Policies

Eco-Mileage System

Date 2014-08-11 Category Environment Updater scaadmin
Affiliation
CLIMATE & AIR QUALITY MANAGEMENT DIVISION
Date
2014-08-11
Last Update
2018-03-05

POLICY OVERVIEW

The Eco Mileage System is an energy-saving program that engages citizens by giving incentives to member households and organizations who voluntarily cut back on use of electricity, water, urban gas and local heating use per month by at least 10% compared to the monthly average of the previous two years. The name of the program comes from the words ecofriendly and mileage, suggesting that the program implements a mileage accumulation system. Incentives include household environmentally-friendly products, which can be reinvested toward energy conservation, public transportation card replenishment, gift certificates for use in traditional markets, and credit card points.
 

Before (2008) 

After (2014.3)

Seoul’s greenhouse gas (GHG) emissions were 45,622tCO2 in 2007, which occupied 10.9% of the total GHG emissions nationwide

64.4% of Seoul’s GHG emissions were from the building sector and 21.5% from the transportation sector

Total of 1.42 million citizens have participated in the eco-mileage project

Citizens participating in the project reduced 300tCO2 of greenhouse gas and saved energy by 151,168TOE. The figures are equivalent to:

  - The amount of gas saved by creating a forest which is 93 times bigger than Yeoui Island in Seoul

  - The amount of energy used for operating 190 cars a year

HISTORICAL BACKGROUND

Recognition of the Challenge Posed by Global Warming

During the 100 years from 1908 to 2007, the average temperature of the earth rose by 0.74℃ and that of Korea by 1.5℃. During the same period, the average temperature of Seoul jumped by 2.4℃, tripling the earth’s average. As of 2009, Korea emitted 564 million tCO2e of greenhouse gases, of which 8.7% (49 million tCO2e) came from Seoul. Unlike in other cities, 94% of greenhouse gas emissions in Seoul are generated by residential and commercial buildings and cars. Therefore, the best way to cut emissions in Seoul is to save energy in our homes and workplaces.

Necessity of Citizens’ Participation in the Reduction Efforts of Greenhouse Gas Emissions 

According to a survey on the characteristics of greenhouse gas emissions in Seoul, households and buildings account for 67% and transportation for 24%. Those two areas compose more than 90% of the total greenhouse gas emissions. Thus, the most effective way to reduce gas emissions in the city within a short period of time was to make households and businesses voluntarily take part in energy conservation efforts.

Decline in the Effectiveness of the Previous Incentive Program

A better incentive program was demanded by the public as the previous programs, including the Carbon Point Program run by the Ministry of Environment, were losing their effectiveness. The biggest problem of the existing programs was that they provided incentives for temporary measures to save energy. Thus, the citizens lacked motivation to save energy in the long-term, and consequently, their participation rate dropped significantly after a certain period of time. Also, the city budget was being spent on temporary measures that did not contribute to the lasting reduction of greenhouse gas emissions.

The Seoul Eco Mileage System Established at the Request of Civic Society

A number of civic groups called on the city of Seoul to come up with energy conservation systems. In April 2008, the city established the procedures for the implementation of the Eco-Mileage System along with the energy consumption quantity management system under the leadership of the city’s director of the Climate & Environment Headquarters. In January 2009, the Eco-Mileage System was put into effect and its aim was to reduce greenhouse gas emissions in the city.

Households and Businesses, Two Biggest GHG Emitters
A 2007 GHG emissions report in Seoul found that households and businesses together emit 64.4% of GHG emissions, followed by 21.5% from transport sector. The finding enlightened Seoul that the most immediate and effective way to curb GHG emission is encouraging citizens and businesses to voluntarily join in the cause.

 

GOALS AND OBJECTIVES

  • A unified response to global warming through the city government, private enterprises, and citizens;
  • Continuous energy reduction through citizen’s voluntary participation; and
  • A reduction of greenhouse gas emissions in Seoul (a 40% reduction of the 1990 level by 2030)

POLICY IMPLEMENTATION

 Working in partnership with companies

To successfully implement the Eco-Mileage System, the Seoul Metropolitan Government signed MOUs with large and medium-sized companies, including Samsung Electronics, Hyundai Motors, and LG Chemical, with the aim of providing environmentally-friendly incentives. These companies offered their products to households that had demonstrated outstanding energy conservation. The list of companies that signed MOU with Seoul are as follows

No

Company

No

Company

1

LG Chemical

9

Nuri Telecom

2

Hyundai Motors

10

Sekwang Electronics

3

Kia Motors Corporation

11

Lock & Lock Co.,   Ltd.

4

Shinsung E&T Co.,   Ltd.

12

Hyosung Electric Industrial

5

Daejin DMP Co., Ltd.

13

Samsung Electronics

6

CEST Co., Ltd.

14

KyungDong Navien   Co., Ltd.

7

Wellbas

15

Tong Yang Magic

8

JESJTEK

16

Autus, Inc.

 

Evaluation System based on Accumulated Usage

Seoul changed the calculation method of energy consumption from “the quantity at a certain point in time” to “the average quantity used during six months,” encouraging continuous energy conservation. Currently, the city monitors households’ energy consumption from the past six months and selects households that have saved more than 10% per month compared to the monthly average of the previous two years. The incentives that Seoul offers include household environment-friendly products that are reinvested in energy conservation; public transportation card replenishment; gift certificates that can be used in traditional markets; and credit card points. For groups, like those in an apartment complex or a commercial building, Seoul selects those with excellent records in the reduction of greenhouse gas emissions and grants subsidies in amounts from 5 to 10 million KRW, which can be used to upgrade to high-efficiency facilities. 

Issuing Eco Mileage Card

As the program expanded and membership continued to grow, Seoul adopted the “Eco-Mileage Card” system to decrease the program’s fiscal burdens. So far, 793,679 Eco_Mileage Cards have been issued. Seoul promoted the benefits of the mileage card system to the rest of the country, and as a result, 3,249,252 cards have been issued nationally. The card mileage system benefits citizens remarkably and strengthens their commitment to environmental protection. This is a result of the collaboration of the city administration, a credit card company, financial institutions, manufacturers, and retailers. The system costs the city administration very little while leading to significant change.

 

Support for Citizens through a Two-Way Information Channel 

Along with the provision of incentives, the Eco-Mileage program promotes two-way communication with citizens. The Eco-Mileage website posts citizens’ energy conservation tips and experts’ advice. It also informs citizens of new city programs, like the Energy Clinic that pays free visits to households or buildings to offer an energy diagnosis service.

Resident Centers Helping the Disadvantaged to Participate

Seoul arranged for those who do not own computers at home or cannot operate them well to visit a resident center and become members. In addition to in-charge officials, a temporary student worker at each center will help them apply for the membership online.

Setting up Institutions
In order to give a form to the eco-mileage system, the central government and Seoul went ahead with laying a legal foundation first so that they can provide support to a citizen participatory energy conservation initiative. With the amendment of the relevant law, Seoul also enacted the Low Carbon Green Growth Basic Ordinance in July 2011. Seoul also added provisions in the Climate Change Response Ordinance that stipulated that such a system can award energy-saving entities or individuals in the form of mileage, prize and incentives according to their level of participation or performance. It also states that a web-based system can be created to give online mileage points to users according to their contribution to city’s administration, visit counts and other activities pertaining to the energy saving cause.
 
Energy Consumption Data Sent to Participants
Energy providers send information of their energy consumption through an online platform to all households and businesses participating in the Eco Mileage program. Thanks to the platform, participants can check their consumption level by month up the 2 years back while the government can use the data to calculate the amount of incentive to each household.
 
Collaboration with Financial Institution and Corporate Social Contribution

Seoul collaborated with various stakeholders and signed MOUs with multiple companies to institutionalize the system, instead of having it as a one-off event. The system gives mileages instead of cash incentives, and members can use the mileage points to buy other ecofriendly products, basically incentivizing members with good energy-savings records to invest in driving further energy reductions. At the same time, Seoul extensively worked with private companies such as credit card companies, financial institutions and telecommunications companies to create a proper model for Eco-Mileage credit card.
MOUs with such companies gave members benefits such as a 10% discount on public transportation, 1-5% discount on purchases of green products.


 

Obstacles and Ways to Overcome

Technical Difficulties with Establishing a System to Identify Individuals’ Carbon Emission Quantities 

Energy providers were reluctant to share their information on citizens’ energy consumption because they thought the information was confidential. Therefore, tighter security measures needed to be installed to ease their concerns. By establishing a safe security system, Seoul has succeeded in persuading energy providers such as  Korea Electric Power Corporation and city gas companies to cooperate in sharing the necessary information.

Insufficient Public Awareness of Global Warming and Little Voluntary Participation 

Since Seoul citizens showed little interest toward the global warming issue, it was difficult to attract the citizens’ voluntary participation. To address this problem, the city administration set up an organization with district offices, schools, civic groups, and enterprises at an early stage to raise citizens’ awareness about global warming. The organization toured the city and held 788 education sessions for 72,771 citizens including community leaders,  environment teachers, apartment maintenance managers, and women’s association leaders.

Lack of Participation from People with Limited Internet Access

Since households and businesses could monitor their energy consumption through an online platform, those who had limited access to internet could not actively participate in the system. To resolve this problem, the city administration arranged for resident centers throughout the city to establish a system to help them. A full-time official or a volunteer helped them to navigate the internet and get an eco-mileage membership.

Difficulties with a Tight Budget 

As memberships increased, incentives had to increase too, straining the city budget. Building partnership with 24 enterprises paved the way for solving the problem. The enterprises offered their environmentally-friendly products to the city for use as incentives. The Eco-Mileage Card system was made possible through cooperation with a card company, financial institutions, and manufacturers and retailers.

Evaluation System Based on Accumulated Usage
Seoul changed the calculation method of energy consumption from “the quantity at a certain point in time” to “the average quantity used during six months,” encouraging continuous energy conservation. In other words, in order to receive incentives, a household has to record a reduction in emissions for the past 6 months by more than 10% compared with the same period 2 years back. This means that a household has to continue to cut back energy use to continue to receive the benefits.
 
Reinvestment of the Incentives to Energy Conservation
A household with good energy-savings records receive mileage points, which can be used to buy products or devices that can further cut GHG emissions. For example, a household can use the mileages points to buy eco-friendly or energy-saving products, charge transportation cards, receive vouchers for traditional markets. They can also choose to use the mileage points to donate to energy-poor populations or to help planting trees for anti-desertification for better air quality. Participating entities such as school, apartment complexes or commercial buildings can receive financial support for planting/ gardening their facilities and improving their facilities with high energy-efficient devices.
 
Support for Citizens through Tailored Support and Two-Way Information Channel
At the Eco-Mileage Website, members can check precisely how much energy they have used for the month or over a period of time, other people’s valuable energy-saving tips as well as experts’ advice on energy conservation. This two-way communication channel promotes citizen participation even further while giving them a variety of information. The website also informs citizens of new city programs, such as the Energy Clinic that pays free visits to households or buildings to offer an energy diagnosis service.
 
Eco-Mileage Card to Promote Greater Participation
As the program expanded and membership continued to grow, Seoul looked further than simple incentives program. With the aim of embrace green consumption and green transport, in January 2010 Seoul decided to expand the incentive program to the eco-mileage card program. The city signed MOUs with companies such as Samsung Electronics to supply the manufactures’ goods as Eco- Mileage incentives and with BC Credit Card to issue Eco-Mileage Cards. In October 2010, Seoul signed another MOU with KT, communication service provider in Korea, to issue online points to active users on the net.
 

COST

Fiscal Resources 

The municipal government’s budget has been kept to a minimum. As the-Eco Mileage system has been benchmarked by almost all the local governments and implemented across the country, the profits generated from the system are then controlled by the central government. The private companies’ earnings from issuing the Eco-Mileage Card are being donated to and managed by the Ministry of Environment, and the ministry subsidizes the city government with 3.5 billion KRW annually. Even with minimal municipal input, the system can now run sustainably.

Annual Budget (Unit : KRW)

2010

2011

2012

2013

2,532,000,000

3,126,160,000

3,096,272,000

3,656,269,000

 

2013 Budgeting (Unit : KRW)

Total

3,656,269,000

   Management of affairs

131,728,000

   Cost of Operation

53,705,000

   Incentive

2,841,336,000

   Current Subsidies

625,000,000

RESULT AND EVALUATION

Seoul Citizen’s Positive Participation

After four years (2009-2013), the membership sharply increased to 1,480,000 households, 1,605 schools, 1,996 multi-unit housing complexes, 3,563 public institutions, and 31,543 commercial and general purpose buildings.

The total number of members (Unit : 1000)

Retrenchment of Energy and Reduction of CO2 Emission

By engaging private households, businesses, and energy-related entities, the “Eco-Mileage System” has demonstrated remarkable success not only in reducing energy consumption and carbon emissions, but also in raising public awareness. Since the launch of the program in 2009, Seoul has reduced 122,000 tons of oil equivalent (TOE) of energy consumption and cut CO2 emissions by 355,000 tons. Membership has surpassed 1 million, and more than 10 percent of users have received incentive points for their energy consumption reduction.

 

2 Million People Signed up for the Program
Since the launch of the program in September 15, 2009, the membership has increased to reach 1.91 million by 2014. The breakdown shows 1.87 million households, 1,400 schools, 2,000 multiunit housing complexes, 3,600 public institutions, and around 30,000 commercial and general purpose buildings.
 
Global Recognition as Exemplary Citizen Engagement Program
The Eco-Mileage System is the first citizen-participating greenhouse gas reduction program implemented by a local government in Korea. The City of Busan, Gyeonggi, and Jeollanam-do Provinces have already benchmarked Seoul’s program.
In January 2010, the Ministry of Environment recognized the Seoul Eco-Mileage System as a model for the government-enterprise cooperation in the implementation of environment-friendly measures. Accordingly, the Ministry expanded the program to the Carbon Point Zero program for other municipal and provincial governments throughout the country to follow. The exemplary program won Seoul the UN Public Service Awards (UNPSA) in 2013, garnering global recognition.
 

TRANSFERABILITY

Eco-Mileage System is being replicated and disseminated.

The Eco-Mileage System is the first citizen-participating greenhouse gas reduction program implemented by a local government in Korea. The City of Busan, Gyeonggi, and Jeollanam-do Provinces have already benchmarked it. In January 2010, the Ministry of Environment designated the Seoul Eco-Mileage System as a model for the government-enterprise cooperation in the implementation of environment-friendly measures. It is preparing for the dissemination of the system to other municipal and provincial governments in the country. In July 2012, the ministry benchmarked the Eco-Mileage Card System and introduced a “Green Card” for national application.

Brochure

Department / Contact

  • Climate & Air Quality Management Division
  • Global Urban Partnership Division  /  82-2-2133-5264  /  policyshare@seoul.go.kr
  • Global Future Research Center  /  82-2-2149-1418  /  ssunha@si.re.kr