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Professor Gerald M. Stokes' contribution to Maeil Business Newspaper

Net- Zero Written by Professor Gerald M. Stokes Recently, Korea pledged to make its economy “net-zero.” This means it will effectively eliminate all carbon emissions by 2050. This goal is admirable and in keeping with the five-year-old Paris Climate Accord process. In Korea, this is part of an emerging strategy to use the recovery from the COVID-19 pandemic as a vehicle for enhancing the green agenda in general and the reduction of greenhouse gas emissions in particular. The commitment is important and necessary. Every nation will have to make a similar commitment in order to stabilize the Earth’s climate. Korea’s leadership in this process is consistent with its emerging leadership role in many areas like culture, electronics, and disaster response and in this case the UN Framework Convention on Climate Change (UNFCCC). This leadership within the UNFCCC became significant during the tenure of Ban Ki Moon as Secretary General of the UN and continues with Hoesung Lee, the current head of the Intergovernmental Panel on Climate Change. This will not be easy, and I think it is important to think about what a profound change this will bring to Korea. Net-zero has two parts. The first part is to reduce the amount of carbon dioxide being released into the atmosphere. The emissions from Korea are greater than 12 metric tons of carbon dioxide per person per year. These emissions come from many industrial sources: generation of electricity, manufacturing, steel production, and shipping. Individual Koreans generate emissions by driving, cooking, and heating residences. Carbon dioxide emissions come from practically every aspect of society. Because “decarbonizing” some of the uses will be difficult, for example, steel production, the second part of a net-zero strategy is supporting processes that absorb carbon dioxide from the atmosphere. These processes are needed to offset difficult to eliminate emissions. For example, the forests of Korea absorb a little less than one ton per capita of carbon dioxide per year. There are also technologies that capture carbon dioxide for either utilization or disposal. These latter technologies are not currently in widespread use in Korea or anywhere else in the world. They are certainly worthy of governmental R&D. A great deal of energy generation technology is available to facilitate this transition., Renewable energy systems like wind, solar, and wave energy, as well as nuclear power can all make significant contributions. Recent advances in fusion power are also important, but this technology is not likely to create an impact before 2050. I am sure that Korea will rise to the technological challenge, but there is more. First and foremost, net-zero essentially means no fossil fuel use in Korea – not for electricity, not for driving, not for manufacturing, not for cooking. The 12-ton per capita carbon emissions highlight how much the Korean economy depends on fossil fuels. In many ways decarbonization should also be viewed as a reindustrialization of the country. This transformation will not be easy. It entails not only capital investment but many businesses, large and small, will either no longer exist or will have to dramatically change their business strategy. Lessons from around the world suggest that the magnitude of these changes will create political resistance. The challenge will become how to sustain the commitment with the government changing every 5 years. Next, it is important to plan to decarbonize the entire economy. Generally, we think carbon emissions are tied to production and fuel use within the country. However, there is a concept called consumption emissions, which is a measure of the emissions associated with consumption within a country. For example, if a country imports steel for construction, the country is consuming a commodity that generated emissions while being produced in another economy. Korea’s imported consumptive emission has dropped from 30% of domestic emission in 1990 to less than 5% in 2017, an impressive change. The US on the other hand, had no net addition of emissions from consumption in 1990, but its transformation to a service economy has resulted in it importing goods that now embody almost 8% of its production emissions. In essence, the US, in offshoring its heavy industry, has also exported its emissions. In Europe the same is true where countries like France, Great Britain, and Italy import goods that generate between 20 and 30 percent of their domestic emissions. The temptation for Korea to move emissions offshore will be very high. The net-zero commitment must include the whole economy, including emissions embodied in imports. Similarly, countries not only offshore emissions but they offshore poorly performing technology to the developing world. One prominent example of this is automobiles. Many developed countries, including Korea, are putting in place policies to improve mileage or accelerate the transformation to electric vehicles. The resulting used car supply is frequently exported to developing countries, where the vehicles’ poor performance creates environmental issues. These issues have led to some countries actually banning the import of used vehicles. Losing, or not participating in these markets would affect the value of used cars, a non-trivial consideration in consumer decisions to upgrade their vehicles. But the emissions exported in these vehicles are not a real reduction in global emissions. Similarly, developed countries not only export emissions in used technology, but also sell technologies abroad that would not be allowed within their own borders. Sometimes foreign assistance dollars are spent supporting the construction of coal-fired power plants in developing countries, that could not be built in the donor country. In conclusion, net-zero is an important and necessary aspiration. However, as Korea takes on this task, it must do several things. First, it needs a policy and aspiration that covers the whole economy, including addressing the carbon emissions of its imports and exports. Next, it must ensure that the policy has continuity and long-term support. Finally, it needs to be ready for the profound transformation net-zero represents. Korea shares the atmosphere and climate with almost 200 other countries. Its leadership will help others understand the importance of assuming global responsibilities and stewardship. Click here to read the original article
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Registration Date2021-04-19
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