Professor Shih-Mo Lin, Chung Yuan Christian University, Taiwan
Energy and environmental issues have become increasingly important over the past decade. Concerns over the security of fossil fuel supply have accelerated the pace of exploring alternative energies among major energy-consuming countries. However, research and development (R&D) in new and renewable energy technologies inevitably engages in all the stages of life cycle of new product or technology development, meaning that uncertainty involves and tremendous investment that crowds out other expenditures might result in disappointing returns. As such, comprehensive assessment on the potential costs and benefits of a new or renewable energy technology investment project is necessary. This paper refines the new-energy data and updates the input-output data based on the most recent input-output tables for the top-down economic analysis model developed specifically for Taiwan’s energy and environmental policy analysis. The linking of the top-down model to the MARKAL energy-engineering model is also explored to take advantage of the strengths of both kinds of model. Cost and benefit analysis for the development of new and renewable energies as well as specific policy analyses based on the constructed integrated modeling system is then performed to justify the development of certain new and renewable energy technologies in Taiwan. Our analysis results indicate that with a reasonable level of R&D investment and learning process, new and renewable energy technology development is cost-effective and shall have significant environmental benefit.