NCPA - National Center for Policy Analysis

North Korea, Eco State?

June 12, 2012

Under the terms of the Kyoto protocol, signatory developing countries have the right to build clean energy projects that may apply for Certified Emission Reductions, or CERs, popularly known as carbon credits.  These nations can then sell them to a rich country or company that needs the credits to offset its own greenhouse gases, says BusinessWeek.

Interestingly, the profit potential created by this scheme has caught the eyes of North Korean government officials.

  • Dig into data from the United Nation's Framework Convention on Climate Change and you will find seven North Korean projects registered for carbon trading.
  • Miroslav Blazek, director of Czech company Topic Energo, acts as a link between North Korea and potential carbon credit buyers.
  • According to Blazek, North Korea is now building seven hydroelectric plants, which provide some of the cleanest energy.
  • The dams may generate as many as 241,000 CERs a year, worth almost 1 million euro ($1.3 million).

According to Blazek, the North Koreans "jumped" at the opportunity to get into carbon trading, recognizing immediately that the CERs revenue would supplement the profitability of the projects.

However, because of current geopolitical tension regarding North Korea, the marketing of North Korean CERs becomes more complicated.

  • Blazek, who is responsible for finding sellers, indicated that more than 30 potential buyers pulled out because of the U.S. embargo on trade with North Korea.
  • He finally struck a deal with a Chinese-controlled conglomerate that needs credits to offset emissions from facilities in Europe.
  • The purchase is so sensitive that the Chinese company required that it be guaranteed confidentiality.

Furthermore, the construction of the dams and North Korea's apparent willingness to further engage in the global economy should not be mistaken for an improvement in the people's outlook.  While visiting the construction sites for the dams, Blazek found workers digging with their bare hands, indicating that "human labor has practically no price there."

Source: Ladka Bauerova and Alessandro Vitelli, "North Korea, Eco State?" BusinessWeek, May 31, 2012.

For text:


Browse more articles on Environment Issues