South Korea now moving ahead with carbon trading plan
A key committee of South Korea’s National Assembly has voted in favour of much delayed plans to introduce a national carbon emissions trading scheme from 2015. Approval by the Climate Change Committee paves the way for the bill to go before the Legislation and Judiciary Committee before being voted on in a plenary session of the Assembly on 16 February.
Under the planned legislation, a national cap-and-trade scheme similar to that deployed in Europe will be introduced in 2015, covering almost 500 carbon-intensive firms. President Lee Myung Bak is keen to see the legislation passed ahead of a general election that could see the long-running measures stalled once again.
South Korea is following a path blazed in Asia Pacific by New Zealand, followed last year by Australia, which will also have a emissions trading mechanism in place by 2015. The Pacific neighbours have already said they will link their carbon markets and assuming the Korean proposals are passed into law, it could link its scheme with the other too, creating a significantly larger and more liquid market.
Korean’s draft legislation will no doubt be looked with interest by Chinese officials, who are starting to beef up plans to pilot carbon trading at a provincial level.
The latest set of proposals passed by the Climate Change Committee contains a number of concessions designed to appease industrial firms opposed to the plans. Most notably, the government has said that 95 per cent of the carbon allowances distributed during the first two phases of the scheme between 2015-2017 and 2018-2020 will be provided for free.
However, the legislation continues to face fierce opposition from some leading energy firms and industrial groups, which have warned it will drive up energy prices and could undermine the competitiveness of Korea's export-led economy.