Importance and Prospect of Korea's Emissions Trading Scheme
- Institutional frame that reduces the greenhouse gases with cost effective policies, converts the Korean industrial structures to low carbon high efficiency energy industry and creates the new growth power based on the green technology was prepared through the enactment of the Emissions Trading Act and its enforcement ordinance.
- The enactment of the Emissions Trading Act holds significant meaning as it finalizes the legal infrastructure for the green growth policies following the Framework Act on Low Carbon, Green Growth (December 2009), Special Law for Smart Grid (November 2011) and Green Building Supporting Law (February 2012).
Government showed its plan to enforce the national power that leads the international low carbon green growth by stabilizing the virtuous cycle structure of environment preservation and economic progress while operating the Emissions Trading to be successfully executed from 2015.
- The annual predicted reduction path (2010 ~ 2020) of greenhouse gases emission by 2020 was determined at the 2011 Cabinet meeting and it predicted that the national emission amount will gradually increase until 2014 and then the total amount will be reduced from 2015. In the meantime, through the practical reduction activities of the organizations from this year (2012), it is expected that emission of the national greenhouse gases will be reduced practically from 2015.
- MRV system that predicts and estimates the emission of target companies will be established by internally reinforcing the operation of the current MBO system. In the meantime, setting up of a resonable and fair emission permissible amount based on this system could be expected to be the valuable property that makes possible to secure the flexibility in forming the stable emission trading market and in executing the reduction obligation of allocation target organization through precise and fair allocation by the Emissions Trading from 2015.
Main Characteristics of the Korean Emissions Trading Scheme
- Main characteristics 1) The characteristics of the Korean Emissions Trading Scheme is that it fits to the global standard and the competitiveness of the domestic industries is considered when the system is designed.
1-1) (Free Allocation) In order to minimize the burden of the industries during the initial stage and to improve the effectiveness of Emissions Trading, the free allocation rate will be expanded gradually from 2018. Also, 100% of free allocation will be applied if the trade integration or production cost occurrence is higher than certain rate by considering the competitiveness of domestic industries.
- Main characteristics 2) (governance of the competent authorities) In order to improve the reliability of system operation and efficiency of administration, competent authorities are needed to be unified and the Minister of the Ministry of Environment was decided to be the competent authority.
2-1) Participation of the related department was institutionally guaranteed through Allocation Deliberation Committee and Emission Certification Committee for the consideration of economic and industrial policies during the execution.
Last modified : 10.23.2013 16:53
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