[Consumer Climate Action Column] Cooperatives and Social Economy Responding to the Climate Crisis

Jeong Wongak, Director of Gyeongnam Social Economy Integrated Support Center

On December 10, 2020, the Government of the Republic of Korea declared the ‘2050 Carbon Neutral Vision.’

‘Carbon neutrality’ refers to reducing greenhouse gas emissions caused by fossil fuel use and other sources, and offsetting or removing the inevitably emitted greenhouse gases through forests, wetlands, etc., so that the net emissions become ‘0.’

Accordingly, changes are occurring in various fields, with the transition to a ‘plastic-free’ society being a representative example.

The Asia Economy Honam Reporting Headquarters is running a series of ‘Consumer Climate Action Columns’ to empathize with and participate in the plastic-free movement.

A child appears on the screen worrying, saying, ‘When I grow up, the Earth might get so hot that fish won’t be able to live in the sea. What should we do now?’ This is the content of a public service advertisement.

Global warming and the climate crisis are causing the Earth's temperature to rise continuously, melting glaciers in the Antarctic, Arctic, and perennial snow on the Himalayas and Alps, and triggering extreme weather changes such as cold waves, heatwaves, and typhoons, threatening the survival of flora, fauna, and humans.

Although some conspiracy theories claimed that the crisis caused by global warming was exaggerated, it has now become an unfortunate future that no one can deny or prevent.

However, we cannot give up just because it cannot be stopped. Efforts to minimize the impact are being made by the UN, governments worldwide, civil society, and the economic sector.

The agreed framework embodying these efforts is SDGs 17 (Sustainable Development Goals 17). Of course, climate crisis resolution is not the only goal among the 17 goals, but including directly related goals such as ‘Climate Action’ and ‘Affordable and Clean Energy’ as well as linked goals, more than half are connected.

The UN requires governments to present national carbon reduction targets for 2030 and 2050. The core of overcoming the climate crisis is reducing carbon dioxide emissions, known as the main cause of global warming. To achieve this, fossil fuel use such as oil and coal in electricity production must be suppressed, and energy must be produced through renewable methods such as solar, wind, and water.

Efforts to overcome the climate crisis are not made by governments alone. Companies are also actively involved. Of course, companies do this to leave a good image with consumers and to lead to product sales.

In corporate management, ESG?environmental preservation, social value, and governance improvement?is actively pursued to shed the image that companies are the main culprits of the climate crisis. While some companies like Patagonia have adopted environmental preservation as a more important slogan than profit, most companies are shifting from environmental exploitation to environmental preservation for profit.

A more proactive corporate action than ESG is participating in RE100. RE100 means that companies commit to using 100% renewable energy for the electricity used in manufacturing their products.

Currently, 346 companies worldwide, including global giants such as Google, Apple, Facebook, and Lego, have achieved or joined RE100. In Korea, 14 companies including six SK affiliates, LG Energy Solution, Amorepacific, and Korea Water Resources Corporation (K-water) have joined.

There are criticisms that these trends are being used as barriers for developing countries to export their products to developed countries. Some of these criticisms are valid. However, it is more urgent for the fate of the Earth that these criticisms do not become obstacles to overcoming the climate crisis.

Then, what are social economy sectors, especially cooperatives, preparing for the climate crisis? It is difficult to grasp because the scope and regulations of social economy vary by country.

Instead, we will look at cooperatives, which can be considered representative organizations of the social economy.

Cooperatives have responded relatively quickly to the climate crisis. Many consumer cooperatives in Western Europe, including Sweden, started carbon zero movements in 2006 and 2007, and in Denmark and Germany, renewable energy cooperatives such as solar power cooperatives and wind power cooperatives have been established.

Also, cooperative banks like Merkur in Denmark have invested in renewable energy projects. Looking at this by country, Germany’s Renewable Energy Act enacted in 2000 became a catalyst for the growth of energy cooperatives, which grew to 270 in 2010, 1,080 in 2017, with 180,000 members and power generation exceeding 200,000 GWh.

Japanese consumer cooperatives began participating in renewable energy after the Great East Japan Earthquake in 2011. As of March 2020, there are 392 renewable energy facilities operating nationwide with a capacity of 160 million KWh, and plans to double this by 2030.

In the United States, where 42 million consumers are members and electric energy cooperatives cover 75% of the territory for electricity transmission and distribution, cooperatives have been participating in renewable energy production such as solar, wind, and tidal power since the 2000s, beyond just transmission and distribution.

What about the situation in Korea?

As of 2019, Korea’s total power generation capacity is 131,169 MW, of which renewable energy accounts for 23,172 MW, or 17.7% of the total capacity. Among this, solar power is 11,768 MW, about 9.0%.

Regarding solar power generation facilities owned by cooperatives and cooperative status, the total capacity is 30.6 MW across 137 power plants, with 41 cooperatives and 8,886 members. This accounts for 0.02% of total power generation capacity and 0.26% of solar power generation capacity.

This is far lower than cooperatives in Europe, the United States, and Japan. According to the 2016 announcement by the UK climate change NGO ‘Climate Action Tracker,’ Korea is one of the ‘world’s four major climate villains’ along with Saudi Arabia, Australia, and New Zealand. This is because Korea has the highest carbon dioxide emission growth rate among OECD countries and ranks seventh worldwide in total carbon dioxide emissions.

This is very shameful. Looking at the share of cooperatives in renewable energy, it seems that cooperatives and the social economy are by no means free from this shame.

Since the 19th century, social economy and cooperatives have recognized and responded to social challenges of their times as their own issues.

When countless workers died from unknown occupational diseases, they started mutual aid associations; when capitalists monopolized consumer goods and made excessive profits, consumer cooperatives were formed; when loan sharks exploited citizens with high interest rates, credit cooperatives were founded. Now, facing the climate crisis, a threat to humanity and the Earth’s extinction, it is time for Korean cooperatives and the social economy to respond.