hankyoreh

South Korea has set up a 200-billion-won (US$212 million) "carbon fund" aimed at financing commercial greenhouse reduction programs, the government said Thursday.

The Ministry of Commerce, Industry and Energy said the so-called capital call method will be used to create the fund.

This method pools funds every time an investment opportunity presents itself.

"The fund is to be used to finance renewable energy endeavors that can cut back on carbon dioxide emission and recover methane gas from landfills," said Cho Seok, head of the ministry energy and resources policy bureau. He said money will also go into the reduction of non-carbon dioxide (CO2) gasses that are harmful to the environment.

An investment firm that will run the fund was set up on August 14 and registered with the Financial Supervisory Service on Monday.

Reduction through such efforts could be sold for cash on both the local and foreign climate exchange markets.

The government said Wednesday it will establish a local carbon exchange market by the end of the year that will allow companies to sell their cuts in greenhouse gas emissions. The government and state-run energy companies, including Korea Electric Power Corp.,

Korea Hydro & Nuclear Power Co. and Korea District Heating Corp.,

are to be the main buyers.

Cho said for the near future, the fund is to be injected into solar energy and waste heat recovery projects.

South Korea is not a member of Annex I of the Kyoto Protocol that went into effect in early 2002, but it ranked tenth in the world in terms of CO2 emitted as of last year. The amount of CO2 released has resulted in growing pressure by the international community to join the mandatory reduction programs.

Under the Kyoto Protocol of 1997, which is a working agreement of the United Nations Framework Convention on Climate Change, Annex I countries must reduce their aggregate emissions of greenhouse gases by at least 5 percent from 1990 levels during the 2008-2012 period. SEOUL, Aug. 23 (Yonhap News)