Korea's Green Growth Experience
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Korea’s Green Growth Experience: Process, Outcomes and Lessons Learned ISBN 979-11-952673-5-4 Copyright © 2015 Global Green Growth Institute 19F Jeongdong Building, 21-15 Jeongdong-gil, Jung-gu, Seoul, 100-784, Korea The Global Green Growth Institute does not make any warranty, either express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or any third party’s use or the results of such use of any information, apparatus, product, or process disclosed of the information contained herein or represents that its use would not infringe privately owned rights. The text of this publication may be reproduced in whole or in part and in any form for educational or nonprofit uses, provided that acknowledgement of the source is made. Resale or commercial use is prohibited without special permission. The views and opinions of the authors expressed herein do not necessarily state or reflect those of the Global Green Growth Institute. Cover Image © Freedom Man - Shutterstock, Inc. Korea’s Green Growth Experience: Process, Outcomes and Lessons Learned Table of Contents Foreword I Acknowledgment II Abbreviations and Acronyms III Executive Summary 1 CHAPTER 1: Introduction 1. Introduction 7 1.1 Overview 7 1.2 Low-Carbon Green Growth: The Korean Way 10 1.3 Institutional Framework for Low-Carbon Green Growth 12 1.4 Implementation Plans for Green Growth 14 References 20 CHAPTER 2: Low-Carbon Society 1. Introduction 23 1.1 Overview 23 1.2 Baseline Assessment 24 1.3 Challenges and Opportunities for Green Growth 31 2. Targets and Strategies 32 2.1 Setting of Mid-term Emissions-Reduction Targets 33 2.2 Setting of Emissions-Reduction Targets by Sector, Business Types, and Year 37 3. Policy Actions and Programs 40 3.1 Establishment of the GIR and National GHG Inventory 42 3.2 Korea Voluntary Emission Reduction (KVER) Scheme 44 3.3 Target Management Scheme (TMS) 49 3.4 Public Sector TMS 58 3.5 Korea Emissions Trading Scheme (K-ETS) 62 4. Assessment 71 4.1 Quantitative Assessment 71 4.2 Qualitative Assessment 71 5. Takeaways and Recommendations 76 References 78 CHAPTER 3: Energy Efficiency and Renewable Energy 1. Introduction 83 1.1 Overview 83 1.2 Baseline Assessment 85 1.3 Challenges and Opportunities for Green Growth 89 2. Targets and Strategies 91 2.1 The First National Energy Basic Plan (2008-2030) 92 2.2 Energy Demand Management 93 2.3 Energy Supply Management – Promotion of Clean Energy Use 96 2.4 Target Setting 99 3. Policy Actions and Programs 100 3.1 Policies and Programs on Renewable Energy 100 3.1.1 Feed-in Tariff Policy 101 3.1.2 Renewable Portfolio Standard (RPS) 107 3.1.3 Renewable Fuel Standard (RFS) 112 3.2 Policies and Programs on Energy Efficiency 100 3.2.1 Tax Credits for Investments in Energy-Saving Facilities 114 3.2.2 Government Loans on Energy Use Rationalization Projects 116 3.2.3 Government Support for Energy Diagnosis of SMEs 120 3.2.4 Mandatory Public Procurement of Energy Efficient Goods 122 3.3 Rationalization of Energy Prices 123 3.4 Government Revenues for Financing Energy Sector Programs 128 4. Assessment 129 4.1 Quantitative Assessment 130 4.2 Qualitative Assessment 132 5. Takeaways and Recommendations 135 References 137 CHAPTER 4: Green Technology and Innovation 1. Introduction 141 1.1 Overview 141 1.2 Baseline Assessment 144 1.3 Challenges and Opportunities for Green Growth 148 2. Targets and Strategies 148 2.1 Principles of Selection and Concentration 148 2.2 National Strategy and Target Setting 150 2.3 Green Technology Target Setting (Five-Year National Plan for Green Growth) 156 3. Policy Actions and Programs 157 3.1 R&D Investment Plans 157 3.2 Institutional Framework 159 3.3 R&D Programs and Fostering Green Talents 163 3.3.1 Expansion of Basic Research and Promotion of Technological Convergence. 163 3.3.2 Technologies for Greening of Strategic Industries 165 3.3.3 Eco-friendly Technologies 166 3.3.4 Establishment of Infrastructure for Green R&D 168 4. Assessment 174 4.1 Quantitative Assessment 174 4.2 Qualitative Assessment 179 5. Takeaways and Recommendations 181 References 183 CHAPTER 5: Green Lifestyles 1. Introduction 187 1.1 Overview 187 1.2 Baseline Assessment 188 1.3 Challenges and Opportunities for Green Grwoth 191 2. Targets and Strategies 194 2.1 Local Green Growth Committees (LGGCs) and the Green Start Movement 195 2.2 Government Plans and Strategies 197 2.2.1 Plan on Expansion of Low-Carbon Green Life Practices (2009) 197 2.2.2 Follow-up Plans from the Ministry of Environment 199 2.3 Target Setting 199 3. Policy Actions and Programs 202 3.1 Green Procurement and Consumption 202 3.1.1 Mandatory Green Public Procurement 202 3.1.2 Green Store Certification Program 204 3.1.3 Voluntary Agreement for Green Procurement 207 3.1.4 Carbon Labeling 208 3.1.5 Carbon Points System 210 3.2 Green Education and Environmental Awareness 212 3.2.1 Green Leaders Program 213 3.2.2 Green Campus Initiative 216 3.2.3 “Cool-Mapsy” Campaign 218 3.3 Waste Management 219 3.3.1 Volume-based Waste Fee System 220 3.3.2 Weight-based Food Waste Fee System 224 4. Assessment 228 4.1 Quantitative Assessment 228 4.2 Qualitative Assessment 236 5. Takeaways and Recommendations 237 References 239 CHAPTER 6: Green Industries 1. Introduction 243 1.1 Overview 243 1.2 Baseline Assessment 244 1.3 Challenges and Opportunities for Green Growth 250 2. Targets and Strategies 250 2.1 Green Transformation of the Industrial Sector 250 2.2 Development of Green Venture SMEs 256 2.3 Building an Industrial Structure based on Resource Circulation 257 2.4 Establishment of Green Industrial Complex and Clusters 259 2.5 Target Setting 260 3. Policy Actions and Programs 261 3.1 Green Certification and Financial Instruments 261 3.1.1 Green Certification Scheme 261 3.1.2 Financial Instruments in Support of Green Industries 263 3.2 Regional Green Industrial Clusters 267 4. Assessment 269 4.1 Quantitative Assessment 269 4.2 Qualitative Assessment 274 5. Takeaways and Recommendations 276 References 278 CHAPTER 7: Green Homeland and Transportation 1. Introduction 281 1.1 Overview 281 1.2 Baseline Assessment 282 1.3 Challenges and Opportunities for Green Growth 288 2. Targets and Strategies 291 2.1 GHG Reduction Targets under the Green Homeland and Green Transport Agenda 291 2.2 Strategies: Green Cities and Green Buildings 291 2.3 Strategies: Green Transport 293 2.4 Target Setting 296 3. Policy Actions and Programs 297 3.1 Green Transportation 297 3.1.1 Transportation Reform in Seoul and the Metropolitan Area 297 3.1.2 Improvement of Vehicle-Emission and Fuel-Economy Standards 302 3.1.3 Old Car Replacement Subsidy Program 304 3.2 Green Cities 305 3.2.1 Greening of Cities in the ROK – Case Studies of Incheon and Seoul 306 3.2.2 Urban Farming 311 3.3 Green Buildings 313 3.3.1 Building Design Criteria for Energy Saving 313 3.3.2 Energy-Efficiency Grade Certification Scheme 315 3.3.3 Green Standard for Energy and Environmental Design (G-SEED) Program 318 4. Assessment 321 4.1 Quantitative Assessment 321 4.2 Qualitative Assessment 325 5. Takeaways and Recommendations 326 References 329 CHAPTER 8: Conclusion 1. Conclusion 334 1.1 Key Milestones 334 1.2 Key Limitations 337 1.3 The New Five-Year Plan for Green Growth (2014-2018) 340 1.4 Takeaways and Recommendations 341 References 343 Foreword Many countries look up to the Republic of Korea’s (ROK) phenomenal rise when it morphed from a besieged underdog to an economic powerhouse. Left in ruins after years of colonization and war, the government pursued export-oriented industrialization strategies that enabled economic growth at an unprecedented scale and speed. The admiration for the ROK’s rags-to-riches economic success stems largely from the fact that it is a nation devoid of natural resources, thus lacking the recourse to adopt resource-based approaches that have proven successful in many well-endowed countries. However, the limitations of the ROK’s manufacturing-driven and export-led growth have become more apparent in recent years. Despite having weathered the global oil shock in the 1970s and the emerging market debt crises in the 1980s, the nation’s economy was hit severely by fluctuations in global trade and commodity prices during the 1990s-2000s. Today, the country stands at the crossroads – it has to address the growing perils of natural resource scarcity, climate change, and global economic slowdown. The rapidly changing global landscape has pushed the ROK to position itself as a leading global force in promoting green growth as a new development paradigm. While various countries have also started to explore the merits of green growth in their policies and programs, the ROK raised the bar higher by embracing green growth as a national vision embedded in its governance system. Its confidence to explore this uncharted path deserves an in- depth analysis and since no exhaustive documentation has been undertaken so far to evaluate the progress of the ROK’s green growth policy, this report – Korea’s Green Growth Experience – intends to fill this knowledge gap. The report highlights the processes, outcomes, and key takeaways in advancing green growth planning and implementation in the Korean context. Drawing on the expertise of a broad range of sector specialists and practitioners, the value-added knowledge from this report is expected to serve as the basis for more vigorous, long-term, and country-driven engagement on green growth.