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Estimating the public’s value of implementing the CO2 emissions trading scheme in Korea

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  • Song, Tae-Ho
  • Lim, Kyoung-Min
  • Yoo, Seung-Hoon

Abstract

The Korean government set out the carbon dioxide (CO2) emissions reduction target as 30% below business-as-usual by 2020. The CO2 emissions trading scheme (ETS) was initiated in January 2015 to meet this target. We attempt to estimate the public's value of implementing the ETS for CO2 emissions reduction. We apply the contingent valuation (CV) method using the willingness to pay (WTP) data obtained from a national CV survey of 1000 randomly selected households. The survey was conducted via in-person interviews. Value judgments required of the respondents were within their abilities. The mean WTP to achieve the stated target of CO2 emissions reduction using ETS is estimated to be KRW 1873 (USD 1.66) per household per month, which is statistically significant at the 1% level. The aggregate national value amounts to KRW 409.2 billion (USD 363.4 million) per year. Thus, even though Korea has no obligations to cut emissions under the Kyoto protocol, the public is willing to bear a financial burden to implement the ETS. If its cost is less than this value, implementing the ETS can be socially profitable. The results of this study can serve as a basis for further policy discussions and decisions.

Suggested Citation

  • Song, Tae-Ho & Lim, Kyoung-Min & Yoo, Seung-Hoon, 2015. "Estimating the public’s value of implementing the CO2 emissions trading scheme in Korea," Energy Policy, Elsevier, vol. 83(C), pages 82-86.
  • Handle: RePEc:eee:enepol:v:83:y:2015:i:c:p:82-86
    DOI: 10.1016/j.enpol.2015.04.007
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    References listed on IDEAS

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    4. Linnenluecke, Martina K. & Smith, Tom & McKnight, Brent, 2016. "Environmental finance: A research agenda for interdisciplinary finance research," Economic Modelling, Elsevier, vol. 59(C), pages 124-130.
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    6. repec:gam:jsusta:v:10:y:2018:i:8:p:2711-:d:161402 is not listed on IDEAS
    7. Lim, Seul-Ye & Kim, Hyo-Jin & Yoo, Seung-Hoon, 2017. "Public's willingness to pay a premium for bioethanol in Korea: A contingent valuation study," Energy Policy, Elsevier, vol. 101(C), pages 20-27.
    8. Kafle, Sagar & Parajuli, Ranjan & Bhattarai, Sujala & Euh, Seung Hee & Kim, Dae Hyun, 2017. "A review on energy systems and GHG emissions reduction plan and policy of the Republic of Korea: Past, present, and future," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 1123-1130.

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