Taiwan remains one of the strongest environmental markets in Asia, but is perhaps one of the toughest to penetrate. The market for environmental services and technologies has remained remarkably steady throughout the 1990s thanks in part to improved enforcement and growing economic pressures that continued to generate high demand. Private-sector investment in environmental equipment has dipped from the high levels of the early 1990s when it ranged from 11-13 percent of fixed investment dollars, while public-sector spending has continued to grow steadily. However, Taiwan's market opportunities are no longer a secret, and competition is stiff among U.S., European, Japanese, and a small but growing group of Taiwanese firms.
Taiwan's early pollution control efforts were geared toward establishing a national pollution control system. A basic infrastructure of laws and standards controlling air and water emissions was created and are now in effect. A network of environmental monitoring stations has been established, providing much needed data on the state of the environment. Gaps still need to be filled in the waste management infrastructure (i.e., Taiwan is still desperately short of solid waste disposal facilities as many projects lag behind schedule), but efforts are under way to address this problem. With the groundwork for basic pollution control now established, the Taiwan Environmental Protection Administration (TEPA) will gradually begin turning its attention to more complex problems such as soil remediation, hazardous waste management, and implementation of sophisticated pollution fee systems.
TEPA's efforts have been supported by a highly detailed set of environmental laws and regulations. The primary polluting industries are now subject to regulatory controls, and TEPA is expanding and deepening the scope of regulations. Many of the standards promulgated by TEPA have raised considerable controversy, but this has increased dialogue between industry and TEPA. Although the relationship is still primarily adversarial in nature, TEPA and industry have been slowly edging toward more conciliatory stances on a number of issues.
Overall, Taiwan's environmental market is transitioning from being driven by regulatory mandates to being driven by economic forces. Starting with the fuel tax in 1995, TEPA has implemented a number of policies that harness regulatory incentives to drive improvements in environmental performance. At the same time, Taiwan's export-oriented industries have begun to feel external pressure from their customers in overseas markets to develop more competitive, “cleaner” technologies.
For the most part, Taiwanese industry still sees environmental protection and business growth as a trade-off. The mindset may begin to change in the coming decade as the younger generation of managers move into more senior positions. Likewise, the large number of ISO systems (i.e., standardized quality management systems designed by the International Standards Organization and adopted in over 65 countries representing 95 percent of the world's industrial production) being implemented in leading businesses around the island may lead to a change of philosophy in the business world. However, at the moment, many companies are more interested in hanging a certificate on the wall than in adopting the true spirit of environmental stewardship.
The strongest long-term pressure will be provided by growing public awareness of the environment. Since the early 1990s, all levels of Taiwanese society have shown increasing concern about the gravity of Taiwan's environmental problems, and in the last couple of years, the government has come under increasing public pressure to address these problems. The environment was one of the key issues in the local government elections in late 1997. Politicians of all stripes have begun to take notice of voter concern and have become more vocal in advocating environmental policies.
For the immediate future, Taiwan's environmental priorities will remain focused on highly visible problems, such as managing municipal and industrial solid waste, improving air quality, and reducing effluents into rivers and surface waters. Over the next five years, priorities will gradually begin to shift to less obvious problems such as hazardous waste disposal and soil and groundwater remediation.
The Taiwanese environmental market holds strong potential for American technology providers, but it requires patience and perseverance. There is high demand for foreign pollution control technologies, especially in the water and air sectors. American technologies have a good image, but the companies that sell them must adapt their approach to Taiwan's style of doing business.
The best markets will be in the private sector as environmental controls are tightened on industry. Although not as alluring a market as in the early 1990s, especially in light of the recent economic turmoil in Asia, Taiwan still holds strong potential in the long run for companies ready to invest in it.
(Please Note That any Mention of Private Companies in this Report is not an Endorsement of their Products or Services).