[1][2] Complying to the country's pledge made at the Copenhagen Accord of 2009, the South Korean government aims to reduce its greenhouse gas (GHG) emissions by 30% below its business as usual scenario by 2020.
[4] The cap-and-trade system is a tool of carbon pricing that has been adapted by several countries to mitigate greenhouse gas (GHG) emissions through a market mechanism.
It entails a market open to the transaction of trade permits, which allow participating businesses or countries to emit a given amount of greenhouse gases.
The major objectives of the KETS is to place South Korea at the forefront of the global effort in reducing GHG emissions and to develop its market competitiveness in the clean energy sector.
Lastly, by implementing the emissions trading scheme, the government has prospects of developing its green industries and increase its global share of the clean energy market.
The aftermath of the global recession in 2008 increased the awareness of energy self-sufficiency in the country which led to the Green Growth Agenda campaign under former President Lee Myung-Bak's administration.
[5] In 2009 UN member states commenced at the United Nations Framework for Climate Change Conference and signed the Copenhagen Accord at which South Korea pledged to reduce its emissions by 30% of its projected business as usual scenario.
At the domestic level, former President Lee Myung-bak had pledged a 7% annual growth rate and a green economic agenda as part of his election campaign.
The feasibility of establishing a legally binding system of emissions reduction and the potential for cultivation the green sector as an economic growth engine were put into question.
"[5] Under provisions of Article 42, the Framework Act introduced the Target Management System (TMS) in 2012 which served as a transitional step before implementing the emissions trading scheme.
Three sectors including grey clinker, oil refinery and aviation will receive free allowances based on data analysis of previous activity.
[5] Among the 525+ business entities that were subject to the newly introduced emissions trading scheme in South Korea more than 500 were able to achieve their targets by the deadline of June 30, 2015.
[8] Sub-industry groups such as petrochemicals and non-ferrous producers voiced out their complaint that the government did not sufficiently allocate permits and lacked proper explanation of the unequal distribution.