Green Building Blocks: Quad-South Korea Cooperation on Climate Infrastructure
By James Bowen
This chapter was written by Policy Fellow James Bowen as part of the German Marshall Fund’s policy paper, ‘Building a Quad-South Korea Partnership for Climate Action‘, published in July 2022.
Climate change and infrastructure demand are two of the most pressing, and highly interrelated, global challenges. Advanced economies continue to edge toward meeting a modest goal of donating $100 billion per year to meet developing-country climate needs.1 Most of this funding, and any rising quantum, must go toward developing new physical assets for decarbonizing economies and protecting against natural disasters. A 2021 United Nations report estimated infrastructure was responsible for generating 79 percent of global greenhouse gas emissions.2 It also accounted for 88 percent of necessary adaptation costs. Indo-Pacific countries face some of the most acute needs. Climate-responsive assets add $200 billion to the $1.5 trillion in annual infrastructure spending that the Asian Development Bank estimates the region needs to maintain growth and eradicate poverty.3
South Korea should be integrated into existing Quad initiatives on green shipping, hydrogen infrastructure development, and adaptation infrastructure.“
Infrastructure provision and climate change action are key priorities of the Quad and its members’ future Indo-Pacific engagement. These complementary endeavors align well with existing South Korean interests and abilities. The Quad governments and Seoul could cooperate more closely on meeting vast regional needs in this area, and there are promising opportunities for the Quad and Korea to grow both financial and technical aid. Big wins are possible from better leveraging well-established commitments and institutions. Specifically, South Korea should be integrated into existing Quad initiatives on green shipping, hydrogen infrastructure development, and adaptation infrastructure. The Quad countries also have the opportunity to learn from Seoul’s implementation of green growth principles and to engage with the Global Green Growth Institute and the Green Climate Fund, which are both based in South Korea.
Quad Commitments on Climate and Infrastructure
The first in-person Quad leaders’ summit in September 2021 confirmed the group’s commitments to both infrastructure provision and climate action.4 Several pledges recognized the bridges between these two outcomes. One of two big mitigation-focused initiatives was the development of an Indo-Pacific “green shipping network” that would deploy clean fueling facilities and other decarbonized port infrastructure. The other was the creation of new regional hydrogen supply chains. Both these efforts focus on exploiting intra-Quad interests and abilities. Yet they might still open doorways to external engagement by proving the viability of new industrial pathways and helping bring down costs.
By necessity, adaptation-focused infrastructure commitments at the 2021 summit focused more on third-party countries. The most notable of these would equip the Delhi-based Coalition for Disaster Resilient Infrastructure (CDRI)—which includes all Quad members—with a new technical assistance facility for aiding small island developing states. Generic Quad infrastructure commitments will also have climate-centric implications. These include efforts to align future work streams with the G7’s Build Back Better World (B3W) infrastructure drive. There are also plans for a new Quad infrastructure coordination group that would conduct regular assessments of Indo-Pacific infrastructure needs and promote transparent and high-standards responses to them.
Coordinated Quad efforts in turn make up only a small part of the total contributions which individual members—largely the advanced economies of Australia, Japan, and the United States—make to climate infrastructure. Much financial assistance from these countries continues to be channeled through multilateral development banks (MDBs). Yet more prominent flows also feature in bilateral mechanisms formed in response to China’s Belt and Road Initiative.
For example, the Australian Infrastructure Financing Facility for the Pacific is supporting solar power projects in Papua New Guinea and Palau, hydropower in the Solomon Islands, and flood alleviation in Fiji.5 Tokyo’s Partnership for Quality Infrastructure platform has been more active in Southeast Asia. Japanese-funded projects in Indonesia alone cover geothermal power, mass transit, and countering land subsidence.6 Washington’s most prominent recent commitment is a $500 million International Development Finance Corporation loan, which will support a US solar company building a factory in fellow Quad member India.7
Importantly, President Joe Biden has sought to make climate-centric investment an organizing principle of future US infrastructure investment. Guidance issued to US international finance agencies in 2021 called for ending support to carbon-intensive projects and prioritizing climate mitigation and adaptation investments.8 If consistently implemented, this could have important flow-on effects to future Quadaligned activity.
Integrating South Korea into Quad Initiatives
There is considerable potential for South Korea to cooperate more closely with the Quad and its members on climate-focused infrastructure facilitation. This could exploit strong complementarities and existing channels of engagement in this space. It could support the priorities of South Korea’s New Southern Policy (NSP), reify Seoul’s longstanding support for “green growth,” and engender greater support for key climate-related institutions already based in the country.
South Korea has direct interests in the Quad’s two major mitigation-focused infrastructure efforts. It has a strong established presence in global shipping, and in 2020, the Ministry of Oceans and Fisheries supported the pursuit of a bigger green shipping foothold.9 South Korea is also a strong advocate of hydrogen as a fuel for decarbonizing sectors including transport, power, and heavy industry. It shares this ambition with Japan and is already working to secure supply from emerging exporter Australia.10 Incorporating South Korea in Quad conversations on green shipping and hydrogen infrastructure development should thus be a priority.
South Korea and the Quad should also look to cooperate more on providing adaptation infrastructure. Assets in this space are sorely needed in highly vulnerable states such as the Indo-Pacific’s many low-lying island nations. Yet spending in the area currently accounts for only about 25 percent of climate-related financial transfers from advanced to emerging economies.11 The most obvious channel of South Korea-Quad convergence here would be Seoul joining the CDRI, which would provide an important avenue of cooperation with third-party countries.
South Korea and the Quad should also look to cooperate more on providing adaptation infrastructure.“
Joining the CDRI would also signal South Korea’s support for India’s growing regional leadership. This would align with Seoul’s NSP priorities of diversifying economic and strategic relations. South Korea could also work with Quad partners on climate infrastructure in the NSP’s other focus area of Southeast Asia. Direct alignment with the most active partner in this region, Japan, may face strong political headwinds due to recent disputes over trade and historical issues between the two countries. Enhanced South KoreaQuad support for MDB activity could overcome this. The Asian Development Bank’s new $25 million Climate Innovation and Development Fund is indicative of strong prospects in this regard.12
Leveraging and Learning
The Quad countries should simultaneously be aware of and seek to support what South Korea can offer on climate infrastructure. Seoul has long been a leading proponent of marrying improved environmental and economic outcomes, particularly in the wake of major crises. The blueprint for South Korea’s post-coronavirus Green New Deal was established with its promotion of “green growth” as a means of recovery from the 2008 financial crisis.13
These green growth principles could help inform Quad climate infrastructure activity. They would particularly benefit commitments that overlap with the B3W program, which was itself a response to the coronavirus pandemic. US policymakers implementing new guidance on climate-centric infrastructure could also benefit. Dialogue with South Korean partners could help them develop pathways that improve both development and climate outcomes in third countries.
The most beneficial product of South Korea’s green growth push is in the institutional space. Seoul formed the Global Green Growth Institute (GGGI) in 2010 to provide policy and investment assistance to developing countries. It established the Green Climate Fund (GCF) in the same year under the aegis of the United Nations Framework Convention on Climate Change. This is the central agency for mobilizing and distributing climate finance to developing countries.
Quad members could better leverage these assets in several ways. One obvious suggestion is for Japan and the United States to join Australia as advanced economy members of the GGGI, which already works with India as an aid recipient. Another valuable outcome would be the Quad Infrastructure Coordination Group working with GCF officials to create climate-centric mechanisms for monitoring and responding to Indo-Pacific infrastructure needs.
Conclusion
The pervasive need for new climate-responsive infrastructure is a huge liability for the Indo-Pacific. Left unaddressed, it will exacerbate harmful warming and leave many countries exposed to grave economic and political insecurity. But massive needs create attendant opportunities for engagement by countries with significant capacity. The Quad countries and South Korea have well-aligned national infrastructure interests in areas such as green shipping and hydrogen. They have even more meaningful abilities to collaborate on providing third countries with the assets they need to both mitigate and adapt to climate change.
Seizing this opportunity can begin with relatively simple recalibrations of the membership and priorities of existing partnerships and institutions. The vast scale of the climate infrastructure challenge is conducive to creating stronger and more sustainable relationships between South Korea, the Quad countries, and the broader Indo-Pacific.
References
1. Jocelyn Timperley, “The broken $100-billion promise of climate finance—and how to fix it”, Nature, October 20, 2021.
2. Scott Thacker et al, Infrastructure for climate action, United Nations Office for Project Services, October 12, 2021.
3. Asian Development Bank, “Meeting Asia’s Infrastructure Needs,” February 2017.
4. The White House, “Fact Sheet: Quad Leaders’ Summit,” September 24, 2021.
5. Australian Infrastructure Financing Facility for the Pacific, Investments.
6. Japan International Cooperation Agency, Cooperation on Climate Change, October 2021.
7. US International Development Finance Corporation, DFC Announces Approval to Provide up to $500 Million of Debt Financing for First Solar’s Vertically-Integrated Thin Film Solar Manufacturing Facility in India, December 7, 2021.
8. The White House, US International Climate Finance Plan, April 21, 2021.
9. Ministry of Oceans and Fisheries, 2030 Greenship-K Promotion Strategy to Dominate the Global Green Ship Market, December 23, 2020.
10. James Bowen and Kyle Springer, Strategic Energy: The Emerging Australia-Korea Hydrogen Partnership, Perth USAsia Center, March 25, 2022.
11. Julie Bos, Lorena Gonzalez, and Joe Thwaites, Are Countries Providing Enough to the $100 Billion Climate Finance Goal? World Resources Institute, October 7, 2021.
12. Asian Development Bank, Establishment of the Climate Innovation and Development Fund, March 2022.
13. Hyoeun Jenny Kim, OECD and Korea, Champions of Green Growth, The Organization for Economic Cooperation and Development Forum Network, October 19, 2021.