Korea's Experiences in Energy Conservation

초록

Corresponded energy prices to the scarcity of energy resources and were environmental costs of production and consumption of energy resources reflected in energy prices, energy conservation efforts would not be required. However, this has not been the case in Korea. Low energy prices and distorted energy price structure have been the reality. Energy conservation policies have been to complement to certain extent low and distorted energy prices. Korea has pursued low energy price policies. Low energy prices were to promote the economic (industrial) growth, to hold down the general price level in times of high inflation and to support low-income groups. As to be discussed later, the electricity tariffs have been determined to subsidy the industry and low-income groups. The industry was supplied with electricity at Won 60.80 per kWh on average, well under the production costs of Won 73.56 per kWh in 2001. Lower fuel prices have lead to a relatively energy intensive industry structure and made many energy conservation investments in the industry uneconomical. Distorted energy prices (low diesel and butane prices and high gasoline price) in the transportation sector has lead to higher fuel consumption, as diesel and butane cars drive longer and have larger stroke volumes than average gasoline cars. This study discusses first the question whether there have been energy efficiency improvements and the question why the energy intensity (energy/GDP ratio) increased (deteriorated) from 1981 to 2000. Then, this study reviews Korea's energy conservation policies and programmes. At the end, several policy measures to reduce drastically the energy consumption growth are recommended.