CO2 Emission Controversy

 

Twenty-eight economic organizations, including the Federation of Korean Industries (FKI), and 38 companies in the power generation and energy sectors released a statement on Dec. 2 that the government’s carbon emissions allowance by enterprise, which is scheduled to take effect next year, is short of their request by approximately 400 million tons. Therefore they will have to pay a fine of 12.7 trillion won (US$11.4 billion) for three years.

On the same day, the Ministry of Environment fixed the total allowance for 2015 to 2017 at 1.598 billion tons. The 525 companies subjected to the plan had made a request for 2.021 billion tons earlier.

“We have to pay the fine unless we can purchase the emissions rights, and the amount is estimated at 30,000 per ton,” a representative of the company claimed, adding, “Then, the 525 companies will have to carry at least 12.7 trillion won [US$11.4 billion] for the three years, which is sure to act as an obstacle against production and employment, and thus the government should adjust the reference price downward.”

According to the representative, the carbon credit trading market cannot function as desired, because the reserves for market stabilization are limited to 14 million tons, while a shortage amounts to at least 423 million tons. The organization also called for the government to come up with measures for the stable supply of emissions rights.

In addition, they mentioned the necessity of a prudent review of the greenhouse gas emissions reduction goal. “The government’s promise of about a 30 percent reduction compared to the BAU by 2020 is a hard goal to achieve, and it would compromise national competitiveness if the reduction target for 2021 and later was determined based on it,” a representative continued, adding, “Any excessive regulation will affect our bargaining power in the new climate regime of all countries to be launched after 2020. We need to set a sustainable goal by thoroughly examining our room for reduction.”

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