26 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 43 | 2025 blocks can impede implementation of rate increases, a result of strong freedom of speech and freedom of the press requiring policymakers to gain broad stakeholder support. In summary, while higher rates could theoretically enhance Taiwan’s water security, there are challenges. The semiconductor industry’s vital economic role, the political risks of public and industrial backlash, and Taiwan’s transparent and participatory democractic processes collectively create a complex environment for policy reform. Addressing these obstacles calls for skillful negotiation, stakeholder alignment, and innovative solutions that balance economic interests with sustainable water management. Conclusion Taiwan’s water resource management challenges stem from temporal and spatial clustering, infrastructural inefficiencies, and outdated pricing that fails to promote conservation. The industrial sector, particularly semiconductors, places disproportionate demands on resources, complicating efforts to achieve sustainable usage across the island. While policies such as the Reclaimed Water Resources Development Act and seasonal tariffs represent progress, more comprehensive pricing reforms are needed to align with conservation goals and reflect true social costs. Implementing customer classification, higher pricing tiers for large industrial users, and internalizing social and environmental costs into pricing would enhance Taiwan’s water resource sustainably. These changes would better reflect actual water costs while encouraging industrial users to adopt alternative technologies such as reclaimed water. However, accomplishing these reforms will require overcoming barriers, including the semiconductor industry’s influence, public resistance to rate increases, and the intricacies of participatory democracy. Moving forward, Taiwan must strike a delicate balance between its economic interests and the long-term sustainability of its resources. While rate structure reform will contribute to improving the island’s water security, supply-side solutions remain vital. By addressing these challenges head-on, Taiwan can create a more resilient and sustainable water management system that supports its economic and security-related aspirations. References American Water Works Assocation. (2016). M1 principles of water rates, fees, and charges (7th ed.). Chen, Y.-C. (2020). System dynamics evaluation of household water use behavior and associated greenhouse gas emissions and environmental costs: A case study of Taipei city. Journal of Water Process Engineering, 37, 101409. doi:10.1016/j.jwpe.2020.101409 Cheng, H.-H., Yu, W.-S., Tseng, S.-C., Wu, Y.-J., Hsieh, C.- L., Lin, S.-S., Chu, C.-P., Huang, Y.-D., Chen, W.-R., Lin, T.-F., & Whang, L.-M. (2023). 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