South Korean companies should continue investing in the United States' clean energy market despite an anticipated drop in the US' own interest in the sector, a report said Wednesday, insisting the drop in US interest will only be temporary.
The report from the Institute for International Trade noted the new Donald Trump administration was expected to quit the Paris Agreement on climate change, under which 194 signatories, including the US, are required to achieve their nationally determined contributions to greenhouse gas emissions reductions.
An image of windmills (Yonhap)
Citing Trump's campaign pledges and policy objectives of his government, the report said the US government was also expected to repeal its climate action plan and clean power plan initiatives that sought to promote the use of clean, renewable energy.
Instead, "The Trump government is highly likely to pursue fossil fuel-friendly policies," it said.
The IIT is a private think tank run by the Korea International Trade Association, the largest trade organization in South Korea.
The report, however, claimed the negative impact the United States' apparent regression to fossil fuels will have on the development of clean and renewable energy will be limited, if there is any.
"Such fossil fuel-friendly policy direction may lead to a slight drop of investment in renewable energy in some areas with fossil fuel-based economic structures, but its impact on the overall market will likely be limited," it said.
First, some 4,000 state and federal government programs aimed at promoting clean, renewable energy sources are already under way, with tax incentives for many such programs already extended to as late as 2020, the report pointed out.
"Also, new policy initiatives proposed by Trump on boosting investment in infrastructure include four wind power-related projects, sending a positive signal to the overall market for renewable energy," it said.
"The Trump administration will most likely take a different path from that of the Obama administration in dealing with energy and climate change," it added. "And that is why South Korean firms must closely monitor the future direction of the related US policy and work to turn a crisis into an opportunity." (Yonhap)