Fair and Reasonable ActionFair and Reasonable Action : The Path Forward

Equity and Global Climate Change ConferenceMayflower Hotel, Washington, DC

April 17 - 18, 2001

Dr. Jung-Sik KohMinistry of Commerce, Industry and Energy

Republic of Korea

Today’s World At a GlanceToday’s World At a Glance

Population :Population :

Wealth :Wealth :

Energy Energy Consumption :Consumption :

COCO22Emission :Emission :

: Developed Countries(OECD, Former USSR & Eastern Europe): Developed Countries(OECD, Former USSR & Eastern Europe)

: NIEs (Korea, Taiwan, Singapore, HK, Brazil, Mexico): NIEs (Korea, Taiwan, Singapore, HK, Brazil, Mexico)

: Developing Countries: Developing Countries

22.4 5.8 71.222.4 5.8 71.2

79.4 6.7 13.879.4 6.7 13.8

60.6 6.3 33.160.6 6.3 33.1

61.2 5.9 32.961.2 5.9 32.9

(1998, %)(1998, %)

Four Factor Emission ModelFour Factor Emission Model

XXi i : Country : Country ii’s CO’s CO22 Emission Emission

PPi i : Country : Country ii’s Population’s PopulationGDPGDPi i : Country : Country ii’s GDP Per Capita (US$/Capita)’s GDP Per Capita (US$/Capita)EEi i : Country : Country ii’s Energy Intensity (toe/US$1,000)’s Energy Intensity (toe/US$1,000)CCi i : Country : Country ii’s Carbon Intensity (C-ton/toe)’s Carbon Intensity (C-ton/toe)

i = 1i = 1

NN

XXi = i = PPi i GDPGDPi i EEi i CCii

15,732

5,107

8560

4,000

8,000

12,000

16,000

20,000

Per Capita GDPPer Capita GDP

(’90 US$)(’90 US$)

Developed Developed CountriesCountries NIEsNIEs DevelopingDeveloping

CountriesCountries

WorldWorldAverageAverage4,4434,443

4.42

1.78

0.75

0.00

1.00

2.00

3.00

4.00

5.00

Per Capita Energy ConsumptionPer Capita Energy Consumption

(TOE)(TOE)

Developed Developed CountriesCountries NIEsNIEs DevelopingDeveloping

CountriesCountries

WorldWorldAverageAverage

1.641.64

Per Capita COPer Capita CO22 Emission Emission

2.87

1.06

0.48

0.00

0.50

1.00

1.50

2.00

2.50

3.00

(C-TON)(C-TON)

Developed Developed CountriesCountries NIEsNIEs DevelopingDeveloping

CountriesCountries

WorldWorldAverageAverage

1.051.05

Controllable VariablesControllable Variables

Population : , In the Long-run Const.

GDP :

E = f (I, F, L, W, ••••) I : Industrial Structure ( –– )

Domestically Meaningful, Globally No Difference !

F : Process & Equipment Efficiency ( ) L : Standard of Living, Life Style ( ) W : Weather Condition ( –– )

C = f (Energy Mix)

Korea’s Efforts to Harmonize Energy, Korea’s Efforts to Harmonize Energy, Economy and EnvironmentEconomy and Environment

Energy Project Special Account : A Firm Commitment to Cope with the Real Issues of Global Warming

Import surcharges on petroleum and LNG

Sales surcharges on Kerosene

Safety management surcharges on LNG and LPG

Import surcharges on petroleum and LNG

Sales surcharges on Kerosene

Safety management surcharges on LNG and LPG

Promotion of LNG Energy Conservation Energy Technology R&D

and NRSE Development Phasing-out of the

Anthracite Coal Mines Others

Promotion of LNG Energy Conservation Energy Technology R&D

and NRSE Development Phasing-out of the

Anthracite Coal Mines Others

RevenueRevenueRevenueRevenue ExpenditureExpenditureExpenditureExpenditure

Budget of Energy Project Special AccountBudget of Energy Project Special Account

1985~1995 1997 1999 2000 2001

Promotion of LNG 723.0 140.0 190.0 212.0 224.0

Energy Conservation 956.9 276.2 424.9 423.5 546.6

Phasing-out ofAnthracite Coal Mine

422.4 18.4 1.2 8.1 56.8

Energy TechnologyR&D and NRSE

Development240.2 69.1 82.0 73.8 108.2

Sub-Total 2,342.5 503.7 698.1 717.4 935.6

Others 9,635.0 1,422.0 1,712.5 1,203.2 1,586.4

Total 11,977.5 1,925.7 2,410.6 1,920.6 2,522.0

(Uint : Bil. Won)(Uint : Bil. Won)

* Exchange Rate KW/US$ : 951(1997), 1,194(1999), 1,131(2000)

Major Achievements in Energy SectorMajor Achievements in Energy Sector

Voluntary Agreement : Majority of Korean Firms.

Financial Assistance : Loan & Tax Benefit

Energy Efficiency Regulation : Appliances, Vehicles, Buildings

Citizens’ Alliance for Energy Conservation : Major NGOs

District Heating : 1 Million Households

: : Energy Conservation and Efficiency EnhancementEnergy Conservation and Efficiency Enhancement

YearParticipating

FactoryPeriod

EnergyConsumption

(Thou.Toe/year)

EnergyReduction(Thou. Toe)

CO2Reduction(Thou. TC)

Investment(bil. Won)

ReductionRate(%)

1998 15 99~2003 18,012 1,360 1,426 1,098.3 10.9

1999 31 99~2003 3,951 574 470 290.0 14.6

1999 21 2000~2003 6,257 552 403 161.2 12.2

2000 145 2000~2004 14,531 1,630 1,599 1,161.0 9.2

2001 150 2001~2005 5,520 441 433 171.5 8.0

COCO22 Reduction Plan of VA Participants in Korea Reduction Plan of VA Participants in Korea

Major Achievements in Energy SectorMajor Achievements in Energy Sector : : Achieving a Less Carbon Intensive Energy MixAchieving a Less Carbon Intensive Energy Mix

Energy Consumption Trend by SourceEnergy Consumption Trend by SourceEnergy Consumption Trend by SourceEnergy Consumption Trend by Source

0

50

100

150

200

250

Other

Hydro

Nuclear

LNG

Bitumious

Anthracite

Petroleum

Primary Energy Consumption by SourcePrimary Energy Consumption by SourcePrimary Energy Consumption by SourcePrimary Energy Consumption by Source

BitumiousCoal8%

Hydro1%

Nuclear2% Etc.

6%

Anthracite23%

Petrolem60%

1980 2000

Hydro1%

Etc.1%

LNG10%

Anthracite2%

Nuclear14%

BitumiousCoal21%

Petrolem51%

0.680.75

0.60 0.62

0.40

0.76

0.00

0.20

0.40

0.60

0.80

1.00

USUS

OECDOECDAverageAverage0.640.64

DenmarkDenmark JapanJapan KoreaKorea FranceFrance ChinaChina

Comparision of CarbonComparision of Carbon IntensityIntensity

Energy Technology R&D and NRSEEnergy Technology R&D and NRSE

To reduce total energy consumption by 10% To supply 3% of TPEC from NRSE To develop clean fossil fuel technology

To reduce total energy consumption by 10% To supply 3% of TPEC from NRSE To develop clean fossil fuel technology

Goals by 2006Goals by 2006Goals by 2006Goals by 2006

The 10-year Energy Technology R&D Plan (1999 - 2006)

The New NRSE Promotion Plan (2001-2003) To Supply 2% of TPEC by 2003

- Compulsory Installment, Green Pricing

Perspective to Fair and Reasonable ActionPerspective to Fair and Reasonable Action

Ultimate Per Capita Equity Flexible, Self-Determined Stabilization Path

Base Year, Target Year Freezing Around Current Level Impossible

Growth Target should be Allowed

Recommended by J.S. Koh : Jung-Sik Koh, “ Global Warming Related Carbon Dioxide Abatement P

roposals”, J.Environ. Sci. (China), 1993, Vol. 5 No. 3, pp269~78.

Ultimate Per Capita Equity Flexible, Self-Determined Stabilization Path

Base Year, Target Year Freezing Around Current Level Impossible

Growth Target should be Allowed

Recommended by J.S. Koh : Jung-Sik Koh, “ Global Warming Related Carbon Dioxide Abatement P

roposals”, J.Environ. Sci. (China), 1993, Vol. 5 No. 3, pp269~78.

Three PrinciplesThree PrinciplesThree PrinciplesThree Principles

Zero Emission Transportation Energy : A Must Enhanced Role of Nuclear Energy : Necessary Evil (?) Add-On CO2 Conversion Tech. For Coal Facilities: A Must

Zero Emission Transportation Energy : A Must Enhanced Role of Nuclear Energy : Necessary Evil (?) Add-On CO2 Conversion Tech. For Coal Facilities: A Must

Three ImplicationsThree ImplicationsThree ImplicationsThree Implications

SuggestionsSuggestions

Sequestration quota might be allocated to the developed countries according to historical responsibilities

It’s time to answer for the role of nuclear energy under the constraints of global warming

Carbon Intensity could be a practical criterion to make fair and reasonable action for the whole world

: Ratchet Clause for the Carbon Intensity