South Korea government announced its green new deal plan

Several media including THE CONVERSATION reported that South Korea is planning to execute its green new deal.

As the COVID-19 pandemic devastates the global economy, there’s an opportunity for governments to support a green-led recovery. This involves spending fiscal stimulus on renewable energy and other clean technologies to create jobs while addressing climate change.

The chorus calling for such a move is strong and diverse: banks, investors, academics, energy companies, climate advocates and politicians.

Rising from a COVID battering

South Korea’s economy, like those across the world, has been hit hard by the pandemic. In particular, its export industries dropped by 24% in May as demand for the nation’s mainstay products, such as cars, semiconductors, machinery, petrochemicals and steel, fell away.

In April, 26.93 million Koreans were reportedly employed – 392,000 fewer than a year earlier. Job losses were highest in the wholesale and retail sectors, accommodation and food services.

In response, Korean President Moon Jae-in in July launched the Korean New Deal or “K-New Deal”. The US$135 billion investment in green and digital technology comprises:

  • US$96.3 billion from Treasury
  • US$21.2 billion from local governments
  • US$17.3 billion from the private sector.

The “green” part of the plan is known as the Green New Deal (not to be confused with the US’ proposed package of climate policies, of the same name). The Korean green plan involves US$61.9 billion targeting the creation of 319,000 jobs by 2022 and 659,000 by 2025.

President Moon will personally chair a monthly strategy meeting on the K-New Deal to monitor the performance of government ministers, and ensure the private sector meets its commitments.

What the green recovery looks like

The Green New Deal involves investing in advanced technology initiatives to create jobs.

The plan calls for an expansion of solar panels and wind turbines to 42.7 gigawatts in 2025, up from 12.7 gigawatts last year. The government will also install solar panels on 225,000 public buildings.

Central to the plan are so-called “smart grids” – digital technology that allows an energy utility to communicate with and respond to its customers, and vice-versa. Korea plans to install “smart meters” in five million more apartments, to help consumers reduce their electricity use.

The government will also invest in microgrid communities. This involves using renewable energy and energy storage systems in regional areas, and those with many islands, creating decentralised, low-carbon energy systems.

The Green New Deal also sets a target of 1.13 million electric vehicles and 200,000 hydrogen-powered fuel-cell electric vehicles on Korean roads by 2025. This creates a domestic market for Korean car manufacturers such as Hyundai.

Money will also be spent building electric vehicle recharging stations (15,000 rapid and 30,000 standard). About 450 hydrogen refuelling units will also be built, benefiting homegrown firms such as EM Korea.

Circular economy initiatives will also be implemented such as reducing and recycling energy using advanced computerised power grids in factories. The plan also involves technology to capture and store carbon emitted from industrial processes and re-using industrial materials.

Opportunities and risks lie in the crisis

The year, 2020, is almost over, and what will be in our mind when we look back to this year in the future? The pandemic? Postpone of Tokyo Olympics? Black Lives Matter? The US presidential election? Israel–United Arab Emirates peace agreement? Brexit? Digital Transformation? Remote work? Sustainability? ESG investments?

So many things will be in our mind about 2020 so that we might say that 2020 will be decisive year for us as well as the earth. Many people mention that the crisis leads to our innovation, and we, human beings, have tried to solve many crises around us through our innovation and wisdom. For instance, the sharing economy giants, Uber and Airbnb, were founded after the financial crisis. We want to tackle problems by taking advantage of our experiences, new ideas and serendipities some time. At the same time, incentives are important because teamwork and collaboration allow us to realize bigger things, even though what everyone can do is tiny. For instance, public policies incentivize our certain actions, and South Korea’s green new deal is a good example for this. This is because people in South Korea will consider climate action and circular economy are essential concepts to sustain not only our life but also future generations and the earth.

Even though every person all over world faces the difficulties in 2020, there are opportunities to improve our society. When we live in the earth, of course, lots of uncertainties exist and we cannot predict, control and change something. However, we hope we can overcome those hardships if we focus on the opportunities. Only thing we can do is to focus on what we can control, to believe in our potential, and to take actions.