Kansai Research Centre, IGES
Before joining IGES in September 2010, served UNESCAP as an environmental consultant. Research focuses on the topics of business and the environment in Northeast Asia, particularly on the development of carbon pricing policies for enhancing energy saving and climate practices of businesses. Holds a master degree of Urban Environmental Engineering from the University of Tokyo.
Entering a New Era of Green Growth
Associate Researcher, Kansai Research Centre, IGES
A Three-Pronged Triangular Approach
to Green Growth in South Korea
---South Korea has assumed an active international role with regard to the environment. Last autumn, a South Korean city was chosen from among six international candidate cities to host the secretariat of the Green Climate Fund (GCF*1). Looking ahead, how will these developments impact on efforts to reduce carbon levels in Asia?
The government of Lee Myung-bak worked hard to establish a reliable system for green growth within the country, whilst striving internationally to burnish South Korea’s image as an environmentally-advanced nation, thereby enhancing its status. Domestically, the government declared a national vision of “Low carbon green growth”, and selected relevant policy measures. It also announced targets for GHG reduction, adjusting legal and other mechanisms and forging an organisational structure to achieve these targets. Efforts such as these in the domestic arena afforded the country a platform to subsequently propose a new international green growth paradigm and to actively enhance its own role in order to promote that paradigm. Such initiative-taking yielded obvious results when the Global Green Growth Institute (GGGI*2) was approved as an international organisation and South Korea’s bid to host the Green Climate Fund (GCF) secretariat was successful.
In addition to GGGI and the GCF, South Korea established the Green Technology Center (GTC*3), forming a triangular green strategy. Among the three organisations, GGGI’s objective is to support green growth throughout the world, which it does both at the national and regional levels in developing and newly industrialised nations, alongside supporting economic development. GCF, meanwhile, plays an important role in providing funding for green growth, while GTC adds technical support to the strategic and funding-based support provided by the other two. Thus the three organisations share the same “green triangle” strategic objectives and work together to contribute to making low-carbon green growth a reality in countries across Asia.
South Korea aspires to act as a bridge linking the leading industrialised nations and the developing nations, thereby making an important contribution to the international community.
Moreover, by capitalising on the fact that the three organisations are now international and combine both the public and private sectors, it is quite possible that South Korea will be able to develop and activate a framework for offering Green ODA to North Korea. Without a doubt, laying the institutional groundwork to enable North and South Korea to cooperate on green issues would act as a valuable catalyst for greater peace in Asia.
Energy Policy and the New Administration
---What do you think will happen to South Korea’s environment and energy policies under the new Park administration?
In the early hours of 1 January, a plenary session of the national assembly passed the proposed budget for 2013, which outlined the new administration’s thinking with regard to public finances. And then, on 6 January, a committee to oversee the new presidential transition was officially inaugurated, and until 25 February, work on the transfer of political power is due to be in full swing.
As far as environment and energy policies are concerned, the Park government is likely to inherit most of the Lee government’s policies. The essential features of the Lee government’s environment and energy policies can be summarised as follows: (i) an emphasis on nuclear power generation; (ii) climate change mitigation measures; (iii) public works — most notably by means of the Four Major Rivers Restoration Project*4; (iv) reducing environmental pollution; and (v) upgrading and expanding environmental business infrastructure.
Key issues for the new government in terms of energy policy are: (i) future approach towards use of nuclear power plants ; (ii) measures, including electricity tariff-related policies, to overcome electricity supply shortages; and (iii) plans to make the best use of fossil energy and renewable energy.
Taking as its theme A Big Step*5 for the Economy and for Livelihoods, the budget was designed to improve how the country’s finances are used. The total budget for the year was KRW342.5 trillion, an increase of 5.3% from the previous year. It was characterised primarily by the fact that the welfare allocation was increased to KRW103 trillion, launching a new era in which the welfare allocation tops KRW100 trillion, accounting for 30% of total expenditure. This reflects the president-elect’s emphasis in her election manifesto on crafting separate welfare policies for each stage of the life cycle to create a society that is 70% middle class. (As of 8 January 2013, exchange rates were as follows: KRW100 = JPY8.23; USD1 = JPY87.4.)
A close look at the details of the proposed budget for energy and the environment reveals modest increases in the allocations for the Ministry of Environment and for R&D. Under the heading “Low Carbon Green Industries and Obtaining Reliable Energy Resources”, the items “Investment in green growth”, “Support for environmental industries” and “New energy development” appear. The sums allocated in each case are as follows: KRW21.3 trillion in investment to support the Five-Year Plan for Green Growth; KRW3.6 trillion in investment for R&D into green technologies; and KRW156.9 billion allocated for the first time to show committed support for developing a test-bed for environmental technology to serve as a platform for growth in environmental industries. In addition, loans to environmental industries and subsidies to cultivate South Korea’s export base have increased by more than 25%. Meanwhile, the new administration has devised policies to bolster investment in the development of new sources of energy, such as shale gas, and in stabilising the supply-demand balance for electric power. It has also made a new KRW6 billion allocation for energy and environment related R&D in the form of technology development targeting generation of energy from waste resources. In addition, the budget features increased allocations for improving energy efficiency and expanding energy-related welfare services (including enhanced provision of basic energy needs for those on low incomes), as well as for creating the infrastructure to systematically monitor reductions in GHGs. There is a conspicuous increase in the allocation for supporting green ODA.
However, the new year budget proposal’s allocation for investment in renewable energy sources is 12% lower than usual. Having increased significantly in 2011 to KRW 1.0034 trillion, the renewable energy budget has been declining since then. In her election manifesto, Park Geun-hye has taken a realistic position in use of the nuclear power by considering that it is a substantial proportion of domestic energy demand, but also exhibited caution with regard to employing renewable energy as a substitute. President-elect Park maintained that the renewable energy industry had pinned its hopes on the current government’s low-carbon green growth course of action, while the reality was that investment had been unreliable and the government’s actual achievements with regard to its plans were poor.
She declared that her administration would resolve these issues by drawing a new map of available renewable energy resources, setting national targets for renewable energy dissemination and devising a strategy to achieve those targets. She stated, moreover, that in order to effectively manage demand side, her administration would revise energy pricing across the board, including prices for electricity. Ms. Park also intends to extend the use of smart grids and energy storage systems (ESS), among other plans.
The detail policy design for renewable energy has not yet been formulated, and the predictions currently available are confused. Looking ahead to the process of configuring the nation’s guiding plans for renewable energy and energy as a whole, attention will focus on the progress toward specific solutions for government support to drive new growth engine industries.
---Thank you very much.
*4:The Four Major Rivers Restoration Project’s budget and likely effects caused clashes with public opinion in various sectors of society. Consequently, the new government set a budget of zero for the project. Nonetheless, it has drawn up costing for alternative projects targeting rivers (Han River, Nakdong River, Geum River and Yeongsan River).
*5: Big: Budget for Integration and Growth
Step: Strong, Trustworthy, Energetic, Prudent