Carbon Emissions Trading Scheme's Disproportionate Abatement Costs on Developing Nations: Evidence from the Korea ETS

Abstract

This research paper delves into the intricate dynamics of Carbon Emissions Trading Schemes (ETS), emphasizing the environmental injustices embedded in their implementation, particularly with re-spect to the disproportionate financial and economic impacts on developing countries. Centered on the case of South Korea's ETS, the paper employs a comprehensive case study to unveil nuanced in-sights into how these schemes influence the competitiveness of industries in nations undergoing eco-nomic development. Employing rigorous econometric analysis, the study scrutinizes the alloca-tion of CO2 ETS permits across various sectors, revealing significant disparities in the distribution of abatement costs. The findings underscore the multifaceted challenges of formulating global climate policies that effectively reconcile the need for environmental sustainability with the economic constraints faced by developing nations. This paper advocates for a more nuanced and equitable ap-proach to international climate action, suggesting modifications to ETS frameworks that better ac-count for the distinct developmental stages and economic vulnerabilities of these countries. By urging a shift towards an approach that acknowledges and addresses these complexities, the re-search contributes significantly to the ongoing discourse surrounding the formulation of inclusive, ef-ficacious, and just global environmental policies.