Tackling the Economic and Climate Crisis

Together !May 7, 2009

Dr. Jeong-Woo KilJoongAng m&b

At the G-20 meetings…• Economic recovery efforts monopolize

national agendas with promising to strain state budget.

• Policymakers seek - to generate short-term economic growth and employment, - to address long-term goals sidelined by the current crisis.

Energy & Environment: ‘Green’ Stimulus

• “Green” stimulus gained considerable attention around the world.

• Japan and South Korea trumpeted their stimulus plans as “Green New Deals.”

• China earmarked $586 billion in spending for energy and environmental projects.

• The United Kingdom and Germany followed.• The US Congress is looking to green $50 to

$100 billion of a proposed $ 825 billion package.

Assessing the Green Stimulus Effect

• To assess the cumulative effect ofeconomic recovery package on global carbon dioxide emission;

• To ensure Green Stimulus efforts complement each other and long-term emission reduction goals as well.

 

Framework for Evaluating

Effectiveness of Green Stimulus plans.- Economically, it is a question of

speed and scope; how quickly and how broadly the money is put to work.

- Environmentally, it is about strategic design.

Green Stimulus…Some Arguments

• Green components of a recovery effort can create jobs and stimulate the economy.

• A Green Stimulus is no replacement for climate and energy policy.

• Green recovery package can reduce the cost of comprehensive climate and energy policy.

• Internationally, the response to the economic crisis is an opportunity to lay the foundation for, and build confidence in, a multilateral approach to the climate crisis.  

Groundwork to address Climate Change

 

1.Keeping clean energy momentum alive

• The cost of climate policy depends in large part on how fast low-carbon energy sources are developed today.

• The credit crisis and collapsing oil prices threaten this momentum.

• Making policy incentives meaningful through loan guarantee or greater tax credit flexibility can help keep the renewable industry on track.

 

2. Laying the foundation for future low-carbon growth

• The ability of market-based climate policy to move the global economy onto a low-carbon trajectory will depend on infrastructure.

• Infrastructure investments can begin today as part of an economic recovery effort.

• Low-carbon investments must be balanced against non-green infrastructure projects.

3. Energy efficiency, rather easy pick

• The most promising area for green stimulus spending, in terms of both economic and environmental benefit, is energy efficiency.

• A number of low-cost or even profitable opportunities to reduce carbon dioxide emissions that will likely not respond to price-based climate tools alone.

Common commitment on a more environmentally sustainable footing will help build confidence in climate negotiations later this year.

That’s why we should tackle the

economic and climate crisis together.

Climate Change vs. Trade Liberalization

Trade-related rules have gained political support,- they address the competitiveness issue - they arguably create incentives for other countries to join in combating global warming.

But the Reality is…• First, trade measures may not provide

intended economic relief to domestic industries;

• Second, trade measures may not create substantial leverage to shape climate change policies of other countries…particularly China and India.

Collision with WTO Rules

When Green House Gas trade measures are mixed with mechanisms designed to alleviate the burden of emission controls on domestic firms, the possibility arises of a collision with WTO rules.

Korea’s Cases

• Presidential Commission for Green Growth is leading…

• Green + New Deal = explore growth potential & creating jobs= (low carbon dioxide+ environment friendly+ energy conservation)..

• Green Growth Strategy + job creation = Green New Deal

Civic Activities • Korea’s Green Fund runs the Climate

Change Center;• Educational programs targeting CEOs…• Another move is organizing the Club to

donate one out of ten thousands of the company’s annual revenue for environ-mental protection programs, currently around 150 companies joined.