Industrial Effects of Reducing Greenhouse Gas Emissions: A Case Study of Chemical Material and Product Industry in Taiwan

The goal of Taiwan’s Intended Nationally Determined Contributions (INDCs) was to reduce greenhouse gas (GHG) emissions by 20% and 50% from 2005 to 2030 and 2050, respectively. This aggregated goal was distributed into industrial level in this study in two steps. First, the industrial GHG emissions from consuming coal, petroleum, gas, and electricity in 27 sectors was calculated. Second, a model connecting economic variables, energy demands, and emissions from 1982 to 2014 was built to analyze the effects of reducing GHG emissions. Emitting the highest GHG in Taiwan, the chemical material and product industry was chosen as a case study. The estimated results indicate that marginal costs of reducing 461,967 ton CO2 (1.192%) were decreasing TWD 7,328 million capitals or 22,934 labors, causing the value added decrease by TWD 5,655 million (1%) in the chemical material and product industry. In other words, any investments, whose costs are lower than these marginal costs, are worthy to do.