Impacts of Renewable energy Promotion on Income and Employment in the Republic of Korea

초록

Renewable energy promotion is considered together with energy efficiency improvement as an option to mitigate greenhouse gas emissions. Advocates of renewable energy promotion argue that such incentives are justified as impacts of investments in RES on income and employment are positive. However, other studies express concerns on RES promotion. Impacts of such investments on income and employment will largely depend on the productivity of investments in RES. The discussion shows that the productivity of RES is very low due to their higher investment requirements and limited fuel cost saving. Thus, the discussion on impacts of investments in RES on income and employment seems to be not very relevant. More relevant will be the discussion on the cost-effectiveness of CO2 emissions reduction which is the major climate policy objective. Any subsidy payment scheme, whether in the form of FIT or RPS, should be designed to reduce CO2 emissions cost-effectively. As the technology specific subsidy payment scheme favors PV and is not cost-effective, one should consider the introduction of a uniform subsidy per kWh of electricity generated or per ton of CO2 emissions reduced from RES which should be more market conform.