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Industry Report

Industry reports, briefs issued by Samsung Economic Research Institute

Low-Carbon Green Growth and Financial Industry Development

Low-Carbon Green Growth and Financial Industry Development

DO Gun-Woo

May 11, 2009

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Worldwide concern over the environment continues to deepen, as climate change intensifies owing to global warming. The Kyoto Protocol, a legally binding agreement that regulates the greenhouse gas emissions of industrialized countries, took effect in 2005. Though it is not mandated under the Protocol, Korea, the world's ninth largest emitter of CO2, is now under pressure to join global efforts to reduce greenhouse gases.

The Korean government adopted in August 2008 "low-carbon green growth" as a national growth strategy, envisioning a low-carbon society and green industrialization. This strategy is aimed at resolving both the environmental crisis caused by global warming and the economic crisis triggered by financial turmoil in the United States.

In this context, the financial industry can promote green growth by supporting eco-friendly industries while also serving the function of institutional infrastructure for a low-carbon society. As most green industries are in their infancy, when business risk is quite high, the support and cooperation of the financial sector will be critical to facilitating and promoting green investment.


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