S. Korea to adopt new program for greenhouse gas reduction

SEOUL (Yonhap) - South Korea will introduce a new program next year that calls for large companies and their smaller suppliers to work together to reduce greenhouse gas emissions, the government said Tuesday.
The so-called green credit system will allow large companies to receive carbon credits from suppliers in return for offering the latter with money and technology to reduce their greenhouse gas emissions, the Ministry of Knowledge Economy said.
To that end, large South Korean companies such as top carmaker Hyundai Motor Co. and leading steelmaker POSCO signed a memorandum of understanding with their subcontractors, the ministry said.
The program is expected to encourage large companies to inject up to 1 trillion won (US$913 million) worth of investments into their smaller suppliers over the next 10 years, the ministry predicted.
Large conglomerates in such areas as power generation, electronics, petrochemicals, auto manufacturing and steel account for 58 percent of all greenhouse gases released by South Korea and consume 41 percent of energy used.
"Carbon credits earned through this process can help stem global warming and contribute to South Korea releasing 30 percent less greenhouse gases than the business-as-usual level by 2020," said Toh Kyung-hwan, head of the ministry's energy conservation office. "The system will also benefit conglomerates and their suppliers alike."
In late 2009, South Korea voluntarily made the pledge as part of the worldwide effort to stem global warming.
The ministry also said it is pushing to give conglomerates tax deductions equivalent to 7 percent of the money they use to help their suppliers reduce energy consumption and greenhouse gas emission levels.