COVID-19 Update: South Korea to Invest $60B in Green Projects as Part of ‘New Deal’ Scheme
Since confirming its first domestic case of COVID-19 infection on Jan. 20 in South Korea, the COVID-19 outbreak has battered the nation’s exports and depressed local consumption. The pandemic has brought the global economy to a temporary standstill, causing a severe blow to the export-reliant South Korean economy. New waves of infections around the world are expected to delay the pace of recovery.
The IMF predicted South Korea’s economy will contract 2.1% this year while the global economy will shrink 4.9%. In the first quarter of this year, the South Korean economy contracted 1.3%, marking the sharpest quarterly contraction since the last three months of 2008, when it was hit by the global financial crisis.
Despite the current shrink in the South Korean economy, the nation’s economy is widely expected to perform better than other nations, thanks to aggressive containment efforts without lockdown measures and the government’s expansionary fiscal policies.
As a part of expansionary fiscal policies, the South Korean government unveiled a $60 billion investment plan in the energy segment in line with its ambitious “New Deal” plan meant to transform the nation’s fossil fuel-reliant economy into an eco-friendly one. Through this “New Deal” plan, the South Korean government plans to renovate some 225,000 units of state rental houses with environment-friendly materials, along with other public facilities, including daycare centers and hospitals.
The country will also seek to expand the power generation capacity of solar panels and windmills to reach 42.7GW in 2025, posting more than a three-fold growth from 12.7GW last year. In the automobile industry, the country will aim to have the total number of hydrogen-fuel cell cars running here reach 200,000 by 2025, along with some 1.14 million electric vehicles. To induce more people to purchase environment-friendly cars, South Korea also plans to provide subsidies to those scrapping old diesel automobiles.
This set of projects will also help South Korea to cut 12.2 million tons of carbon emission by 2025.
To learn the opportunities for Canadian wood products amid Korea’s ambitious transformation, read more here: