• Journal of Korean Society of Industrial and Systems Engineering
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• v.40 no.3
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• pp.83-91
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• 2017

Climate change has been identified as one with the greatest challenges facing nations, government, business and over future decades. Activities to reduce greenhouse gas emissions by the Kyoto Protocol, the international community has been in progress. Korea also has introduced the Emission trading system to reduce greenhouse emission from the supervision of the government. Greenhouse gases emissions quantity should be internationally recognized. Mutual Recognition Arrangement should be recognized as the same greenhouse gas emission. International recognition of domestic verification body of international mutual recognition is required. Efforts are needed to secure the equivalence between the emission rights through direct cooperation with the relative nation accreditation body. Early entry into the IAF/PAC GHG MLA is essential for demonstrating equivalence between greenhouse gas emissions. Emissions trading will also require connection to the EU ETS, California, USA, and Tokyo, Japan to link Emissions trading. In the case of establishing accreditation standards and accreditation criteria, it will be necessary to distinguish between the domestic Energy Target Management System and the Emission Trading System. Independent greenhouse gases verification bodies should be established to meet the requirements of IAF and PAC. It is necessary to revise the qualification criteria for the verification of the greenhouse gas verification body according to international standards requirements. It is necessary to support the role of accreditation bodies of domestic greenhouse gas verification bodies. It is required to join international organizations of international mutual recognition of international trade and the need for pilot projects to link greenhouse gas emissions. The core link to our emission trading system is called EU-ETS, and we will need to join the IAF/PAC GHG MLA GHG. The International Mutual Recognition Agreement (IAF) is expected to allow international interoperability of GHG emissions verification between EA and the PAC. By signing a PAC GHG MLA, it will need to be prepared to prepare for the pilot project to link the emission trading system.

• Journal of the Korean Operations Research and Management Science Society
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• v.40 no.1
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• pp.21-33
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• 2015

This paper develops an analytic model for minimizing the cost of distributing items by truck from one supplier to many customers under Milk run logistics strategy. The model derives formulas for not only inventory and transportation costs but also costs associated with carbon emission trading scheme. In addition, monetary investment for reducing carbon emissions is considered. We analyze how to determine optimal shipment size and carbon emission reduction investment. The purpose of this work is to evaluate the effects of carbon emission trading scheme on the Milk run logistics strategy in terms of how much to reduce carbon emissions and/or inventory and transportation costs. We analytically show that it is possible to reduce carbon emissions while reducing inventory and transportation costs by introducing cap-and-trade carbon emission trading scheme under certain conditions.

• Journal of Korean Society for Atmospheric Environment
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• v.21 no.6
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• pp.561-571
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• 2005

To introduce an emissions trading system for GHG that currently have no reduction requirements, the following should be considered as priorities: eliciting the participation of the industrial sector and linking GHG emission trading systems to the emissions trading system (implemented from July 2007) that has become part of national policy with the enactment of the Special Act. Two directions can serve as viable alternatives in that regard. One is a baseline-and-credit method based on incentive auctioning. This has the advantage of inducing participation through economic incentives without a reductions commitment. The downside of this method is that it requires vast investments, as well as the fact that reaching an agreement between participants and the government to decide an objective baseline is difficult. On the other hand, the cap-and-trade method set forth in the Special Act is attractive in that it can be integrated with the air pollutant emissions trading system, but it would be difficult to elicit the participation of the industrial sector in the absence of GHG emission reduction requirements. In the current situation, it would be preferable for the government to induce the participation of the industrial sector by devising a wide variety of incentives because taking part in the emissions trading system before reducing GHG emissions offers large incentives through learning by doing. The timing of GHG reduction commitments and emissions trading system implementation may be uncertain but their Implementation will be unavoidable. Thus the government needs to facilitate preparations for emissions trading of GHG in the future and continuously review its operation in integration with the air pollutant emissions trading system to maximize adaptation and teaming by doing effect in the industrial sector.

• The Transactions of The Korean Institute of Electrical Engineers
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• v.56 no.3
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• pp.481-490
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• 2007

WASP which is used to plan generation expansion has disadvantages that can't manage environmental factors and regional supply-demand planning. But with the effectuation of the United Nations Framework Convention on Climate Change (UNFCCC) and Kyoto Protocol, it is expected that reducing greenhouse gases affects power system in its long-term generation expansion planning. Therefore national countermeasures is needed. This paper formulates a mathematical model considering CO2 emission constraints and Emission Trading that will be enforced. This model is based on the MEFISET (Model for Economic Feasibility of Interstate Electrical Ties) which was made by Korea Energy Economics Institute and Hong-ik university and manages generation expansion planning. And this mathematical model is verified by studying a case system.

• The Journal of Industrial Distribution & Business
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• v.11 no.11
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• pp.7-18
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• 2020

Purpose: The Emission Trading Scheme (ETS), which enables structuring emission credits as a financial product, is taking a crucial position of global collaboration against climate change. Previous studies that have covered ETS subjects from the macro perspective contribute to facilitating legal enactment of this scheme. However, they have rarely addressed challenges aligned with issues arising from labor burdens for ETS works from the business perspective. Research Design, data and methodology: This study presents conceptual models that are expected to help design an electronic system. The study model contains four modules: emission allocation, data interface, reduction technology sharing, and emission trading. Two validation approaches, the Analytic Hierarchy Process (AHP) and regression analysis, are applied in confirming the feasibility of the proposed model. Results: This study suggests an IT system methodology to help improvement of the current K-ETS mechanism. In particular, this study addresses effectiveness for real businesses and the adaptability of this mechanism to other nations. Conclusions: The proposed IT platform diagram can contribute to successful operation of ETS by providing multiple benefits to participating companies through in-house allocation mechanisms, the soft-landing of ETS adoption to participating companies through reduction of technology-sharing, group purchases, and transaction costs through the trading system.

• Journal of the Korean Institute of Illuminating and Electrical Installation Engineers
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• v.23 no.5
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• pp.50-57
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• 2009

The Kyoto Protocol finally entered into force in 2008. In this respect, it is imperative to explore different options to reduce greenhouse gas emissions for developing countries under the framework of the Kyoto Protocol. One of the main sources of $CO_2$ gas emission is fossil fueled power plants, thereby emission reduction could be achieved by substituting fossil fuel by non-fossil fuel sources on electric power generation sector. This paper presents the method for evaluating the effectiveness of emissions trading by fuel mix change. The cost of Fuel mix is formulated considering the economic effects of emission trading in electricity market. And the optimal fuel mix is proposed under the given emission constraints.

• Environmental and Resource Economics Review
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• v.21 no.2
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• pp.301-319
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• 2012

The primary purpose of Renewable Portfolio Standard (RPS) is to facilitate investment in renewable energy technology. Since emission trading program has similar purpose, it is conceivable to attempt to link RPS and emission trading program through interlinked markets. RPS in Korea with single REC and emission allowance markets has particular advantages for constructing linkages between two markets. This paper provides a real option model to examine investment effects of linkage of RPS to the trading program. Emission permit price and REC price are assumed to follow stochastic processes and renewable investment is irreversible. The result shows that linked market provides further incentive for renewable investment by raising managerial flexibility for power companies.

• Environmental and Resource Economics Review
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• v.22 no.1
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• pp.53-76
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• 2013

This paper analyzed on the relationship between R&D productivity of renewable energy and the Emissions Trading Scheme using OECD's country-specific patents and R & D input data. We empirically tested whether this R & D productivity has been substantially improved before and after the implementation of the emissions trading scheme and whether emission trading scheme has been promoted technology progress of renewable energy. Analytical methods used in this study, Negative Binomial Models which was proposed by Hausman et al. (1984). According to the results of this analysis, the R & D productivity of renewable energy was improved by emissions trading scheme, which was statistically significant at the 99% confidence interval [CI]. The R&D productivity of renewable energy was higher in Annex I countries. This research is significant in that R&D productivity was analyzed in associated with the emission trading scheme rather than it was analyzed by simply comparing R&D productivity.

• Environmental and Resource Economics Review
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• v.21 no.1
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• pp.27-67
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• 2012

This paper analyzed the effect of transaction costs on the prices and trading volumes at the initial stage of emission markets and also examined how the size of the effect differs depending on the characteristics of the transactions. We built trading protocols modeling a recursive process to search the trading partner and make transactions with several behavioral assumptions considering the situations of early markets. The simulations results show that adding transaction costs resulted in reduction of trading volumes. Furthermore, the speed of reduction in trading volume to the increase of transaction costs is higher when there is scale economy. With a certain level of scale economy, the trading volumes abruptly fall down to almost zero as the transaction cost gets over a certain level. This suggests the possibility of a failed market. Since the scale economy is thought to be significant in the early stage of emission trading market, it is desirable to design a trading system that maximizes trading volumes and minimizes unit transaction costs at the outset. One of the alternatives to meet these conditions is to establish a centralized exchange and take measures to increase trading volumes.

• 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.