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(LEAD) S. Korea to revamp taxation, set up fund for carbon neutrality goal

All News 11:18 December 07, 2020

(ATTN: RECASTS headline, lead; UPDATES with more details throughout)

SEOUL, Dec. 7 (Yonhap) -- South Korea said Monday it plans to overhaul a taxation scheme related to carbon emissions and set up a fund designed to fight climate change in a bid to achieve the goal of carbon neutrality by 2050.

The country also plans to accelerate the reduction of reliance on coal as it nurtures eco-friendly industries and builds up the low-carbon economic structure to effectively reduce carbon emissions to zero by that year.

President Moon Jae-in announced in October that the country will seek to go carbon neutral by 2050 in an effort to transform the country's fossil-fuel reliant economy into an eco-friendly one.

Carbon neutrality has emerged as a global agenda for fighting climate change since the Paris climate accord went into effect in 2016. Major countries, including the European Union, China and Japan, have unveiled the timeline for their carbon zero goals.

This photo, provided by the Korea Forest Service on Aug. 7, 2020, shows solar panel facilities set up on a mountain. (PHOTO NOT FOR SALE) (Yonhap)

The Korean government unveiled its commitment to "proactively" respond to climate change challenges and strategies in achieving carbon neutrality.

The move gained urgency as South Korea heavily relies on fossil fuels and its backbone industries -- manufacturers, steelmakers and the petrochemical segment -- are traditionally high carbon emitters.

The finance ministry said the country plans to overhaul the carbon pricing system after taking into account related taxes, financial burdens and carbon-emission trading scheme. It will also set up the tentatively named Climate Response Fund.

"As for (the introduction of) carbon taxes, the government plans to considerably review many factors, including the fallout on climate, income distribution, inflation and industrial competitiveness," Finance Minister Hong Nam-ki said at a press briefing.

"But at the current stage, it is not desirable to mention details about whether to introduce carbon taxes or raise taxes on diesel," he added.

The country plans to seek to support technical development in various fields, including power generation and transportation, in a bid to spur the early reduction of greenhouse gases, according to a joint statement by the finance, industry and science ministries.

In a related effort, the country will accelerate its efforts to scale down dependence on fossil fuels and further develop green energy sources such as hydrogen and renewable energy.

Of the country's power generation sources, coal accounted for 40.4 percent as of end-2019, followed by liquefied natural gas (LNG) with 25.6 percent and nuclear power with 25.9 percent.

The country will also strive to support high-carbon emitting industries to help them transform to the low-carbon economic structure. It will back up the development of eco-friendly cars and nurture new industries to take the lead in such segments as rechargeable batteries and power-efficient chips, according to the ministries.

The initiative is part of the Moon government's efforts to shift its energy policy from nuclear and fossil fuel-based power generation to renewable energy sources, such as solar power, under its nuclear phase-out policy.

The carbon neutrality campaign is also in line with the government's Green New Deal drive being pushed to achieve sustainable growth through eco-friendly policies.

The country said it will seek to slash the emissions of greenhouse gases in 2030 by 24.4 percent from the 2017 level.

The government said it plans to set up a presidential committee on a carbon-neutral campaign to push for the vision as it seeks to draw up detailed action plans starting next year.

This file photo, taken on May 27, 2020, shows a hydrogen charging station in Seoul's southeastern ward of Gangdong. (Yonhap)


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