Taiwan
In terms of international sustainability efforts, Taiwan is in a unique position because it isn’t an official member of the UN. Therefore, it can’t directly participate in the UN SDGs. Despite this, Taiwan has developed 18 sustainable development goals, 17 comparable to the UN SDGs, with an additional goal to phase out nuclear power by 2025 (Oung, 2021). In 2019, the measurable indicators of these 18 goals grew to 336.
In 2021, the Environmental Protection Administration, ROC (EPA), published its first SDG audit, which determined the efficacy of sustainable policy from 2016-2019. Taiwan had achieved its goals for 75% of the 336 indicators. Improvement was recorded in gender equality, measured by a rising number of female police officers, environmental protection, seen through higher water quality, and sustainable cities, determined by a reduction in PM 2.5 (EPA, 2021).
Taiwan has taken a strong stand on increasing the TCFD-aligned disclosure of climate-related risk information. In the Corporate Governance 3.0-Sustainable Development Roadmap of 2020, the Financial Supervisory Commission will require certain companies to file disclosure reports. This is due to the fact that “Investors worldwide and industrial supply chains are paying more attention to ESG issues” (2020, FSB). Therefore, publicly listed companies with paid-in capital of over NT$2 billion must start disclosing climate-related risk information in 2023.
These companies will join Taiwanese semiconductor leader, TSMC, who has been voluntarily filing TCFD reports since 2018. According to TSMC, these reports will help improve the company’s image in the long term by showing commitment to sustainability issues. For instance, in a 2020 report, TSMC disclosed that greenhouse gas emissions reduced by 68% per unit product from 2010 to 2020 (TSMC, n.d.). In 2023, once TCFD reports become compulsory in Taiwan, international investors will have more confidence that other Taiwanese companies will also be able to adapt to future climate-related regulatory pressure.
Part of this pressure comes from the EU CBAM. Starting in 2021, Taiwan has been taking preliminary steps to adapt by helping businesses determine how the EU CBAM calculates carbon emissions. If importers can’t provide this information, the EU will automatically determine appropriate levies. The pressure for manufacturers to adapt might further increase because other countries, such as Japan and the US, have mentioned they might impose their own CBAM as well (EPA, 2021).
Currently, Taiwan’s main climate legislation, the Greenhouse Gas Reduction and Management Act (GGRMA), doesn’t include carbon levies and only plans to reduce emissions to half of 2005 levels by 2050. However, on March 21, 2022, President Tsai Ing-wen announced Taiwan would officially join the effort to achieve net zero emissions by 2050 (MOFA, 2022).
Taiwan plans to start achieving net zero through amending the GGRMA to include domestic carbon levies. The Executive Yuan amended the GGRMA in April 2022. If the Legislative Yuan approves and passes amendments, the GGRMA will be renamed the Climate Change Response Act, and emitters of over 25,000 tons of carbon per year will have to pay levies starting in 2024 or 2025 (Hsin-fang, 2022).
This is one part of the National Development Council’s Pathway to Net-Zero Emissions in 2050. The plan aims to leverage Taiwan’s high-tech sector, develop renewable energy sources, and promote electric vehicles (OP, 2022).
Malaysia
Malaysia is aligned with many international sustainability efforts. In a September 2021 address to Parliament, former Prime Minister Ismail Sabri Yaakob said that Malaysia would be carbon neutral by 2050. Due to technical reasons and costs, initial emissions reductions will probably entail a mix of domestic carbon pricing and tax measures (CNA, 2021).
Mandatory TCFD- aligned disclosures will further help provide information to determine fair carbon pricing. Starting from 2024, the government will start requiring climate-related disclosures from all financial institutions. This will also inform stakeholders on how climate risk affects financial decisions and spur further positive action on climate change (BT, 2021).
Despite the positive long-term impacts of TCFD disclosures, Malaysia might have to quickly adapt to a stricter regulatory environment due to the EU’s CBAM, which will impact Malaysia’s exports. In 2019, Malaysia exported US$1 billion of CBAM affected goods to the EU (DW, n.d).
Therefore, the UN Global Compact Network Malaysia and Brunei Executive Director Faroze Nadar suggested that Malaysia adopt a 3-pronged approach to respond to the EU’s CBAM. This includes improving resource efficiency, getting third party evaluations of large companies based on the Paris Accord, and instituting a voluntary domestic carbon trading system (Safri, 2021). This could preemptively lower carbon emissions in the manufacturing sector before the EU CBAM gets instituted.
Despite the potential costs of adjusting, the Ambassador of France to Malaysia, Roland Galharague, also has encouraged the Malaysian government to see the potential benefit of the EU CBAM. According to Galharague, fewer domestic and foreign firms with the intention of exporting to the EU will produce carbon intense products in Malaysia (Galharague, 2022).
Adopting stricter climate regulations will also assist Malaysia achieve further progress towards the UN SDGs. In its latest self-audit, using information from over 30 ministries and agencies, Malaysia had positive results on 34% of the UN SDG indicators (TS, 2021). In addition, the 2021 Sustainable Development Review also noticed steady progress by stating that Malaysia had filed two voluntary reviews, declared a high-level endorsement and mentioned SDGs in a national budget (SDR, n.d.).
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Thailand
Thailand submitted its second Voluntary National Review (VNR) last year. This largescale project tracked national progress towards all 17 UN SDGs. The 2021 VNR required input and data from the National Statistical Office as well as a wide variety of government ministries. Through this VNR, Thailand was able to ascertain the effectiveness of localizing UN SDG implementation (UN, n.d.).
Part of Thailand’s success was due to implementing the Thailand SDG Roadmap. This policy established the National Committee for Sustainable Development (NCSD), which focuses on six key areas; policy integration, enabling mechanisms, partnerships, pilot projects, monitoring and evaluation and awareness-raising (DIO, 2021).
The 2021 VNR stressed that Thailand has made strides in cross-sector sustainability through imbuing national policy with elements of the UN SDGs. For instance, policy makers had the UN SDGs in mind when drafting the Sufficiency Economy Model, the latest 20-Year National Strategy, and the 5-year National Economic Plan (DIO, 2021).
Thailand will further encourage sustainable development through TCFD disclosures. On November 17, 2021, the Stock Exchange of Thailand (SET) announced its public support for the TCFD. According to the SET, TCFD encourages environmentally friendly investments and sustainability in listed companies. Therefore, the SET has organized workshops to spread awareness on the benefits of disclosure towards making ethical loans. In addition, the SET gave local companies a chance to better understand TCFD best practices by translating the TCFD Good Practice Handbook (SET, 2021). The SET declaration of support is a positive first step, which may eventually lead to further comprehensive mandates on disclosing climate-related information.
Thailand has also voiced its support for reducing emissions at the 2021 UN Climate Change Conference. Prime Minister Prayut Chan-o-cha stated that Thailand aims to be carbon neutral by 2050 and net-zero by 2065. The Thailand National Energy Plan is driving domestic climate change policy, which stresses the use of electric vehicles and alternative energy sources (BakerMcKenzie, 2022). Despite this, some are concerned that without strict climate-related regulations, it will be difficult to curb Thailand’s current amount of greenhouse gas emissions (Thanaboonchai, 2021). As of now, the Thai government has yet to legislate any carbon pricing schemes or levies.
In this vein, some experts think the EU CBAM will encourage Thailand to adopt carbon pricing. However, the current lack of a carbon trading system will make the technical elements of CBAM difficult for Thai producers. For instance, the way the EU collects emission information is more stringent than Thailand. There might be some resistance to the EU CBAM because Thailand currently lacks the technical knowhow associated with a domestic carbon pricing scheme (KAS, 2021).
Despite this, according to a 2021 Konrad Adenauer Stiftung perceptual assessment determined that the EU CBAM wouldn’t severely impact Thailand. Most of its high-carbon goods are used and consumed domestically. However, Thailand might have to enact its own CBAM if market pressures make it advantageous to purchase carbon-heavy products, such as steel from China (KAS, 2021).
Australia
Singapore is renowned for its effective and comprehensive healthcare system. However, according to Professor Patrick Tan Executive Director of PRECISE, due to an Australia submitted its first VNR in 2018. The VNR reflected the unique approach Australia has taken in implementing the UN SDGs due to geographic, demographic, and political factors. According to Australia’s 2018 report, the country had experienced 26 continuous years of economic growth, but “Aboriginal and Torres Strait Islander peoples, those from culturally or linguistically-diverse backgrounds, women and girls, lesbian, gay, bisexual, transgender, and intersex (LGBTI) persons, youth, the elderly, people with disability and those living in remote and rural locations…remain at risk of being left behind” (AG, 2018).
Therefore, Australia decided to focus on fostering equality through location-specific policies. Instead of a top-down approach, the national government has enacted a framework that encourages local institutions to “monitor progress and promote engagement through existing committees and representative organizations” (AG, 2018). Through such an approach, the UN SDGs can permeate to every level of society and tap into Australia’s vibrant tradition of volunteering, which has “an estimated annual economic and social contribution of $290 billion (AG, 2018). Looking forward, Australia aims to motivate individuals to contribute their time and energy towards improving the welfare of the country’s most vulnerable groups.
Likewise, many large companies voluntarily have started to compile climate-related financial disclosures despite not having any legal reason to do so. In 2020, 80 ASX 100 companies disclosed information on climate-related financial risks, which was up from 21 in 2016 (Symons, 2021). According to legal experts, businesses have provided disclosures to protect themselves from litigation regarding “greenwashing,” which is a term for understating a business’s impact on the environment (Symons, 2021). If a company has misrepresented their environmental impact or vulnerability to climate change, insurers or investors may sue due to unforeseen climate-related losses.
Australia has become even more focused on the issue due to the recent COP27 climate conference in Egypt. According to EY’s APAC leader Terence Jeyaretnam, “There’s funding put aside for [Australia] adopting international standards.” Other countries, such as New Zealand, are making large public companies, insurers, and banks include disclosures in their 2023 financial reports (Wood, 2022). Australia’s TCFD parameters would most likely be similar if the country were to conform to such international norms.
Despite a large consensus on TCFDs, carbon taxes in Australia have been a highly contentious political issue over the past decade. From 2012 to 2014, Australia briefly experimented with a carbon tax under the Clean Energy Act, which was repealed after a change in governance (Dayton, 2014). Since then, Australia hasn’t had a comprehensive national-level carbon tax or levy scheme. In 2018, the OECD ranked Australia 36th of 44 countries in terms of Carbon Price Score.
At the time, Australia only priced 19% of “all energy related carbon emissions at a certain benchmark.” For comparison’s sake, the top country, Switzerland, had a carbon pricing score of 69% (OECD, 2021). Australia only enacts fuel levies, but nothing in the way of an explicit carbon price (OECD, 2022). The OECD concluded to lower emissions, countries such as Australia should directly price emissions from the “road sector…fossil fuel use in the residential and commercial sector…[and] electricity generation.” (OECD, 2021).
Regardless of Australia’s lack of carbon levies, last year the country pledged to reach net-zero emissions by 2050 through “technology not taxes” (Taylor, 2021). Instead of focusing on curbing emissions through regulation, Australia plans to invest heavily in emerging green energy technology. Australia’s Long Term Emissions Reduction Plan (the Plan) aims to “unlock” AUD$80 billion in public and private investment for improvements in areas such as solar, bioenergy, hydrogen, green infrastructure, waste management, and agriculture (AG, n.d.) As of now the Plan is still in effect, but a regime change in May 2022 could result in climate-related policy changes.
References
- Taiwan
2. Malaysia
3. Thailand
4. Australia