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Greening Industrial Parks A Case Study on South Korea’s Eco Industrial Park Program

10/01/2018

   Special economic zones have played a critical part in South Korea’s rapid industrial development over the past few decades, and have contributed to significant economic and social benefits to the country. However, this rapid development has also resulted in severe environmental degradation and consequential challenges to public well-being. Industrial Complexes (ICs), once the symbol of the Korean economic miracle, gradually became areas to avoid due to various forms of pollution, and businesses in those special industrial areas faced increasing public scrutiny and disputes over damages caused by their operation. Stimulated by the United Nations Conference on Sustainable Development in 2012 (Rio+20), the Korean government began introducing new environmental management measures harmonized with industrial growth. The Korean National Cleaner Production Center (KNCPC) launched the National Eco-Industrial Park (EIP) program in 2003, in line with efforts by the Ministry of Trade, Industry, and Economy (MOTIE) to promote innovative industrial development which simultaneously achieves environmental sustainability. A rather top-down implementation approach failed to attract private sector participation during the first two years of the program, resulting in few meaningful outcomes. This changed after the Korea Industrial Complex Corporation (KICOX) took over the role of implementing agency and adopted a new more engaging and business centric strategy. Business participation started picking up in the third year and eventually resulted in a surge in projects. KICOX also revamped the program with more specific goals and a three-phase implementation strategy, covering the period from 2005 to 2019. As of 2015, KICOX had received 595 project proposals, out of which 388 projects were funded for further research and development and 197 were constructed. Direct and indirect benefits of the program were significant. As a result of adopting cleaner production and Industrial Symbiosis (IS) facilities, projects yielded 6.48 million tons of carbon dioxide (CO2) emission reductions and 1.09 million tons in reductions of other toxic gases from 2005 to 2014. New investments in R&D and industrial infrastructure development created 848 jobs, promoted technology development, and produced 56 new patents and 100 pending patents. As of 2015, participating companies also benefited from a windfall of KRW 1,848 billion (approximately USD 1,680 million) collectively, by saving resources or selling waste and by-products through IS systems. Several factors contributed to the success of the Korean EIP program. First, KICOX effectively utilized local experts and their networks to expand business and civil society engagement in the program. KICOX particularly invested a lot of effort in engaging and attracting resident companies in ICs, since their involvement was critical for the success of the program. Through close working relationships with industries in the ICs, regional EIP centers and designated local coordinators were able to build up communities of stakeholders based on commonalities such as industry or resource types. In order to stimulate business participation and investment in the program, KICOX focused on delivering quick wins and demonstrating economic profitability of EIP projects, especially during the early years of the program implementation. KICOX strategically utilized regional EIP centers to promote the EIP program and its benefits to strengthen business participation in the program. Success stories were widely promoted through both online and offline communications channels. The Korean government also employed an effective funding scheme to facilitate private participation and investment without causing fund recipients to become dependent or avoid accountability. The government provided funding to support R&D needs of selected project proposals, and funding levels were determined based on the size of the recipient company, the scale of potential impact, the degree of technological innovation, and other specific criteria

   Also, various government programs supplemented private investments by offering special loans or grants, in most cases to support implementation of proven or innovative technologies or to reduce pollution and conserve resources. Despite its many achievements, the Korean EIP program has potential opportunities to improve. First of all, the program could focus on further enhancing environmental impacts of EIP construction. Emissions of CO2 could be reduced further relative to from the implementation of the program is not so significant when considering the overall emission from the industrial sector or the national greenhouse gas (GHG) reduction goal. In line with this, stronger measures could be adopted to support projects that are less economically viable but still environmentally beneficial. Lastly, cooperation and collaboration between national EIP implementation agencies and local governments needs to be strengthened and systematized to bring about more effective outcomes. National and subnational policy coordination is essential to make these changes happen.

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(Global Green Growth Institute  source)

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