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Evaluating the feasibility and efficiency of Korea’s environmental policies for carbon neutrality in the manufacturing sector

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  • Lee, Hyoungsuk
  • Choi, Yongrok
  • Jeong, Hojin
  • Ma, Yunning

Abstract

The Korean government has promoted regulatory policies for carbon neutrality by 2050. As an export-driven country with a high reliance on the manufacturing industry, Korea faces significant challenges in achieving its national reduction targets. This study examines the total factor carbon efficiency (TFCE) of the Korean manufacturing industry to develop feasible solutions. We employed the metafrontier sequential slack-based model (M-SSBM) to reflect the group heterogeneity arising from industrial characteristics. Data from 35 subsectors were collected from 2012 to 2019, and these subsectors were classified into three groups: technology, capital, and labor-intensive. The average TFCE of all industries shows a downtrend. Meanwhile, the TFCE of the three groups commonly showed good performance in the group-frontier, while it resulted in different group rankings in the metafrontier. A panel Tobit regression was conducted in the second stage, and the result shows that exports are significantly related to enhancing TFCE.

Suggested Citation

  • Lee, Hyoungsuk & Choi, Yongrok & Jeong, Hojin & Ma, Yunning, 2024. "Evaluating the feasibility and efficiency of Korea’s environmental policies for carbon neutrality in the manufacturing sector," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 65(1), November.
    • Handle: RePEc:fgv:eaerae:v:65:y:2024:i:1:a:92492
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