Korea started hosting the headquarters of the Green Climate Fund (GCF) in Songdo, Incheon in December 2012, the last year of the Lee Myung-bak administration. Korea became the first Asian country to bring in an environment-related institution under the United Nations (UN). This was the highlight of the green growth policies that the Lee Myung-bak administration emphasized during the ruling period, as Korea became capable of speaking officially regarding international issues including greenhouse emissions rights and climate change.
However, after two years now, the government is worrying about continuing to support the GCF. In fact, the Park Geun-hye administration does not actively support green growth policies. However, as Germany, which was competing against Korea to host the headquarters of the GCF, said that it would pay US$1 billion ahead of the UN Climate Summit to be held in New York on September 23, Korea cannot just ignore the situation. The country needs to decide whether to keep up is appearances as a hosting country of the GCF headquarters or to consider practical matters soon.
According to the related departments including the Ministry of Strategy and Finance, the government is busy trying to solve the problem regarding the additional GCF share before President Park Geun-hye’s official schedule during the UN General Assembly and the Climate Summit on Sept. 22 to 24. Since hosting the GCF headquarters in 2012, Korea promised to pay the operation fund of US$1 million every year until 2020, support US$40 million for building capacity, and provide US$5 billion as green official development assistance (ODA). According to the Ministry of Strategy and Finance, Korea has paid a total US$12 million so far, including US$2 million of operation funds and another US$10 million for capacity building.
The GCF aims to raise US$100 billion (100 trillion won) in funds every year, but is having difficulties in initial financing. The GCF headquarters claims that other countries should actively participate in raising funds to respond to climate changes. Especially after Angela Merkel, Chancellor of Germany, promised to pay US$1 billion, the GCF is publicly pressuring other countries including Korea, since the UN Climate Summit in which leaders from 140 countries get together is to be imminently held in New York on Sept. 23.
President Park will explain how to create new growth drivers by making countermeasures against climate change as an essential task of the creative economy and mention the additional GCF share as well at the summit. This means that relevant departments, including the Ministry of Strategy and Finance, have to solve GCF problems before President Park leaves Korea. The amount of additional share has not been determined yet. One side is claiming to pay a similar amount to Germany as the hosting country of the headquarters, and the other side is insisting to be practical and realistic.
Regarding this, an official at the Ministry of Strategy and Finance said, “Korea is honestly keeping the promise to pay a standard quota as the hosting country of the headquarters. Furthermore, as Korea is classified as a developing country, not an advanced country, in the UN Framework Convention on Climate Change (UNFCCC), there is not much burden of additional share.”
Advanced countries feel quite obliged to raise funds as they are immediately concerned about greenhouse gas emission issues. However, developing countries that can voluntarily participate have a relatively lesser burden. But in Korea's case, since the Lee Myung-bak administration declared to decrease greenhouse emissions quantity by up to 30 percent of business as usual (BAU) and promised to provide substantial financial support when hosting the GCF headquarters, there is a lot of pressure from other countries.