• Environmental and Resource Economics Review
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• v.33 no.2
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• pp.179-201
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• 2024

In introducing emissions trading schemes, many countries start with a high level of free allocation to reduce the sudden cost burden on companies and increase acceptance of the policy. The free allocation is then gradually reduced, considering the risks of carbon leakage. This aligns with the "polluter pays" principle and is often considered one of the elements of an advanced emissions trading scheme. In this context, this study uses a simple emissions trading market model to show that decreasing the free allocation rate may not be desirable if the emissions market is not perfectly competitive. In particular, by identifying the existence of a free allocation rate at which the cost inefficiency is minimized, this study demonstrates that having a low level of free allocation does not necessarily imply the improvement of the emissions trading scheme.

• Environmental and Resource Economics Review
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• v.25 no.3
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• pp.403-419
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• 2016

Cap-and-trade policies that allow firms to trade emission allowances are designed to reduce emissions at least cost and are shown to be efficient when there is no uncertainty over emissions. This paper examines how uncertainty in emissions affects firms' decisions about permit purchase and abatement. The results show that whether firms abate more under uncertainty compared to a case with no uncertainty depends on the expected penalty cost and marginal abatement cost. If the expected marginal penalty cost is greater than the marginal abatement cost, the firm will choose to reduce emissions and abate more under uncertainty. When the expected marginal penalty is greater than the marginal cost of abatement, increases in uncertainty result in reduced emissions. This paper also examines whether the order of abatement and permit trading and the realization of uncertainty affect firms' decisions. The results show that total expected emissions are the same regardless of the order of moves.

• Bulletin of Korea Environmental Preservation Association
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• s.403
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• pp.22-25
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• 2013

기업들은 온실가스 배출권거래제를 대비하여 철저한 준비가 필요하다. 에너지 온실가스 경영을 적극 도입하여야 하며 사업장내의 감축이행에 소요되는 한계비용과 배출권 시장 가격 등을 고려한 다양한 감축 옵션을 검토하여 기업경쟁력 저하를 방지하고, 자사의 강점을 살려 기후변화 시대에 맞는 비즈니스모델 도출을 위한 준비에 힘써야 할 것이다.

• Environmental and Resource Economics Review
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• v.21 no.4
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• pp.809-850
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• 2012

A linkage of emissions trading schemes among Korea, China and Japan demonstrates overall increase in gross domestic product (GDP). However, it also demonstrates reductions in household consumption, and the impact of integration could be very unbalanced between the countries. In particular, the reductions in domestic marginal costs are high in both Korea and Japan. Therefore, household consumptions in the two countries decrease despite increases in GDP because Korea and Japan will be purchasers of emissions rights. China, on the other hand, will experience the opposite. The unbalanced impacts on real household consumptions are intensified when emission credits are allocated via paid auctions instead of free allocation. This was demonstrated to be the case because the circumstances of three countries are intensified when using a paid emissions credit allocation scheme, and their differences could potentially hinder the cooperation between the three countries. Under the free allocation scheme, the emission trading schemes' unbalanced impacts on consumption could be mitigated, but unavoidable negative impacts of free allocation schemes are also serious. Based on the analysis results, Korea, China, and Japan will individually face complicated impacts if their carbon markets are integrated. Although the GDP of three countries will increase as a result of carbon market integration, the benefits of integration will surely be unbalanced, and the three countries will experience negative impacts in terms of actual consumption or employment. In particular, increases in income and consumption, reductions in employment, and energy dependence by credit purchasers (Japan and Korea) and production reduction and possibility of offshoring faced by revenue producing countries (China) could serve as a barrier to carbon market integration. To maximize the positive influences of carbon market integration while reducing the risks of negative side effects, the development and application of complimentary policy tools, such as import duties or discounts for emissions credits, are required.

• KDI Journal of Economic Policy
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• v.34 no.2
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• pp.173-204
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• 2012

This study examines the equilibrium investment on the pollution abatement when firms are facing Cournot competition in the output market while the pollution permit market is perfectly competitive. Unlike standard perfect competition scenario, the abatement investment delivers an indirect effect in which it reduces other firms' equilibrium output. Consequently, compared with the socially optimal level, overinvestment arises. I also overview the potential inefficiencies that imperfect market structure induces under the emission trading scheme, presenting policy implications.

• Journal of Climate Change Research
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• v.5 no.2
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• pp.179-187
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• 2014

The global warming caused by GHG has emerged as a global environmental problem. For this reason the continued efforts to reduce GHG emission by international cooperation and each country are in progress. This study was performed for a successful accomplishment of Korea's ETS aims in 2015, that is to reduce GHG emission, maintain competitiveness of the domestic industries and to reinforce competitiveness of the environmental management of domestic companies through comparing analysis research of major overseas ETSs with main features of Korea's ETS and the analysis of semiconductor industry. In this study, the cases of already being implemented ETS countries such as the European Union, the United States and New Zealand etc. have been investigated by comparing to Korea's ETS. We also suggested the detailed political proposals to stabilize the introduction of Korea's ETS at the enterprise level.

• Environmental and Resource Economics Review
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• v.9 no.1
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• pp.183-208
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• 1999

교토의정서 제17조에 규정된 국제 온실가스 배출권거래제(IET)는 온실가스 감축의무가 있는 국가에 배출쿼터를 부여한 후, 동 국가간에 배출쿼터의 거래를 허용하는 제도로서, 최소의 비용으로 감축목표를 달성할 수 있는 장점을 가지고 있다. 현재 IET의 디자인과 관련하여 논쟁이 되고 있는 주요 이슈는 거래참가자의 대상 및 자격조건, 거래책임, 거래의 한계설정과 자연발생 잉여배출권 (Hot Air)의 인정여부 등이며 미국, 일본 중심의 JUSSCANZ그룹과 EC/동구권 국가들간에 이견을 보이고 있다. 향후 COP5와 COP6의 협상결과에 따라 IET의 모습도 달라질 것으로 전망되며, 경우에 따라서는 우리 나라가 감축의무를 부담할 시는 물론이고 그 이전이라도 IET를 활용하여 기업의 이윤을 제고시킬 수도 있을 것으로 판단된다. 이에 따라 IET에 대한 국가차원의 장기적인 전략수립이 필요하며 이를 위해서는 첫째, 교토메카니즘과 관련된 협상과정에서의 전략적 대웅이 필요하며, 둘째, IET 관련 해외정보의 신속한 수집, 전파 및 기업홍보를 통한 효율적 활용, 마지막으로는 시범적인 국내 온실가스 배출권거래제 도입 검토 및 기반구축이 필요하다.

• JOURNAL OF ELECTRICAL WORLD
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• s.456
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• pp.33-40
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• 2014

• Bulletin of Korea Environmental Preservation Association
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• s.413
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• pp.11-13
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• 2014

생산품에 대한 국제적 환경기준은 강화되고, 친환경소비를 실천하는 소비자의 요구도 커졌다. 온실가스 감축은 거를 수 없는 시대적 흐름이다. 우리나라를 비롯한 많은 국가들이 배출권거래제 도입에 적극적인 이유는 여러 가지 긍정적 효과에 기인한다. 배출권거래제는 기존 온실가스 목표관리제에 비해 국가 온실가스 감축비용이 44-68% 수준으로 절감된다고 한다. 또한 기업의 신재생에너지, 에너지 고효율 기술 등 저탄소 분야에 대한 투자와 기술개발을 유인하고, 저탄소 경제구조로의 전환과 경제성장에도 기여한다고 한다. 배출권거래제의 성공적 시행을 위한 중요한 과제는 정부의 면밀한 준비와 할당 대상업체 등 산업계의 적극적 협조다.

• Environmental and Resource Economics Review
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• v.30 no.1
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• pp.129-167
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• 2021

The emission trading system is an essential policy for reducing greenhouse gas emissions and converting low-carbon society. EU ETS is a good benchmark that is ahead of Korea's emission trading system in terms of operating period and design know-how. Therefore, this study focused on the key design elements of EU ETS phase 4 such as total emission allowances issued (Cap), free allocation method, carbon leakage list, market stability reserve, and innovation supporting system. In addition, we analyzed the impact of key design elements and their changes during EU ETS Phase 1 to 4 on the design and operation of Korea emission trading system in the future. First of all, the expected impact on the design of Korea emission trading system is to increase three demands: preparing benchmark renewal plans, establishing criteria for selecting free allocation industries that reflect domestic industrial structure and characteristics and introducing two-stage evaluations for free allocation industries, and preparing specific plan to support innovation and industries using allowance auction revenues. The next three impacts on the operation of Korea emission trading system are the increased needs for objective and in-depth impact assessment of plan and amendments, provision of system stability and response opportunities by quickly confirming plan and amendments prior to the implementation, and coordination of the emission trading system governance and stakeholder participation encouragement.