Cap and trade

Chad Futrell, an environment and foreign policy professor at the Beijing Foreign Studies University, is a specialist in Chinese and Korean environmental issues.

Deutsche Welle: South Korea developed very quickly, doubling its emissions in just a couple of decades. What kind of industry does the country have?

Chad Futrell: I think these days we think about Korea primarily through Samsung and their high technology industry. But Korea really became developed through heavy industrialization: car companies, ship building, as well as construction firms.

And which sectors would you say are the big polluters?

The construction firms, shipbuilding, and cars. These all take steel and concrete. Steel and concrete, in general, are two of the heaviest polluters.

South Korea's President Lee Myung-bak came to power on a platform of green growth. Some observers say that the carbon trading scheme is his attempt to make good on those promises. What are your thoughts?

I think the green growth platform of President Lee Myung-bak is a very curious thing. He's been lauded for this program internationally. Meanwhile, in Korea, every environmental NGO is against it, and at this point up to 70 to 80 percent of the Korean people are against major portions of his green growth platform.

Why would you say that is?

Well, he calls it green growth. I think the better way to say it would be radioactive and gray growth. For example, rather than renewable energy, the plan is to actually double the amount of nuclear power over the next 30 years, build another 8 nuclear power plants along with another 11 that they're buildling at this moment. Instead of actual renewable energies, such as solar and wind, they're building dams. They're literally dredging about 700 kilometers of Korean rivers - pouring concrete into them and just making them all concrete canals.

How has the business community in South Korea responded to the plan to push forward carbon trading?

They're against the cap and trade because they say it's going to put them at a disadvantage vis-a-vis Japanese firms and Chinese firms. They do not want to be disadvantaged economically because they're afraid it will add to their costs.

Would you say there's anything to those complaints?

Cap and trade in theory should add to the costs, and that's part of the point of it – to make it more expensive to pollute and thus to spur innovation and let the market take over. Unfortunately, when you look at the first three years of the plan, the carbon trading permits… 470 firms will be given those permits for free. So it's really not so much cap and trade - it's more like cap and give away.

Could you explain what cap and trade is?

The cap is the idea of having a legislative limit on the amount you can pollute. You then sell permits to pollute. The total number of permits would decrease over time, and thus the idea is that would spur innovation, and then you would actually have a price on carbon. People would start trading it.

You also can buy offsets. For example, you can plant a forest, That is supposed to account for a certain amount of carbon, and so you can continue to pollute. Unfortunately, offsets have been riddled with problems. Some forests have been planted four or five times, but actually there's still not a forest there. Several businesses have benefited from that. They've been able to pollute even more, while telling their investors that they're being green.

South Korea's emissions doubled between 1990 and 2005, as the country went through a period of rapid industrial growth. You've spent a lot of time in South Korea and you've seen this development up close. What does that look like?

It is amazing how fast the country has transformed itself. Seoul is one of the most modern and most technologically savvy cities in the world. And the way this plays out on the landscape is it's just city everywhere. Seoul is a sea of city with little islands of green that pop up here and there.

Because Korea is such a small country in terms of geographic space – you have 50 million people in a place the size of Indiana in the United States – they're paving the rivers. You have high speed trains going places that only took five hours before – now they take less than two hours. Because they say their space is so limited, now they're reclaiming wetlands all along the coast.

Now that's something you've actually seen up close. Could you say something about that?

On the west coast of Korea – on the Yellow Sea – there are the richest tidal flat wetlands in the world. These are mud flats up to seven kilometers in length. They are extraordinarily important, not only birds, but also fish breeding and other biological diversity. In 1991, Korea started the world's largest wetland reclamation project, where they literally built a 33 kilometer wall to connect a couple of islands and basically turn the sea into land. That was one of the most important wetlands in the entire world.

Once they closed that seawall, populations of certain endangered bird species started dropping 20 percent or 30 percent per year, because they all used that one place to feed on their annual migrations down to Australia.

If cap and trade isn't the answer, what recommendations would you make for reducing emissions in South Korea?

The idea of putting a price on carbon is brilliant. That is a wonderful idea, and we need to price carbon. The idea of cap and trade, though, kind of misses the mark.

Korea is an amazingly technologically savvy country. Their carbon emissions increased more than any other country in the world in the last decade, even more than China. Korea should be using this technological savvy to make better products instead of calling a program green when it's really actually just nuclear and concrete.

Koreans now are not poor. In a few years, the average Korean will have more income than the average Japanese. So they can also afford to pay for their carbon and pay for the pollution. So I hope they will become an environmental leader in carbon taxing and through energy innovations, rather than trying to take a lead in this way.

Interview: Saroja Coelho
Editor: Gerhard Schneibel