Adoption of digital repositories for CO₂ emissions reduction: the case of Korea

ABSTRACT

This study aims to estimate the potential economic benefits, energy and CO₂ emissions reductions when using trusted third-party digital repository (TTPR) services in one individual bank, and within the banking industry in Korea. First, the cost, benefit and net benefit of using TTPR services in the banking industry are estimated. Second, the net induced output effect is estimated. Third, based on an environmentally extended input–output analysis, CO₂ emissions reduction was estimated as 1924.32 tons in 2009 and the energy consumption reduction as 640.70 TOE. Fourth, the total economic benefit, which is the sum of the net induced output effect and economic value of CO₂ emissions reductions, is approximately $11.04 million. The findings demonstrate that energy consumption and CO₂ emissions reductions are meaningful enough to result in significant economic benefits. Therefore, the Korean government should promote the use of TTPR services in the entire industry.

KEYWORDS:

• Digital repository
• CO₂ emissions
• energy consumption
• environmentally extended input–output analysis
• trusted third third-party digital repository

JEL CLASSIFICATION:

• Q58 Environmental Economics: Government Policy
• Q40 Energy: General
• C67 Input–Output Models

Acknowledgements

The authors thank Yong-Gun Kim, participants of BK21 plus and SSK Joint Seminar at the Department of Food and Resource Economics, Korea University, and the anonymous referees for their helpful comments and suggestions. This is a revised version of the paper that was presented at the 88th Western Economic Association International Annual Conference.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ This act was first legislated as the Framework Act on Electronic Transactions in 2002 and amended several times between 2005 and 2011 and then substantially amended in 2012.

² For detailed examples of life cycle assessment, see Leon et al.’s study (2014) for paper production comparisons or Counsell and Allwood (2007) for cutting out stages in the life cycle.

³ See the left-side pie chart, which is the portion of Bank B in slide #15 (the right-side pie chart is excluded because of another client’s portion) (Hana I&S 2012).

⁴ The file size of an electronic document in text ranges from 50 kb to 550 kb, depending on its file format, the number of characters, colour, resolution, compression, etc. See details in Chapman et al.’s study on Text Pages, Quality Ratings by Size (2007, 4). The Korean government specified the resolution of digitized documents with the Ministry of Knowledge Economy (2009). Based on this requirement, this study determines 300 KB is the average file size of a text document.

⁵ The exchange rate is based on the World Bank (2015). Hereafter, the same exchange rate (Korean Won to US$) is applied to this study.

⁶ See the left-side bar graph, which is the portion of Bank B in slide #15 (the right-side bar graph is excluded because of another client’s portion) (Hana I&S 2012). These data are also reported in the Ministry of Strategy and Finance (2010, 80).

⁷ One may argue the ratio can be affected by the global financial crisis. The values of the same ratio were 9.24 in 2007, 9.12 in 2008 and 9.20 in 2009, respectively. Because the average value of 3 years (from 2007 to 2009) is 9.19, the ratio of 9.2 does not seem to have been affected by the global financial crisis.

⁸ This might not be the case, as the scale can also affect the cost benefit. However, this is the only approach that can be used in this study as there is no other source of data.

⁹ The detailed calculation of the amount is given in Section II.

¹⁰ Since Statistics Korea announced the Yearbook of Energy Statistics, the ‘National Statistics (No. 33901)’ in 2002, the Yearbook of Energy Statistics has been considered the most authoritative data source in Korea.

¹¹ Researchers also contacted representative stationery stores in the USA and Canada. Their average wholesale prices were very similar in US currency.

¹² The difference in Equations 3 and 9 is that while Equation 3 exogenizes hth industry for an extraction method, Equation 9 endogenizes the industry for CO₂ emissions.

¹³ This includes energy-related CO₂ emissions only.

¹⁴ ICE ECX EUA Futures are carbon credits developed by the European Climate Exchange (ECX) for trading on the Intercontinental Exchange (ICE) Futures.

¹⁵ The value was taken by the search of Bank B from the Financial Statistics Information System site (http://efisis.fss.or.kr/fss/fsi/id/fssmain_en.jsp, accessed 1 June 2015).

¹⁶ If we do not use the proxy and include the induced direct output only from adopting TTPR in the banking industry ($10.34 million) and paper industry ($2.82 million), then the amount of the net induced output effect would be $7.52 million.

Additional information

Funding

This work was supported by the Hankuk University of Foreign Studies [Research Fund 2016].