Policy Implication of Economic-Environmental Linkage in Korea

Abstract

While the rapid growth of the Korean economy has been extensively researched, relatively little attention has been paid the environmental consequences. The first part of the papaer reviewed the evidence on the relationship between economic growth and the state of the environment within the context of the interdependence between the three economic spheres. The latter part of paper identified the environmental implications of economic growth for Korea. Based on the environmental Kuznet's Curve(EKC) test, Korean economy during the past decades appears to be broadly consistent with a positive pattern of interaction between economic growth, industrialization and the environment. Even if economic growth in Korea contributes to slightly positive structural and technological effects that offset the negative scale effects of local air pollutants, economic growth does not address the cumulative effects of pollution. In this context, Korea needs a policy for structural and technological changes that "dematerialization" and "depollute" economic activities. Such a policy will induce profound changes in the energy intensity industrial structure.