Australia and South Korea have a long history of friendship and co-operation. My country is Australia's fourth-largest trading partner, and this year we will mark the 60th anniversary of diplomatic relations. But big changes are under way, raising the question of how we can evolve our relationship in a decarbonising world.
South Korea's economy is currently rapidly transitioning away from coal, which will have a lasting impact on our key trading partners. Our trade relationship with Australia is currently built on fossil fuels, with South Korea importing large amounts of coal and exporting large amounts of refined petroleum.
Our countries face similar challenges, with both having large per capita carbon footprints and both facing the challenge of decarbonising our fossil-fuel-reliant economies while expanding our economy and jobs. It's wise for us to look to prosper together in a renewable energy future. We have much to learn from each other.
With the beginning of the Biden administration and stricter environmental policies being enacted in the European Union, failing to respond to climate change means losing competitiveness in the global economy. Through ambitious wind mega-projects off the coast of South Korea and Australia's proven solar potential, with the right policy changes Australia and South Korea can together become the renewable energy superpowers of the 21st century.
South Korea, along with China and Japan, is one of the world's last three countries to finance the coal industry, and is still one of the world's seven largest carbon emitters. No financial institutions have joined international networks to green the financial system. But changes are being made, and have accelerated since President Moon Jae-in took office in 2017, and since 2020 when my party, the governing Democratic Party, took up a majority of the assembly seats. Environmental experts have also become legislators, which has been key.
Even before the new assembly opened in May 2020, the Korean New Deal taskforce was created to discuss the Korean New Deal, which consists of the Green New Deal and Digital New Deal. The taskforce also drew up the outlines of the 2050 net-zero target, which President Moon made official during his speech at the assembly last year.
Since the announcement, many sectors and key players, including government ministries, have changed their attitude towards climate change and acted accordingly, and President Moon has signalled that we all should move toward a low-carbon society. He also announced the country's state-run financial firms would stay out of future coal power projects during the Biden climate summit on April 22.
As a lawmaker myself, I was tasked with overhauling our financial system to cope with the change, and to finance the Green New Deal. Together with three fellow legislators, I proposed a bill to stop Korean public financial institutions from funding coal projects abroad, and worked on bills aiming to mandate that financial institutions and pension funds must take ESG (environmental, social and governance) factors into account. If they are passed, it's expected that investment will shift from carbon-intensive industries to renewable energy sectors.
Most importantly, the bill for a special act to promote green finance to respond to the climate crisis should be passed. The legislation aims to have the government set the basic principles of green finance, limit financial support for the fossil fuel industry and establish a green financial corporation.
For this bill, I have done an extensive case study on Australia's Clean Energy Finance Corporation, which is a world leader and a good example for South Korea, which has just begun the conversation on green finance. This is another area where South Korea and Australia can work together.
South Korea and Australia should be looking to the carbon-free future and promoting a green recovery. Together we can find the solutions and prosper together in a renewable-led future.
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