THE ECONOMIC IMPACTS OF IMPLEMENTING NET ZERO POLICIES IN KOREA: A COMBINED TOP-DOWN AND BOTTOM-UP APPROACH

The South Korean government aims to achieve carbon neutrality by 2050. Here, this study analyzed the economic efforts of the net-zero policy by integrating top-down and bottom-up models; The UNIfied Climate Options Nexus (UNICON) within this study aims to create a link between the 26 sectors from the bottom-up model and the 85 sectors of the top-down model. Positive mathematical programming methods were used to ensure consistency between the top-down and bottom-up models within the base year. The study found that the total reduction rate was slightly higher in the integrated model than in the computable general equilibrium (CGE) stand-alone model. In both models, the reduction rate increased when the carbon tax increased, but the marginal reduction rate was considerably lowered, and the reduction rate did not exceed 80% even with the high level of a carbon tax. The technological change o…