October 30, 2009 8:00 pm

Asia ministers fear climate impact on business

Ministers from two of Asia’s tiger economies have said worries about climate change must not compromise business, casting further doubts on whether an international framework on greenhouse gas emissions can be agreed at Copenhagen in December.

Speaking weeks before South Korea is due to set a voluntary target for carbon emissions, Seoul’s minister responsible for industry said on Friday that the country was moving too fast in its attempts to reduce pollution.

“We are going too fast,” Choi Kyung-hwan, knowledge economy minister, was quoted as saying by the official Yonhap news agency on the topic of reining in emissions. “We should examine how many jobs will be lost and whether the competitiveness of major industries can be maintained.”

The ministry confirmed his comments but could not provide more details.

The minister’s remarks raise questions about how widely officials and business leaders in the Asia-Pacific’s fifth biggest economy support the vision of a green new deal proposed by President Lee Myung-bak, who hopes to steer the country away from its heavy manufacturing base. Privately, officials admit the government is sharply divided.

Such sharp divisions bode ill for December’s climate change negotiations, as the country has been seen as a leader on the issue among rapidly emerging economies. Amid fanfare and plaudits, South Korea’s economic stimulus package earlier this year was hailed as the greenest of any country, promising large-scale investment in low-carbon technology. The country’s carefully cultivated reputation as a green champion will take a battering from the industry minister’s comments.

The US, Japan and the European Union are also facing pressure from sections of their industry not to agree stringent cuts in emissions at Copenhagen, though other parts of industry are clamouring for a deal.

Seoul has said it will soon choose from three possible 2020 greenhouse gas targets. One is an 8 per cent increase from the 2005 level, one demands no change and the last is a 4 per cent cut. European diplomats argue only the reduction would be meaningful.

The presidential committee for green growth said it was battling to forge a consensus on emissions with politicians close to the business community but hoped Seoul would be able to announce its target in the middle of November.

South Korea, home to massive car plants, dockyards and steel mills, was the fastest growing emitter in the Organisation for Economic Co-operation and Development between 1990 and 2005. The United Nations Environment Programme has also queried South Korea’s low renewable power target of 6 per cent by 2020 compared with 20 per cent in China and the EU.

The president and his close advisers have repeatedly mapped out a vision of new green growth engines for the economy, looking to move into sectors such as solar panels and wind-turbines. Rather than being a handicap, the government is trying to persuade Korean companies they can profit from carbon markets.

This issue is increasingly pressing as the international community is expected to define South Korea as a “developed” economy from 2012.

Separately, Singapore’s minister for environment and water, Yaacob Ibrahim told the Straits Times: “Whatever we do, we cannot compromise our ability to grow. How we find a balance will be a continuous process.”

He said Singapore would play its part in reducing emissions but reiterated the country had no obligation to do so.

Last week, Lee Kuan Yew, Singapore’s founding father and minister mentor, opposed imposing emission targets, saying such a move would be unfair and would hamper economic growth. Singapore says it will try to combat emissions through increased energy efficiency.

Additional reporting by Fiona Harvey in London

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