South Korea

All climate change-related laws, policies and regulations should be in harmony with the basic principles for the promotion of low-carbon, green growth under Korea’s flagship legislation, the Framework Act on Low Carbon, Green Growth. The Framework Act, passed in 2009, builds on the National Strategy for Green Growth (2009-2050) and the Five-Year Plan for Green Growth (2009-2013).

The National Strategy for Green Growth aims to promote eco-friendly growth, enhance quality of life and contribute to international efforts to fight climate change. The Five-Year Plan outlines government actions for implementation of the Strategy, and detailed tasks for ministries and local governing entities as well as specific budgets. Under the plan, the government will spend approximately 2% of annual GDP on green growth programmes and projects. Investments will initially be geared towards infrastructure systems in order to boost the economy.

During the COP 15 meeting held in Copenhagen in 2009, Korea announced its national GHG reduction goal of 30% below business-as-usual (BAU) projection by 2020. In order to accomplish this goal, in 2010 the government established the Greenhouse Gas Inventory & Research Centre of Korea (GIR). The GIR’s main mission is to manage the national GHG inventory and analyse GHG reduction potential. It is also responsible for providing the guidelines for Measurement, Reporting, and Verification (MRV) for the National GHG Inventory, and supporting the operation of the ETS plan.

In 2010, the Framework Act on Low Carbon, Green Growth and its Enforcement Decree entered into force. These instruments create the legislative framework for mid- and long-term emissions reduction targets, cap-and-trade, carbon tax, carbon labelling, carbon disclosure and the expansion of new and renewable energy. They also set out the target to reduce national emissions by 30% in 2020 below the BAU scenario. The Framework Act includes a system of mandatory reporting of carbon emissions by all carbon- and energy-intensive industries and provides a basis for the creation of a carbon trading system. The Enforcement Decree mandates a cap on emissions, but leaves out the operational structure, how permits will be issued, the sectoral coverage and other details, for implementing laws to decide.

The Framework Act takes precedence over other Acts in application to low-carbon green growth. Other related Acts include Energy Use Rationalisation, the Electricity Business Act, the Act to Promote the Purchase of Environment-friendly Products, and the Energy Act. These Acts must conform to the purposes and basic principles of the Framework Act, and many of them emphasise the important role environmental technology has in the economy.

In January 2014 the Ministry of Environment launched the new National Greenhouse Gas Emissions Reduction Roadmap 2020, including emissions reductions targets for seven sectors, to be reached through a range of policies, including commencing the planned emissions trading system, development of low-carbon technologies, creating GHG reduction markets and jobs. The Roadmap allocates responsibility for developing detailed sectoral GHG reduction measures to responsible ministries, while the Office for Government Policy Co-ordination is responsible for co-ordinating ministries and making period assessments of government GHG reduction performance.

Energy supply

The First Energy Master Plan, a governmental plan introduced in 2008, sets a target of 11% renewable energy in the production portfolio by 2030, and allows all households to access affordable energy. It leans on three pillars (“the 3 Es”) to dictate the direction of the national energy policy until 2030: energy security, energy efficiency, and environment. The Second Energy Master Plan, launched in January 2014, re-affirms the 11% renewable energy deployment rate target, and calls for establishing 15% of power from distributed generation by 2015, for applying advanced GHG reduction technology to new power plants. In 2012 Korea introduced a renewable portfolio standard (RPS) for large energy providers, applying to the 13 public and private utilities with capacity in excess of 500MW. The RPS replaced the feed-in tariff that had previously been available for renewable energy. It required that these utilities purchase or generate energy at a rate equal to 10% of their share of total energy generation by 2022, with stepped increments every year up to 2022. The RPS system allows for trading in renewable energy certificates (RECs).

Energy demand

Energy efficiency is one of the three pillars of the First Energy Master Plan, and there is a goal of reducing energy intensity by 46% by 2030. However, a review of the First Energy Master Plan notes that energy consumption in the industrial sector and electricity demand have both increased faster than forecast from 2007-2012. The Second Energy Master Plan sets a target to reduce energy demand by 15% by 2035 through adjusting energy tax rates, electricity pricing, and ICT-based demand management systems.

Carbon pricing

According to the 2009 Framework Act on Low Carbon Green Growth, in order to accomplish its target of reduction of GHGs “the government may operate a system for trading emissions of GHGs by utilising market functions”. In 2011 the government enacted a GHG & Energy Target Management Scheme (TMS) as a precursor to the ETS. This scheme was designed to manage and impose specific GHG reductions and energy consumption standards on large businesses with high energy consumption and GHG emissions. Through this scheme, the government managed more than 90% of industrial GHG emissions and 70% of overall national GHG emissions. The implementation of this target management involved the development of a Measurement, Reporting, and Verification (MRV) scheme for the GHG emissions and energy consumption, which became the basis for the national ETS.

In 2012, the national assembly passed the Act on the Allocation and Trade of Greenhouse Gas Emissions Rights, establishing a domestic cap-and-trade ETS, which is closely modelled on the EU’s ETS. The motivations to promote the ETS included development of green industry technologies and pushing green businesses ahead of other countries. The ETS Act, however, only called for the government to operate a system for trading emissions of GHGs.

The Enforcement Decree of the Emissions Trading Act was approved by the Cabinet in 2012. It outlined the rules and governance structure of the ETS, which opened on 12 January 2015. It also establishes two plans to implement the ETS: the Master Plan and the Allocation Plan. The Master Plan, implemented in January 2014, provides the legal basis for the ETS, and will be revised every five years, providing a 10-year plan for the operation of the market. In January 2014 MOE designated the securities exchange KRX as the official emission permits exchange for the ETS. The Ministry of the Environment submitted the Allocation Plan to the Allocation Committee and the Green Growth Committee in June 2014, calling for three implementation phases from 2015 to 2025, starting with 100% allocated permits with increased phasing in of auctioned permits.

The plans for the ETS were reviewed in 2014 after concern from the Ministry of Strategy and Finance. The government has modified the plans to reduce emissions targets by 10% from previously planned levels for all industries covered by the ETS, to aim to keep the price at KRW10,000 (USD89.84) per ton of emissions by using stabilisation measures, to allow businesses to transfer to or borrow from past and future accounts, and to allow extra emissions rights for new facilities.

REDD+ and LULUCF

During Japanese rule and the Korean War, most of the forested area in Korea was destroyed by illegal logging and over-harvesting. In the late 1960s, policy and strict law enforcement on forest management were put in place. The comprehensive forest rehabilitation plan was established with the enactment of the forest law in 1961. The first (1973-1978) and second (1979-1987) National Forest Rehabilitation Plans focused on rehabilitation and restoration of devastated mountainous areas. The third National Forest Plan (1988-1997) shifted the forestry policy from greening the nation to achieving an environmentally healthy forest. The fourth National Forest Plan (1998-2007) introduced a new paradigm of sustainable forest management.

The current Fifth National Forest Plan (2008-2017) was designed to further expand the implementation of sustainable forest management in pursuit of maximising forest functions. The Plan especially highlights the importance of forest functions in response to climate change. The overall vision of the Fifth Plan is “to realise a green nation with sustainable welfare and growth” by sustainably managing forests as key resources for strengthening the nation’s economic development, land conservation and an improved quality of life.

Transportation

The Ministry of Environment intends to support transport emissions reduction through promoting low carbon transport options. A low carbon vehicle fund had been set to commence in January 2015, but in September 2014 the implementation date was delayed until 2020. The fund system is intended to establish additional charges on purchases of high GHG emitting vehicles as well as subsidies on low GHG emitting vehicles.

Adaptation

The National Framework on Low Carbon Green Growth states that the government shall establish and implement every five years a basic 20-year plan for coping with climate change. This spurred the generation of several national and local plans dealing with climate change adaptation. In 2008 Korea published the National Climate Change Adaptation Master Plan (NCCAMP) for the years 2009-2030. This was followed by the National Strategic Plan for Climate Change Adaptation 2011-15 in 2010 and the establishment of the National Government Adaptation Committee (NGAC) to implement the Plan. The NGAC is composed of the representatives of 13 ministries. The Ministry of Environment is in charge of the NGAC and also of supporting local governments.

The National Strategic Plan for Climate Change Adaptation has 87 major projects, covering 10 sectors: public health, disaster management and infrastructure, agriculture, forestry, marine and fisheries, water, eco-system, climate change monitoring and projection, adaptation business and industry, and publication, education and international cooperation. The Plan includes provisions for local action planning. The 1st Adaptation Action Plan by local governments was expected to be set up in 2012. The national climate change scenario was updated in 2011, customised and adapted for the whole country, leading to a new vulnerability assessment and the publication of an updated National Strategic Plan in 2012.