THE ECONOMIC IMPACTS OF IMPLEMENTING NET ZERO POLICIES IN KOREA: A COMBINED TOP-DOWN AND BOTTOM-UP APPROACH

Ki-Bok Chang, Sung Won Kang, Oh Sang Kwon, Seoungho Lee, Jeongeun Lee and Yoonmo Koo
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Ki-Bok Chang: Korea Environment Institute, 370 Sicheong-daero, Sejong 30147, Korea
Sung Won Kang: Korea Environment Institute, 370 Sicheong-daero, Sejong 30147, Korea
Oh Sang Kwon: ��Department of Agricultural Economics and Rural Development and Integrated Major in Global Smart Farm, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea
Seoungho Lee: ��Korea Energy Economics Institute, 405-11 Jongga-ro, Jung-gu, Ulsan 44543, Korea
Jeongeun Lee: Korea Environment Institute, 370 Sicheong-daero, Sejong 30147, Korea
Yoonmo Koo: Technology Management, Economics and Policy Program, College of Engineering, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea5Graduate School of Engineering Practice, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, 08826, Korea

Climate Change Economics (CCE), 2025, vol. 16, issue 01, 1-18

Abstract: The South Korean government aims to achieve carbon neutrality by 2050. Here, this study analyzed the economic efforts of the net-zero policy by integrating top-down and bottom-up models; The UNIfied Climate Options Nexus (UNICON) within this study aims to create a link between the 26 sectors from the bottom-up model and the 85 sectors of the top-down model. Positive mathematical programming methods were used to ensure consistency between the top-down and bottom-up models within the base year. The study found that the total reduction rate was slightly higher in the integrated model than in the computable general equilibrium (CGE) stand-alone model. In both models, the reduction rate increased when the carbon tax increased, but the marginal reduction rate was considerably lowered, and the reduction rate did not exceed 80% even with the high level of a carbon tax. The technological change of the linked industries in the integrated model showed that the steel industry had the highest emission reduction. When estimating costs for reducing GHGs, results can vary based on the technological changes under consideration.

Keywords: Carbon; CO2; net-zero; CGE; bottom-up; UNICON (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S2010007824400116

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