Problem: There is no issue more important to life on Earth than how to respond to Climate challenges. We either end the fossil fuel era or the fossil fuel era ends us. There is no global, geo-political security issue more consequential than this. This impacts everything. There is no more time to do nothing. Greenwashing, i.e. paying-to-pollute is not decarbonization which means replacing fossil fuels with zero-carbon energy. Filling out regulatory “check the box” placebo reports without implementing carbon-reducing conduct is not a solution. If you are not actively part of the solution, you are part of the problem. UN Secretary-General Antonio Guterres stated that the world has entered the stage of global boiling.
The world watched as John Kerry stated that US-China climate cooperation is critical and should be protected from any negative consequences of the ongoing US techno-trade war with China. Unfortunately, for all living beings on planet Earth, the US and Chinese governments have no cooperative framework nor any modus vivendi to cooperate on climate challenges. This is bad news for all life on Earth. This is similar to the decades of meetings held by global governments under the UN and other auspices to implement global energy transition by replacing fossil fuels with zero-carbon energy sources (decarbonization).
Fact: Despite decades of discussions, all governments have failed to create any progress because government regulators have failed to create decarbonization and energy transition policies, laws, regulations and systems that are operable, implementable and effective. Instead, regulatory ineptitude and failure has allowed humans to emit more greenhouse gases (“GHG”) and increase the human impact of climate change which is a threat to life on Earth. Once again, the government regulators, banks, institutional investors, insurers and companies of the world have put on display their inability to decarbonize and complete energy transition, they are all contributors to the climate crisis.
June to September 2023 were the 4 hottest consecutive months ever recorded in 120,000 years on planet Earth. Scientists warn temperatures will continue to increase
- Earth Experiencing its Hottest Week in Recorded History
- Greenland’s Glaciers Are Melting 100 Times Faster than Estimated
- Antarctic Sea Ice Failing to Form in Winter
- Plummeting Insect Populations
- A Loss of Two-Thirds of Earth’s Wildlife in the Past 50 Years
- Disappearing Forests
- Soil Becoming Drastically Less Fertile
- Mass Extinctions
- Marine Oxygen Decline
- Depleted Fish Stocks
- Mass Plastic Pollution
Why Is This Happening? Humans burn fossil fuels, emit GHGs and cause environmental degradation in the pursuit of profits. Humans cause the Climate catastrophe. Since Bretton Woods and the end of WW2, the world economic and financial system is set up to “maximize profit” rather than to balance the interests of all stakeholders, even at the cost of destroying the planet’s ecosystem (See Attachment 1: How to Strategically Respond to Climate Change Crisis and Collapse by Applying Rule of Law and Compliance Systems)
Humans defined other interests as “externalities” and that desirable capital deployment meant maximizing profits, even at the expense of other stakeholder interests. Global governments and regulators have continuously failed to implement and enforce whole of government, whole of society systems to deploy capital in ways that mandate more globally responsible sustainable standards, legal frameworks and guardrails that lead to decarbonization and energy transition, re-sets and transforms business as usual mentality, not just maximizing profits. If business as usual mentality continues, without deploying capital to cause energy transition and decarbonization, that means the destruction of life as we know it.
What Is To Be Done?
The (Missed) Opportunity: Taiwan is the 10th largest GHG emitter per capita and it ranks 7th from the bottom according to the 2023 Climate Change Performance Index (“CCPI”) which ranks territories based on their climate performance. This makes Taiwan a climate laggard/recidivist. Taiwan is not part of the UN system, the Paris Agreement (COP21) nor most international agreements and conventions. Taiwan has been excluded from participating in all the COP gatherings. Taiwan’s government has made many zero-carbon pledges but these are not actionable and the pledges have not been achieved after the (greenwashing) media event. (See Attachment 2: Are all of Taiwan’s Climate Pledges Real and in Compliance with UN Standards or are they Complete Greenwashing Failures? Visuals, Timeline and Summary)
The (Ironic) Opportunity: In the climate space, where the interests of all living beings converge, the UN’s Deputy Secretary General, Amina Mohammed has stated:
|“We said leave no one behind, and I think member states have to find a way to make sure that we are not in that position where we’re excluding people. Every person matters whether it’s Taiwan or otherwise”.
Then Taiwan’s Foreign Minister, Joseph Wu responded by saying “I think there is growing attention from the international community that there has to be peace between Taiwan and China and the best forum to discuss this issue will be the United Nations. So, keeping Taiwan out of the United Nations is immoral, is unjust and is something that we have to make change to”. Unfortunately, Minister Wu failed to respond to the issue of inclusion in the climate process. The intent of the Deputy Secretary General was focused on Taiwan’s inclusion in climate matters only. Naturally, this situation would be different if Taiwan was an ecological model jurisdiction instead of an ecological laggard.
The EU has been a leader in the global climate initiatives. China has made good progress on decarbonization and energy transition. Global NGOs continue their efforts but have largely followed China and erased Taiwan. While the US is seeking to cooperate with China on environmental matters, the irony is that there is an opportunity for Taiwan and the US to cooperate, especially if the Taiwan government became an ecological model jurisdiction. What would it take for the Taiwan government to seize the opportunity to transform itself into a model jurisdiction and what kinds of benefits would inure to itself, its public-private partners and the world community?
“Weak regulatory frameworks and inadequate enforcement are allowing unsustainable practices to flourish. Governments need to step up and create a level playing field that incentivizes green businesses and penalizes polluters.”
– . Achim Steiner, Administrator, UNDP
In reality the Taiwan government and regulators could seize the opportunity and take the initiative, and transform Taiwan into a first-mover jurisdiction, a worldwide catalyst, and a global model jurisdiction.
- The Taiwan government can transform itself from an environmental laggard/pariah into a first-mover jurisdiction, that others wish to partner with, then Taiwan can become a global catalyst for implementing concrete climate solutions by doing the following
- (i) Cause the re-deployment of capital (lending and investment) to cause decarbonization and energy transition
- (ii) Implement a comprehensive whole-of-government, whole-of-society transformation of mentality from maximizing profits to balancing all stakeholder interests
- (iii) Use Dharma Codex to design, plan and implement global/local regulatory compliance best practice standards to monitor, measure and report on sustainability criteria to cause decarbonization and energy transition (See Attachment 3: Dharma Codex Introduction).
- (iv) Use Dharma Codex to design, plan and implement global/local regulatory compliance best practice systems to monitor, measure and report on sustainability criteria to cause decarbonization and energy transition
- (v) Implement comprehensive climate sustainability and resiliency training for all regulators (FSC, Banking Bureau, Insurance Bureau, Securities Bureau, Taiwan Stock Exchange/Taipei Exchange) and regulated entities (banks/lenders, insurers/insured, institutional investors/invested companies and supply chain companies)
- (vi) Use Dharma Codex to develop and implement strategic plans for success for regulators and regulated entities over 1-3-5 years
- (vii) Coordinate an ecosystem of subject matter experts to support regulators and regulated entities to improve sustainability compliance over time
- (viii) Use Dharma Codex to drive and develop decarbonization and energy transition projects and solutions for regulators and regulated entities
- (ix) Change laws to transform Taiwan from a pariah to a model jurisdiction everyone wants to partner with
Become the first jurisdiction to enforce operable, implementable and most effective global sustainable standards, legal frameworks and guardrails to properly monitor, measure, and report on comprehensive sustainability criteria (with incentives and penalties to enforce changed behavior) that drive decarbonization and energy transition. Taiwan can accomplish the above and become the model for a global trend, many public-private partnerships can then happen at the government, education, sustainable entrepreneurship, technology, NGOs and investor levels and Taiwan can become a model for other jurisdictions to copy in the Climate Solutions space.
Taiwan can then seize the opportunity to become a global environmental leader for others to follow, rather than being an ecological pariah. Life on earth needs this process to happen. Then a global public-private partnership can begin to implement decarbonization and energy transition solutions and begin the Solutions implementation process. Life on earth needs this process to happen.
Protecting the Global Supply Chains: Taiwan is a hub of supply chains for itself/US/Global ecosystems. The stability, sustainability and resilience of this supply chain is priceless to Taiwan/US/global. The biggest threat to the stability, sustainability and resilience of this supply chain is not war but the current failure by Taiwan’s government to decarbonize and deliver energy transition which will cause the mass migration of supply chains out of Taiwan to China and elsewhere.
Taiwan is a major global exporter with huge economic turnover. Almost every Taiwan enterprise is part of one or more supply chains. Few enterprises are stand-alone; they are all globally connected and interdependent. Many tens of thousands (or more) of Taiwan enterprises are part of the world’s major global supply chains (i.e., Apple, Amazon, Meta, Microsoft) in consumer electronics, technology and industry. Therefore, they all are already using portions of the Dharma Codex. (See Attachment 4: Major Global Supply Chains in Taiwan).
Taiwan’s supply chains expanded globally over the previous three decades and are now operating everywhere. This globalization process is continuing. As a result, to stay globally competitive, Taiwan enterprises/supply chains have already adopted global best practices and global compliance to meet many/every diverse national, regional and market regulatory sustainability compliance systems to:
- Maintain compliance and competitiveness to continue to integrate with the global supply chains, which are increasingly strict in enforcing supply chain, ESG/Equator Principles/IFC Performance Standards and other sustainability criteria.
- Successfully compete for bank financing by adopting best international banking practices from many markets to continue to qualify for evolving international bank financing requirements such as the Equator Principles and IFC Performance Standards
- To successfully compete for investors and cooperators in the world market, adopt best practices and implement actual effective operational improvements across the full spectrum of sustainability criteria; much more than on-paper “check the box” reporting.
- Position their businesses to meet and dominate every potential market challenge (including Climate change) that they will certainly face in the future, by adopting best practices and implementing Dharma Codex solutions.
- Be ready in the real world and not be restricted by the de minimis mindset and limited imagination and experience of bureaucrats and regulators, who have failed to keep pace with and anticipate the scope and pace of waves of changes that threaten life as we know it. The five waves include (i) Inflation, (ii) geo-political generated stress, (iii) COVID-19 and future global pandemics, (iv) supply chain disruption and (v) Climate change. (See Attachment 5: How Will Enterprises and Supply Chains Face the 5 Waves?)
- Position the business to survive and compete successfully at the champion level. It is different than being complacent and settling to meet the minimum standards. Companies need to prepare for the challenges of the 6th mass extinction also known the Holocene or Anthropocene extinction.
Regulators Must Catch the Global Market Trend and Drive Resiliency: These realities are what Taiwan’s most competitive enterprises and supply chains are already doing internationally. Virtually all of Taiwan’s exporting enterprises/supply chains will increasingly need to expand internationally in the future due to Taiwan’s failure to secure enough zero-carbon energy sources; thus most of Taiwan’s public companies need to prepare to meet diverse global/regional compliance standards to position to maintain/achieve global sustainability and resiliency. Taiwan regulators need to support, nurture and encourage Taiwan enterprises to develop SOPs and more globally compliant standards to help Taiwan’s enterprises/supply chains prepare to adopt globally compliant SOPs and best practices. It is critically important that the regulators help Taiwan’s enterprises become global leaders by building world-class compliant and competitive standards and systems rather than shelter or coddle them as “infant” industries. Regulators must ensure that Taiwan companies will all be future leaders rather than being complacent and laggards in the face of the looming challenges they will certainly face. Trying to “shelter” and “protect” them from hardships is condemning them to lose the competition for their future.
Regulators Must Stop Handicapping Businesses: Taiwan regulators have the opportunity to transform Taiwan into the leading global standard that the US, Europe and everyone else will wants to partner with, not just in semiconductors, but across all sectors. The US and other leading economies should want to team with Taiwan in sustainability and resiliency, rather than China if Taiwan can transform from doing the de minimis to Taiwan actually achieving best practices.
Osman Hamdi’s painting of an anachronistic historical character attempting to train tortoises is usually interpreted as a satire on the slow and ineffective attempts at reforming the Ottoman Empire. (Taiwan is currently not on the path to actually lowering overall GHG emissions)
Currently, given the de minimis regulatory regime, many Taiwanese companies and supply chains will be doomed to be victims or laggards with poor sustainability and resiliency prospects in the future. Just illustrating with some reasons below:
- Currently, Taiwan’s regulatory regime only measures 29 sustainability criteria, far below the 640 sustainability criteria in the Dharma Codex;
- Currently, Taiwan’s regulatory regime follows a “check-the-box” reporting compliance system; there are no incentives or penalties for meeting/missing any requirements;
- Companies abide by de-minimis standards which have no incentives for achievements and no penalties for failing to meet milestones.
- Currently, Taiwan’s regulatory regime only requires 6 hours of annual sustainability training for directors, hardly enough to even learn the most superficial topic names, let alone enough to achieve substantive expertise needed to make reasonable sustainability judgments. The directors as a target audience does not include all those responsible for an enterprise’s sustainability and resilience.
- Greenwashing and pay-to-pollute schemes that do not lead to decarbonization or to energy transition are widely used without accountability or penalty.
- Taiwan companies are vulnerable to being expelled/dismissed from global supply chains that continue to evolve and which are adopting the highest environmental standards, i.e. zero-carbon requirements and penalties
- The Taiwan government has failed to supply zero-carbon energy above the 20% level to its enterprises/market. This will eventually negatively impact their ability to export to zero-carbon markets such as the EU, the US and China. This is driving increased outbound company relocations/migrations where companies are compelled to achieve higher compliance standards. Taiwan is failing as a sustainable green manufacturing jurisdiction and local companies/supply chains have begun to accelerate migration/relocation. The last 5 years (2018-2022) have seen a 15% increase in outbound investment compared to 2013-2017.
|“Governments have a responsibility to protect their citizens from the harms of climate change. This includes taking urgent action to reduce greenhouse gas emissions and adopt policies that promote climate justice.”
– Amnesty International
Regulators in Taiwan have a responsibility to implement policies designed to be operable, implementable and effective that support the long-term resilience, sustainability and survivability of its enterprises and supply chains. This is not a theoretical desk-top responsibility. Regulators need to mandate the measuring, monitoring and reporting of global sustainability criteria and include real regulatory incentives for compliance and tough penalties for those who do not comply.
Ironically, there is a huge opportunity for Taiwan regulators to transform from a marginal laggard jurisdiction into the first successful financial ecosystem that re-deploys capital to address environmental challenges arising from human ignorance, decarbonization and energy transition.
|“Climate change is a major risk to the global economy. Governments must take action to reduce emissions and build resilience to the impacts of climate change.”
– Kristalina Georgieva, IMF Managing Director
If Taiwan’s regulators tragically miss the chance to seize this opportunity, then they fail to:
- Transform Taiwan from an ecological pariah into an ecological model leading the world on the pathway to meet the challenges of climate change.
- Taiwan would miss the chance to become the first jurisdiction to take steps to walk humanity back from the brink.
- Transform Taiwan into the world’s first jurisdiction to undertake a program to become the global catalyst and model to successfully decarbonize and complete energy transition using the comprehensive Dharma Codex.
- Seize the chance for the US and Taiwan to team to address the greatest global challenge arising from human ignorance, decarbonization and energy transition.
- Transform Taiwan into a global model for other jurisdictions to follow to decarbonize and complete the energy transition
It is reasonably achievable for the regulator to cause this transformation to create the right market conditions. Then Taiwan can close the decarbonization and energy transition gap by attracting and retaining international and domestic investors, corporate, strategic, financial, technology partners and institutional investors. Taiwan would have many public-private partnership opportunities with environmental institutions such as NGOs universities, think tanks and others which could be matched to its highly developed investment and technology communities.
Taiwan could then obtain these concrete benefits:
- Successfully compete for international and domestic energy technology solution providers,
- Successfully compete for international institutional ESG investors and investment dollars.
- Meet the challenges of climate change to make enterprises and supply chains more resilient and ensure that they are increasingly “green” over a period of time to keep the funding and investment flowing.
Currently, the world is witnessing a departure from Taiwan of wind power investors as well as development partners. This is a bad harbinger as Taiwan regulators must be smarter to successfully compete to attract development investors as well as technology partners.
Taiwan and the US can coordinate to use Taiwan as a basis to roll out carbon-neutral solutions in other jurisdictions. By implementing the Dharma Codex to decarbonize and accomplish energy transition (replace fossil fuel with zero-carbon energy), Taiwan transforms itself into a highly attractive investment and lending market, thus attracting more international equity and debt investment. This drives investment, development, job creation, innovation and tax revenues, which is good for Taiwan and its capital markets.
Ironically, Taiwan can become the ideal climate partner for the US and begin a process to change the global business-as-usual approach and the global momentum and trajectory on climate change.