Analysis of the relationship between energy (useful work) and economic growth of the Republic of Korea
MetadataShow full item record
Over the last half-century, Korea has achieved remarkable economic growth enabling it to become the world’s 11th largest economy. Various efforts have been made to identify the driving forces of its rapid economic growth and to verify the relationship between Korea’s energy consumption and economic development. However, conventional energy analyses have limitations because they did not consider the actual services energy provides for economic activities. “Useful work” measures the amount of exergy finally used at the end-use stage, which focuses on the result of an energy use rather than energy input. Moreover, useful work considers both quality of energy and the thermodynamic second-law efficiency, which gives better insights into the role of energy in an economy. Useful work has been an important factor for Korea’s economic development, and it has been affected by industrial structures, economic shocks, and energy policies. Korea’s industrialization in the 1960s and 1970s created a rapid increase in useful work consumption. The oil shocks in the 1970s slightly slowed the growth of useful work consumption and contributed to the diversification of Korea’s energy portfolio. In the late 1980s and 1990s, the growth of Korea’s useful work consumption accelerated again due to the increasing demand in the industry and transportation sectors. After Korea’s financial crisis in 1997, the growth rates of GDP and useful work consumption have slowed down. Korea’s rapid industrialization has increased the shares of mechanical drive and high temperature heat uses, and aggregate exergy efficiency has improved faster than that in other countries. As a result, Korea became able to produce more goods and services with less energy (exergy) inputs, and energy (exergy) intensity has declined. However, useful work intensity has been more stable because of improved exergy efficiency. This shows that Korea’s useful work consumption is more closely related to its economic growth than energy consumption. In this paper, Korea’s energy sectors are briefly introduced, and the processes for estimating useful work from IEA data are summarized. The evolution of Korea’s useful work consumption, exergy efficiency, useful work intensity, and their relationships to Korea’s economic development are also presented.