The Korea Herald


Businesses oppose early adoption of carbon trading

By 황장진

Published : Feb. 7, 2011 - 18:46

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Korea’s major economic organizations called on the government Monday to significantly postpone its plan to introduce a carbon emissions trading system in 2012, saying it could hurt the country’s industrial competitiveness.

The five economic organizations, including the Federation of Korean Industries, the largest industry lobby in the country, urged the government to delay the move at least until 2015.

“The industrial circle opposes the introduction of the carbon emissions trading system, based on uncertainties of the global negotiations on climate change, the delay of introduction of the system by major economies and possible weakening of the country’s international competitiveness,” they said in a joint statement.

The economic organizations, also including the Korean Employers Federation and the Korea Chamber of Commerce and Industry, noted China, the world’s largest producer of greenhouse gas, and the world’s second largest greenhouse gas producer, the United States, as well as other major advanced economies, including Japan and Australia, do not have any immediate plans to introduce the system or have delayed or scrapped their earlier plans to introduce the system.

“And therefore, it is not desirable to begin discussing the introduction of a carbon emissions trading system (in Korea) until there is an international consensus for the need of such a system,” said the statement.

The carbon emissions trading system is the backbone of a government pledge, announced in September 2009, to voluntarily cut the country’s carbon emissions by 30 percent from its business-as-usual levels in 2020.

The organizations, however, said the introduction of a carbon trading system in the country will also significantly add to the production cost of most manufacturers that account for a majority of all businesses in the country.

They claimed the country’s businesses will have to shoulder an additional cost of some 4.2 trillion won ($3.79 billion) a year even if 100 percent of purchasing rights or credits were provided for free, as many companies will have to buy additional credit.

The amount could rise up to anywhere from 5.6 trillion won

($5.05 billion) to 14 trillion won, depending on the portion of purchasing rights provided for free, they said.

The Presidential Committee on Green Growth said in January it will submit a bill on the creation of the system in 2012 to the parliament this month.

President Lee Myung-bak hinted Monday that such plans could change, saying the system will be introduced after thorough consultations with the country’s business circles and at the most suitable time.

“The government will implement the scheme in a flexible manner considering international trends and industrial competitiveness,” the president said in his biweekly national address via radio and Internet broadcast. 

(Yonhap News)