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KCCI asks for delay on carbon tax plan

Korea
Korea Times
23/07/2010

A key business lobby has called for the government to delay the introduction of a carbon tax as the new policy may hurt business activities.

"Introducing the cap-and-trade in the form of a carbon tax policy is too premature. It would be better to take action after fully investigating moves by other governments," said the Korea Chamber of Commerce and Industry (KCCI) Chairman Sohn Kyung-shik at a business forum held at Lotte Hotel, Thursday.

"It's evident that the government will maintain a strong consistency for sustainable green growth by urging domestic firms to lower carbon emissions during their operations. But that shouldn't distract from business activities," Sohn said.

The executive also asked the government for more time to activate the possible new policy.

Seoul is seen to launch the so-called "greenhouse law" in a move to join the global campaign to fight climate change.

South Korea is the world's ninth-largest emitter of carbon dioxide and other heat-trapping gases, and registered the fastest emissions growth among OECD members from 1990 to 2005, according to government data.

In detail, the government is mulling over the possibility to implement the "cap-and-trade" act setting absolute volume limits on emissions as part of its strategy for greener policies.

Korea, which aims to transform its economy toward the services sector, has still not been asked to commit to reductions under the U.N.’s Kyoto Protocol, which requested developed nations to make carbon reductions in the next five years.

But President Lee said the country will cut 569 million tons of greenhouse gases over the next decade, which is equal to 70 percent of the projected 813 million tons that it would produce in 2020 but with no major changes to current development schemes.
Industries, however, are not responding favorably for reasons similar to those mentioned by Sohn. Industries are asking the government to soften the intensity of the policy and demand flexible implementation in consideration of the condition of individual industries.

"The idea of promoting carbon tax is literally persuasive considering the 'green wave.' But the government should investigate more into the economic impact of the tax," said a chief executive at a Seoul-based company, referring to the recent European Union (EU)'s decision to delay the carbon tax proposal.

The executive asked not to be identified.
Market analysts and experts say the new policy will dampen the power generation hard. Steel, automobile and other high energy-consuming manufacturers have already seen stiffer competition from China, the world’s second-largest carbon emitter.

The Korean economy still depends heavily on exports due to its manufacturing-focused economic structure.

"If the government applies much stricter guidelines over carbon emissions, then companies might be burdened," Sohn said.

The KCCI expects the introduction of a carbon tax to help the nation cut the emissions by 4.06 percent in 2013 from the current level, however, it warned the new policy will cut the number of jobs by 55,000.

Sohn said the government will further loosen regulations to help companies boost competitiveness.

In the meantime, the executive added that South Korean corporations should do more by encouraging entrepreneurship.

"Negative views by some civic groups towards companies need to be changed. Calls are high for the need of constructive labor relations to increase productivity," according to the chairman.

The forum takes place annually and has a 35-year history. The event, which runs through Saturday, will be attended by some 700 government officials and company executives.

El contenido de las noticias que se presentan en esta sección es responsabilidad directa de las agencias emisoras de noticias y no necesariamente reflejan la posición del Gobierno de México en este u otros temas relacionados.

    

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