This class exercise was written by Ahyoung Kim and reviewed by Thierry Desclos. It is intended to serve as a basis for group work and discussion only. It does not purport to provide a complete and accurate description of the situation and should not be used as the Public Disclosure Authorized only source of material. The development of the exercise was supported by the PPIAF and ESMAP. © The World Bank Goyang Country context Public Disclosure Authorized The Republic of Korea (ROK, also known as South Korea) is located in the southern half of the Korean Peninsula in Northeast Asia. With a total area of 99,720km2, Korea’s geography is predominantly mountainous in the east, and most agricultural activities remain on the coastal low lands and plains in the west, which accounts for only about 30% of the country. As Korea is blocked off at its northern border by North Korea—with whom it does not have regular diplomatic relations—it is functionally an island, only reachable by air and marine transportation from other countries. Figure 1: Korea in Northeast Asia region Public Disclosure Authorized Public Disclosure Authorized Source: Google Maps The total population of Korea is 51,722,903, and almost half of the country’s population (25,514,000) reside in Metro Seoul area. Korea is an exceptional example of an aid recipient turned a high-income country, with GNI per capita increasing rapidly from US$ 67 in the early 1950s to US$ 27,200 in 2016. With multiple Five Year Economic Plans, the Korean government took a central role in accelerating industrial development and created an export-oriented economy. Today, the Korean economy is quite liberal and its major industries include electronics, shipbuilding, automotive, petrochemicals, and machinery products. Also, Korea’s emerging industries include biotechnology, internet software and services, and high-tech communication. While its initial growth was focused on export-oriented industries, Korea’s focus now is based on technology and education. Transportation Due to the high density in urban life, increasing efficiency in transportation is always a prioritized task for the Korean government. In 2015, congestion cost in Korea reached 33.4 trillion Won, taking up 2.16% of its GDP. Figure 2: National Congestion Cost Increase (2005 - 2015) percent 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015(est.) increase National total 23,540 24,621 26,172 26,903 27,706 28,509 29,097 30,315 31,420 32,385 33,350 3.54 congestion inter- cost (100 9,094 9,180 9,684 9,881 10,064 10,436 10,742 11,130 11,418 11,737 12,057 2.86 regional million Won) city 14,446 15,441 16,488 17,022 17,641 19,073 18,355 19,185 20,002 20,647 21,293 3.96 GDP (trillion Won) 920 966 1,043 1,104 1,152 1,265 1,333 1,377 1,428 1,483 1,542 5.30 % of GDP 2.56 2.55 2.54 2.44 2.41 2.25 2.18 2.20 2.20 2.18 2.16 - Source: Korea Transport Institute, 2014 Korea continues to invest in its road and rail infrastructure with a total budget of KRW 15.8 trillion (Korean Won) (USD 14.4 billion) or 1.1% of 2013 GDP. At the same time, the public transportation system in Korea is heavily subsidized by the government. As of 2010, 1.25 million inflow commuters traveled to Seoul on a daily basis; a large number of commuters departing from cities surrounding Seoul commute to and from Seoul every day (Fig.3). While the improvement in road capacity as well as the increase in the use of public transportation has significantly shortened travel time per passenger for the daily commute, it is still noteworthy that the travel distance for commuters have also greatly increased (Fig.4). Figure 3: Commuting networks from Incheon and Gyeonggi Province to Seoul Source: Metropolitan Transportation Authority, Survey on Household Trips, 2010 Figure 4: Average commute in Korea, 1990 - 2010 Source: OECD (2014c), Compact City Policies: Korea: Towards Sustainable and Inclusive Growth, OECD Green Growth Studies, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264225503-en Until 1990s, Korea had been experiencing the side effects of fast economic growth, from serious traffic congestion, high levels of GHG emissions to heavy air pollution. Seeing that supply-side oriented development had met its limitations, the government made a great shift to green demand-side policies focusing on creating a transit-oriented city. Much progress was achieved with the implementation of the BRT system and extensive modernization of the metro system in the Metropolitan Seoul region, reducing average commute despite the rise in the average commuting distance. However, the public transport system still remains to be heavily subsidized to keep the fares low in order to encourage the use of public transportation over private vehicles (Fig. 5). Thanks to the government subsidy, users who transfer to different routes or modes pay by the total distance of their travel rather than paying each time they board a new mode of transportation. This policy significantly lowers the financial burden of commuting into Seoul from surrounding satellite cities, maximizing accessibility for everyone, regardless of income level. Figure 5: Government Subsidy for Bus Companies in Seoul Year 2010 2011 2012 2013 2014 Government subsidy (100mil. KRW) 1,900 2,224 2,654 2,343 2,538 Source: http://opengov.seoul.go.kr/public/86131 Other modes of transport are also subject to heavy government regulation and subsidization. For example, most metro lines are owned and operated by state owned enterprises such as Seoul Metro and Seoul Metropolitan Rapid Transit Corporation. Buses are operated by private companies, which are subject to regulation from city or province governments. Taxis, which are operated by private companies or individual drivers are also subject to regulation from the government. Recently, Korea has witnessed a huge pushback from taxi drivers against ride-sharing and the government has been generally supportive of the local companies and industries rather than opening up the market to foreign ride-sharing companies such as Uber Figure 6: Modal Share of Transportation in Korea (unit: %) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Public Transportation 62 62.3 62.3 62.5 62.8 63 64.3 65.1 65.6 65.9 66 65.8 (Sum) Bus -26.2 -27.5 -27.6 -27.6 -27.8 -27.8 -28.1 -28 -27.4 -27.1 -27 -26.5 Metro -35.8 -34.8 -34.7 -34.9 -35 -35.2 -36.2 -37.1 -38.2 -38.8 -39 -39.3 Personal 26.4 26.3 26.3 26.3 26 25.9 24.1 23.5 23.1 22.9 22.8 23 Vehicles Taxi 6.6 6.5 6.3 6.2 6.2 6.2 7.2 7 6.9 6.8 6.8 6.8 Other 5 4.9 5.1 5 5 4.9 4.4 4.4 4.4 4.4 4.4 4.4 Source: http://traffic.seoul.go.kr/archives/289 Environment Korea has been concerned with the issue of yellow dust and particulate matter in the air significantly degrading the quality of life and limiting outdoor activities. Among OECD countries, Korea is ranked 4th in terms of micro particles emissions, and the high density of population in Korea exposes more people to carcinogenic micro particles than any other member nations of the OECD. The World Health Organization considers air unsafe when average exposure to fine particulate matter exceeds 10 micrograms/m3. A third of people exposed to poor air quality (1.3 billion) live in the East Asia and Pacific region, where in China and South Korea more than 50 percent of their populations are exposed to unsafe levels of fine particulate matter.1 In an effort to improve the air quality in populated areas, the Ministry of Environment has revealed its plans to initiate emergency measures to limit public vehicle use. City Context Goyang is located northwest of Seoul, in Gyeonggi-do (Gyeonggi Province). Along with 8 other cities, including Incheon, Goyang is one of the satellite cities which surround Seoul as part of the Metropolitan Seoul area. Goyang is adjacent to Seoul city to its Southeast, and the Han River flows along its Southwest border. Without traffic, it takes about 40 minutes by car to travel from city center of Goyang to downtown Seoul, and buses and trains to downtown Seoul takes about an hour. Figure 7: Map of Goyang in Metropolitan Seoul 1 2016 Environment Performance Index Full Report Source: Google Maps Geography and land use Goyang was first developed in the mid 90's, as a planned city to accommodate the ever-growing population in Seoul. Planned and functioning as a 'bed-town', Goyang is home to many who commute to Seoul for work and education. Goyang’s area is 268.05km2 and it is divided into three districts—Ilsan Seo-gu, Ilsan Dong-gu, and Deokyang-gu. Within its border, 1,036,621 residents inhabit, mainly in the southwestern half of the city, where residential development first started. The eastern region of the city is quite mountainous and thus harder to develop into residential areas. Also, Goyang still retains much of its greenbelts, designed to control the urban sprawl of Seoul metro area. Starting from its most west region, farming land and industrial warehouses line up along the Han river. Residential buildings, mostly high-rises, are concentrated and are built along the metro line.