The 22nd AIM international workshop, NIES, Japan

Marginal Abatement Cost of CO2
Mitigation Options for theResidential Sector in Korea
2016.12.09.

Chan PARK, Taeyong JUNG, Dongkun LEE
University of Seoul, Yeonsei University, Seoul National University

2 Korea plans to reduce its greenhouse gas emissions by 37% from the business-as-usual (BAU,850.6 MtCO2eq) level by 2030
GHG emission(MtCO2eq)

1000

851

800
536600400
2000BaUTarget

 Government approved the 1st National Climate Change Response Plan on state council(2016.12.06)
 Coordination role: MOE -> Office for Government Policy Coordination (2016.06)
 Responsibility of emission reduction management: Each ministry of sector(2016.06)

3 The mitigation target is finalized by sector
Ratio(%)

Sector2030 BAU(MtCO2eq)

Reduction amounts(MtCO2eq)

Bysector

ByTotalPower generation

333

64.5

(19.4)

7.6

Secondary industries

481

56.4

11.7

6.6

Buildings

197.2

35.8

18.1

4.2

Green industries

-28.2

-

3.3

Transportation

105.2

25.9

24.6

3.0

Public and others

21

3.6

17.3

0.4

Waste

15.5

3.6

23.0

0.4

Primary Industries

20.7

1

4.80.1

Domestic reduction

219

25.7%

96

11.3%

851
Emission trading**Through the international market mechanism (Detailed plan will be prepared by 2020)

4

1. Low carbon energy policy- Ramping up renewables(A renewable portfolio standard (RPS) increase, Renewable FuelStandard increase, incentives): (’20) 5.0% → (’25) 7.7% → (’30) 9.7% → (’35) 11%- Energy mix change in power sector (Withdrawal or shift energy source: 10 coal fired plant),
Deploying high efficiency plant equipment- Energy demand management (Negawatt Market project, Electronic price change, Deploying
high efficiency devices)- Building energy(BEMS, Zero emission building, etc), Vehicle (hybrid: 4million, Electronic: 1mil,
H2: 0.6mil), low emission Infrastructure (BRT: 29.0 km → 928.8 km, Rail: (’16) 3,729.3km → (’25)
5,363.5km, ICT, …), improve its vehicles' average fuel efficiency- Deploying high efficiency equipment in industry sector
2. Low carbon energy policy- Local emission trading(Incentive for BM(BenchMark) allocation, CDM, Improving MRV system,
tax incentive, Reducing Information access gap)
- International market mechanism (Bilateral cooperation, ODA, SDM, Governance building)
3. Investment for green industries- CCS and CCU(Steel industry), Microgrid, Smart grid, Energy Storage System, and so on)- Climate Technology Roadmap(2016.06)

54. Climate proof cities- Climate change monitoring system- Climate adaptation (Vulnerable groups, infrastructure, and so on)- Managing biodiversity and ecosystem service
5. LULUCF and others- REDD+ (Urban forest: (’15) 38,513ha → (’30) 60,160ha, and so on)- Initiate Bio-energy use- Recycle & Reuse of waste
6. International cooperation- Improve transparency- Bilateral cooperation, and so on

7. Citizen participation

6

New strategy towards 2030 low carbonized society
Category

Current strategy

Response

Mitigation only

Mitigation method

Regulation

Corresponding

Individual response

Integrated response

Governance

Government oriented

Public–private partnership

Evaluation-MRV/Feedback

International
reporting program-Mid-long term strategy
Mitigation/ Adaptation/
Transparency⇒Market / Technology

Implementation and evaluation
reports (Every 5 years)

78

- South Korea have to invest in energy efficiency in residential, and other sectors to meet

mitigation target.
- Residential sector in South Korea doesn’t use much energy than other countries due to energy
price in current situation. But, in the long, South Korea also use large energy in the residential
sector due to lifestyle change caused by income change, climate change, and others.
- It is important to examine the amount of energy consumption, reduction potential, reduction
cost by each sector with the long-term sight.

 This study elaborates the service demands of the residential sector in 2050 and offers marginal

abatement cost in residential sector with detailed technologies.

9Socioeconomic indicators assumption

Household Energy Service demand

Optimization (AIM/Enduse model)

GHG Emission
Reduction
scenario

Optimization (AIM/Enduse model)

Marginal Abatement Cost

MACj,t = (Cj,t – Ci,t)/(Ei,t – Ej,t)

10

Energy use
Energy Efficiency (2000-2010)

Energy service demand
Climate, socio-economic data(2000-2010)

Regression analysis(theoretical model)
Climate scenario(KMA, RCP85),
socio-economic data(SSP2) (2011-2050)

Future Energy Service
Demand11Scenario

Abbreviation

Definition
Efficiency improvements are included to someextent as a consequence of technological progress

Business as Usual

BAUand current policy implimentation
No emissions cap, no emissions tax

Emissions cap: 30% reduction in 2050 comparedto the BAU level in the target year
Reduction

RD

Efficient technologies are introduced into themarket in order to meet the pre-set emissions cap
12Unit: 1000 $/person

MillionPopulation
55

80,00050

60,00045

40,00040

20,000
2010

2020

2030

2040

2050

2010

2020

GDP per Capita

2030

2040

2050

KOR
SSP1
SSP2
SSP3
SSP4
SSP513

HDD(1)
HEATING
0.125***(0.0194)(2)
HOTWATER
0.026*(0.00993)

CDD(3)
COOLING(5)
COOKING

(6)
REF

(7)
ICT

(8)
OTHERS(9)AIR

0.528***(0.046)
1.893*(0.850)
64
0.848
0.796

-5.240***(0.636)177.000***(12.13)
64
0.822
0.761

1.091***(0.0892)
3.253(1.701)
64
0.865
0.820

0.714***(0.060)2.651*(1.146)
64
0.829
0.771

0.436***(0.039)1.578*(0.746)
64
0.903
0.870

0.027***(0.005)-0.013(0.101)
64
0.569
0.422

0.005*(0.00288)
2.783***(0.663)

AIRGDPPC_cons(4)
LIGHTING-118.3*(46.19)
64
0.739
0.650

26.280(23.64)
64
0.665
0.551

NR-sq
adj. R-sq(rsme)
Standard errors in parentheses* p<0.10 ** p<0.05*** p<0.01

2.653***(0.491)
64
0.872
0.825

14

-Energy service demand in the residential sector increases to 1.15 times in 2030 and 1.08
times in 2050 compared to 2010 level
It is also shown that heat and the hot water energy service demand is decreasing due to theclimate change, cooling service is appeared to be increased slightly.
Other services using electricity are expected to increase their service demand because of
population increase and higher income levels

15

- It can be reduced by 24
MtCO2-eq compare to theBaU in the entire
residential sector and it
would cost with the rangeof 100 to 500 dollar in US.
- 8.8 billion dollars areneeded in whole
residential sector(187$ per person)- The positive value par of
MAC indicates necessary
information for theinstallation of deployment
policies and researchpolicies with the goal tofoster innovation.

16

Total (billion$)
Cost of residential sector for
30% Reduction in 2050

Per capita ($)
9

Income tax of labor (Average)

Note(year)

170

2050

4,160

2015

Subsidy for high efficiency
device purchasing (All sector)

121

2010

SOC

22468

2017

Welfare Budget

130

2,766

2017

Total government budget

400

8,511

2017
17

Any comments or questions?