Promotion policies for renewable energy and their effects in Taiwan

Taiwan is an interesting case in bioenergy development, and its government has employed several subsidies to promote bioenergy, such as released land compensation and energy crop subsidies; however, how farmers respond to these economic incentives is not clear. The study employs the concept of "Big Data" by incorporating data on the input output of crop production, demand elasticities, international trade and tariffs, processing technologies, commodity prices and energy prices for more than 85% of Taiwanese agricultural and forest commodities. The study first utilizes a mathematical programming model to examine the effectiveness of these policies in terms of bioenergy production and GHG (greenhouse gas) emissions reduction and then applies the dynamic structural equation model to analyze the interactions among important input and output factors, such as social welfare, energy prices, bioenergy production, GHG emissions and CO2 trade prices. The results show that (1) the GHG price is more effective than the coal price in the sense of reducing the ethanol production; (2) the gasoline price has a negative impact on contemporary electricity production while the coal and GHG prices have positive impacts; (3) current ethanol production has a negative influence on current GHG emissions reductions; and (4) the gasoline price, coal price, GHG price and GHG emissions reductions have a significant positive impact on contemporary welfare. (C) 2016 Elsevier Ltd. All rights reserved.