"Green New Deal, Job Creation Is Difficult"

Government to Announce Detailed Plan Early Next Month
Experts Doubt Policy Effectiveness
"Costs and Regulations May Actually Burden Companies"

On Earth Day, April 22, officials from the Environmental Health Citizens' Center are performing a demonstration at Gwanghwamun Square in Jongno-gu, Seoul, urging the protection of the Earth's environment and the prevention of COVID-19 resurgence. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporters Kim Bo-kyung and Moon Chae-seok] The government is tightening its efforts to promote the 'Green New Deal' aimed at simultaneously revitalizing the environment and the economy. Detailed Green New Deal policies will be announced in early next month, and the related budget will be included in the third supplementary budget bill. However, most experts express skepticism about expecting significant economic stimulus or job creation effects from the Green New Deal to overcome the COVID-19 pandemic. Since the Green New Deal policy fundamentally focuses on responding to climate change, voices are emerging that it should be approached with a long-term plan.

According to the government on the 22nd, detailed Green New Deal project plans will be announced in early next month, and the Green New Deal-related budget will be included in the third supplementary budget. The government has decided to include the Green New Deal in the 'Korean New Deal' to overcome the COVID-19 crisis, with the Blue House leading discussions involving the Ministry of Environment, Ministry of Trade, Industry and Energy, Ministry of Land, Infrastructure and Transport, and Ministry of SMEs and Startups. The Green New Deal is expected to include 'Green Remodeling' to improve energy efficiency in old buildings, energy transitions such as nuclear and coal phase-out, expansion of hydrogen vehicle distribution, and activation of green industries. The policy aims to respond to climate change by reducing greenhouse gas emissions while increasing jobs and revitalizing the economy depressed by COVID-19.

However, economists express doubts about the job creation effects of the Green New Deal. There are concerns that low-carbon and energy efficiency policies, which involve high costs and regulations, could burden companies already struggling due to COVID-19. Professor Kim So-young of Seoul National University said, "Most energy policies are areas where immediate job creation effects are difficult to expect," adding, "Jobs should be created by the market. Artificially created jobs by the government tend to have lower productivity in the long term." Professor Kim pointed out, "There needs to be deliberation on the pace of the Green New Deal policy," and noted, "It seems less efficient than existing job creation policies, and it may be difficult for companies to align with government policies."

Criticism is also raised that the government’s hasty acceleration of the Green New Deal could negatively impact the market. Due to the nature of 'New Deal' policies, short-term economic stimulus effects are required, which conflicts with climate change measures that require mid- to long-term plans. This differs from the policies of European countries proactively responding to climate change. The European Union (EU) is comprehensively promoting the 'Green Deal,' which includes a long-term goal of achieving net-zero greenhouse gas emissions by 2050. It is a mid- to long-term plan looking 30 years ahead.

Professor Sung Tae-yoon of Yonsei University said, "If the government abruptly shifts policies to achieve short-term goals, it could burden companies," adding, "If the burden on companies increases, it will be difficult to practically overcome the economic crisis and create jobs." Professor Ha Jun-kyung of Hanyang University suggested, "Energy efficiency and short-term productivity should both be improved in line with the policy’s intent, but there are similarities to the previous administration’s 'Green Growth' policy and it is quite ambiguous," and recommended, "The government needs to clearly present a vision to the public."