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Posted : 2011-02-08 16:11
Updated : 2011-02-08 16:11

Business up in arms over cap and trade market


Lee Dong-keun, top executive at KCCI, answers reporters’ questions during a news conference, Monday. Lee strongly objected to an early introduction of a carbon trading scheme.
/ Courtesy of KCCI
By Kim Yoo-chul

The business community is voicing its opposition to an early introduction of carbon emissions trading, claiming that it hurts their competitiveness.

``Forcing firms to buy carbon permits to cover their emissions output will surely bring competitive disadvantage to our industrial edge,’’ Lee Dong-keun, executive vice chairman at the Korea Chamber of Commerce and Industry (KCCI), told reporters, Monday, at a news conference in downtown Seoul.

Referring to moves seen by the U.S., China, India and Japan either to delay or scrap the ``cap-and-trade’’ scheme, Lee said the introduction of carbon trading will scare investors away from the Asia’s fourth-biggest economy.

``The KCCI has submitted its written opposition, asking the government to delay its introduction or to completely scrap the plan,’’ the executive said. He added that Korea should wait rather than move ahead of the pack.

Korea, which aims to cut its greenhouse gas emissions by 30 percent from projected levels by 2020, is planning to introduce the carbon trading bill at the National Assembly.

Government sources say Korea’s emissions reduction total has doubled since 1990. It is larger than Australia’s 600 million tons, pushing the government to place ``green growth’’ as its top priority.

``Korean industries would need to spend an additional 5.6 to 14 trillion won, if the trading scheme is introduced. Steel makers and oil firms would be severely affected,’’ said the executive.

Data from the KCCI shows POSCO would expect to spend an additional 2.3 trillion won to buys carbon permits.

The steel maker’s annual operating profit is known to be around 3.1 trillion won. The electricity industry would need to pay up to 27 trillion won by 2020, causing utility bills to soar..

``Korea’s energy-intensive industries have a made substantial progress in increasing their energy efficiency. Further emissions cuts are unacceptable,’’ Lee said.

The draft bill, if passed in parliament, could usher in the second ``cap and trade’’ scheme in the Asia-Oceania regions after New Zealand.

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