World Bank Group Korea Office Innovation and Technology Note Series FEBRUARY 2022, NOTE SERIES NUMBER 6 Greening Digital in Korea Korea Case Study for Greening the ICT Sector KOREA OFFICE PAGE | 2 CASE STUDY: GREENING DIGITAL IN KOREA Acknowledgements This case study was made possible by the support of the Korea Green Growth Trust Fund (KGGTF). The drafting team authoring the report comprised Zaki B. Khoury (Senior Digital Development Specialist and TTL, Korea Digital Development Program); Astrid Jacobsen (Senior Digital Development Specialist, IDD05); Elyse Jee Hyun Lee (Consultant, IDD05); and Jeongjin Oh (Junior Professional Officer, IDD05) of the Digital Development Global Practice at the World Bank Group (WBG). The authors are grateful to the Ministry of Science and ICT (MSIT) of the Government of Korea for providing valuable inputs and information for this paper, as well as the valuable feedback received from the Institute of Information and communications Technology Planning (IITP), and the National Information Society Agency (NIA). The authors also appreciate the guidance and support received from Jason Allford, Special Representative, WBG Korea Office; and Mark Williams, Practice Manager, Global Knowledge and Expertise and East Asia Pacific (EAP) region, Digital Development, at the World Bank. Special thanks go also to the following individuals for their valuable comments: Professor Yunmook Nah of Dankook University and the Korea Data Center Council (KDCC), Professor Kyung Ryul Park of the Korea Advanced Institute of Science and Technology (KAIST), Xavier Decoster and Do Kyu Lee of the World Bank Digital Development Global Practice. The authors are also thankful for Luba Vangelova providing editorial guidance, the Korea Digital Development Program (KoDi) team and WBG Korea Office for overall support. Finally, the authors are grateful for the additional support received from the Korea Green Growth Trust Fund (KGGTF). Cover image © Shutterstock.com/ Butusova Elena Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street, NW, Washington, DC 20433, USA; fax: 202-522- 2625; e-mail: pubrights@worldbank.org. The Korea Office Innovation and Technology Note Series is intended to summarize Korea’s good practices and key policy findings on topics related to innovation and technology. They are produced by the Korea Office of the World Bank. The views expressed here are those of the authors and do not necessarily reflect those of the World Bank. The notes are available at: https://www.worldbank.org/en/country/korea. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 3 Table of Contents Executive Summary 4 PART I: Context and Conceptual Framework 5 Introduction 5 ICT Sector Definition 6 Scope of the Case Study  7 PART II: Korea ICT Sector’s GHG Emission Estimates  8 Estimates for GHG Emissions in the ICT Sector  8 PART III: The Evolution of Korea’s Green ICT Policy  11 Introduction  11 The Journey of Korea’s Green ICT Strategy  12 Korea’s Green ICT Strategy Today Toward a Carbon Neutral Future 13 Introduction  17 Legislation  18 Standards  19 Information and Product Based Instruments  19 Economic Instruments  22 Stimulating Innovation  23 Green Procurement  25 Voluntary Approaches  25 Other Incentives and Regulations  27 PART V: Key Takeaways of Korea’s Policy Approach  28 Conclusion  29 Appendix30 References34 PAGE | 4 CASE STUDY: GREENING DIGITAL IN KOREA Executive Summary Digital technologies are making a significant impact on societies, economies, and the physical world, presenting both opportunities and challenges for the green agenda. Applications of these technologies in sectors such as energy, urban, transport, and agriculture are creating new possibilities for climate change mitigation strategies. However, the rapid expansion of digital technologies increases energy usage too, and is therefore also increasing greenhouse gas (GHG) emissions. In seeking to address these challenges, the World Bank’s Digital Development Global Practice (DD) will publish a flagship report on Digital Development Opportunities for Climate Change, which will assess opportunities for greening with information communication technology (ICT), as well as opportunities for greening the ICT sector itself. To inspire and inform this flagship report, DD studied Korea’s experience in greening its ICT sector, with support from the Korean Green Growth Trust Fund. The Republic of Korea was selected for the case study due to its experience in both the digital and green sectors, and its status as a globally recognized ICT powerhouse. The country was also an early adopter of a green policy agenda, and is integrating DNA (data, network, and AI) into these policies. The government announced a national policy vision of “Low Carbon, Green Growth” in 2008 and has taken concrete steps to build a solid foundation for the green transition, through legislation, standardization, information-based instruments, economic instruments, research and development (R&D), and green procurement. More recently, the country has been aligning its green ICT strategy with the broader national GHG reduction target. Korea’s experience can offer meaningful lessons to other countries looking to reduce the ICT sector’s climate impact. It shows that public policies have an important impact on the ICT market. The policy tools that can spur decarbonization of the ICT sector include green government procurement, information-based instruments, economic instruments, and provision of guidelines on green business practices. Keys to success in applying such tools include strong and early political commitment; long-term planning and comprehensive policies; prioritization; research and development (R&D) and investment; and a governance structure that allows a whole-of-government approach. Additionally, Korea’s experience shows that renewable energy will play an increasingly important role in reducing GHG emissions from the energy-intensive ICT industry. Korea’s experience also underscores the fact that more evidence and analysis are needed to measure and determine the effectiveness of policy and regulatory pathways for greening the ICT sector. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 5 PART I: Context and Conceptual Framework emissions, mitigation, and adaptation); and (2) a Introduction more comprehensive plan for the ICT sector that Digital technologies are making a significant incorporates each nation’s climate change strategy. impact on societies, economies, and the physical To address these challenges, the World Bank’s world, presenting both opportunities and Digital Development Global Practice (DD) will challenges for the green agenda. Countries around publish a flagship report on Digital Development the world are bracing for the Fourth Industrial Opportunities for Climate Change, which will Revolution by investing in advanced information assess ICT greening opportunities in the urban, and communication technology (ICT) transport, agriculture, and energy sectors. ICT’s infrastructure and transforming industries with carbon impact and the related options to reduce digital technologies. Addressing climate change GHG emissions will be among the report’s is a top global priority, and digital technologies findings. could play an important role—applications of these technologies in sectors such as energy, The Republic of Korea was selected for the case urban, transport, and agriculture are creating study due to its experience in both the digital and new possibilities for climate change mitigation green sectors, and its status as a globally recognized strategies. ICT powerhouse (Ko, Sangwon et al 2014). Since the 2000s, Koreas has been called a digital leader At the same time, digital technologies also by the ITU, the World Intellectual Property present challenges for the green agenda. The Organization (WIPO), and the World Economic rapid expansion of digital technologies increases Forum (WEF), among others.1 It is a founding energy usage, and is therefore also increasing member of the Digital Nations, a network of the greenhouse gas (GHG) emissions, despite the world’s leading digital governments. fact that this is partly offset by energy efficiency gains (International Energy Agency, Digitalization Korea was the world’s 11th largest economy in and Energy 2017). ICT’s carbon footprint 2020, with a gross domestic product (GDP) of could account for as much as 14 percent of the US$1.630 trillion.2 It is home to global electronics world’s carbon emissions by 2040 (Belkhir and and ICT companies such as Samsung Electronics, Elmeligi 2018). The United Nations International LG, SK Telecom, SK Hynix, KT, Naver, and Telecommunication Union (ITU) in 2020 Kakao. Korea is also the world’s leading memory predicted that ICT’s GHG emissions will increase chip producer, with the second largest share of from 730 million metric tons of carbon dioxide revenue (19 percent) in the global semiconductor equivalent(Mt CO2-eq) in 2020 to a little more industry as of 2019 (Deloitte 2020). Since 2017, than 800 Mt CO2-eq in 2030. In order to follow when the government started shaping the Fourth the 1.5°C trajectory, per the ITU, GHG emissions Industrial Revolution Strategies, Korea has sought from ICT should be reduced by half, and thus to integrate DNA (data, network, and AI) to be limited to less than 400 Mt-CO2 equivalent enhance industry competitiveness, the labor in 2030. Although the differences in forecasts market, and the daily lives of its citizens.3 illustrate the difficulty of precisely projecting GHG emissions from the sector, the direct At the same time, Korea is one of the world’s emissions of the ICT sector is still an issue of biggest GHG emitters. In 2018, the country concern for many researchers and policy makers at emitted about 727.6 million metric tons of carbon the national and international level. dioxide equivalent (CO2-eq).4 In that same year, Korea ranked 17th in the world In terms of To reduce climate impact with digital metric tons of CO2 emissions per capita (12.2), technologies, developing countries need: (1) well ahead of Japan (27th, with 8.7), Germany a clearer understanding of the ways in which (28th, with 8.6), and China (38th, with 7.4).5 digital technologies affect climate change (GHG Furthermore, other than during its 1998 economic 1  No. 2 in the ITU 2017 ICT Development Index; No. 2 in the UN E-Government Development Index 2020; No. 3 in the UN 2020 Global E-Government Development Index; No. 1 in human capital and research, per the WIPO 2020 Global Innovation Index; and No. 1 in ICT Adoption, per the WEF 2020 Global Competitiveness Index. 2  GDP data available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=KR. 3  For example, the ICT industry is being restructured so that data are becoming the core competency of companies, which brings competitiveness to a platform or ecosystem-based business. In the labor market, automation is being introduced in various sectors and is enhancing the quality of human labor. At the same time, the rise of the sharing economy and platform-based services is disrupting the labor market with gig economy jobs and new types of employment. The advancement of digital technologies has also made citizens’ daily lives more convenient (via maps that provide the fastest routes with real-time data, etc.) as well as safety (analyzing crime data to find patterns and estimate crime types, locations, and times of day they are occurring). 4 https://www.statista.com/statistics/1019810/south-korea-annual-greenhouse-gas-emissions-volume/. 5  World Bank Data. https://data.worldbank.org/indicator/EN.ATM.CO2E.PC. PAGE | 6 CASE STUDY: GREENING DIGITAL IN KOREA crisis, the country has had the highest increase of reduction target instead of business-as-usual-based GHG emissions among OECD member countries reduction target, and that mitigation measures will since 1990.6 include banning construction of new coal-fired power plants (UNFCCC 2020a). Furthermore, Korea’s energy supply still depends heavily on fossil in April 2021, President Moon announced that fuel. These sources accounted for about 69 percent Korea will stop official financing for foreign coal of Korea’s electricity generation in 2019, and the power projects, effectively banning state-owned share of nuclear power accounted for 25 percent. enterprises from participating in the construction Coal-fired power, which is a baseload source, is the and operation of coal-fired power plants abroad dominant fossil fuel used to generate electricity (Yonhap News Agency 2021). The government’s (40 percent); natural gas-fired power is the second- carbon neutrality policy has strong public support, largest source (26 percent)7. The government with 62.1 percent of adults backing the policy.9 has attempted to switch fuels, expand nuclear According to the Pew Research Center’s survey power, and increase the use of liquid natural (2021), 86 percent of Koreans view climate change gas (LNG) to integrate air management and as the top global threat, ahead of terrorism or the energy policies. However, the Korean economy’s Democratic People’s Republic of Korea. Koreans energy intensity is still among the highest in are more willing to make at least some changes the OECD.8 Recognizing the urgent need for to their lives to help reduce the effects of climate reducing the country’s carbon footprint, the change (84 percent of respondents) than the government announced a national policy vision of people in the United States (74 percent), Japan “Low Carbon, Green Growth” in 2008 and took (55 percent), France (83 percent), and Germany concrete steps to build a solid ground for the green (79 percent). transition in the ensuing years by establishing the Presidential Commission on Green Growth (2008) With the ICT sector accountable for 11 percent of and enacting the Framework Act on Low-Carbon the country’s GDP and 33 percent of total exports Green Growth (2010). Addressing the ICT sector’s at the end of 2019, the greening of the ICT sector carbon footprint was one of the priorities of the itself has become one of the key priorities in government’s green transition, as illustrated by the Korea’s attempts to achieve carbon neutrality, as announcement of the Green IT National Strategy announced by the Ministry of Science and ICT’s (2009). Since the announcement of that strategy, Carbon Neutral Tech Innovation Strategy (2021). the government has introduced various measures to green the ICT sector, including a green certification program (2010), standardization ICT Sector Definition of green data center guidelines (2012), and a number of government-funded R&D projects for There is no single, universal definition of ICT. The green data centers and communication network World Bank (2003) defines ICT as consisting of technologies. hardware, software, networks, and media for the collection, storage, processing, transmission, and In recent years, President Moon Jae-In’s presentation of information (voice, data, text and administration has demonstrated its commitment images), which remains a flexible definition that to addressing climate change through the can be adjusted depending on the context (World announcement of its 2050 Carbon Neutral Bank 2009). According to the Organisation Strategy and the legislation of the Framework for Economic Co-operation and Development Act on Carbon Neutrality and Green Growth (or (OECD 2002), the ICT sector encompasses “Carbon Neutrality Act”). With its new Intended manufacturing and services industries whose Nationally Determined Contribution (INDC), products primarily fulfil or enable the function updated in 2020, Korea plans to achieve a 24.4 of information processing and communication percent reduction in GHG emission by 2030, by electronic means, including transmission and compared to the total national GHG emissions in display. Per the statistical office of the European 2017 (UNFCCC 2020a). In addition to setting an Union (EUROSTAT), the ICT sector covers both ambitious national GHG emissions target, Korea’s ICT manufacturing (manufacture of electronic 2020 NDC states that the 24.4 percent reduction components, computers, communications target is an economy-wide absolute emissions equipment, consumer electronics, etc.) and ICT 6 https://www.oecd.org/site/envind/korea.htm. 7  US Energy Information Administration (EIA). https://www.eia.gov/international/analysis/country/KOR. 8 https://www.oecd.org/site/envind/korea.htm. 9  According to a survey done by the Asian Citizen’s Center for Environment and Health. For more details, see (article in Korean): http://eco-health.org/bbs/board.php?bo_table=sub02_03&wr_ id=1076. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 7 services (software publishing, telecommunications, 3. End-user devices that may rely on one or data processing and hosting, etc.).10 The term both infrastructures above. End-user devices ICT is thus a broad term that relates to electronic include computers and peripherals (e.g., computing equipment and related activities that servers, individual computers, game consoles, convert, store, protect, process, transmit, and laptops, and office imaging equipment); retrieve digital information. digital data recorder-storage-player devices (e.g., DVDs, hard disk drives, USB memory The direct impact of the ICT sector on climate sticks, and MP3 devices); modems (e.g., high change (i.e., greenhouse gas emissions) is driven and low speed network interfaces); phones by the energy consumption during its life cycle: and multimedia devices (e.g., normal and production, use and end-of-life. Similarly, indirect cordless phones, mobile feature phones, impacts, whereby ICT enables the reduction of smartphones, and tablets). Televisions and GHG emissions in other sectors such as transport peripherals (e.g., STBs, antennas, and satellite or urban, are also an active area of research dishes) and Internet of Things (IoT) devices (through the effects of mitigation, adaptation and may also be included. The boundary between monitoring of climate change). ICT equipment and consumer electronics To estimate the ICT sector’s energy consumption (CE) is difficult to define. For example, triple and GHG emissions, the World Bank’s DD play set-top boxes (allowing internet access conducted a literature review analyzing recent and telephony, as well as access to digital TV estimates of the sector’s direct impacts, to services) are at the convergence of ICT and inform the flagship report Digital Development CE and are therefore difficult to categorize. Opportunities for Climate Change. This identifies This approach is consistent with the ICT sector the three most energy consuming activities in the definition set out by the ITU to assess the sector: environmental impact of the ICT sector (ITU 1. Data management infrastructure (data 2018). centers). A data center is a physical facility that any public or private organization can use to house online applications and data. Data Scope of the Case Study centers host all the required digital equipment This case study analyzes the policies, regulations to store, share and process data and and other measures implemented by Korea to applications, such as servers, routers, switches, support its ICT sector’s green transition. It also etc. A typical average data center is about identifies existing research that has been carried 10,000 square meters; the world’s largest data out in this area and draws lessons from Korea’s center is about 600,000 square meters (Allen experience. Specifically, the study analyzes the 2018).11 government measures to green data management 2. Data transmission infrastructure infrastructure, data transmission infrastructure, (telecommunication networks). and ICT devices. As one of the world’s most Telecommunication networks consist of connected countries and an early mover on the many physical transmitters and receivers green-ICT agenda, Korea’s experience and policies that send digital communications between in greening the ICT sector can present meaningful end-users, including wireless networks lessons to other countries looking to adopt (especially mobile communication networks measures to reduce the sector’s climate impact. and satellite networks) and fixed networks. At In terms of greening ICT devices, the study the end of 2019, mobile networks consisted primarily focuses on the government’s efforts of equipment placed on 4.8 million towers to support the development of innovative and and rooftops around the world (Osmotherly energy-efficient ICT devices, information- 2019). These networks are still growing - based instruments to induce green purchases by about 250,000 new towers were erected in consumers, and green government procurement. 2020 (Global Newswire 2021). Measures to reduce Scope 1 direct emissions12 by decarbonizing the ICT manufacturing industry’s processes and measures to reduce the 10  EUROSTAT, ICT Sector, statistical presentation available at: https://ec.europa.eu/eurostat/cache/metadata/en/isoc_se_esms.htm 11  Equivalent to the area of nearly 85 soccer fields. 12  “Scope 1” emissions are direct emissions from owned or controlled sources; “Scope 2” emissions are indirect emissions from the generation of purchased energy; and “Scope 3” emissions are all indirect emissions (not included in Scope 2) that occur in the value chain of the firm (including both upstream and downstream emissions). PAGE | 8 CASE STUDY: GREENING DIGITAL IN KOREA environmental harm of sourcing materials for ICT This study is based on thorough desk research devices and e-waste are beyond the scope of this and literature review, a series of interviews, and case study. materials provided by relevant ministries from April to October 2021. PART II: Korea ICT Sector’s GHG Emission Estimates Estimates for GHG Emissions Figure 1. Korea’s national GHG emissions trends in the ICT Sector The Greenhouse Gas Inventory and Research Center (GIR) under the Ministry of Environment (ME) publishes the National Inventory Report (NIR), with input from various sectors including waste (ME), agriculture (Ministry of Agriculture, Food and Rural Affairs; MAFRA), industrial processes (Ministry of Trade, Industry and Energy; MOTIE), transport (Ministry of Land, Source: Ministry of Environment Infrastructure and Transport; MOLIT), fisheries (Ministry of Oceans and Fisheries; MOF), and ICT sector GHG emissions are not reported land use and forestry (MOLIT and MAFRA). separately in the GIR’s NIR. However, the GHG In 2018, Korea’s total GHG emissions were 727.6 emissions data from ME on the ICT companies15 million metric tons of carbon dioxide equivalent subject to the Emissions Trading Scheme (K-ETS) (Mt-CO2eq), up 2.5 percent from the previous and GHG and Energy Target Management year (709.7 Mt-CO2eq), and up 142.7 percent system (TMS) can be a potential data point for from the 1990 level (292.2 Mt-CO2eq). During understanding the GHG emissions from the the 1990s, year-on-year emissions from 1990 to sector, although GHG emissions from the ICT 1997 grew sharply, with an average annual increase devices’ use phase are not accounted for.16 of 8.1 percent (with the exception of 1998, when According to the GHG emissions data from the GHG emissions decreased by 14.1 from the ICT companies subject to K-ETS and TMS, ICT previous year in the aftermath of the 1997 Asian companies’ GHG emissions accounted for 5.23 financial crisis). Beginning in the 2000s, GHG percent of Korea’s emissions in 2019,17 while the emissions growth slowed significantly, with steady sector’s output accounted for 11.2 percent of GDP growth since 2013 without much fluctuation and 33 percent of total exports in the same year.18 (Figure 1).13 The Korean ICT sector’s absolute contribution In 2017, Korea was estimated to be the 11th to the overall GHG emission is higher than the largest GHG emitter in the world. The country’s global estimates of the ICT sector’s contribution to emissions amounted to 5.7 percent of the total global GHG emissions, which are estimated emissions of China and 10.9 percent of those of to range from 1.4-3.6 percent in 2020 (Malmodin the United States, the top two emitters globally. and Lundén 2018) (Belkhir and Emigli 2018). By CO2 emissions per capita, Korea ranked 17th in the world in 2018 at 12.2 metric ton(t), well ahead of Japan (27th, 8.7 t), Germany (28th, 8.6 t), and China (38th, 7.4 t).14 13  According to the Korean government, the slowdown of emissions is due to a series of policy measures to cut emissions that came into effect with the enforcement of the Framework Act on Low Carbon Green Growth (enacted on January 13, 2010). 14 https://data.worldbank.org/indicator/EN.ATM.CO2E.PC?most_recent_value_desc=true. 15  ICT companies here include companies in the semiconductor, electronics, telecommunications, and display industries as classified by the Korea Standard Industry Code. 16  GHG emissions data from the companies subject to K-ETS and energy and GHG TMS available here (in Korean): https://ngms.gir.go.kr/link.do?menuNo=30130101&link=/websquare/ websquare.html%3Fw2xPath%3D/cm/bbs/OGCMBBS021V.xml%26menu%3D30130101. 17  National GHG emissions include Scope 1 emissions; ICT sector GHG emissions include Scope 1 and 2 emissions. National GHG emissions data for 2019 are an estimate by the Ministry of Environment. 18  ICT sector contribution to GDP is available at: https://www.itstat.go.kr/itstat/kor/stat/StatList.html (in Korean). The ICT sector’s contribution to total exports is available at: https://www.index.go.kr/potal/main/EachDtlPageDetail.do?idx_cd=2782. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 9 Figure 2: ICT sector GHG emissions relative to the MSIT estimates that data centers will consume National GHG emissions (2011-2019) a maximum of 1711.8 MW of power by 2024, 5.12% 5.23% resulting in 6.9 million tons of GHG emissions, a 126 percent increase from 2020. 4.81% 4.78% 4.48% 4.53% The GHG emissions of a data center occur 4.06% 4.21% 4.29% through energy consumption in two main areas: ICT hardware and cooling system. The energy consumption of hardware is directly correlated 2011 2012 2013 2014 2015 2016 2017 2018 2019 with its data processing capacity, data servers Source: WBG analysis based on the data from the Ministry of (processors consuming the largest share), data Environment. storage devices, and other network components. Data Centers The electricity consumed in data centers is converted into heat and thus cooling systems With the rapid development of Korea’s ICT sector, are designed for removing this generated heat. the number and power consumption of data Power usage/utilization effectiveness (PUE) is centers have similarly increased. The number of the indicator commonly used to describe how data centers in Korea has increased steadily since efficiently a data center uses energy. PUE is the 2000, reaching 158 sites in 2019 (see Figure 3). ratio of the total amount of electrical energy used According to the Korea Data Center Council by a data center to the electrical energy used purely (KDCC), 24 additional private data centers will be by its IT equipment (servers, network, and storage built by 2024 (Kim 2021). devices). The closer the PUE value is to 1, the greater the energy efficiency of the data center. Figure 3. Data center growth trend in Korea PUE for Korean data centers (accounting both industry and public data centers) is 2.54 as of 2016 (MSIT 2018), approximately 1.6 times higher than the global average (see Table 1). Industry data centers have higher energy efficiency with lower PUE than government-owned data centers.21 According to KDCC, the average PUE range of recently built industry data centers is 1.3 to 1.5. Naver, Korea’s largest search engine Source: KDCC 2020 company, has an average of 1.09 PUE for its data centers as of 2021. There is limited data on data center power consumption trends in Korea. However, according Wireless/Wired Networks to the government fact-finding survey conducted According to the telecommunications industry, in 2020 as part of the Cloud Computing GHG emissions data from telecommunications Industry Promotion Project, the annual power companies22 subject to the Energy and GHG consumption of Korea’s 58 biggest private data Target Management System (TMS) and Emissions centers in 2019 was estimated to be 601.8 Trading Scheme (K-ETS), wired/wireless network megawatts (MW) (5,272 gigawatt-hours, or equipment accounts for 58 percent of the gWh).19 This accounts for 0.9 percent of annual industry’s total emissions (see Figure 4). With the electricity production (585,301 gWh) and 3.6 launch of 5G networks in 2019, GHG emissions percent of service industry electricity consumption from wireless network equipment increased 9 (145,816 gWh) in the same year. When converted percent from 2018. The telecommunications to GHG equivalent, these data centers emitted industry’s GHG emissions accounted for 2.5 million tons of GHG in 2019, accounting for approximately 0.5 percent of total national 0.35 percent of total national GHG emissions.20 emissions in 2019.23 19  Estimates provided by MSIT. 20  Emission coefficient: 0.46625 tCO2eq/mWh. 21  According to an interview with the researcher who undertook the Korea data center PUE survey, the smaller scale of government/public data centers compared to industry data centers can be partly attributable to their higher PUE. The economies of scale offered by hyperscale data centers can increase energy efficiency. According to a study by the Lawrence Berkeley National Laboratory, it is estimated that if 80% of servers in small data centers in the United States were moved over to hyperscale facilities, this would result in a 25% drop in energy use. Additionally, the government data centers are generally equipped with older equipment as many of them were introduced earlier than industry data centers. 22  Companies must be classified as wired telecommunications (code 61210), wireless and satellite telecommunications (code 61220), telecommunications resellers (code 61291), other telecommunications (code 61299) industries by the Korean Standard Industrial Classification (KISC) and that meet the GHG emissions and energy consumption threshold set by the Ministry of Environment to be subject to K-ETS and TMS. 23  The national GHG emissions data for 2019 are an estimate by the Ministry of Environment as of September 2021. PAGE | 10 CASE STUDY: GREENING DIGITAL IN KOREA Table 1. Global comparison of data center PUE Country(ies), Geographical Zones Average PUE Year Data Source Korea 2.54 (Total) 2016 MSIT, Korea Information 1.73 (Industry) Technology Service Industry Association 3.89 (Government/ Public) Global 1.58 2018 Uptime Institute *PUE for industry data centers only Nordic countries (Denmark, Finland, Norway, 1.71 2017 Environment Sweden) Agency Austria and Borderstep Institute UK and Republic of Ireland (England, Scotland, 1.83 Wales, Northern Ireland, Republic of Ireland) *PUE for industry data centers only Northern/Central Europe (Austria, Belgium, 1.72 France, Germany, Hungary, Luxembourg, The Netherlands, Portugal, Poland, Switzerland) Southern Europe/Mediterranean (Gibraltar, 2 Greece, Italy, Malta, Spain, Turkey, Monaco, Romania, Bulgaria) Figure 4. Telecommunications industry GHG emissions trends and breakdown by emissions source Source: MOTIE KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 11 PART III: The Evolution of Korea’s Green ICT Policy The government took steps to lay the groundwork Introduction for the green transition in the following years. Korea’s push to lay the foundation for green In February 2009, the government established growth dates to the early 1990s. In 1990, the Presidential Commission on Green Growth the country enacted the Framework Act on (PCGG) and enacted the Framework Act on Low- Environmental Policy and embraced sustainable Carbon Green Growth (“Green Growth Act”) in development as a guiding principle in its 2010. Under the Green Growth Act, green growth environmental law and policy. Korea adopted its is defined as “growth achieved by saving and Five-Year National Plan for Energy Conservation using energy and resources efficiently to reduce Technology Development (1992–1996), which climate change and damage to the environment, was followed by a Ten-Year Basic Plan for New securing new growth engines through research and and Renewable Energy Research, Design, and development of green technology, creating new job Development (RD&D) (2003–2012) that opportunities, and achieving harmony between focused on diversifying the nation’s energy mix, the economy and environment.” establishing clean energy technology development In 2010, the government established the targets, and identifying priorities for green energy Greenhouse Gas Inventory and Research Center research and development (R&D) (Burton 2010). (GIR) in the Ministry of Environment (ME) In August 2008, the government announced to manage national GHG statistics efficiently. a new national policy of “Low Carbon, Green Since then, it has implemented a national-scale Growth.” The initiative was intended to pursue emissions trading system (K-ETS); and has three primary objectives: (1) promotion of “eco- submitted Intended Nationally Determined friendly new growth engines” for the national Contributions (INDC) and Nationally economy, (2) enhancement of Korea’s quality of Determined Contributions (NDC), and its Long- life, and (3) contribution to international efforts to term low greenhouse gas Emission Development fight climate change. Korea’s green growth model Strategy (LEDS), namely, “2050 Carbon Neutral is characterized by its high degree of bureaucratic Strategy of the Republic of Korea Towards a centralization and strong leadership that elevated Sustainable and Green Society,” to the UNFCCC green growth as a national priority (Global Green Secretariat, according to the Paris Agreement on Growth Institute 2015). climate change. As of August 2021, Korea is one of the nine countries to have introduced an ETS on a national scale.24 Figure 5. Korea’s key green policy milestones 24  World Bank, “Carbon Pricing Dashboard,” accessed August 26, 2021. PAGE | 12 CASE STUDY: GREENING DIGITAL IN KOREA Table 2. Korea’s green policy in recent decades Year Gov’t Initiative Major Projects/Goals Budget (₩) 2006-2009 Seoul Initiative • Sustainable Infrastructure forum 400 million/yr on Green • Green GDP, tax incentives discussion Growth • Green growth training for developing countries (Bhutan, Vietnam) • Climate change and green growth projects 2008-2013 The Green Goals 50 trillion for 4 yrs Growth • Promote eco-friendly new growth engines National • Enhance people’s quality of life Strategy • Contribute to international efforts to fight climate change Major Project • The Four Major Rivers Restoration Project 2013-2017 The Creative • More focused on ICT innovation and nurturing business/ 21.5 trillion for the Economy investment/startup first 3 yrs • Its “ICT planning” selected some green technologies as part of 120 national strategic technologies and 30 focus technologies: solar energy technology, eco-friendly cars, smart grid, carbon capture and sequestration/storage (CCS), pollutant processing technology25 2020-2025 Korean New • Digital New Deal (12 projects) 160 trillion, 2020- Deal • Green New Deal (16 projects) 2025 • Human New Deal (11 projects) The Journey of Korea’s Green Figure 6. Percentage of ICT industry’s energy consumption in total industrial consumption, 2003-2007 ICT Strategy 15% 16% 17.15% 13.30% 12.0% Green IT National Strategy (2009) After the “Low Carbon, Green Growth” vision announcement, a number of government ministries announced green ICT industrial 2003 2004 2005 2006 2007 policies in the following months: “Green IT Industry Strategy” (January 2009) by the Ministry Source: MKE 2009 of Knowledge Economy (MKE), “New Green ICT Korea” (January 2009) by the Ministry of After a series of green ICT policy announcements the Interior and Safety (MOIS), and “Green by different ministries, the PCGG, nine ministries, Broadcasting and Communications Strategy” and six government agencies jointly announced (April 2009) by the Korea Communications the Green IT National Strategy (May 2009), Commission (KCC). In the “Green IT Industry which emphasized the whole-of-government Strategy,” MKE outlined as main drivers: 1) approach facilitated by cross-ministerial increased energy consumption in the IT industry; collaboration.26 2) environmental damage from e-waste, especially with increased use and disposal of devices and The two strategic pillars of the Green IT National equipment; 3) the growth potential of the green Strategy are: 1) greening of the IT industry itself ICT industry; and 4) increased awareness and through the green transformation of the entire demand for greening with ICT and of the ICT cycle of IT products and services; and 2) greening industry itself. by IT to maximize energy efficiency and accelerate the transition to a low-carbon society. In the greening of the IT industry itself, the government prioritized three key tasks (see Table 3). 25 https://www.hellodd.com/news/articleView.html?idxno=48693 26  Green IT National Strategy document (in Korean) available at: https://kcc.go.kr/user.do?mode=view&page=A05030000&dc=K05030000&boardId=1113&cp=336&boardSeq=25578 KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 13 Table 3. Greening of IT key tasks in the Green National IT Strategy Greening of ICT Description Carbon Footprint Target Key Tasks (2008) World’s best in The government prioritized developing three key 14.9 Mt-CO2eq Reduce annual energy green IT product green IT products (PCs, TV displays, servers) with annually consumption by 20% development and high market potential. *PCs (4.68 Mt-CO2eq), (2 Mt-CO2eq) by exports The government also committed to introducing TV displays (3.35 Mt- 2020 green procurement mandate. CO2eq), servers (1.34 Mt-CO2eq) Greening IT The government targeted raising IT service energy Data center energy 40% increase in services efficiency by 40% by greening data centers, consumption is doubling energy efficiency in adopting cloud computing, greening broadcasting/ every five years IT service industry by communications network infrastructure. 2020 Giga-internet The government targeted building a high-speed, Increased need for high- High-speed network high-capacity network, up to 10 times faster than capacity, high-speed broadband deployment to the existing infrastructure, to support the green network to support convergence network support the green transition of society. As the demand for public remote working, deployment and transition Internet of Things (IoT) sensors for climate data real-time climate/ core technology monitoring and collection rapidly increased in environment/disaster development by 2013 previous years, the government planned to utilize monitoring. to support remote network base stations and repeaters to install working/healthcare/ public IoT sensors for climate data monitoring and education collection. Korea’s Green ICT Strategy GHG emissions in 2017, 709.1 MtCO2eq, by 2030. Today Toward a Carbon The primary objective of Korea’s 2050 Carbon Neutral Future Neutral Strategy is to achieve the three goals Notwithstanding the 2009 announcement of of carbon neutrality, economic growth, and the Green IT National Strategy, the government improved quality of life. The policies are focused has yet to present a cross-ministerial strategy on decarbonizing the industries while building a solely focused on the greening of the ICT sector. low-carbon industry ecosystem. The government However, the government’s plan for greening emphasizes its plan to leverage digital technologies ICT is manifested through the Carbon Neutral to power and bolster its various carbon-neutral Tech Innovation Strategy (focused on R&D for programs and projects, as outlined in the 2050 greening ICT) and the Korean New Deal (through vision (see Box 1).27 smart and green industrial projects). Plus, greening “with” ICT is a key means through which the Box 1. Korea’s 2050 vision government plans to reduce the carbon footprint of all industries, including the ICT sector. The Republic of Korea is moving towards the goal of carbon neutrality by 2050. The Korean New Deal will serve as a stepping stone to 2050 Carbon Neutral Strategy (December reach carbon neutrality by 2050. Korea will 2020) harness green innovations and advanced digital technologies to create synergies In December 2020, the government announced between the Green New Deal and the Digital the 2050 Carbon Neutral Strategy, the country’s New Deal, the two pillars of the Korean long-term Low GHG Emission Development New Deal. Korea will also take decisive Strategies (LEDS), which shared the nation’s vision action, especially in supporting and investing and plan to achieve carbon neutrality by 2050 in the development of innovative climate (The Government of Republic of Korea 2020a). In technologies to achieve carbon neutrality by 2020, Korea also submitted its updated Nationally 2050. Tackling climate change requires global Determined Contribution (NDC) to the United efforts and collective engagement. Korea will lead by example to help the international Nations Framework Convention on Climate community jointly make efforts to reach Change (UNFCCC) Secretariat. The updated carbon neutrality by 2050. target is to reduce 24.4 percent of total national 27  2050 Vision is introduced in the 2050 Carbon Neutral Strategy PAGE | 14 CASE STUDY: GREENING DIGITAL IN KOREA For the robust implementation of the Carbon approach in carrying out the country’s climate Neutral Strategy, the government announced the policies and projects. The plan lays out key policy “2050 Carbon Neutral Strategy Action Plan,” directions along with 10 key tasks (see Table 4). which emphasizes the whole-of-government Table 4. Key tasks for the 2050 Carbon Neutral Strategy and ministries in charge Policy Directions 10 Key Tasks Ministry in Charge Low-carbon economic Expanding the use of clean power Ministry of Trade, Industry and Energy (MOTIE) structure Low-carbon transition of energy- MOTIE, Ministry of SMEs and Startups (MSS) intensive, high-carbon industries Future mobility MOTIE Urban/land Ministry of Land, Infrastructure and Transport (MOLIT) Ministry of Environment (ME) Ministry of Agriculture, Food and Rural Affairs (MAFRA) Ministry of Oceans and Fisheries (MOF) Korea Forest Service Low-carbon industrial New industries MOTIE ecosystem Innovation ecosystem MSS, ME Circular economy ME Just transition towards Incorporation into a greener MOTIE, MSS carbon-neutral society industrial system Centering local communities ME Increasing national awareness ME Ministry of Education (MOE) Strengthening the Carbon emissions trading ME institutional foundation for carbon-neutral society Green financing Financial Services Commission ME R&D Ministry of Science and ICT (MSIT) International collaboration Ministry of Foreign Affairs The Korean New Deal (July 2020) convergence projects of the Korean New Deal. As such, cities and municipal governments are As an additional measure to accelerate building public-private partnerships to develop implementation of the updated NDC, Korea large-scale green data centers (see Table 6). has been promoting the Korean New Deal 1.0 since July 2020. The Korean New Deal 1.0 After one year of the Korean New Deal 1.0, the consists of three pillars: the Digital New Deal, the government announced an upgrade—to Korean Green New Deal and Stronger Safety Net, and New Deal 2.0—to reflect internal and external an additional drive for a Local New Deal. The changes to the initial strategy. Internally, there had Green New Deal 1.0 is underpinned by three key been increasing concerns related to the pandemic, pillars: green transition in cities/spatial planning/ such as COVID-19 disproportionately affecting living infrastructure, diffusion of low-carbon and lower income groups. Additionally, surging distributed energy, and establishment of innovative demand for labor in new industries, such as green industry ecosystems. The government software, prompted critics to urge a transition to a launched 10 key projects, including three digital low-carbon economy. Meanwhile, the government projects, three green projects, and four digital and believed it needed to respond to external trends, green convergence projects (see Table 5). such as movements to achieve carbon neutrality and to accelerate digital transformation (e.g., Establishing low-carbon and green industrial transition to 6G). complexes is one of four green and digital KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 15 Table 5. Green and digital projects in the Korean New Deal 1.0 Green and Digital Project Overview Targets by 2025 Projects Green and Smart The installation of energy-saving facilities supports • Invest ₩15.3 trillion (approx. Schools environmentally friendly classrooms, while the use of US$13.5 billion), including technology-based educational materials provides a learning ₩3.4 trillion (approx. US$3 environment that incorporates a blend of both online and billion) from the treasury offline methods. • Create 124,000 new jobs Digital Twin Digital twins (digital replicas of objects that can be used for • Invest ₩1.8 trillion (approx. the analysis and prediction of the future through simulation) US$1.6 billion), including will be made for roads, underground spaces, harbors, and ₩1.5 trillion (approx. US$1.3 dams to lay the foundation for new industries such as billion) from the treasury drones and self-driving vehicles, and to allow for the safe • Create 16,000 new jobs management of land and facilities. Digitization of Social Key infrastructure (water, expressways, early-warning system • Invest ₩14.8 trillion (approx. Overhead Capital(SOC) for disasters) that ensure safe and convenient lifestyles will be US$13 billion), including digitalized, and systems will be prepared to efficiently prevent ₩10 trillion (approx. US$8.8 and respond to disasters. billion) from the treasury • Create 143,000 new jobs Smart and Green Industrial complexes will be made smart and eco-friendly • Invest ₩4 trillion (approx. Industrial Complexes (high productivity, high energy efficiency and low pollution) US$3.5 billion), including based on digital technology. ₩3.2 trillion (approx. US$2.8 billion) from the treasury • Create 33,000 new jobs Table 6. Regional green data center construction projects as part of the Korean New Deal 1.0 Project Name Description Project Period, Budget (₩) K-Cloud Park The eco-friendly hydrothermal energy convergence cluster Invest 302.7 billion by 2025 (Gangwon-do) project is promoted as part of the Korean New Deal. One of the main goals of the project is to build six green data centers using cold water from Soyanggang Dam on an area of 784,912₩ in Chuncheon, the capital city of Gangwon-do. Saemangeum Data Saemangeum area of Gunsan city signed an agreement with Invest 2 trillion by 2029 Center Industrial Park SK Broadband—the internet infrastructure division of SK (Jeollabuk-do) Telecom—to build 16 large-scale, renewable energy-powered data centers. The company’s goal is to make the data centers run off 100% renewable energy by 2029. Suncheon-NHN Cloud In March 2021, the city of Suncheon signed a ₩300 billion Invest 300 billion in a 20-year Data Center (Jeollanam- investment agreement with NHN Enterprise to build public period do) cloud data centers and a smart IT industrial complex in the city. The city plans to transfer public data to the cloud by 2025. PAGE | 16 CASE STUDY: GREENING DIGITAL IN KOREA To respond to ongoing challenges strategically and systemically, the Korean New Deal 2.0 takes Box 2. The Green New Deal ODA (Official a 3+1 approach, with the three main pillars of Development Assistance) Strategy Digital New Deal, Green New Deal, and Human New Deal (an upgrade of jobs and social security According to the OECD Development programs), and Local New Deal (see Figure 7). Assistance Committee(DAC), Korea provided The government increased its investment to ₩220 19.6% of its aid as Green ODA during 2015- trillion by 2025, from the previously planned 2019, lower than the OECD DAC country ₩160 trillion. average of 28.1% in the same period. In July 2021, Korea’s Committee for Figure 7. The Korea New Deal 2.0 Frame International Development and Cooperation (CIDC) announced the Green New Deal The Korean New Deal 2.0: 3+1 Approach official ODA strategy as part of its foreign aid strategy. The Green New Deal ODA strategy’s main objective is for Korea to lead global climate response with the following three Digital Green New priorities: New Deal Deal Local New 1.Increase the share of green ODA above that Deal of the OECD DAC average by 2025 and Human support partner countries’ green transition New Deal through building a Green New Deal ecosystem and flagship projects tailored to partner countries’ needs; For the Green New Deal 2.0, a new category of 2.Lead global discussions and initiatives on carbon neutrality has been added, under which green ODA through increased contributions investment will be made in projects to achieve to green-related international organizations the 2030 NDC, such as building an emissions including the Green Climate Fund and the Global Green Growth Institute. Expand measurement system and creating a carbon partnerships with UN agencies and reduction program for industries, and the scope multilateral development banks; and of previous Green New Deal projects have been expanded to effectively support the transition 3.Build mutually beneficial partnerships with to a low-carbon economy (see Appendix A). partner countries and the private sector by Ultimately, the Korean New Deal 2.0 is expected focusing support in the sectors with high to create synergy between the Digital and the alignment between the partner countries’ development needs and Korea’s strengths such Green New Deal to help the country achieve as green energy and green mobility. carbon neutrality by 2050. *Green ODA markers: environment, climate mitigation, climate adaptation, biodiversity, desertification as tracked by OECD-DAC KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 17 The Ministry of Science and ICT (MSIT) academia, research institutes, relevant ministries, Carbon Neutral Technology Innovation and government institutions jointly formulating Strategy (April 2021) R&D strategy and key tasks for developing the 10 core technologies for carbon neutrality.29 The Achieving “greening by ICT” with the use of identification of the 10 technologies is based on ICT technologies to reduce GHG emissions and the sectoral targets stated in LEDS, sector analysis, accelerate sustainable development is a crucial contribution level of GHG emissions reduction, component of the 2050 Carbon Neutral Strategy relevance to major sectors, and the policy and the Korean New Deal. The policies to support environment. The government has committed “greening of ICT,” by reducing the climate to provide a targeted support system for the footprint in the entire ICT product and service life commercialization of carbon neutral technologies cycle in the ICT sector, is also in development and through the expansion of regulatory sandboxes, is expected to be announced by early 2022.28 public procurement, venture investment, subsidies, tax cuts, and research capacity development. In April 2021, MSIT disclosed high-level policy directions for greening the ICT sector in its Specifically, through digitization, MSIT plans to announcement of the Carbon Neutral Technology green the ICT sector by developing innovative Innovation Strategy (MSIT 2021a). Innovation technologies to green data centers, communication in energy efficiency in the ICT sector through networks, and ICT devices. The long-term digitalization is one of the top 10 goals of the R&D roadmap and focus technologies under the strategy (see Figure 8). With MSIT as the greening ICT agenda are described in detail in ministry in charge, the technology experts group Part IV of the case study. consisted of members from the private sector, Figure 8. Ten core technologies for carbon neutrality 30 Source: MSIT 2021 PART IV: Key Actions and Measures for Greening the ICT Sector government’s national strategy for green growth, Introduction whereas others were unveiled more recently. There have been numerous policy tools and Although the government is a lead facilitator instruments deployed to implement the for several tools, such as laws and economic government’s greening of the ICT sector. Some instruments, the private sector is also contributing were introduced in the early 2010s (i.e., green to the national efforts to green ICT by adopting certification, green data center guidelines, K-ETS, voluntary measures. This section categorizes etc.) following the announcement of the Green IT measures for greening the ICT sector into the National Strategy (May 2009) and the enactment following seven domains, informed in part by the of the Green Growth Act (February 2010) OECD’s Environmental Performance Reviews that provided legal basis for implementing the policy categorization. 28  According to an interview with MSIT. 29  Relevant ministries and government institution include MSIT (ministry in charge), Ministry of Finance, Ministry of Trade, Industry, and Energy, Ministry of Environment, Ministry of Land, Infrastructure and Transport, Ministry of Oceans and Fisheries, Ministry of SMEs and Startups, and Kores Forest Service. 30  Carbon Capture, Utilization, and Storage(CCUS) CCUS is a collective term used to describe various methods of trapping CO2 from industrial processes, and either storing it permanently or utilizing it PAGE | 18 CASE STUDY: GREENING DIGITAL IN KOREA Legislation The Green Growth Act will be replaced by the Framework Act on Carbon Neutrality and Green Growth legislated in September 2021, as the The Framework Act on Low Carbon country’s highest legal base for addressing climate Green Growth (February 2010) change (see the subsection on the Framework Act on Carbon Neutrality and Green Growth). Despite a number of environmental protection laws,31 Korea’s national policy strongly focused on economic growth and industrialization until the The Act on the Allocation and Trading mid-1990s. The Framework Act on Low Carbon of Greenhouse Gas Emissions Rights Green Growth (or “the Green Growth Act”) is (November 2012) an umbrella law introduced in 2010 to combine fragmented laws and provide the legislative The Act on Allocation and Trading of Greenhouse framework for systematic implementation of green Gas Emissions Allowances (“Emissions Trading growth national strategy and action plans. Act”) and its Enforcement Decree, passed in 2012, stipulate government actions, institutions, and The Green Growth Act set mid- and long-term timelines for the Korea Emissions Trading Scheme emissions reduction targets, cap-and-trade, (K-ETS). K-ETS covers six sectors including the carbon tax, carbon labeling, carbon disclosure, industry sector in which ICT companies belong. and the expansion of new and renewable energy (UNESCAP 2012). Main provisions of the act include the following: The Framework Act on Carbon Neutrality and Green Growth (September 2021) • It defines the main principles of a green economy, including green growth via In September 2021, Korea became the 14th environmental technologies and industries, country in the world to legislate a carbon and the balance between environment and neutrality act after the National Assembly passed economy. the Framework Act on Carbon Neutrality and Green Growth (or “Carbon Neutrality Act”) • It established the Committee on Green in August 2021. The Carbon Neutrality Act Growth to deliberate on the country’s major integrates carbon neutrality and green growth and policies and plans related to low carbon green will replace the Green Growth Act as the country’s growth. highest legal base for tackling climate change. The act stipulates legal procedures and policy • It declares that the government will foster instruments to achieve the country’s 2050 carbon new green industries and formulate means neutrality vision. Specifically, the act introduces to transform traditional industries into measures to achieve four primary policy goals, green ones, setting targets and adapting including GHG emissions reduction, climate infrastructure to an environmentally adaptation, just transition toward a carbon-neutral friendly structure; and that green investment society, and green growth.32 companies shall be established and may be supported by the government. The act requires the government to actively utilize ICT technologies and services to reduce GHG • It calls for the facilitation of research, emissions and save energy. The act also promotes development, and commercialization of green the development of technologies to green the ICT technology. sector and devices. Other major provisions of the • It prescribes mandatory annual GHG Carbon Neutrality Act include the following: emissions reporting to the government, • The Carbon Neutrality Act clearly states 2050 and the establishment of an Integrated carbon neutrality as Korea’s national vision information management system for GHGs.  and legally sets forth procedures required to • It instructs the government to prepare and achieve that vision. The procedures are mainly enforce a basic plan for energy every five years about the details for establishing a national for a planning period of 20 years. strategy, a mid- to long-term greenhouse gas emissions reduction target, and a framework plan, as well as on reviewing implementation. 31  Environmental Pollution Prevention Act (1963), Environmental Preservation Act (1977) and Framework Act on Environmental Policy (1990) 32  Carbon Neutrality Act text is available at (in Korean): https://www.lawmaking.go.kr/lmSts/nsmLmSts/out/2112217/detailRP. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 19 • The act sets a mid-term target to achieve the 2050 carbon neutrality vision, requiring the Standards government to cut greenhouse gas emissions in 2030 by 35 percent or more from 2018 Standards for Green Data Center levels, increasing the target by 9 percentage Construction and Self-Evaluation points. The government is also required to set Guidelines sector and industry-specific annual reduction targets. In 2012, the Korea Communications Commission (KCC) published the national standard for green • Participatory governance is legislated in the data center construction guidelines and self- act to encourage the participation of youth, evaluation methodology for calculating data center workers, and local residents. Previously, energy efficiency.33 The standardized green data participation was limited to experts and center construction guidelines provide technical, businesses. With the enactment of the act, operational, and architectural recommendations the Presidential Committee on 2050 Carbon for energy-efficient and green data centers. The Neutrality established in May 2021 will gain guidelines were previously developed through the legal status as a commission. green data center standardization project Korea • Various policy options are included in the and the EU initiated in 2010 and adopted as an act, including the adoption of climate impact international standard (ITU-T L.1300) by the assessments for major national plans and International Telecommunication Union (ITU) in development projects. September 2011. • The act introduces climate-responsive In April 2021, the government announced its budgeting to reflect emissions reduction plan to develop detailed evaluation indicators for targets in drafting national budgets. The resource use efficiency in data centers by 2025.34 Climate Response Fund will be established as well to support industries in transforming their structure and industrial processes. Information and Product • The act includes detailed policy measures for Based Instruments just transition. The measures aim to protect As of December 2020, there were 17 the regions and groups vulnerable to impacts environmental and green technology-related in the context of transition. Designation of certifications that companies could acquire. special districts and establishment of support Of the 17 certifications, six are mandatory and centers are part of such measures designed to 11 are optional certification programs meant protect specific regions and groups who could for providing environmental information to be affected by the transition, for instance consumers and inducing firms to develop and workers in coal and internal combustion produce green products (GTC 2020). Among engine vehicle industries. the optional certification programs, the Green Certification program, Eco-Label program, and The Carbon Neutrality Act comes into effect in Carbon Footprint of Products (CFP) labeling March 2022. However, the Climate Response certification are most relevant for ICT products Fund will be implemented on January 1, 2022 and services. and the climate impact assessments will be begin September 2022. 33 https://www.rra.go.kr/ko/notice/newsList_view.do?nb_seq=508&cpage=15&nb_type=2&searchCon=&searchTxt=&sortOrder=. 34 https://www.korea.kr/news/pressReleaseView.do?newsId=156449429. PAGE | 20 CASE STUDY: GREENING DIGITAL IN KOREA Green Certification • Specialized green enterprise: Companies with 20 percent or more of sales from certified Article 32 of the Green Growth Act stipulates green technologies in the previous year’s total that “the Government may grant certification sales. of conformity for green technology, green projects, and green products or accreditation Incentives of specialized green enterprises, impose an obligation to purchase on public institutions, or • Green certified companies get preferential provide technical guidance in order to facilitate consideration in public procurement (1.5 the development of green technology and green points added in the qualification screening industries.”35 Following enactment of Green process by the Public Procurement Service, Growth Act, the Green Certification program 1 point advantage in the Multiple Award launched in April 2010. Schedule (MAS), 1 to 2 points advantage in getting excellent product classification). With MOTIE as ministry in charge and the Korea Institute for Advanced Technology (KIAT)36 • The certified companies are selected as a as a dedicated organization, the program is jointly target for preferential purchase of technology operated by nine ministries (MOTIE, Ministry products by MSS, and preferential treatment of Economy and Finance (MOEF), Ministry of for technology guarantee funds and credit Culture, Sports and Tourism (MCST), MAFRA, guarantees. MSIT, MSS, MOF, ME, MOLIT) and 11 • Korea Technology Finance Corporation evaluation institutions. expands the guarantee limit (₩3 billion → ₩7 billion) through the Green Hi-Tech Certification Types and Eligibility Preferential Guarantee for preferential support There are four types of certifications including: 1) to green certified companies and reduces the green technology, 2) green technology product, 3) guarantee fee by 0.5 percent. In addition, green project, and 4) specialized green enterprise. guarantees of up to ₩300 million are provided for green-related R&D expenses and • Green technology: Technologies minimizing technology introduction costs. GHG emissions and pollution, such as those related to renewable energy, green mobility, • The Korea Credit Guarantee Fund smart cities, clean manufacturing, sustainable preferentially supports green technology farming, and energy efficiency improvement. and green industries and gives preference to guarantee conditions. Eligible green ICT technologies: LED, semiconductor (system and memory), next generation display, green software & Environment Product Declaration (EPD) solutions, green computing (hardware, and Carbon Footprint of Products (CFP) software, infrastructure, AI, big data Labeling Certification computing technologies), internet of The CFP labeling certification program37 is things (IoT), communications networks. a voluntary certification system that seeks to • Green technology product: A commercialized promote consumer-led purchases of low carbon product that utilizes certified green goods and green business processes. It is one of technologies. the seven impact categories of the Environment Product Declaration (EPD) certification • Green project: Large-scale projects with program.38 The amount of GHG emitted during substantial economic and technological the life cycle of a product (including a service) is ripple effects in relation to green growth and converted into the amount of CO2 emissions and carbon reduction, such as renewable energy marked on products. Among the CFP certified deployment projects. products, products with lower-than-average carbon emissions compared to products of the same type can be certified as Low Carbon Products. 35 https://www.law.go.kr/LSW/lsInfoP.do?lsiSeq=98467&viewCls=engLsInfoR&urlMode=engLsInfoR#0000. 36  KIAT is a quasi-NGO under MOTIE. 37 EPD certification is categorized into seven different impact categories and labels: carbon footprint, ozone depletion, eutrophication, resource footprint, photochemical smog, acidification, and water footprint. 38  EPD certification is categorized into seven different impact categories and labels: carbon footprint, ozone depletion, eutrophication, resource footprint, photochemical smog, acidification, and water footprint. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 21 ME manages the program with the Korea Eco-Label Certification Program Environmental Industry and Technology Institute (KEITI) in charge of the development and The Eco-Label certification program41 aims to revision of the Guidelines for Carbon Footprint provide accurate environmental information to of Products, certification of carbon footprint consumers and to encourage firms to produce label, and follow-up management. The Korea environment-friendly products in line with Environment Preservation Association (KEPA) consumers’ preferences. The certification provides education programs to train certification requirements include both environmental aspects inspectors for carbon footprint labeling. and the quality of the products (KEI 2016). The environmental requirements pertain to the Target Products environmental effects of products (i.e., how much do the products reduce the use of hazardous All products and goods, with the exception materials, promote human health, save energy of agricultural products, fishery and livestock and water, etc.) throughout their life cycles. To products, forest products, pharmaceutical products be certified, the products must also satisfy the and medical equipment, can be considered for quality requirements of the Korean Standards certification. (KS). KEITI is in charge of the management of the program. Incentives • CFP labeling status is reflected in the selection Target Products of the total bidding system by the Public Products in 165 categories, including office Procurement Service. supplies and machines, and electric and electronic • Up to 2 points can be added to G-SEED products, are subject to certification. when using carbon footprint labeled Incentives materials.39 • Additional points are given during the • Green Card credit card holders who purchase tendering process of the Public Procurement CFP labeled products get ECO MONEY Service. points.40 • Priority purchase status is given for local • Certification service fee reduction by 50 government procurement and construction percent to small and medium enterprises specifications. (SMEs). • Diverse policies and advertisement programs • Carbon emission calculation support is promote certified products. provided to SMEs. • Mandatory procurement of certified products • Certified products are promoted through by public institutes and organizations. newsletters, advertisements, and exhibitions. Figure 9. Certification mark Figure 10. Certification Figure 11. Certification mark for Eco-Label for CFP labeling mark for Low Carbon Products 39  G-SEED is Korea’s green building certification system, which has certified more than 8,000 buildings from its 2002 inception to 2016. G-SEED undertakes assessments across seven categories, including land use and transportation, energy and environmental pollution, materials and resources, water management, ecology, and indoor environment. Incentives for certification include 5 percent to 15 percent acquisition tax reduction, 3 percent to 15 percent property tax reduction, and ease of building standards. 40  Eco-Money is a consumer reward program for incentivizing green consumption with the use of the Green Card. The Green Card was first introduced in 2011 to promote environmentally friendly consumption, providing “Eco-Money Points” every time the cardholder partook in an eco-friendly activity such as purchasing low-carbon, environmental products, or using public transportation. 41 http://el.keiti.re.kr/enservice/enindex.do. PAGE | 22 CASE STUDY: GREENING DIGITAL IN KOREA Regulation on Standby Power Reduction Economic Instruments Program42 With MOTIE as ministry in charge, the program The Energy and GHG Target Management aims to induce the minimization of standby power System (TMS) and Emissions Trading and the adoption of an energy saving mode during Scheme (K-ETS) standby periods that do not require the operation of a product. The producers (or importers) that An emissions trading scheme is a market-based do not meet the energy efficiency requirements scheme designed to cost-effectively meet a nation’s of the program must attach a warning label on GHG reduction targets by allocating a number their products. The producers (or importers) can of emissions permits to eligible entities. The voluntarily attach an energy efficiency label on participating entities can trade any surplus or products meeting requirements mandated by deficit in their emissions allowances with other the program. ICT devices such as computers, participants in the market. monitors, and residential gateway devices are subject to regulation. The Korea Emissions Trading Scheme (K-ETS) launched in January 2015 as East Asia’s first Figure 12. Voluntary label Figure 13. Mandatory nationwide mandatory ETS. Entering into the for products that meet the warning label for products third phase of the program (2021-2025), the standby power reduction that do not meet the K-ETS covers 685 of the country’s largest emitters, standards standards standby power reduction accounting for 73.5 percent of national GHG standards emissions (ICAP 2019a). During Phase II (2018- 2020), 3 percent of total allowance was allocated for auctioning. For comparison, 57 percent of allowances were auctioned in Phase III (2013– 2020) of the EU Emissions Trading System (EU ETS) (ICAP, 2019b) (see Table 7). Table 7. K-ETS threshold, emission cap and allocation by phase Phases Threshold Emission Cap Allocation Phase I (2015-17) Companies with over 125,000 1,686.3 MtCO2e, including a reserve 100% free allocation tCO2e or more total annual of 88 MtCO2e for early action and new emissions or companies with one entrants. 84.5% of the reserve was used or more business sites with over within the phase. 25,000 tCO2e or more annual Phase II (2018-20) 1,777 MtCO2e, including 134 million 3% allocated for emissions are subject to caps under for new entrants and other purposes. auctioning the K-ETS. Companies with Phase III (2021-25) emissions below the threshold 3,048.3 MtCO2e. This corresponds to At least 10% may voluntarily participate in the an average annual cap of 610 MtCO2e, allocated for K-ETS. including reserves. Annual caps are higher auctioning in Phase III due to the expansion in scope, but reflect a 4.7% decrease in emissions compared to the 2017-2019 baseline. Source: ICAP 2019a K-ETS covers six sectors including the industry sec- display manufacturing), telecommunications, data tor in which ICT companies belong. During Phase processing, hosting and related industries (Ministry III, the industry sector is divided into 50 subsec- of Environment 2020a). tors, including semiconductor manufacturing, electronics components manufacturing (includes 42  The overview of the Regulation on Standby Power Reduction Program is available at (in Korean): https://eep.energy.or.kr/business_introduction/standby_summary.aspx. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 23 In 2019, total emissions dropped by 2.3 percent telecommunications, and display industries, as from the previous year for the first time since the classified by the Korea Exchange) under TMS. scheme’s launch (see Figure 14). There are 11 institutions, including the Korea Standards Association, that certify emissions Figure 14. Final allocation and certified emissions by year, reporting by these companies.44 in million-ton CO2e (source: GIR 2020, ME 2021) 610 600 593.5 601.5 587.6 587.9 Stimulating Innovation 590 585.5 580 571.9 MSIT has been funding R&D projects to 570 560 560.7 554.3 increase energy efficiency of data centers and 550 540.1 542.7 communications networks in recent years. 540 530 MSIT’s green data center R&D projects focus 520 on improving the operational efficiency of data 510 500 centers, especially in cooling and power provision 2015 2016 Final Allocation 2017 Certified Emissions 2018 2019 systems (see Appendix D). From 2018 to 2021, MSIT funded 10 R&D projects to increase energy Source: GIR 2020, ME 2021 efficiency and reduce the carbon footprint of The K-ETS was preceded by a mandatory GHG communications networks, investing ₩9.4 billion and Energy Target Management System (TMS) (see Appendix E). that launched in 2012. The TMS facilitated In September 2021, six months after the the collection of verified emissions data, and it announcement of the Carbon Neutral Technology still applies to smaller entities not covered by Innovation Strategy, MSIT and the Korea Institute K-ETS. TMS combines command-and-control of Energy Research published the “Carbon components with strong voluntary network-like Neutral Technology Innovation Strategy—10 mechanisms (Niederhafner 2014). Core Technology Development Directions” ME is the ministry in charge of TMS and report (MSIT 2021c). The report describes a K-ETS to manage GHG emissions by companies long-term roadmap and goals for developing exceeding a threshold set by the government.43 and commercializing 10 key carbon-neutral Although ME is responsible for controlling technologies that will be instrumental in achieving and operating K-ETS and TMS, other relevant carbon neutrality by 2050. The 10 technologies ministries such as MOTIE, MAFRA, and will support energy transition, accelerate MOLIT co-manage the TMS and K-ETS. As of decarbonization of industries, and increase energy 2020, MOTIE manages GHG emissions by 32 efficiency. Greening ICT is a key component of ICT companies (in semiconductor, electronics, digitization (see Figure 15). Figure 15. Ten core technologies for carbon neutrality Source: MSIT 2021c. 43  Companies subject to TMS: companies with an average annual total of more than 50,000 tons of GHG emissions, companies with one or more business sites of 15,000 tons or more. 44  Written response from MSIT. PAGE | 24 CASE STUDY: GREENING DIGITAL IN KOREA Within the broader goal of greening ICT, the Table 8). The long-term R&D roadmap in Table 9 government prioritizes greening data centers, shows milestones by phase, from development to communication networks, and ICT devices (see commercialization of these technologies. Table 8. Greening ICT key projects and tasks MSIT’s Greening ICT Rationale for Prioritization Key Projects and Tasks Policy Priorities Greening data centers • To improve energy efficiency • Cooling and heating: Real-time analysis of data center of ICT devices, mobile operating environment using IoT sensor optimization communication base stations, of temperature control based on AI to reduce energy and data centers for digital use by 40%. transformation. • IT equipment: Development of technology that • To secure data platforms, automatically adjusts servers according to data optimal networking throughput and energy-efficient server/network technology, and eco-friendly equipment. and high-efficiency ICT-based Greening • Wireless communication: Dynamic adjustment of technologies to serve the communications power amplifier and antenna usage in base stations common infrastructure for networks (2023 approx.). Apply gallium nitride (GaN) element carbon neutral technologies. with higher output than convention silicon. • To strengthen competitiveness • Wired communication: Develop dynamic power and lead the sustainable market adjustment technology to minimize power by building capacity in ICT consumption of high-speed internet communication materials, parts, and equipment. equipment. Greening ICT devices • Energy harvesting technology and intelligent/ autonomous IoT. Table 9. R&D roadmap for greening ICT Source: MSIT 2021c An expert subcommittee led by the Electronics (Ewha Woman’s University), research institutes and Telecommunications Research Institute (Korea Institute of Energy Research, Korea (a government-funded research institute) will Electrotechnology Research Institute, Korea lead R&D for digitization and technologies for Institute of Science and Technology, KEPCO greening ICT infrastructure and devices. The Research Institute), and industry (Korea Data subcommittee has members from the academia Center Council). KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 25 Green Procurement Certification types include 1) new certification, 2) renewed certification, 3) preliminary certification, In 2011, following the enactment of the Green and 4) design certification. Energy efficiency is Growth Act, the government revised and expanded evaluated from the design stage to the building the Act on the Encouragement of Purchase of and operation stage, and the centers graded Environment-Friendly Products, which mandated according to the scores received. government procurement of green products including electronic products and ICT devices. When the program launched in 2012, the need The newly introduced Act on the Promotion for green data centers was yet to be established of Purchase of Green Products requires public in Korea. PUE for most data centers at that time organizations to submit the record of green ranged from 2 to 3. Major private data centers purchases to ME to be verified. According to the in Korea recently have achieved much lower PUE levels (e.g., Naver - PUE 1.1 and LG CNS act, public organizations are required to purchase - PUE 1.3.46 KDCC’s certification program may green products among available options when: have played a significant role in achieving these 1) direct purchasing, 2) purchasing through improvements in energy efficiency. 47 subcontractors, or 3) purchasing construction materials through construction companies. The As of 2021, only about 12 percent of data Green Growth Act defines green products as centers have been certified by KDCC as green products that received Eco-label certification, data centers. KDCC believes lack of substantial Low-Carbon Product certification, and Good incentives to justify the costs and time required Recycled certification (Ministry of Environment for acquiring and maintaining the certificate could 2020b).45 be contributing to the low participation rate. Data center-related policies and issues span many different ministries (MSIT (technology), MOIS Voluntary Approaches (operations), MOTIE (facilities), and MOLIT (construction)). There needs to be cross-ministerial Korea Data Center Council (KDCC) Green coordination and consensus to develop support Data Center Certification Program measures, which can be difficult to attain (Choi 2021). According to MSIT, however, relevant KDCC has been managing a private green data ministries and organizations are under close certification program since 2012 to increase discussions, aiming to lay out the incentives in energy efficiency in data centers. The program 2022.48 Several options, including tax benefits, are was first initiated as a response to the data center being discussed as potential incentives for certified power efficiency policy promoted by the Ministry data centers. of Knowledge Economy (currently MOTIE and MSIT) in 2011, through the Act on the Industry initiatives from the Development of Cloud Computing and the Protection of its Users and the Framework Act on telecommunications sector National Informatization. As of 2021, around 20 SK Telecom is one of the 29 global mobile data centers are certified out of approximately 160 network operators (MNOs) that has agreed to the in Korea. Science-Based Target (SBT) set by ITU, GeSI, and GSMA in line with the Paris Agreement The two criteria for evaluation include 1) (UNFCCC 2020b). MNOs adopting the SBT are infrastructure efficiency (80+5 points) and required to reduce emissions by at least 45 percent 2) green operation practices (20 points). by 2030. Infrastructure efficiency is measured based on international standard ISO/IEC 30134-2 (PUE). SK Telecom is reducing its energy consumption The applicants are evaluated by application by, for instance, lowering the consumption of documents and site visits. Best practices for energy cooling energy (through the elimination of heat efficiency of certified data centers are promoted given off by equipment), integrating network through certification awarding ceremonies and equipment such as base stations and repeaters, media reports. and replacing old cooling equipment (SK Telecom 2020). In November 2020, the company joined 45  Good Recycled Certification is given to high-quality products manufactured from recycled materials. MOTIE is the ministry in charge of the program. 46  Comments based on the interview with the World Bank Digital Development team. 47  A view expressed by Professor Yunmook Nah, dean of the Software College at Dankook University and chairman of the Green Data Certification Committee at KDCC 48  Based on the written response from MSIT. PAGE | 26 CASE STUDY: GREENING DIGITAL IN KOREA Box 3. Green data center best practices in Korea LG CNS Busan Global Cloud Data Center Figure 16. Design of the chimney-style airway(Source: Design Log) LG CNS is a subsidiary of LG Corporation that provides information technology services including consulting, System Integration, Network Integration, Business Process Outsourcing, and Information Technology Outsourcing. The company opened Korea’s first dedicated data center in 1992 and operates eight data centers in Korea and globally today. Especially, the company’s Busan Global Cloud Data Center has been recognized for its high energy efficiency with the annual average PUE of 1.39 anwd the lowest PUE at 1.15 during the winter season when cooling devices are not in operation. The Busan Global Cloud Data Center earned the highest rating of A+++ by the KDCC’s green datacenter certification program, consecutively between 2014 and 2016. The Busan Global Cloud Data Center uses a unique chimney-style hot-air exhaust and a hybrid cooling system called the Built-Up Outside Air-cooling System to improve energy efficiency. Naver Data Center GAK NAVER Corp. is a global ICT company that provides Korea’s number one search portal NAVER and the global messaging platform LINE. Naver operates data centers in Korea and globally under the brand GAK with an average 1.1 PUE. The Center won “platinum” certification from LEED50 New Construction (NC) 2009, for the first time among data centers in the world. The Center uses a range of methods, including the reuse of waste heat, photovoltaic and solar thermal power generation, and a natural cooling system using outside air to increase energy efficiency. Figure 17. Naver Data Center GAK Chuncheon KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 27 the RE 100 Initiative and pledged to procure 100 manages scope 1 and 2 emissions according to the percent of its electricity use from renewable energy guidelines set by the Ministry of Environment sources by 2050. 4950 (ME) and manages scope 3 emissions through an independently developed methodology. Scope 1 Telecommunication companies are also developing to 3 emissions are verified by a verification agency technologies to reduce carbon footprint in their designated by ME. The company has installed operations. LG U+, for example, developed the GHG monitoring system in 322 office buildings next-generation eco-friendly rectifier to increase across the country for monthly emissions energy efficiency in its 5G base stations. The evaluation (Cha 2021). eco-friendly 5G rectifier is 25 percent smaller in size than the existing one and uses high- In 2019, the company reduced 46,000 tons of frequency switch circuits and high-precision CO2-eq through various energy-saving and eco- control technology. With an increased rectification friendly practices. In 2011, KT built a solar power efficiency rate of 94 percent (previously 90 plant in Gangneung and has continued to invest percent), expected energy savings are 80 watt- in its renewable energy facilities since then. The hours (W/h) per unit and a total of 700 kW company’s solar power energy generation increased annually. The company installed eco-friendly more than 14-fold from 2016 to 2019 (KT Corp. rectifiers in 80,000 5G base stations to save 5,600 2020). kW of electricity per year. As of March 2020, a total of 31,816 units have been installed in the company’s LTE and 5G base stations (LG U+ Other Incentives and 2019). Regulations KT announced its intent to become a carbon-free There are a number of programs in place to company and has established a goal of reducing incentivize the use of renewable energy and energy GHG emissions by 35 percent in 2030 compared efficient business practices in the ICT sector (see to 2007 emissions. The company has been Table 10). managing scope 1 and 2 emissions since 2007 and scope 3 emissions since 2013. The company Table 10. Regulations and incentives to increase energy efficiency in the ICT sector Ministry in Charge Program Overview and Incentives MOTIE K-RE100 Both industrial and general consumers of electricity can participate in the K-RE100 system through registration at the state-run Korea Energy Agency. The renewable energy can be procured through various methods, including the green premium system, the third-party power purchase agreement (PPA), the purchase of renewable energy certificates (REC), or self-generation. Companies’ participation in the K-RE100 system will count toward their overall GHG reduction targets. The Ministry of Environment is in the process of revising relevant guidelines on detailed energy sources and methods of reducing emissions. Moreover, the government will prepare various support measures to promote renewable energy use. MOTIE, Ministry of Zero-energy building ZEBC officially launched in 2017 to promote the implementation of Land, Infrastructure certification (ZEBC) renewable energy systems and building energy management systems to reduce and Transport building-energy consumption and improve building-energy independency (MOLIT) rates. Buildings are rated as level 1 to 5 based on the energy independent rate achieved. MOLIT, ME Green Standard G-SEED is Korea’s green building certification system, which has certified for Energy and over 8,000 buildings from its inception in 2002 to 2016. G-SEED undertakes Environmental assessments across seven categories, including land use and transportation, Design (G-SEED) energy and environmental pollution, materials and resources, water management, ecology, and indoor environment. Incentives for certification include 5-15% acquisition tax reduction, 3-15% property tax reduction and ease of building standards. 49  RE100 is the global initiative led by international non-profit the Climate Group in partnership with CDP to accelerate the transition to zero carbon electricity grids. 50  LEED: Leadership in Energy and Environmental Design, Environmentally friendly building certification developed by the U.S. Green Building Council PAGE | 28 CASE STUDY: GREENING DIGITAL IN KOREA PART V: Key Takeaways of Korea’s Policy Approach Korea’s ICT sector decarbonization strategy and green data center certification) but these are policies can be understood as part of the country’s all based in this overall framework. broader and systematic efforts to achieve carbon neutrality. As one of the world’s most connected 3. Prioritization countries and early movers, Korea’s experience The government is pursuing greening of ICT can present meaningful lessons to other countries with strategic prioritization aligned with the looking to adopt measures to reduce the ICT country’s core industrial competitiveness sector’s climate impact. Below is a list of key while also aiming to create and lead global takeaways from Korea’s decade-long policymaking green ICT market. With the Carbon Neutral in greening its ICT sector. Technology Innovation Strategy (2021), 1. Early commitment MSIT has clearly defined three priorities in greening ICT, with a focus on greening Korea was among the first countries data centers, communication networks, and to embrace green growth as a national ICT devices. The prioritization is not solely development strategy and announce its based on environmental impact, but also on commitment to green the ICT sector as the country’s strategic goal to lead the global early as the 2000s. In the years following the green ICT market by building capacity in announcement of the “Low Carbon, Green green ICT materials, parts, and equipment Growth” vision (2008), the government manufacturing. pursued a green growth strategy characterized by a strong top-down leadership that 4. R&D and investment to drive elevated green growth as a national priority implementation (Global Green Growth Institute, 2015). The The government is collaborating with public government’s commitment to green the ICT research institutes, academia, and industry sector was first officially promulgated in the to develop innovative carbon-neutral Green IT National Strategy (2009), followed technologies that will improve the energy by the enactment of the Green Growth efficiency of data centers, networks, and ICT Act (2010), which provided a strong legal products over the next 30 years. Additionally, framework to introduce measures such as Korea’s government R&D expenditure as K-ETS and a green certification program. a percentage of GDP (1.09 percent) is the 2. Long-term planning and comprehensive highest in the world as of 2021.51 The national policies R&D budget for 2022 is set at ₩29.8 trillion, representing an 8.8 percent increase from the The move for greening of ICT in Korea has previous year’s budget. been incorporated into and backed by a long- term vision and strong political commitment 5. A governance structure that allows a whole- (e.g., 2050 Carbon Neutral Strategy), large- of-government approach will be required scale infrastructure projects (e.g., the Korean In combating climate change, a government- New Deal), R&D for innovative technologies wide strategy and approach accompanied (e.g., Carbon Neutral Tech Innovation by a governance structure enabling effective Strategy), and a robust legal framework policymaking and cross-ministerial to support the implementation of green coordination would be critical for a country’s initiatives (e.g., Green Growth Act, Carbon successful green transition. In Korea’s case, Neutrality Act). the Presidential Committee on 2050 Carbon These initiatives, collectively, provide a Neutrality will be the central governing body coherent national strategy on green ICT for the carbon neutrality policy agenda, as that has been sustained over a long period. stipulated in the Carbon Neutrality Act. The strategy continues to evolve with new However, it is not yet clear how green measures to green the ICT sector (e.g., ICT policy coordination will be achieved, incentivizing the use of renewable energy in because different ministries—including data centers, and designing incentives for MOTIE (in charge of energy and GHG 51 https://www.msit.go.kr/bbs/view.do?sCode=user&mId=113&mPid=112&pageIndex=1&bbsSeqNo=94&nttSeqNo=3180682&searchOpt=ALL&searchTxt=%EC%98%88%EC%82%B0. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 29 TMS, energy policies, green certification, electricity rates for highly energy efficient and data center facilities), MSIT (green data centers, regulatory reform to allow ICT R&D), MOIS (government/public waste heat utilization by data centers, and data centers), MOLIT (ICT building exempting highly efficient data centers from regulation and data center construction GHG emission limit—require coordination regulation), and MOE (K-ETS)—have across multiple ministries. For effective split responsibilities and mandates in this policymaking, a governance structure that matter. A number of potential incentives for supports a whole-of-government approach in greening data centers—including discounted greening ICT will be required. Conclusion Public policies have an important impact on the In Korea’s case, the launch of the K-RE100 ICT market. Korea’s case illustrates a range of system— which allows industry and consumers different policy tools available for the government to procure renewable energy through third to induce decarbonization of the ICT sector, party power purchase agreements (PPAs), the including green government procurement, purchase of renewable energy certificates (REC), information-based instruments, economic or self-regulation—is expected to accelerate the instruments, and the provision of guidelines on transition. green business practices. Some of the lessons from Korea’s experience may not be readily applicable Because policy and regulatory pathways for or feasible for developing countries. However, greening ICT are still in development globally, there are some steps developing countries can additional time and research are needed to take early to establish greener business practices. assess the outputs of these strategies and their These would include providing a strong legislative effectiveness in identifying best practices for framework for the green transition, facilitating developing countries. Indeed, even in Korea’s cross-ministerial coordination for effective case, while many of the policies observed have policymaking, setting long-term targets, and been in effect for a few years, more evidence and encouraging the industry to adopt global best analysis are needed to measure and determine their practices in greening business processes and effectiveness. However, there is still no universally products in the ICT sector. accepted method to calculate the carbon footprint of Korea’s ICT sector (or the global ICT sector) Additionally, renewable energy will play an for policy assessment purposes.52 Recently, the increasingly important role in reducing GHG need for environmental data and standards for emissions from the energy-intensive ICT industry. the ICT sector was also echoed by the Greens– Many countries, including Korea, have a nascent European Free Alliance in their open letter to renewable energy industry that cannot yet fulfill the European Commission.53 Going forward, the ICT sector’s high energy demands. However, the international community should establish governments can help facilitate the renewable an agreed-upon, standardized methodology to market and incentivize the use of renewable energy measure the effectiveness of green policies and in the ICT sector by reforming energy policies. calculate GHG emissions by the ICT sector. 52  In 2018, the International Telecommunications Union published a Recommendation (ITU-T L.1450) on “Methodologies for the assessment of the environmental impact of the information and communication technology sector.” However, the Recommendation ITU-T L.1450 only provided guidelines and best practices to follow to assess the carbon footprint of the ICT sector. 53  https://www.greens-efa.eu/en/article/document/need-of-environmental-data-and-standards-for-the-ict-sector. PAGE | 30 CASE STUDY: GREENING DIGITAL IN KOREA Appendix A: Comparison of Government Investment Plans for Korean New Deal 1.0 and 2.0 Table A.1 Comparison of Government Investment Plans for Korean New Deal 1.0 and 2.01 2020–2025 Budget(₩, Trillions) Focus Areas New Deal 1.0 New Deal 2.0 1. Stronger integration of DNA54 31.9 33.5 throughout the economy 2. Advancing “untact” (or contactless) 2.9 3.2 infrastructure (INTEGRATED) Digital New Deal 3. Fostering hyperconnected new - 2.6 industries (e.g., metaverse) (NEW) 4. Digitalization of Social Overhead 10.0 9.7 Capital (SOC) Sub-total 44.8 49.0 1. Establishment of carbon neutrality - 4.8 drive (NEW) 2. Green transition of infrastructures 12.1 16.0 Green New Deal 3. Low-carbon and decentralized energy 24.3 30.0 4. Innovation in the green industry 6.3 10.2 Sub-total 42.7 61.0 1. Investment in human resources 4.0 9.3 2. Employment and social safety net 22.6 27.0 Human New 3. Youth policies55 (NEW) - 8.0 Deal 4. Reducing income/social divides and - 5.7 promoting inclusive policies56 (NEW) Sub-total 42.6 50.0 Total 114.1 160.0 Local New Deal 42.6 62.0 54 DNA refers to data, network and artificial intelligence (AI), the three innovative industries selected by the Presidential Committee on the Fourth Industrial Revolution. 55 This new component aims to ease young adults through the impacts of the pandemic by additional support in areas from education and employment to housing and asset building. 56 This new component intends to bridge gaps by upgrading education and childcare support for low-income households and prepare them for a rapid transformation of the economy, and by upgrading the country’s caregiving systems in areas from child and senior care to disability assistance and single-parent support. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 31 Appendix B: ICT Sector Taxonomy as Classified by the Ministry of Science and ICT (MSIT)57 According to the Harmonized Classification system of Information and Communication Technology Industry introduced by the Ministry of Science and ICT of Korea (MSIT) in 2017, the ICT sector consists of three levels: equipment, service, and software and digital content.58 MSIT introduced it in order to create a unified ICT classification system for all ICT statistics in Korea. The classification system is compatible with the existing industry classification systems of the OECD and the UN.2 Table B.1. ICT sector taxonomy as classified by the MSIT Information, Electronic components • Semiconductors Telecommunication, • Flat panel displays and • Sensors Broadcasting • Passive components Equipment • Printed circuit boards • Mechanical components Computers and • Computers peripherals • Computer peripheral equipment Communication and • Communication equipment broadcasting equipment • Broadcasting equipment Video and audio • Video equipment equipment • Audio equipment • Other video and audio equipment Information and • Home appliances telecommunication • Office appliances applied apparatus and • Medical instruments instruments • Meters, controllers, analysis Instruments • Electrical equipment • Other information and telecommunication applied apparatus and instruments Information, Telecommunication • Wired telecommunications Telecommunication, services • Wireless and satellite telecommunications and Broadcasting • Other telecommunications Services • Telecommunications resellers Broadcasting services • Terrestrial broadcasting • Pay TV services • Program production and broadcasting • Other broadcasting services Information services • Information infrastructure services • Information mediation services (web search portals) • Internet hosting services Software and Package software • System software Digital Content • Application software Game software • Online games • Mobile games • PC games • Video games • Arcade games IT services • IT consulting and system development • IT system management and support services Digital content • Content development services for publication • Content development services for video • Content development services for music • Content development services for education Embedded software • Embedded software platforms • Industry-specific embedded software 57 https://www.itstat.go.kr/itstat/kor/brmp/BrmpList.html. 58 http://www.tta.or.kr/data/ttas_view.jsp?rn=1&pk_num=TTAK.KO-09.0002/R2. PAGE | 32 CASE STUDY: GREENING DIGITAL IN KOREA Appendix C. K-ETS Compliance Results and Trading Market Performance Figure 18. K-ETS compliance results and trading market performance Source: GIR 2020 KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 33 Appendix D. Government Funded Green Data Center R&D Projects (2017-2021) In the last five years, MSIT has funded several green data center technology R&D projects that focused on improving the operational efficiency of data centers, especially in cooling and power provision systems (see Table D.1).3 Table D.1. Green data center technology R&D projects funded by MSIT Government Project classification Project title Project details Applicable areas support Core technology Development 3 years 1) Analysis of the energy Data center development for energy of energy-saving (2018-2021) consumption components in refrigeration and air demand management integrated solutions the air conditioning-power conditioning and facility modules system in data centers for realizing PUE 1.3x 2) Development of a software data centers that identifies energy saving priorities and impact analysis Core technology Development of data 3 years Development of a new type of Data center development for energy center energy saving (2018-2021) power supply system: DC59 - refrigeration and air demand management solutions AC60 including UPS61 + DC conditioning distribution type Core technology Development of next- 4 years Development of a next Data center development for energy generation energy (2022-2025) generation cooling system for refrigeration and air demand management saving solutions for computer rooms and high- conditioning high-density and high- density data centers, to the efficiency data centers level of 50 kW/rack Support for new Development of low- 3 years Development of ARM-based Computing (advanced researchers power micro-server (2014-2017) low-power micro-server SoC RISC machine (ARM) SoC, efficient for cloud (system on a chip) servers, hardware) service Development of Development of ARM 3 years Development of ARM servers Computing (ARM startup growth servers and standalone (2018-2021) and standalone BMC modules servers, hardware, technology BMC modules for software) low-power and high- performance data centers Support for promising Development of 2 years Development of an integrated Network ICT technology high-performance, (2017-2018) package for Virtual Appliance low-power 40G and Cloud OS, and 10G/40G server networking network interface card with acceleration technology QoS62-guaranteed data plane for edge cloud data acceleration technology. The centers development aims to reduce power consumption of servers and provide quality assurance for cloud computing users. 59 DC: Direct current power supply. 60 AC: alternating current power supply. 61 UPS: Uninterruptible power supply. 62 Quality of service. PAGE | 34 CASE STUDY: GREENING DIGITAL IN KOREA References Allen, Mark. 2018. “And the Title of the Largest Global Green Growth Institute (GGGI). 2021. Data Center in the World and Largest Data “Greening ODA: extending Korea’s leadership Center in US Goes to...” Datacenters.com, on New Green Deal and NetZero into its in- June 14, 2018. https://www.datacenters.com/ ternational partnerships.” https://gggi.org/site/ news/and-the-title-of-the-largest-data-center- assets/uploads/2021/03/Feb-19-2021_Green- in-the-world-and-largest-data-center-in. ing-ODA_Frank-Rijsberman.pdf Belkhir, Lotfi, and Ahmed Elmeligi. 2018. “As- Globe Newswire. 2021. “Telecom Towers Mar- sessing ICT global emissions footprint: Trends ket—Growth, Trends, COVID-19 Im- to 2040 & recommendations.” Journal of pact, and Forecasts (2021-2026).” June 16. Cleaner Production 177: 448-463. https://doi. https://www.globenewswire.com/news-re- org/10.1016/j.jclepro.2017.12.239. lease/2021/06/16/2248017/0/en/Telecom- Towers-Market-Growth-Trends-COVID-19- Burton, P. Scott. 2010. “South Korea’s ‘Low Car- Impact-and-Forecasts-2021-2026.html. bon, Green Growth’ Initiative Spurs Renew- able Energy, Carbon Market and Green-Tech Greenhouse Gas Inventory and Research Center of Developments in the ROK and Beyond.” Korea (GIR). 2020. “K-ETS Summary Report Hunton & Williams Renewable Energy Quar- (Phase II: 2018-2020).” https://www.gihoo. terly 6. https://www.lexology.com/library/ or.kr/download/downloadFile.do;jsession- detail.aspx?g=423ec506-b23e-4cac-bad0- id=CiGYkoNILOg81Vc4frwDUDZS9YY- 24bc67afc8b2. Q71CKzBeUQt3hN7pXiaEJJaZ7w19PKM- whduBd?attFileNo=19152. Cha, Hyunah. 2021. “Telcos scramble to find energy efficiency solutions as energy consump- Green Technology Center (GTC). 2020. “A tion grows with 5G deployment.”Ajunews, Supporting Project to Acquire Technology January 6, 2021. https://www.ajunews.com/ Certification of the Green and Climate Tech- view/20210106122010875. nology Field for Overcoming the COVID-19 Crisis.” https://www.gtck.re.kr/gtck/gtcPubli- Choi, Insik. 2021. “Interview with Professor cation.do?mode=view&boardNo=17&article- Hwang of KDCC.” Kharn, June 6, 2021. No=2198. http://www.kharn.kr/news/article.html?- no=16294. International Carbon Action Partnership (ICAP). 2019a. “ETS Detailed Information: Korea Donor Tracker. 2021. “South Korea unveils Green Emissions Trading Scheme.” Last Update: Au- New Deal ODA strategy.” https://donortrack- gust 9, 2021. https://icapcarbonaction.com/ er.org/policy-updates/south-korea-unveils- en/?option=com_etsmap&task=export&for- green-new-deal-oda-strategy mat=pdf&layout=list&systems%5B%5D=47. Deloitte. 2020. “Rise of the ‘Big 4’: The semi- International Carbon Action Partnership (ICAP). conductor industry in Asia Pacific.” https:// 2019b. “ETS Detailed Information: EU Emis- www2.deloitte.com/content/dam/Deloitte/cn/ sions Trading System (EU ETS).” Last update: Documents/technology-media-telecommuni- October 29, 2019. https://icapcarbonaction. cations/cn-tmt-rise-of-the-big-4-en-082820. com/en/?option=com_etsmap&task=export&- pdf. format=pdf&layout=list&systems[]=. Global Green Growth Institute (GGGI). 2015. International Energy Agency (IEA). 2017. “Digi- “Korea’s Green Growth Experience: Process, talization and Energy.” Paris. https://www.iea. Outcomes and Lessons Learned.” https://gggi. org/reports/digitalisation-and-energy. org/report/koreas-green-growth-experien- ceprocess-outcomes-and-lessons-learned/. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 35 International Telecommunication Union (ITU). Malmodin, Jens, and Dag Lundén. 2018. “The 2018. “Recommendation ITU-T L.1450, Energy and Carbon Footprint of the Global Methodologies for the assessment of the ICT and E&M Sectors 2010–2015” Sustain- environmental impact of the information and ability 10 (9): 3,027. https://doi.org/10.3390/ communication technology sector.” https:// su10093027. www.itu.int/rec/T-REC-L.1450/en. Ministry of Environment (ME). 2020a. “K-ETS International Telecommunication Union (ITU). Phase III GHG Trading Permit Allocation 2020. “Greenhouse gas emissions trajectories Plan” (in Korean). https://ors.gir.go.kr/ for the information and communication tech- home/board/read.do?menuId=2&boardMas- nology sector compatible with the UNFCCC terId=4&boardId=44. Paris Agreement. Recommendation ITU-T L.1470.” Ministry of Environment (ME). 2020b. “Green Procurement Guidelines for 2021.” http:// Kim, Jiseon. 2021. “Number and Size of Data www.me.go.kr/home/web/policy_data/read. Centers Continue to Increase in South Korea.” do?pagerOffset=0&maxPageItems=10&- Korea IT News, March 17, 2021. https://en- maxIndexPages=10&searchKey=&searchVal- glish.etnews.com/20210317200001. ue=&menuId=10277&orgCd=&condition. orderSeqId=7669&condition.rnSeq=40&con- Korea Data Center Council (KDCC). 2020. “Ko- dition.deleteYn=N&seq=7668. rea Data Center Market 2020-2023.” https:// www.digitalcentre.technology/wp-content/ Ministry of Environment (ME). 2021. “Analy- uploads/2020/06/KDCC-report.pdf. sis of the emission trading system in 2019, emission decreased by 2.3% compared to the Korea Environment Institute (KEI). 2016. previous year” (in Korean). http://www.me.go. “Eco-label Certification System (ECS) in kr/home/web/board/read.do?boardMas- Korea.” https://www.greengrowthknowledge. terId=1&boardId=1428870&menuId=286. org/national-documents/eco-label-certifica- tion-system-ecs-korea. Ministry of Knowledge Economy (MKE). 2009. “Green IT Industry Strategy.” January. https:// Ko, Sangwon et al. 2014. 2013 Modularization of www.korea.kr/archive/expDocView.do?do- Korea’s Development Experience: ICT R&D cId=21133. System and Policy, Korea Information Society Development Institute (KISDI). https://www. Ministry of Science and ICT (MSIT). 2018. kdi.re.kr/kdi_eng/publications/publication_ “A Study on Realities of Actual Condi- view.jsp?pub_no=13688 tions for the Activation of Data Center Industry Ecosystem.” https://scienceon. KT Corp. 2020. ESG (Environmental, Social, kisti.re.kr/srch/selectPORSrchReport. and Governance) Report 2020. https://corp. do?cn=TRKO201800039182. kt.com/eng/html/sustain/possibility/sustain- ability.html?menuid=trigger_sustainabili- Ministry of Science and ICT (MSIT). 2021a. ty_03. “Establishment of the Strategy for Technolo- gy Innovation for carbon neutrality.” March. Lawrence, Andy. 2019. “Is PUE actually going https://english.msit.go.kr/eng/bbs/view. UP?” Uptime Institute Blog, May 15, 2019. do?sCode=eng&mId=4&mPid=2&pageIn- https://journal.uptimeinstitute.com/is-pue-ac- dex=5&bbsSeqNo=42&nttSeqNo=495&sear- tually-going-up/. chOpt=ALL&searchTxt=. LG U+. 2019. Sustainability Report 2019. https://www.uplus.co.kr/cmg/engl/coif/pelu/ RetrievePeLuCsr05.hpi?mid=10384. PAGE | 36 CASE STUDY: GREENING DIGITAL IN KOREA Ministry of Science and ICT (MSIT). 2021b. The Government of the Republic of Korea. 2020a. “Strategy of Technology Innovation for 2050 Carbon Neutral Strategy of the Repub- Carbon Neutralization.” Presentation. 2021 lic of Korea Towards Sustainable and Green CTCN ASIA-PACIFIC Forum. https://www. Society. December. https://www.greengrowth- ctc-n.org/sites/www.ctc-n.org/files/1.3_Strate- knowledge.org/national-documents/2050-car- gy%20of%20technology%20innovation%20 bon-neutral-strategy-republic-korea-to- for%20carbon%20neutralization_Mr.%20 wards-sustainable-and-green-society. Doyoon%20Kim.pdf. The Government of the Republic of Korea. 2020b. Ministry of Science and ICT (MSIT). 2021c. The Korean New Deal. https://english.moef. “Carbon Neutral Technology Innovation go.kr/pc/selectTbPressCenterDtl.do?boardC- Strategy—10 Core Technology Development d=N0001&seq=4948. Directions” (in Korean). http://www.ctpp. re.kr/home/#0. The Government of Republic of Korea. 2021. “The 38th meeting of the international Com- Montevecchi, F., T. Stickler, R. Hintemann, S. mittee for International Development and Hinterholzer. 2020. Energy-Efficient Cloud Cooperation.” https://www.korea.kr/news/ Computing Technologies and Policies for pressReleaseView.do?newsId=156460573#site- an Eco-Friendly Cloud Market. Final Study map-layer Report. Vienna: European Commission. https://digital-strategy.ec.europa.eu/en/library/ United Nations Economic and Social Commission energy-efficient-cloud-computing-technolo- for Asia and the Pacific (UNESCAP). 2012. gies-and-policies-eco-friendly-cloud-market. “Low Carbon Green Growth Roadmap for Asia and the Pacific: Case Studies and Policy Niederhafner, Stefan. 2014. “The Korean Ener- Papers.” https://www.unescap.org/resources/ gy and GHG Target Management System: low-carbon-green-growth-roadmap-asia-and- An Alternative to Kyoto-Protocol Emissions pacific-case-studies-and-policy-papers#. Trading Systems?” TEMEP Discussion Paper No. 2014: 118. Available at SSRN: https:// United Nations Framework Convention on ssrn.com/abstract=2508143 or http://dx.doi. Climate Change (UNFCCC). 2020a. The org/10.2139/ssrn.2508143. Republic of Korea’s Update of its First Na- tionally Determined Contribution. https:// OECD (Organisation for Economic Co-opera- www4.unfccc.int/sites/ndcstaging/Published- tion and Development). 2002. Measuring the Documents/Republic%20of%20Korea%20 Information Economy 2002. Paris: OECD First/201230_ROK%27s%20Update%20 Publishing. https://www.oecd-ilibrary.org/sci- of%20its%20First%20NDC_editorial%20 ence-and-technology/measuring-the-informa- change.pdf. tion-economy-2002_9789264099012-en. United Nations Framework Convention on Cli- Osmotherly, Kieron. 2019. “The new shape of mate Change (UNFCCC). 2020b. “Telecoms the global telecom tower industry.” TowerX- Sector Agrees Pathway to Net Zero Emis- change, December 9, 2019. https://www. sions.” February 28. https://unfccc.int/news/ towerxchange.com/the-new-shape-of-the- telecoms-sector-agrees-pathway-to-net-zero- global-telecom-tower-industry/. emissions Pew Research Center. 2021. “In Response to Cli- World Bank. 2003. “ICT and MDGs.” https:// mate Change, Citizens in Advanced Econo- documents1.worldbank.org/curated/ mies Are Willing to Alter How They Live and en/538451468762925037/pdf/278770ICT- Work.” 010mdgs0Complete.pdf. SK Telecom. 2020. Sustainability Report 2019. https://www.sktelecom.com/en/csr/download/ persist.do. KOREA OFFICE INNOVATION & TECHNOLOGY NOTE SERIES PAGE | 37 World Bank. 2009. “Measuring foreign direct investment in the area of information and communication technology (Vol. 2) : De- liverable 1 - definition of the ICT Sector.” https://documents.worldbank.org/en/pub- lication/documents-reports/documentde- tail/757361468248669440/deliverable-1-defi- nition-of-the-ict-sector. World Bank. (forthcoming) Information and Communication Technology (ICT) and Climate Change - Direct Greenhouse Gas Emissions of the ICT Sector Yonhap News Agency. 2021. “(LEAD) Moon: S. Korea to set higher goal of cutting emissions, submit it to U.N. this year.” April 22, 2021. https://en.yna.co.kr/view/ AEN20210422006051315.