No abstract

The post-Kyoto Protocol era has seen a transition to focus on the development of a renewable energy (RE) market as a primary instrument to reduce greenhouse gas (GHG) emissions worldwide. This paper analyses the development of GHG reduction and RE market in China, Japan, and Taiwan that are geographically proximate but socioeconomically diverse, and each plays a different but significant role in the world’s economy. By deploying a consolidated model incorporating the key components of market drivers underlying the goal of achieving GHG reduction, we threaded through the policy- and market-instruments implemented for each of the case studies over the past 20 years using the model. One commonality is that subsidiary schemes in the form of feed-in tariffs have served as an effective policy tool to boost the growth of renewable energy installations, though the worsening financial burden renders this path unsustainable. Over-reliance on feed-in-tariff schemes may have also impeded the liberation of an energy market pivotal to the success of elevating RE portfolio through trading mechanisms. What followed were the implementations of renewable energy certificate (REC) systems that have experienced various roadblocks leading to failures of the certificate market. By understanding the paths engaged in each of the cases, a conceptualized strategy depicted by the consolidated model is proposed to show the links between a renewable market and a carbon market. The framework would expedite the trading of RECs and carbon credits to accelerate the attainment of GHG emission reduction goals.