25 MARTINDALE CENTER FOR THE STUDY OF PRIVATE ENTERPRISE tomers willing to pay premiums over tap water rates, which presents a major obstacle to their development (Cheng et al., 2023; Crook, 2023, April 20). Therefore, industrial users who highly value stable access and are affected by existing and future reclaimed water policies will likely either pay the premium for municipal wastewater or construct their own reclaimed water processing facilities. As of early 2025, fewer industrial users have been motivated to pursue alternative resources than the Executive Yuan has targeted. While the Executive Yuan has plans for future policy mandates for industrial users to increase reclamation capacity, another approach would be to increase the block prices in the current tap water rate structure, reducing the price disparity between tap and reclaimed water. In summary, the increasing block structures and seasonal tariff are consistent with my recommendations and should be maintained in Taiwan’s rate structure. Additionally, adopting customer classification and increasing pricing blocks specifically for large industrial users can enhance Taiwan’s ability to meet its conservation and alternative resource development goals. These changes would address the economic and operational disparities between domestic and industrial use, align pricing more closely with the full costs of delivery, and create stronger incentives for industrial users to adopt reclaimed water technologies. By reducing the price disparity for the industrial sector between tap water and reclaimed water, Taiwan can ensure more effective resource utilization and sustainable management. This approach aligns with the policy objectives outlined in the Reclaimed Water Resources Development Act as well as addressing the critical need for stability and resilience in the face of increasing water scarcity. Barriers Although the recommendations made in this article may theoretically improve water security in Taiwan, there remain political and economic barriers to implementating such changes. Three major barriers are the potential negative impact of raising rates for the semiconductor industry, the political optics associated with raising rates, and the potency of democracy and public opinion. This section briefly addresses how each of these may prevent policy changes in Taiwan, regardless of potential benefits to quality of life. The semiconductor industry has given the island a foothold in global political and economic matters, but the silicon shield could be jeopardized by higher industrial water rates. Manufacturing semiconductors relies heavily on water, with TSMC consuming 22.8 million cubic meters per month on average. This high use detracts from nearby domestic and agricultural needs. The semiconductor industry is so prioritized that subsidies are paid to farmers in southern Taiwan to not grow crops during the dry season. The Taiwanese government has demonstrated that protecting the semiconductor industry is an utmost priority during water crises. Consequently, raising prices for semiconductor manufacturers would contradict the precedent set by the Taiwanese government to protect chipmaking due to its political significance. Additionally, economic theory suggests that higher water prices would increase TSMC’s overall costs, which would then be passed onto consumers, resulting in lower chip production and sales. Since semiconductors contribute roughly 15% of the island’s GDP, policymakers may expect a downturn in chip production to have a ripple effect on the broader economy (Jones & Krulikowski, 2024). A second barrier to implementating higher prices is how the public perceives policymakers who advocate for such increases. Some argue that a blanket increase in water prices for all users is inevitable (Chou & Haggerty, 2021). Such an increase would precipitate public outcry, especially among domestic sector users who commonly blame the industrial sector for gross overuse of Taiwan’s resources. For this reason, many politicians have avoided proposing rate increases, fearing voter backlash (Sui, 2021). Even if rated increases targeted only industrial users, companies like TSMC likely maintain sway in policymaking. When policymakers discuss raising industrial rates, affected companies express their disapproval with politicians (Steven Crook, personal communication, November 20, 2024). In a similar vein, the public outcry that politicians fear reflects the third barrier: the strength of Taiwan’s democracy. Unlike China, Taiwan operates with a transparent democracy, ranking first in East Asia and twenty-seventh globally in the 2024 World Press Freedom Index (Ministry of Foreign Affairs, 2025). When policymakers push for changes in Taiwan, stakeholders across society will hear about it through diverse media outlets. This transparency ensures opposing voices are also heard, often slowing policy execution. Another complicating factor is the strength of Taiwanese independent governance, specifically among politicians. Taiwan’s parliament has broken into brawls on multiple occasions over disagreements on bills relating to democratic principles (Wu & Moritsugu, 2024). These democractic road-
RkJQdWJsaXNoZXIy MTA0OTQ5OA==