[LUNAR NEW YEAR SPECIAL]`Green New Deal`: Korea`s new growth engine

"Green growth" has been one of the hottest issues recently, especially since the government announced its "Green New Deal" project on Jan. 6. The "Green New Deal" is an ambitious project designed to create 960,000 jobs by investing 50 trillion won ($36.4 billion) over the next four years.

There have been debates about what "green growth" is. The interconnectivity between the protection of the environment and profitability is another hot topic.

When we look back, we can see changes in our attitude towards environmental conservation and economic growth.



A brief history



Thomas Malthus argued in his 1798 "Essay on the Principle of Population" that human beings would face "limits of growth" due to growing populations. Debates regarding the coexistence of conservation and growth followed in the centuries ahead, with some arguing that advanced technologies -- including high-tech farming -- would one day make economic growth and environmental conservation possible.

However, others have argued that economic growth should be given a priority over environmental conservation.

The 1992 United Nations Conference on Environment and Development was a turning point in the attitudes toward growth and conservation. The U.N. conference raised international awareness of the importance of environmental conservation, introducing a new idea of "green growth."

"Green growth" is generally defined as achieving economic growth by developing eco-friendly industries.

In wealthy countries, "Green growth" is now receiving overall support. It has become a critical model for the future of economic development.



Korea`s strategy



The "Green New Deal" was born against the backdrop last year of the burgeoning global financial crisis. Economies stumbled, central banks and elected figures, including Korea`s, stepped in with massive interest rate cuts and fiscal stimulus packages.

The Korean government has taken the position that this crisis is an opportunity to advance eco-friendly economics; by pumping investment into "green technologies," we will be both helping the economy and setting the stage for future economic growth.

The Green New Deal`s short-term goal is to overcome the current economic difficulties by providing more jobs, while the mid- and long-term goals are to nurture future growth engines and help conserve the environment. Other major economies have also introduced plans to advance eco-friendly growth.

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"The Green New Deal"



The U.K. adopted a low-carbon, eco-friendly national strategy in 2005. The plan involves investment in public transportation, incentives for homeowners to make their homes more energy efficient, among others.

U.S. President Barack Obama has announced a plan known as the "New Apollo Project" to invest $150 billion into clean energy development over the next 10 years.

Japan also plans to increase the scale of its environmental market to 100 trillion yen by 2015.

In addition, the international community has long recommended green growth strategies. Both Agenda 21, revealed in Rio de Janeiro in 1992, and the World Summit on Sustainable Development (2002) in South Africa recommended water, energy, health, agriculture, and biodiversity (WEHAB) as five key sectors needed for sustainable development.

Secretary-General of the United Nations Ban-Ki-moon urged the formation of international leagues for green growth and green economy-driven job creation at the 13th UN Climate Change Conference.

The Korean government`s Green New Deal was crafted in line with such global trends, composed of nine core and 27 related projects that will create a large number of near-term jobs.

The plan may be divided into four major categories.

The first concerns projects to establish an energy-efficient economic structure, such as energy-saving and resource-recycling projects. The government will help to build 2 million "eco-friendly green homes," which will utilize solar energy by the end of 2018.

As part of the "green school" project, schools lacking flora and suffering from poor energy efficiency will be have trees planted on their property and will be provided with technology to utilize a rainwater collecting system. Environment-friendly paint and energy-efficient lighting will be used in those facilities as well.

Furthermore, public sector corporations will have 20 percent of their lighting provided by LEDs.

The second category includes projects to increase the general standard of healthy living.

First of all, the government will increase its investment in low carbon transportation, such as railways and bicycle paths. The opening of Gyeongbu-Honam express railway will happen earlier than scheduled.

To promote the use of bicycles, bicycle paths spanning 3,114 kilometers will be gradually established. In major cities, a pilot project to build paths exclusively for bicycles will be planned.

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Also, rivers throughout the country will be restored.

The third category consists of preventative measures such as reducing carbon emissions and securing fresh-water resources.

Examples include development of the four major rivers, securing water resources and afforestation projects. Given that Korea is very vulnerable to flooding, with damage from flooding amounting to 2.7 trillion won annually, development of the four rivers is expected to solve this problem, and will allow our rivers to become more environmentally friendly as well as offering people much-needed relaxation area.

Additionally, expansion of dike cross-sections, construction of small and medium sized dams and flood control gates will help further prevent chances of large-scale flooding. The four rivers, as beautiful as they already are, will receive a complete makeover in order to turn them into major tourist attractions.

Bicycle paths will follow alongside rivers, while "Cultural Exploration Routes" will be established to make the rivers into a "river flowing with history and culture."

The project to utilize forests is also getting attention. As trees are a main source of carbon absorption, forested areas will be greatly expanded, while damaged forests will be restored. Facilities to upgrade the value and maximize the utilization of forest biomass including wood and agricultural products will also be established.

Korea has been designated by the U.N. as not having sufficient resources for the future. Building reservoirs and dams will help secure sufficient future water resources as well as minimizing environmental damages.

Damming rivers will help to minimize environmental damage.

In particular, development of the four major rivers and promoting afforestation is one of the five core tasks presented the at 2002 Sustainable Development Council, and is essential for survival and enhancing competitiveness in the 21st century.

The last category concerns investment projects for future industries. The government will systematically establish a database to consolidate basic information required to create a green nation -- such as land, energy, water resources and buildings.

If the Green New Deal is successful, it is estimated that up to 960,000 jobs will be created in the next four years. The creation of jobs will increase household income, stimulate consumption, promote corporate profitability, and increase investment. This will lead to a positive ripple effect on retail and domestic industries, accelerating economic recovery.

The Green New Deal Policy will also contribute to stimulating the regional economy. The river development projects will particularly benefit small and medium-sized construction companies located nearby the rivers. If underutilized, riverside land can be developed into leisure or cultural spaces, they will give residents a place to relax. Creating bicycle paths throughout the country will stimulate the tourism and leisure industries.

The early opening of the Gyeongbu and Honam express railways is expected to improve accessibility and lead to regional development.

The Korean government has tried to overcome problems that the existing environment and green growth policies face while establishing new measures through the Green New Deal. The existing measures on conservation build a consensus on their necessity, but did not involve a funding resources mechanism. It was a challenge to develop conservation policy into job creation and growth. However, the Green New Deal is a tangible idea that connects the existing green growth plan with funding and support.

The project may cost 50 trillion won in total between 2009 and 2012. In this regard, there are some concerns that this will harm the fiscal soundness of the central government. But such a belief is unfounded. After President Lee announced "low carbon, green growth" as a policy goal on Aug. 15, 2008, government departments actively developed diverse policies, which might have resulted in an overlap in investment. However, the Green New Deal has focused on preventing overlapping investment in the same areas and promotes financial efficiency: it introduced a targeted policy package based on key factors that meet global standards.

In other words, government agencies merge projects based on key business sectors, creating a package to maximize policy effects. They also tried to restructure projects in non-key areas to promote efficiency. The government strictly applied the principle of "timely, targeted, temporary," in consideration of growth potential, while coming up with Green New Deal policy.

It is possible to make "timely" measures in forest conservation, for example, by creating jobs and "temporarily" managing the scope of business if the economy improves.

Moreover, it is "targeted" enough to make a connection with the future growth business or forest biomass.

Of the 50 trillion won, only 38 trillion won is to be supported by state subvention. It is only 3.2 percent of the estimated budget between 2009 and 2012. While making spending plans, the government will prioritize existing projects, manage the timing of operations, etc.

In conclusion, the Green New Deal is designed to ensure a growth engine for the future as well as to overcome financial difficulty and create jobs. Thus, the project will be a stepping-stone to turn today`s crisis into opportunity.

It is our plan that the government will have a ministerial-level crisis management council before announcing the details of nine key business areas of the Green New Deal in January or February.

In line with the proposal of new growth engines unveiled on Jan. 13, the government will make efforts to strengthen the strategy of increasing green technology and strive to achieve practical and balanced results through the Green New Deal policy.



By Park Cheol-kyu