Green Growth Research Division

NRCS KOREA

Economics of Climate Change and Low Carbon Growth Strategies in

Northeast Asia - The 2nd Regional Consultation (11 Oct. 2010, UB)

Green Growth and Climate Issues

Dr. Sang In KANG
National Research Councils for Economics,
Humanities and Social Sciences, Korea
 Green Growth Research Division
Contents NRCS KOREA

I. Green Era

II. Climate Change in the Green

III. Conclusion

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 Green Growth Research Division
I. Green Era NRCS KOREA

1. Turning points: Green Economy, Growth, New Deal, Recovery…

 Contraction of the global economy in 2008
- financial crisis followed by recessions
- stimulus packages for recovery and sustainable growth

 “Low Carbon, Green Growth” as a development strategy, August 2008, Korea

 A call for a “Green New Deal” by Ban Ki-Moon, the UN Secretary-General in the
speech to the UNFCCC in Poznan in Dec. 2008

 “Green Recovery”
- “make the best possible use of investment funded by fiscal stimulus programs towards
the goal of building a resilient, sustainable and green recovery.” London G20 Summit,
April 2009
- “Green Recovery: The way out of the Economic Crisis”, BMU, Germany, April 2009

 “Green Economy”
- “Low carbon technologies in a green economy”, House of commons, UK, March 2010

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 Green Growth Research Division
I. Green Era NRCS KOREA

 UNEP “ Green Economy Initiative” in 2008

- designed to provide the impetus for the Global Green New Deal,
- proposes to reshape and refocus policies, investments, and public spending towards
low-carbon and environmentally-friendly sectors such as cleaner technologies,
renewable energies, agriculture and waste management…
- has 3 core elements: Green Economy Report, Green Jobs Report, and The Economics
of Ecosystems and Biodiversity study (TEEB).

 OECD “Green Growth Strategy” in 2009

- focusing on the green stimulus packages to recover from recent global financial crisis,
(“Green Growth : Overcoming the Crisis and Beyond”, 2009)
- confirms, together with innovation, going green can be a long-term driver for economic
growth, through investment in renewable energy and improved efficiency in the use of
materials.
- endorsed by the Declaration on Green Growth (C/MIN(2009)5/ADD1/FINAL) and to be
delivered in 2011.

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 Green Growth Research Division
I. Green Era NRCS KOREA

2. Vision
 Green Economy
- an economy that results in improved human well-being and reduced inequalities over
the long term, while not exposing future generations to significant environmental
risks and ecological scarcities (working definition of GE, UNEP/ ETB),
- promotes green investments as the best bet for real growth, combating climate change
and triggering an employment boom.

 Green Growth
- means promoting economic growth and development while reducing pollution and
greenhouse gas emissions, minimizing waste and inefficient use of natural resources,
and maintaining biodiversity (OECD).
- proposes to make investment in the environment a driver for economic growth and
development, by improving health and jobs prospects for populations, strengthening
energy security through less dependence on fossil fuels, etc.
- requires a shift in both public and private investments, and limited public funds need
to be carefully targeted and accompanied by the right policy frameworks to help
leverage private financing.

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 Green Growth Research Division
I. Green Era NRCS KOREA

3. Challenges

 Global
- Depletion of natural resources
fossil fuels energy prices, global warming
water, food, forest international/national socio-economic tension

- Degradation of global socio-ecosystem

climate +6°C in 2030 increased damage costs
cultural and bio-diversity loss deteriorated socio-economic cohesion

- Persistent poverty and under-development with lack of growth engine

decreased purchasing power of lower income group
health problems of 9 bill. (in 2020) and increased mortality

- Deepening Ecological Deficit (global ha/person, WWF Study, 2006)

Bio-capacity 1.8 Ecological footprint 2.2

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 Green Growth Research Division
I. Green Era NRCS KOREA

 Asia and the Pacific

- 60% of world population with 37% of world GDP

- Advanced, Rapidly growing emerging, and Lest developing economies
- 1.5 times population density with 2/3 of world poor
- 600 million without safe drinking water
- 1.9 billion without sanitation
- 800 million without electricity
- 43% of world CO2 emission

 We need definitively a green growth in the context of environmentally sound

and sustainable development with poverty eradication…

 Long history, much talks, no tangible and substantial progress

- since Stockholm in 1972, ESSEG, SD, MDG…

 But the problem is we have still,

- persistent poverty, degradation, depletion of environment and natural resources…
- climate change and warming as a global environmental and socio-economic challenge

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 Green Growth Research Division
I. Green Era NRCS KOREA

 Questions
- Sustainability of the globalized modern world
mass production and consumption over the global carrying capacity
loss of cultural diversity, tolerance and social cohesion
- Market efficiency premised by perfect competition among price takers
market price ignoring costs of environmental degradation
speculative financial flows in a volatile money market
- World political economics inherited in the past centuries
East-West diversity of socio-economic systems
North-South deepened interest-gap on resources and income

 Doubts intervene in all faces of the green growth, and a strategic solution set seems not
always the same as a global, regional, national or local one.

 And further, as to the climate, the warming is global but the resulted damage
varies across regions, which requires a coordinated and innovative international policy
responses…

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 Green Growth Research Division
II. Climate change in the Green NRCS KOREA

1. Economics of climate change

 Climate changed, changes and will change further, and this in spite of the human efforts.
- +0.74 °C (1906-2006)
- +0.1 °C every 10 years
- +1.1~6.4°C between 1980 and 2099 (most plausible scenario)

 Costs of climate change

- Global costs of inaction are bigger than those of early action against climate change
- Aggregate costs of mitigation as % of GDP would be lower in the OECD countries than
in the BRIC and the rest of the world countries.
- Equitable burden sharing is essential in future agreements beyond Kyoto.

 It seems uncertain that the current international framework will go on as it is

- International carbon market under Kyoto mechanism (ET, JI, CDM)
- Domestic carbon markets under national regulatory cap and trade system

 Nevertheless, changing climate as well as commitments created new business

opportunities, technological progress and changes in production-consumption pattern.

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 Green Growth Research Division
II. Climate change in the Green NRCS KOREA

2. Korean economy

 7.5 times GDP increase during 1975-2006

 from poor developing to developed industrialized country with in a generation
 high proportion of manufacturing and energy-intensive industries in GDP

 heavily dependent on the imported energy and natural resources

weight of imported energy 96%
 substantial ecological deficit (global ha/ person)
Bio-capacity 0.5 Ecological footprint 4.1 Deficit –3.5
 GHG emissions doubled since 1990s
298.1 MtCO2 (1990) 620.0 MtCO2 (2007)
85% of emissions come from the energy sector

 In spite of difficulties, Korea took the “Low Carbon Green Growth” as a paradigm shift
toward a sustainable socio economic development…

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 Green Growth Research Division
II. Climate change in the Green NRCS KOREA

3. “Low Carbon Green Growth Strategy”

 LCGGS established as a set of National Green Growth policy
- Presidential Committee on Green Growth (2008)
Ministries, Local Governments, Academics, Civil societies …
- Framework Act on Low Carbon Green Growth (“Green Growth Act”, 2008)
- Enforcement Decree of FALCGG (2009)
Role of Committee on Green Growth
Green Growth National Strategy
National and Local Implementation Plan
Policy linkages and Coordination of Central and Local governments

National GHG Reduction Target -30% BAU in 2020

Tools and Measures to implement GHG Registry, ETS, Carbon Tax,
Building and Vehicle standards, …
Supportive measures to Green Technology and Industry Development
- 5-year Green Growth Plan as a new cycle of economic planning
Six 5-year economic development plan(1962-1991), New economy 5-year plan
- Global Green Growth Institute, Green Growth Research Division in NRCS, …
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 Green Growth Research Division
II. Climate change in the Green NRCS KOREA

4. “5-year Green Growth Plan”

 3 Key Strategies and 10 Policy Directions with 50 Major Targets
- Measures for Climate Change and Securing Energy Supply
Reduce carbon emissions
Decrease energy dependence on oil and enhance energy efficiency
Support adaptation to climate change impacts
- Creation of New Growth Engine
Develop green technologies as future growth engines
Greening of industry
Develop of cutting-edge industries
Set up policy infrastructure for green growth
- Contribution to International Community
Green city and green transport
Green revolution in life style
Enhance national contribution as a global fore-runner in green growth

 Under the 10 policy directions, 50 policy targets are identified and the implementation
is to be evaluated on a regular base. Details in http://www.greengrowth.go.kr

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 Green Growth Research Division
III. Conclusion NRCS KOREA

 Conclusion

 Green growth challenging the degradation of environment and natural resource

depletion is possible only with an environmentally harmless and resource circular
socio economic system at regional, national and local levels
 For a country with lowest ecological carrying capacity, a Green Growth is imperative
to proceed with a holistic socio-economic system change on extraction, production,
consumption and final disposal.
 Rapid economic growth needs to be harnessed with efficient energy and water system,
eco-friendly planned urbanization, and sound health and education system.

 For this,

- Make market serve for the need instead of the greed, get prices rights and secure the
macro economic stability against speculative money flows.

- Enhance public-private partnership to promote green business, market, industry and

infrastructure.

- Increase targeted public support for R&D on environmentally sound technologies and
social policies to reconcile and restore social cohesion lost in the mid of globalization

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 Green Growth Research Division
III. Conclusion NRCS KOREA

 Propos

- As in the case of Korea, the highest level leadership supported by national consensus is
essential to get a low carbon green growth.

- Knowledge and experience sharing in the development of green growth strategy and
its implementation plan is the first step to take.

- Use existing international environmental governance opportunities in 3 pillars of SD

and ride on the Green ODA flows

Many Thanks !!!

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