Korea’s emissions trading system (KETS) has completed its first commitment period (2015–2017), and began its third period (2021–2025) in 2021. In this paper, we examine the effectiveness of the KETS in stimulating the transition to a low-carbon economy. Micro data collected by the Greenhouse Gas Inventory and Research Center (GIR) are used for our empirical exercise. A duration curve is designed to depict the energy composition of the KETS manufacturing sector and carbon intensities of energy sources that make up the curve. We find that a few meaningful changes have been made since the KETS launched in 2015, but the level of changes is very small. A panel data analysis delivered similar findings: the energy intensity of KETS firms was originally higher than that of non-ETS firms but improved with the adoption of the KETS in 2015. At the same time, the KETS itself is not effective in transforming the energy mix into a low-carbon one, but a strict allocation which enforces a reduction burden for covered firms is effective for increasing the energy share of low-carbon fuels. It should be noted that the impact level is very small for both (energy intensity and energy mix), although statistically valid.

The aim of this paper is to analyze the simulated effects of carbon pricing on South Korea's industrial sector by using carbon pricing scenarios. The estimation results show that carbon taxation is highly effective to reduce carbon emissions of industrial sector only when the changes of energy mix take place. If the energy mix remain unchanged, the level of carbon tax should be higher than 60,000 Korean won (USD 54.55) to achieve the NDC goal of 14 % emissions reduction in industrial sector. In addition, the reduction in industrial production due to the carbon tax is estimated to be relatively small when substitution between energy and other production factors is possible. This paper proposes policies that can induce changes in the energy mix are very necessary in order to decarbonize and strengthen the competitiveness of industrial sector.

본 연구는 배출권 거래 활성화의 목적으로 도입된 온실가스 배출권 거래의 부가가치세 면제제도의 실증적 효과에 대하여 분석하였다. 할당 업체들을 대상으로 한국개발연구원 경제정보센터에서 2020년 실시한 설문조사의 응답 결과와 한국거래소에서 제공한 2015년부터 2019년 6월까지의 배출권 거래데이터, 기업정보데이터(KISData)가 사용되었다. 패널 프로빗(Probit)과 토빗(Tobit) 모형을 적용한 분석 결과 제도를 인지하고 있는 기업들의 거래 참여확률 및 거래량이 통계적으로 유의하게 증가하였으며 기업의 경영활동 지표인 생산시설 투자, 온실가스 저감시설 투자 및 추가 고용이 증가하였다. 내생성 및 선택편의를 통제하기 위하여 추가로 수행한 성향점수 매칭(Propensity Score Matching) 결과 역시 패널 분석의 결과를 지지하는 것으로 나타났다.

This study investigates how social distancing policy to curb the COVID-19 pandemic control affected the survival of stores in Korea. Using a Difference-in-Difference approach, we find that an increase in exit and a decrease in entry was more severe for stores in sectors and regions that faced stricter social distancing policy. In the district level analysis of Seoul, we find that high rent districts had a statistically significant drop in store entry while de facto mobility lessened a decrease in store exit. The results confirms that the vulnerability of stores and sectors is highly associated with social distancing and mobility.

The purpose of this study is to test whether Korea’s emission trading scheme (KETS) was effective in curbing GHG emissions in the three major emitting sectors during the first commitment period (2015–2017). The merged dataset, which contains GHG emissions, the amount of free allowances, fuel use and sales at the firm level, and market price information for fuels and Korea’s allowance units (KAU), was used for the empirical exercise in this paper. Our research show that the adoption of the KETS was effective in improving the carbon intensity of KETS-regulated entities in the manufacturing and building sectors, but not in the power sector. The reduction burden, defined as the proportion of the expected emission level to the amount of free allowances allocated before the complying year starts, was shown to be critical in altering CO 2 emission characteristics of covered entities in the manufacturing and building sectors. This paper’s empirical findings also suggest that the development of a pricing scheme reflects carbon costs in electricity prices, In addition to the stringency in free allowances allocated to large emitters, is necessary to mitigate CO 2 emissions in the power sector.

This study investigates the effects of distance restrictions on Korean coffee shops' survival. Restrictions were implemented by South Korea's Fair Trade Commission to limit the headquarters' opening of new shops to protect franchisees' territorial rights. Using extended Cox proportional hazard regression analyses, we find that the hazard rates of all coffee shops decreased significantly under the radius restriction, with more substantial decreases for young stores, attenuating over store ages. However, selective restrictions on five big brands influencing interbrand competition might have changed the coffee franchise industry's landscape and thereby widening the gap between exempted brand coffee shops and the rest. (JEL D22, L40, L66)

Since 2009, electricity consumption has developed a unique seasonal pattern in South Korea. Winter loads have sharply increased, and they eventually exceeded summer peaks. This trend reversal distinguishes these load patterns from those in the USA and the EU, where annual peaks are observed during the summer months. Using Levene’s test, we show statistical evidence of a rise in temperature but a decrease in variance over time regardless of the season. Despite the overall increase in the temperature, regardless of the season there should be another cause of the increased demand for electricity in winter. With the present study using data from 1991 to 2012, we provide empirical evidence that relatively low electricity prices regulated by the government have contributed significantly to the rapid upward change in electricity consumption, specifically during the winter months in the commercial sector in Korea.

A number of empirical studies on the efficiency of racetrack betting market have shown the 'favourite-longshot bias,' which means longshots are overbet while favourites are underbet. Asian markets such as Hong Kong and Japan, however, have produced some contradictory empirical evidence to the bias. One critical element in the efficiency test procedure is how to assess the unobservable objective winning probability of a horse in a race. This paper proposes a new test framework with a more general evaluation of the objective probability of winning than the traditional method. Unlike the traditional method, our model allows the heterogeneity of the horses and the races. We apply the new empirical method to test whether the favourite-longshot bias is present in racetrack betting market of Korea. We found that the favourite-longshot bias exists in the racetrack market of Korea and the result distinguishes Korean racetrack market from other Asian markets.