Seoul to launch carbon credit exchange

[Korea Times, 22 August] South Korea will launch a local market to buy and sell carbon dioxide emission rights by the end of 2007. Nine state-owned energy companies - including Korea Electric Power Corp, Korea Hydro & Nuclear Power Co and Korea District Heating Corp - are to sign a renewable portfolio agreement designed to fuel greenhouse gas trading, according to vice energy minister Lee Jae-Hoon. The companies would then have to meet set targets to expand the use of clean, renewable energy and, if they fail to do so, they must buy CO2 rights from the local carbon exchange market. South Korea is not a member of Annex I of the Kyoto Protocol that went into effect in early 2002. Seoul has maintained that it cannot participate in mandatory reductions unless China and India take similar actions. The global Clean Development Mechanism (CDM), which is backed by the United Nations, aims to have companies contribute to the reduction of global greenhouse gas emissions and 'sell' the results at international carbon exchange markets. "If the South Korean carbon exchange becomes a viable market, 434.3 billion won ($460 million) worth of the total market will be capable of being traded on foreign climate exchanges," said the vice minister. He added that this could account for 11.8% of the global CO2 exchange volume that is expected to reach $3.9 billion in 2012.

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