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Korea, the Greening Country Giulia Agostinucci Klara Kasperkovics Gottfried Mitterer Prof. John A.Mathews. Fall semester 2010/11.

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Presentation on theme: "Korea, the Greening Country Giulia Agostinucci Klara Kasperkovics Gottfried Mitterer Prof. John A.Mathews. Fall semester 2010/11."— Presentation transcript:

1 Korea, the Greening Country Giulia Agostinucci Klara Kasperkovics Gottfried Mitterer Prof. John A.Mathews. Fall semester 2010/11

2 South Koreas environmental status quo Korea was 16 th in global ranking of greenhouse gas emission in billion tons (CO2) worldwide Koreas share: 594 million tons Per capita emission: 11.1 tons Increasing trend of CO2 emission over the years (almost doubled between 1990 and 2005) Big dependence on fossil fuels Korea has to import 97% Greenhouse gas emissions by sector in 2005 Source: World Resources Institute, 2009 PROBLEM:Energy dependency, environment, economic crisis SOLUTION:Comprehensive transformation into green economy

3 Green Growth as new model Green growth is Koreas new guiding economic principle Perceived as strategic advantage rather than a burden Strong industrial and environmental policies at national level Strong commitment and leadership at international level Collaboration with int. org. (UNEP etc.) to support green economy in developing countries The underlying objective of the Low Carbon Green Growth strategy is to promote sustainable development, by putting in place a positive cycle in which the environment revives the economy and the economy preserves the environment. Lee Myung-bak, President of South Korea

4 Ok, great! Good idea, nice words! But how do they actually want to do it?

5 "A dictatorship would be a heck of a lot easier, there's no question about it President George W. Bush Source: Bloomberg Businessweek, July 30, 2001

6 Sorry George, the feasibility issues, you know...

7 Ok, how could it work then? There have been examples of hugely successful economic change in Asia… TAIWAN ( ) Systemic development of semiconductor and computer industry National Science Council as driving force behind industry creation Creation of public sector infrastructure: Hsinchu Science-Based Industrial Park Industrial Technological Research Institute (ITRI, 1973) Creation of favorable industrial environment Close cooperation of public, private, academic R&D consortia (with CRADAs) to speed up knowledge generation SOUTH KOREA ( ) - Strong industrial conglomerates (chaebol) - Financial system that channels foreign capital to the chaebol (policy loans) - Strong pilot agencies that lead and define targets and performance standards Learning at the center of industrial development State intervention with subsidies and investments Early technology acquisition via apprenticeship and imitation Sources: Mathews, JA (1998): Fashoning a new Korean model out of the crisis: the rebuilding of institutional capabilities Mathews,A JA (1997):A Siclicon Valley of the East – Creating Taiwans Semiconductor Industry Mathews, JA ( 2002): The Origins and Dynamics of Taiwans R&D Consortia Amsden, AH (1989): Asias Next Giant – South Korea and Late Industrialization

8 What specifically did they have in common? Underdeveloped countries relative to industrialized nations Economies based primarily on cheap labor Lack of relevant technical know-how Economic backwardness and potential for catch-up strategies Strong governments with far-reaching powers More communitarian than individualistic societies Key industries defined by government Strategic technology procurement Central steering of overall industry by government Strategic long-term plans with short-term targets and regular updates Creation of favorable industrial environment Creation of infrastructure for knowledge generation and transfer Strong cooperation of public, private and academic institutions Economic incentives for private firms (tax holidays, investment tax credits etc.)

9 Presidential Committee on Green Growth August 2008: PCGG was established by President Lee Myung-bak November 2008: Organization of preparatory task force to integrate individual committees December 2008: Preparatory task force is assembled February 2009: First meeting of PCGG July 2009: PCGG finalizes the National 5 Year Plan PCGG as central coordinating institution Strong political commitment from the top levels of government down all levels Active involvement of and sponsorship by Prime Minister Kim Hwang-sik Top-down approach, combined with bottom-up initiatives Ambitious environmental and economic goals Integrated, comprehensive plan for green industrial development Affecting all relevant areas of life: industry, agriculture, energy, traffic etc. 5-year action plan as strategic guideline

10 Vision of PCGG To be the Worlds 7 th Green Power by 2020 To be the Worlds 5 th Green Power by main Objectives to reach this Goal Mitigation of climate change & Energy independence Effective mitigation of greenhouse gas emission Reduction of fossil fuels use & enhancement of energy independence Strengthen capacity to adapt to climate change Creation of new engines for economic growth Development of green technologies Greening of existing industries, promotion of green industry Advancement of industrial structure Development of structural foundation of green economy Improvement in quality of life & enhancement of international standing Greening the land and water, creation of green transport infrastructure Bringing the green revolution into daily life Becoming an international green growth role model Five Year Action Plan

11 Organization of PCGG Co-Chairmen (Prime Minister + Private sector) 35 Comissioners nominated by President 13 Comissioners designated by law Admisintrative Comissioner: Minister of Prime Ministers Office Green Growth & Industry Subcommittee (10) Climate Change & Energy Subcommittee (10) Green life & Sustainable Development Subcommittee (9)

12 Organization of PCGG Joint Secretaries-General Policy Planning & Coordination Team Energy Policy Team Climate Change Policy Team Green Technology & Industry Team Green Life & Sustainable Dev. Team International Cooperation Team

13 Targets by 2020 Effective mitigation of GHG emissions GHC emission reduction Carbon absorption by forests: 1,854 Mt CO2 Afforestation areas in North Korea: 4,000 km2 Reduction of fossil fuels use & enhancement of energy independence Reduction of energy intensity: 0,233 toe/1000 USD Share of new and renewable energy use: 6,08 % Share of nuclear energy use: 32 % Strengthen capacity to adopt to climate change Environment-friendly agricultural products: 18 % National forest resources: 1,087 million m3 Development of green technologies Koreas market share in global green tech market: 10% Number of foreign specialists in green tech: 250 Greening of existing industries, promotion of green industry Resource recycling rate: 10 % Share of green goods export in major industries: 250 Number of enterprises in green partnerships: 2900 Number of green industrial complexes: 20 Advancement of industrial structure Number of foreign patients treated in Korea: 350,000 Broadcasting&telcom convergence industry exp: 240 Bln USD

14 Targets by 2020 (2) Development of structural foundation of green economy Volume of trade in domestic carbon emissions trading market: 2 trillion KRW Public credit guarantee fro green tech & Industry: 8tril KRW Percentage of energy-poor households: 3.5 % Number of green Social Enterprises: 500 Greening the land and water, creation of green transport infrastructure Nature reserve areas: 1,500 km2 Share of passengers transported by rail: 26 % share of bicycle transportation: 10 % Bringing the green revolution into daily life Number of green households : 1,5 million Number of categories of goods for carbon footprint labeling:1000 Amount of procurement of low carbon green goods: 10 trillion KRW Number of green village center: 500 Becoming an international green growth role mode Proportion of green ODA: 30 % Number of World Friends Korea Volunteers: 4200+

15 Sub-policies Greenhouse Gas Reduction Target Green Technology Renewable Energy Smart Grid Green Car Green Home International Cooperation through GGGI

16 Critical point of view of the IEA According to International Energy Agency: Carbon emission of Korea will remain well above the average of OECD countries Under reference scenario: 35% (OECD countries: less than 5%) Under low-emission scenario: 25% (OECD countries: less than 15%) Urgent and challenging to reduce GHG emission Source: World Resources Institute

17 Headquartered in Korea and founded in June 2010, GGGI is a new international organization that helps developing and emerging countries pioneer a new «Green Growth Paradigm» that is economic growth with climatic and environmental sustainability.

18 Born in Korea With the Purpose of Getting More and More International A New kind of International Organization Interdisciplinary Multi-stakeholder Driven by emerging and developing countries

19 18 Nationalities Among Board and Staff

20 2010 Launch first programs 2011 Build Internal Capacity 2012 Get International GGGIs Three-Year Plan

21 Supporting developing and emerging countries in the design and implementation of green growth economic development plans at the national or provincial level Facilitating public-private cooperation to strengthen the enabling environment for resource-efficient investment, innovation and diffusion of best practice in the private sector. Pursuing research to advance the theory and practice of green growth, drawing particularly from the experience of the governments and industries with which we work. Strategic Goals practitioners and scholars developed and developing countries public and private sectors GGGI Seeks to serve as a bridge between…

22 1) Support in green growth economic development plans Initial relationship and exploration of opportunities with recipient countries Detailed agreement on work to be done with GGGI, resources to deliver it and set up of local counterparty Completion of countrys GGP Recipient country implements its GGP independently, and contributes content to GGGIs network.

23 2) Facilitating public-private cooperation 3GF or GGGF Forum which explored public-private cooperation in the field of green growth. -Initiative by the Danish government -supported by the Korean government -developed in association with the GGGI Linking companies to developing country governments that are seeking private sector finance, technology and expertise to accelerate implementation of their green growth economic development plans Building intra- and cross-industry programs of cooperation, and linking them to relevant intergovernmental processes, to expand markets for resource-efficient products, services and industrial processes. Aim is to scale resource efficient investment, innovation and management best practice within the private sector.

24 3) Conducting Research The Institutes research portfolio is under development and will include : Macroeconomic modeling of a full-scale transition to green growth; Employment and poverty reduction potential of green growth strategies; Country and industry best practice; Trade and technology policy GGGI's Research program promotes the development of a new green growth paradigm by conducting research into various aspects of green growth theory and practice. An open global laboratory: Will support experimentation and collective learning by countries seeking to leapfrog the resource-intensive and environmentally unsustainable model of industrial development pioneered by advanced economies in an earlier era. Policy brief summarizing the outcomes of the first workshop of its kind to focus on the social dimensions of climate change regarding water, energy, and green employment The book includes details on implementing a policy to tackle challenges

25 Korea as model for economic transformation Most recent developments: Mexico decided to emulate the Korean economic transformation model to become the Green Growth Leader in Latin America and has signed a memorandum of understanding with the GGGI to establish an organization formed after the GGGI. - Sharing of green growth practices - Mutual training and capacity building in technical areas Denmark entered into a strategic business partnership on green growth with Korea - US$ 15 million over 3 years for the GGGI from Denmark - Fast-start financing in energy and transportation sector Germany and France form strategic cooperations with Korea on green development

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