Explained: Research Paper on Decarbonizing Road Transport in Korea

Written by: Ethan Brown

Edited by: Sophia Eli

Junior Division

One of the most serious environmental concerns our planet faces is carbon emissions from road transportation, from which 15% of global emissions are generated (Kim et al., 2024). Gas-powered Internal Combustion Engine Vehicles (ICEV) are massive contributors to global warming. Researchers at the Korea Environment Institute, Jeongeun Lee, Yong-Gun Kim, and Hyungwoo Lim, authored a fascinating paper entitled “Decarbonizing road transport in Korea: Role of electric vehicle transition policies”. It was published in Transportation Research Part D: Transport and Environment in March of 2024. The paper constructs a general equilibrium model to analyze the impact of transportation on the Korean road transport system, looking at both environmental impact and economic effect. A general equilibrium model explains how an outside shock shifts the entire economy. In this model, the external shock was the modification of the government's road transport policy. Their model simulated how changes in the supply and demand of transportation impact the larger economy. As many countries, including Korea, plan to attain net-zero emission levels by 2050, it is essential to implement effective policies to transition to cleaner modes of transportation. The research paper by Lee et al. provides great insight into the projected impact of certain policy cases.

The paper begins by pointing out the flaw with the South Korean government’s current emission reduction policies. Alone, they are not enough to reach net-zero emission levels by 2050. This would result in continued environmental degradation. While the government has numerous measures in place to encourage Electric Vehicle (EV) use and promote movement away from ICEVs, they are insufficient: New road emissions fell by only 0.02% between 2018 and 2021. Furthermore, emissions increased post-pandemic. Thus, the paper establishes that CO2 reduction targets are not on track to be satisfied.

Compiling baskets of policy tools, Lee et al.’s paper introduces three outcomes: current, advanced, and stringent. These baskets are a compilation of a certain set of existing or proposed transportation laws. The “advanced” set of policies demands that the government expand the duration and value of rebates for the EV purchase subsidies in addition to implementing a Vehicle‑Kilometers‑Traveled (VKT) Tax. The “stringent” basket of clean transportation policies conserves all of the taxes and incentives described in the advanced basket; however, the basket additionally recommends the introduction of a complete ban on internal combustion engine vehicles.

Most of the data on which the recommended policies were based was gathered from the Korea Automobile Manufacturers Association and the Bank of Korea. The data was entered into their general equilibrium model, which then computed expected vehicle purchase decisions, such as the choice to drive an EV over a gas-powered car. It translated these predictions into tangible economic and environmental data points. Along with environmental impacts like CO2 emissions, the model estimates economic outcomes as well, accounting for GDP, price points for consumers, and government revenue.

Using the general equilibrium model, the paper was able to estimate that the “current” South Korean government policy basket will reduce vehicle CO2 usage by 78.7%. While this is a significant improvement, it is not enough to reduce emission levels to net zero by 2050. Notably, the “advanced” basket of policies would reduce vehicle CO2 emissions by 81.2% - only a marginal improvement compared to the “current” basket. Only the mix of policies recommended by the “stringent” basket would achieve the net-zero target for transportation emissions by 2050, providing a staggering 99.6% reduction in CO2 emissions.

When it comes to the economy, “advanced” or “stringent” transportation policies would boost welfare. While there may be hiccups in the short run as society rapidly shifts away from gas-powered cars to EVs, the data suggest that real GDP can grow by almost an additional percentage point as a result of more comprehensive EV policies such as those described under the “advanced” or “stringent” baskets. In both cases, manufacturing, consumption, and trade balance are predicted to improve significantly. EV manufacturing would also consequently boom, while Internal Combustion Engine Vehicle (ICEV) manufacturing would be constricted. Public transport use would increase marginally as well. In addition to the environmental concerns, continuing on the current path means a lost economic opportunity.

While the research paper is compelling, relevant, and empirically grounded in discussing EV policy to support economic and environmental goals, one possible limitation is that it does not clearly discuss how public transit can be used as an alternative or supporting strategy for decarbonization. While the article mentions public transport ridership, it does not describe any specific ideas. It would strengthen the case for a certain road transport policy mix if there were a prediction as to how it might bolster public transit.

Furthermore, the paper does not deal with the upstream emissions resulting from a heightened demand for mining. EV batteries require raw materials such as lithium, cobalt, nickel, graphite, and manganese. The intensive mining process required to extract these materials can degrade the natural environment (Snel, 2023). Moreover, as manufacturing EV batteries requires high levels of energy, the electricity used in manufacturing must be produced from a sustainable source. The paper cohesively reveals the impact of government policies on on-road emissions, but there is still much to explore when it comes to alternative factors such as public transit and battery manufacturing.

Although the paper focuses on Korea, effective road transit policy carries global implications for almost every major economy. Across the globe, countries have pledged to attain net-zero emissions by a future date, but struggle to contend with an overreliance on gas-powered cars in achieving this goal. Economic conditions in Korea are similar to those of many other advanced economies, meaning that the authors’ results can reasonably be applied to similar countries and offer valuable insights for practical solutions. Moreover, South Korea is a major manufacturer as well as importer and exporter of automobiles, so they have an outsized effect on the global automobile market - as the paper states, “South Korea ranks fifth globally in automobile production.” Thus, the path their automobile economy takes certainly influences the global EV market.

Overall, the paper skillfully demonstrates how road transportation laws impact climate change and economic growth. It is undoubtedly a worthwhile contribution to academic research as it informs policymakers in Korea - and around the world - how to craft effective and environmentally-friendly road transport policy.

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References 

Kim, Y. -G., et al. (2024). “Decarbonizing Road Transport in Korea: Role of Electric Vehicle Transition Policies.” Transportation Research Part D: Transport and Environment, Vol. 128, pp. 104084–104084, https://doi.org/10.1016/j.trd.2024.104084.

Snel, P. (2023). “Can Electric Vehicles Save the Planet?” Department of Civil & Mineral Engineering, civmin.utoronto.ca/can-electric-vehicles-save-the-planet/.