The world economy has responded in a lagged manner to the orchestra of central banks raising interest rates. But by the first week of April indicators of slowdown or “softness” are visible in the US and feeding into other countries. As usual we will track how the Korean economy is performing and whether the hopes of a much better second half of 2023 which underlie forecasts of 1.6% for the year as a whole are reasonable.
Korea announced its new NDC targets at the end of March with the terminal value of 436 M/T of CO2e in 2030 is exactly the same figures as proposed in 2021. The target of a 40% reduction by 2030 on a 2018 base remains the same. But the figures used in the plan for 2018 and 2021 give pause to wonder where 150 million MT of CO2e have gone? Have emissions really been reduced by 21% between 2018 and 2021 leaving the process to cruise down only 18% in the years to 2030? As I shall describe there is a rationale for this discrepancy, but is the rationale correct and is the data correct?
There are new proposals for carbon trading which is the solution recommended by OECD but how is the carbon market going to work given its poor track record in the past?
Korea’s energy and emissions policy has a lot of problems, principally a pricing issue which meant that even though Korea Nuclear and Hydro produced at maximum output in 2022, it still made a financial loss. Does the most recent electricity plan take into account the fact that as well as removing emissions from existing capacity the future is expected to use significantly more electricity? Wind power continues to face opposition from fishermen and the marine economy. Hydrogen to date has proved more difficult to manage and achieve lower emission results than had been hoped.
The new plan lets industry take a little bit longer to get its house in order and let offsets and carbon storage take a slightly larger role. We will look at which industries have the greatest emissions in more detail and their plans and hopes to reduce emissions significantly by 2030.
Join us for a discussion about the economy and about controlling emissions on Thursday 20 April