[Exclusive] Support for Greenhouse Gas Reduction in Developing Countries... Government to Completely Revamp Environmental Official Development Assistance

Ministry of Environment Develops Green ODA Promotion Strategy
Green ODA Budget Increased by 260% but Effectiveness Lacking
"Let's Establish an Effective Strategy" Consensus Formed
Creating K-Aid Brand in Global Green Market

The government is completely revising its green Official Development Assistance (ODA) strategy. Small-scale, one-off projects with minimal impact will be drastically reduced, while large-scale and package projects will be expanded. Plans to link these efforts with the overseas expansion of Korean companies are also being prepared. This strategy is interpreted as aiming to catch two rabbits at once: 'supporting domestic companies' and 'reducing greenhouse gas emissions.'

Creating the 'K-ODA' Brand in the Global Green Market

According to a comprehensive report by Asia Economy on the 6th, the Ministry of Environment established the 'Green ODA International Development Cooperation Promotion Strategy' on the 1st, centered on these contents. Green ODA refers to support projects for developing countries that consider the environment. Unlike the past, which focused solely on poverty eradication, the goal now is to assist green transition efforts such as climate change and greenhouse gas reduction. This reflects the growing importance of green ODA as environmental issues have emerged as a core concern in the international community.

According to the plan, the government will design and discover large-scale package projects linked to export support and international reduction achievements. Initially, it will create a 'Green ODA brand' in the water, sanitation, and energy sectors that can attract international attention. In the future, it plans to expand into biodiversity and plastics, areas of high international interest. Successful ODA projects will be expanded to other regions, and even after ODA ends, efforts will be made to link them to 'international reduction projects' recognized for greenhouse gas reduction volumes.

International cooperation partnerships will also be actively utilized. The Ministry of Environment plans to pre-plan Green ODA projects ahead of high-level bilateral talks or multilateral meetings such as the G20 summits. When discovering ODA projects, the government's pre-established diplomatic strategies will be prioritized. Vulnerable countries that are difficult to support one-on-one will be assisted through the international networks of multilateral organizations.

The Green Transition Initiative (GTI) will simultaneously pursue performance creation and national interest realization. GTI is a climate change response platform launched in March by Korea along with six countries and seven institutions. Through GTI, the government plans to identify environmental issues and development needs of member countries and secure promising ODA projects. From the preliminary review stage, it will secure reduction achievements and promote linkage to follow-up projects in sectors with high private sector entry potential.

Strategically Seizing the Green Market... "Aid as a Link to Overseas Expansion"

The background for the government's revision of ODA policy includes self-reflection that 'there is no effective strategy.' Korea's ODA remains at a rudimentary stage despite increasing demand for green infrastructure in developing countries. The Ministry of Environment's ODA increased by 14 billion KRW (264.1%) from 5.3 billion KRW in 2021 to 19.3 billion KRW this year, mostly in water resource projects. In 2021, there were no other projects, and this year, only about 7.6 billion KRW. This is in stark contrast to advanced countries promoting various climate and environmental ODA projects.

Criticism that many ODA projects are small-scale is also a reason. There have been concerns inside and outside the government that the small scale of ODA projects reduces their effectiveness. On the 7th of last month, Assemblyman Cho Jeong-hoon of the Transition Korea party stated at the National Assembly Budget and Accounts Committee, "It is better not to conduct ODA projects under 1 billion KRW," adding, "30-40% is wasted on administrative and travel expenses. Small amounts need to be consolidated." Foreign Minister Park Jin also responded, "I think there is a need to reduce small-scale ODA." The Ministry of Environment acknowledged in an internal report that "one-off and small-scale projects were mainly promoted, resulting in insufficient achievement of the national greenhouse gas reduction target (NDC)."

The Ministry of Environment will also enhance post-management levels to ensure smooth application of the Green ODA strategy. Monthly execution review meetings will be held, and internal regulations equivalent to those of the OECD Development Assistance Committee will be established in the second half of next year. An integrated ODA management platform will be created within the Ministry to share trends, project information, and outcomes.

An official from the Ministry of Environment explained, "Recently, green industries have been activated due to climate change issues, and globally, governments are supporting their domestic companies' entry into related markets," adding, "In Korea as well, it was judged that Green ODA should achieve its own purpose as aid while serving as a link to overseas expansion."