Title: Why does the manufacturing industry in Korea produce CO2 more?: Policy risks and governance factor
Abstract: To achieve carbon neutrality, the Korean government has promoted regulatory policies on the transition toward a carbon neutrality in 2050. As an export-driven country with a high reliance on the manufacturing industry (27.9% of GDP), Korea faces significant challenges in achieving its national GHG reduction targets. Therefore, this study examined total factor carbon efficiency (TFCE) of the Korean manufacturing industry for feasible solutions toward a carbon neutral economy. For this purpose, we adopted the meta-frontier sequential slack-based model (M-SSBM) to reflect group heterogeneity coming from industrial characteristics. 35 subsectors of manufacturing industrial data were collected from 2012 to 2019, which were classified under three groups: technology-intensive, capital-intensive, and labor-intensive. TFCE average of whole industry shows downtrend, implying environmental regime is not workable. Meanwhile, TFCE of three groups commonly showed a good performance in group-frontier, but it showed different value and ranking in meta-frontier. Especially, capital-intensive group which includes big emitter sectors showed the worst performance. To obtain a feasible political implication, panel tobit regression was conducted in the second stage. Result shows that export is significantly related to enhancing TFCE, implying the global market pressure makes companies to actively increase their environmental performance.
CERE is an inter-disciplinary research center in the field of environmental and resource economics and management. The Centre, located at Umeå School of Business and Economics, unites Umeå University (UmU), and the Swedish University of Agricultural Sciences (SLU). Individually, they are leading Swedish academic institutions providing research strength on issues regarding the husbandry of our environment and natural resources. Together they strengthen the research field even further.