[Asia Future Business Forum] Chey Tae-won "Incentives Should Be Given for Reducing Carbon Emissions... Companies Will Invest More" (Comprehensive)

Chairman Chey Tae-won of the Korea Chamber of Commerce Proposes Alternatives for Achieving Net Zero

"Expand Carbon Neutrality Incentives to Enable Market Mechanisms Rather Than Regulation"

"Government Needs to Advance the 'Golden Cross' Timing and Collaborate with the Private Sector"

Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry, is delivering a congratulatory speech at the '2022 Asia Future Business Forum' hosted by Asia Economy on the 27th at the Western Chosun Hotel in Jung-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Moon Chaeseok]

"From the CEO's perspective, if a system is created so that the more carbon is reduced compared to competitors, the greater the investment benefits and brand value become, completely different behaviors will emerge. It is necessary to expand carbon neutrality incentives so that market mechanisms work rather than regulations. The government should work with the private sector to consider how to bring forward the ‘golden cross’ point where investment benefits exceed carbon neutrality investment costs."

Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry, emphasized the importance of expanding carbon neutrality benefits and public-private cooperation to practice net zero at the opening speech of the ‘10th 2022 Asia Future Business Forum’ held on the 27th at the Westin Chosun Hotel in Sogong-dong, Seoul, under the theme ‘Net Zero is the Future.’

Chairman Choi stated, "Carbon neutrality is not only a response to climate change but also an opportunity that can become a pillar of growth for both companies and the nation, so there is a need to change the perspective of the Korean economy toward carbon neutrality." He added, "The key is to induce corporate action, and for this, carbon neutrality must be approached as a growth platform opportunity rather than a regulation for companies."

Chairman Choi diagnosed that approaching carbon emissions as a ‘cost’ through taxes or emission permits would have limitations in encouraging corporate response. While regulations are not necessarily wrong, he emphasized that as regulatory intensity increases, the scope of incentives should also expand to maintain ‘balance.’ The idea is that the private and public sectors should cooperate so that companies themselves can share the idea that ‘the more carbon emissions are reduced, the more business opportunities will open.’

He said, "The reason the industrial and economic sectors are reluctant toward carbon neutrality is that forced participation through methods such as taxation reduces corporate motivation," and pointed out, "Thinking of carbon neutrality as something to avoid is exactly the result of implementing policies within the ‘regulatory framework.’"

He continued, "If the perception arises that reducing carbon emissions more than before results in corresponding incentives, companies will think about ‘how much we need to reduce and what rewards we get if we reduce more,’ leading them to invest a little more and find solutions faster," explaining, "This means behavior changes and the dimension of investment changes."

He added, "CEOs will encourage ‘reducing carbon emissions even a little more,’ and if this atmosphere spreads, socially, who gains more benefits will become a point of pride," suggesting, "It is necessary to expand incentives so that market mechanisms operate rather than regulations in the process of realizing carbon neutrality."

Chairman Choi also said that a joint private-sector plan should be prepared to bring forward the ‘golden cross’ point where carbon neutrality investment benefits exceed costs from the perspective of companies and the nation. He said, "There is a need for the public and private sectors to find solutions together on ‘how big the carbon neutrality market is and how much funding should be invested in which projects effectively,’" and added, "From the government's standpoint, carbon neutrality is about allocating budget resources, so through cooperation in the allocation process, the public and private sectors will consider together ‘what and how much investment yields greater effects.’"

He also emphasized a success strategy for the ‘golden cross.’ He said, "The golden cross is the point when carbon investment benefits exceed carbon costs," and added, "Since Korea is in a position to increase investments related to carbon neutrality, it must consider ways to bring forward the ‘golden cross,’ and if successful, it will overcome initial costs and lead Korea to take the lead in the net zero agenda while achieving economic growth."

Meanwhile, Chairman Choi plans to hold a ‘Special Roundtable for ESG (Environment, Social, Governance) Innovation Growth of the New Government’ on the 29th at the 20th-floor Chamber Hall of the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, hosted by Ahn Cheol-soo, Chairman of the Presidential Transition Committee. Ahn and Yoo Woong-hwan, a member of the Economic 2 Subcommittee of the transition committee, are expected to participate. About 20 representatives of major member companies from the Chamber and Seoul Chamber will attend. Yoo is expected to directly explain the new government’s ESG policy direction to corporate officials during the roundtable. Yoo is reported to be leading the design of ESG-related policies within the transition committee.