Taiwan’s path to net-zero: fiscal and financial strategies for energy transition

This paper examines Taiwan’s recent fiscal and financial policy initiatives aimed at facilitating its transition toward net-zero emissions by 2050, with a focus on green finance, carbon pricing, and the emissions trading system. It synthesizes and critically evaluates major strategic frameworks such as the Five Strategies for Transition to Zero Emissions, the Green Finance Action Plan, the carbon fee scheme, and the voluntary emissions trading system. The paper highlights both achievements and limitations in Taiwan’s climate policy landscape. While substantial progress has been made in establishing foundational instruments, key challenges remain, including persistent reliance on natural gas, shortfalls in renewable energy targets, contested carbon pricing levels, and underdeveloped carbon markets. The analysis suggests that Taiwan’s climate policy is significantly influenced by external economic pressures—particularly the European Union’s Carbon Border Adjustment Mechanism (CBAM)—which shape its motivation to align with global decarbonization standards. This review concludes that achieving Taiwan’s long-term net-zero goals will require more robust investment strategies, technological innovation, and enhanced policy coherence and communication.