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작성일 : 14-09-16 18:54
Enerzine No.37 South Korea's emissions trading scheme
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   http://enerpol.net/newsletter/Enerzine/Enerzine No.37.pdf [1868]

The Korean government is currently facing a problem regarding the enforcement of the Emissions Trading Scheme (ETS), which is expected to start on January of next year, due to a lack of preparation for the legal deadline. Even though the emission allocation plan could be done until June 30, 2014, which is 6 months ahead, the allocation has not been determined as of yet, and 2 months would have already passed since the deadline.

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Enerzine introduce two columns which written by Jieon Lee (Energy coordinator, Korea Federation for Environmental Movement, Friends of the Earth Korea) and Jupil Lee (Researcher, Energy and Climate Policy institute for Just Transition)


1.The Emissions Trading Scheme hit bottom before on cruise.
August 21, 2014

The Korean government is currently facing a problem regarding the enforcement of the Emissions Trading Scheme (ETS), which is expected to start on January of next year, due to a lack of preparation for the legal deadline. Even though the emission allocation plan could be done until June 30, 2014, which is 6 months ahead, the allocation has not been determined as of yet, and 2 months would have already passed since the deadline.

In January 2014, the ETS master plan had been decided via consultation between the related departments through a cabinet meeting. The Ministry of Environment has created an emission allocation plan in May 2014, and followed by a master plan. The Ministry of Strategy and Finance, however, has not yet held a conference for the emission allocation, and it has been delayed several times. As a result of this delay, the designation of compulsively incorporated enterprises and institutions has failed. Furthermore, the government agency has been violating the ordinance process frequently. The blame falls on the abuse of legislative power, which has been created via social debate and mutual agreement between the opposing parties.

The only reason that will explain the government’s crippled operation with ordinance violations is its surrender to the pressure of the industrial world. Economic organizations, such as the Federation of Korean Industries (FKI), have insisted on irrational opinions, which infringed the industrial world’s vested rights. Moreover, they are claiming that they will delay the ETS enforcement after July 2020.

Did the government push forward the ETS with contempt for the industrial world? The answer is no. The earlier expectation of the ETS enforcement was in 2013; however, it has been suspended for 2 years. The industrial sector reduction rate was set to only 18.5%, which was way behind than the 30% national greenhouse gas reduction rate. During the first phase of the Korean ETS, 100% of allowances will be freely allocated, and up to 97% of allowances will be freely allocated later in Phase II. However, for a sensitive type of business, 100% of allowances will be freely allocated, and the 10% additional appeasement on reduction rate will increase to 16.6%. These results have been derived not from reasonable debate, but from the temperamental appeal of the industrial sector, to which the ETS should not impose a heavy burden on.

After the failure of designation for compulsively incorporated enterprises and institutions, which should be completed by the 31st of July, there were press reports regarding the delay of the ETS enforcement. The Dong-A Daily News reported the delay of the ETS as a fact under the title: ”[Exclusive] Government, Delay Emissions Trading System”. Furthermore, the situation of a non-transparent discussion process on the enforcement of ETS has attracted the media, and there were news regarding a closed meeting among the Ministry of Strategy and Finance, the Ministry of Environment, and the Ministry of Industry on the 14th of August. They have decided to start the ETS next year by reducing the burden on the industrial sector. The detailed method for reducing the load of the industrial sector has not yet been released, and there has been an observation that approximately 90 million tons, which is equivalent to 5% of the total allotment of the emission credit, might be distributed additionally. There is a possibility of ETS regression, and many civil society organizations mentioned the uselessness of the system. Not only is there an additional mission credit, but there is also a debate regarding the decrease of the penalty fee.

The ETS covers 530 enterprises and 8,100 establishments, which emit large amounts of greenhouse gases. In addition, both direct and indirect emissions are included. It seems very reasonable that the concern focuses on the industrial sector’s preferential treatment from the relatively lower price of electricity. If the concern has been directed at the truth that the ETS target enterprises take 81.4% of total national greenhouse gas emission, it is within bounds to say that the success or failure of the ETS will make or break the national greenhouse gas reduction target in Korea. The setup of greenhouse gas reduction target, and its execution in order to address the climate changes are the concurrences of our society, as well as the international society, toward the Republic of Korea, which is ranked 7th in the greenhouse gas emissions (by 2011) country and 3rd in the greenhouse gas emissions per capita country in the world.

Written by Jieon Lee (Energy coordinator, Korea Federation for Environmental Movement)
(jiean.lee@gmail.com)

2.The Real Problem concerns the insistence on the Improvement of the Emissions Trading Scheme
September 8, 2014

Finally, the cap-and-trade emissions trading scheme was decided to start in the Republic of Korea. The relevant regulations have been legislated in 2012, and they will be enforced in 2015.

On September 2, 2014, the Park Geun Hye administration (2013.2~) determined the National Greenhouse Gas Emissions Permit Allocation (2015~2017), which retreated from the existing suggestion caused by the steady resistance and lobbying of the industry. The government relived the emission reductions sharply and provided the basic price as 10,000 KRW per ton. We could not conceal our doubt, and we wondered if the cap and trade would be successful or not. As a result, questions would be asked regarding the National greenhouse gas reduction road map, which was set up with a very passive target. Even if the target was made, the cap and trade could become a burden to the citizens and families.

If the cap-and-trade scheme has improved, can we expect a reduction in efficiency as many environmental groups insist? Why is the Korean society not concerned with the other alternatives?

A review activity on carbon tax already went off during the Lee Myoung Park administration (2008.2~2013.2). Several conflicts have developed in various forms that surrounded the Emissions Trading Scheme between the government (economic department, financial department, environment department, and Presidential Committee on Green Growth) and the society (the industrial world, environmental groups, consumer groups, and trade unions) from 2011 to 2012. During that time, a competitive composition was formed through another measure, which was the Greenhouse Gas and Energy Target Management, and carbon tax. The Emissions Trading Scheme was not mentioned as the only one political option to reduce emissions. Based on the concept of strategic selectivity, even though the Emissions Trading Scheme holds hegemony as a primary policy after announcing the national vision on low carbon green growth in 2008, carbon tax also took an important position in the government and civil society as a parallel or alternative political means. The environmental groups in Korea, however, did not show any interest on the other alternate policy, such as the carbon tax, but instead they wanted a positive introduction of the Emissions Trading Scheme. Currently, measures were taken in order for the Emissions Trading Scheme to persuade the industry to reduce their emissions via the carbon market. Based on their opinion, the problem is not the Emissions Trading Scheme, but its content retrogression.

Is that the truth? No. The real problem is not with the Emissions Trading Scheme, but the insistence on its improvement. It seems that there is quite a struggle with the so-called carbon trading, which is the lesser evil that does not insist on the lesser good or gradual improvement of the lesser good.

Energy and Climate Policy Institute reviewed many measures in 2011. For this reason, we suggest that several measures that have elements for direct control, such as Carbon Tax, Cap & Dividend, Cap & Share, and Carbon Rationing, among others, are not only more effective in emission reduction than carbon trading, but they are also efficient in climate justice and just transition.

In conclusion, the more systems available for the improvement of the Emissions Trading Scheme, the better outcome will be with regard to the carbon tax. It would rather insist initially on the carbon tax rather than the Emissions Trading Scheme. Nevertheless, if someone took the time to improve the Emission Trading Scheme, then I would like to recall Karl Marx’s sentence in CapitalⅠ, to which he said: “Accumulate, accumulate! This is Moses and the Prophets!” I would like to change that to: “Emit, emit! This is Light Green and Environmental movements!” The improvement of the Emissions Trading Scheme is not done via taking a step back in order to take two steps forward, but instead it undergoes retrogression.

Written by Jung-pil, Lee (Researcher: scumaru3440@hanmail.net)


 
   
 




 
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