The Paris Agreement was adopted to the UNFCCC at COP21 in December 2015. The Agreement opened a new chapter in the global climate regime. It requires not only developed countries but also developing countries to put forward their best efforts through Nationally Determined Contributions (NDCs) and to strengthen these efforts in the years ahead. The Republic of Korea also submitted its Intended Nationally Determined Contribution (INDC), pledging to reduce emissions by 37% from the BAU level by 2030. Against this backdrop, this report objectively evaluates the submitted INDC in advance of the National Assembly’s ratification and analyzes policy tools to achieve a 11.3% mitigation target of the total using the Internationally Transferred Mitigation outcomes (ITMOs).  

   Following the International Comparison Index, Korea’s Post-2020 INDC is estimated to be 112.52-145.27, higher than the average (100) of other countries, which implies the nation’s relatively strong commitment to the initiative. Indeed, the newly added reduction (11.3%) using the ITMOs accounts for a large portion of the total and lacks in concrete policy instruments.

   This report proposes two options to achieve the 11.3% reduction target using the ITMOs: direct purchasing of overseas emissions credits and receiving allowances through overseas renewable energy projects. The analysis of cost sensitivity tests concludes that the latter generates a high return, and increasing the proportion of the latter would be advantageous with the credit prices in global carbon markets rising higher. Yet, considering risks of the renewable energy projects, effective risk management is a prerequisite for using of the ITMOs.

   In order to achieve transparency and acceptability for the process of setting the national emissions reduction target in the future, laying the legal grounds which collect the opinions of various stakeholders is needed through amending the “Framework Act on Low Carbon, Green Growth.” In addition, to ensure that a roadmap towards emissions reduction is translated into actions, the implementation of the roadmap is needed to be reflected in the public service evaluation under the “Framework Act on Public Service Evaluation” as well as mandating public hearing sessions and submitting the roadmap to the National Assembly are recommended. Other endeavors are also essential to use the ITMOs. These include designing fiscal programs to support SMEs in developing projects and enhancing international cooperation to reduce uncertainties in projects of partner countries through signing MOUs with investment host countries and linking to ODA programs. Establishing and operating an International Cooperation Center on Emissions Reduction (tentative) could also be considered as a venue to work with developing countries in the areas of transferring emissions reduction technologies, sharing human resources, and implementing joint projects.