{"id":2205362,"date":"2024-06-04T18:38:22","date_gmt":"2024-06-04T09:38:22","guid":{"rendered":"https:\/\/koreapro.org\/?p=2205362"},"modified":"2024-06-05T19:07:44","modified_gmt":"2024-06-05T10:07:44","slug":"as-summer-rains-loom-south-korea-confronts-the-economic-costs-of-climate-change","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/06\/as-summer-rains-loom-south-korea-confronts-the-economic-costs-of-climate-change\/","title":{"rendered":"As summer rains loom, South Korea confronts the economic costs of climate change"},"content":{"rendered":"

South Korea\u2019s summer monsoon season will officially begin in the coming weeks, kicking off a roughly monthlong period of near-daily rainfall when the country most acutely feels the worsening consequences of climate change.<\/span><\/p>\n

Flooding last summer caused <\/span>dozens of deaths<\/span><\/a> and extensive <\/span>property and agricultural damages<\/span><\/a>, and the memory of such disasters has <\/span>authorities bracing<\/span><\/a> for heavy rains in the weeks ahead.<\/span><\/p>\n

But the physical devastation of these seasonal monsoons is merely the tip of the proverbial melting iceberg when it comes to the impacts of climate change on the ROK.<\/span><\/p>\n

Global warming poses sweeping risks to sectors across the South Korean economy, from adverse weather disrupting agricultural production and driving up food prices to high heat increasing the financial strain on state-run energy companies.<\/span><\/p>\n

Moreover, the country\u2019s manufacturing sector, particularly its automotive and semiconductor industries, faces challenges adapting to a low-carbon future, while demographic shifts may compound the long-term economic consequences of climate change.<\/span><\/p>\n

But while a <\/span>new survey<\/span><\/a> shows that nine out of 10 South Koreans believe that the country is now facing a climate crisis, recent lawsuits have called into question whether the government is doing enough to address the problem, and could compel Seoul to take more drastic measures before it\u2019s too late.<\/span><\/p>\n

ECONOMIC TOLL<\/b><\/p>\n

Heavy rainfall and heat waves have had significant economic consequences for South Korea.<\/span><\/p>\n

The country recorded its <\/span>hottest April in over a half-century<\/span><\/a> this year, with the average temperature 2.8 degrees Celsius higher than between 1991 and 2020.\u00a0<\/span><\/p>\n

At least <\/span>23 people<\/span><\/a> died due to summer heat waves last year, about three times the number of heat-related deaths from 2022. As summer months get hotter, that number will likely further increase.<\/span><\/p>\n

Additionally, heavy rainfall during the summer monsoon season has had an increasingly severe impact. <\/span>Last year\u2019s flooding<\/span><\/a> displaced over 10,000 residents, and about 40 people lost their lives.<\/span><\/p>\n

Heavy rains also <\/span>inundated<\/span><\/a> approximately 77 square miles of farmland and killed more than 561,000 livestock animals. Such devastation to agricultural production inflates produce prices, contributing to a rise in the consumer price index and placing additional financial pressure on households.<\/span><\/p>\n

According to the <\/span>Organization for Economic Cooperation and Development<\/span><\/a> (OECD), South Korea\u2019s inflation rate of \u201cfood and non-alcoholic beverages\u201d in February was 6.95%, exceeding the OECD average of 5.32%.<\/span><\/p>\n

The economic impact of these extreme weather events extends beyond the agricultural sector. Heavy rains also damaged public and private properties, with 628 public facilities and 317 private properties affected, including the collapse or inundation of roads and homes. Power failures caused by the heavy rains affected more than 28,000 households nationwide.<\/span><\/p>\n

\"\"

Cars submerged under water due to floods, Aug. 8, 2022 | Image: Korea Meteorological Administration<\/a><\/em><\/p><\/div>\n

UTILITY COMPANIES UNDER PRESSURE<\/b><\/p>\n

South Korea\u2019s state-run energy companies, Korea Electric Power Corporation (KEPCO) and Korea Gas Corporation (KOGAS), face significant financial strain as people consume more electricity to escape from intense heat waves.<\/span><\/p>\n

These challenges have led to rising debt levels and a growing need for price adjustments, which could have far-reaching implications for the energy sector and consumers.<\/span><\/p>\n

KEPCO, the country\u2019s largest electric utility, has accumulated a staggering debt of $147 billion (<\/span>202.5 trillion won<\/span><\/a>) as of the end of 2023. This has been exacerbated by the company\u2019s practice of supplying electricity at prices <\/span>lower than the cost of production<\/span><\/a>, particularly during the surge in global energy prices following the Russian invasion of Ukraine.<\/span><\/p>\n

Similarly, KOGAS, the state-run natural gas supplier, has amassed a debt of $34.4 billion (47.4 trillion won).<\/span><\/p>\n

The mounting debt has forced these energy giants to spend substantial amounts on interest payments. In the first quarter of 2024 alone, KEPCO and KOGAS spent a combined $1 billion (1.5 trillion won) on interest charges, equating to a daily interest expense of $12 million (16.7 billion won).\u00a0<\/span><\/p>\n

As a result, both companies <\/span>have emphasized<\/span><\/a> the need for price hikes to reduce debt and ensure their ability to invest in essential power infrastructure.<\/span><\/p>\n

However, price adjustments will likely face pushback from consumers and businesses grappling with <\/span>inflation<\/span><\/a>. Higher energy prices could further strain household budgets and increase business operating costs, potentially hampering South Korea\u2019s <\/span>economic recovery<\/span><\/a>.<\/span><\/p>\n

INDUSTRIAL SECTOR BLUES<\/b><\/p>\n

South Korea\u2019s industrial sector is also grappling with the challenges posed by climate change. Carbon-intensive industries like automobiles and semiconductors are particularly vulnerable to shifting <\/span>environmental regulations<\/span><\/a> and changing consumer preferences.<\/span><\/p>\n

For instance, the automotive industry, a cornerstone of South Korea\u2019s manufacturing sector, is navigating the transition toward electric vehicles (EVs) and <\/span>low-carbon transportation<\/span><\/a>.\u00a0<\/span><\/p>\n

As governments worldwide implement stricter emissions standards and consumers increasingly demand eco-friendly options, South Korean automakers risk losing market share if they fail to adapt quickly.<\/span><\/p>\n

Similarly, the semiconductor industry, another pillar of the country\u2019s economy, faces pressure to reduce its carbon footprint and adopt more sustainable production practices.<\/span><\/p>\n

However, this will require significant investments in research and development and the implementation of policies that incentivize the adoption of cleaner production methods and renewable energy sources. While the Yoon administration has <\/span>vowed to boost R&D spending<\/span><\/a> in next year\u2019s budget, the move comes after the government <\/span>slashed<\/span><\/a> its R&D budget for this year.<\/span><\/p>\n

As other nations prioritize sustainability and low-carbon solutions, South Korean companies risk losing ground in international markets. This, in turn, could lead to reduced exports, job losses and a decline in the country\u2019s overall economic growth.<\/span><\/p>\n

\"\"

Deputy industry minister Kang Kyung-sung (blue jacket) inspects power plant facilities ahead of the typhoon season, Aug. 10, 2023 | ROK Ministry of Trade, Industry and Energy<\/a><\/em><\/p><\/div>\n

CLIMATE CHANGE-RELATED LITIGATION<\/b><\/p>\n

Climate change-related litigation is emerging as a significant factor in shaping South Korea\u2019s response to the global climate crisis.\u00a0<\/span><\/p>\n

In April, over 250 plaintiffs, including a 17-month-old child, <\/span>filed a petition<\/span><\/a> with the country\u2019s Constitutional Court arguing that the government\u2019s \u201cinadequate\u201d action on climate change violates their fundamental rights.<\/span><\/p>\n

The case spotlights the growing recognition of climate change as a human rights issue. The plaintiffs contend that the government’s current emissions reduction target of <\/span>40% by 2030<\/span><\/a> compared to 2018 levels is insufficient, stating that this infringes upon their constitutional rights to life, health and a clean environment.<\/span><\/p>\n

The outcome of this case could influence South Korea\u2019s climate policies and the judiciary\u2019s role in holding the government accountable for its climate commitments.\u00a0<\/span><\/p>\n

A ruling in favor of the plaintiffs would set a precedent for similar legal challenges in the future. As public awareness of the linkages between climate change and human rights grows, the government may face increasing pressure to adopt more ambitious emissions reduction targets and implement more robust climate adaptation measures.<\/span><\/p>\n

The success of this litigation could also embolden civil society groups and individuals to pursue legal avenues to drive further action on climate change.<\/span><\/p>\n

However, South Korea\u2019s reliance on <\/span>carbon-intensive energy sources<\/span><\/a>, such as coal, will make it challenging for its industrial sector to pivot toward cleaner alternatives. In the meantime, it will likely impede South Korean firms\u2019 ability to compete in the international market.<\/span><\/p>\n

DEMOGRAPHIC RISKS<\/b><\/p>\n

The long-term economic implications of climate change for the country\u2019s demographic trends also cannot be overlooked.<\/span><\/p>\n

As the country grapples with an aging population and a declining birth rate, the impact of climate change on different generations could exacerbate existing challenges and create new ones.<\/span><\/p>\n

For the younger generation, the burden of addressing the consequences of climate change will fall heavily on their shoulders. They will be faced with the task of adapting to a rapidly changing environment while also dealing with the economic fallout, such as potential job losses in carbon-intensive industries and increased costs of living due to climate-related disasters.<\/span><\/p>\n

If the government fails to take adequate measures to support the youth in navigating these challenges, this could lead to growing <\/span>intergenerational tensions<\/span><\/a> and social instability.<\/span><\/p>\n

Meanwhile, the elderly population, projected to comprise over <\/span>40%<\/span><\/a> of South Korea’s population by 2060, is especially vulnerable to the adverse effects of climate change, including heat waves and air pollution.<\/span><\/p>\n

The increased health care costs associated with treating climate-related illnesses could strain the country\u2019s social welfare system and divert resources away from other critical areas of the economy.<\/span><\/p>\n

As the working-age population shrinks and the elderly population grows, South Korea may face significant challenges in maintaining its economic growth and social stability in the face of climate change, but it remains to be seen whether the government will make difficult decisions to address climate change head on related challenges grow more acute.<\/span><\/p>\n

Edited by Alannah Hill<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Culture & Society<\/span><\/a>Domestic Politics<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

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