An Entrepreneurial State in Green Transition: Korea’s Energy Security and Canada-ROK Co-operation

Table of Contents Introduction South Korea’s Energy Mix and Green Transition Policies Pressing Challenges in Balancing Energy Security and Climate Goals Enhancing Canada-South Korea Co-operation in Energy Supply Chain Conclusion End Notes About the Author Canadian Global Affairs Institute Introduction Responding to the urgency of combating climate change, many governments have embarked on an unprecedented acceleration towards a low-carbon economy in recent years. Notably, the U.S. Inflation Reduction Act (IRA), the biggest climate spending initiative in U.S. history, earmarks US$369 billion for clean energy investment. Similarly, the European Union Green Deal Industrial Plan for the Net-Zero Age signifies a relaxation of prior stringent regulations, facilitating increased government support for investments and manufacturing in the green sector. The year 2022 witnessed an intensified green tech race spurred by rising energy demand, post-pandemic recovery and energy security disruptions precipitated by Russia’s invasion of Ukraine. Although addressing climate change had been a primary driver of low-carbon transitions until the invasion, governments are now placing greater emphasis on energy security. There are many reasons for this shift: the need to counter inflation, supply chain disruptions and the vulnerability associated with energy resource scarcity. The Indo-Pacific region has emerged as the focal point of this race to go green. China’s significant subsidies and industrial policies since 2012, aimed at leapfrogging other nations, have catalyzed the global competition. The IRA strategically aims to displace China as the primary supplier of crucial equipment for solar, wind and electric vehicle battery production. Other East Asian nations, including South Korea and Japan, have also entered the race with ambitious green plans, revitalizing old and new tools of industrial policy to hasten innovation and manufacturing in renewable energy. This contest revolves around the creation, production and widespread deployment of green technologies, culminating in a paradigm shift from market fundamentalism to state-driven activism. The imperative to avoid lagging behind has necessitated a more proactive and entrepreneurial governmental role. Energy security and advancing the low-carbon economy align closely with Canada’s Indo-Pacific Strategy. Given South Korea’s heavy dependence on imported energy resources and its exposure to geopolitical risks, energy security has evolved into a vital concern. On May 2023, the memorandum of understanding (MOU) on critical mineral supply chains, the clean energy transition and energy security between Prime Minister Justin Trudeau and President Yoon Suk-yeol was a remarkable turning point for further co-operation on energy security