ABSTRACT
This paper examines the role of Public-Private Partnerships (PPPs) in achieving net-zero emissions. It explores how PPPs integrate both the public and private sectors to accelerate the transition to a net-zero emissions society. The analysis delves into the potential benefits of PPPs, such as increased financial resources, risk sharing, and innovative solutions. It also highlights the challenges and risks associated with PPPs. This paper also explores several cases in Taiwan fostering PPPs in achieving the enhancement of natural carbon sinks. This paper also proposes practical recommendations for policymakers, such as establishing comprehensive policy frameworks in promoting incentives and transparency for PPPs proposals.
Keywords: public-private-partnership, net-zero emissions, climate change mitigation, natural carbon sinks, natural-based solutions.
INTRODUCTION
With the net-zero emission goal emerging as an urgent global priority that drives industrial and societal transitions, effective climate change mitigation demands innovative, and concerted efforts from the governments, businesses, and civil society. Public-private partnerships (PPPs) present a promising approach harnessing the strengths of both the public and private sectors to implement impactful climate change mitigation strategies. This paper examines the role of PPPs in climate change mitigation and highlights the key factors that contribute to their success. Drawing on Taiwan’s experience in developing PPPs to advance nature-based climate solutions, this study discusses key characteristics and offers practical insights for policymakers aiming to adopt PPP frameworks to achieve net-zero emission goals.
The role of PPPs in climate change mitigation
PPPs are collaborative institutional frameworks that bring together public and private sectors' expertise, resources, and influence to address public challenges, including climate change. In the context of achieving net-zero emission goals, for instance, PPPs can play a crucial role in providing innovative and effective ways rather than being conducted by government or private actors alone. (Susanne Foerster & Jenny Chao, 2021) PPPs offer unique advantages that government or private efforts alone might lack. By analyzing PPPs’ practical applications, this paper identifies essential characteristics that make them effective tools in climate change mitigation.
- Establishing a sustainable financing mechanism
The most challenging factor for implementing successful climate change mitigation measures is seeking sustainable and appropriate financial resources. Climate change mitigation projects often require significant financial support. (Torsten Ehlers et al., 2022) While governments alone may lack sufficient resources, PPPs can offer a financial mechanism that attracts private investment by sharing risks and rewards, thus reducing the financial burden on governments. This especially benefits emerging economies, where limited resources can impede effective climate action. PPPs can establish a sustainable funding base for long-term climate initiatives by creating incentives and ensuring transparency (Ann Gardiner et al., 2016).
- Innovation and efficiency
The inclusion of private-sector funding often brings innovative solutions to climate mitigation policies that purely government-driven initiatives may lack. Government-funded projects frequently encounter regulatory or financial constraints, limiting flexibility and the ability to adapt to evolving challenges. PPPs can develop innovative approaches to climate change mitigation because private funding projects may overcome public regulatory challenges and improve the efficiency of public services. Some innovative financial mechanisms or new technology applications could be established through PPPs due to more flexibility in terms of private expertise input and fewer regulatory constraints. Moreover, PPPs can foster collaboration between public and private actors, leading to the development of more efficient and effective solutions (Lucia Xiaoyan Liu et al., 2023).
- Risk allocation
Implementing climate change measures can involve substantial financial and technological risks, including the potential impacts of low-carbon innovations such as carbon capture, utilization, and storage (CCUS) and renewable energy development. Climate change mitigation projects may result in large-scale financial risks or technological risks to human health or the ecosystem. PPPs can help to manage the risks associated with climate change mitigation projects by distributing risks between the public and private sectors. The balanced risk-sharing approach within PPPs can prevent delays in achieving net-zero targets due to financial or risk management challenges, enhancing the resilience of climate initiatives (Carter B. Casady et al., 2024).
Taiwan's experience with PPPs in climate change mitigation
Taiwan has a long history of using PPPs to deliver public services, such as in the areas of infrastructure-building, public transportation, and healthcare services (Pauline Wang & Yung-Ching Huang, 2020). In recent years, the Taiwan government has started the use of PPPs in climate change mitigation, employing various models tailored to its unique needs and challenges.
- Regulatory incentive-centric model
One approach that Taiwan has successfully implemented is the regulatory incentive-centric model, in which the government provides legal and financial incentives for private actors to invest in climate change mitigation projects. A typical example of this incentive-centric type is the development of renewable energy projects. Taiwan’s government has introduced various regulatory incentives to encourage private sector investment in renewable energy development. For instance, the Renewable Energy Development Act ensures that electricity generated by private renewable energy enterprises is purchased at a fixed rate, fostering investments in solar and wind energy. Moreover, the government allows renewable energy investors to obtain renewable energy certificates (RECs) as tradable assets. These policies have led to a surge in the development of solar and wind power projects, many of which are implemented through PPPs. This model has also spurred private sector engagement in energy efficiency projects, supporting the government’s goals for sustainable energy usage across buildings, transportation, and industry. PPPs have been used to finance and implement energy efficiency projects in buildings, transportation, and industry (Jessie Cai, 2023).
- Natural-Based Solutions (NBS) as a PPP model
Nature-based solutions (NBS) are strategies involving the protection, restoration, and sustainable management of ecosystems, such as forests, wetlands, and soils to enhance their capacity to absorb carbon dioxide from the atmosphere. NBS encompasses methods like reforestation and soil management that help capture CO₂ while enhancing biodiversity and ecological resilience. They offer a holistic approach to climate action, integrating ecological, social, and economic benefits while supporting sustainable development and adaptation to climate risks (Adele Beardmore, 2023).
While Taiwan is not a signatory to the Paris Agreement due to its unique geopolitical status, it remains committed to global climate goals. The government has launched various carbon offset initiatives to curb emissions and contribute to international efforts to combat climate change. NBS has become a crucial element of Taiwan's National Net-zero Emission Roadmap Strategies for achieving a net-zero emission goal by 2050 (National Development Council, 2050 Net-Zero Emissions). The Climate Change Responsive Act has empowered the Ministry of Agriculture to enhance Natural Carbon Sink as a key strategy to achieve net-zero emission goals under its authority (Ministry of Agriculture). The Forestry and Natural Conservation Agency under the Ministry of Agriculture promotes three major strategies for enhancing forest carbon sinks: "increasing forest area", "strengthening forest management" and "enhancing the use of domestically produced timber." By enlarging forest areas, the afforestation and reforestation projects not only help absorb CO₂ but also enhance biodiversity by creating habitats for native species. In addition to natural forest areas in mountainous areas, there are limited public and private lands, especially in plain areas for tree planting in Taiwan. The Forestry and Natural Conservation Agency promotes policies that transform abandoned or degraded lands into forest areas. These policies rely on PPPs to coordinate legal, financial, and technical resources, encouraging private landowners to participate in NBS projects (Wan-Yu Liu, 2024).
Thus, PPPs could provide flexibility in the context of legal and financial mechanisms in coordinating or integrating public and private resources to develop NBS projects aimed at natural carbon sink enhancement. The Taiwan government encourages the private sector’s active engagement in NBS carbon offset projects by providing incentives, subsidies, and technical support. The Taiwan Forestry and Natural Conservation Agency promotes PPPs to implement NBS projects by encouraging private landowners and corporations to participate in various afforestation activities. Taiwan’s first registered carbon offset project, initiated by the Fourth River Branch of the Water Resources Agency namely "Tree Planting at the Green Beautification Site of Dongpu Ganxi Village," demonstrates this approach. The project involves tree planting along Dongpu Ganxi Creek, originally intended for green beautification, and has attracted private sector interest, leading to the registration of carbon credits. The newly planted seedlings of the project have been provided by the Forestry and Nature Conservation Agency free of charge and supported by voluntary workers from local communities.
In addition to tree planting on green beautification sites, the Department of Rural Development and Soil and Water Conservation under the Ministry of Agriculture also provides subsidies for landowners of landslide-prone slope lands to improve the environmental resilience of such areas. The landslide-prone slope landowners receiving subsidies shall provide lands for companies or NGOs to participate in or invest in such afforestation projects. BenQ Cultural and Educational Foundation participating in the project has adopted 0.6 hectares of land and planted more than 900 trees. BenQ could reduce its carbon footprint as a symbolic ESG achievement through this PPP platform. The carbon credit accredited from this afforestation project was reviewed and approved by the Ministry of Environment on July 12, 2024. This case has successfully applied for registration under the Ministry of Environment’s approved methodology of the "Afforestation and Reforestation" carbon sequestration project. This successful carbon credit registration case creates a precedent for promoting multi-functional purposes because of implementing NBS projects serving both carbon sequestration and biodiversity conservation purposes. The Dongpu Ganxi Village afforestation project is expected to encourage more private stakeholders to actively participate in domestic NBS projects (CommonWealth Magazine, 2024).
Another notable case was initiated by the National Property Administration of the Ministry of Finance. The National Property Administration has designated state-owned lands for PPP-driven afforestation, targeting carbon sequestration and recreational use. These projects have attracted private companies through competitive bidding, with contracts requiring participants to implement an afforestation plan and register for carbon credits within the contractual time frame. Companies winning the bid shall pay for the rent for up to 30 years and apply for carbon credits and the National Property Administration could receive 10% of successfully registered carbon credits. In one instance, Senwei Energy won the bid and signed the contract with the National Property Administration. Under the contract, Senwei Energy acquired 71.98 hectares of state-owned land that once used to be mining sites in Chishang Township, Taitung County. The afforestation will be jointly implemented with its subsidiary Yuanshan Forest Company and collaborate with the Forestry Department of National Chung-Hsing University. These initiatives show how PPPs in Taiwan foster private-sector investment in natural carbon sink projects, leveraging government incentives to advance climate goals (Min-Qian Zhuang, 2024)
- Establishment of a PPP matching platform
Despite the great potential for implementation of NBS projects through PPPs, the lack of information has limited private participation in NBS projects under the PPP. The Forestry and Natural Conservation Agency thus established the "Natural Carbon Sequestration and Biodiversity Project Matching Platform" (referred to as the ESG Project Matching Platform). This platform connects corporate entities seeking to fulfill environmental, social, and governance (ESG) obligations with government-led NBS initiatives. By bridging information gaps, this platform strengthens the potential for PPPs to support climate resilience and biodiversity conservation (Weichingma, 2024).
CHALLENGES AND OPPORTUNITIES
While Taiwan has made strides in using PPPs for climate action, several challenges persist. First, attracting sufficient private investments remains difficult due to perceived risks and uncertainties associated with long-term climate mitigation projects. For instance, the increased risk of wildfires from extreme weather events poses a threat to afforestation and forest management projects. Second, regulatory barriers can hinder PPP development. Although Taiwan has a supportive regulatory environment, including the Climate Change Responsive Act, certain areas require clarification. There may be areas where the rules and regulations need to be clarified or streamlined such as complexity and strict screening standards as adopted in the carbon registration process managed by the Ministry of Environment.
Despite these challenges, PPPs in Taiwan present significant opportunities. Taiwan’s industrial capacity and the government’s focus on bottom-up approaches to sustainability create an environment conducive to innovative, PPP-driven solutions. By refining regulatory incentives and building on the successes of the NBS project model, Taiwan can expand its climate mitigation efforts, effectively mobilizing private-sector resources to overcome obstacles such as limited land availability and public funding.
RECOMMENDATIONS FOR POLICYMAKERS
To enhance the effectiveness of PPPs in climate mitigation, Taiwan’s experience could provide some valuable lessons for policymakers wishing to promote NBS projects through PPPs:
A Comprehensive policy and Institutional framework
Taiwan has established a relatively supportive legal and policy framework for facilitating PPPs in various areas, including civil and tax laws, special legislation promoting PPPs in the context of public constructions, and guidelines that govern the establishment and operation of PPP projects. However, refining institutional capacities and standardizing PPP practices across sectors could enhance consistency and scalability.
Performance-based contract and Risk-sharing mechanisms
Taiwan’s PPPs often employ performance-based contracts with clear metrics to allocate risks equitably. Afforestation projects on State-owned lands, for example, incentivize private sector partners to achieve specific outcomes and meet performance targets such as number of planted trees and allocation of carbon credits. In afforestation projects on state-owned lands, for instance, private partners are incentivized to meet specific targets, with rewards like tax exemptions or technical assistance. These contractual elements reduce uncertainties and improve private-sector confidence in active participation.
Public participation mechanism
The successful PPP program to implement climate mitigation projects relies heavily on public support. Taiwan has a history of fostering a culture of dialogue and collaboration between the public and private sectors. Open and transparent communication channels between government agencies and private entities foster a mutually supportive environment, essential for sustained collaboration. Encouraging public participation can also help ensure that climate initiatives align with community needs.
CONCLUSION
PPPs have the potential to play a significant role in addressing the challenges of climate change mitigation. By leveraging the complementary strengths of the public and private sectors, PPPs can help mobilize resources, foster innovation, and improve the efficiency of climate change mitigation efforts. Taiwan’s experience illustrates that, with targeted regulatory support and strategic frameworks, PPPs can create effective pathways for carbon reduction and environmental resilience.
Taiwan’s deployment of nature-based solutions highlights how PPPs can deliver holistic climate benefits, encompassing carbon sequestration, biodiversity conservation, and ecosystem resilience. As international demands for climate action increase, the integration of NBS projects through PPPs provides a replicable model for other nations. Expanding PPP frameworks to cover a broader range of climate-related projects will likely become essential as global climate actions intensify. By addressing the challenges in investment attraction, regulatory barriers, and risk management, Taiwan's experience with PPPs in this area provides valuable insights and lessons for policymakers. PPPs will likely become an increasingly important tool for achieving net-zero emission goals in the future.
REFERENCES
Ann Gardiner, Matthieu Bardout, Francesca Grossi & Sandrine Dixson-Declève, Public-Private Partnerships for Climate Finance, available at https://norden.diva-portal.org/smash/record.jsf?pid=diva2%3A915864&dswid=-7021 (last visited 29/10/2024).
Adele Beardmore, Explainer: What Are Nature-Based Solutions And How Can They Help Tackle the Climate Crisis?, https://earth.org/nature-based-solutions-can-help-tackle-the-climate-crisis/ (last visited 29/10/2024).
Carter B. Casady, Alessandra Cepparulo, & Luisa Giuriato, Public-private partnerships for low-carbon, climate-resilient infrastructure: Insights from the literature, available at https://www.sciencedirect.com/science/article/pii/S0959652624027872#bib41 (last visited 29/10/2024).
CommonWealth Magazine, The first domestic afforestation carbon sink project passed the Ministry of the Environment's review – The Water Resources Agency's “Tree Planting at the Green Beautification Site of Dongpu GanxiVillage” project is expected to acquire 605 tons of carbon rights in 30 years, https://csr.cw.com.tw/article/43735 (last visited 29/10/2024).
Jessie Cai, A guide to Taiwan green energy market: Current status and analysis, https://www.infolink-group.com/energy-article/current-stays-and-analysis-of-renewable-energy-market-in-taiwan (last visited 29/10/2024).
Lucia Xiaoyan Liu, Stewart Clegg & Julien Pollack, The Effect of Public-Private Partnerships on Innovation in Infrastructure Delivery, available at https://journals.sagepub.com/doi/reader/10.1177/87569728231189989 (last visited 29/10/2024).
Ministry of Agriculture, https://esg.forest.gov.tw/ForestESG/Knowledge/EsgKnowledge (last visited 29/10/2024).
Min-Qian Zhuang, Senwei steps into the forest carbon sink! Its subsidiary, Yuanshan Forest, launched the first voluntary forest reduction project, earning an estimated 57,000 tons of carbon rights, https://www.reccessary.com/zh-tw/news/world-market/shinfox-energy-forest-carbon-sink (last visited 29/10/2024).
Pauline Wang & Yung-Ching Huang, A general introduction to public-private partnerships in Taiwan, https://www.lexology.com/library/detail.aspx?g=10f228a2-d8e6-48d6-ab88-246b277ac263 (last visited 29/10/2024).
Susanne Foerster & Jenny Chao, Leveraging PPPs to tackle climate change – A new resource, https://blogs.worldbank.org/en/ppps/leveraging-ppps-tackle-climate-change-new-resource (last visited 29/10/2024).
Torsten Ehlers, Charlotte Gardes-Landolfini , Fabio Natalucci & Prasad Ananthakrishnan, How to Scale Up Private Climate Finance in Emerging Economies, https://www.imf.org/en/Blogs/Articles/2022/10/07/how-to-scale-up-private-climate-finance-in-emerging-economies (last visited 29/10/2024).
Wan-Yu Liu, Agricultural Policy Planning for Carbon Emission Reduction in Taiwan, https://ap.fftc.org.tw/article/3606 (last visited 29/10/2024).
Weichingma, New Options for Corporate Participation in Natural Carbon Sinks and Biodiversity Conservation Programs! Forestry and Natural Conservation Agency's Carbon Sinks Matching Platform is online!, https://reurl.cc/ZVm1Ng (last visited 29/10/2024).
The Role of Public-Private Partnership in the Context of Climate Change Mitigation: A Case Study of Taiwan’s Natural-based Solution Experience
ABSTRACT
This paper examines the role of Public-Private Partnerships (PPPs) in achieving net-zero emissions. It explores how PPPs integrate both the public and private sectors to accelerate the transition to a net-zero emissions society. The analysis delves into the potential benefits of PPPs, such as increased financial resources, risk sharing, and innovative solutions. It also highlights the challenges and risks associated with PPPs. This paper also explores several cases in Taiwan fostering PPPs in achieving the enhancement of natural carbon sinks. This paper also proposes practical recommendations for policymakers, such as establishing comprehensive policy frameworks in promoting incentives and transparency for PPPs proposals.
Keywords: public-private-partnership, net-zero emissions, climate change mitigation, natural carbon sinks, natural-based solutions.
INTRODUCTION
With the net-zero emission goal emerging as an urgent global priority that drives industrial and societal transitions, effective climate change mitigation demands innovative, and concerted efforts from the governments, businesses, and civil society. Public-private partnerships (PPPs) present a promising approach harnessing the strengths of both the public and private sectors to implement impactful climate change mitigation strategies. This paper examines the role of PPPs in climate change mitigation and highlights the key factors that contribute to their success. Drawing on Taiwan’s experience in developing PPPs to advance nature-based climate solutions, this study discusses key characteristics and offers practical insights for policymakers aiming to adopt PPP frameworks to achieve net-zero emission goals.
The role of PPPs in climate change mitigation
PPPs are collaborative institutional frameworks that bring together public and private sectors' expertise, resources, and influence to address public challenges, including climate change. In the context of achieving net-zero emission goals, for instance, PPPs can play a crucial role in providing innovative and effective ways rather than being conducted by government or private actors alone. (Susanne Foerster & Jenny Chao, 2021) PPPs offer unique advantages that government or private efforts alone might lack. By analyzing PPPs’ practical applications, this paper identifies essential characteristics that make them effective tools in climate change mitigation.
The most challenging factor for implementing successful climate change mitigation measures is seeking sustainable and appropriate financial resources. Climate change mitigation projects often require significant financial support. (Torsten Ehlers et al., 2022) While governments alone may lack sufficient resources, PPPs can offer a financial mechanism that attracts private investment by sharing risks and rewards, thus reducing the financial burden on governments. This especially benefits emerging economies, where limited resources can impede effective climate action. PPPs can establish a sustainable funding base for long-term climate initiatives by creating incentives and ensuring transparency (Ann Gardiner et al., 2016).
The inclusion of private-sector funding often brings innovative solutions to climate mitigation policies that purely government-driven initiatives may lack. Government-funded projects frequently encounter regulatory or financial constraints, limiting flexibility and the ability to adapt to evolving challenges. PPPs can develop innovative approaches to climate change mitigation because private funding projects may overcome public regulatory challenges and improve the efficiency of public services. Some innovative financial mechanisms or new technology applications could be established through PPPs due to more flexibility in terms of private expertise input and fewer regulatory constraints. Moreover, PPPs can foster collaboration between public and private actors, leading to the development of more efficient and effective solutions (Lucia Xiaoyan Liu et al., 2023).
Implementing climate change measures can involve substantial financial and technological risks, including the potential impacts of low-carbon innovations such as carbon capture, utilization, and storage (CCUS) and renewable energy development. Climate change mitigation projects may result in large-scale financial risks or technological risks to human health or the ecosystem. PPPs can help to manage the risks associated with climate change mitigation projects by distributing risks between the public and private sectors. The balanced risk-sharing approach within PPPs can prevent delays in achieving net-zero targets due to financial or risk management challenges, enhancing the resilience of climate initiatives (Carter B. Casady et al., 2024).
Taiwan's experience with PPPs in climate change mitigation
Taiwan has a long history of using PPPs to deliver public services, such as in the areas of infrastructure-building, public transportation, and healthcare services (Pauline Wang & Yung-Ching Huang, 2020). In recent years, the Taiwan government has started the use of PPPs in climate change mitigation, employing various models tailored to its unique needs and challenges.
One approach that Taiwan has successfully implemented is the regulatory incentive-centric model, in which the government provides legal and financial incentives for private actors to invest in climate change mitigation projects. A typical example of this incentive-centric type is the development of renewable energy projects. Taiwan’s government has introduced various regulatory incentives to encourage private sector investment in renewable energy development. For instance, the Renewable Energy Development Act ensures that electricity generated by private renewable energy enterprises is purchased at a fixed rate, fostering investments in solar and wind energy. Moreover, the government allows renewable energy investors to obtain renewable energy certificates (RECs) as tradable assets. These policies have led to a surge in the development of solar and wind power projects, many of which are implemented through PPPs. This model has also spurred private sector engagement in energy efficiency projects, supporting the government’s goals for sustainable energy usage across buildings, transportation, and industry. PPPs have been used to finance and implement energy efficiency projects in buildings, transportation, and industry (Jessie Cai, 2023).
Nature-based solutions (NBS) are strategies involving the protection, restoration, and sustainable management of ecosystems, such as forests, wetlands, and soils to enhance their capacity to absorb carbon dioxide from the atmosphere. NBS encompasses methods like reforestation and soil management that help capture CO₂ while enhancing biodiversity and ecological resilience. They offer a holistic approach to climate action, integrating ecological, social, and economic benefits while supporting sustainable development and adaptation to climate risks (Adele Beardmore, 2023).
While Taiwan is not a signatory to the Paris Agreement due to its unique geopolitical status, it remains committed to global climate goals. The government has launched various carbon offset initiatives to curb emissions and contribute to international efforts to combat climate change. NBS has become a crucial element of Taiwan's National Net-zero Emission Roadmap Strategies for achieving a net-zero emission goal by 2050 (National Development Council, 2050 Net-Zero Emissions). The Climate Change Responsive Act has empowered the Ministry of Agriculture to enhance Natural Carbon Sink as a key strategy to achieve net-zero emission goals under its authority (Ministry of Agriculture). The Forestry and Natural Conservation Agency under the Ministry of Agriculture promotes three major strategies for enhancing forest carbon sinks: "increasing forest area", "strengthening forest management" and "enhancing the use of domestically produced timber." By enlarging forest areas, the afforestation and reforestation projects not only help absorb CO₂ but also enhance biodiversity by creating habitats for native species. In addition to natural forest areas in mountainous areas, there are limited public and private lands, especially in plain areas for tree planting in Taiwan. The Forestry and Natural Conservation Agency promotes policies that transform abandoned or degraded lands into forest areas. These policies rely on PPPs to coordinate legal, financial, and technical resources, encouraging private landowners to participate in NBS projects (Wan-Yu Liu, 2024).
Thus, PPPs could provide flexibility in the context of legal and financial mechanisms in coordinating or integrating public and private resources to develop NBS projects aimed at natural carbon sink enhancement. The Taiwan government encourages the private sector’s active engagement in NBS carbon offset projects by providing incentives, subsidies, and technical support. The Taiwan Forestry and Natural Conservation Agency promotes PPPs to implement NBS projects by encouraging private landowners and corporations to participate in various afforestation activities. Taiwan’s first registered carbon offset project, initiated by the Fourth River Branch of the Water Resources Agency namely "Tree Planting at the Green Beautification Site of Dongpu Ganxi Village," demonstrates this approach. The project involves tree planting along Dongpu Ganxi Creek, originally intended for green beautification, and has attracted private sector interest, leading to the registration of carbon credits. The newly planted seedlings of the project have been provided by the Forestry and Nature Conservation Agency free of charge and supported by voluntary workers from local communities.
In addition to tree planting on green beautification sites, the Department of Rural Development and Soil and Water Conservation under the Ministry of Agriculture also provides subsidies for landowners of landslide-prone slope lands to improve the environmental resilience of such areas. The landslide-prone slope landowners receiving subsidies shall provide lands for companies or NGOs to participate in or invest in such afforestation projects. BenQ Cultural and Educational Foundation participating in the project has adopted 0.6 hectares of land and planted more than 900 trees. BenQ could reduce its carbon footprint as a symbolic ESG achievement through this PPP platform. The carbon credit accredited from this afforestation project was reviewed and approved by the Ministry of Environment on July 12, 2024. This case has successfully applied for registration under the Ministry of Environment’s approved methodology of the "Afforestation and Reforestation" carbon sequestration project. This successful carbon credit registration case creates a precedent for promoting multi-functional purposes because of implementing NBS projects serving both carbon sequestration and biodiversity conservation purposes. The Dongpu Ganxi Village afforestation project is expected to encourage more private stakeholders to actively participate in domestic NBS projects (CommonWealth Magazine, 2024).
Another notable case was initiated by the National Property Administration of the Ministry of Finance. The National Property Administration has designated state-owned lands for PPP-driven afforestation, targeting carbon sequestration and recreational use. These projects have attracted private companies through competitive bidding, with contracts requiring participants to implement an afforestation plan and register for carbon credits within the contractual time frame. Companies winning the bid shall pay for the rent for up to 30 years and apply for carbon credits and the National Property Administration could receive 10% of successfully registered carbon credits. In one instance, Senwei Energy won the bid and signed the contract with the National Property Administration. Under the contract, Senwei Energy acquired 71.98 hectares of state-owned land that once used to be mining sites in Chishang Township, Taitung County. The afforestation will be jointly implemented with its subsidiary Yuanshan Forest Company and collaborate with the Forestry Department of National Chung-Hsing University. These initiatives show how PPPs in Taiwan foster private-sector investment in natural carbon sink projects, leveraging government incentives to advance climate goals (Min-Qian Zhuang, 2024)
Despite the great potential for implementation of NBS projects through PPPs, the lack of information has limited private participation in NBS projects under the PPP. The Forestry and Natural Conservation Agency thus established the "Natural Carbon Sequestration and Biodiversity Project Matching Platform" (referred to as the ESG Project Matching Platform). This platform connects corporate entities seeking to fulfill environmental, social, and governance (ESG) obligations with government-led NBS initiatives. By bridging information gaps, this platform strengthens the potential for PPPs to support climate resilience and biodiversity conservation (Weichingma, 2024).
CHALLENGES AND OPPORTUNITIES
While Taiwan has made strides in using PPPs for climate action, several challenges persist. First, attracting sufficient private investments remains difficult due to perceived risks and uncertainties associated with long-term climate mitigation projects. For instance, the increased risk of wildfires from extreme weather events poses a threat to afforestation and forest management projects. Second, regulatory barriers can hinder PPP development. Although Taiwan has a supportive regulatory environment, including the Climate Change Responsive Act, certain areas require clarification. There may be areas where the rules and regulations need to be clarified or streamlined such as complexity and strict screening standards as adopted in the carbon registration process managed by the Ministry of Environment.
Despite these challenges, PPPs in Taiwan present significant opportunities. Taiwan’s industrial capacity and the government’s focus on bottom-up approaches to sustainability create an environment conducive to innovative, PPP-driven solutions. By refining regulatory incentives and building on the successes of the NBS project model, Taiwan can expand its climate mitigation efforts, effectively mobilizing private-sector resources to overcome obstacles such as limited land availability and public funding.
RECOMMENDATIONS FOR POLICYMAKERS
To enhance the effectiveness of PPPs in climate mitigation, Taiwan’s experience could provide some valuable lessons for policymakers wishing to promote NBS projects through PPPs:
A Comprehensive policy and Institutional framework
Taiwan has established a relatively supportive legal and policy framework for facilitating PPPs in various areas, including civil and tax laws, special legislation promoting PPPs in the context of public constructions, and guidelines that govern the establishment and operation of PPP projects. However, refining institutional capacities and standardizing PPP practices across sectors could enhance consistency and scalability.
Performance-based contract and Risk-sharing mechanisms
Taiwan’s PPPs often employ performance-based contracts with clear metrics to allocate risks equitably. Afforestation projects on State-owned lands, for example, incentivize private sector partners to achieve specific outcomes and meet performance targets such as number of planted trees and allocation of carbon credits. In afforestation projects on state-owned lands, for instance, private partners are incentivized to meet specific targets, with rewards like tax exemptions or technical assistance. These contractual elements reduce uncertainties and improve private-sector confidence in active participation.
Public participation mechanism
The successful PPP program to implement climate mitigation projects relies heavily on public support. Taiwan has a history of fostering a culture of dialogue and collaboration between the public and private sectors. Open and transparent communication channels between government agencies and private entities foster a mutually supportive environment, essential for sustained collaboration. Encouraging public participation can also help ensure that climate initiatives align with community needs.
CONCLUSION
PPPs have the potential to play a significant role in addressing the challenges of climate change mitigation. By leveraging the complementary strengths of the public and private sectors, PPPs can help mobilize resources, foster innovation, and improve the efficiency of climate change mitigation efforts. Taiwan’s experience illustrates that, with targeted regulatory support and strategic frameworks, PPPs can create effective pathways for carbon reduction and environmental resilience.
Taiwan’s deployment of nature-based solutions highlights how PPPs can deliver holistic climate benefits, encompassing carbon sequestration, biodiversity conservation, and ecosystem resilience. As international demands for climate action increase, the integration of NBS projects through PPPs provides a replicable model for other nations. Expanding PPP frameworks to cover a broader range of climate-related projects will likely become essential as global climate actions intensify. By addressing the challenges in investment attraction, regulatory barriers, and risk management, Taiwan's experience with PPPs in this area provides valuable insights and lessons for policymakers. PPPs will likely become an increasingly important tool for achieving net-zero emission goals in the future.
REFERENCES
Ann Gardiner, Matthieu Bardout, Francesca Grossi & Sandrine Dixson-Declève, Public-Private Partnerships for Climate Finance, available at https://norden.diva-portal.org/smash/record.jsf?pid=diva2%3A915864&dswid=-7021 (last visited 29/10/2024).
Adele Beardmore, Explainer: What Are Nature-Based Solutions And How Can They Help Tackle the Climate Crisis?, https://earth.org/nature-based-solutions-can-help-tackle-the-climate-crisis/ (last visited 29/10/2024).
Carter B. Casady, Alessandra Cepparulo, & Luisa Giuriato, Public-private partnerships for low-carbon, climate-resilient infrastructure: Insights from the literature, available at https://www.sciencedirect.com/science/article/pii/S0959652624027872#bib41 (last visited 29/10/2024).
CommonWealth Magazine, The first domestic afforestation carbon sink project passed the Ministry of the Environment's review – The Water Resources Agency's “Tree Planting at the Green Beautification Site of Dongpu GanxiVillage” project is expected to acquire 605 tons of carbon rights in 30 years, https://csr.cw.com.tw/article/43735 (last visited 29/10/2024).
Jessie Cai, A guide to Taiwan green energy market: Current status and analysis, https://www.infolink-group.com/energy-article/current-stays-and-analysis-of-renewable-energy-market-in-taiwan (last visited 29/10/2024).
Lucia Xiaoyan Liu, Stewart Clegg & Julien Pollack, The Effect of Public-Private Partnerships on Innovation in Infrastructure Delivery, available at https://journals.sagepub.com/doi/reader/10.1177/87569728231189989 (last visited 29/10/2024).
Ministry of Agriculture, https://esg.forest.gov.tw/ForestESG/Knowledge/EsgKnowledge (last visited 29/10/2024).
Min-Qian Zhuang, Senwei steps into the forest carbon sink! Its subsidiary, Yuanshan Forest, launched the first voluntary forest reduction project, earning an estimated 57,000 tons of carbon rights, https://www.reccessary.com/zh-tw/news/world-market/shinfox-energy-forest-carbon-sink (last visited 29/10/2024).
Pauline Wang & Yung-Ching Huang, A general introduction to public-private partnerships in Taiwan, https://www.lexology.com/library/detail.aspx?g=10f228a2-d8e6-48d6-ab88-246b277ac263 (last visited 29/10/2024).
Susanne Foerster & Jenny Chao, Leveraging PPPs to tackle climate change – A new resource, https://blogs.worldbank.org/en/ppps/leveraging-ppps-tackle-climate-change-new-resource (last visited 29/10/2024).
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