Sustainability & CSR
Accelerating Taiwan's Just Transition dialogue
Taiwan's new government will continue to promote renewable energy and net zero policies despite political challenges, necessitating stakeholder dialogue and collaboration. Just Transition principles offer a framework for balancing energy expansion with social equity. Corporations should also consider adopting a Just Transition as a core principle in their sustainable practices.
By Jason Wang, James McCatherin, and Wen Huang
Taiwan's new government, led by President Lai Ching-te, has pledged to continue President Tsai Ing-wen's policies on net-zero and energy transition. Although the incumbent government will be focusing on the continuous development of renewable energy, it is also faced with a likely expansion of energy demand by Taiwan’s semiconductor industry, while other industries show lacklustre growth. Public opinion polls still indicate strong support for renewable energy development. However, the current political landscape suggests that the Lai administration will face more challenges compared to his predecessor. For example, the opposition-controlled legislature has already attempted to freeze electricity prices, after the Executive Yuan's decision to increase them.
The current political climate coupled with unmet energy transition goals, failing by a wide margin to install 29GW of renewable energy capacity by 2025, and delays in bringing online gas power plants, pose significant risks to Taiwan’s Just Transition movement, which is still in its infancy. Ensuring a just transition which includes, among other aspects, an effective social dialogue, is more imperative than ever to ensure a sustainable net zero transition in Taiwan that is equitable to all.
Implementation of a Just Transition and minding the gap
The Just Transition has been enshrined in Taiwan’s climate change legal and policy framework. Ministries are required to incorporate the principle of a Just Transition in their net zero policies to mitigate the impact on stakeholders.
However, the risk of an ineffective or overlooked Just Transition is heightened by the current political and economic environment. Currently, government and industry feel mounting pressure to speed up the decarbonisation of the electricity sector. However, this also comes at a time when deliberate collaboration and objective dialogue are more challenging within civil society and the political realm. In such an environment, it is vital that the principles of a Just Transition are applied in a way which includes clear mechanisms for stakeholder negotiations as well as vital resources for social dialogue. Otherwise, there is potential for the principles of a Just Transition to be forgotten, ignored, or overlooked as Taiwan moves forward in its energy transition, which will only lead to more friction within Taiwan’s society.
To promote a Just Transition, NIRAS, in collaboration with academic institutions, which included prominent universities in this field, such as National Taiwan University, National Chengchi University and National Sun Yat-sen University, organised a symposium on 6 May 2024, inviting civil groups to share their efforts, methods, challenges, and potential solutions related to a Just Transition. Key takeaways from the symposium are summarised below in (Table 1).
Table 1: Key outcomes from NIRAS Just Transition Symposium on 05/06/2024
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Topics |
Issues |
Description |
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Concerns
|
General Concerns |
How can the impact of net-zero transition be measured? Is it possible for existing social injustices to be addressed during the transition process? Potential conflicts among labour groups, communities, and various groups when initiatives are implemented. |
|
Timing of Social Dialogue
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Are the net zero policies adequately prepared? If policies are not ready, stakeholders will have higher expectations of the implementing parties. |
|
|
Lesson Learns & Solutions |
Stakeholder Identification
|
Engaging local leaders will be beneficial. Different locations require different methods for identifying stakeholders, necessitating collaboration with local intermediaries. Group discussions also highlighted the importance of boundary setting and categorising issues based on policy topics. |
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Effective Communication:
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Communication strategies should be clear, with information disclosed appropriately. When engaging in communication, avoid using overly theoretical or academic language. Instead, engage in deep dialogue based on what is most meaningful to stakeholders. Aim for diverse and engaging interactions, understanding local frictions, and fostering a spirit of co-learning to establish strong local ties. Local community leaders or intermediaries should play a very important role. |
Recommendations for the government of Taiwan
Following the discussion from the symposium, it is clear that the net zero transition will bring about social, economic, and cultural changes to Taiwan. We cannot accelerate this development without considering the principles of a Just Transition, highlighted in (Table 2).
Table 2: Principles from COP26 Just Transition Declaration, 2021
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In the Just Transition Declaration 2021 at COP 26, 32 countries committed to the following principles:
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Principle 1 Support workers, communities and regions that are particularly vulnerable to the effects of the move away from carbon-intensive economies. |
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Principle 2 Promote social dialogue and engagement between governments, employers’ and workers’ representatives, and other groups affected by the transition to green economies. |
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Principle 3 Implement economic strategies that support clean energy, foster resource-efficient economic growth, create income and decent jobs, and reduce poverty and inequality. |
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Principle 4 Create decent jobs for people in their local areas, coupled with reskilling and training, and social protection for those in need. |
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Principle 5 Ensure that existing and new supply chains create decent work for all, including the most marginalised, with respect for human rights. |
However, implementing a Just Transition is easier said than done. Currently, Taiwan’s transition faces the fundamental issue that neither the public nor private sectors have been able to adequately measure or articulate the impact of the net zero transition on society and the economy. This lack of clarity hinders NGOs, policy makers and industry representatives from providing stakeholders with concrete assessments of the impacts, making it difficult to quantify the basis for compensation or mitigation measures. More resources for an objective and comprehensive analysis of socioeconomic impacts of the energy transition are needed to better inform the Just Transition.
This raises another question: is it appropriate to initiate social dialogue without first measuring the impacts of the net zero transition policies? If we cannot measure the policy impacts, how can we persuade affected communities to accept unassessed mitigation measures? Although this is a valid question, Taiwan’s Just transition is already underway, and in the face of such uncertainties, initiating social dialogue becomes even more crucial. Only by beginning to circulate information and raising public awareness about the net zero transition can society start to build consensus and evaluate the extent of its impact.
For any dialogue to be effective however, it needs to be targeted and inclusive with clear objectives for follow-up action. The key lies in defining the objective of social dialogue and linking discussion outcomes with relevant resources. Throughout these processes, the Just Transition principles as outlined above can be used as a tool for guidance. Likewise, international examples can be drawn upon and moulded into a Taiwan context in order to increase the effectiveness, inclusivity, and outcomes of discussion.
Currently however, there is a risk of the Just Transition being used as a political tool. If the government merely uses social dialogue as a disguise for policy promotion and pushing through its agenda that does not genuinely engage with and address the needs of stakeholders, it may undermine the goals of the Just Transition and, by extension, of the energy transition itself.
Incorporating Just Transition into ESG strategies
In recent years, the importance of Environmental and Social Governance (ESG) has gained recognition within the business communities internationally and in Taiwan. Although increased awareness of the importance of ESG in business is a very positive trend, its scope must go beyond the “E”, basic environmental indicators, the term is commonly associated with. Applying true ESG strategies not only includes assessment and disclosure of carbon-related information, but also the incorporation of the “S” a clear assessment and mitigation for the socioeconomic impacts of doing business.
As the business community continues to see increased emphasis on ESG, participation and action in the Just Transition movement is becoming more important for businesses who want to mitigate risk and demonstrate their commitment to sustainable practices. This trend has been further accelerated by the European Parliament's adoption of the Corporate Sustainability Due Diligence Directive (CSDDD) on 24 April 2024.
For businesses, Taiwan’s crucial role in the global supply chain comes with the responsibility to proactively adapt to the demands of international business practices and to comply with changing global regulatory requirements. As Taiwanese firms are thus increasingly required to use green energy and demonstrate sustainability, their impact on the efficacy of the energy transition comes to light. Simultaneously, failure to address potential social impacts related to energy use may lead to operational and reputational risks for companies based in Taiwan. For this reason, it is in the best interest of both individual firms and the industry as a whole to commit to participation in the Just Transition.
With labour, supply chains, and the employment market so intricately connected to the Just Transition, companies which proactively embrace the Just Transition can differentiate themselves from competitors and create new opportunities for growth and innovation. Amongst other changes, the increased need for re-skilling and upskilling around the energy transition offers opportunities for companies looking to attract and retain talent. Economic restructuring related to the energy transition will also provide opportunities to firms who engage in the transition proactively and further boost the reputation of those who uphold high standards of sustainability.
Collaborative efforts for sustainable growth
The Just Transition is not solely a concern of governments and non-profit organisations, it must also be included in corporate ESG initiatives. Companies, therefore, need to engage with relevant stakeholders to assess and mitigate socioeconomic impacts. An effective Just Transition cannot be achieved through the will of one entity; it will take collaboration amongst governments, businesses, and civil society to ensure an equitable, sustainable, and prosperous future in Taiwan.
Jason Wang is a Senior Economist for NIRAS, a Danish multi-disciplinary engineering company. He is focused on energy policy, the Just Transition and energy market consultancy in Taiwan.
James McCatherin is a Consultant for Renewables and Sustainability Advisory at NIRAS. He is an expert in stakeholder engagement, permitting and policy within Taiwan's renewable energy industry. He is deeply engaged with the Just Transition and related social issues within the energy transition.
Wen Huang is Director for Renewables and Sustainability Advisory (APAC) at NIRAS. He has abundant experience in engaging Taiwan's renewable energy industry and sustainability sector to support several renewable developers and corporations to accelerate their sustainable transitions.
