Assessing Taiwan’s energy security under climate change

This paper intends to assess Taiwan’s energy security situation under current and future development of global environment. We construct a static computable general equilibrium model for Taiwan to fulfill our purpose. The model is benchmarked in 2006 and includes detailed specification of power generation technology and renewable energy producing sectors. It also distinguishes sources of imported energy to reflect Taiwan’s current policy of diversifying sources of supply for energy. Simulations using the model have been focused on both changes in energy price and quantity of energy supply under specific specifications of the development of renewable energy technologies and CO2 emission reduction requirements. Our simulation results demonstrate that energy security and climate change mitigation interact each other, and under a specific emission reduction target, the effect of exogenous energy shocks on the economy will be partially absorbed by the internal adjustment mechanism of the economy.