While South Korea’s new government is showing welcome signs of taking strong action to tackle climate change, its Paris Agreement climate commitment is very weak, allowing domestic greenhouse gas emissions in 2030 to be more than double their 1990 levels. With emissions already above that level, and in a country with some of the fastest growing emissions in the OECD, the new government has a lot of work to do.
South Korea’s Nationally Determined Contribution (NDC) target to reduce its greenhouse gas emissions by 37% below business-as-usual (BAU) emissions replaces its previous 2020 Copenhagen pledge.
Given that the 2020 pledge was more ambitious—aiming for a similar emissions level ten years earlier—the NDC actually represents a weakening of South Korea’s climate plans. South Korea intends to achieve its NDC target through a combination of domestic emission reductions and purchasing credits through international market mechanisms. We rate Korea’s NDC target “Highly Insufficient”.
South Korea’s new government was elected in May 2017 and is showing signs that it will pursue more ambitious energy policy reforms than its predecessor. In June 2017, the new administration, led by President Moon Jae-in, announced that it would shut down ten existing coal-fired plants, build no new coal-fired power plants, and not seek to extend the life of its nuclear plants.
President Moon also wants to increase the share of renewable electricity generation in 2030 to 20%, building on the 10% share by 2024 currently targeted by the renewable portfolio standard. However, he is also planning considerable new gas-fired generation in South Korea’s energy mix. If implemented, these announcements would lead to emission reductions of around 69 to 84 MtCO2e (9–11%) below the current policy projection level in 2030, moving South Korea close to the NDC target level to be achieved domestically.
The CAT rating of “Highly Insufficient” means that commitments with this rating fall outside the fair share range and are not at all consistent with holding warming to below 2°C let alone limiting it to 1.5°C as required under the Paris Agreement, and is instead consistent with warming between 3°C and 4°C: if all countries were to followSouth Koreas’ approach, warming could reach over 3°C and up to 4°C.
The NDC target allows domestic greenhouse gas emissions (excl. emissions from the land use sector) to more than double by 2030 compared to 1990 levels. Given that current emission levels are already above the 2030 target level, emissions would need to peak and start declining to be on track for the NDC target. To achieve this, more stringent policies are required, even for a weak target.
South Korea intends to achieve part of its target by using “carbon credits from international market mechanisms” (Republic of Korea, 2015). The Government clarified that a 25.7% reduction below BAU will be achieved domestically and a further 11.3% reduction will be achieved by international market mechanisms (Ministry of Environment, 2015).
South Korea signed the Paris Agreement on 2016, and ratified it on 3 November 2016. Its NDC proposes an economy-wide target to reduce GHG emissions by 37% below business-as-usual (BAU) emissions of 850.6 MtCO2e in 2030 (Republic of Korea, 2015). In absolute terms, this is a target of 536 MtCO2e excluding land-use, land-use change and forestry (LULUCF) (equivalent to 81% above 1990 emission levels).
South Korea intends to achieve a 25.7% emissions reduction below BAU domestically (equivalent to 115% above 1990 emission levels, excluding LULUCF), one of the four options ranging from 14.7% to 31.3% below BAU by 2030 that South Korea announced for its NDC prior to submission in June 2015 (Korea Herald, 2015). The remaining 11.3% will be achieved through international market mechanisms (Korea Herald, 2015).
South Korea’s NDC is an economy-wide pledge covering all greenhouse gases. It states that a decision on the inclusion of the LULUCF sector, and the accounting rules to use for it, will be made “a later stage” (Republic of Korea, 2015). Our current analysis treats South Korea’s NDC target as excluding LULUCF. South Korea’s LULUCF sector has been a small sink of between 32 and 59 MtCO2e over 1990-2012 (UNFCCC, 2015) and is projected to remain a sink of 24 MtCO2e by 2020 (Republic of Korea, 2012).
Under the Copenhagen Accord, South Korea agreed to reduce its emissions by 30% below business-as-usual (BAU) emissions by 2020. It proposed this unconditional target in November 2009 and submitted it to the Copenhagen Accord on 25 January 2010.
Under the BAU projections from the Third National Communication, this pledge would have resulted in emissions of 543 MtCO2e in 2020 excluding land-use, land use change and forestry (LULUCF). This represents an increase of 84% in GHGs from 1990 emissions levels.
However, South Korea has replaced the 2020 pledge by the weaker 2030 NDC target in its updated Green Growth Act (Republic of Korea, 2016). Although the Copenhagen pledge has not officially been withdrawn, it is no longer actively pursued. We therefore no longer take this target into account when calculating the global temperature increase resulting from the current pledges of all countries.
We rate South Korea’s 2030 target “Highly insufficient.” The “Highly insufficient” rating indicates that South Korea’s climate commitment in 2030 is not consistent with holding warming to below 2°C, let alone limiting it to 1.5°C as required under the Paris Agreement, and is instead consistent with warming between 3°C and 4°C: if all countries were to follow South Korea’s approach, warming could reach over 3°C and up to 4°C. This means South Korea’s climate commitment is not in line with any interpretation of a “fair” approach to the former 2°C goal, let alone the Paris Agreement’s 1.5°C limit.
The CAT ratings are based on climate commitments in (I)NDCs. In particular, the CAT rates the overall (I)NDC target, which could be met through a combination of domestic emission reductions and the purchase of credits through international market mechanisms. South Korea’s NDC indicates that it intends to meet its target in such a manner.
If the CAT were to rate South Korea’s projected emissions levels in 2030 under current policies—which does not include the new administration’s proposed changes to the electricity generation mix—we would rate South Korea “Critically insufficient,” indicating that South Korea’s current policies in 2030 are consistent with a warming of over 4°C: if all countries were to follow South Korea’s approach, warming would exceed 4°C. This means South Korea’s current policies are not in line with any interpretation of a “fair” approach to the former 2°C goal, let alone the Paris Agreement’s 1.5°C limit.
For further information about the risks and impacts associated with the temperature levels of each of the categories click here.
Between 1990 and 2012, South Korea's emissions more than doubled. Emissions steeply increased in the early 1990s, with growth then continuing at a slower pace, and the CAT projects that GHG emissions growth will continue to slow. Actual emissions levels in the period 2010–2012 were above the BAU projections from the Third National Communication.
South Korea is one of the countries with the fastest growing emissions in the OECD. The high export rates from Korea’s manufacturing industry play a critical role in Korea’s increasing emission levels (Kim et al., 2015). In most developed APEC (Asia-Pacific Economic Cooperation) economies, energy consumption per capita is declining as economies shift towards the service sector and improve energy efficiency. However, Korea is an exception: energy per capita continues to rise as industrial energy use increases and population declines (APERC, 2016).
Currently implemented policies are estimated to lead to an emissions level of 728–744 MtCO2e in 2030 (147–153% above 1990 levels), excluding emissions from land use, land use change and forestry (LULUCF). To reach its 2030 NDC target, South Korea will have to strengthen its climate policies.
South Korea has implemented its Green Growth Strategy, a comprehensive policy package targeting all policy areas including climate change. One of its key policies is the cap and trade scheme introduced in January 2015.
Before the implementation of the ETS, South Korea introduced the Target Management System (TMS) in 2012, which was a precursor to the ETS and covered 60% of total emissions. In Phase I (2015–2017) of the ETS, all allowances were allocated freely. Auctioning will only take place for 3% of allowances in Phase II (2018–2020) and for 10% of allowances in Phase III (2021–2025) (IETA, 2015). Energy intensive and trade-exposed sectors will receive free allowances for all of their emissions in all three phases.
The ETS covers 525 business entities from 23 sub-sectors from steel, cement, petrochemicals, refinery, power, buildings, waste and aviation sectors; this includes all installations in the industrial and power sectors with annual emissions higher than 25 ktCO2e. The ETS system includes both direct and indirect emissions (emissions from electricity use).
In Phase I of the ETS (2015–2017), the absolute emissions cap was planned to decrease from 573 MtCO2e in 2015, to 562 MtCO2e in 2016 and 551 MtCO2 in 2017 (Carbon Market Watch, 2015). In addition to the overall cap, the ETS also sets sectoral caps that reflect sectoral-based emissions reduction targets (ICAP, 2016). The sectors were selected based on the size of their contribution to the country’s overall emissions. They were expected to play an important role in meeting South Korea’s former target of reducing emissions to 30% below the baseline by 2020, with sector-wide reductions ranging from 17.5% for waste to 34.3% for transport. The caps for Phase II (2018–2020) and Phase III (2021–2025) have not been announced.
In 2016, responsibility for the ETS shifted from the Ministry of Environment to the Ministry of Strategy and Finance (Carbon pulse, 2016) and the ETS was adjusted to ease the pressure on market participants (ICAP, 2017). As part of those adjustment measures, an additional 17 MtCO2e of allowances were added to the annual cap in 2016 (Republic of Korea, 2017). In addition, the share of allowances that companies are allowed to borrow for compliance was doubled from 10% to 20%.
South Korea’s power demand increased by 162% over the period 1990–2013 and is dominated by coal-fired (43% in 2015) and nuclear generation (30% in 2015) (IEA, 2016). South Korea introduced a Renewable Portfolio Standard (RPS) in 2012, replacing a previous feed-in tariff scheme. The new standard obliges suppliers to meet annual generation targets from renewable and new energy, starting at 2% and increasing to 10% in 2024 (IEEJ, 2014). In this target, Integrated Gasification Combined Cycle (IGCC) plants are also considered as “new energy.” However, the CAT does not consider this technology to be renewable energy.
Following the election in May 2017, the new South Korean government has announced that it intends to shift electricity generation away from coal and nuclear towards more natural gas and renewables. Specifically, the new administration has announced that it will boost gas-fired generation from about 18% in 2015 to 27% by 2030 and increase the share of renewable electricity generation in 2030 to 20% (Reuters, 2017), up from the 10% targeted by the RPS in 2024.
The government has also announced that it will pull forward the shut-down of ten old coal-fired power plants—which was originally scheduled for 2025—to 2022 to coincide with the end of the government’s term in office (VOA News, 2017). Finally, the government has announced a shift away from its current nuclear-centred energy policy, which will reduce the share of nuclear electricity generation from 30 percent in 2015 to 21.6 percent in 2030 and phase out nuclear power in the long term (POWER, 2017). In summary, the resulting electricity generation mix in 2030 from these announcements is: 21.6% nuclear, 21.8% coal (Reuters, 2017), 27% natural gas, 20% renewable energy, and 9.6% unspecified.
The impact of these announcements is not quantified in CAT’s analysis of South Korea’s current policy projections, due to the lack of laws or measures to implement them. The CAT estimates that if fully implemented, these announcements would lead to a 68 to 84 MtCO2e (26%-30%) reduction in electricity-related emissions under current policies. This is equivalent to a 9–11% reduction in total GHG emissions excl. LULUCF in 2030, compared to the current policy projection.
These announcements represent a substantial shift away from the energy policy of the former government, which had planned to build 20 new coal-fired power plants by 2022 (Reuters, 2016) and announced plans for the construction of two new nuclear reactors (Reuters, 2015).
In 2009, South Korea set a light-duty vehicle emissions standard of 140 gCO2/km in 2015. In December 2014, this was strengthened to 97 gCO2/km by 2020 (TransportPolicy, 2015). The South Korean Government is also pushing the uptake of electric vehicles (EV), with a goal of having 250,000 EVs on the road by 2020, through subsidies of up to US$12,000 per vehicle; local authorities also offer an additional subsidy of up to US$10,000 per vehicle (Financial Times, 2017). The government is also investing in a programme to improve charging infrastructure. The number of annual EV sales doubled from 2015 to 2016 to nearly 6,000.
Historical emissions in South Korea were taken from the national inventories submitted to UNFCCC (2015). The 2030 NDC target was calculated based on the accompanying BAU scenario (Republic of Korea, 2015). The target is calculated excluding LULUCF emissions.
BAU projections for the 2020 pledge were taken from the Third National Communication (Republic of Korea, 2012) whilst the BAU for NDC is taken directly from the NDC pledge. We no longer consider the 2020 pledge when calculating the global temperature rise associated with the aggregated pledges of all countries.
Current trend projections are based on the BAU scenario from the 6th Edition of APEC Energy Demand and Supply Outlook (APERC, 2016) and the US EPA non-CO2 emission projections until 2030 (USEPA, 2012). Non-energy related CO2 emissions are assumed to remain constant at the 2012 level. For the upper end of the range we use the APERC BAU scenario directly. This scenario reaches 3.7% of renewable power generation in 2024, growing further to 4.7% in 2030. For the lower end of the range we adjusted the scenario based on the Renewable Portfolio Standard (RPS), assuming 10% of renewable power generation is achieved by 2024 and sustained up to 2030.
To estimate the impact of President Moon’s announced intention to change the electricity generation mix, the announced shares of generation per technology were firstly scaled up to cover the 9.6% of generation that was not allocated to a particular generating technology. These shares were then multiplied by the total generation under a BAU scenario in 2030 (APERC, 2016). The generation per technology was multiplied by emission factors for each fossil fuel generating technology in 2014 (IEA, 2017) (emission factors in 2030 used in the APERC BAU scenario are unavailable) to obtain a first estimate of electricity-related emissions under the announced generation mix.
The first-estimate emissions level was then compared to calculated emission levels resulting from the two power-sector scenarios described above (APERC BAU and 10% renewable power scenarios). The electricity-related emission levels in these scenarios were re-evaluated with the emission factors from 2014 from the IEA (2017) (these appear to be slightly higher than the emission factors in 2030 used in APERC (2016)) to obtain an updated baseline level from which the relative impact of the announced generation mix was compared. This relative impact was then converted into a final estimate of the electricity-related emissions under the announced generation mix by multiplying this relative impact by the absolute emission levels under the APERC BAU and 10% renewable power scenarios.
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