Questions/Answers

KOWEPO implemented a coexistence business project between public company and agriculture households through national GHGs reduction considering economical prosperity as well as social value creation together with the Central(the MAFRA) and the Provincial(Chungnam-do) Government as KOWEPO moved its headquarter to rural society, named “Wellbeing rural development project”. Heretofore facility farms faced with excessive energy cost due to fossil fuel usage nevertheless insufficient opportunities to cost minimization as their limited technologies and cost burden to low-carbon facilities replacement even if they wish to do. KOWEPO focused on such technological and financial solutions to achieve agriculture low-carbonization, established working group with the Central and the Provincial Government, launched agriculture support business for farm-households carbon reduction in 2016, for the first time in Korea. Total numbers of farm beneficiaries reached to 79 with successful reduction of 116,000 tCO2e, and additional 43 farms joined this year with 56,000 tCO2e ex-ante reductions. (total 122 farm-households, 172,000 tCO2e reduction) This project proceeded as 4 main steps. First, KOWEPO established collaboration system with the Government, the MOU for agriculture GHGs reduction was signed among KOWEPO, the MAFRA, and Chungnam-do in November 2015, then working group composed of KOWEPO, the MAFRA, and the ATCF started. Second, company-farms joint reduction business model with mechanism was developed. Through this mechanism KOWEPO who possesses GHGs reduction technologies and business know-hows provided low-carbon technologies with funds where farms returned GHGs reduction credits. Third, KOWEPO held business briefing sessions together with the ATCF and Chungnam-do from applicants’ understanding. Actual beneficiaries nominated through such interactive communication, and GHGs reduction projects were implemented with introducing geothermal equipments, etc. The number of participants has been grown from initially 2 farm-households to currently 79. Fourth, based on successful progress, this project are now national widely spreading; to other provinces, and inter-sectoral spreading; to afforestation and building section.

It can be told that this project enhanced the public institutions' effectiveness to reach the SDGs. In specific, this project activated cooperative and interactive partnership among the Central and the Provincial Government, public company, and farms, aiming low-carbon agriculture transition for national GHGs reductions, local income growth, and systematic innovation in agriculture in the long run. Consequently, this project profoundly reflects promotion on sustainable agriculture by innovation of farm system(SDG 2), urgent action to overcome climate change(SDG 13), and strengthen implementation means and partnerships for sustainable development(SDG 17). This project is now spreaded inter-provincial and inter-sectoral.

(Target supporting : SDGs 13. Urgent action to overcome climate change) The Republic of Korea set its national target for climate change response, proceeds countermeasures for GHGs reductions and climate change adaptation step by step according to National Greenhouse Gases Reduction Roadmap. K-ETS(Emission Trading Scheme) was also adopted since 2015 that more than 600 companies are currently participated GHGs reduction with K-ETS, however, agriculture area shows low level of GHGs reduction which is out of K-ETS. That’s one motivation to KOWEPO to establish “Wellbeing rural development project”, for activating GHGs reduction in non-management sector as well as increase competitiveness of farm-households with income growth. As one countermeasure to response climate change, this project playes a significant and emergency roll to prevent climate change disaster in agriculture by introducing low-carbon cultivation technology with providing virtuous mechanism, aiming interactive GHGs reduction and minimization GHGs emission in farms.

This project secured its social, economical, environmental sustainability; farm-households’ income growths are virtual and the localities’ environment are improved as well as GHGs reduction. Beyond the border of the Chungnam-do, this project are now spreaded to other provinces such as Jeju-do as its distinction recognized. Furthermore, this project shows positive effect of inter-sectoral spread with 33 times of daily media reports; sectors such as afforestation and building GHGs reductions.

As stated in questionnaires 2 and 3, this “Wellbeing rural development project” contributes to sustainable agriculture promotion(SDG 2), active and virtuous response against climate change(SDG 13), and strengthen implementation for sustainable rural development with partnerships(SDG 17). Especially this project dedicates to massive GHGs reductions in agriculture which is relatively blind and vulnerable spot of emission reduction by active and innovative approaches; fossil fuel transition to renewable ones in facility cultivations and energy consumption efficiency improvement, as parts of rural low-carbonization. Beyond technical aspects, this project provides linkage between farm-households and K-ETS(Korean Emission Trading Scheme) so as to return visible profits to those participants for economical income growth targeting rural welfare increase. Low-carbon agriculture, this project’s final goal, is directly connected to promote sustainable agriculture which is declared in SDG 2. And public stakeholders such as the Central(the MAFRA-the Ministry of Agriculture, Food and Rural Affairs) and the Provincial(Chungnam-do) and public institution(KOWEPO) build partnership to proceed this project from now and on, which is also straightly linked to partnership reinforcement with countermeasure implementation which is declared in SDG 17 as well.

This project supported facility farms irrelevant to gender ownership, holded onto those who faced with difficulties on cultivation business due to abnormal and general climate change effects. Through this project the triangular composition(the Central Government, the Provincial Government, and KOWEPO) provided technical introducing and funding to farm-applicants for better agriculture business surroundings.

This project was initially launched in Chungnam-do, briefing sessions and field explanations were held in local farms for better understandings for recruitment of farmers. GHGs reductions in facility cultivations directly enrolled and linked to K-ETS which issues emission credits, KOWEPO supported the entire administrative fees to enroll individual business and to issue credits so that farm-households could concentrate on low-carbonization activities. Consequently, participants of this project could save energy cost for farming by low-carbon techniques adoption and make profit by emission credits sale which KOWEPO is willing to purchase. These profitabile tracks increase competitivity of farm-households against business circumstance changes such as FTA. Furthermore, there have been remarkable awareness changes of farm-participants. Doubts and curiosity were the main responses from local farmers, however, farmers' proud and satisfactory has been grown because they realized how this project is effective to reduce national GHGs emission as well as increase cultivation effectiveness by themselves.

As a following action of MOU, working group was established and project guidelines were prepared by four public institutions; KOWEPO, the MAFRA, Chungnam-do, and the ATCF(the Agricultural Technology Commercialization Foundation). The WG held 1 to 4 times of field briefing sessions and received farm-applicants every year in Chungnam-do. Potentiality and possibility of applicants’ reductions capacity was discussed and determined in the WG once project recruitment was closed. Then actual low-carbonization farm activities were lively proceeded after project funding was delivered to those selected applicants; the WG did K-ETS external project enrollment instead of participants and paid investment funds as type of pre-purchase the anticipated emission credits from applied low-carbon farming. For the past 5 years since project launched in 2016, 79 farm-households have been approved as “External Reduction Project related to emission right securing” by the Korean Government; with applied GHGs reduction methodologies such as geothermal heat pump application, woody pellet boiler replacement, air heat pump application, and biogas plant adoption. The governmental approval enabled to link to K-ETS so as to secure government granting emission credits issuing from this project. It is now expected that approximately 120 thousand tons of GHGs reductions from this project period, those 79 farm-applicants received about 1.8 billion KRW(1.5 million USD) as ex ante emission credits purchase. It is also expected that 34.7 billion KRW of energy consumption cost saving will be achieved during 10 years of project expansion with low-carbonization cultivation in those 79 beneficiaries. In terms of enlighten this project’s transparency, periodical reduction monitoring and the third party’s verification was included in project develop procedure, final reduction approval was proceeded by the Government’s process including jurisdictional evaluation. KOWEPO has secured and strengthened agriculture’s sustainability with GHGs reduction, secured emission rights by that mechanism from business implementation to final evaluation.

For this project was the one and only business model in Korea, there was no relevant process existed nor case for benchmarking at the beginning, thus KOWEPO faced with obstacles. Nevertheless, the more difficulties the WG faced the higher sense of duty project designers inspired, thus initial project mechanism was successfully prepared. Beyond the administrative aspects there had been also awareness barrier breaking with farmers about the necessity of low-carbonization. KOWEPO held 1 to 4 times of annual field promotions with business explanation toward farm-households. As a result local farms’ recognition was increased and their perception was changed.

This “Wellbeing rural development project” is a brand-new business model ever tried in Korea, so it is clearly distinct and innovative. Domestic GHGs reductions have been done mostly in chimney industries with emission rights trading(K-ETS), however, this project issued new possibility of GHGs reduction in non-chimney industries related to emission trading scheme with appropriate investment and benefitial return to participants, which represents this project’s creativity. This project suggested new GHGs reductions methodology in non-industry sectors as well as secured industrial sustainability. This project has unique and innovative performance of GHGs reduction and sustainable agriculture development contribution, aligned to achieve SDGs.

Not Applicable (This project is the very first trial with successful performance, consequently it is now spreaded and inspired to other regions and institutions.)

Not Applicable (This project introduced fossil fuel using farm-housesholds to existing energy-saving technologies; heat pump adaptation, multi-layer insulation curtain installation, woody-pellet boiler replacement, etc.)

In 2016 this project was initially launched in Chungnam-do(province) under leadership of KOWEPO(Korean Western Power), scaled-up spreaded and benchmarked. In 2018 KOEN(Korea South-East Power, formally known as KOSEP) launched the same project in Gyeongnam-do(province) and KEPCO(Korea Electric Power) also launched the same one in Jeonnam-do(province). Not just this but to expand, KOWEPO signed MOU in May 2020 with the JARES(Jeju Agricultural Research & Extension Services) to apply “Wellbeing rural development project” also in Jeju-do(province) where policy driven carbon-zero island is about to be started. KOWEPO will spread this project to Jeju-do for agriculture low-carbonization. Not to be limited in regional spread but to sectoral spread this business model, this project was benchmarked to other sectors likes building reductions and afforestation; KOWEPO and the KEA(Korea Energy Agency) agreed by MOU to apply project mechanism into building GHGs reduction sector so as to contribute to national emission reductions, and KOWEPO also planned afforestation with Gangwon-do’s(province) cooperation, the first “Carbon Offset Forest of Peace” was successfully created which was also benchmarked by other public institutions. In conclusion, this project is one best practice that launched provincially but spreaded in nation-wide scale and inter-sectoral(afforestation and building reduction) as well.

Not Applicable

(Financial support) The gross amount of funding were 2.1 billion KRW(1.75 million USD) ; 1.8 billion(1.5 million USD) KRW for pre-purchase ex ante emission credits and 0.3 billion KRW(the rest of it) for administrative fees of business enrollment of 79 farm-applicants. (Personnel support) The working group composed of experts from each public institutions provided solutions such as institutional alternatives for trouble shooting. Experts visited or documented to low-carbonization business owners for solution suggestions.

Since 2015 when MOU was signed, awareness change in agriculture has been widely spreaded through this “Wellbeing rural development project”; renewable energy source adoption in farms, low-carbonization and minimization of fossil fuel usage in agriculture, contribution to national GHGs reduction as well as increase farm-households’ competitivity, until now. Such spread of perception changes altogether with business expansion and GHGs reduction performance can secure sustainability of this project and motivation for expansion as well.

Si

All sub-projects were evaluated and approved as "External Reduction Project" by Korean Government. (Process Evaluation) Each 79 individual project applied and installed one of reduction methodologies that approved by the Government; national methodologies defines specific type of technology application with monitoring and verification for transparent measurement of GHGs reduction result. All 79 projects had been evaluated by such process which is defined by law and subsidiary regulations. (Performance Evaluation) Best practice nomination and commendation by the ministry of industry, agriculture, and the local government highly proved successful project’s performance in GHGs reduction, agriculture development, and social value creation as well.

Tools for projects’ evaluation was the Government’s approval to “External Reduction Project”. Such approval process is opened and monitored only to GHGs reduction/sink/elimination businesses under national guidelines which is strictly operating regulation as similar as the level of international GHGs reduction mechanism. In other words, this “Wellbeing rural development project” is possibly one GHGs reduction business model as international best practice.

Each of 79 farm-business had several steps of “External Reduction Project” approval. The working group did general field evaluation on farm applicants which contains; GHGs reduction technology application, operation, monitoring measurement. Then project design documents were prepared including; definition on the baseline scenario, monitoring methodology, counting project activity emission reductions, necessary data of verification, etc. The MAFRA(the Ministry of Agriculture, Food and Rural Affairs) verified and the MOE(the Ministry of Environment) approved requested project documents and issurance of reduction credits. This “Wellbeing rural development project” was verified and approved through such the governmental processes so that aligned with international standards, emission reductions credits issued by this “Wellbeing” project can be traded in K-ETS(Emission Trading Scheme) which provides sustainability after all.

“Wellbeing rural development project” was designed by KOWEPO with implementation leadership for activating GHGs reduction in agriculture and increasing welfare as well, in line with the K-ETS(Korea Emission Trading Scheme) was implemented in 2015. The Central Government(the MAFRA) took the institutionalization scope, the Local Government (Chungnam-do) took the intermediate position that visualized farms’ needs to reflect project mechanism design, KOWEPO and the ATCF(the Agricultural Technology Commercialization Foundation) researched countermeasure on connection agriculture GHGs reduction with K-ETS. Each institutional scope was horizontally formulated, cooperation relationship was the basis of planning this project. Farm households selection was one sharp and sensitive edge of this project, thus the working group(decision making committee) was composed with equivalency of each public institutions to determine crucial issues, prevent anticipated or unexpected obstacles, proceed this project in good manners and better ways. Such solid and concrete cooperation partnerships and equivalent working group provided excellent motivation on successful implementation of this project.

(In 2015) Project design was started by KOWEPO, the MAFRA, Chungnam-do, the ATCF, and the KFQ(Korean Foundation of Quality) to project baseline preparation for securing sustainability in agriculture related to K-ETS also launched in 2015. (In November, 2015) “Wellbeing rural development project” was launched with Triangular MOU signed among KOWEPO, the MAFRA, and Chungnam-do. (In 2016) the working group gathered; KOWEPO, the MAFRA, Chungnam-do, and the ATCF. This project authentically started with field briefing on project summary and promotion to interesting farms. Applicants selection, introducing reduction technologies, and funding support was done step by step, annually. Project implementation businesses were enrolled by the working group and finally approved as “External Reduction Projects” by the Ministry of Environment. (In 2018) For encouraging project’s promotion and expansion, KOWEPO has recruited “GHGs Reduction supporters” consisted of rural returners and graduates free of charges. This program created jobs to rural returners and graduates in the field of GHGs reduction project as management experts. “Social Value Promotion Committee” where actual participants(farmers) took part in, for communication with reflux, for project evolution by needs of beneficiaries. As results, KOWEPO contributed to inclusive GHGs reduction modeling as well as national GHGs reduction and agriculture sustainability increase.

“Wellbeing rural development project” is the very first business model ever in Korea. Initial contemplation among the working group brought into brand new guidelines and procedures, which is now spreaded to other sectors and benchmarked by relevant public institutions, ultimately will contribute to national GHGs reduction, these facts are of great significance of this project. Although there had been trial with errors for sure, nevertheless, business model and operational regulations have been solidly formulated. This project is now spreaded beyond border from Chungnam-do to Jeju-do(island) and inter-sectoral expanded into building reductions and afforestation with reputational domestic evaluation as inclusive GHGs reduction project. Additionally, this project was introduced as best practice at the 25th of Conference of the Parties in Spain, last year, with international attention from COP observers worldwide. Based on such performance, KOWEPO will evolve this project to a international one so as to be benchmarked by global stakeholders, to expanded it to developing countries, and to achieve and realize global SDGs.