Using grey model to predict the achievement of policy objectives

Owing to the pressures of decreasing CO₂ emissions and establishing a sustainable environment, many nations have set specific goals for conserving energy and reducing CO₂ emissions. Governments have implemented various policies to achieve these goals. The assessment of policies that can effectively lead to energy conservation and CO₂ reductions is becoming a critical issue. Hence, the aim of this paper is to develop an assessment model that can be used to predict the achievement of policy objectives. In this paper, first, a brief introduction of the background and the fundamentals of the grey model are presented. This is followed by a report on the application of the grey model to predict the achievement of Taiwan´s subsidy policy. This paper uses data on Taiwan´s solar water heater coverage area for the subsidized period (2001-2009) to assess the achievement of the subsidy policy. Taiwan has set a policy objective of covering an area of 6 million m² by 2020. Considering Taiwan achievement from 1978 to 2009, representing a completion of 32%, the coverage is predicted to increase to 62% during the period from 2010 to 2020. Further, since China´s coverage area for solar water heaters is the world´s largest, this study also uses the grey model to predict its achievement of policy objectives to provide a comparison with reference to Taiwan. It is predicted that by 2020, China´s achievement will reach 124% of its policy objectives. Compared to China´s achievement, Taiwan´s prediction shows that the current policy will fail to achieve its objectives. Therefore, early prediction may provide Taiwan´s decision makers with a reference for an early response.