• Korea Trade Review
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• v.47 no.1
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• pp.99-114
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• 2022

This paper analyzed the dynamic conditional correlation between the carbon emission trading prices of Korea, China, EU, New Zealand. This paper was analyzed using the daily data of carbon emission trading prices of each country from January 12, 2015 to January 13, 2021 using the DCC-GARCH model. Summarizing the research results, first, the dynamic conditional correlation between carbon emission trading prices in the EU, Korea, and China, excluding New Zealand, was strong, indicating that there was a co-movement phenomenon. Second, it was found that carbon emission trading prices in major countries have a stronger tendency to co-movement due to global shocks. Third, it appears that the dynamic conditional correlation between the carbon emission trading prices of Korea and China is gradually strengthening. This study confirmed that the co-movement between carbon emission trading prices in Korea and other countries gradually intensified as time passed. In particular, it is meaningful in suggesting the implication that the phenomenon of co-movement between carbon emission trading prices in Korea and China is gradually intensifying.

• Journal of the Korean Professional Engineers Association
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• v.44 no.6
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• pp.29-34
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• 2011

Korea has been officially classified as a non Annex-I country under the Kyoto Protocol, however, international community is used to considering it as if it were an Annex-I country. Korea has been under great pressure from the international community, especially from the EU and the US, to get included as an Annex-I country or to accept a legally-binding emissions reduction target like other developed nations. Korean Government declared its national target of emissions reduction in 2020 before the Copenhagen meeting, and also pronounced "Low-Carbon Green-Growth" as a new national paradigm to drive the entire nation toward a low carbon society and develop a new growth momentum. The 'green Act', which was passed by the National Assembly in 2009, is a comprehensive and fundamental law providing legal grounds to all of the national policies and measures that are needed to transform the nation into a low-carbon society. Korean government announced to begin Carbon Emissions Trading from 2015, instead of the originally scheduled year of 2013, considering global trends and industrial competitiveness in a flexible manner. The Carbon Emission Trading would reduce carbon emissions by 30 percent from the expected 2020 level, or 4 percent below its emissions in 2005.

• Korea Trade Review
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• v.47 no.1
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• pp.115-130
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• 2022

In this study, I focus on analyzing how the effects of implementing ETS are different depending on whether Korean ETS linking with carbon markets in other countries. The global computable general equilibrium (CGE) model built in this study analyzes the chages in the production and trade of industrial sectors according to the international linkage of ETS compared to the reference scenario of emissions reduction targets and implementation of ETS. From the analysis of internatioanl linkage of carbon markets scenarios, Annex B countries-South Korea carbon market linkage with individual ETS in China worse the economic outcomes in South Korea the most. This means South Korea lose the international competitiveness compared to China in this scenario. On the other hand, Annex B-China carbon market linkage with Korean individual ETS implementation reduce the decreases in production and trading. The most effective way is to join a global emissions trading market with China. The results are consistent in most industries of South Korea. These results are caused by that the supply of emission allowance is increased and the price of emissions allowances is dropped by China's participation to the carbon market, which can be understood to reduce the carbon reduction cost for industrial sectors. In addition, it can be also concluded that the determinant of the negative impact of ETS on changes in production and trade is more sensitive to the price of emissions allowances than to the characteristics of production and trade structure.

• International Journal of Highway Engineering
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• v.18 no.6
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• pp.1-10
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• 2016

OBJECTIVES : Currently, the market for carbon emissions trading has been increasing. In Korea, it is known that traffic mode rate in bike transportation is low. However, if bike transportation system is encouraged and the traffic mode rate is increased, it would be possible to reduce carbon emissions through the trading market. In this study, a practical policy to activate the bike transportation system in Korea will be proposed and verified. METHODS : Past studies regarding bike transportation system in international and domestic metropolitan cities were analyzed. Moreover, detailed reviews on recent carbon emissions trading market were performed. In particular, SWOT analysis on the bike transportation system in Korea and policy topology analysis were conducted. RESULTS : Based on the literature reviews and SWOT analysis, a new bike transportation policy was proposed. Several actual plans to adopt in Korea were proposed. In addition, a new bike transportation policy was analyzed using policy typology model, and a business model related to the cost of implementing the system and CERs were also proposed. CONCLUSIONS : It is concluded that the proposed bike transportation activation policy and several practical plans to connect CERs and a business model including bus, subway, T-money and bike riders to give some incentive were effective and reasonable. It is desired that this study will help Korea to get CERs through bike transportation activation in the future.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.58
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• pp.329-351
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• 2013

Since the Kyoto Protocol was released in 2005, there has been a number of mechanisms about funding and how to allocate the burdens. The UNFCCC(United Nations Framework Convention on Climate Change)have discussed establishing an international fund to support the reduction of a greenhouse gas. As the availability of adaption finance for developing countries increase, it's needed for a way of prioritizing countries. This article analyzes the carbon reduction system that includes a emission trading scheme, a carbon tax and examines GCF(Green Climate Fund)'s role and needs. A solution to finance Green Climate Fund is more preferred a harmonized carbon tax that across all nations with carbon tax. Especially the role of industrialized countries is important that based on their historical responsibility for fossil fuel emission. That is, they should get more shares of the global costs than developing countries.

• Journal of Korea Trade
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• v.26 no.2
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• pp.45-64
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• 2022

Purpose - This paper examines South Korea's potential status as a carbon leakage country, and the level of risk posed by the Korean emissions trading scheme (ETS) for Korean industries. The economic effects of border carbon adjustments (BCAs) to protect energy-intensive Korean industries in the process of achieving the carbon reduction target by 2030 through the Korean ETS are also analyzed. Design/methodology - First, using the Korean Input-Output (IO) table, this paper calculates the balance of emissions embodied in trade (BEET) and the pollution terms of trade (PTT) to determine Korean industries' carbon leakage status. Analyses of the risk level posed by carbon reduction policy implementation in international trade are conducted for some sectors by applying the EU criteria. Second, using a computable general equilibrium (CGE) model, three BCA scenarios, exemption regulations (EXE), reimbursement (REB), and tariff reduction (TAR) to protect the energy-intensive industries under the Korean ETS are addressed. Compared to the baseline scenario of achieving carbon reduction targets by 2030, the effects of BCAs on welfare, carbon leakage, outputs, and trading are analyzed. Findings - As Korea's industrial structure has been transitioning from a carbon importing to a carbon leaking country. The results indicate that some industrial sectors could face the risk of losing international competitiveness due to the Korean ETS. South Korea's industries are basically exposed to risk of carbon leakage because most industries have a trade intensity higher than 30%. This could be interpreted as disproving vulnerability to carbon leakage. Although the petroleum and coal sector is not in carbon leakage, according to BEET and PTT, the Korean ETS exposes this sector to a high risk of carbon leakage. Non-metallic minerals and iron and steel sectors are also exposed to a high risk of carbon leakage due to the increased burden of carbon reduction costs embodied in the Korean ETS, despite relatively low levels of trade intensity. BCAs are demonstrated to have an influential role in protecting energy-intensive industries while achieving the carbon reduction target by 2030. The EXE scenario has the greatest impact on mitigation of welfare losses and carbon leakage, and the TAF scenario causes a disturbance in the international trade market because of the pricing adjustment system. In reality, the EXE scenario, which implies completely exempting energy-intensive industries, could be difficult to implement due to various practical constraints, such as equity and reduction targets and other industries; therefore, the REB scenario presents the most realistic approach and appears to have an effect that could compensate for the burden of economic activities and emissions regulations in these industries. Originality/value - This paper confirms the vulnerability of the Korean industrial the risk of carbon leakage, demonstrating that some industrial sectors could be exposed to losing international competitiveness by implementing carbon reduction policies such as the Korean ETS. The contribution of this paper is the identification of proposed approaches to protect Korean industries in the process of achieving the 2030 reduction target by analyzing the effects of BCA scenarios using a CGE model.

• Korea Trade Review
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• v.46 no.6
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• pp.143-162
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• 2021

Although awareness of the need to respond to climate change is expanding, various controversies are being raised about the EU's Carbon Border Adjustment Mechanism (CBAM). The EU has announced that they will implement CBAM as responding to climate change and preventing carbon leakage. However, the questions are raised as to whether it is actually effective in preventing carbon leakage. Above all, CBAM has its own contradictions, thus it could not be easy to implement. This is because the possibility of violation of the WTO principles is high and there are many issues in implementation. Emission Trading System (ETS) based on CBAM differs by country, and international linkage is not easy in that ETS is not a widely used system worldwide. The EU's CBAM is highly likely to be used as a trade restrictive tool, and is inevitably subject to trade disputes in that it imposes additional tariffs. The unilateral implementation of CBAM should be restrained unless support from the international community and consideration for developing countries are not taken into account.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.46
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• pp.265-313
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• 2010

Kyoto Protocol is an international convention on concrete performance program for UNFCCC(United Nations Framework Convention on Climate Change), which regulate and prevent to global warming and officially came into effect on February 16, 2005. Kyoto flexible mechanisms, the agreed environmental system in March 1997 in the Third Conference of Parties in UNFCCC General Assembly, Emission Trading System(ETS), Clean Development Mechanism(CDM) and Joint Implementation(JI), are key policies related to environment. In advanced countries, greenhouse gas emissions should be reduced average 5.2% level compared to 1990 in total emissions during 2008-2012. World leading carbon market finished the trial on the EU ETS I greenhouse gas emissions trading system, EU ETS II is operated regularly after 2008. World Bank leads to make 'Prototype Carbon Fund(PCF)' in April 2004, which is the world first carbon fund and a representative public carbon fund type, World Bank operate various funds including present PCF. Thus, I would like to propose as follows in relation to this study: First, in the validity analysis of carbon funds, it would be needed to analyze the Emission Reduction Cost Efficiency(ERCE) of carbon. The ERCE is a break-even value which brings the Net Present Value(NPV) to zero. NPV approach is used among projects and it enables potential projects to be compared and evaluated the ERCE on the basis of the net present value of net future cash flows. Therefore, according to results of analysis, carbon funds should be developed and invested. Second, it would be necessary to allow of issuing bonds together with carbon funds, carbon finance etc. Third, carbon funds, it would be reasonable to have a relatively enough maturity in project and as a financial derivatives in the international financial markets, it is needed various types of transactions. Fourth, it would be needed to standardize the carbon emissions trading for more efficiently. Fifth, it would be necessary to establish and invest in various kinds of domestic and overseas global carbon funds, including governments, privates, governments and privates sectors. And it is also needed to establish the medium and long term plans for carbon funds. Sixth, it would be needed to foster the advanced trade mechanisms for carbon funds in the most effective ways. Finally, carbon funds should be used in harmony with international societies to reduce global warming as the social responsible investing funds and it should be contribute to sustainable development. In addition, it would seem that carbon funds should be studied on establishing the contributable standard of sustainable development in the future assignment.

• Environmental and Resource Economics Review
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• v.24 no.1
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• pp.141-164
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• 2015

The concept of consumption-based greenhouse gas (GHG) inventory is directly related with the carbon content of international trade. Along the lines of the consumption-based GHG inventory, we investigate domestic and foreign carbon contents embodied in sectoral exports of Korea. In addition to the analysis of carbon content of exports, it is investigated how much share of responsibility for carbon emissions of Korea belongs to each major trading partner of Korea. We also compute the carbon intensities of Korean exports in carbon chain with other trading partners and find some characteristics revealed in Korea's carbon emissions embodied in its exports.

• Korean System Dynamics Review
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• v.10 no.2
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• pp.53-79
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• 2009

The main purpose of this study is to find what steps are needed for a system for CO2 emissions trading to be formulated as government policy, using System Thinking approach. First, this paper analyzed Korean newspapers to consider the social issue regarding CO2 emissions trading. There were more articles related to international issues than domestic ones before 2008. This trend, however, became reversed from January 2008, which means that consideration of CO2 emissions trading has been discussed as a domestic social issue from 2008. Second, it analyzed speeches by former president Roh Moo-Hyun and current president Lee Myung-bak. In particularly, President Lee Myung-bak declared "Low Carbon and Green Growth" as a new growth engine and a Korea's vision of the future national development. Third, it examined which government agencies, including departments and committees, are pursuing policies regarding climate change, global warming, and CO2 emissions trading. Most policy has originated in the Ministry of Environment, although policy alternatives have been proposed in other agencies including the Ministry of Knowledge Economy. The study concludes that the political consideration has played a major role in the policy agenda-setting process of the CO2 emissions trading in Korea.