The Impact of the environmental industry in the Korean economy

Abstract

As the environmental industry plays a significant role in both environmental protection and sustainable economic development, analyzing its economic impact is crucial for policymaking. The purpose of this study is to examine the impact of the environmental industry on the Korean economy. To define the environmental industry for input-output analysis, the Environmental Industry Special Classification Table of the 2018 Report on the Environmental Industry Survey is matched to the Bank of Korea’s 2015 Benchmark Year Basic Sector Classification. Also, the data from the 2015 Benchmark Year Input-Output Tables is processed by the author to include the environmental industry among the original classifications of the input-output tables. The environmental industry’s production, value-added, import, and employment multipliers are computed to examine its impact on other industries in Korea. The result of the analysis shows that the environmental industry has a high value-added rate compared to other industries and that despite having a low production multiplier, the environmental industry has a strong forward linkage effect, indicating that it plays a significant role as an intermediate good for other industries.