Gwangju Carbon Bank system

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Main actors

Local Government, City Government, National Government, Private Sector, Public Utility

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Project area

Whole City/Administrative Region

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Ongoing since 2008

In 2008, the City of Gwangju has initiated a program to spark voluntary carbon-saving steps by citizens. Five years later, 1.5 million Gwangju citizens were already participating or 62 percent of the city’s population.

Gwangjus Carbon Bank system calculates reduced amounts of carbon dioxide through voluntary energy-saving efforts by household (regarding electricity, city gas, and waterworks) and turn them into points. Then it provides those points to participating households, thus helping them to save money. Kwangju Bank issues participating households the Carbon Green Card through which households receive points. Through the system, the city can analyze and evaluate reduced amounts of greenhouse gas emissions each year and expand the system through continual monitoring in the years ahead. While the city pays for educational and operating costs, a Green Star Network is responsible for implementing the education and promotion activities. Greenhouse gas emissions have decreased each year, most recently by 135,000 tons.

Sustainable Development Goals

Ensure access to affordable, reliable, sustainable and modern energy for all
Make cities and human settlements inclusive, safe, resilient and sustainable
Take urgent action to combat climate change and its impacts
Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

Guangzhou Award

This project was shortlisted for the 'Guangzhou Award' in 2014.

Gwangju, South Korea

Size and population development
Gwangju covers over an area of approximately 501.24 square kilometres. As of November 2022 census, the city had a population of 1,432,651 people with a population density of 2,900 people per square kilometre. Over the last decade the population has stayed relatively stable.

Population composition
Gwangju is overwhelmingly populated by Koreans, with nearly 99.9% of the population. There are small communities of other, ethnicities, including Chinese Japanese, and Southeast Asians, but these groups make up less than 0.1% of the population. The vast majority of Gwangju's population speaks Korean as their native language. The most prevalent religion in Gwangju is Buddhism, practiced by approximately 30% of the population. Christianity is the second largest religion, with about 15% of residents identifying as Christians. Other religions including Confucianism, Shamanism, and Islam, are practiced by smaller minorities. A significant portion of the population, around 55%, identify as having no religion. Gwangju has a slightly higher ratio of females to males, with approximately 51% of the population being women and 49% being men. This is a trend observed nationwide in South Korea, attributed to declining birth rates and a longer life expectancy for women.

Main functions
As the sixth-largest city in South Korea, Gwangju serves as the administrative center for the Gwangju metropolitan area. The city government plays a crucial role in regional governance, managing public services, infrastructure development, and economic growth. Gwangju is well-connected to major cities within South Korea and internationally. The city boasts a high-speed rail network, a well-maintained highway system, and Gwangju International Airport, offering domestic and international flights.

Main industries / business
Gwangju's economy relies on a diverse range of businesses and industries, with the automotive, electronics, textiles and apparel, food processing, and service and retail sectors playing key roles. The city's commitment to fostering emerging industries like artificial intelligence and renewable energy demonstrates its focus on future-oriented development and economic sustainability.

Sources for city budget
Gwangju's budget is funded through a combination of local revenues and national government grants. Local revenues are primarily sourced from taxes, fees, asset sales, and other miscellaneous income. The national government provides general and specific-purpose grants, with matching grants requiring the city to contribute additional funds.

Political structure
The national government of South Korea maintains oversight of Gwangju through the Ministry of Interior and Safety and appoints the mayor.

Administrative structure
Gwangju operates under a democratic framework with a locally elected council and mayor. Five administrative districts further manage local affairs. Citizen participation is encouraged through public hearings, advisory committees, and online platforms. Gwangju collaborates with the national government to align with national goals and access resources.

When the program was started, over 47% of greenhouse gas emissions produced in Gwangju were attributed to the non-industrial sector including households and commercial sector. There was an urgent need for reducing greenhouse gas emissions produced by households. Thus, Gwangju introduced the Carbon Bank system to encourage 1.5 million Gwangju citizens to improve their awareness of climate change and greenhouse gas emissions and induce them to reduce their emissions.

Gwangju City is in charge of the Carbon Bank system whereas Kwangju Bank provides points to participating households. The data for the initiative have been provided by Korea Electric Power Corporation, Gwangju Metropolitan Waterworks Authority, and Hae Yang City Gas based on households usage. The Green Start Network (involving 31 non-governmental organizations) is responsible for promotion and education regarding the system. In addition, local organizations including Local Community Head Group, Saemaeul Women’s Association, and Carbon Coordinators also actively encourage residents to participate in the system.

Based on the data provided, Gwangju City calculates the reduction amount of greenhouse gas emissions and turns the amount into points following certain standards. The city, then, notifies Kwangju Bank of the calculation which issues points to the Carbon Green Card. This method was used until 2012.  

Since 2013, each self-governing district of the city inputs household usage of electricity, water, and gas into the Carbon Point system. Then, based on certain standards, the Korea Environment Corporation calculates points. Once points to be issued are finalized, each district offers points to individuals through BC Card. In this way, each district can measure the amount of reduced greenhouse gas emissions. 

The city also implements the initiative with the Low Carbon Green Apartment Project. In this way, the city helps build green communities through participation and cooperation of local residents, contributing to reducing greenhouse gas emissions. The city also nurtures “carbon coordinators” and assign them to households, performing diverse, coordinating roles to reduce greenhouse gas emissions.

Any financial obligations regarding points earned through the Carbon Bank system were paid for by Kwangju Bank for five years between 2008 and 2012. Gwangju City was responsible for managing and operating the system. While the city paid for education and promotion expenses, the Green Start Network was responsible for implementing education and promotion activities. Since 2012, the Ministry of Environment (50%) and Gwangju City (50%) have been responsible for financial obligations related to points.

Through MOU agreements with relevant agencies, systemic and credible data could be secured and, based on standards for reduction amount, participating households are given points as incentives. 

In 2008, the number of participating households was approximately 20,000. In five years, that number has increased to approximately 330,000 households, drastically changing the degree of civic participation. Among participating households, 60% of them have succeeded in reducing targeted greenhouse gas emissions. In turn, the amount of emitted greenhouse gases has decreased each year, currently amounting 135,000 tons of gases. This reduction was made possible by systemic cooperation among data-providing agencies regarding greenhouse gases emitted from households. The most important issue, obtaining financial resources, was resolved by the participation of the local bank, Kwangju Bank, which focuses on being a “green bank.” Carbon points were issued through the Carbon Green Card. 

Locally, the system prepared for Gwangju to become a “carbon neutral city” adapting to climate change, which is a general trend worldwide for environment-friendly local governments. It helped Gwangju citizens strengthen their capacity to deal with climate change. The “good governance” surrounding the system has also contributed to cementing cooperation among various groups forming the city. Lastly, the circulation of points across the city has stimulated the local economy.

The initiative is premised on voluntary participation of local residents. Initially, many local residents were not aware of the need to adapt to climate change and it was difficult for the project team to foster participation among them. In addition, ensuring systemic, reliable data was critical, and this required personal information of local residents, making them hesitant to participate in the initiative.

To resolve these issues, the city made strenuous efforts to promote the initiative through TV/radio advertisements, city bulletin boards, subway/bus signs, advertisement through public utility bills, stickers attached to elevators in multi-unit housings, and pamphlets. These diverse, active promotional efforts led to an increase in the number of local residents participating in the Carbon Bank system.

Another difficulty was to ensure that the system leads to actual reduction of greenhouse gas emissions. But, based on the analysis of the data one year after the implementation of the system, it turned out be effective in reducing greenhouse gas emissions.

The initiative introduced by Gwangju has been effective in inducing voluntary citizen participation to reduce greenhouse gas emissions. A greenhouse gas emission reduction program in the non-industrial sector is critical as part of the Clean Development Mechanisms of a city. Premised upon systemic, credible data, the initiative by Gwangju can expand to an emission trading system in the non-industrial sector. Operated by collaborative governance, the initiative helps stimulate cooperation among local communities for their revitalization. The effective combination of voluntary citizen participation and local resources is the most critical factor for the success of the initiative. 

The initiative as an efficient way to reduce greenhouse gases emitted from households has been introduced to local governments around the world. The initiative was presented as an excellent practice in the area of low carbon policy during the 2011 Gwangju Summit of the Urban Environmental Accords and RIO + 20- United Nations Conference on Sustainable Development, helping improve the city’s reputation as a leading green city. And many local governments around the world have tried to emulate the initiative. Nationally, the system laid the foundation for the Ministry of Environment to introduce the Carbon Point system across Korea in 2009.

- Gwangju, Korea: GHGs Emission Program in Household Carbon Bank in Gwangju, Guangzhou Award for Urban Innovation, (accessed 30 June 2016)

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Guangzhou International Award for Urban Innovation
Guangzhou, China

Guangzhou International Award for Urban Innovation

Institution | Urban Award

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