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Background Information
The Green New Deal in South Korea, announced in July 2020, is part of a comprehensive strategy to transition the country to a low-carbon, sustainable economy. This initiative is a significant component of South Korea’s broader “Korean New Deal,” which also includes a Digital New Deal. The Green New Deal aims to invest approximately $144 billion by 2025, creating 1.9 million jobs. The policy focuses on promoting renewable energy, green infrastructure, and low-carbon industries to mitigate the impacts of climate change and stimulate economic recovery following the COVID-19 pandemic (UNDP) (The Diplomat).
Economic Theory Behind the Policy and Intended Impact
The Green New Deal is grounded in the economic theory of sustainable development, which seeks to balance economic growth with environmental protection and social equity. The policy aims to internalize the environmental externalities associated with carbon emissions by promoting green technologies and renewable energy sources. Key components include:
Renewable Energy Investment: Expanding solar and wind power capacity from 29.9 GW to 42.7 GW by 2030, significantly increasing the share of renewables in the energy mix.
Green Infrastructure: Developing green urban spaces and enhancing public transport to reduce emissions and improve air quality.
Innovation in Green Industries: Supporting the development of low-carbon technologies and industries, including subsidies for electric and hydrogen fuel cell vehicles (MDPI) (nesta).
The intended impact is to create a more resilient and sustainable economy that reduces dependency on fossil fuels, cuts greenhouse gas emissions, and generates green jobs.
Unintended Consequences and Evaluations of Effectiveness
While the Green New Deal is ambitious, it faces several challenges and potential unintended consequences:
Reliance on LNG: The transition period may see an increased reliance on liquefied natural gas (LNG) as a “bridging fuel,” which, although cleaner than coal, still produces significant greenhouse gases. This could lock in carbon emissions for decades if not managed carefully (The Diplomat).
Economic Costs: The substantial financial investment required may strain public finances, especially if green technologies do not become economically viable as quickly as anticipated.
Social Equity: Ensuring that the benefits of the Green New Deal are equitably distributed among all regions and socio-economic groups is crucial to avoid exacerbating existing inequalities.
Evaluating the effectiveness of the Green New Deal will involve monitoring progress towards renewable energy targets, job creation metrics, and overall reductions in carbon emissions. Early indications suggest positive movement towards these goals, but ongoing assessment and adjustments will be necessary to address emerging challenges and ensure the policy’s success (UNDP) (nesta).
In conclusion, South Korea’s Green New Deal represents a bold step towards building a sustainable and resilient economy. While the policy has the potential to drive significant environmental and economic benefits, careful management and continuous evaluation are essential to mitigate unintended consequences and achieve long-term goals.