Establishment of "Ministry of Climate and Energy" Draws Attention... Hopes and Concerns Over Conflicts of Interest [New Government Policy Issue]

Ministry of Climate and Energy Linked to Lee Jaemyung's AI Push
Concerns Over 'Conflict of Interest' in Policy Implementation and Oversight

President Lee Jaemyung pledged to establish a "Ministry of Climate and Energy" during his presidential campaign. The most likely scenario being discussed is the integration of the energy policy functions of the Ministry of Trade, Industry and Energy with the climate responsibilities of the Ministry of Environment. The core objective is to create a so-called "climate control tower" that encompasses both economic and environmental considerations. The plan is to manage and coordinate the long-standing conflicts between regulation-focused environmental policies and industry-centered energy policies through a unified ministry.

The background for the new government's establishment of the Ministry of Climate and Energy is closely tied to the artificial intelligence (AI) industry. President Lee has positioned "AI" at the center of Korea's economic growth strategy. He has expressed his ambition to invest 100 trillion won in the AI industry, a future growth engine, with the goal of becoming one of the world's "top three powers" in this field. AI is an industry that requires massive amounts of electricity to operate high-performance servers and computational infrastructure. However, large-scale power generation inevitably leads to corresponding carbon emissions. Therefore, improving energy efficiency and enabling decarbonization have emerged as the core of "Lee Jaemyungnomics." The Ministry of Climate and Energy is intended to serve as the control tower to manage these issues efficiently.

While the rationale for establishing the Ministry of Climate and Energy is clear, there are concerns that integrating government ministries will not be a simple task. One major issue is the competition for leadership among ministries. It is uncertain whether conflicts of interest between policy-implementing ministries and supervisory ministries can be resolved merely through physical integration. There is a risk that organizational operations may immediately tilt toward the area?either climate or energy policy?that gains more influence. If industrial logic takes precedence over climate policy, regulation-centered policies are likely to lose their strength. Conversely, if the focus shifts to environment-centered policies, there is a strong possibility of backlash from industry. In either scenario, policy momentum could be weakened. When industrial promotion and regulatory ministries are separated, as is currently the case, they can check and balance each other. However, if they are merged into a single ministry, there is a greater likelihood that only one perspective will prevail.

A senior official at the Ministry of Environment, who requested anonymity, expressed strong doubts about the establishment and success of the Ministry of Climate and Energy. In an interview with Asia Economy, the official said, "Since the minister of the new ministry would be a political appointee, there is a high probability that the focus will be on short-term policies," adding, "However, energy policy has significant short-term impacts, while climate is a mid- to long-term issue. If both responsibilities are housed in one ministry, which area do you think the minister will prioritize?" The official predicted that the environment would naturally favor a focus on energy policy for short-term achievements. The official emphasized, "An organization dedicated solely to climate and environmental issues must exist in its own right."

From an organizational logic standpoint, there are also concerns that the status of existing ministries could be weakened by the creation of the new ministry. There is immediate concern about the weakening of the link between the energy and industrial sectors. Energy policy is not simply about adjusting power generation; it is connected to various industries such as artificial intelligence, renewable energy, and electric vehicles. If energy is separated from the Ministry of Trade, Industry and Energy, these connections could become more fragile. In practical terms,if the energy policy sector is separated,the scope of future roles for the remaining ministry staff will also be limited. Issues of fairness in assignments cannot be ruled out. Those who have mainly handled or have experience in the energy sector may be more likely to take on key roles in the new ministry.

However, there are also voices cautioning against approaching the issue solely from the perspective of organizational logic. A senior government official, speaking on condition of anonymity, said in a phone interview, "The energy industry is the sector with the highest carbon emissions, making energy transition absolutely necessary. The key is to take a multifaceted approach to determining which energy sources to use and how to procure them to meet power demand. This is not an issue that should be viewed only through the lens of organizational structure."