Procurement Tender (CERUPT) program of the Netherlands. The CDM projects involve hydroelectric power, renewable energy, fuel switch and energy efficiency and would reduce over 90 million tons of carbon dioxide equivalent, most of which would take place in Latin America. According to recent estimates, about 200 CDM projects are expected to be submitted for approval this year.

While Latin America has attracted most of the CDM projects so far due to early interest and preparation in the region, the Asian region is expected to attract most of the projects in the future, because of its large reduction potential and rapid economic growth. According to a recent World Bank study, Asian countries will account for about 90% of the CDM market, with China leading the Asian share with 65%, followed by India with 12%, Indonesia with 5%, South Korea with 3%, and the rest of Southeast Asia with 13%. The estimated annual export revenues from Asian CDM projects are between USD 1.4 to 1.5 billion, with annual profits from USD 0.7 to 3 billion.

However, with the continuing uncertainty of the Kyoto Protocol and the initial formation of the carbon market, the price of carbon is still difficult to estimate with certainty. A recent estimate by Natsource put the price at USD 2.5-5 per ton of CO2 before the year 2008, rising to USD 5-11 during the commitment period (2008-2012) of the Kyoto Protocol. Thus, while there are potential risks for early action, there are also incentives to purchase credits at a lower price during the early stage of the carbon market.

Potential Role for Taiwan

Although Taiwan is not a Party to the UNFCCC and the Kyoto Protocol, the government has taken a proactive position in its response. The National Energy Conference was convened in May 1998 to formulate policies and measures to address climate change. The conference produced comprehensive plans that direct each relevant agency to implement response actions, ranging from research and development to policy formulation to voluntary programs for energy conservation, as well as other policy tools. These are "no regrets" measures that not only address global warming concerns, but also promote industrial efficiency and economic competitiveness.

With rapid economic growth, Taiwan's GDP has more than quadrupled during the past 20 years, and our energy consumption has more than tripled. As a result, the per capita emission of carbon dioxide has doubled and is reaching the level of many developed countries, while Taiwan's annual emission of carbon dioxide has reached about 0.9% of the global total in 2001. In addition, due to Taiwan's limited energy resources and the increasing demand to meet economic development and lifestyle changes, our reliance on imported energy supply has increased from 83% to 97% during the past 20 years.

While Taiwan is becoming a significant contributor to global greenhouse gas emissions, our important status in global trade and investment also give us an opportunity to become part of the solution to the rising global concern. In 2001, Taiwan was the 14th largest exporting economy in the world and ranked 5th in Asia, while we ranked 16th in imports globally, 6th in Asia. As for foreign direct investment, we ranked 17th in the world, which is likely higher if including indirect investment in mainland China that accounts for almost 40% of our total foreign investment.

Considering that the markets for energy efficient products and clean energy will take off in the near future, as well as the market to invest in greenhouse gas emissions reduction through the CDM, Taiwan should not be left out simply because we cannot be a party to the Kyoto Protocol. Our exports of electrical and electronic products will be required to meet the increasing energy efficiency standards worldwide, while our energy efficient and clean energy technologies can be marketed worldwide through the CDM. Our multinational companies can invest in CDM projects in developing countries that have ratified the Kyoto Protocol, while the earned reduction credits can be traded in the international market. Taiwan cannot afford to miss such opportunity and lose our competitiveness in this emerging global market.

Concluding Thoughts

So far most of the political attention has been focused on how to reduce emissions of greenhouse gases, as it would have significant impacts on the economies of developed countries. However, much more attention is needed on ways to adapt to the impacts of global warming, since even immediate reduction in global greenhouse gas emissions would not fully prevent the potential impacts that will likely result from past and present emissions.
Global warming has no boundary and is caused by everyone's action in our modern global society. Furthermore, it will affect the lives of our future generations. Therefore, mitigating global warming would require everyone's effort and changes in our lifestyle. It resonates well with the environmental motto of "think globally, act locally." As for the emerging global carbon market, taking action is no longer equated with costs only, but potential profits as well. It is also creating a new financial mechanism to promote sustainable development worldwide, and Taiwan can and should be a part of such important effort.

*Representative of Climate Investment Partnership in Taiwan

Achievements of Energy Star Program in Taiwan

Implementation of Energy Star program in Taiwan resulted in savings of 150 million kWh of electricity and 5 million NT dollars (about 140 thousand USD) in utility bills in 2002 alone. Over 40% of Taiwanese recognize Energy Star logo and 53 products from 12 manufacturers are using Energy Star logo on their products.

Reduction of carbon dioxide emissions amounts to 130 thousand metric tons (kT) carbon equivalent in 2002 due to the Energy Star program, all from office equipment category which includes computer, monitor, scanner, printer, fax machine, copier and multifunction device. The bulk of the reduction comes from monitor (98.9 kT, 76%) and computer (20.8 kT, 16%) products.

As of 2003, the following companies have become the Taiwan Energy Star Partners, and are permitted to use the Energy Star logo on their qualified office equipment products.