UC Berkeley

This dissertation focuses on analyzing the problems of the institutional structure and the process of energy policymaking for carbon pricing as a domestic implementation scheme of the global climate accord and making proposals for improvement. The case of South Korea illustrates the political and institutional challenges and conflicts that the global climate change scheme faces concerning local implementation. The country has recently experienced continued lower rate of renewable energy generation and acute political conflicts on energy options, despite ambitious commitment to reduce greenhouse gases communicated globally. This study analyzes the political and institutional causes of the current problems with the South Korean energy regulatory scheme as a case study and makes proposals for the institutional and instrumental changes required to mitigate those problems. The goal of the proposals is to build a more efficient energy policymaking process with enhanced transparency in order to make the energy generation and consumption of South Korea more sustainable, which will enable the country to contribute to global efforts concerning climate change mitigation.

The dissertation begins by reviewing energy policy documents, research papers containing cost-benefit analyses and the carbon pricing created by multiple agencies of the Korean government, which were obtained through official information disclosure requests filed with the Korean government. The analysis focuses on the less refined cost-benefit analysis, the inconsistent and unfounded method of carbon pricing in each document, and the dynamics among relevant agencies by comparing the subtle difference in the way each agency handles energy policy, including carbon pricing. This review further elaborates on the less aligned aspects of the relevant policy instruments, such as the traditional command-and-control style of environmental regulations and the status of their implementation, a newly introduced market-based emissions trading scheme, the wholesale electricity pricing mechanism with the market structure and carbon pricing methodology.

Proposals to mitigate those problems based on a comparative review of corresponding U.S. energy policy follow in three aspects, addressing the practicality and the expected political conflicts: (i) instrumental changes in energy policymaking required to make the cost-benefit analysis for energy policies more accountable, efficient, and transparent, reflecting proper carbon pricing; (ii) improvements of the current nation-wide, market-based emissions trading scheme for CO2, with further refinement of the relevant command-and-control type regulations, and the electricity price scheme; and (iii) institutional changes required in the structure of the relevant agencies and the electric power market required to build a more solid institutional infrastructure to effectively implement domestic climate-change policy, securing noticeable independence from political changes.