South Korea unveils CO2 target plan

SEOUL Tue Aug 4, 2009 1:00pm EDT

SEOUL (Reuters) - South Korea pledged for the first time on Tuesday to set a 2020 emissions reduction target, as the OECD's fastest-growing carbon polluter voluntarily joined richer nations in setting hard goals to roll back climate change.

By committing itself to one of three options, all of which are relatively modest compared to the cut-backs pledged by developed economies, Seoul is establishing a precedent that might encourage much bigger emitters like China and India to agree to targets of their own, although their resistance is unlikely to bend soon.

The government said it would choose a target this year from three options: an 8 percent increase from 2005 levels by 2020, unchanged from 2005, or 4 percent below 2005. Its emissions doubled in the 15 years to 2005, the fastest growth in the OECD.

South Korea, Asia's fourth-largest economy, laid out several measures to help it achieve the goal, adding that trade in carbon emissions rights and tax incentives could help offset some of the costs. It did not provide any further details on these plans.

It also aims to increase use of hybrid cars, renewable and nuclear energy consumption, energy efficiency with light-emitting diodes and smart grids to achieve the target, which will cost 0.3 to 0.5 percent of GDP.

While modest compared to the 15-17 percent curbs that Japan and the United States have pledged, officials said they marked a big commitment to head off an estimated 30 percent rise in emissions that would result if no action were taken.

Seoul drew measured praise for taking a lead among newly industrialized nations not bound by the U.N.'s Kyoto Protocol by setting 2020 goals ahead of a major global climate meeting in Copenhagen, where the U.N. hopes to seal agreement for a successor pact to Kyoto from 2013.

"It's good to see countries like South Korea willing to take a step forward but of course we would like to see a higher level of ambition," said Diane McFadzien, climate policy officer for conservation group WWF in Singapore.

"If you look at the group of developing countries in general, having some come forward and take steps is useful, it stops them from hiding more as a bloc, saying it's not possible."

GREEN INVESTMENT

The country's green investment plans already rank near the top in Asia. The government said last month it would invest 107 trillion won ($87.56 billion), or 2 percent of its annual GDP, in environment-related industries over the next five years, pushing stricter fuel efficiency and emission requirements.

But as one of Asia's richest nations, it has come under pressure to cut its output of planet-warming carbon dioxide, which reached 11.1 metric tons per person in 2005, the same as some European nations and the 17th largest among OECD members.

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"Probably many would say 'great, South Korea is taking steps now'. But in terms of really big impact, in terms of the Copenhagen process, it is probably not significant enough to impact other countries' commitments," said Changhua Wu, Greater China Director for The Climate Group, an NGO.

Under the Kyoto Protocol, nearly 40 developed nations are legally bound to curb greenhouse gas emissions between 2008-2012. Those countries are under intense pressure from developing countries to ramp up their targets to cut emissions more deeply by 2020 as part of a broader climate pact under negotiation.

South Korea, along with other newly industrialized states such as Singapore and Mexico, are unlikely to immediately join the list of nations legally bound to curb emissions, making any measures voluntary. Mexico in June said it would voluntarily cut emissions by an estimated 8 percent by 2012.

FEAR OF "CLIMATE TARIFFS"

As the world's sixth-largest crude buyer and second-largest LNG buyer, South Korea wants to reduce its dependence on carbon energy resources and embrace green energy, messages that stoke anxiety among many of its resource-intensive industries.

"To the petrochemical industries, it means new additional costs," said an official at top ethylene maker Yeochun Naphtha Cracking Center.

The Korea Chamber of Commerce & Industry said in a statement: "It is hard to evaluate the target options without specific details, although they look desirable, considering the Korean economy keeps growing."

Samsung Electronics Co Ltd, Hyundai Motor Group, which owns Hyundai Motor Co, Kia Motors Corp, POSCO and SK Energy have all announced billion dollars in green-related investment plans.

But the government on Tuesday pointed to the future risk of border tariffs on South Korean exports. In a statement, the government said the European Union and other developed countries might punish some exporting nations that do not adopt tough greenhouse gas reduction targets.

South Korea, as the world's fifth-largest automaker, is heavily dependent on exports of manufactured goods and petroleum products to drive its economy.

(Additional reporting by David Fogarty; Editing by Jonathan Leff)

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