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1. Paris Agreement Article 6 and Implications for Korea’s NDC Implementation

Author:
Jione Jung
Publication Date:
11-2023
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Korea plans to use voluntary cooperation under Article 6 of the Paris Agreement as a complementary measure to its domestic mitigation efforts. There is an urgent need to establish a plan to promote international emission reduction and to prepare specific implementation measures. The government needs to play a role in securing funding and providing support for international emissions reduction projects, as well as establishing laws and regulations to promote emissions reduction activities abroad.
Topic:
Climate Change, Law, Regulation, Carbon Emissions, and Paris Agreement
Political Geography:
Asia and South Korea

2. Carbon Border Adjustment Mechanisms, Carbon Pricing Policy, and the Inflation Reduction Act

Author:
Alistair Ritchie and Yi Chen
Publication Date:
08-2023
Content Type:
Special Report
Institution:
Asia Society
Abstract:
As Korea seeks to achieve a 40% reduction in greenhouse gas (GHG) emissions from 2018 levels by 2030 to meet its Nationally Determined Contribution (NDC) under the Paris Agreement, significant climate policy developments are taking place in the European Union (EU) and United States (U.S.). The EU Emissions Trading System (EU ETS) continues to advance and is aiming to achieve a 62% reduction in GHG emissions from 2005 levels by 2030, in combination with implementation of the EU Carbon Border Adjustment Mechanism (CBAM). The United States is actively considering its own CBAM policy and has triggered massive investment in clean energy technology through the Inflation Reduction Act (IRA). The Asia Society Policy Institute (ASPI), with the generous support of the Korea Foundation, organized a study tour to the EU and the U.S. in which seven young Korean leaders in climate and energy policy participated in meetings and networking events in July 2023. The project was aimed at equipping the participants with knowledge, insights, and networks to understand the implications of EU and U.S. policies related to ETS, CBAM, and broader climate and energy policies, and to help them in developing strategies to align its K-ETS with more ambitious emission targets, comply with EU's CBAM, and implement emission reduction technologies to meet its NDC and net zero goals. This summary report presents key learning points from the study tour to support Korea in achieving its GHG emission targets and responding to evolving trends in EU and U.S. climate policies.
Topic:
Climate Change, European Union, Carbon Emissions, and Paris Agreement
Political Geography:
Asia and South Korea

3. Developing Effective Benchmark-Based Allocation for Industrial Sectors: The Case of the Korean ETS

Author:
Dong-Hyeok Kwon and Alistair Ritchie
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
Emissions trading systems (ETS) are increasingly being introduced as a way of cost-effectively reducing greenhouse gas emissions to meet ambitious national climate change targets, including Nationally Determined Contributions and net-zero long-term goals under the Paris Agreement. A key concern for governments and industry, however, is how to protect industry’s global competitiveness and prevent “carbon leakage”, that is, the transfer of production to world regions with less ambitious climate policies that would lead to an increase in total emissions. To address this concern, ETS allowances are typically allocated for free to greenhouse gas (GHG)-intensive or trade-intensive industries at risk of carbon leakage. The type of free allocation design is important because it directly impacts on the financial performance of companies. It also determines how companies are rewarded. Those that have invested more in GHG reduction technologies will be rewarded better under a benchmark (BM)-based allocation approach, where allocation is based on the level of production multiplied by an emissions intensity benchmark. Those that have invested less in such technologies will be rewarded better under a grandfathered approach, where allocation is based on historic emissions. However, while BM-based allocation is generally regarded as a fairer method, it is also considered more difficult to design and implement. This Asia Society Policy Institute issue paper, Developing Effective Benchmark-Based Allocation for Industrial Sectors: The Case of the Korean ETS, shows how BM-based allocation has been successfully implemented for some of Korea’s most important industrial sectors, steel and petrochemicals. It provides valuable insights and recommendations for other countries to develop an effective allocation system in a timely and efficient way.
Topic:
Climate Change, Trade, Carbon Emissions, and Paris Agreement
Political Geography:
Asia, South Korea, and Korea

4. Increasing Global Climate Ambition and Implications for Korea

Author:
Jinyoung Moon, Soo Hyun Oh, Youngseok Park, Sunghee Lee, and Eunmi Kim
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Since the adoption of the Paris Agreement, wider and decisive actions to tackle climate change and reduce greenhouse gas (GHG) emissions have been called for in the international community. Many countries are seeking a sustainable economic recovery plan that reflects climate change and environmental considerations. The private sector has also been trying to expand environmentally sustainable investments and disclose relevant information on climate change. In particular, major GHG emitters such as China, the United States (U.S.), European Union (EU), Japan and Korea have pledged to move forward carbon neutrality. For this goal, the EU has established action plans for the European Green Deal, including a plan for introducing a Carbon Border Adjustment Mechanism (CBAM). In this context, this study aims to propose policy recommendations for Korea by analyzing measures to strengthen reduction targets and the economic impact of the EU's CBAM. The following implications can be derived. First, it is necessary to support low-carbon transition efforts in industries. Second, it is also important to support low-carbon technological innovation. Third, monitoring and response measures for the CBAM should also be prepared. Fourth, the private sector should expand voluntary efforts to reduce emissions and environmentally sustainable investment. Lastly, it is necessary to actively engage in international cooperation, not only in terms of reducing GHG emissions but also responding to climate change.
Topic:
Climate Change, Environment, Science and Technology, Sustainability, Carbon Emissions, and Paris Agreement
Political Geography:
Asia and South Korea

5. U.S. and China Climate Goals: Scenarios for 2030 and Mid-Century

Author:
Asia Society Policy Institute and Climate Analytics
Publication Date:
11-2020
Content Type:
Special Report
Institution:
Asia Society
Abstract:
In September 2020, President Xi Jinping announced new goals for China to reach carbon neutrality before 2060, as well as to strengthen its existing 2030 commitments under the Paris Agreement. With these announcements, China has signaled a move to join the European Union—as well as the United States under a Biden administration—in leading long-term climate action among the big emitters. Our analysis demonstrates that if China’s new long-term goal covers all greenhouse gas (GHG) emissions, and not just carbon dioxide (CO₂), this could bring the country within reach of the emissions reductions required by mid-century for its actions to be in line with the Paris Agreement’s long-term goal of limiting average global temperature increases to 1.5°C. However, if President Xi’s announcement is only meant to cover CO₂, then China would need to achieve carbon neutrality around 2050 for this to be compatible with the Paris Agreement.1 Either way, China’s short-term actions will also need to be quickly brought into line with its new long-term trajectory. This includes doing more than simply peaking CO₂ emissions before 2030 as President Xi foreshadowed. Instead, our analysis demonstrates that China would need to peak its emissions by 2025 and rapidly reduce these thereafter to be compatible with the Paris Agreement. This also implies a need for significant adjustments to the other quantifiable targets identified in China’s existing Nationally Determined Contribution (NDC) under the Paris Agreement and the ramping up of action to achieve these. Reducing coal-fired power generation quickly and phasing it out entirely by 2040 would be an important step toward achieving this early peak and rapid reductions. Under the Trump administration, the United States has reneged on past climate action promises and rolled back existing policies resulting in an increase in emissions compared with the Obama administration. As a result, this report highlights that even under a Biden administration, the United States is likely to miss its previous 2025 target under the Paris Agreement. However, a Biden administration means that the United States now has the potential to reverse the Trump administration’s rollbacks and make a significant contribution to closing the Paris Agreement’s ambition gap in a new 2030 NDC. Indeed, by taking the initiative to reboot U.S. action in line with the Energy and Climate Package touted by President-elect Biden during his campaign, including its goal to reach net-zero emissions by 2050, U.S. emissions could be reduced substantially by 2030.2 For example, our analysis indicates that if the Biden campaign’s policies were to be fully implemented with the support of Congress (see below), and continue to be supported by strong subnational action, they could bridge more than half of the U.S. share of the global ambition gap by 2030 through reducing emissions by up to 38%–54% below 2005 levels (GHGs, including land use, land-use change and forestry)3. This would also reduce estimates for average global temperature increases in 2100 by 0.1°C, on top of the 0.2°C–0.3°C reduction achieved by China’s recent announcement. As this report shows, President-elect Biden’s plan to decarbonize the U.S. electricity system by 2035 would represent by far the biggest contribution to this effort and is in line with the Paris Agreement temperature goal. It would result in savings of ~1,350 MtCO₂ out of a total abatement potential of ~1,810 MtCO₂e [1,630–2,100] in 2030 across his Energy and Climate Package. However, this report also estimates that potentially only half of this potential could still be achieved through Executive Authority in the event of Congress not supporting action, although this estimate carries a large degree of uncertainty. We also outline how additional emissions reductions could come from action in other areas, including freight transport and industry—with the electrification of end-use sectors and green hydrogen important opportunities to achieve this. If the United States and China fully implement these ambitious goals and are able to achieve net-zero GHG emissions around mid-century, it would be a monumental step forward toward bringing the Paris Agreement goals within reach. It would also mean that for the first time more than 60% of the world’s emissions are in countries with a clear pathway to decarbonize their economies. However, achieving the goals will require bold action in all sectors of the economy, with an early coal phaseout being paramount for both countries.
Topic:
Climate Change, Carbon Emissions, Paris Agreement, and Decarbonization
Political Geography:
China, Asia, North America, and United States of America

6. Green Stimulus Proposals in the United States and China

Author:
David B. Sandalow and Xu Qinhua
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On June 14, 2020 New York time and June 15, 2020 Beijing time, the Center on Global Energy Policy at Columbia University and Center for International Energy and Environment Strategy Studies at Renmin University convened a joint Zoom workshop on green stimulus programs in the US and China. The workshop offered a chance for scholars from the two universities to explore the recent economic downturn due to the COVID-19 pandemic, stimulus measures adopted to date and green stimulus proposals in both countries. Participants also discussed other measures to promote clean energy and low-carbon development in the US and China.
Topic:
Climate Change, Energy Policy, Environment, Green Technology, and Paris Agreement
Political Geography:
China, Asia, North America, and United States of America

7. China’s Carbon Market: Accelerating a Green Economy in China and Reducing Global Emissions

Author:
Yifei Zhang, Jonathan Harris, and Jim Li
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
The National Carbon Emission Rights Trading Market (ETS) Construction Plan (Power Generation Industry) was released in Beijing on December 19 , 2017 by China’s government. As promised during COP23 held in Bonn, Germany in November 2017, this is a key step to fulfilling China’s commitment to the Paris Agreement. The performance of ETS pilot projects in seven provinces of China have been evaluated since October 2011. The supporting policies were also thoroughly analyzed at both local and central government levels. Analysis of the pilot projects shows that the national ETS just initiated in China will not only strengthen supply-side structural reform and carbon-saving patterns of economic growth, but it will also contribute to poverty alleviation by introducing ecosystem valuation into the market. This is a practical application of the “Two Mountain Theory” suggesting that the economic and ecological systems can work in harmony, as proposed by President Xi and emphasized in the 19th National Congress of the Communist Party of China (CPC) on development, poverty alleviation and environmental protection in October 2017. Policy suggestions in terms of economic characteristics, industrial development and regional differences were developed to improve the effects of ETS in China. Taking advantage of differences in the costs of reducing emissions and expanding the size of the trading market are key to success.
Topic:
Climate Change, Environment, Carbon Emissions, and Paris Agreement
Political Geography:
China and Asia

8. The AIIB’s Energy Opportunity: How the Asian Infrastructure Investment Bank’s Energy Lending Can Chart a New Path of Sustainable Development

Author:
Kiri Hanks
Publication Date:
06-2017
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
The new Asian Infrastructure Investment Bank (AIIB) will be a major new funder of infrastructure in developing Asia, where demand for power is growing faster than any other region in the world. Done right, its energy lending could promote an inclusive and sustainable Asian energy transition. This report sets out a vision for an AIIB partnership with the region’s most climate-vulnerable countries. This could forge a new path of economic development and confirm a new era of Southern climate leadership.
Topic:
Climate Change, Environment, Natural Resources, Infrastructure, Sustainable Development Goals, Fossil Fuels, and Paris Agreement
Political Geography:
Asia and Global South