• Journal of Environmental Policy
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• v.14 no.3
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• pp.41-73
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• 2015

The Korea Emissions Trading System that was launched in Jan. 2015 is expected to be a crucial policy measure to abate domestic $CO_2$ emission. For accomplishing its purpose, prior information on the price discovery process needs to be presented in order to facilitate the trading of spot allowances with different vintages. We develope a customized pricing method for Korean ETS using the concept of term structure and the cost of carry model.

• Journal of Environmental Policy
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• v.8 no.1
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• pp.1-30
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• 2009

Emission trading schemes, exemplified by the EU Emission Trading Scheme, have been playing active roles in mitigating greenhouse gas emissions since the Kyoto Protocol employed an emission trading as one of the cost-effective mechanisms. The objective of this study is to investigate potential integration of forestry offsets in designing an emission trading scheme in South Korea. First, the study found feasible scopes in which forestry sectors can take part by analyzing five emission trading schemes: EU Emission Trading Scheme, Chicago Climate Exchange, New South Wales Greenhouse Gas Abatement Scheme, New Zealand Emission Trading Scheme, and Regional Greenhouse Gas Initiative. The rationale of including forestry offsets in a domestic emission trading scheme was derived from the fact that forestry offset credits can provide cost-effective ways for market participants to commit their emission targets and expand abatement activities through reducing greenhouse gases in other geographical locations as well as other industrial sectors. Even though forestry offset credits have risks induced by their technical complexities in terms of accounting, additionality, and leakage, the integration of forestry offset credits into an emission trading scheme would be able to provide positive opportunities both to forestry sectors and other industrial sectors. In addition, there are technical questions which need to be answered in order to maintain these opportunities.

• Journal of Environmental Policy
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• v.9 no.4
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• pp.77-102
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• 2010

The purpose of this paper is to analyze the Japanese emission trading system and climate change policy thereby contributing to the instituting of similar systems that will be viable for the Korean context. In applying such analyses, it is important to include a careful consideration of cost sharing between stakeholders and firms, an enhancement of the trust worthiness of data concerning greenhouse gases, and an examination of related infrastructure such as emissions authentication agencies and their development. Moreover, it is important to minimize the outflow of domestic resources such as offset credit, green electricity certification system, and ecopoint, making compatible economic growth and carbon reduction thereby encouraging the production and dissemination of 'Environmental Value' as well as connecting 'Environmental Value' to a emission trading system.

• Environmental and Resource Economics Review
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• v.25 no.3
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• pp.377-401
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• 2016

This study analyzes how much cost the power generation and energy sector in South Korea have to bear due to the introduction of emissions trading scheme during 2016 - 2017. To this end, the data on the seventh basic plan for long-term electricity supply and demand is applied to the electricity market simulation model called M-Core, and then the model forecasts carbon dioxide emissions to compare with the free emission allowances in the first national emissions permit allocation plan. The main results are as follows. Carbon dioxide emissions are estimated to be less in 2016 but more than the free emission allowances in 2017. When the price of the allowances is changed from \10,000/ton to \20,000/ton, the cost of purchasing the allowances is ranged from \70 billion to \140 billion. Under the assumption that CO2 cost is incorporated into the variable cost, a reversal of merit order between coal and LNG generation takes place when the price of the allowances exceeds \80,000/ton.

• Environmental and Resource Economics Review
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• v.25 no.3
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• pp.421-447
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• 2016

I examine the situation in which the players compete to obtain economic rents which is generated by the market-based environmental regulation, such as carbon taxes or tradable permit allocations. Drawing on contest theory, I employ the sharing rules which is devised to motivate players best effort, and consider two models in carbon taxes: one model with observable sharing rules and the other model with unobservable sharing rules. I show that, first, the overall welfare of carbon taxes is always less than that of tradable permit allocations under the model with observable sharing rules. Second, depending on the share of the preassigned allocation in tradable permit allocations, the overall welfare of carbon taxes may be larger than that of tradable permit allocations under the model with unobservable sharing rules.

• Cement
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• s.203
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• pp.18-21
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• 2014

한국경제연구원(원장 : 권태신)은 지난 7월 16일 여의도 FKI타워 컨퍼런스센터에서 '배출권거래제와 저탄소차협력금제도: 개선방향의 모색'이라는 주제로 세미나를 개최했다. 이번 세미나는 배출권거래제와 저탄소차협력금제도가 초래할 경제적 사회적 문제를 짚어보고 개선방향을 논의하고자 마련됐다. 여기서는 이번 세미나의 주요 발표내용을 요약해 게재한다.

• Cement
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• s.203
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• pp.14-17
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• 2014

전국경제인연합회는 지난 8월 11일 주요 업종별 단체와 공동으로 배출권거래제가 계획대로 실시될 경우 기업들에게 미치는 영향 및 예상 피해 사례 유형을 조사 발표했다. 전경련은 배출권거래제가 시행되면 (1)국내 생산물량 해외 이전 (2)위기기업 경영 악화 (3)국내 사업장의 생산 제약 (4)신기술 개발 및 신시장 선점 지연 등 4가지 피해 사례가 나타나 산업경쟁력이 크게 악화되어 국민경제 타격이 우려된다고 밝혔다.

• 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.

• 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.

• Environmental and Resource Economics Review
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• v.32 no.3
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• pp.149-166
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• 2023

The emissions trading system, introduced to reduce greenhouse gas emissions, experienced a sharp increase in emission allowance prices during the second plan period (2018-2020), which led to an increase in the demand for smooth supply and demand of emission allowances, while suppliers anticipating a shortage of emission allowances in the future did not participate in trading. Therefore, the authority temporarily revised the guidelines to ensure that the amount of allowances carried forward is proportional to the trading volume as a market stabilization measure. Through an optimization process using a dynamic nonlinear mathematical model, this paper analyzes the impact of the government's intervention on the carryover policy on GHG emission reductions and emission allowance market prices. According to the simulation analysis results, banking regulations could cause a decline in prices during the regulation period, even though the initial policy was predicted to be adopted.