South Korea to spend $132 billion on green projects to boost economy but skirts zero-carbon target

The new projects are expected to create some 1.9 million jobs through 2025. PHOTO: AFP

SEOUL (REUTERS, BLOOMBERG) - South Korea's government launched a plan on Tuesday to spend 114.1 trillion won (S$132 billion) on a "Green New Deal" to create jobs and help its economy recover from the impact of the coronavirus, President Moon Jae-in said on Tuesday (July 14).

The plan would move Asia's fourth-largest economy away from its heavy reliance on fossil fuels and promote environmentally friendly industries powered by digital technologies, including electric and hydrogen cars, smart grids and telemedicine.

The new projects are expected to create some 1.9 million jobs through 2025, Mr Moon said in a speech.

South Korea aimed to have 1.13 million electric vehicles and 200,000 hydrogen cars on the roads by 2025, up from 91,000 and 5,000 respectively at the end of 2019, he said, while the government would expand charging stations for the vehicles.

The plan would promote remote medical services, a work-from-home policy for businesses and online schools based on fifth-generation (5G) wireless networks, and would include tax breaks for telecom providers installing the systems.

The government would also invest 24.3 trillion won to set up smart grids across the country to manage electricity use more efficiently, Moon said.

Under the plan, 42.7 trillion won ($35 billion) will be spent to ramp up renewable energy and environmentally friendly infrastructure, but came short of setting a time frame to phase out carbon emissions.

Still, the plan dashes hopes of environmentalists, who had anticipated that a 2050 net-zero carbon emissions goal proposed by Mr Moon's party would make it into the broader final policy.

Asian nations have struggled to commit to lowering dependence on carbon-emitting fossil fuels despite mounting international pressure to transition to cleaner energy sources as warnings over the pace of global warming grow more dire.

China, Japan and South Korea were absent from a commitment at the United Nations climate meeting last December to aim for net-zero CO2 emissions by 2050.

"While South Korea says it seeks to bring carbon dioxide emissions to net zero, it doesn't give any timelines," Mr Jang Daul, an advocacy specialist at Greenpeace East Asia based in Seoul, said by phone.

"The investment is massive, yet it's more or less keeping its existing renewables target and lacks all the details about how much greenhouse gas the projects are expected to decrease."

South Korea seeks to increase solar and wind capacity to 42.7 gigawatts by 2025, compared with 12.7 gigawatts in 2019, Mr Moon said.

The government is already targeting about 54.2 gigawatts of capacity by 2030.

The government will invest 9.2 trillion won by 2025 on numerous renewable energy projects, including wind farms and subsidies for household solar, according to Mr Moon.

Asian nations have also come under fire for doing too little to combat the spread of coal-fired power.

Korea Electric Power, the nation's state-owned utility, was called out by investors for deciding to fund a coal-fired power plant in Indonesia.

Last week, Japan was criticised for leaving the door open to invest in overseas coal-fired power plants after a high-profile review to its export policies.

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