South Korea Companies and Government to Spend Billions More on Clean Energy

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The top 30 industrial groups of South Korea are planning to invest 22.4 trillion won ($18.5 billion) in clean energy projects by 2013, Bloomberg reported this week.

This proposed investment, which will be for 2011-2013, is a 48% increase over the past three years (in which they spent 15.1 trillion won).

The government is also stepping up its financial commitment to clean energy considerably.

Samsung Group, South Korea’s largest industrial group, and LG Group are taking the lead in the private sector.

Samsung Group is planning to invest 23.3 trillion won alone by 2020 for new clean energy projects, including for solar cells and electric vehicle batteries.

LG Group is planning to invest another 20 trillion won by 2020 to cut greenhouse gas emissions and develop more energy-saving products.

In addition to the great investments these industry leaders are making, the South Korea government just announced plans to more than double its financing for research and development in this field over the next few years. It is now planning to invest 3.5 trillion won ($2.9 billion) by 2013. On the whole, the government is planning to spend 107.4 trillion won ($85 billion) — 2% of the country’s annual GDP — on green projects between 2009 and 2013. If the US invested a comparable amount of its national wealth, it would be investing approximately $275 billion annually.

“Such support is needed since green R&D requires long-term investments and has relatively slow returns, which can cause private companies to delay making critical decisions,” the ministry said.

As the OECD’s fastest-growing carbon emitter and the world’s fifth-largest crude oil importer, these investments in the clean energy economy by South Korean companies and government are a very important part of addressing climate change.

The country has become a leader in this field and hopefully more countries will follow closely behind it. It had approximately 80% ($38 billion) of its economic recovery spending earmarked for low-carbon projects, a recent UN report found. For comparison, the US spent about 12% of its economic recovery funding on such projects. South Korea is also planning to build the world’s first nationwide smart grid system (by 2030).

Hopefully we will see more good news like this from other countries in the near future.

Image Credit: erjkprunczyk via flickr