By Kim Tae-gyu
Staff Reporter
Obviously, the buzzword for the Lee Myung-bak administration is ``green'' as it has gone all-out to introduce a flurry of eco-friendly measures since its launch early 2008.
The latest step is the ``green card,'' not a permanent resident card in the United States but a certificate for technologies or companies run in a pro-environmental fashion.
The Ministry of Strategy and Finance (MOSF) said Sunday that it plans to come up with the system aimed at financially helping eco-friendly companies.
``Private financial entities have introduced green financial products but firms have struggled to raise funds in the eco-friendly business due to start-up glitches,'' the ministry said in a statement.
``In particular, the monetary support needed for early-stage research and development of green technologies has been very weak. We need to tackle this,'' it said.
As action plans, it said that techniques or firms that garnered the green card would get favorable treatment such as tax cuts. Details will be disclosed later over the third quarter of this year.
In addition, the government looks to jack up the size of the public funds for mid-sized green outfits to 1.1 trillion won by 2013 from 60 billion won this year.
The budget for the development of green techniques will rise to 2.8 trillion won by 2013 from 2 trillion won this year and the credit guarantee for green projects will be extended from 2.8 trillion won to 7 trillion won over the same period.
A 500 billion won green private equity fund will be initiated late this year and investors in the green bonds will get tax exemptions.
All those ideas will be reported to the Presidential Committee on Green Growth, which is to meet today under the chairmanship of President Lee Myung-bak.
``Because of the big uncertainties and a long investment recovery period, the green business cannot rely solely on private financing schemes,'' an MOSF official said.
``Plus, the low-carbon industries have an externality. Accordingly, monetary back-ups from the public funds are necessary to channel enough liquidity to the industries,'' he said.
According to Wikipedia, otherwise called a spillover, an externality is an impact on a party that is not directly involved in the transaction ― prices do not reflect the full costs or benefits of a product or a service.
Pollution is the classic example as toxic waste imposes big costs on all society but not on companies, which are thus tempted to ignore it.
Along the same lines, green businesses offer huge social benefits much bigger than the profits to specific companies that carry out the business, the ministry said.
Subsequently, companies may not be motivated to funnel money in the segment while society needs to nurture it. This offers the logic for the public to support the business.