Hyundai Economic Research Institute’Changes in the International Order in the Era of Carbon Neutrality and Our Response’… Presenting 7 major challenges
Countermeasures must be prepared to maximize the positive effects of carbon neutrality and minimize negative effects.
[에너지데일리 변국영 기자] It was analyzed that it was necessary to present a policy vision based on the social deliberation model to minimize the conflict caused by the transition to the carbon-neutral era.
The Hyundai Economic Research Institute presented the’seven major challenges’ including these contents in the report’Changes in the International Order in the Era of Carbon Neutrality and Our Response’.
The report stated that an objective analysis of economic and social changes resulting from the transition to a carbon-neutral era is necessary, and that countermeasures must be prepared to maximize the positive effects that can occur and minimize negative effects.
He suggested that it is necessary to present a policy vision based on a social deliberation model in order to minimize the conflict arising from the transition to the carbon neutral era, and that it is necessary to establish a new energy governance led by the private sector to attract the participation of all stakeholders who sympathize with the carbon neutral vision. . In addition, it is necessary to create an environment that can implement policies that can be realized while considering the growth and environment of the company at the same time, and that it is necessary to establish policies that enable sustainable growth. It said that it is necessary to implement an energy ecosystem. He also predicted that as a responsible member of the international community, it was necessary to strengthen solidarity and cooperation and actively participate in the process of solving global problems.
▲ Carbon neutral vs. Korean economy at a crossroads in economic growth
While there is concern about the impeding economic growth due to economic costs and losses resulting from the realization of a low-carbon economy, it is necessary to expand growth potential and prepare an opportunity for sustainable growth in the mid- to long-term.
It is evaluated that the stronger the degree of response policy in the carbon neutral transition process, the greater the benefit as it can reduce the damage to the growth potential. However, globally, the cost of conversion due to the promotion of carbon neutrality is expected to be high. However, domestic Green New Deal policies and investments in new industries can serve as new opportunity factors, and it is estimated that sustainable economic growth can be expected through active responses to energy conversion.
▲ Establishing an industrial ecosystem that guarantees coexistence
It is necessary to present the future direction of the entire energy industry and to implement an ecosystem of participation, communication, integration, and coordination of various stakeholders. The necessity of realizing an industrial ecosystem that can coexist is emerging as the frustrations between fossil fuel companies and new and renewable energy companies are mixed according to the energy conversion policy. In particular, it is expected that an integration and coordination function that can support the sustainable growth of the energy industry amid changes in the industrial and energy environment is expected.
▲ Concerns and survival strategies of companies in the era of carbon neutrality
Companies should recognize opportunities and crises amid the paradigm shift in the era of carbon neutrality and strive to establish management strategies that can change the core competencies of companies by seizing them. Companies are most concerned about the environmental regulations that may arise in the process of implementing carbon neutrality and the corporate burden that may arise. Amid the global paradigm shift of carbon neutrality, domestic companies are actively responding by establishing business strategies focused on improving energy efficiency, expanding the use of renewable energy, and producing eco-friendly products.
▲ Improving public burden and quality of life
The public burden may increase during the energy conversion process, but benefits through environmental protection and improvement are also expected to increase. In the process of energy conversion and renewable energy structure conversion, there is also the possibility that the public burden will increase, such as a rise in utility bills and inflation. However, it is expected that national benefits that can arise in terms of environmental protection benefits such as air quality and water pollution are expected to be large.
▲ Changes in energy governance
Since carbon neutrality can have various effects on the country, industry, and corporations, it is necessary to deviate from the hierarchical policy execution centered on the government and build energy governance that can encompass the challenges of industry, corporations, and citizens. The energy paradigm is shifting from energy supply-centered to demand management and climate change response, requiring the participation of various stakeholders such as industries, companies, and citizens. In particular, in the industrialization period, the role of the public sector was important to supply inexpensive and stable energy, but under the change of energy paradigm and the environment of the internal and external energy industry, the private sector’s leading role will be important.
▲ Establishing successful and sustainable policies
It is necessary to establish a policy to achieve economic and social prosperity through innovation while building a sustainable energy system on the basis of stability and growth. While maintaining the value of’stable energy supply’, which has been pursued in the existing energy policy, it is necessary to switch to a sustainable energy system in order to settle the energy conversion policy in the long term. In addition, it is necessary to improve national competitiveness by devising policies that can simultaneously achieve economic development and improvement of people’s quality of life by improving domestic energy policy conditions and leading new industries.
▲ Response to changes in the global energy paradigm
As governments and regulatory agencies around the world reinforce global regulations on environmental protection, the economic order is changing, so it is necessary to prepare countermeasures to minimize negative impacts. Changes in the trade environment resulting from the climate change crisis are inevitable negatively affecting Korea, which is highly dependent on trade due to the existence of regulatory policies planned or already being implemented by major developed countries. As global companies are proactively or autonomously pursuing a carbon-neutral management strategy as it is an important time to manage climate risk from the front, domestic companies should also consider ways to participate.
Copyright © Energy Daily Unauthorized reproduction and redistribution prohibited