The politics of climate change policy design in Korea

Abstract

The climate change policy design of the Lee Myung-bak administration was the outcome of interest group politics around the greenhouse gas and energy target management scheme, carbon taxes, and the emission-trading scheme. Using qualitative methods, this research examines powerful stakeholders and their interests at play in Korea’s climate change policymaking processes. It also links the political economy of climate change policy to the legacy of the ‘developmental state’ and examines environmental developmentalism in the design of the three climate change policies. The Lee administration strongly promoted environmental developmentalism, which created a new growth engine in an environmental field, while bolstering manufacturing businesses and excluding the views of environmental non-governmental organisations from the target-management and the emission-trading schemes. The Lee administration also sought to facilitate pro-business measures such as low taxes, which led it to reject a carbon tax. Therefore, environmental developmentalism was central to the politics of the Lee administration’s climate change policy design.

Keywords:

• Emission-trading scheme
• carbon tax
• target management scheme
• developmental state
• environmental developmentalism
• green growth

Acknowledgements

This research was supported by the Korea Institute of Public Administration (KIPA) and the National Research Foundation of Korea Grant funded by the Korean Government (NRF-2013S1A3A2053087). This article is partially based on my 2012 KIPA report entitled ‘Conflict studies on Carbon Emission Trading Policies’. Special thanks to Sung-Kyun Kim, Anthony Zito, and two anonymous reviewers for their thoughtful comments, as well as Da-Hye Lee and Haejun Moon for their assistance.

Notes

1. See Jin (2013) and Kim and Thurbon (2015) for a detailed history of this idea.

2. In 2011, manufacturing businesses with higher GHG emissions ranked as follows: gadgets (14,079 tCO2eq) > automobile company (10,611) > semiconductors (8642) > electric and electronics (7595)> display (6580)> shipbuilding (3792) (Kim and Shim 2013, p. 42).

3. He noted that Korea was tenth among nations responsible for GHG emissions, with only 1.7% of total global GHG emissions in 2005. The percentage of GHGs Korea contributed to global emissions from 1850 to 2000 was estimated to be 0.7% – 23rd highest in the world (Kwang Lim Choi quoted in Climate Action 2009). However, for 2015, Korea ranked seventh for GHG emissions.

4. After the ETS started in 2015, businesses with annual emissions of >125,000 tCO₂eq (factory of >25,000 tCO₂eq) were shifted to the ETS, and small and medium-sized businesses below the level still remained under the control of the TMS.

5. The fine is three million won ($2719) for the first violation, six million won ($5437) for the second violation, and 10 million won ($9064) for the third violation.

6. The BISD argues that, given a carbon tax of €25 (32,828 won) per tonne of CO₂, the price of steel products would rise by 4.53%. The percentage of manufacturing businesses per GDP in 2005 was as follows: Korea (28.9%), Japan (22.2%), and the US (13.8%). The percentage of energy consumption in the industrial sector in 2005 was as follows: Korea (55.2%), Japan (38.7%), and the US (25.9%). BISD expects that a carbon tax of $50 per tonne of CO₂ will result in a 2.5% reduction in total production of manufacturing businesses of BAU by 2013 (KCCI BISD 2010).

7. The letter says that a 3% auction-based allocation would cost 4.5 trillion won ($4.05 billion) annually and that a 10% auction-based allocation would cost 14 trillion won ($12.6 billion).

8. For the 2010 industry output in the data of 2014 benchmark tables, the relative ratio of Korean manufacturing businesses to service businesses is 49.3:40.3%, while in the case of OECD, the ratio is 26.2:56.4% (Korea Bank 2014).