Regional budget allocation for a just transition

This study explores regional budget allocation strategies for achieving carbon neutrality in Korea through the lens of a just transition. Although Korea has declared its carbon neutrality target and introduced the National Carbon Neutrality and Green Growth Basic Plan, financial and institutional mechanisms to ensure regional equity remain underdeveloped. Drawing on insights from the European Union’s Just Transition Mechanism (JTM), this study analyzes system support of vulnerable regions in the EU. An allocation formula is then applied to the Korean context, using regional CO2 emissions, manufacturing employment, and energy-related employment as key indicators. Based on the KRW 539.9 billion budget allocated for just transition in 2022, the study calculates an optimal regional distribution. The results show that provinces of Jeollanam-do, Gyeongsangbuk-do, and Chungcheongnam-do require greater support due to their high carbon intensity and industrial concentration. In contrast, metropolitan areas such as Seoul and Daejeon may require less support, though targeted policies for energy efficiency and public transport remain important. This research offers practical policy recommendations for enhancing the social acceptability of carbon neutrality and minimizing economic disruptions during the transition. It also underscores the need for region-specific strategies and inclusive stakeholder engagement in shaping Korea’s just transition policy framework.