Estimation of the cost of greenhouse gas reduction in Korea under the global scenario of 1.5 °C temperature increase

Abstract

ABSTRACTThis paper assesses the feasibility of reducing greenhouse gas (GHG) emissions in Korea to pursue efforts to limit the global temperature increase to 1.5 °C above pre-industrial levels, as considered in the Paris Agreement. Economic cost, risk and possibility of climate commitment are examined using different burden-sharing schemes and using a computable general equilibrium model based on assumptions of future socioeconomic conditions. Four scenarios are used for 2050, including a Nationally Determined Contribution (NDC) extended scenario and one of almost zero emissions. Then, the simulation results are analyzed under different scenarios, including several policy implications. In order to meet a goal of zero emissions around 2050, the use of fossil fuels for power generation should be replaced with renewable energy sources, such as solar, wind and hydro. The results show that, regardless of the scenario of burden-sharing schemes using the global carbon budget, the Korean economy can bear the marginal cost of a GHG reduction, ranging between USD 100 and 350 in 2050, compared to the NDC extended scenario. It is evident that without a transformative change in the Korean economic structure and energy systems, the cost of reducing GHG emissions will be enormous.