[Indo-Pacific Strategy Special Report] ④ Pursuing a Leading Role in Green Transition, Health, and Energy Sectors

I. Contribution of Ecological and Environmental Cooperation Strategies in the Indo-Pacific Region

Ecological and environmental cooperation strategies in the Indo-Pacific region are discussed as a key area of cooperation for the common good of humanity and as a framework to overcome interest-based policies exemplified by the US-China dynamic. Furthermore, it contributes to the design and establishment of climate change cooperation mechanisms in the Indo-Pacific region by strengthening cooperation with climate change-vulnerable areas, including island nations in the Indo-Pacific. Ecological and environmental cooperation, including climate change, is a core element of cooperation centered on freedom, peace, prosperity, and values-based norms.

[Background of the Indo-Pacific Strategy]The Biden administration seeks to achieve prosperity and ensure security by building an Indo-Pacific strategy that connects with allies and partner countries. This serves as an innovative link not only for competition with China but also for responding to urgent issues such as climate change and pandemics. Furthermore, the Indo-Pacific Economic Framework (IPEF) was established with the aim of developing supply chains, realizing joint investments in decarbonization and clean energy, and reducing the vulnerability of regions affected by climate change and environmental impacts through a series of cooperative efforts.

[Points of Contact with Korea]Korea has expressed concern over rapid climate change and possesses the capabilities and knowledge to address it. For instance, the Korean government has proactively responded to climate change by proposing Green Growth in 2008 and the Green New Deal policy in 2020. Considering these points, Korea can play an active role as a partner country for technological and policy cooperation related to climate change with IPEF participating countries.

[Climate Change Cooperation Areas]Climate change was presented as a common agenda item for participating countries at the Quad Summit in March 2021. Subsequently, cooperation in technology development and finance related to carbon neutrality, clean energy, and climate change adaptation has been pursued. Furthermore, in September 2021, a green logistics network was established, and hydrogen partnerships were expanded, followed by the establishment of the Quad Climate Change Adaptation and Mitigation Package (Q-CHAMP) in May 2022.

Climate change has become an agenda item in the Indo-Pacific strategy because addressing climate change has emerged as a major issue in domestic politics of various countries, the use of (mini) multilateral cooperation through international organizations is increasing, and the need to provide public goods internationally and regionally has grown.

II. Measures for Promoting Development Cooperation to Achieve Sustainable Development Goals (SDGs) Based on the Needs of Developing Countries in the Region

The 2015 Paris Agreement, which replaced and supplemented the Kyoto Protocol, and the UN's Sustainable Development Goals (SDGs) were established with the aim of establishing low-carbon economic growth through cooperation with various stakeholders. To implement the Paris Agreement for climate change response, collective efforts and the establishment of actionable plans and activities by partners are required. Countries are forming cooperative relationships to implement sustainable development and climate action as development strategies. Consequently, building bilateral and multilateral partnerships among nations is a crucial element in responding to climate change.

In particular, Green Official Development Assistance (ODA), which advocates for sustainable low-carbon growth, is a representative example of climate cooperation in the form of development cooperation for climate change response with developing countries. This is being pursued with the aim of promoting economic growth and reducing greenhouse gas emissions through aid and technological investment to overcome the climate change vulnerability of developing countries. If discussions on related issues are held among IPEF participating countries and Korea with developing countries, development cooperation for achieving SDGs based on the needs of developing countries and eco-climate change cooperation can be pursued in the following areas.

1. Expanding Renewable Energy Utilization by Establishing Technical Standards in Smart Grid and Battery Sectors

It is necessary to explore ways to increase the utilization of renewable energy through technological cooperation and investment in the renewable energy sector. According to the International Energy Agency (IEA), renewable energy accounted for 26.6% of the global energy mix in 2019, but is projected to reach 87.6% by 2050. Nuclear and thermal power plants, which are targets for decarbonization, are expected to decrease. As the transition to renewable energy is discussed as a major means of carbon neutrality, international technological cooperation is needed to ensure energy security and move away from fossil fuel dependence.

Considering the increasing energy demand in the Indo-Pacific region and the Korean government's efforts to explore energy mix solutions through cutting-edge low-carbon technologies, Korea can cooperate with IPEF to promote the use of low-carbon and clean energy in the Indo-Pacific region. Additionally, coordination is needed to prepare for energy price volatility through standardization of smart grids and batteries, and to enhance interoperability.

2. Expanding Cooperation for the Development of Hydrogen Production and Fuel Cell Technology and Establishment of Standards

Cooperation to develop the hydrogen economy and technology needs to be expanded. Green hydrogen (hydrogen produced using surplus renewable energy) is expected to play a crucial role in achieving decarbonization as it does not emit greenhouse gases into the atmosphere. With the emergence of green hydrogen, expectations for the role and potential of hydrogen in the green energy sector have recently increased, leading to the proposal of a green hydrogen partnership within IPEF.

Cooperation is needed on the framework for investment, innovation, and regulation to expand the global utilization of green hydrogen. The Biden administration in the United States has focused on the relationship between green hydrogen and carbon neutrality, proposing a $9.5 billion investment in a nationwide green hydrogen initiative. As Korea has also pledged carbon neutrality by 2050, it keenly feels the need for an IPEF partnership for green hydrogen. With joint efforts to expand the hydrogen market, hydrogen energy is projected to account for 16% of final energy consumption by 2050.

3. Participation in the Green Shipping Network

Carbon reduction can be achieved by participating in the Green Shipping Network and developing eco-friendly transportation methods. The shipping industry is a key sector contributing to greenhouse gas emissions, yet it lags behind in climate change-related investment and innovation. Focusing on these aspects, Quad countries are cooperating to launch a task force (TF) comprising major ports and establish a Green Shipping Network dedicated to the decarbonization of the maritime and shipping sectors. This requires the development of ships operating on clean fuels and eco-friendly port infrastructure, along with the necessary regulations and policies to realize these goals. Korea, as a country with a developed shipbuilding industry and busy ports such as Busan (the fifth busiest in the world), Gwangyang, and Incheon, can play a significant role in forming the Green Shipping Network.

Measures to decarbonize the shipping network, which handles international trade, include forming green networks between ports, sharing experiences and technologies for eco-friendly hinterland development, electrifying port energy usage, establishing renewable energy systems, and utilizing eco-friendly fuel sources for ships.

4. Expanding Cooperation in the Production, Development, and Technology of Electric and Hydrogen Vehicles

Cooperation in the production of electric vehicles, batteries, and hydrogen vehicles is crucial for achieving carbon reduction in the transportation sector. Korean companies such as Hyundai Motor and Kia Motors are striving to become global leaders in the electric vehicle market, and domestic battery manufacturers have invested billions of dollars in the United States. In this regard, Korea is expected to form a strong partnership with IPEF participating countries in expanding the production, development, and technological cooperation of electric and hydrogen vehicles. To this end, beyond policies that provide incentives focused on domestic production, such as the US Inflation Reduction Act, joint efforts and reciprocal cooperation among IPEF participating countries are essential.

To this end, in addition to Korea's investments in the US, cooperation can be shared through investments by US automotive companies in Korea, and joint investments and platform sharing in electric and hydrogen vehicle production technology among IPEF participating countries. Furthermore, joint efforts are needed to reduce corporate uncertainty through technological and policy coordination for electric and hydrogen vehicles.

5. Pursuing Carbon Reduction by Linking and Expanding Korean and International Carbon Markets

A carbon trading market can be formed in cooperation with IPEF countries. Korea launched its carbon market in 2015, following the EU and New Zealand, and possesses the second-largest carbon market in the world. Article 6 of the Paris Agreement promotes sustainable development and environmental conservation through international cooperation.

This supports the idea of pursuing cost-effective carbon reduction through the expansion of international carbon markets. Japan operates an Emissions Trading System (ETS) primarily focused on buildings in its metropolitan areas and plans to develop a national carbon market between 2022 and 2023. The United States and Australia also plan to develop national carbon markets. These movements by Quad countries increase the possibility of international linkage of carbon markets, including Korea's carbon market. Through coordination of carbon market regulations with IPEF participating countries, the linkage of carbon markets can be designed and operated. International linkage is considered important as it allows for flexibility and strategic trading through market dominance, while mitigating issues of emission costs and volatility.

6. Multilateral and Bilateral Cooperation with India and Island Nations in the Indo-Pacific Region, Support for and Cooperation in Building Climate Adaptation Infrastructure

The Indo-Pacific region frequently experiences severe natural disasters such as wildfires, sea-level rise, and floods, necessitating the establishment of infrastructure and monitoring systems to prepare for such disasters through international cooperation. Korea adopted the New Southern Policy in 2017 to strengthen and expand relations with India and Southeast Asian countries, and has experience in enhancing the climate resilience of small island nations in the Pacific in cooperation with APEC member economies. Furthermore, the Korea Forest Service has strengthened cooperative relationships with several Southeast Asian countries, including Indonesia, Myanmar, Cambodia, and Vietnam, through the use of forestry and land as nature-based solutions.

Moreover, as indicated by the Indian Minister of External Affairs' expressed desire in 2021 for Korea to join global climate organizations led by India, such as the Coalition for Disaster Resilient Infrastructure (CDRI), this is a form of cooperation demanded by developing countries. Through close cooperation between Korea and IPEF countries, the risks of climate change can be reduced by sharing know-how for the development of disaster-resilient infrastructure.

7. Expanding Environmental ODA to Value-Sharing Countries

As a means to reduce the conflict and disparity between developed and developing countries regarding ecological environment and climate change issues, various development cooperation measures emphasize the responsibility and financial aid of developed countries. A major topic at COP27 in 2022 was how to calculate and support the losses and damages caused by climate change in developing countries. Environmental (Green) ODA is proposed as a measure for sustainability, carbon neutrality, and climate resilience. Green ODA refers to development cooperation support related to reducing fossil fuels, environmental technology, renewable energy development cooperation, and resource circulation promotion, which meets the Rio (Environment) Marker criteria of the OECD. By expanding environmental ODA to regional value-sharing countries together with the United States and Indo-Pacific nations, regional environmental issues can be jointly addressed, while simultaneously expanding investments in climate mitigation, adaptation, and resource circulation infrastructure.

8. Overcoming Obstacles to Ecological and Environmental Cooperation in the Indo-Pacific Region

To realize ecological and environmental cooperation in the Indo-Pacific region, the following obstacles must be overcome. First, the disruption of US-China climate change dialogue and China's backlash. Following the visit of US House Speaker Pelosi to Taiwan, China severed dialogue and cooperation in eight areas, including climate change. Furthermore, the US-China joint declaration on climate change response at the 2021 UN Climate Change Conference (COP26) has faded, and China's access to the market for renewable energy and climate change response technologies has been restricted.

Second, the US's pursuit of national interests first. For example, as seen in the recent controversy over the Inflation Reduction Act (IRA), the US excluded subsidies for electric vehicles produced in Korea to prioritize domestic products.

Third, doubts about whether Korea's climate change intermediary diplomacy can be mainstreamed and achieve cooperation. It is necessary to focus more on finding mutually beneficial points through climate change cooperation and emphasize that solving climate issues through multilateral cooperation is an opportunity for economic and technological innovation. Furthermore, considering factors that could hinder cooperation, such as China's position, climate change response must be discussed in conjunction with national interests and diplomatic strategies.

Climate change is linked to economic and security issues, and a comprehensive strategy is needed to address climate problems. Accordingly, attention should be paid to creating effective initiatives in the climate sector. Considering Korea's progress in discussions and technological capabilities for climate change response, it is expected to establish effective multilateral cooperation with IPEF countries to resolve climate issues. This is expected to enable cooperation centered on freedom, peace, prosperity, and values, which the Korean government emphasizes. ■

■ Author: Lee Tae-dongDistinguished Professor and Professor of Political Science and International Relations at Yonsei University, and Director of the Institute for Environmental, Energy, and Resource Studies. After majoring in Political Science and International Relations at Yonsei University, he obtained a Master's degree in Urban and Regional Planning from Seoul National University's Graduate School of Environmental Studies and a Ph.D. in Political Science from the University of Washington on the topic of "Global Cities and Climate Change: The Translocal Relation of Environmental Governance" (published by Routledge). His primary research interests include analyzing urban climate change and energy policies from the perspectives of international relations and comparative policy. He teaches courses such as Environmental-Energy Politics, Introduction to Village Studies, and Civil Society and NGO Politics. He has authored several books, including "Introduction to Village Studies" (2017), "The Politics We Make" (2018), "Environmental-Energy Living Lab" (2019), "The Politics of Energy Transition" (2021), and "Climate Change and Cities" (2022), and has published over 60 papers in renowned domestic and international journals. www.taedonglee.com

■ Managed and Edited by: Park Han-soo, EAI Research Assistant

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