Concept of promoting green energy industry

[How to respond to the financial crisis] Take the cooperation of four major Chinese cities to produce energy-saving cars as an example

In the past half century, due to the rapid development of the global economy and the rapid advancement of new technologies, energy and other natural resources have also been used extensively. A large amount of carbon dioxide is emitted when using energy, causing air pollution, destroying the ozone that protects the atmosphere, causing global warming, and facing ecological disaster. If humans do not cooperate with each other to reduce pollution and let the warming situation become increasingly serious, they will face the dilemma of energy shortage (oil may be depleted by the middle of this century) and food crisis (ecological changes).

Therefore, countries around the world are actively promoting "green policies" to encourage renewable energy and improve energy efficiency, with the aim of saving energy, planning alternative energy sources, and reducing carbon dioxide emissions to slow down global warming. Even the United States, which is rich in resources, has realized the urgency of the energy issue. When the new President Obama signed the latest financial crisis bailout plan in mid-February this year, he also mentioned the need to develop green energy technology, which is to save energy and reduce carbon. Target, an enterprise that pays attention to environmental protection. The Taiwanese government and the Chinese government have also begun to pay attention to related issues.

Prepare for a rainy day and develop sustainably

Open economies like Taiwan, Hong Kong, and Singapore, which lack natural resources, rely mostly on imports for energy, and depend on exports for growth, should adopt far-sighted industrial policies to create long-term and dynamic competitiveness amid the financial crisis. . China, on the other hand, has a large population and uneven development between its coastal areas and inland areas. Although it produces some of its own energy, it is still not enough for future development.

It is foreseeable that after the global economic recovery, energy will be the biggest bottleneck for the economic development of non-oil and raw material producing countries in the future, and oil and raw material prices will return to the levels before the financial crisis. Economies in East Asia such as Taiwan, which lack energy, must take precautions, develop green energy industries, and reduce the consumption of major energy sources to maintain the sustainability of development. Among them, the automobile industry is the most important "locomotive" industry, because automobile production is a heavy industry, involving countless parts industries, and consumes the most energy. If energy-saving cars can be developed, the chain effects of energy-saving will be vast and profound.

In the case of Taiwan, in order to attract Taiwanese businessmen to invest back in Taiwan, the government authorities are planning "Economic and Trade Operation Zones" to further enhance economic and trade competitiveness. We intend to take this opportunity to combine green energy industry, economic and trade zones and policies for hiring foreign workers, and propose a long-term economic strategy concept for the "four major Chinese cities" to promote the production of energy-saving and environmentally friendly automobile industries for readers' reference.

The economic power of the four major Chinese cities

Our central idea is to use the four major Chinese metropolitan areas of Taipei (county and city), Singapore, Hong Kong, and Shanghai to play the role of "green locomotives" and cooperate with each other to formulate regulations to introduce gasoline-electric hybrid vehicles within ten to fifteen years. Or the market share of electric vehicles will gradually increase to 90%, and vehicle exhaust emissions will be reduced to 50% of current levels.

The populations of these four cities are 6.46 million, 4.5 million, 6.9 million and 19 million respectively; the per capita income is estimated to be US$18,000 (Taiwan) and US$29,000 respectively. Thousand Dollars, Thirty-nine Thousand Dollars and Nine Thousand Dollars. With policy support, this booming regional economy with a total population of nearly 37 million is expected to generate huge demand, leading to the take-off of the energy-saving and environmentally friendly automobile industry, creating a "win-win" situation and further promoting these four The rapid growth of the local economy and the global movement towards reducing air pollution.

Supporting measures for the production of energy-saving vehicles

We propose the following supporting strategic suggestions:

First, the industrial division of labor in the four regions is as follows:Due to Taiwan's superiority in R&D capabilities and the quality of high-tech workers, we can utilize the research investment from Hsinchu and other science parks and the Industrial Research Institute to use central and southern Taiwan as the main automobile assembly production base, and Shanghai and Xiamen as the main automobile raw material production Bases, Singapore and Hong Kong are global logistics and logistics centers for energy-saving vehicles.

Second, solve the employment problem of native workers and foreign workers.The government can plan Taiwan's production bases as overseas economic and trade zones and approve that for every local worker hired, four foreign workers can be matched. Construction and improvement of living, accommodation, entertainment, medical, church and other facilities for foreign workers in the special zone. Since this is a fairly large special zone, foreign workers should be managed and can travel, rest, sightsee and visit the mainland of Taiwan in groups. The wages of foreign workers should not be linked to local workers and should be determined by market mechanisms. In order to encourage the production of energy-saving cars, the government may initially consider tax exemptions (similar to those used in industry promotion regulations) to reduce production costs.

Third, establish a strategic alliance with the United States as the mainstay and Japan as the supplement.The current global financial crisis has brought the U.S. auto industry to the brink of collapse and disintegration (Toyota's sales exceeded General Motors last year), and it is eager to break through. In fact, the United States is the world leader in terms of intellectual property rights such as technology and patents for gasoline-electric hybrid vehicles or electric vehicles; it just lacks a low-cost production base. In particular, the U.S. auto industry is hijacked by labor unions, resulting in high wages, poor quality, and lack of competitiveness. After the four major Chinese cities promote the energy-saving and environmentally friendly automobile industry, it is expected that the United States and Japan will compete to participate. From a geostrategic perspective, the United States should be given priority, because the more the economies of China, Taiwan, and the United States become an interdependent community of life, the more conducive it will be to world peace and prosperity.

Fourth, formulate a gasoline tax linked to crude oil prices.When crude oil prices are low, more taxes are levied; when crude oil prices are high, little or no taxes are levied. Only when gasoline prices reflect external costs will society not return to oil-hungry consumption due to a short-term drop in oil prices, and then stop the research and development and production of energy-saving and environmentally friendly vehicles. At the same time, the revenue from the gasoline tax can be earmarked to subsidize consumers and producers of energy-saving and environmentally friendly vehicles.

Fifth, establish a carbon rights market.For example, in the case of Taiwan, on the one hand, Taiwan’s carbon dioxide emissions are capped (reduced every five years), and on the other hand, industries with lower-than-average emissions (based on emissions per million yuan of output value, such as energy-saving and environmentally friendly products) Automobiles and other energy-saving equipment industries) can sell carbon rights to other industries with higher than average emissions (such as steel, plastics and other automotive material industries); this will help establish a complete upstream and downstream automobile production chain in Taiwan. In addition, the income from the sale of carbon rights can be used for research and development of energy conservation and environmental protection, and other countries can also follow suit.

Sixth, use consumer coupons to drive demand.In order to encourage consumers to purchase energy-saving cars and other green energy industry products, China, Taiwan, Hong Kong and New Zealand can consider issuing consumer coupons to encourage consumption, following Taiwan's recent practice of issuing consumer coupons to stimulate consumption and boost prosperity. Those who buy energy-saving cars and other manufactured products in the green energy industry (such as solar water heaters, electric bicycles, electric motorcycles, energy-saving lighting, electricity and power supply equipment using hydrogen energy and fuel cells, etc.). 1

Doubts clarified

There are two points that need clarification here.

First point, why only choose the Shanghai metropolitan area in China?The main reason is that China is too big. At present, China is not willing to make large-scale carbon reduction commitments, because China's current accumulated pollution (carbon dioxide emissions) and per capita pollution are far lower than those of advanced countries (even if China It has surpassed Japan to become the second largest polluter in the world, second only to the United States). Secondly, it is easier to reach cooperation agreements city-to-city, and it is easier for leaders on both sides of the Taiwan Strait to accept it. Especially when it comes to economic and trade exchanges with China, Taiwan still has the ideological issue of blue-green confrontation. Third, Singapore’s leadership is visionary and has an excellent service system. As long as China and Taiwan reach an agreement, I believe they are willing to join the underwriting work. Hong Kong follows China's preferential policies, which is also helpful for local environmental protection.

Second point, why are the production lines located in Taiwan?First, it is an incentive measure for Taiwan. Second, China is already considered the world's manufacturing factory, and countries around the world are wary of China's production and quality. Taiwan's production quality is excellent, coupled with its leading position in the high-tech industry, the current "Made in Taiwan" (Made in Taiwan) is actually a sign of excellent quality; in terms of production quality and credibility, Taiwan has become Japan's second. Third, the establishment of a special zone for foreign workers in Taiwan can solve the problem of insufficient resources of skilled assembly workers in Taiwan, and the production cost may also be reduced, which is even lower than production in the mainland.

Cooperative economy, loyal to trust

In fact, from a Christian perspective, we know that all things in the world, natural resources, and all our possessions belong to God.“Behold, the heavens belong to the LORD your God, the heavens above, the earth, and everything that is on the earth.” (Deuteronomy 10:14)We have an obligation to take good care of the earth that belongs to God and the resources and property we use, because we are only God’s stewards.“He has been made to have dominion over the works of his hands, to put everything under his feet: all the cattle and the sheep, and the beasts of the field, and the birds of the air, and the fish of the sea, and everything that passes by the way of the sea.” (Psalm 8:6)

Human beings are responsible to God for managing the earth.“What is required of a steward is that he will be faithful.” (1 Corinthians 4:2)If we do not fulfill our responsibilities well, the earth will warm up at an accelerated pace in the future, and we will spread disaster to our descendants, and we will be unworthy of God’s stewards.“But if you have been unfaithful with unjust money, who will entrust you with true money?” (Luke 16:11)Because God is the true owner of the place we live in, we have an obligation to keep the earth clean and free from pollution and to make good use of its natural resources, including energy.

If Chinese Christian business leaders can be far-sighted, lead the economy to unite and cooperate, and create a world-class energy-saving and environmentally friendly automobile industry, it will not only promote the economic development of the Chinese economy, but also benefit the whole world. I hope that this article can start from Chinese Christians and promote this method of mutual assistance and cooperation to the world.

Note

1. See Zheng Zhiming and Wen Yingqian: "Using Green Energy Industry to Promote Economy" "China Times", February 5, 2009.

Author profile
Zheng Zhiming is currently a visiting professor at the Department of Finance at Yuan Ze University in Taiwan and an honorary professor at National Dong Hwa University. He was the dean of the School of Management and director of the Department of Economics at National Dong Hwa University; and a professor and director of the Department of Economics at the University of Alabama in the United States.

Author profile

Wen Yingqian, honorary professor of Donghua University, former professor and department chair of the Department of Economics at National Donghua University; retired senior economic expert from the World Bank.