Korea Set to Try Again on Carbon Trading, Climate Head Says
South Korea, the fastest-growing emitter among rich nations, will try again to pass a bill that sets up emissions trading in 2015 and allows lawmakers to work out details later this year, a top climate official said.
The country, which delayed a decision on Feb. 27 about legislation to start cap-and-trade, is working to reschedule the vote, with a target of April or May, Nam Kwang Hee, director general of the Presidential Committee on Green Growth, said in an interview. The main parties have agreed that emissions trading will reduce greenhouse gases linked to climate change, so the debate is focused on “procedures,” said Nam, 51.
“Ruling and opposition parties shared the conviction that the bill is needed,” he said. “It’s a matter of procedure whether the assembly holds session for voting in April or May.”
South Korea would follow Australia and New Zealand as the third country in the Asia Pacific region to use a cap and trade, a system that lets emitters buy and sell a fixed number of pollution permits. The Federation of Korean Industries and the Korea Chamber of Commerce & Industry, the nation’s largest business lobbies, have asked the government to delay the plan, saying it will increase costs and make them less competitive against countries that don’t charge for emissions.
“We don’t think our legislation pace is slow,” Nam said, noting that Australia took several years to overcome political opposition and pass legislation in 2011 that establishes a cap and trade system in 2015.
Tony Abbott, Australia’s opposition leader, has vowed to repeal climate legislation if he is elected in 2013. Australia’s upper house of parliament voted in November to support Prime Minister Julia Gillard’s plan to impose a carbon price of A$23 ($24.40) a ton for carbon discharges starting in July 2012, before cap and trade starts three years later.
“Our case is different from Australia, as ruling and opposition parties are supporting the bill,” Nam said.
Lawmakers hope to avoid the “worst-case scenario” for South Korea, he said. If the assembly doesn’t hold a session by the end of May, the government would face having to start over on the climate bill. All unfinished bills would be abolished when a new National Assembly is formed in June, Nam said.
Fastest Growing Emitter
South Korea’s greenhouse-gas emissions jumped to about 640 million tons in 2011 from 350 million metric tons in 1990, making it the fastest-growing pollution source among 34 nations in the Organization for Economic Cooperation and Development, Bloomberg New Energy Finance said in Feb. 9 report.
Lawmakers agreed at a multiparty panel of the assembly last month on the need to create a market to help reduce carbon- dioxide discharges. The assembly’s Legislation and Judiciary Committee, in a review of the carbon bill, set back a final vote scheduled for Feb. 27, saying it left too many details to be resolved after the law is passed.
The government submitted a revised bill on March 2, specifying that emission limits will apply to companies emitting more than 125,000 metric tons of carbon dioxide a year or workplaces having 25,000 metric tons of emissions a year. Park Jun Seon, a member of parliament who chaired the session this month of the legislation committee, accepted the revision, leaving a final vote for legislation when the assembly holds another session.
If the assembly passes the bill, the government will have six months to determine the main operating details before the law takes effect, Nam said. The specifics to be resolved include setting up an exchange for trading pollution permits, how many permits should be allocated without charge, and how United Nations emission credits, also known as offsets, can be used in the program.
Australian lawmakers agreed to let emitters use UN offsets, awarded for spending to cut emissions in less-developed countries, for as much as half of their reductions. Credits for delivery in December rose 1.8 percent to 3.87 euros ($5.10) today on the ICE Futures Europe exchange in London. They are down 70 percent from a year ago on concern about oversupply.
President Lee Myung Bak’s government set a target in November 2009 to cut emissions by 30 percent from forecast levels by the end of the decade. The country announced this voluntary target at the United Nations climate summit in Copenhagen in December 2009.
The ruling party, New Frontier, has a majority of 174 seats in the assembly, indicating it can pass climate legislation even without the backing of opposition parties. A new assembly is scheduled to be formed in June after April 11 elections, where two main opposition parties formed a coalition against the ruling party to win.
South Korea imposed reduction goals in October 2011 on 458 polluters, calling for them to manage their emissions starting this year. They range from factories, buildings and livestock farms that produce at least 25,000 tons of carbon dioxide a year.
The South Korean and Indonesian governments are in talks over a reforestation deal, potentially easing pressure on big emitters covered by the cap-and-trade plan.
As soon as the Indonesian government selects a location, the Korean government plans to plant trees for a demonstration project that would earn greenhouse gas emission credits. The project is being led by Korea Forest Service, according to Cho Nam Seong, deputy director of the Daejon, South Korea-based state organization.
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