[The Editors' Verdict] The Pain That Carbon Neutrality Will Bring

[Asia Economy Reporter Kang Hee-jong] The government announced the '2050 Carbon Neutrality' promotion strategy on the 7th. Carbon neutrality in English is expressed as 'net zero,' meaning that the total amount of carbon emissions and absorption is balanced to 'zero.' Countries around the world are declaring carbon neutrality to respond to climate change, and we intend to join them as well.

No one opposes the noble goal of carbon neutrality. Reducing greenhouse gases to slow the pace of climate change and protect our Earth is the only way for humanity to survive. The scientific debate over whether greenhouse gases are truly the main cause of climate change seems to have come to an end. Since countries worldwide are participating, we cannot afford to be left out.

When announcing the carbon neutrality strategy, the government introduced various strategies. The main points include transitioning to a low-carbon economic structure, fostering low-carbon industries and ecosystems, and promoting a fair transition to a carbon-neutral society.

Though these sound grand, there are harsh truths hidden within. To move toward a carbon-neutral era, South Korea must endure tremendous pain. This pain must be shared not only by companies but by all citizens. Without honestly communicating these truths to the public and forming a consensus, no matter how much we call for carbon neutrality, we will never approach it.

The major industries that have been the foundation of South Korea's rapid growth and currently support the economy are mostly sectors that emit large amounts of carbon. The four major carbon-intensive industries?steel, petrochemicals, refining, and cement?account for 8.4% of the country's gross domestic product. This is higher than Germany's 5.6% and Japan's 5.8%, which are similar manufacturing-centered countries. To reduce carbon emissions in these industries, every stage from fuel to production processes must be changed. This could increase the burden on companies, which may lead to price increases.

Coal power accounts for 40% of South Korea's electricity generation. Coal power has provided a foundation for manufacturing growth by offering low electricity rates. However, the government plans to significantly reduce coal power's share through coal phase-out and expand the share of renewable energy. The problem is that discussions about nuclear power have been excluded in this process. Nuclear power is a low-cost and carbon-free energy source. However, under the Moon Jae-in administration's nuclear phase-out policy, serious discussions about utilizing nuclear power have not taken place. South Korea's renewable energy generation costs remain very high, which inevitably leads to electricity rate increases. Moreover, liquefied natural gas (LNG) power, considered a supplement to coal power, emits nitrogen oxides that cause fine dust, raising concerns that it is not a sustainable energy source.

The shock facing the automobile industry will also be enormous. As the industry transitions to electric and hydrogen vehicles, structural changes and job losses are inevitable. There are about 2,800 suppliers in South Korea's internal combustion engine vehicle sector, accounting for 31.4% of all automobile parts companies. The number of workers reaches 250,000. Support for these companies and workers will be required going forward.

The government has decided to establish a fund to secure the resources needed for the transition to a carbon-neutral era. The fund is expected to be raised through various energy taxes such as carbon tax and diesel tax. The burden on companies and citizens will inevitably increase.

Behind the noble goal of carbon neutrality lies enormous change. The government’s target year for carbon neutrality is 2050, which is 30 years from now. Because of this, the public may perceive it as a distant future issue. The government subtly exploits this. Since people do not feel the impact immediately, it tries to push the agenda quietly. The plans are also inadequate. However, this is not something to be taken lightly.

This content was produced with the assistance of AI translation services.