This study aims to develop policy implications with focus on the development of the Korean green industry and its expansion into the Central America. In other words, it makes policy suggestions for improvement of the Korean green growth model and its application to Central America’s green industries. For more effective policy suggestions, this study brings out the valid concept of green industry based on a comparison of industrial categories in Korea and the Central America.
Considering the particulars of the Central American situation and its green industry development, the best concept of a ‘green industry’ categorized here (adopted with three industrial areas as a common denominator) are: environmental industry, renewable energy industry and energy efficiency industry. In addition, this study provides basic information on the general environment of the green industry in Central America; examines various environmental issues and environmental situations relating to water, air, land, forest and the ecosystem as a whole; and will also include environmental law, institution and programs at the level of the Central American Community (e.g. SICA) and each individual country. Based on these backgrounds, this study moves into earnest analysis of the actual situation inthe environmental industry, and its development in Central America and its 8 constituent countries. At the level of the regional community, the green industry in Central America has developed in water, basic sanitation, wastewater treatment and its management, which are urgently needed in individual countries as well.
In particular, many individual countries face problems with supply of drinking water, the lack of basic sanitation infrastructure, insufficient waste treatment facilities, recycling waste matter, air contamination, etc. even though the state has taken up many of the responsibilities of environmental industries except waste treatment and recycling. Many Central American countries have not provided proper environmental services given their small government budgets and intermittent economic instability. The distribution rate and the level of technology in such areas as sewage treatment and basic sanitation service are very low, that is the quality of service provided is poor and the system is not well-organized in its operation.
For example, Guatemala, Honduras and Nicaragua are very poor cases; particularly concerning basic environmental infrastructure. Thus more investment in this field is vitally necessary. Most Central American countries provide electricity with thermal power generation and use firewood in individual houses, thus emitting much CO2 into the atmosphere and contaminate the air. Due to much volcanic activity in this region, air contamination is increased further. It is expected that equipment or technology for air-pollution prevention is urgently necessary in this region. This makes it clear that Central American region has the highest potential for growth in the environmental industry and its markets. The case study of the renewable energy sector also shows great potential for cooperation.
Central America has a tropical climate, plenty of rainfall, abundant plant biomass, lots of sunshine and an active volcanic environment, which could give it another source of energy in the form of geothermal power. This region is also an ideal location for wind power generation, meaning the region has massive potential for development of renewable energy. Even though there is great abundance of natural resources, the rate of energy consumption in this region has increased an average 5.2% in the past decade and the region is experiencing power shortages. To resolve this problem, Central American summit meeting announced the 'Sustainable Central American Energy Strategy 2020' in 2007. This strategy aims to stabilize the system for producing energy through energy resource diversification, giving more consideration to the sustainable development model, involving a balance between the environment, economic growth and social equality. To achieve this aim, dependence on fossil fuel must be reduced and use of renewable energy increased, development of energy efficiency should be promoted, meaning energy saving is the most important strategy for this region.
In addition, power demand in the Central American region is expected to increase by about 5.1%-6.1%, keeping pace with the region's economic growth. Many individual countries in this region have considered renewable energy sources as well as alternative ones including hydroelectric generation, geothermal power, biomass, and wind power. Although the strategies and contents are different depending on the individual countries, most of them are strongly pushing forward strategies for renewable energy for supplying their power needs. Panama and Costa Rica and Guatemala have optimum conditions for future construction of hydroelectric power plants. El Salvador also has interest in developing hydroelectric power. Honduras and Nicaragua, on the other hand, have much interest in wind-power plants. In order to support these industries, many countries have institutionalized various economic incentives.
Central America has been characterized as underdeveloped in terms of its energy industry, thus they have great potential as an energy market, especially in the energy-efficiency sector. Confronted with high oil prices and problems related to climate change, the region has employed new energy strategies that attempted to do more than just react but actually increase the supply of renewable energy. Developing these sectors entails a high level of technology and much investment, but if other countries are willing to engage in cooperation, the focus on energy efficiency as a strategy for energy saving as appears to be the best option. For removal of political, financial and technological barriers, this region has come up with many measures by providing strategies and methods for rational energy usage, as embodied in the term ‘energy efficiency’.
The possibility of green industry in Korea and expansion toward this region depend on making active use of the current 'Central American Opportunity'. Cases of foreign advancement into the region, investigated throughout the last chapter, provide some good examples and increases Korea’s chance for entering the Central American green industry market. Though already researched deeply and extensively through SWOT analysis, policy suggestions and action plans for entering Central America and expanding Korea’s green industry into this region must consider many aspects including institutional, financial, technical and most of all the 'environmental', in its new agenda for international cooperation. Therefore, it must be handled in a gradual manner, towards real cooperation and business partnership.