• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.54
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• pp.261-282
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• 2012

The European Union (EU) has introduced the EU Emissions Trading Scheme (EU ETS) as one of the key policies to reduce the level of greenhouse gas emissions and in July 2008, they decided to include aviation in the scheme. As soon as the decision was announced the EU ETS was met by sharp opposition from world governments and international aviation. A group of US airlines, in particular, dropped a lawsuit against the British government over aviation's inclusion in the EU ETS. On 21 December, the Court of Justice of the European Union (CJEU) ruled that aviation's inclusion in the EU ETS which covers all flights arriving into and departing from the EU is legal and does not contravene international law. The scheme eventually came into effect on 1 January 2012. However, most countries are in opposition to the EU ETS and have agreed on counter-measures to undermine the EU's plan which may bring chaos to the aviation industry if such measures were to put into practice. This study therefore will analyze the likely effects that may be brought to the Korean aviation industry as a result of the inclusion of aviation in the EU ETS. Further, it hopes to contribute to the Korean aviation industry by studying other countries' counter-measures in advance.

• Environmental and Resource Economics Review
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• v.14 no.3
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• pp.569-593
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• 2005

This study tests for the law of one price and Grander Causality between the EU ETS and Nord Pool $CO_2$ allowance prices. The Johansen cointegration test shows that there exists a long run equilibrium between EU ETS and Nord Pool prices and support the law of one price. The Granger casuality test suggests that the EU ETS leads Nord Pool for all vintages traded. The test results imply that the EU ETS can be regarded as the representative carbon market in the EU where many exchanges just started competing for the newly rising market for carbon.

• International Area Studies Review
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• v.12 no.2
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• pp.297-324
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• 2008

As greenhouse gas (hereinafter GHGs) emissions have been increasing, the world's climate is also rapidly changed. $CO_2$ is the most important artificial GHGs and the annual emissions amount was increased approximately 80% between 1970 and 2004. After suggesting Kyoto Protocol, EU is the second largest emissions embodiment in the world, set the emissions trading scheme (hereinafter EU-ETS) and is trying to reduce $CO_2$ emissions aggressively. This study focuses on the EU-ETS and EU-ETS market to examine their emissions reduction policy and review the result of their efforts. EU-ETS which is composed of 2-step phases had already completed the first phase and is running on the second phase in 2008. Up to now EU-ETS has been proceeding successfully and the amount of $CO_2$ emissions has been decreased. To prepare for their coming events, countries excluded from Kyoto Protocol fulfillment need to have some implication from EU and have to make up their own plans.

• The Korean Journal of Air & Space Law and Policy
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• v.26 no.1
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• pp.127-145
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• 2011

European Union unilaterally included the emissions from aviation activities into EU ETS on 19 November 2008 by amending Directive 2003/87/EC. According to the Directive all the emissions(mainly against the CO2) from aviation activities shall be subject to the regulation of EU ETS from 2012. For the period from 1 January 2012 to 31 December 2012, the total quantity of allowances to be allocated to aircraft operators shall be equivalent to 97% of the historical aviation emission s. From 1 January 2013, the allowances will be reduced to 95%. The allocation of allowances which may be applied by each operator with free of charge will be reduced from 85% to 82% from 1 January 2012 to 1 January 2013. Since the Directive will affect every country's airline industry more or less, the nations and international organizations respond variously. The controversial focus is that whether EU has the right to unilaterally include the emissions from international aviation activities into EU ETS. This article firstly analyzes the effect caused by EU ETS to China's airline industry, and then studies the legality of the action of EU subject to current positive international law, and finally draws the conclusion that EU enjoys no such right to unilaterally include the emissions from international aviation activities.

• Environmental and Resource Economics Review
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• v.30 no.1
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• pp.129-167
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• 2021

The emission trading system is an essential policy for reducing greenhouse gas emissions and converting low-carbon society. EU ETS is a good benchmark that is ahead of Korea's emission trading system in terms of operating period and design know-how. Therefore, this study focused on the key design elements of EU ETS phase 4 such as total emission allowances issued (Cap), free allocation method, carbon leakage list, market stability reserve, and innovation supporting system. In addition, we analyzed the impact of key design elements and their changes during EU ETS Phase 1 to 4 on the design and operation of Korea emission trading system in the future. First of all, the expected impact on the design of Korea emission trading system is to increase three demands: preparing benchmark renewal plans, establishing criteria for selecting free allocation industries that reflect domestic industrial structure and characteristics and introducing two-stage evaluations for free allocation industries, and preparing specific plan to support innovation and industries using allowance auction revenues. The next three impacts on the operation of Korea emission trading system are the increased needs for objective and in-depth impact assessment of plan and amendments, provision of system stability and response opportunities by quickly confirming plan and amendments prior to the implementation, and coordination of the emission trading system governance and stakeholder participation encouragement.

• Journal of Climate Change Research
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• v.7 no.1
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• pp.41-48
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• 2016

Korea has introduced Korea Emissions Trading Scheme (Korea ETS) since 2015. However, not many companies voluntarily participate in the emissions trading. The goal of this paper is to provide the way to improve the Korea ETS. This study compares the Korea ETS with EU Emissions Trading System, which has been practiced for a decade, and suggests three strategies to activate the Korea Emissions Trading Scheme. The first thing is to encourage more companies to participate in the emissions trading since the number of companies in the emissions trading in Korea is quite limited compared with that of EU. The second thing is to activate the trading of Korean Credit Unit in order to stimulate various emission reduction mechanisms. Currently, the most of the trading in the emissions market is through the Korean Allowance Unit. The third thing is to establish concrete measures to continuously improve the Korea ETS. A comprehensive evaluation of the Korea ETS is needed along with the ongoing convergence with the associated comments. The improvement of Korea ETS would be one of the most efficient ways to compete the climate change, and would also play a role to raise the status of Korea.

• Journal of Climate Change Research
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• v.6 no.1
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• pp.11-19
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• 2015

This study has aimed to compare an emission trading system (ETS) in the EU and Japan that introduced the scheme prior to Korea and provided the latter with a benchmarking model. Especially, the EU has a reputation for its well-organized and evolving system, and Japan has also successfully established the system despite its similar condition with Korea, such as an industrial structure and the degree of energy dependence. However, there are noticeable differences between the EU and Japan in their ETS. Whereas Japan has focused on securing certifications in CDM as the implementation of Kyoto protocol, EU has shown a tendency to transform the trading market from a parallel structure of EUA and CER transaction to only the EUA transaction after ending of 1st commitment period of the Kyoto Protocol. Since the differences were mainly caused by not only in a design of the system but also in internal governance and their national circumstance, it is meaningful to analyse the Korean case with a similar framework. This study may contribute to designing an appropriate system for emission trading in Korea through the comparison of the EU and Japanese case.

• Environmental and Resource Economics Review
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• v.21 no.3
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• pp.519-542
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• 2012

In this paper, we empirically analyzed whether carbon leakage really happened in EU by comparing before and after the period of EU ETS. We regarded foreign direct investment outflows as indicator of carbon leakage and analyzed panel regression between production cost including environment cost and this FDI variable. Also we consider foreign market potential to analyze market oriented FDI. According to this analysis, carbon leakage was observed in some models for manufacturing industry. However carbon leakage did not prove consistently in a variety of models and it is hard to speak carbon leakage was happened in EU ETS. Notwithstanding relatively short time series of data, in the view of the fact that carbon leakage was tested in some models, Korea also should keep in mind the possibility of carbon leakage and design emission trading scheme.

• Journal of the Korean Society for Aviation and Aeronautics
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• v.25 no.4
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• pp.178-186
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• 2017

Air travel has become an essential part of the global society and its sustainable development is expected. Airlines profit structure and network operation will be influenced by internalization of external costs like emission charge. This additional cost of the airlines will be directly pose air ticket fare increase and demand of air passenger will be decreased. EU-ETS is a part of environmental binding to airlines fly to EU territory airports. This study analyzes the impact of emission charges by application of EU-ETS on airlines network change. For long-term forecast, a reliable estimation of the future price of carbon dioxide (CO2) will be used.

• Korea Trade Review
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• v.47 no.6
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• pp.355-375
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• 2022

In this study, LCA based on EU PAS 2050 and Product Category Rules (PCR) was conducted for steel products with the highest proportion of Korea's exports to the EU among the carbon border adjustment items that were passed by the EU Parliament in June and applied to imports from 2025. Carbon emissions were calculated by (ISO 14040) analysis. As a result of the analysis, the total emission is 394,000 tons, and when converted to the EU ETS weekly price, it is 39,000.000 euros, which is about 5% of the export amount of 734 million dollars. This is the same effect as a 5% tariff increase. This study applies international standards in calculating the carbon footprint and provides information that is closest to the expected amount to be imposed in the future EU CBAM, providing the effect of enabling exporters to establish trade strategies and international competitiveness measures in advance.