A sustainable energy policy to meet the challenge of climate change in the Republic of Korea
Date
2016
Authors
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Journal ISSN
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Publisher
University of Delaware
Abstract
Energy is indispensable to sustain a society. However, rapid increase in energy
consumption has caused many problems such as environmental pollution, ecological
degradation, and worldwide climate change. Especially, climate change caused by
anthropogenic GHG has been seriously threatening the world. According to the IPCC,
the global temperature is expected to rise by 4.8 °C and sea level by 0.95 m compared
with pre-industrial period, provided that the world would keep consuming fossil fuel
without making resolute efforts for reduction (2014: 10-11).
Nonetheless, the world has not taken sufficient actions to address these crises.
Korea is no exception. Korea’s GHG emissions have increased by 2.57 times during
22 years, from 2.17 toe in 1990 to 5.57 toe in 2012 based on per capita (MOTIE &
KEEI, 2014: 5). According to IEA, Korea is the world’s 7th largest GHG emitting
country and its per capita emission is 2.8 times higher than that of the world (2015a).
Confronting these challenges, it is necessary to reform Korea’s current energy system
toward a sustainable one within the frame of global equity and responsibility. A
sustainable energy system should satisfy the key elements of sustainable development:
namely, minimizing environmental pollution or degradation, preventing dangerous
anthropogenic interference with the climate system, sustaining continual economic
development, improving social equity, stability and balanced development, and, if
possible, contributing to other countries.
To keep GHG emissions within a level believed to be sustainable, the Korean
government has established many policies such as the National Basic Energy Plans,
the Basic Plans on Developing and Disseminating New and Renewable Energy, the
Basic Plans for Electricity Supply and Demand, and the Plan for Setting Post-2020
GHG Reduction Goal (hereinafter referred to as ‘INDC plan’) which was developed
for submitting to the UNFCCC secretariat that included Korea’s INDC. Among these
policies, the INDC plan includes the most challenging goal – 37 % of GHG reduction
by 2030 compared with BaU scenario, which means the emission reduction to 535.5
Mt_CO2 from 850.6 Mt_CO2. Provided that Korea achieves this reduction goal, per
capita emissions in 2030 will amount to 10.3 t_CO2. However, the target is not
sufficient to satisfy the international requirement to bind the global temperature rise
within 2 °C – around 3.3 ton of per capita CO2 emissions (Byrne & Wang et al., 1998).
This means that Korea’s current and future energy system is far from fulfilling what is
required for sustainable energy system.
Recognizing these limitations, this study analyzes the situations of Korea’s
energy system and suggests policy alternatives to contribute to constructing
sustainable energy system. For this, it designs a new BaU scenario, which predicts that
Korea’s TFC would amount to 272.4 Mtoe and TPES 372.2 Mtoe by 2030. This study
also estimates the potential of renewable energy would be 272 (3,022 TWh) ~ 363
Mtoe in 2030, and foresees that renewable energy would increase to the extent that
exceeds the energy demand of Korea – 449 Mtoe (5,652 TWh) in 2050 – due to
technological advancement and growing public acceptance. Based on these, this study
establishes an alternative scenario taking four policy recommendations into
consideration. The first is the reform of industrial structure. Since Korea’s economic
system is significantly dependent on energy intensive manufacturing industries, this
study suggests lowering their portion from 6.3 % (the INDC Plan) to 4.2 % (KEEI’s
2006 scenario) based on the value-added. The second is to end the use of domestic
coal. Domestic coal industry has been sustained by various environmentally harmful
subsidies, tax exemption and political supports. The substitution of natural gas for
domestic anthracite is, therefore, suggested. The third is to make and implement
aggressive efficiency improvement policies, following the JISEEF report which
analyzes the overall saving effects to be 27.1 % as TFC and 27.7 % as GHG. The
fourth is to reduce energy service requirement. Public engagements by using public
transportation, saving energy through adjusting temperature for heating and cooling,
consuming local and seasonal food are the examples of these policies. If these all
factors are adopted, Korea’s TFC would decrease to 162.2 Mtoe from 272.4 Mtoe in
2030.
In addition, renewable energy is found to have price competitiveness from the
mid-2020s with the internalization of external social costs. The gradual reflection of
external costs, even if controversial, will not make the economy vulnerable given that
other taxes like labor tax are adjusted together. With these policies, Korea is expected
to reduce GHG emissions to 325.4 Mt_CO2 or 6.2 t_CO2 of per capita emissions by
2030 (or 4.4 t_CO2, if overseas purchase of emission certificate is considered) and to
achieve one of the most important goals for sustainable energy system by 2050 – the
accomplishment of 3.3 t_CO2 emissions based on per capita. Extended use of
renewable energy could also contribute to accelerating regional development, since
renewable energy is relatively well-distributed across regions. The burden of
importing energy, which is usually identified as the ratio of energy import costs to
GDP, is expected to go down significantly, from 12.9 % to 5.9 % by 2030 and much
less by 2050. In addition, when the burden of energy import is relieved, it is possible
to secure a stable energy supply. In sum, the policy alternatives suggested in this study
are expected to make Korea’s energy system more sustainable from the perspectives
of environment, economy, and socio-politics.
Starting from the scenario that reflects the government’s premises, this study
elicits the possibility of constructing a sustainable energy system. Even though the
Korean government and many economy-oriented experts express their concerns, the
transition from a fossil fuel-based centralized energy system to a renewable energybased
decentralized one is indispensable and achievable with additional benefits such
as clean environment, economic soundness and various socio-political advantages. For
this, additional policies to reduce social resistance – the reform of tax and subsidy
system, more aggressive renewable energy policies, active diffusion of efficient
technologies, and the change of lifestyle based on self-sufficiency – are required. In
addition, efforts have to be made to reduce the resistance of interested groups and
people who do not want change.
Even though this study has limitations in analyzing Korea’s energy situations
and suggesting policy alternatives, the reform of Korea’s energy system into a
sustainable one is important and imperative. Recently, the world at the COP21 in Paris
agreed to reduce GHG emissions to hold the increase of global temperature within 2
°C or less. The policy recommendations of the study could be suggestive to Korea and,
hopefully, to other countries.
Key words: Sustainable Energy System, Industrial Structure, Energy Efficiency,
Energy Service, Renewable Energy