Flood Risk Replaces Drought as Rains Fill Taiwan Reservoirs

Taiwan will ease water restrictions in several areas as heavy downpours bring relief from the worst drought on record, with officials now turning their attention to preventing floods as annual “Plum rains” fill up reservoirs.

Water-supply cuts will end for Chiayi and Tainan, as well as for Taoyuan, Hsinchu, and Miaoli, which will instead be subject to lower water pressure, the Water Resources Agency said at a briefing Tuesday. Other curbs were eased earlier in June.

The rain is good news for farmers, who consume more than 70% of Taiwan’s water, and for chipmakers who have had to truck in supplies to their plants. Year-long conservation efforts such as using desalination plants and wells have helped the island cope with drought, and the recent rains have replenished reservoir levels, Economy Minister Wang Mei-hua said.

“What’s next is the potential challenge of combined disasters in the face of extreme weather,” Wang said. “So we need to adjust our operating mode from focusing on fighting against droughts to preventing both droughts and torrential rain simultaneously.”

The Central Weather Bureau issued an extremely heavy rain advisory for much of Taiwan Tuesday with the wet weather forecast to continue into the weekend.

The Water Resources Agency said reservoir levels have risen from a low of below 10% in some areas to between 26% and 100%. Some reservoirs will reach their upper limit this week, Wang said, saying she has asked the agency to take steps to address the issue.

Economic Challenge

The drought has been hurting farmers, driving up food prices, and even raising concern at the central bank. It’s also affecting power output, just as Taiwan’s exports surge on demand for computer chips.

“Climate change led to the worst drought in 100 years in the first half of this year, and water shortages were severe,” the central bank said last Thursday, as it held interest rates unchanged. At the same time, hot weather, frenzied manufacturing and a rise in working from home because of the pandemic have all driven up electricity use, it said.

“That’s causing power-supply shortages and may affect both domestic manufacturing and livelihoods,” the central bank said.

Its warning underscores a growing awareness among policy makers that climate change can have near-term negative effects on the economy. The Bank of Japan last week joined other central banks with measures to support climate action, and the issue was a key focus for Group of Seven leaders this month.

Domestic Issue

Even as Taiwan’s overall economy is booming, thanks to the sophisticated chips it makes for everything from smartphones to high-performance computers, the drought has hurt people and businesses who aren’t in the tech sector. Their woes have been compounded by a Covid outbreak which has claimed more than 500 lives since April, and forced the closure of schools and a ban on in-restaurant dining.

And even as the government prepares for the possibility of floods in some areas, at least a third of the island’s reservoirs are less than 60% full.

Plus, the climate problem isn’t going away soon. Taiwan’s average temperature has risen about 1.3C in the past century, about twice the global rate, and may gain by at least as much again by the end of this century. Between 1957 and 2006, the summer became almost a month longer and winter a month shorter, according to monitoring site Taiwan Adaptation Platform.

The central bank said climate change is becoming a key monetary focus globally, mentioning green bonds as a possible policy tool for monetary authorities around the world. “It poses challenges to central banks in designing the monetary policy structure.”

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