Non-Nuclear, Low-Carbon, or Both? The Case of Taiwan

The Fukushima nuclear accident in Japan has renewed debates on the safety of nuclear power, possibly hurting the role of nuclear power in efforts to limit CO2 emissions. I develop a dynamic economy-wide model of Taiwan with a detailed set of technology options in the power sector to examine the implications of adopting different nuclear power policies on CO2 emissions and the economy. Absent a carbon mitigation target, limiting nuclear power has a small economic cost for Taiwan, but CO2 emissions may increase by more than 3.5% by 2035 when nuclear is replaced by fossil-based generation. With a low-carbon target of a 50% reduction from year 2000 levels by 2050, if the nuclear option and carbon sequestration are not viable, gas-fired power would provide almost 90% of electricity output due to the limited renewable resources. In particular, wind power would account for 1.6% to 4.9% of that output, depending on how it relies on other back-up capacities. With both non-nuclear and low-carbon policies, deploying carbon sequestration on fossil-based generation can significantly reduce the negative GDP impact on the economy. Lastly, lowering carbon mitigation costs further is possible with expanded nuclear capacity.