[Viewpoint] Korea needs green catch-up action

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[Viewpoint] Korea needs green catch-up action

The U.S. House of Representatives recently passed the American Clean Energy and Security Act. It has three key points.

First, it seeks to reduce carbon emission from major U.S. sources by 17 percent by 2020 and 83 percent by 2050, compared to 2005 levels. Second, it requires electric utilities to meet 20 percent of their electricity demand through renewable energy sources and increased energy efficiency by 2020. Third, it will introduce a system of “cap and trade” on the quota for greenhouse gas emission rights. In the early stage of the trade system, the price of a ton of carbon dioxide will be limited to $13, or around 16,400 won, and CO2 emission rights will be allocated to companies for free for the first few years.

The law should catch our attention because it allows the U.S. president to impose a wide range of control measures or levies on products imported from countries that do not reduce their own CO2 levels. The regulation is a warning that the United States is ready to protect its energy-hungry industries, such as the steel industry, which can easily become less competitive. Countries that have not reduced greenhouse gases until now, such as China, India and Korea, should also participate.

Protectionist measures, using CO2 as a pretext, have started in the EU. Europe is not going to allow the import of vehicles that emit 120 grams or more of CO2 per kilometer starting in 2012. Airplanes that land in Europe will also have to pay around 27,000 won to 140,000 won per round-trip air ticket, based on to the flight distances. European countries claim that measures also have to be taken in the shipping sector, like a CO2 or distribution tax.

In 2007, Japan announced a comprehensive plan to make the country a low-carbon society by 2050. The country plans to introduce a CO2 emission rights trade system and establish around 10 trade centers throughout Japan to reach its goal of reducing CO2 emissions by 15 percent of the 2005 standard by 2020. The United Kingdom has set a goal of reducing CO2 emissions by 26 to 32 percent by 2020, and by 80 percent by 2050, compared to the 1990 level.

It is at this point that the U.S. House of Representatives passed the bill. Of course, there was strong opposition from some in the corporate community and inside the Congress. There is even a pessimistic view that the bill will not pass the Senate.

However, it is clear that the United States is changing. It is changing because it is trying to transfer the leading role Europe plays in climate change to the United States and clearly recognizes the seriousness of the problem. At the same time, it realizes that the central government has to change first so that companies, which are caught in an economic crisis, find a solution, too. Ultimately, the legislation demonstrates the will to introduce Green New Deal policies and move toward the direction of building a green economy.

Korea is not in a favorable position in the CO2 reduction negotiations. Almost all Western countries demand that South Korea should join in the move, and developing countries no longer consider Korea to belong in their ranks.

Literally, Korea has the whole world against it. The government drafted a “Green Development Basic Law” and submitted it to the National Assembly, where it is still pending. Companies do not accept the emission rights quarter system, saying it is too early for that.

However, the CO2 trade war has already begun. The United States added fuel to the flames. To win in this war on a 160 trillion won playing field, the government has to work hard to pass the Green Development Basic Law as soon as possible. In addition, it has to promote its policies of educating the public about low-carbon dioxide green development.

It’s a good development that the Ministry of Knowledge Economy and the Ministry of Environment, which fought over carbon control, have recently decided to jointly operate the “CO2 mileage system.” It is hoped that a similar cooperative effort will also be made in the emission rights trade system. The government presented “low carbon green growth” as the key for Korea’s future development, but the government itself has to be a genuinely green government that is not green for just appearance’s sake.

Businesses should also realize that they can be losers in the war if they continue to resist change. The “victory of the future over the past” that U.S. President Barack Obama declared after the passage of the bill is applicable to Korea, as well.

*The writer is a professor of industrial economics at Chung-Ang University. Translation by the JoongAng Daily staff.

by Kim Jeong-in
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