South Korea—Moving Forward
The Korean Energy Economics Institute (KEEI) conducted a study to evaluate the effectiveness of Korea’s Target Management System, using a Greenhouse-gas Reduction Efficiency (GRE) index. The policies are The Target Management System and the Emissions Trading Scheme.
South Korea’s Greenhouse Gas (GHG) and Energy Target Management System, known as “Target Management System,” was implemented between 2012 and 2015. According to this policy, 1,107 companies were under obligations to reduce their GHG emissions as of December 2015. After 2015 firms participating in the Target Management System were asked to participate in Korea’s new Emission Trading Scheme (KETS). KETS is one of the world’s largest cap-and-trade systems.
For its study, KEEI collected a dataset of 251 firms that were under the Target Management System. The data set included each firm’s GHG emissions, energy consumption, sales, tangible assets, and number of workers between 2011 and 2015. Also, KEEI looked at changes in emissions by participating firms in the following sectors: semiconductors, displays, electronics, petrochemicals, iron and steel, shipbuilding, textiles, paper, ceramics, automobiles, power generation, cement, machinery, nonferrous metals, refining, telecommunications, and mining.
After the analysis, KEEI found that the average GRE index was improved in the first year of 2012, and then deteriorated from 2013 to 2014. However, in 2015 when the Emission Trading Scheme was initially implemented, the average GRE index was greatly improved. Some sectors, such as the refining sectors showed marked improvement, and the average emission levels of the fifteen major industries of South Korea improved compared to 2011. This data suggests that South Korea is moving forward in its efforts to support the Paris Agreement. Some criticize that South Korea’s target is inadequate, but this study’s findings show that South Korea is doing a good job to comply with its pledge at COP21
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Korea Energy Economics Institute, “A Positive Research on Greenhouse-gas Reduction Efficiency after Target Management System Implemented” (December 2016)