SEOUL, SOUTH KOREA, July 26, 2019 – The Seoul Metropolitan Government announced that it secured KRW 13.3 billion (USD 11.2 million) in tax revenue by selling 628,000 tons out of its remaining rights. This was possible due to Seoul’s effort to reduce greenhouse gas emission over the past four years between 2015 and 2018. For this year, Seoul earned KRW1.2 billion of the tax revenues. The city government sold 42,000 tons of its emission rights out of the remaining 169,000 tons to private organizations and businesses.
The central government assigns the annual emission quota to agencies that produce large volumes of greenhouse gas. If an agency emits more or less than its quota, it can partially buy or resell its emission rights from or to other agencies.
589 agencies including local governments, companies and national agencies have participated in the “greenhouse gas emission trading scheme.” The government started implementing this program in 2015. In Seoul, 138 agencies including the Seoul Metropolitan Government participate in the initiative.
To stabilize the prices of the trading rights, the central government encourages the agencies with excessive emission rights to sell the particular amount of their rights. Agencies can trade their emission rights through Korea Exchange.
▶ Market price of emission rights: KRW 28,400 per ton (as of July 22, 2019, Korea Exchange)
▶ Limitation of carried-over amount: It is allowed to own the carried-over rights if the emission rights are triple of the net selling rights or if it is less than 75,000 tons (if the both values are applicable, the bigger number applies.)
Seoul holds 23 facilities that subject to the emission scheme, including four resource collection facilities, 14 water supply facilities, four water regeneration facilities, and the World Cup Park.
Seoul has strived to reduce the greenhouse gas emission in multiple ways. Seoul minimized the inflow of vinyl and plastics that produce a large amount of greenhouse gas. The city government installed the equipment using renewable energy such solar energy in the water supply and regeneration facilities.
Seoul also replaced aged ventilators and pumps with facilities with high efficiency. It is especially noticeable that Seoul encouraged the private sector to reduce the gas emission by selling its rights first to private companies which voluntarily design and implement their reduction plan.
With the tax revenue created from selling the rights, the Seoul Metropolitan Government will deposit the amount to the climate change fund. It plans to invest the fund in the initiatives for greenhouse gas reduction such as distributing the small photovoltaic power generations and building up the energy independent towns. The fund will also be used to buy emission rights if they are lacking in the future.