Evaluation and Implications of Greenhouse Gas and Energy Targert Management System in Korea

Abstract

The Korean government has been implementing the Greenhouse Gas and Energy Target Management System towards big emitters and energy glutton entities, based on the Framework Act on Low Carbon, Green Growth since 2010. The Target Management System is a tool for smoother transition to the Emissions Trading Scheme which is set to start in 2015, and offers the opportunity for covered entities to reduce greenhouse gases. The GHG emission and energy consumption levels of controlled entities was reported to the government for the first time in late March of 2013, for the first year that the policy was implemented in 2012. This study focuses on the controlled entities of the power and industry sector, which account for 97% of all covered entities, by analyzing their submitted GHG emissions and energy consumption records and evaluating implementation performance as well as suggesting institutional improvements and complementary measures. Based on analysis of performance results, GHG emissions were effectively reduced by an excess of 7.6%, and energy consumption by an excess of 4.3%, showing the effectiveness of the Target Management System in reducing GHG emissions and energy consumption. Among sub-sectors, the machinery industry is shown to have the highest target accomplishment rate, whereas the elecrticity sub-sector could not meet reduction goals as a result of frequent shutdown of nuclear power plants in 2012. Analysis of performance result according to the big company group and the small and medium company group shows that the big company group shows an average reduction ratio of GHG and energy usage, respectively, of 0.1168 and 0.0344. These numbers were satisfactory compared to the reduction ratios of small and medium companies of -0.0910 and -0.1627, showing that in order to successfully implement the Target Management System, the government must offer its financial and technical support to the small and medium companies.

Keywords: Greenhoese Gas, Energy, Target Management System, Achievement Ratio, GEAR index