In the Green Transition, the Government Need Not Pick the Technology

The policy stance of making the green transition a core task of industrial policy has recently been gaining strength. In this process, the scope of government involvement in how businesses produce and sell their goods is also expanding. Subsidies are provided for the purchase of electric vehicles, and automakers are assigned targets for the distribution of low-emission and zero-emission vehicles. Bottled water and beverage companies above a certain size are required to use recycled materials above a prescribed ratio in colorless PET bottles.

There is broad agreement on the need to protect the environment and reduce greenhouse gases. The problem is that the government is trying to decide in detail even the methods for achieving those goals. When subsidies are concentrated on specific products and technologies, and sales targets or material usage ratios are uniformly set, companies begin to look first to government policy rather than consumer demand.

It is difficult for the government to predict accurately which technologies will be promising in the future. Because technology and markets change faster than government plans, there is no guarantee that a technology regarded as effective today will remain the most economical and environmentally friendly option a few years from now. Companies also differ in the technologies they possess and their production conditions, so presenting a single method as the right answer may reduce innovative efforts to find new alternatives.

The automobile sector is a representative case. The government assigns automakers targets for the distribution of low-emission and zero-emission vehicles and provides subsidies to electric vehicle buyers. The low-emission vehicle distribution target is set to rise from 28% in 2026 to 50% in 2030, and the method for calculating performance is also designed to encourage expanded sales of electric and hydrogen vehicles.

Automakers are already subject to standards requiring them to lower the average greenhouse gas emissions of all vehicles they sell. If targets for low-emission and zero-emission vehicle distribution are imposed on top of that, companies will have less room to configure their vehicle lineup in line with market demand. Technologies that reduce emissions through means other than electric and hydrogen vehicles should also be given a fair chance to compete.

The mandatory use of recycled materials presents the same problem. Starting this year, bottled water and beverage companies that use 5,000 tons or more of PET bottles annually must use at least 10% recycled materials when producing colorless PET bottles. The government plans to raise the mandatory ratio to 30% by 2030 and expand the scope of application. Applying the same mandatory ratio to all firms subject to the policy makes it difficult to adequately reflect the realities of companies that differ in raw material procurement, quality, and production costs.

There is no reason to narrow the means of achieving the green transition to just one option. Renewable energy is only one means of reducing carbon emissions; it is not the only solution suited to every region and every company. Solar and wind power in particular are affected by weather and location, and expanding the power grid and storage facilities also entails costs. Rather than simply increasing deployment, we must consider emissions reduction effects, costs, and the stability of electricity supply together.

What matters in carbon neutrality is feasibility. We should remain open to alternatives besides renewable energy, and decisions about which means are appropriate should be based on scientific verification and economic viability. If the same amount of greenhouse gases can be reduced at lower cost, that option should be usable regardless of the type of technology involved. If policies impose costs that businesses cannot bear or apply uniform standards, investment and production may shrink. The transition should proceed at a pace and in a manner that companies can accommodate, taking into account technological levels and production conditions by industry.

Regulation is necessary for polluting activities that directly harm the public’s safety and health. However, the focus of regulation should be on the actual pollution and damage caused, rather than on which technologies companies use. It is preferable for companies to choose their own technologies and production methods and then be held responsible for the results.

Environmentally friendly technologies can continue to grow only if they are recognized as competitive in the market. A market that is shaken every time policy direction changes or subsidies are reduced is unlikely to endure. What is needed is a structure in which companies that improve price, quality, and environmental performance together are chosen by consumers. The green transition should take place through corporate initiative and consumer choice.

Sang-yeop Kim, Senior Researcher, AI Content Team, Center for Free Enterprise (CFE)

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Original title: 친환경 전환, 정부가 기술까지 정할 필요는 없다

Author: Sang-yeop Kim

Date: 2026-09-18

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=1&idx=29552