Background

Impacts of Emissions Trading in Korea

This project assessed policy options to address the issues surrounding the Korean emissions trading system, and evaluate lessons from Europe and their relevance for Korea.

Year: 2012 Past Project

  • Overview

    One of the 20 largest economies in the world, South Korea has experienced rapid growth largely through reliance on exports of manufactured goods. Due to its large industrial base, Korea is also the tenth largest electricity consumer, with more than two thirds of its electricity generated from fossil fuels. As a result, Korea has a substantial carbon footprint – which prompted the Korean government to adopt an ambitious policy framework for a low carbon, green growth trajectory in 2013.

    As part of this framework, Korea stated its commitment to reducing greenhouse gas emissions by 30% below projected business-as-usual level emissions in 2020. Adopting an emissions trading system was a central tool for its achievement, set to begin in 2015. Resistance from the private sector and concern about industrial competitiveness have necessitated inclusion of a number of provisions. 

    The European Emissions Trading System also faced opposition from a number of sectors a decade prior. After two trading phases, the European experience offered useful insights on policies to limit negative impacts, as well as processes to engage affected stakeholders to improve the understanding and acceptance. Such lessons from Europe can also help strengthen the implementation of the Korean emissions trading system, and inform preparations for its impending launch.

    This project assessed policy options to address the issues surrounding the Korean emissions trading system, and evaluate lessons from Europe and their relevance for Korea.

  • Partners

    The project is funded by the Korean Environment Institute.

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