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Significant changes in the United States’climate change policy are likely with President-elect Joe Biden’s inauguration on January 20, 2021. This short note explores the new U.S. administration’s prospective policy on climate change and energy, and draws implications for Korea.
Outgoing U.S. President Donald Trump has been a staunch supporter of conventional industries such as oil and gas, and has shown his inclination to ignore or talk down the seriousness of climate change during his term of office. The fact that President Trump led the U.S. to withdraw from the Paris Agreement, which represents the world community’s newest commitment to effectively tackling climate change, most strongly demonstrates the Trump administration’s approach to climate issues.
The Trump administration also repealed the Clean Power Plan which was the previous administration’s regulatory tool on greenhouse gas emissions from the power sector, weakened the corporate average fuel efficiency standard on vehicles, and issued Executive Order 13783, “Promoting Energy Independence and Economic Growth,”which aimed to abolish federal regulations that would potentially burden the development or use of domestically produced energy resources. All in all, the Trump administration’s action collectively amounted to the denial of, or the failure to act upon, climate change.
By contrast, Mr. Biden proclaimed that he would recommit the U.S. to the Paris Agreement on Day One of his office, expressing his resolution to actively engage in climate change issues. He also emphasized that climate change is a “threat multiplier”that magnifies existing geopolitical and weather-related risks, and he is expected to elevate climate change as a core national security priority and develop a comprehensive strategy to address the security implications of climate change.
In addition, the Biden administration will lay out a plan to achieve net-zero emissions and 100 percent clean energy economy no later than 2050 by adopting such policy measures as enhancing energy efficiency of federal buildings and fully electrifying small-to-medium road vehicles. The share of domestically produced renewable energy will also increase during Biden’s first term, through a large-scale investment in low-carbon technologies and energy resources such as biofuels.
Furthermore, the Biden administration will aggressively pursue trade and non-trade measures to ensure reductions of global greenhouse gas emissions, such as imposing carbon adjustment fees or quotas upon carbon-intensive goods from nations that fail to comply with climate and environmental obligations. Conditioning future free trade agreements (FTAs) on partners’commitments to enhance their Paris climate ambitions, seeking a G20 commitment to end all export finance subsidies of high-carbon projects, and demanding a worldwide ban on fossil fuel subsidies will also be on the Biden administration’s climate agenda.
Meanwhile, Korea’s climate policy focuses on achieving its nationally determined contribution (NDC) that was submitted as part of obligations for a Paris Agreement member Party, which is to reduce the country’s greenhouse gas emissions in 2030 by 24.4 percent compared to those of 2017. In absolute terms, this translates into the reduction of greenhouse gas emissions in 2030 from that year’s projected emission of 719 million tons of carbon dioxide equivalent (MtCO2e) to 536 MtCO2e. At the end of 2020, the Korean government announced the ䷂Carbon Neutrality Strategy,”taking into account a paradigm shift in global climate policy that embraces reaching carbon neutrality by 2050 as new national goals. This strategy envisages the comprehensive transformation of the national economy, by de-carbonizing the whole industrial structure and promoting new and renewable energy industries, which would help the country accomplish carbon neutrality without compromising economic growth and quality of life. It may take several years for the government to come up with a blueprint on specific action plans, though.
When the Biden administration begins to implement its climate policy in earnest, it will likely put multilateral pressure against nations not very active on climate issues, in collaboration with like-minded countries, which may present a variety of challenges for Korea. Although China will be the main target for the U.S. pressure in relation to climate ambitions, Korea may also find it difficult to cope with the U.S.’s bilateral and/or multilateral pressure at such forums as the Paris Agreement and G20, because Korea has been highly criticized for not putting climate change high enough on its list of policy priorities.
Such pressure will likely be made on enhancing Korea’s NDCs under the Paris Agreement, and on stopping financing or investing in carbon-intensive industries such as domestic and foreign coal power generation facilities. Moreover, the Biden administration will not shy away from taking such trade-related measures as carbon adjustment fees, which may adversely impact Korea’s exports.
Except the carbon adjustment fees, however, the U.S.’s pressure on Korea through the other foreign policy tools may work as a facilitator for Korea in achieving climate goals, at a time when Korea sets itself up to reach carbon neutrality by 2050. Therefore, the Korean government may as well constructively engage in the U.S. initiatives to enhance the climate ambitions. That being said, an ex ante examination will be required of the effects Korea’s participation in the U.S.-driven global climate commitments may make in the domestic economy. As Korea still directly and indirectly gives out favors to small and medium enterprises, farmers and fishermen in the form of various subsidies on their gasoline consumption and the use of coal for generation, policy measures to minimize the adverse impacts on these economically disadvantaged groups may be warranted.
Additionally, as a way both to officially acknowledge climate change as a security threat and to wage a public awareness campaign on the seriousness of climate change, the Korean government should also consider establishing within the National Security Council a new post called Adviser on Climate Security, or at least commission Adviser on National Security Strategy to develop a comprehensive strategy to deal with the security implications of climate change.
Lastly, because the Biden administration’s discussions on carbon adjustment fees will likely trigger debates on such broader issues as the interlinkage between the environment and trade, as well as the trade-related measures aimed at protecting the environment, the Korean government must turn to trade policy experts to closely follow this new direction of trade discourses. Furthermore, the government needs to brace for the possibility that environment-related trade disputes are brought to the WTO dispute settlement mechanism, by making an assessment of the compatibility of such measures with WTO rules.
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