South Korea Subsidies

South Korea–$667 million in 2013-2014 counting domestic subsidies and subsidies for overseas oil and gas exploration

According to a report, “G20 subsidies to oil, gas and coal production: Republic of Korea”, that was published in 2015, South Korea’s subsidies for fossil fuels can be summarized as follows:

As the table above shows, the majority of South Korea’s subsidies have been used for supporting coal production, and the largest subsidy went to the production of coal briquettes. This is related to South Korea’s energy market structure. In South Korea, major energy industries are still publicly owned. For example, Korea National Oil Corporation (KNOC) is responsible for exploration, development and production of oil and natural gas within and outside of the country as well as strategic reserves. Likewise, the coal industry is also largely dependent on state ownership. Three out of eight major domestic anthracite mines are run by Korea Coal Corporation (KCC), which is state-owned.

South Korea has the highest level of support for overseas coal power plant projects through export credit agencies among OECD countries. Also, Korea ranked first in terms of the size of the export credit institutions that were supported by foreign export credit institutions in the overseas coal-fired power plant projects that were done by Korea’s Exports Bank and Korea’s Trade Insurance Corporation. Their total support amounted to $4.345 billion from 2003 to 2013. Japan ranked second with $ 3.27 billion, and Germany third with $2 billion.

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Alex Doukas, “G20 subsidies to oil, gas and coal production: Republic of Korea” (Overseas Development Institute, 2015).

South Korea Survey

Only 20% of the general public respondents answered that mitigation is important, which indicates that more efforts should be made to promote awareness of climate change to the public.

A 2015 Comparative Study of Perception of the Public and Stakeholders to Climate Change Adaptation can be evaluated as the country’s first national awareness survey on adaptation to climate change. The study’s authors evaluated the conceptual recognition of climate change-related terms in order to evaluate the conceptual perception about climate change. The concept of climate change, especially mitigation and adaptation, is not easily understandable to the general public. In this study, the authors use Kyoto Protocol, IPCC, weather change, mitigation/adaptation, greenhouse gas and sea level rise as the terms related to climate change.

The findings from the survey and policy recommendations can be summarized as follows. First, only 20% of the general public respondents answered that mitigation is important, which indicates that more efforts should be made to promote awareness of climate change to the public. Second, the level of awareness of the public in responding to climate change is significantly lower than that of environmental stakeholders. The response rate of the general public perceiving climate change mitigation concept is about three times lower than that of stakeholders and the rate for adaptation was about four times lower. (See Figure 2 below.) These results suggest that it is necessary to diversify and promote information about climate change through public education programs.

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Yunji Jeong and Jongsik Ha, “The Comparative Study of Perception of the Public and Stakeholder to Climate Change Adaptation,” Journal of Climate Change Research Vol. 6, No. 2 (2015).

The following table (Table 1) shows you the demographic composition of their survey respondents.

South Korea Strategies

South Korea: (1) Meet existing Paris Agreement pledge before making a new pledge; (2) Promote the use of renewable energy though the deregulation of its current energy system.

At COP 21, South Korea pledged “to reduce its greenhouse gas emissions by 37% from the business-as-usual (BAU, 850.6 MtCO2eq) level by 2030 across all economic sectors.” Some critics would see South Korea’s INDC as pretty defensive. For instance, the Climate Action Tracker evaluated South Korea’s target as “inadequate” (The Climate Action Tracker). However, considering South Korea’s current energy portfolio, especially heavy dependence on fossil fuels, it would be pretty challenging to accomplish this target. In 2015, South Korea’s primary energy consumption is composed as follows: 41% from petroleum and other liquids, 31% from coal, 14% from natural gas, 13% from nuclear, and 1% from renewable sources. More than 85% of South Korea’s primary energy consumption is from fossil fuels—the major culprits of greenhouse gases. Without major changes in policies, it would be difficult to substantially reduce this level of fossil fuel consumption while not damaging its economy.

South Korea’s original plan for its INDC target was mainly focusing on expanding its nuclear power capacity. In its Second Basic Plan for Energy published in January 2014, South Korea set up a target for increasing nuclear power capacity from its current share of 22% up to 29% by 2035. However, its original plan now faces significant challenges mainly because of political changes.

The new Moon Jae-in administration, which was inaugurated on May 10, 2017 after the long political turbulence involving Park Geun-hye’s impeachment, declared that South Korea will phase out coal and nuclear power ultimately as responses to growing public concerns about air pollution and nuclear safety. The new administration’s numeric targets are not set up yet, but it already decided on the permanent shutdown of the country’s oldest nuclear reactor and temporary shutdown of aged coal power plants. Additionally, President Moon appointed Paik Un-kyu, who is an engineering professor and a well-known renewable energy expert/ advocate as the new minister of trade, industry and energy, which indicates that the new administration will prioritize renewable energy.

From the perspective of climate change policies, it is complicated to judge the Moon administration’s policy direction. The new administration’s anti-nuclear policies are somewhat incompatible with its INDC pledge. In order to fill up possible gaps in electricity generation, the new administration is trying to expand electricity generation from gas power plants, like Japan did after its shutdown of nuclear power plants after the Fukushima nuclear accident. Natural gas combustion is relatively better in terms of greenhouse gas emission compared to coal. Nonetheless, it cannot be more competitive than nuclear energy. If South Korea expands natural gas consumption significantly in the coming years for power generation, it would be more difficult for South Korea to comply with its INDC target.

Therefore, I would recommend the followings for South Korea. First, it needs to recalculate its electricity demand projections. The country’s original plan of expanding nuclear capacity needs to be reviewed because South Korea’s economy is entering in a mature stage with slow growth rate and its population growth is also slowing down. However, sudden reductions in nuclear power that has occupied more than 30% of electricity generation can bring negative side effects too. Expanding natural gas consumption for electricity generation cannot be the best alternative the from perspectives of energy security and climate change policies.

South Korea needs to set up a long-term strategy that moves towards the use of renewables to meet electricity demands. It also needs to make reforms in its electricity market. South Korea’s electricity transmission and distribution market still remains vertically integrated while the power generation market has been liberalized. As long as electricity trades remain rigid and difficult, it will be difficult to sustainably increase renewable energy. South Korea’s new government needs to work on how to facilitate electricity trades and transactions which can be the major motivation for consumers to transfer themselves to energy producers too.

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South Korea Renewable Energy

South Korea—No 100% 2050 commitment
Benchmark: 11% renewable energy by 2035

South Korea did not make an explicit commitment for 2050. The longest plan for the country’s energy portfolio targets 2030-2035. South Korea established and announced the “Fourth Plan for New and Renewable Energy” in September 2014. It outlined detailed measures for the implementation of new and renewable energy. This plan suggests that South Korea focus on creating a new environment for new and renewable energy markets and transform its energy market from the current ‘government-led’ type to a new one led by ‘public-private partnerships.’

The South Korean government (Ministry of Trade, Industry and Energy) publishes a New and Renewable Energy White Paper biennially. The latest version was published in October 2016 before the Moon Jae-in administration was inaugurated. According to this white paper, South Korea aims to increase the share of new and renewable energy from the current 3.6% (in 2014) to 9.7% by 2030, to 11% by 2035. The following table shows how South Korea will reach the goal with solar power and wind power that are likely to increase substantially according to the government’s plan. Solar power, geothermal, and waste heat are supposed to supply heat and electricity for houses and buildings.


(Source. METI, 2016 New and Renewable Energy White Paper)


During the 2017 presidential campaign, Moon Jae-in, as the frontrunner candidate, suggested pretty radical changes in the country’s energy policy. He proposed two phase-out plans, nuclear phase-out and coal phase-out. After his inauguration, South Korea shut down eight aged coal-powered plants and also committed to permanently shutting down Kori 1, the country’s oldest nuclear power plant. Therefore, it is likely that South Korea will expand its natural gas consumption in order to make up for the shortage of energy supply caused by these two plans. It will also increase the share of new and renewable energy even more aggressively beyond the current plan. President Moon appointed Paik Un-gyu as his first minister of trade industry and energy. Minister Paik was a professor of engineering at Hanyang University and an expert of renewable energy, and designed Moon’s election pledges for energy policies.


South Korea Success Project

South Korea

In response to the Paris Agreement at which South Korea (hereafter Korea) pledged its significant reduction of the greenhouse gas emission (37% reduction from the business-as-usual (BAU, 850.6 MtCO2eq) level by 2030 across all economic sectors), the greenhouse gas emission reduction program has been implemented.
According to the Korea Energy Management Corporation (KEMC), Korea developed its original greenhouse gas emission reduction program, called Korea Voluntary Emission Reduction (KVER).
Under KVER the government subsidizes the administrative costs of voluntary greenhouse gas reduction activities by small and medium size enterprises (SMEs). KVER tracks and and manages the activities of companies that offer to reduce their energy and greenhouse gas emissions.

As a result of KVER, the Korean economy successfully experienced the withdrawal of unused thermal energy, conversion of fuel, development of renewable energy, installation of energy-savings facilities, and improvements in those facilities. KVER aided companies in withdrawing unused thermal energy (waste heat or steam) that is generated in the industrial facilities and/or utility facilities and helped this energy to be reused as an energy source.

KVER also helped SMEs convert to low-carbon fuels. By installing facilities with high energy efficient equipment, firms were able to significantly reduce their energy use and related greenhouse gas emissions. For example, Samchully Gas achieved emissions of 615 tCO2 by reducing greenhouse gas emissions through one year of fuel conversion.

The development of this unique greenhouse gas reduction program can be regarded as one good example to show that Korea is trying to stay on track with its emissions reductions pledge to the Paris Agreement. In June 2011 South Korea helped Thailand adapt the KVER demonstrating its replicability. However, there may be some caveats in that there seems to be relatively low incentive for businesses to participate in this program. The initial cost of altering their energy sources and the lack of energy sources in Korea might be potential impediments for this program to be expanded throughout the whole market. The Korean government stopped providing incentives at the end of 2016.

South Korea Checkup

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)

South Korea Emission Reduction Policy

First Basic Plan for Climate Change Response

On December 6, 2016, the South Korean government confirmed the country’s “ First Basic Plan for Climate Change Response,” after approval by the National Green Growth Committee’s and at a cabinet meeting led by Prime Minister (Acting President) Hwang Kyo-Ahn. The Basic Plan incorporates the goal of reducing the national greenhouse gas emission level by 37% (BAU) by 2030 in line with South Korea’s pledge to the Paris Agreement.

The Basic Plan is the first comprehensive policy that has medium and long-term strategies and specific action plans to combat climate change. The Basic Plan puts the focus for emission reduction on new market-and-technology-oriented efforts. It seeks to encourage the role and contribution of the private sector in reducing emissions. The Basic Plan also promotes the active participation of the public in climate change efforts. It establishes mechanisms that facilitate collaboration in combatting climate change between the central and local governments and public and private sectors. The Basic Plan provides consulting services to small and medium enterprises regarding the adoption of energy-saving technologies.

The Plan further states that the South Korean government will invest more in the development and utilization of clean energy across the country. It calls for the government and public enterprises to cooperate in doubling the investment of R&D for utilizing clean energy. Private enterprises will concentrate on their own businesses and the government will focus on R&D for the public sector. The Basic Plan states that the prime investment fields for clean energy technology will be in renewable energy, efficiency improvements, demand management, carbon capture, use and storage, nuclear energy, and thermoelectric power transmission and distribution.


The National Green Growth Committee is a special committee that is part of the Prime Minister’s office for the purpose of deliberating and coordinating the government’s green growth policies and collecting diverse opinions in the society. It is composed of 38 committee members, 21 civilian members from relevant fields and 17 government officers including minister of Finance and minister of Science, ICT and Future Planning.

Prime Minister Hwang Kyo-Ahn has been serving as Acting President as the process of impeachment of President Park Geun-hye was ongoing during this period of time.

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South Korea Extreme Weather Event

2016 Extreme Heat Wave

The recent extreme heat wave in 2016 caused extensive damage to people, the environment and to the country as a whole. The damage can be seen in the agricultural sector, the maritime-fisheries sector, the environment/energy sector and on people’s health.

Damage to the agricultural sector included death of livestock and plants because of the high temperatures that were above 32 degrees Celsius. The repair costs for these damages were over 2,000 million KRW. The government tried to deal with these agricultural sector problems by introducing policies and actions such as providing information on the analysis of agricultural climate characteristics, climate damage by agro-climatic zones, and forecasting each region’s soil moisture status (167 cities and counties).

The most significant damage to the maritime-fisheries sector was that aquaculture species died as a result of the high-water temperatures that cost 50 billion KRW. The government issued warnings and breaking news on low/high water temperatures to help the aquaculture industry prevent the massive death of fish (this was also a reaction from the cold waves in 2015 and 2016).

Due to these heat waves in Seoul, which lasted for 24 days, including 32 days of tropical nights, national ozone warnings were issued on a regular basis. During this period, electricity consumption reached its peak, 8,370,000 kW. This high demand for electricity resulted in the rapid increase of sales of air conditioners (160% increase), dehumidifiers (245% increase), and electric fans (92% increase). As a policy response, the National Institute of Environmental Research and NASA developed a joint air quality investigation.

The heat waves also affected people’s health. In 2016, the number of patients with thermal problems (heat stroke) doubled. In order to monitor such health issues, the Korean Centers for Disease Control and Prevention now provides the current status of health damages and releases news on the rapid increase in the number of patients with thermal conditions/problems.

South Korea Media Organizations

Broadcast Media

Korea Broadcasting System (KBS) is the national public broadcaster of South Korea. It is a public corporation which is funded by the South Korean government and license fees collected from the South Korean people, but managed independently. It is one of the largest TV networks as well as one of the major presses that provides radio, television, and online services. It started as Kyeongseong (Seoul’s old name) Broadcasting Corporation in February 1927 with broadcasting radio programs and started TV broadcasting in December 1961.

Since it is a public enterprise and a major broadcaster in South Korea, it does not take a specific position towards climate change. Instead, KBS shows the trends in world climate issues, South Korea’s environment policies, and the global climate agreement. So far, the South Korean government supports and took an active role in the Paris Agreement. KBS appears to the government climate change policies because of the concerns about abnormal climate issues and environmental problems in S. Korea.

Content Sample:

‘Disappearing Grasslands in Baekdu-daegan area due to Climate Change’
Due to unique climate conditions, grasslands have been developed in Baekdu-daegan mountains area which is 1,300 meters above sea level. Baekdu-daegan area is called as the subalpine zone and has the right conditions for grass to grow rather than trees. The area is habitat to a number of endangered plants. Because of abnormal climate change, however, the grasslands have become much smaller than they use to be and several lowland trees have begun to grow there. Basically, climate change is destroying the area’s eco-system.

Contact: 3rd floor, 31, Eonnam-gil, Seocho-gu, Seoul, Republic of Korea, 06779.

Online Media

Energy News, established in August 2010, is an on-line daily newspaper focused on energy and environmental issues including petroleum, natural resources, electricity, renewable energy, and nuclear energy. Energy News publishes its off-line newspaper weekly. Energy News tries to act as a guide for the public to follow whether or not the government is properly implementing its ‘low carbon green growth project.’ It organizes some conferences regarding energy issues, including the Asia Pacific Gas Conference (APGC).

As Energy News is a major energy newspaper, it does not take a specific point of view towards climate change. Energy News tries to follow the role of the press by checking if the government properly designs and implements its energy and environmental policies. Therefore, Energy News supports the Paris Agreement, but it sometimes criticizes government policies that slow down achieving the stated goals set by the government.

Contact: Mailing address: 13, Yeouigongwon-ro, Yeongdeungpo-gu, Seoul, Republic of Korea, 07235.

Print Media

The Korea Energy Newspaper began as the Monthly Gasoline Journal in 1994, which was the first magazine focused on the oil industry. It aims to provide energy and environmental news related to various industries and economic impacts. It has organized the International Green Energy Expo annually since 2004.

The Korea Energy Newspaper aims to provide news and data concerning environment and energy issues which are highly related to several industries and economic outcomes. The Korea Energy Newspaper has put forth opinions that the Paris Agreement would hurt several industries, but it largely supports the Paris Agreement and environmental improvement.

Content Samples:
‘The New Regime for Climate Change, Expanding LNG Power Plants Desperately Needed’
Initially, the South Korean government announced that it would increase the development of eco-friendly alternative energy such as LNG (Liquid Natural Gas) in order for it to meet its greenhouse gas reductions goal. However, this voice has been weakened recently. The article points out the importance of power generation by LNG because of the electricity market systems in South Korea.

The current system does not reflect the greenhouse gas emission costs in the generation costs. Thus, the increase in the price of emission rights would not lead to the reduction in greenhouse gas emission, unless the price of emission rights equals fuel conversion costs (even when the emission costs are included in the generation costs). Therefore, the article introduces alternative methods such as the establishment of emission credits in the power generation sector and LNG portfolio standard obligation. As such, the government should regulate the total amount of greenhouse gas emissions in the power generation sector as a whole, instead of distributing the emission permits to each individual power generation company. This strategy would eventually minimize the power generation costs and optimize the operation system.

Content Samples:
The article suggests the South Korean government should create leading cities that use hydrological cycle technologies. The article explains that “rainwater’ can be a solution for environmental challenges and help South Korea meet its commitment to the Paris Agreement. Rainwater should permeate into the soil properly so that it can prevent the underground water to be drained and can purify the water. The Ministry of Environment has designed “Low Impact Development (LID)” for its urban development plan, which is a more environment-friendly development method that is expected to reduce pollution and slow down water flow speed in order to improve the water cycle system in cities.

Contact: Mailing address: 1213 ho, 19, Seoun-ro, Seocho-gu, Seoul, Republic of Korea, 06732.

South Korea Subnational Best Practices


Incheon City—Incheon City received a commendation for reduction of greenhouse gas emission from the Korean Ministry of Environment. On October 26, the Ministry of Environment held a conference for awarding public sectors in the recognition of greenhouse gas emission reduction and efficient energy management. Incheon won the first place in reduction of greenhouse gas emission among 243 local governments. Compared to the emission in 2015, which was 30,397tCO2eq, Incheon emitted only 19,665tCO2eq greenhouse gas, which resulted in the reduction of its greenhouse gas emission by 39.6%. Incheon City developed and managed renewable energy facilities, replaced existing lighting equipment to LED lights, strengthened supervision on the CO2 emissions in waste water-disposal plants. In April 2016, Incheon City declared that the year of 2016 is ‘the First Year of Greenhouse Gas Reduction’. Incheon City presented a target strategy to maintain the greenhouse gas emission level below the emission level of 2016. Also, Incheon City developed ‘Comprehensive Plans for Climate Change Response (2016-2035)’, which is a five-year plan for enhancing green environment in Incheon City. The city will focus on practicing green life habits, green transportation, green construction, green resources, green businesses, R&D and outreach system. According to its announcement, Incheon presented its target greenhouse gas reduction rate as 25.9% (3,000 thousand tons) by 2030 based on Business As Usual (BAU) levels.
Mr. Sang-bum Lee, Incheon City Director of the Department of Green Environment
Mail: 9, Jeonggak-ro, Namdong-gu, Incheon, Republic of Korea 21554
Telephone: +82-32-440-2085

Gimhae City—Gimhae City also won an award provided by the Minister of Environment for its reduction in  greenhouse gas emissions and its energy target management system. According to Gimhae in News, Gimhae City won first place among primary local governments ranked 9th among 814 public institutions in the greenhouse gas reduction by reducing its emission amount by 36.2%.
Gimhae City achieved the reduction in greenhouse gas emission by enhancing the cogeneration in Jangyu incineration plant, promoting green roof gardens, and replacing lighting equipment, and changing A/C and heating systems in Gimhae City’s offices to highly efficient ones.

Mr. Sung-sul Bang, Head of the Department of the Ecological Environment
Mail: 2406 Gimhae-daero, Gimhae-si, Gyeongsangnam-do, Gimhae City, Republic of Korea 50935
Telephone: +82-55-330-2440

Suwon City—Suwon City took tenth place in the same conference hosted by the Ministry of Environment following Gimhae City. The major projects in reducing their greenhouse gas emission were replacing lighting in government offices to LED lights, enhancing photovoltaic systems and facilities, establishing smart-grid systems, increasing the use of green-touch computers, and regulating indoor temperatures. As a result, Suwon City reduced the greenhouse emission by 36.2% (reduced more than the national target rate of 20%) and was awarded as ‘high-performing authority’ in greenhouse gas reduction for two years.

Mr. Byung-gu Min, Director of the Department of Environment, Suwon City
Mail: 241, Hyowon-ro, Paldal-gu, Suwon-si, Gyeonggi-do, Republic of Korea 16490
Telephone: +82-31-228-2029