 Map of global annual carbon dioxide emissions in 2006 |
By Kim Hyun-cheol
Staff Reporter
A carbon tax is likely to be introduced from 2010 in a master plan to achieve low-carbon based development.
Chong Wa Dae has recently confirmed a list of 40 new administrative strategy agenda, which includes substitution of a carbon tax with the current transportation tax, the Chosun Ilbo, a Korean daily, reported Thursday.
With those new agenda added, the government will soon unveil a new list of 100 domestic governing projects, the newspaper added.
Most revenues of the tax amounting to an annual 11 trillion won ($10.4 billion) will be the financial source for the "Low Carbon, Green Growth" scheme, which was announced in President Lee Myung-bak's speech marking the nation's 63rd Liberation Day last week.
A carbon tax is imposed on emissions of greenhouse gases including carbon dioxide. The direct taxation system is now applied to several European countries, such as Sweden, the Netherlands and Norway, as well as several states in North America.
The temporary transportation tax, one of the major objective taxes in the country, is slated to end in 2009. About 80 percent of its yield is used in transportation-related work like road construction.
Analysts say the global trend of emissions control influenced the decision as the start of low-carbon policies.
South Korea is expected to be under pressure to join the worldwide greenhouse gas reduction plan around 2013, when the Kyoto Protocol expires. The world's sixth largest greenhouse gas producer is exempt from the duty until 2012, as the country is categorized as a developing economy under the protocol applied to 38 advanced countries.
Last month, President Lee said Korea will halve its carbon emissions by 2050 and also kicked off a low emission campaign at the G-8 summit in Japan.
Additional taxation amendment could follow with a "tax on emissions" bottom line, in possible implementations of tax discrimination according to a vehicles' size and a carbon tax on the currently tax-free thermal power plants.
Taxation on emissions is inevitable in that low carbon policies take substantial budget, the government says.
It will take a 17 trillion won investment until 2020 for Seoul to halve fossil fuel use, the Seoul Development Institute said Friday in a report.
"Oil prices will remain above $100 per barrel globally due to increased demand from emerging markets. Seoul City, where the service industry takes up 85 percent of its economy, needs to take more aggressive moves to lower emissions," the report said.
But room still remains for criticism on the overall feasibility of the ambitious long-term project.
"I still can't get an exact hold of the conception and there was no internal discussion on that either," an official of the Ministry of Knowledge Economy said on condition of anonymity on the "Low Carbon, Green Growth" plan.
Some also point out the policy paradox of the Lee government, which claims to kill two birds of economic growth and eco-friendliness with one stone.
Skepticism is accordingly growing that Lee's aims could be groundless without reforming the whole fundamental of Korea's industrial structure, which makes it hard to easily reduce carbon emissions.
The country had 600 million tons of emissions in 2005, with 40 percent of it coming from the industrial sector, 30 percent coming from power generation and 20 percent from transportation. And its main force is composed of a bunch of energy-consuming heavy businesses like steel production, petroleum refining and shipbuilding.
This means forced emission control in those industries will be executed at the mercy of substantial growth.
The government is predicting the amount will rise to 1 billion tons in 2030. In the current circumstances, emissions directly lead to energy use, which is directly linked to an economic upturn.
"Carbon-wise, it is more like part of a scheme to burden Korea with emissions control when other advanced countries level with us," a researcher said. "It is urgent to set up an energy plan more fitting for our condition."
hckim@koreatimes.co.kr
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