A PRoJECT oF THE ASIA FoUNDATIoN

In an interview with the Korea Herald earlier this year, Hur

Dong-Soo, CEO of Korea’s GS Caltex, called his company’s in-

vestments in heavy-oil upgrading facilities a “green growth

business.” As the phrase “green growth” becomes ever more

common—now used in reference to everything from solar

panel exports to a stimulus-backed cure-all for ailing national

economies—such claims beg the question, what does green

growth really mean? Is it a strategy for cashing in on the

growing global demand for clean energy products, like wind

turbines and smart grid components? Is it the goal to derive

more power from renewable sources? Or, is it investing in

technology to meet the demand for cleaner-burning petro-

leum products, as GS Caltex is doing?

According to a new report from UC Berkeley and the Den-

mark-based Green Growth Leaders Council, the answer may

be all of the above. The Council, which includes Dr. Young

Soo-gil, Chairman of Korea’s Presidential Committee on

Green Growth, met for the first time on April 13 to consider

the report’s findings. After reviewing the existing literature,

the report authors found six different definitions of green

growth and three separate policy debates about it, each with

different ambitions. These range from the proposal that re-

ducing greenhouse gas emissions can be compatible with eco-

nomic growth, to the more ambitious notion that investments

in low-carbon technology can drive job growth, and finally, to

the idea that green investments can spur an entirely new

“green industrial revolution.”

Korea is striving for all three of these goals under the green

growth vision that President Lee Myung-bak first announced

in August of 2008. He pledged to spend 107 trillion won

(US$97 billion), which amounts to 2 percent of annual GDP,

in pursuit of green growth objectives between 2009 and 2013.

Since then, he has received several international awards for

his environmental leadership. Where does Korea’s green

growth strategy stand now?

There is evidence of success and difficulties. Green growth

has served as a basis for new bilateral partnerships and a pub-

lic relations platform for Korean efforts to bolster the coun-

try’s global image. The Seoul-based Global Green Growth

Institute is up and running, with projects underway in three

countries. Korea is building a comprehensive smart grid test-

bed on Jeju Island, with a view to becoming the first country

with a nationwide smart grid by 2030. The Framework Act on

Low Carbon Green Growth has become law, establishing the

legal foundation for the Lee Administration to move the strat-

egy forward.

But there are limits to how far, how fast, and how easily the

government can push forward to achieve its aims.

First, how far can the government go? Cap and trade remains

a tough sell in Korea. It is central to the government’s goal of

reducing the country’s greenhouse gas emissions by 30 per-

JUNE 2011 - Vol. 3, No. 6

KOREA’S 97 BILLION DOLLAR QUESTION: WHAT IS GREEN GROWTH?

JILL KOScH O’DONNELL

cent below "business as usual" (BAU) levels by 2020, some-

thing it is not obligated to do under the Kyoto Protocol (The

proposed goal would mean a reduction of 4 percent below

2005 levels in the present BAU scenario, but not necessarily

so if the BAU is revised). Representing the industry view, Lee

Dong-keun, Executive Chairman of the Korea Chamber of

Commerce and Industry, told reporters that “Forcing firms to

buy carbon permits to cover their emissions output will surely

bring competitive disadvantage to our industrial edge.” South

Korean business groups cite two other factors in their opposi-

tion: the uncertain outcome of global climate change negotia-

tions; and the unlikely prospects for implementation of cap

and trade systems in other advanced economies, like the

United States and Japan. Earlier this year, the government

acquiesced to private sector pressure when it revised draft leg-

islation to delay implementation of cap and trade for two

years to 2015.

Second, how fast can the government achieve its green growth

goals? Along with green growth, Korea is aggressively pursu-

ing new sources of fossil fuels, which it will need to power its

economy for quite some time. President Lee’s recent trip to

the United Arab Emirates underscores this reality. While

there, he accepted the Zayed Prize for Global Environmental

Leadership and secured an oil field development deal worth

110 trillion won (US$100 billion) for Korea. President Lee is

seeking to achieve a 20 percent energy self-sufficiency ratio in

oil and gas for Korea during his term. Green growth will play

out over a much longer timeframe.

Third, how easy will it be to marshal public and private sector

resources toward common goals? Implementation of Korea’s

green growth strategy is diffused among many players who

view their role in green growth through different lenses.

Given the scope and ambition of President Lee’s strategy, this

is not surprising; green growth policies affect the work of

many government ministries and research institutes. This is

necessary to implement such a sweeping strategy, but it also

presents an obstacle to clarity about what green growth really

means.

Finally, what are the prospects for U.S.-ROK cooperation on

green growth? There are competitive and cooperative forces

at play. In a March hearing before the Senate Energy Com-

mittee, Korea was mentioned in the competitive context of a

clean energy technology “race.” Both countries have been

clear that they are seeking to secure leadership positions in

the global market for these technologies. The U.S. Depart-

ment of Energy’s new Strategic Plan reinforces this goal.

President Lee recently touted his country’s seven-fold in-

crease in exports of new and renewable energy, saying that

Korea’s solar and wind industries will be nurtured as the

semiconductor and shipbuilding industries once were as part

of South Korea’s economic development strategy. Further, in

U.S. forums like the Senate hearing, Korea is often overshad-

owed by China as a strategic focus of cooperation.

However, the Department of Energy’s new “Quadrennial

Technology Review” (QTR) may bode well for U.S.-ROK coop-

eration by shedding light on the strategic direction for U.S.

energy transformation at the federal level. The QTR will pro-

vide a framework for meeting U.S. energy challenges and, in

the words of QTR Director Dr. Steven Koonin, consider “how

the many different kinds of organizations that influence en-

ergy innovation and transformation can better work to-

gether.” While there is no U.S. equivalent to Korea’s

Presidential Committee on Green Growth, the QTR might

serve as a proxy, at least in the realm of energy technology in-

novation. In addition, Korea’s push to establish itself at the

center of new multilateral organizations, such as the Interna-

tional Smart Grid Action Network, may present new avenues

for cooperation.

The Berkeley report cautioned that green growth “may be real

and achievable, but hardly generalizable and inevitable.” It

also cast doubt on the notion that the transition to a low-car-

bon economy can drive GDP growth directly. Two-and-a-half

years into President Lee’s strategy, green growth has yet to

fully live up to its name. But its place in the policymaker’s

vernacular seems assured as Korea pushes forward on this

work-in-progress idea.

Jill Kosch O’Donnell reports regularly on developments in

South Korea’s green growth strategy for the Center for U.S.-

Korea Policy. She can be reached at jillkosch@hotmail.com.

The Center will address South Korea’s green growth strategy

at a conference co-hosted with the Korea Economic Institute

in Washington DC on June 23, featuring a keynote speech by

Dr. Young Soo-gil, Chairman of the South Korean Presidential

Committee on Green Growth.

NEWS & EVENTS

JUNE 23, 2011—CENTER FOR U.S.-KOREA POLICY AND

KOREA ECONOMIC INSTITUTE—WASHINGTON, DC

SOUTH KOREA’S GREEN GROWTH STRATEGY: WHERE

IT STANDS AND WHERE IT’S GOING

9:00 am-1:30 pm | 1800 K Street NW, Suite 1010

The Asia Foundation’s Center for U.S.-Korea Policy and the

Korea Economic Institute will host a seminar on South

Korea’s Green Growth strategy, featuring a keynote address

by Young Soo-gil, Chairman of the South Korean Presidential

Committee for Green Growth. To RSVP please contact

Sarah Howe at showe@keia.org with name and affili-

ation.

JUNE 13-15, 2011—THE ASAN INSTITUTE FOR POLICY

STUDIES—SEOUL, KOREA

THE 1ST ASAN PLENUM: OUR NUCLEAR FUTURE

The Westin Chosun Hotel, Seoul

The Asan Institute for Policy Studies will host its inaugural

plenum on “Our Nuclear Future.” This plenum seeks to shape

the global debate on our nuclear future in light of recent de-

velopments and in anticipation of Seoul’s hosting of the 2nd

Nuclear Security Summit in April 2012. Scott Snyder, Center

for U.S.-Korea Policy Director, will serve as a panelist. Event

details are available at: www.asanplenum.org.

JUNE 10-11, 2011—PACIFIC FORUM CSIS—HONOLULU,

HI

U.S.-CHINA RELATIONS, REGIONAL SECURITY AND

GLOBAL GOVERNANCE

Hilton Hawaiian Village, Honolulu

Pacific Forum CSIS in collaboration with Fudan University’s

Center for American Studies and The Asia Foundation will

hold the 11th dialogue on U.S.-China relations. Scott Snyder,

Center for U.S.-Korea Policy Director, will speak on Korean

peninsula issues. This event is closed to the public.

JUNE 26-29, 2011—PACIFIC FORUM CSIS—MAUI, HI

U.S.-ROK STRATEGIC DIALOGUE

Pacific Forum CSIS will convene Korean and U.S. experts for

its third U.S.-ROK Strategic Dialogue. Scott Snyder, Center

for U.S.-Korea Policy Director, will serve as a U.S. presenter.

This event is closed to the public.

PUBLICATIONS

See-Won Byun (June 6, 2011), " The China-South Korea-Japan

Triangle: The Shape of Things to Come?" Asia Pacific Bulletin,

No. 115, East-West Center.

Scott Snyder (June 2, 2011), “ North Korea Food Aid: Avoiding

Moral Hazard (VIDEO),” Council on Foreign Relations.

Scott Snyder (June 2, 2011), “ Blowout in Inter-Korean Rela-

tions,” Asia Unbound, Council on Foreign Relations.

Scott Snyder and See-Won Byun (May 28, 2011), " North Korea

and Community Building in East Asia," Paper presented at the

1st East Asian Community Forum on " Rising China and the

Future of East Asian Community," Asiatic Research Institute,

Korea University, Seoul.

Scott Snyder (May 25, 2011), “ A Human Rights Envoy to As-

sess North Korea’s Food Situation,” Asia Unbound, Council on

Foreign Relations.

Scott Snyder and See-Won Byun (May 13, 2011), " Can Inter-

Korean Dialogue Revive Six-Party Talks?" in Carl Baker and

Brad Glosserman, eds., Comparative Connections, Vol. 13, No.

1 (January-April 2011), Pacific Forum CSIS.

Scott Snyder and See-Won Byun (April 2011), “ Cheonan and

Yeonpyeong: The Northeast Asian Response to North Korea’s

Provocations,” RUSI Journal, Vol. 156, No. 2, pp. 74-81, Royal

United Services Institute.

Balbina Y. Hwang (April 2011), “ Furthering North Korean

Human Rights Through U.S.-ROK Cooperation,” Center for

U.S.-Korea Policy, The Asia Foundation.

Jill Kosch O’Donnell (April 2011), “ ROK Green Growth Quar-

terly Update: January-March 2011,” Center for U.S.-Korea Pol-

icy, The Asia Foundation.

For a complete list of publications, please visit:

www.centerforuskoreapolicy.org.

VIEWS ON THE U.S.-ROK ALLIANCE

"As long as there exist threats from North Korea, the Korea-

U.S. relations cannot but strengthen…The alliance between

the U.S. and South Korea aims to deter war. It is not at all to

invade North Korea."

--President Lee Myung-bak, Interview remarks with Le

Monde in Paris, May 14, 2011.

"The Republic of Korea-U.S. alliance remains ready to deter

and to defeat any North Korean aggression and if deterrence

fails, we will fight and win. We continue to call on North

Korea to change its ways and to join the international com-

munity as a responsible nation."

--Walter Sharp, Commander, UN Command, Combined

Forces Command, U.S. Forces Korea, Memorial Day Speech,

Seoul. May 26, 2011.

CenTer For KoreA PoliCy

The Asia Foundation

1779 Massachusetts Ave NW, Suite 815

Washington, DC 20036 USA

TEL: (202) 588-9420

FAX: (202) 588-9409

info@centerforuskoreapolicy.org

Scott Snyder, Director

See-Won Byun, Research Associate

Jill O’Donnell, Program Associate

Yong Hyun Jung, Intern

David Kim, Senior Advisor

For more information on Center activities please visit: www.centerforuskoreapolicy.org.

The Center for U.S.-Korea Policy is based in the Washington DC office of The Asia Foundation with seed funding from the Smith Richardson Foun-

dation. The Center accepts donations from the public and private sector for its programs and operations. Inquiries should be directed to Scott Snyder

at ssnyder@centerforuskoreapolicy.org.

This newsletter is produced by the Center for U.S.-Korea Policy to provide updates and analysis on current policy issues related to the U.S.-ROK al-

liance partnership. All views expressed in this publication are those of the author(s).

To be added to the newsletter listserv, please contact info@centerforuskoreapolicy.org.

The Asia Foundation

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The Center for U.S.-Korea Policy aims to

deepen and broaden the foundations for institu-

tionalized cooperation between the United States

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