Application of AIM/Enduse Model to Korea

Abstract

The AIM-Korea Model has been developed to analyze global environmental policies together with local ones in Korea. Various scenarios are considered for analyzing policy options to reduce CO₂ emissions. The major findings of this study can be summarized in terms of three aspects. Firstly, CO₂ emissions will continue to increase as long as energy demand increases. It could be difficult to introduce in the market by 2020 energy savings or devices with low CO₂ emissions in every sector without implementing any climate policy measures. Secondly, the policy implications of the mitigation of CO₂ emissions in Korea is that the adoption of energy-saving devices should be further encouraged, which is indicated by the simulation results showing that the scenario of providing subsidies leads to the most effective reduction in CO₂ emissions, as opposed to imposing only a carbon tax. Thirdly, the marginal cost of mitigating CO₂ emissions varies according to the sector. Hence, it is important to identify the potential sectors where CO₂ emissions reductions might be achievable at relatively low cost. According to the simulation results, the transportation, residential and commercial sectors could be potential candidates.