The problem is apparent: Seoul’s fine dust concentration rate is much higher than most other developed cities. According to the 2016 Environmental Performance Index (EPI), compiled by Yale and Columbia universities in collaboration with the World Economic Forum, South Korea ranks a lowly 173rd out of 180 countries in terms of air quality. Furthermore, statistics from ‘airvisual’ which tracks air pollution levels, showed during one week in March 2017 three South Korean cities ranked in the world top ten worst affected by air pollution. The Organisation for Economic Cooperation and Development (OECD) reported that in 2015 South Korea’s average exposure to fine-dust particles under 2.5 micro-metres in size was the highest of all OECD member nations.


The main components of air pollution include carbon oxides (primarily from vehicular emissions); sulphur oxides (primarily from vehicle emissions and burning of fossil fuels); nitrogen oxides (primarily the result of combustion engines such as those in automobiles); volatile organic compounds, VOCs, which are typically classified as methane (primarily produced by livestock digestion fossil fuel extraction and decomposing biomass), and nonmethane (derived primarily from building materials and cleaning products); toxic metals such as lead and mercury; and last but not least, particulate matter also known as PM, which may include COx, SOx, and NOx. Particulate matter is a mixture of solid particles and liquid droplets found in the air. Some particles, such as dust, dirt, soot, or smoke, are large or dark enough to be seen with the naked eye.

Through chemical reactions, sometimes from photo-dissociation by sunlight, primary pollutants can form secondary pollutants, including fine particles in the atmosphere. Getting rid of these is more complex, in part due to their size. These 2.5 micro-metre and even smaller particles, each roughly the width of a thirtieth of a human hair, have the capacity to enter deep inside our organs and even the bloodstream to cause respiratory and cardiovascular disease. According to WHO, this fine dust is the #1 cancer causing agent in air pollution.

Illnesses related to air pollution also include cardiac and respiratory disorders and stroke. According to the OECD report “Environmental outlook to 2050”, air pollution will be the biggest threat for the young-child death rate in future. Fine micron dust is being identified as an agent in an increasing number of human disabilities and serious illnesses such as mental and neurological impairment, bone diseases, reproductive defects and even diabetes.

Fig 1: Air Pollution (PM2.5) as at 13 December 2015


In an estimate from South Korea’s environment ministry, China’s contribution to Korea’s PM10-- particulate matters with ten micro-metres or less in size--ranges from 30 to 50 percent on average, but can reach up to 80 percent on the haziest days. According to the World Bank, only one percent of China’s 560 million city dwellers breathe air considered safe by the European Union, which the bank attributes to PM2.5-particulate matter 2.5 micro-metres or less in diameter-resulting, largely, from burning coal.

However, while China has recently decreased its dependence on coal power, Korea operates 53 coal-powered plants and intends to construct 20 more in the next fi ve years. Although ten ageing plants will be shut by 2025, between 2005 and last year, the capacity of the country’s coal-fi red power plants increased almost 95 per cent. Burning of the fossil fuel — a source of carbon dioxide emissions and smog — accounts for about 40 per cent of the country’s energy generation.

Whether China admits responsibility for Korea’s poor air quality, there is sense in the two cooperating to improve it, given their proximity and wind fl ows. China included an ambitious target reduction of PM2.5 in its last fi ve-year plan, but admitted in October that it was unlikely to achieve its clean air goals for 2017. In fact, the ban on coal-heating in northern China is now in place; yet, the replacement gas-heating system isn’t. Many provinces, including Shandong, Shanxi, Shaanxi, Hebei, Henan, and Tianjin, have issued strict regulations to prevent residents from burning coal, meaning that thousands of families, schools, and factories in northern China may be shivering this winter — probably not a sustainable model for a democratic society. However, because China is focused on becoming “beautiful”, taking a lead in AI development, and attracting investment funding in cleanup technology and alternative energy from third parties such as the ADB and state governments, it could be a useful partner.


In 2016, the Korean government implemented a new policy to control fi ne dust, but its effect thus far has been limited. The Ministry of Science and ICT identified “fi ne dust removing technology development” as one of nine National Strategy Projects. Fine dust related technology can be broken down into four major areas (outbreak, measurement and forecast, dust collection and reduction, protection and counter action). The plan included industrialisation of such technology and collaboration with foreign institutions. In 2014, the market size of the fine dust management environment was KRW6.2 tn (USD5.67 bn) and the export market was KRW3.3 bn (USD3 mn). Within the next 10 years, the government expects the domestic market size will triple and the export market will increase by 10 times. This may not be enough soon enough.


While China could become a partner in resolving the Korean air pollution problem, the US case might be seen as a precedent. It began the fight against air pollution with the 1955 Air Pollution Control Act which provided funds to local and state agencies for research and training. This was followed in 1962 by the Air Pollution Control Act which required auto emissions controls; and the Clean Air Act in 1963 which authorised funding for research and training; and the 1965 Motor Vehicle Air Pollution Control Act, which set national standards for auto emissions and coordinated pollution control between the United States, Canada, and Mexico. The Environmental Protection Agency was established in 1970, and under its auspices, emissions standards were established for industries and for specific pollutants with major goals for protecting and promoting human health and public welfare. Unfortunately, less progress is evident under the current US administration.

Research in the US has shown repeatedly that the projected costs of following pollution standards often turn out to be gross exaggerations, both because the estimates are based on information from industry and because innovation ends up reducing prices. The U.S. Census Bureau conducted an annual survey of the U.S. manufacturing sector and found that the cost of reducing all forms of pollution was on average only 0.4 percent of manufacturing costs. Even the most heavily regulated industries typically devote only about one percent of their revenue to pollution control, according to the NRDC. In addition to the savings in lives and productivity afforded by a safer environment, new technologies create net new jobs and add to GDP. The global market for environmental technologies goods and services reached USD1.05 tn in 2015 and the US was a net exporter.

It is time for Asian countries to fight air pollution, just as the United States has done. As Asian countries industrialised later, their serious pollution problems are more recent. However, they have the advantage of being able to build on the research and technology created by the US and Europe, and to pool resources for development and commercialisation behind responsible government policies and standards.

Fig 2: Worldwide primary energy share (%)

Fig 3: Shares of global primary energy consumption


Hee-Jin Han 

Fixed Income CIO,
Eastspring Investments Korea

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