Is Korea’s economy at risk from cuts in emissions?

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Is Korea’s economy at risk from cuts in emissions?

From Nov. 6 to Nov. 17, delegates from around the world joined a serious discussion on the environment in Nairobi, Kenya. The meeting was dubbed the Conference of the Parties to the Climate Change Convention, a venue for the world to discuss ways to lower greenhouse gas emissions.
As greenhouse gas emitted from factories and automobiles have raised the Earth’s temperature and destroyed natural ecosystems, countries across the globe are trying to protect the environment by reducing greenhouse gas emissions. The effort will affect the Korean economy. Drastically reducing greenhouse gas emissions may cause an economic downturn similar to the one Japan is currently experiencing. The relationship between greenhouse gas reduction and economic impact has several facets.
Teen Teen readers may have heard that a protocol aimed at reducing greenhouse gas emissions has already been laid out. The plan is called the Kyoto Protocol, and it is the very the reason Japan is currently undergoing economic hardship. Under the 1997 protocol of the United Nations Framework Convention on Climate Change, 38 industrialized countries are obliged to reduce their emissions by a certain amount annually from 2008 until 2012. Each country has set its own standard, referring to 1990 levels of greenhouse gas emissions, and pledged to abide by it. If any country fails to keep the promise, it is subject to a fine.
Countries who signed the Kyoto Protocal will attempt to reduce their combined greenhouse gas emissions to 5 percent below 1990 levels by 2012, when the protocol expires. To date, the United Nations Framework Convention on Climate Change has been signed by 189 countries, of which 165 have ratified the protocol. The goals differ for each country; Japan pledged to emit 6 percent less than 1990 levels, the United States 7 percent.
However, Japan is currently in deadlock. Although it proclaimed in 1997 that it would make its targetted reductions in emissions, it has only recently realized its ambitious goal is impossible to attain. The country has spent about 10 trillion won ($10.7 billion) annually over the past decade developing technologies that help reduce greenhouse gas emissions for industrial facilities. However, those technologies were insufficient to meet the nation’s previously designated target. In 2008, Japan will be allowed to emit up to 1.18 billion tons of greenhouse gas, but if no drastic measures are taken before then, the country is expected to release 1.31 billion tons; 123 million tons over their limit. The international community is talking about levying a fine of around 120,000 won per one ton of excess emissions should Japan fail to attain the goal. In this regard, Japan will inevitably be forced to pay about 15 trillion won in fines per year from 2008, when it has already spent tens of trillions of won trying to meet elusive targets.
Japan, out of desperation, is considering levying an “environmental tax” on gasoline. It is based on the judgment that oil price hikes from higher taxes will prompt drivers to use less fuel, which may lead to reduced emissions. However, Japan’s corporate community has offered intense resistance to the measure on the grounds that private companies cannot afford the burden of rising energy costs. For this reason, Japan has yet to decide its future policy.
The United States, which had pledged to reduce greenhouse gas emissions by 7 percent from their 1990 level, felt the side effects of its promise earlier than Japan, announcing it “would not abide by the Kyoto Protocol” in 2001. On the other hand, Britain and Germany have almost reached their goals. Britain is supposed to cut emissions by 12.5 percent from their 1990 level, and Germany 21 percent. Despite higher percentages compared with the portion promised by the United States, the two European countries are nearing their targets. However, it is very easy to reduce emission levels in Britain and Germany. In Germany, simply mending some old equipment built during the old East German period has the potential to cut emissions by up to 20 percent. Britain can take advantage of the natural gas produced in the North Sea..
Natural gas, when burnt, does not produce a large volume of greenhouse gas. A study done by the U.S.-based International Council for Capital Formation showed that Britain and Germany are required to spend $200 to trim down the emission of one ton of greenhouse gas, while it will cost $350 for the United States and $600 for Japan to achieve the same amount.
In 1997, when the Kyoto Protocol was forged, Korea was categorized as a “developing country;” therefore it was excluded from the list of countries that are mandated to reduce greenhouse gas emissions from 2008 to 2012. However, from 2013, Korea is highly liable to become one of the restricted countries. Now that the country is already the world’s 10th-largest economy and a big emitter of greenhouse gas, no other nations will consider Korea to be an exception.
The problem is that, as in Japan, it is very difficult for Korea to cut emission levels. Estimates by experts show that Korea will have to spend around $500 to $550 to reduce one ton of greenhouse gas. Therefore, if the country embraces its responsibility to drastically reduce emissions beginning in 2013, it will be a blow to the economy. Some critics predict Korea may have to lower electric power production volume by around 30 percent from that year. This means not being allowed to turn on air conditioners at will during the summer and possible forceful limiting of the power supply by the government.
However, as a member of global society, Korea is not in a position to evade its duty to reduce greenhouse gas. After much deliberation, Korea has come up with a solution, forging a group of six countries called the “Asia-Pacific Partnership on Clean Development and Climate.” Under the partnership, countries will develop technologies that will enable the member countries to reduce emissions, up to an amount they can manage without economic crises.
European countries failed to show positive responses to the collaboration, as they are spending huge amounts of funds to meet their targets. However, they are also seeking ways to devise measures to spend less and save a lot.

by Kwon Hyuk-joo
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