[Introduction]
Hi, I’m Cuicui from SUNY Albany,
where I research how firms and governments respond to environmental and energy challenges.
Today, I’m excited to discuss a fascinating report recently released by the Bank of Korea,
titled "The Path to a Carbon Neutral Economy: Current Status and Challenges of Korea’s Climate Technologies."
Joining me today is Eseul Choi, one of the report’s authors.
Let’s start with the motivation behind your research.
How did you get started with this focus on climate change and climate tech?
Well, as the impacts of climate change became more severe,
a global call to action emerged under the slogan of 'Carbon Neutrality' - the title of our report.
This means reducing net carbon emissions to zero.
But here’s the challenge: climate response is increasingly reshaping global trade and regulatory environments,
which might pose significant economic shocks in near term, especially for a country like South Korea.
Our economy is heavily export-driven and centered on carbon-intensive manufacturing industries.
But, starting in 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) will impose costs on imports based on their carbon emissions.
Similarly, the global RE100 campaign, which pushes companies to use 100% renewable electricity throughout their production,
is influencing South Korea’s partner firms to follow.
Given these dynamics, we felt it was critical to evaluate where South Korea stands and how our industries are adapting.
So, for South Korea, achieving carbon neutrality isn’t just about contributing to global climate mitigation efforts.
It’s also about preparing for an immediate economic shift. That’s a powerful motivator.
Now, why did you decide to focus specifically on climate tech in this context?
To meet these new climate response requirements, we essentially have two options:
1. Reduce the production of carbon-intensive goods.
2. Reduce emissions during the production process.
To avoid economic contraction, the 2nd approach—developing and implementing climate tech—is essential.
Okay, before we dive deeper, let's clarify what climate tech means so we're all on the same page.
Sure, climate tech refers to any technology that helps mitigate or adapt climate change.
It’s like a toolbox filled with innovative solutions for reducing greenhouse gas emissions and adapting to our changing environment.
What’s even more exciting is that many of these technologies also offer significant economic opportunities.
Absolutely. I’ve also studied climate tech,
particularly in areas like electric vehicles (EVs) and carbon capture, utilization, and storage (CCUS).
These aren’t just tools to fight climate change—they’re drivers of economic transformation.
For example, I’ve seen how CCUS projects in the U.S. not only reduce emissions
but also create new markets for captured carbon,
like using CO₂ in concrete production to strengthen building materials and in carbonated beverages for the food and drink industry.
Similarly, the rapid growth of EV adoption worldwide is also shaping global supply chains.
It’s clear that climate tech plays a critical role in aligning environmental goals with economic growth.
Exactly.
Now, let’s dive into the specifics of your findings and how South Korea is currently positioned in this global race.

[Current status]
One thing that stood out to me as I was reading the report is how Korea has established itself as a global leader in climate technology,
particularly in areas like EVs and batteries.
That’s right. When it comes to climate tech innovation, South Korea has made remarkable progress.
Between 2011 and 2021, Korea ranked third globally in climate tech patent filed in the U.S.
In specific fields like secondary batteries, electric vehicles, renewables, and ICT, Korea’s presence is even more dominant.
For example, Korea accounts for over 20% of global patents in batteries, which are critical for the EV industry.
That’s really impressive.
Batteries, in particular, are the backbone of so many climate tech solutions, from EVs to renewable energy storage.
But as someone who has studied the EV market, I’ve also noticed that innovation isn’t just about quantity—,
How does Korea fare in terms of market concentration and innovation quality?
That’s a great point.
While Korea’s quantitative performance is outstanding, there are challenges in how diverse and impactful its innovations are.
We found that 2/3 of climate tech patents are concentrated within just four major companies, including LG Chem and Samsung Electronics.
This heavy reliance on a small number of players might limit the ecosystem’s overall resilience and adaptability.
That’s an important insight.
When innovation is so concentrated, smaller companies and startups can struggle to compete or even enter the market.
This isn’t just a Korean issue—it’s something we’ve seen globally.
For example, in the global EV battery market, the top producer held close to 40% of the global market share in 2024.
So for Korea, What are some of the implications of this concentration in innovation?
The concentration of innovation means that technological development is focused on a narrow set of industries and technologies.
While this has helped Korea excel in certain areas like batteries and EVs,
it also means we’re not seeing enough diversification into other critical fields, such as carbon emission intensive manufacturing or CCUS.
This could limit Korea’s ability to respond flexibly to future challenges or capture opportunities in emerging climate tech markets.
Diversifying into areas like CCUS could not only enhance Korea’s climate strategy but also align with broader global trends.
For instance, CCUS technologies are gaining momentum globally,
with the U.S. leveraging tax incentives like the 45Q credit to drive innovation
and utilization in industries such as concrete production and enhanced oil recovery.
By investing in similar initiatives,
Korea could position itself as a leader in this growing sector while also reducing its industrial emissions.
Let’s shift to the quality of Korea’s climate technologies.
Patent numbers are important, but the true test lies in the impact and creativity behind those innovations.
How does Korea perform in this area?
well, our study found deficiencies in the qualitative aspects of these patents.
For example, Korea lags behind other top 10 leading countries like the U.S. and Germany in key qualitative metrics such as: citation, originality, generality, and radicalness.
These indices highlight that Korea’s patents often lack the broad applicability or transformative impact seen in the work of global leaders.
That’s interesting.
I’ve found that these qualitative aspects often determine whether a technology truly transforms an industry.
For example, a groundbreaking EV patent might not just improve efficiency but could also pave the way for entirely new manufacturing processes.
Do we know why Korea’s climate tech struggles in this area?
Great question.

[Causes]
Our research identified three primary causes contributing to the high concentration and qualitative deficiencies:
1. Short-term focus
2. Limited incentives
3. Challenges in financing
Let’s start with the first point:
In Korea, innovation investments are heavily focused on mature technologies that are ready for commercialization
—those that deliver immediate market returns.
I see.
So, it sounds to me that there would be less emphasis on high-risk foundational work in general when it comes to firms’ R&D strategies.
Does this pattern impact the overall quality of innovation?
That’s exactly right.
Firms often focused on incremental improvements rather than those aha moments of disruptive innovation that stem from basic research.
In fact, Korean climate tech patents cite just 1/5 of the academic literature compared to other leading nations.
Citations of academic research are important because they show how innovations build on existing scientific knowledge - a key factor in high-quality innovation.
Okay, so while South Korean companies are like charging ahead with commercially viable climate tech solutions,
the underlying research foundation seems a bit shaky.
And this highlights another critical piece of the puzzle that we need to explore:
how have government policies shaped South Korea's climate tech trajectory?
What about government incentives?
This brings us to the second cause: limited incentives.
Government policies have not provided strong enough incentives for carbon reduction or riskier, long-term innovation.
Government R&D support has been lower than the average among climate tech leading countries.
Additionally, Korea's carbon pricing mechanisms remain less robust, with issues such as excessive free emission permits and low carbon prices.
That makes sense.
I’ve seen in the economic literature how stronger carbon pricing can actually lead to more green innovation.
It sounds like Korea’s policies need to evolve to create a better balance between short-term and long-term goals.
What about financing?
Yeah, financing is another critical challenge.
We found that South Korea is lagging behind other leading nations when it comes to both green bond issuance and venture capital investment.
Green bonds are financial instruments that channel investments specifically into environmentally beneficial projects,
such as developing energy-efficient technologies.
While leading countries have seen significant growth in green bond issuance since the mid-2010s, Korea only began issuing them at a meaningful scale in 2021.
And the same goes for venture capital, which is crucial for early-stage startups that often drive truly disruptive innovations.
South Korea's venture capital investment in climate tech startups is still far behind global leaders.
I see the pattern.
Without adequate financing, smaller firms are unable to take the risks needed to develop groundbreaking technologies.
It also reinforces the concentration issue that we discussed earlier.

[Policies]
Now let's shift gears and talk solutions.
What needs to change for South Korea to become a first mover in climate tech?
Feels like we've uncovered systemic issues already.
Our report lays out three key policy directions that are critical to advancing Korea’s climate technologies:
1. Strengthen government R&D support
2. Enhance carbon pricing mechanisms
3. Improve financing conditions for innovation
That sounds like a solid plan.
These policy recommendations are well-supported by the literature as backbone strategies.
They are well positioned to address market failures such as R&D externalities, emissions externalities, and financing obstacles.
Yes, absolutely.
I believe we need to design these policies to work in harmony.
For example, the government could use carbon pricing revenue to fund R&D initiatives.
That's an excellent point.
How would you summarize the potential impact of these policy recommendations?
According to our analysis, if we improve each policy measure by 40% from current levels,
Korea could join top-tier climate tech leaders like the US and Switzerland - considering both the quantity and quality of innovation.
Transforming Korea into a 'first mover' in climate technologies would not only bolster Korea's global leadership,
but also create new economic growth engines, mitigate the risks of climate-related trade barriers,
and enhance the country's resilience against the climate crisis.
That’s inspiring.
Climate tech is not just about addressing the climate crisis—
it's also about rethinking how we grow and innovate as a global community.
Korea has a unique opportunity to lead that charge, and I’m excited to see how it unfolds.
By aligning bold policies with strategic investments,
Korea can set a powerful example of how nations can turn climate challenges into transformative opportunities for innovation and sustainable growth.

[Outro]
Well, Eseul, this has been an enlightening discussion.
Same here. It’s been a pleasure sharing these results.
And to everyone, thanks for watching this video.
If you want to learn more, you can find the full report on the Bank of Korea’s website.
Also, don't forget to hit the subscribe button for more research insights!
Bye!