Flexibility for carbon emissions

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Flexibility for carbon emissions

The government hosted a public debate with industry representatives to coordinate differences over a carbon tax as part of the national and global agenda to reduce carbon emissions. However, the debate served no more purpose than to highlight the intransigent gap within the administration and between the government and businesses on the issue. Under the carrot-and-stick plan slated to take effect next year, consumers will be required to pay a carbon tax if they buy a car with high fuel emissions and buyers of eco-friendly cars will receive subsidies. The penalties will increase in 2016 and 2017, bringing the tax to between 500,000 won ($492) and 7 million won on large vehicles. The program, designed to lower 158,000 tons of annual emissions worth 1.2 billion won of carbon credit by European standards, is being protested by domestic automakers as a boon for fuel-efficient European cars.

The plan has been debated between the ministries of commerce, industry, and energy and the Ministry of Environment. The Ministry of Strategy and Finance mediated and assigned a joint research team of think tanks to come up with a new outline. Despite three months of work, the ministries failed to narrow their differences. The Korea Institute for Industrial Economics and Trade argued that taxes could reach 150 billion won in order to meet the environment ministry’s emissions target. The extra burden would reduce domestic car sales by 5,000 vehicles and hurt the local automobile industry. It could be a fatal blow to Ssangyong Motor, which has just been recovering sales. But the Korea Environment Institute criticized its industrial peers for focusing too much on the negatives. The government can hardly persuade the industry when it cannot even come to an internal agreement.

In a public debate on carbon credits, the industry unleashed complaints against the environment ministry, accusing it of dumping the entire burden on the industry. It claimed companies would have to shoulder up to 28 trillion won for the next three years. The ministry said it would stand by its plan.

Curbing greenhouse emissions is part of an international commitment. Our economy also must be directed toward green growth. But the government should apply flexibility in the process and pace of enforcement if the regulations could threaten industrial competitiveness and jobs. The industry also should try to meet halfway instead of opposing the scheme outright. The government has put back the program schedule to next year from 2013 to give the industry time to prepare. The industry must ask itself what it has done during the grace period.

JoongAng Ilbo, June 10, Page 34

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