South Korea sets stage for 2015 carbon market launch
- 15 January 2014
LONDON: The Korea Exchange has landed the rights to manage South Korea’s emissions trading platform when it launches on January 1, 2015, the Ministry of Environment has announced.
According to Reuters, the Korea Exchange, the nation's only securities exchange, beat out the Korea Power Exchange to manage what is expected to be the world’s second biggest carbon trading market.
The scheme will cap greenhouse gas emissions from over 400 of South Korea's biggest emitters, mainly power generators and manufacturers. As with the EU Emissions Trading Scheme, an overall cap will be set on emissions, and then a certain amount of permits to pollute will be issued to companies, depending on their size.
Firms will be given free permits by the government based on their historical emission levels, but must buy more in the market if their emissions exceed allocated levels. The amount of free permits given out will reduce over time.
The Korean government aims to limit emissions in 2020 at 30% below business-as-usual levels, with the emissions trading scheme as its center-piece policy to achieve the target.
The move is the latest example of ambitious climate policy from a country that has won plaudits from green businesses and clean tech firms for investing over 80% of its economic stimulus package in low-carbon projects and committing to cut emissions by 30% against business as usual levels by 2020.
South Korea represented the world's eighth largest emitter in 2010, with 669 million tons of carbon dioxide equivalent pumped out into the atmosphere. It is not, however, subject to binding emissions cuts under the Kyoto Protocol since it was, and still is, classified as a developing country.
Article originally published on CleanBiz.Asia