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Peer Review on Fossil Fuel Subsidy Reforms in Chinese Taipei

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Peer Review on Fossil Fuel Subsidy Reforms in Chinese Taipei Peer Review on Fossil Fuel Subsidy Reforms in Chinese Taipei APEC Energy Working Group March 2017 Produced by ICF International, Inc. 9300 Lee Highway, Fairfax, VA 22031, USA www.icf.com/ For Asia-Pacific Economic Cooperation Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Tel: (65) 68919 600 Fax: (65) 68919 690 Email: [email protected] Website: www.apec.org © 2017 APEC Secretariat APEC#217-RE-01.9 PEER REVIEW ON FOSSIL FUEL SUBSIDY REFORMS IN CHINESE TAIPEI FINAL REPORT DISCLAIMER This document reflects the recommendations reached by the APEC Fossil Fuels Subsidy Reforms Peer Review Team and the ICF FFSR Secretariat Team. It does not reflect the opinions of the Team’s respective governments or that of ICF in general. The contents of the report are the sole responsibility of the author or authors and do not necessarily reflect the views of the Asia-Pacific Economic Cooperation (APEC) or any government entities. PEER REVIEW ON FOSSIL FUEL SUBSIDY REFORMS IN Chinese taipei CONTENTS Caveats ........................................................................................................................................... i Acknowledgments ......................................................................................................................... i Acronyms and Initials ................................................................................................................... ii Preface ........................................................................................................................................... v Executive Summary ..................................................................................................................... 1 1. Introduction and FFSR Peer Review Process ..................................................................... 6 2. Energy Subsidies – A Global Perspective ............................................................................ 9 Fossil Fuel Subsidies ....................................................................................................................................................... 10 3. Macroeconomic and Sociodemographic Profile .............................................................. 16 Sociodemographic Statistics & Social Policies .......................................................................................................... 21 4. Energy Landscape of Chinese Taipei ................................................................................. 25 5. Subsidy #1: Offshore Islands Sea Freight Subsidy for Petroleum Products .................. 36 Policy Background .......................................................................................................................................................... 36 Context and History ...................................................................................................................................................... 37 Subsidy Effect ................................................................................................................................................................... 38 Reform Solution/Experience ........................................................................................................................................ 40 Insights from the Peer Review Process ..................................................................................................................... 41 6. Subsidy #2: Preferential Electricity Pricing for Street Lights ......................................... 50 Policy Background .......................................................................................................................................................... 50 Context and History ...................................................................................................................................................... 50 Subsidy Effect ................................................................................................................................................................... 51 Reform Solution/Experience ........................................................................................................................................ 52 Chinese Taipei Vision/End goal for Subsidy .............................................................................................................. 53 Insights from Peer Review Process ............................................................................................................................ 53 7. Subsidy #3: Petroleum and Electricity Sales Tax Exemption for Agricultural Machinery-Related Use .............................................................................................................. 63 Policy Background .......................................................................................................................................................... 63 Context and History ...................................................................................................................................................... 64 Subsidy Effect ................................................................................................................................................................... 65 Reform Solution/Experience ........................................................................................................................................ 65 Chinese Taipei Vision/End goal for Subsidy .............................................................................................................. 66 Insights from Peer Review Process ............................................................................................................................ 66 8. Subsidy #4: Preferential Electricity Pricing for Agricultural Motors ............................. 75 Policy Background .......................................................................................................................................................... 75 PEER REVIEW ON FOSSIL FUEL SUBSIDY REFORMS IN Chinese taipei Context and History ...................................................................................................................................................... 76 Subsidy Effect ................................................................................................................................................................... 79 Reform Measures/Experiences .................................................................................................................................... 80 Chinese Taipei Vision/End goal for Subsidy .............................................................................................................. 80 Insights from Peer Review Process ............................................................................................................................ 81 9. Subsidy #5: Petroleum Product Price Subsidy for Agricultural Machinery ................... 88 Policy Background .......................................................................................................................................................... 88 Context and History ...................................................................................................................................................... 89 Subsidy’s Effect ................................................................................................................................................................ 89 Reform Measures/Experiences .................................................................................................................................... 91 Chinese Taipei Vision/End goal for Subsidy .............................................................................................................. 91 Insights from Peer Review Process ............................................................................................................................ 92 10. Cross-Cutting Review of Agricultural Subsidies ........................................................... 97 Chinese Taipei Agricultural Sector Strategy ............................................................................................................ 97 11. Conclusion ...................................................................................................................... 108 12. References ...................................................................................................................... 112 Appendix A – Additional Information on Subsidies for Review ....................................................................... 115 Appendix B – Fossil Fuel Subsidy Reform Evaluation Templates ..................................................................... 118 Appendix C – Peer Review Team Member Biographies .................................................................................... 122 ILLUSTRATIONS Tables Table ES-1. Key Findings and Recommendations from the Peer Review Process ............................................ 2 Table 1. Thailand’s Communications with Households and Street Vendors Regarding LPG Price Increases ........................................................................................................................................................................... 16 Table 2: Key Economic Indices ...................................................................................................................................
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