TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionServiceAnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentTheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentPublicationDateJune2023AuthorsLauriMyllyvirta,CREAContributorsErikaUusivuori,CREACounsultantJamieKelly,CREATranslatorSooyounHan,SFOCDesignersEleonoraFasan,SFOCContactVeraTattari,CREAJoonHuiJung,ProfessorofAccountingatDaeguUniversitySangHoYooYejinChoi,SFOCSooyounHan,SFOC(sooyoun.han@forourclimate.org)LauriMyllyvirta,CREA(lauri@energyandcleanair.org)AboutCREATheCentreforResearchonEnergyandCleanAirisanindependentresearchorganisationfocusedonrevealingthetrends,causes,andhealthimpacts,aswellasthesolutionstoairpollution.CREAusesscientificdata,researchandevidencetosupporttheeffortsofgovernments,companiesandcampaigningorganizationsworldwideintheireffortstomovetowardscleanenergyandcleanair.Webelievethateffectiveresearchandcommunicationarethekeytosuccessfulpolicies,investmentdecisionsandadvocacyefforts.CREAwasfoundedinDecember2019inHelsinki,FinlandandhasstaffinseveralAsianandEuropeancountries.AboutSFOCSolutionsforOurClimate(SFOC)isanonprofitorganizationestablishedin2016formoreeffectiveclimateactionandenergytransitionbasedinSeoul,SouthKorea.SFOCisledbylegal,economic,financialandenvironmentalexpertswithexperienceinenergyandclimatepolicyandworkscloselywithdomesticandinternationalplayers.CREAispoliticallyindependent.Thedesignationsemployedandthepresentationofthematerialonmapscontainedinthisreportdonotimplytheexpressionofanyopinionwhatsoeverconcerningthelegalstatusofanycountry,territory,cityorareaorofitsauthorities,orconcerningthedelimitationofitsfrontiersorboundaries.TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionServiceAnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentKeyfindings•TheNationalPensionService(NPS)hasyettoestablishaspecificpolicytolimititscoalinvestments,morethantwoyearsaftercoaldivestmentdeclarationinMay2021.Meanwhile,theNPScontinuestoinvestlargeamountsofcapitaldirectlyandindirectlyinSouthKoreancoal-firedpowerplants(CFPPs).•ThisstudyanalyzestheairpollutionandhealthimpactscausedbytheNPS’investmentindomesticCFPPsbasedontheCALPUFFmodelingsystem,anindustry-standardemissiondiffusionmodel.Italsoestimatedtheresultingeconomiclosses.•Between2021and2022,exposuretoairpollutionfromCFPPsinSouthKoreaisestimatedtohavecausedapproximately1,970deaths1.Approximately11.2%,2202,canbelinkedtotheNPSthroughitsinvestmentindomesticcoalpowerplants.•Healthandeconomicimpactsasaresultofairpollutionfromcoalinthecountryalsoincludeapproximately580newcasesofasthmainchildren,280pretermbirths,over800,000daysofworkabsence(sickleavedays),and560asthma-relatedemergencyroomvisitsinSouthKoreafor2021and2022combined.Ofthese,theNPS-linkednumberofcasesis67newcasesofasthmainchildren,32pretermbirths,90,690daysofworkabsence,andapproximately63asthmaemergencyroomvisits.•ThetotalcostsofexposuretoairpollutionfromCFPPsinSouthKoreabetween2021and2022amountedtoapproximatelyUSD10billion3(KRW12.9trillion4)inhealthcareandwelfareexpenditures.Ofthese,aroundUSD1.1billion5(KRW1.4trillion6)canbeattributedtotheNPS’investmentindomesticcoal.195%CI:1,340to2,860295%CI:150–321395%CI:USD6.6–13.8billion495%CI:KRW8.5–17.9trillion;Currencyconversionsaredoneusing2022averageexchangerateof1USD=1292KRW.595%CI:USD0.7–1.5billion695%CI:KRW0.9–2.0trillion1TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestment•Intermsofregions,thelargesthealthandeconomicimpactswerefoundtobeinChungcheongnam-do,wheretheTaeanandDangjincoalpowerplantsarelocated,andIncheonMetropolitanCity,wheretheYeongheungpowerplantoperates.TheannualdeathslinkedtotheNPSfortheseplantswereestimatedat26,23and18annualdeathsin2022.Furthermore,thetotalNPS-linkedcostscausedbytheseplantsareUSD120million7(KRW155billion8),USD110million(KRW142billion10),andUSD87million11(KRW113billion12),respectively.795%CI:USD81–177million895%CI:KRW105–228billion995%CI:USD75–160million1095%CI:KRW97–206billion1195%CI:USD59–127million1295%CI:KRW76–164billion2TableofContentsKeyfindings…1I.Introduction…5II.NPS'sinvestmentattributiontotheimpactofdomesticcoalpowerplants…6Table1.Thefinalattributionfactorforstocksand…7bondscombinedisasfollows.III.Emissionsloadandairqualityimpactanalysis…8Figure1.Maximum1-hourand24-hourconcentrationsofSO2,NO2…9andPM2.5fromallcoalpowerin2022comparedtoNPS-attributedinvestmentsincoalin2022Figure2.AnnualMeanConcentrationsfromthemodeledpowerplants…12IV.Healthimpactsandeconomiccosts…14Table2.SouthKoreatotalandNPSattributeddeaths…14fromcoalpowerairpollutionbetween2021and2022,bycause(95%confidenceintervalinparentheses)Table3.TotalhealthimpactsinSouthKoreaandNPS…15attributedhealthimpactsbetween2021and2022fromcoalpowerairpollutionTable4.AnnualNPSattributedhealthimpactsand…15totalcostsin2022,perpowerplant3TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentRecommendations…17AppendixA:CalculationmethodologyforNPSfinancedemissions…18fromdomesticcoalpowerplantsA.ShareholdingAttributionFactor…18B.BondholdingAttributionFactor…19C.NPSrelatedfinancialdatasources…20TableA-C-1.NPSbondinvestmentdata…20TableA-C-2.Powerplantandpowergeneratorconsolidatedfinancialdata…20AppendixB:Airpollutionandhealthimpactanalysismethodologyanddata…21A.Emissions…21B.Atmosphericmodeling…22C.Healthimpactassessment&economicvaluation…23Majorairpollutants…23TableB-C-1.Inputparametersanddatausedto…23estimateeconomicimpacts…24TableB-C-2.InputparametersanddatausedtoestimateeconomiccostsofhealthimpactsconvertedtoSouthKoreanWon(KRW)AppendixC:Stackpropertiesandemissionsdata…25TableC-1.Coordinates,stackpropertiesand…25airpollutantemissions(2021and2022)ofKoreancoal-firedpowerplantsReferences…284I.IntroductionIntheageoftheClimateCrisis,themovementofcapitaltowardsthesustainabilityoftheworld’senvironmentandhumansocietyhasbecomeanirrefutableparadigm.Financialmarketsareindeedstrivingtopavethepathforrestoringsustainability,andthefirststeptowardsthissustainablepathis“coal-free”finance.Amongfossilfuels,coalisoneofthemainculpritsoftheclimatecrisisduetoitshighconcentrationsofgreenhousegasses(GHG).Moreover,coal-firedgenerationisoneofthemaincausesofairpollutionthatconsequentlyhasadverseeffectsonhealth,suchascardiovascularandrespiratorydiseases.InSouthKorea,theNationalPensionService(NPS)recognizestheissuesrelatedtocoalpowergenerationandthenecessityofreducingcarbonemissions.Indeed,inMay2021,theNPSmadeits“coal-freedeclaration”(MinistryofHealthandWelfare,2021).Asa“bigplayer"inthecapitalmarketsinthedomesticandglobalarenas,thisdeclarationismorethanjustsomeESGpolicyfromoneinstitution.Infact,theNPSholdssharesinmorethanathousandcompaniesinSouthKoreaandisauniversalownerwithitsshareofmarketcapitalizationofmorethan6%.Italsoaccountsforaround10%ofthebondmarket.Furthermore,attheendofFebruary2023theKoreanpensionfund’sreservestotaledapproximatelyUSD726billion,thusensuringitsplaceamongthetopthreepublicpensionfunds.Consequently,theESGpoliciesoftheNPShavesignificantinfluenceinthefinancialmarketsandonESGinvestmentandgovernancepoliciesofcompanies.Asoftoday,theNPScontinuestoinvestincoalpowergenerationwithoutdevelopingconcreteexclusionpoliciesdespitebeingtwoyearssincethefund’scoal-freedeclaration.Hence,thedeclarationisamerestatementlackingpracticalplanningandimplementation.Firstofitskind,thisstudyanalyzestheairpollutionandhealthimpactsoftheKoreanNationalPensionService’snationalcoalinvestment,andtheconsequenteconomiclossesoverthesepasttwoyears(from2021to2022).5TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentII.NPS'sinvestmentattributiontotheimpactofdomesticcoalpowerplantsThereareatotalof15domesticcoal-firedpowerplantsinSouthKorea,includingthoseunderconstruction.Ofthese,exceptforfourpowerplantswithprivateoperators,11powerplantsareoperatedbyfivepowergeneratingcompaniestotallyowned(100%shareholding)byKoreaElectricPowerCorporation(KEPCO).Thisstudycalculatedthedegreeofresponsibility,theattributionfactor,oftheNPS'sinvestmentincoalintheairpollutionandhealthdamageimpactsgeneratedbydomesticcoal-firedpowerplants.ThecalculationmethodologywasdevelopedbasedonthecarbonaccountingreportingstandardsforthefinancialindustryproposedbythePartnershipCarbonAccountingFinancials(PCAF)inconsultationwithJun-heeJung,aprofessorofaccountingatDaeguUniversity,andtheamountofcoalinvestmentwasbasedondatasubmittedbytheNationalPensionServicefromtheofficeofChoiYoung-hee,amemberoftheNationalAssembly'sHealthandWelfareCommittee.PCAFisaglobalcoalitionledbyfinancialinstitutionsthataimstodrivecapitalintolow-carboneconomicactivitiesthroughstandardizedcarbonaccounting.PCAF'scarbonaccountingreportingstandardiswidelyusedasamethodforcalculatingGHGemissions(financialemissions)fromfinancialinstitutions'investmentactivities,andthebasicunitofcalculationistheinvesteecompany.However,sincethisstudyanalyzedairpollutionandhealthdamageimpactsatthelevelof'coalpowerplants',itwasinappropriatetoapplythePCAFmethodologydirectly.Therefore,thePCAFmethodologywasusedasthebasicframework,buttheannualairpollutionemissionsofeachpowerplantunitweremultipliedbyanattributionfactorattributabletotheinvestmentactivitiesoftheNationalPensionServicetocalculatethefinalcontribution.TheattributionfactorswerecalculatedandsummedforstocksandcorporatebondsforwhichspecificinvestmentscanbeidentifiedamongthesevenassetclassespresentedinthePCAFCarbonAccountingReportingStandard:listedstocksandcorporatebonds,corporateloansandunlistedstocks,projectfinance,commercialrealestate,mortgages,autoloans,andgovernmentbonds(PCAF,2022).ThedetailedcalculationmethodologycanbefoundinAppendix1.6Table1.Thefinalattributionfactorforstocksandbondscombinedisasfollows.PowercompanyPowerplantNPSfinalattributionfactor(%)YeongheungPowerPlant11.673KOEN11.485YeosuPowerPlant11.576GangneungEcoPowerSamcheonpoPowerPlant0.194GoseongGreenPowerGangneungAninCoalPowerPlant3.349GoseongHaiPowerPlant11.595KOSPOHadongCoalPowerPlant11.679SamcheokGreenPowerPlant11.607KOMIPO11.557BoryeongPowerPlant11.531EWPShinBoryeongPowerPlant11.774GSDonghaePowerShinSeocheonPowerPlant11.470DangjinCoalPowerPlant4.100KOWEPO11.865SamcheokBluePowerDonghaePowerPlant3.036BukpyeongPowerPlantTaeanPowerPlantSamcheokPowerPlant7TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentIII.EmissionsloadandairqualityimpactanalysisCoal-firedpowerplantsemitpollutantssuchassulfurdioxide(SO2),nitrogenoxide(NOx),andfineparticulatematter(PM2.5).Sulfurdioxideisamajorairpollutantthatathighconcentrationsishighlyabsorbedthroughtherespiratorysystem,whereitreactswithmucousmembranefluidsandcausesinflammation.Prolongedexposuretosulfurdioxidecanleadtodiseasessuchaspneumoniaandasthma(SeoulMetropolitanGovernment,n.d).Similarly,long-termexposuretonitrogenoxide13,howeverlowtheconcentrations,canleadtochronicpoisoning,emphysema,andotherhealthproblems(SeoulMetropolitanGovernment,n.d).Ultrafineparticulatematterisdustwithadiameterof2.5micrometers(µm)orless,whichcannotbefilteredfromtheairwaysduringtheinhalationprocessandpenetrateeventhealveoli.Ultrafineparticulatescancauseheartandrespiratorydiseasesincreasingprematuremortality(SeoulMetropolitanGovernment,n.d).Basedondataonairpollutantsandemissionfacilitiesofdomesticcoal-firedpowerplantssubmittedbytheMinistryofEnvironmenttotheofficeofRepresentativeJinSung-joonoftheNationalAssembly(EnvironmentandLabourCommittee),theoperatingcoal-basedpowerplantslistedareestimatedtohaveemitted21.5kilotons(kt)ofSO2,19.2ktofNOx,and1.6ktofparticulatematter(PM)pollutionin2022.TheamountofpollutionthatcanbeattributedtoNPS’sshareofcoalinvestmentsis2.5ktofSO2,2.2ktofNOx,and0.2ktofPM.Figure1visualizestheimpactsofmaximumhourly(1-hrand24-hr)concentrationsofSO2,NO2andPM2.5fromthemodeledpowerplantunitsin2022comparedwiththeconcentrationsofthepollutantemissionslinkedtoNPS’investments.Figure2presentstheannualmeanconcentrationsofthesamepollutants.Ascanbeseenfromthefigures,theemissionsthatcanbelinkedtoNPSarenoticeable,thereforeitsimpactonairquality,theenvironmentandhumanhealtharealsoobservable.13However,NOxgetsquicklyconvertedtoNO2whichisthepollutantassociatedwithhealthimpacts.8Figure1.Maximum1-hourand24-hourconcentrationsofSO2,NO2andPM2.5fromallcoalpowerin2022comparedtoNPS-attributedinvestmentsincoalin20229TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestment1011TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentFigure2.AnnualMeanConcentrationsfromthemodeledpowerplants1213TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentIV.HealthimpactsandeconomiccostsTheoperationalcoalfleetinSouthKoreacausedanestimated1,968deathsinthecountrybetween2021and2022.Ofthis,approximately220deathscouldbeattributedtoNPS’shareofthepowerplants,thatbeing11.2%ofalldeathsacrossthecountryfortwoyears.ThetotalcostofallhealthimpactsontheeconomyforthetwoyearsisestimatedatUSD9.6billion(KRW12,400billion).Again,over11%—orUSD1.1billion(KRW1,400billion)—ofthetotalhealthcoststosocietycanbelinkedtoNPS’shareofthepowerplants.Table2.SouthKoreatotalandNPSattributeddeathsfromcoalpowerairpollutionbetween2021and2022,bycause(95%confidenceintervalinparentheses)PollutantCausesSouthKoreatotalNPSNO2allcauses401(194–831)46(22–94)chronicobstructive110(39–212)12(4–24)pulmonarydisease10(3–20)1.1(0.3–2.2)diabetes230(167–300)26(19–33)283(89–517)31(10–56)PM2.5ischaemicheartdisease173(83–288)19(9–32)lowerrespiratoryinfections239(92–442)27(10–49)336(226–454)38(26–52)lungcancer1,968(1,345–2,861)220(150–321)9.6(6.6–13.8)1.1(0.7–1.5)strokeSO2allcausestotalcasesofdeathstotaleconomiccosts(USDbillion)Otherhealthimpactsoccurasaresultofcoal-firedpollutioninSouthKorea.Anestimated2,760childrensufferedfromasthmaduetopollutionexposurein2021and2022combined,ofwhich315canbeattributedtoNPS’linkagewiththepowerplants.589newcasesofasthmainchildrenaroseinthetwoyearswith67linkedtoNPS,andafurther285pretermbirthsoccurred,32ofwhichlinkedtoNPS.Over2,000yearslivedwithdisabilityduetochronicobstructivepulmonarydisease,diabetesorstrokeofwhichanestimated260werelinkedtoNPS.Additionally,therewereapproximately809,000workabsencesasaresultofpeoplehavingtotakesickleavedaysduetonumerouspollution-relatedhealthissues,ofwhichover90,000casescanbeascribedtoNPS.14Table3.TotalhealthimpactsinSouthKoreaandNPSattributedhealthimpactsbetween2021and2022fromcoalpowerairpollutionTotalnumberofcasesNPS-linkednumberofcasesCauseBestLowHighBestLowHighestimateestimateestimateestimateestimateestimatenewcasesofasthmainchildrennumberofchildrensufferingfrom5891271,3326714152asthmaduetopollutionexposure2,7676925,96131579679(increasedprevalence)asthmaemergencyroomvisits563348775633987285138302321534pretermbirths809,800688,900929,90090,69077,150104,100workabsence(sickleavedays)2,3337614,70525984522yearslivedwithdisabilityIsolatingthehealthimpactsperplantandbytheshareattributedtoNPS,thehighestimpactscomefrompowerplantswiththehighestcapacities,namelythe6,400MWTaeanpowerplantwith26annualdeathsandcostsofUSD120million(KRW155billion),the6,040MWDangjinplantwith23deathsandtotaleconomiccostsofUSD110million(KRW142billion),andthe5,080MWYeongheungplantwith18deathsin2022andallitsimpactscostingtheeconomyUSD113million(KRW84billion).Table4.AnnualNPSattributedhealthimpactsandtotalcostsin2022,perpowerplantPlantnameAsthmaDeathsNewcasesWorkabsencesCost,USDCost,KRWemergencyofasthmamillionbillionroomvisitsinchildrenBoryeong2(1–3)6(4–9)1(0–3)2,990(2,540–3,440)30(21–42)39(27–54)Bukpyeong0(0–0)0(0–1)0(0–0)169(143-194)2(1–3)3(1–4)Dangjin7(4–9)23(16–33)7(1–15)9,500(8,080–10,900)110(75–160)142(97–206)Donghae1(1–1)3(2–4)0(0–0)1,440(1,220–1,650)15(11–19)19(14–25)Gangneung0(0–0)0(0–0)0(0–0)18(15–21)0(0-0)0(0-0)AninGoseongHi0(0-0)1(1–1)0(0–0)375(319–431)5(3–6)6(4–8)Hadong3(2–4)10(7–15)3(1–6)4,250(3,620–4,880)56(39–78)72(50–101)Samcheok1(1–2)4(3–6)1(0–1)2,030(1,720–2,330)22(16–30)28(21–39)GreenPowerSamcheonpo1(1–2)5(3–7)1(0–3)1,930(1,640–2,220)26(18–38)34(23–49)ShinBoryeong1(1–1)3(2–4)1(0–1)1,500(1,270–1,720)15(10–21)19(13–27)ShinSeocheon0(0–0)1(0–1)0(0–1)251(214–289)3(2–4)4(3–5)Taean8(5–11)26(18–39)9(2–20)10,900(9,310–12,600)120(81–177)155(105–228)Yeongheung5(3–7)18(12–27)5(1–12)7,210(6,140–8,280)87(59–127)113(76–164)Yeosu0(0–1)4(2–7)4(1–9)664(565–763)20(11–37)26(14–48)15TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentAstheMinistryofHealthandWelfareofSouthKorea(MOHW)overseestheNPSandisalsoresponsibleforpublichealth,itseemsimperativetoidentifythecurrentsituationregardingpublichealthrelatedtocoal-linkedemissionsandpreparecountermeasuresatthenationalhealthlevel.However,relatedresearchandpoliciesseemtobelacking.16RecommendationsThisstudyshowsalarmingresultsintermsofairpollutionandhealthdamagecausedbytheNationalPensionService’sdomesticcoalinvestments.ThecumulativelossesareexpectedtoincreaseiftheNPScontinuestodelayestablishingscience-basedandeffectivepoliciesrestrictingcoalinvestments.Thisstudyproposesthefollowingcoaldivestmentpoliciestopreventfurtherhealthandeconomiclosses.1.Asapublicpensionfund,theNPSshouldactivelyengageinclimateactiontoremainwithinthe1.5°CdegreelimitsetoutintheParisClimateAgreement.2.Expandthedefinitionofthecoalindustrytoincludetheentirecoalvaluechain.3.Thequantitativecriteriaforclassifyingcoalcompaniesshouldbesetataminimumof30%byrevenue(or,inthecaseofpowergenerationcompanies,byelectricitygeneration).Thecriteriamustbeprogressivelystrengthened.4.Establishstandardsforactivestewardshipactivitiesandenhancetransparencyforcoalcompanies.17TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentAppendixA:CalculationmethodologyforNPSfinancedemissionsfromdomesticcoalpowerplantsA.ShareholdingAttributionFactorTheattributionfactorforstocksiscalculatedthroughthefollowingtwosteps.[Step1]Calculatetheproportionofthetotalassetsofthepowerplantinthetotalassetsforthepowercompany.Powerplant'sconsolidatedtotalassets=aPowercompany'sconsolidatedtotalassetsInthecaseofunlistedcompanies,the“consolidatedtotalassets’isusedintheconsolidatedfinancialstatements.Thetotalassetsofpowerplantsunderconstructionarereplacedbytheprojectcostsinthebusinessplan.[Step2]Inordertohavethefinalattributionfactorlinkedtoshareholding,calculatetheproportionoftheNPS’sinvestmentinthepowergenerationcompanymultipliedbytheresultinStep1.MarketCapoftheparentcompanyequityshareofNPSaMarketCapoftheparentcompany+ConsolidateddebtThefivepowergenerationcompanies-KOEN,KOMIPO,KOWEPO,KOSPO,andEWP-areallsubsidiariesofthepubliclytradedKEPCO.ThePCAFmethodologyusesEnterpriseValueIncludingCash(EVIC)forthecalculation,whichcanbederivedasthesumoftheparentcompany’smarketcapitalizationanditsconsolidateddebt.However,thefourpowerplantsinvolvingprivateoperators-BukpyeongPowerPlant,SamcheokCoalPowerPlant,GangneungAninCoalPowerPlant,andGoseongHaiThermalPowerPlant–receivetheinvestmentofthePensionServicethroughaffiliatedcompaniesconnectedtothepowerplantsbetweenStep1andStep2.Hence,thefollowingstepiscalculatedbetweenStep1andStep2andtheresultingvalue(b)ismultipliedinStep2insteadofthevalue(a)derivedinStep1.aarentcompanyinvestment(equityshare)inthepowergenerationcompany18B.BondholdingAttributionFactorTheattributionfactorrelatedtobondsisthesumofthedirectinvestmentmadebytheNPSbyacquiringbondsissuedbythepowergenerationcompanyandtheindirectinvestmentmadethroughtheacquisitionofbondsissuedbytheparentcompany.Theonlyactorsinvolvedintheoperationofcoal-firedpowerplantsinSouthKoreaareKEPCOandits5subsidiaries,andSamcheokBluePower,operatorofSamcheokCoalPowerPlant,andPOSCOHoldings,whichestablishedSamcheokBluePower.Consequently,thefollowingwillfocusonthesespecificactors.[DirectBondInvestment]TotalbondsacquiredbytheNPSfromKEPCOandSubsidiariesORSamcheokBluePowerKEPCOMarketcapofthepowercompany+ConsolidateddebtORSamcheokBluePowertotalassets+debt[IndirectBondInvestment]TotalbondsacquiredbyNPSfromPOSCOHoldingsconsolidatedentityPOSCOHoldingsequityshareinthepowergenerationcompanyPOSCOHoldingsMarketcap+Consolidateddebt19TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentC.NPSrelatedfinancialdatasourcesThedataondirectandindirectequityinvestmentsoftheNPSincoalpowerplantsisbasedonbusinessreportspublishedintheFinancialSupervisoryService'sElectronicDisclosureSystem(DART).NPSbondinvestmentdataTableA-C-1.NPSbondinvestmentdataInvestorInvesteeInvestmentamount(USD)DatasourceNationalPensionServicePOSCOHoldings239,808,153NationalPensionServiceNationalPension-NationalPensionServiceKoreaElectricPowerCorp15,166,608,500,000CourtesyoftheOfficeofChoi(KEPCO)23,207,240Younghee,NationalAssem-SamcheokBluePowerblyMember(2023.02.13)NationalPension-CourtesyoftheOfficeofChoiYounghee,NationalAssem-blyMember(2023.02.13)NationalPension-CourtesyoftheOfficeofChoiYounghee,NationalAssem-blyMember(2023.02.13)PowerplantandpowergeneratorconsolidatedfinancialdataTableA-C-2.PowerplantandpowergeneratorconsolidatedfinancialdataCompanynameTypeofdataSourceAllPowerCompanyTotalAssetsAssetValueRequesttotheNationalAssembly(2023.04.06)AllPowerPlantsKoreaElectricPowerMarketCapitalisationRequesttotheNationalAssembly(2023.04.06)CurrentandNon-currentCorp(KEPCO)TopMarketCap/KoreaExchange/Information&DataKoreaElectricPowerFinancialLiabilitiesSystems(krx.co.kr)(KOSPIon2022.12.29)MarketCapitalisationCorp(KEPCO)LongTermBorrowingsKEPCO/BusinessReport/ConsolidatedFinancialPOSCOHoldingsStatement(2023.04.10)(fss.or.kr)BorrowingsPOSCOHoldingsMarketCapitalisationTopMarketCap/KoreaExchange/Information&DataSystems(krx.co.kr)(KOSPIon2022.12.29)POSCOInternationalNumberofSharesPOSCO/BusinessReport/ConsolidatedFinancialPOSCOInternationalSharePriceStatement(2023.03.09)(fss.or.kr)POSCOInternationalSamcheokBluePowerTotalAssetsTopMarketCap/KoreaExchange/Information&DataLiquidityDebt+Debenture+Systems(krx.co.kr)(KOSPIon2022.12.29)SamcheokBluePowerLongTermBorrowingsPOSCOInternational/BusinessReport/Consolidated20FinancialStatement(2023.03.10)(fss.or.kr)GoogleFinance(on2022.12.29)SamcheokBluePower/BusinessReport/FinancialStatement(2023.03.30)(fss.or.kr)SamcheokBluePower/BusinessReport/FinancialStatement(2023.03.30)(fss.or.kr)AppendixB:AirpollutionandhealthimpactanalysismethodologyanddataThisstudyfollowsCREA’simpactpathwayapproach(IPA)toquantifythehealthimpactsofcoalpowergeneration.Itiscarriedoutby(1)developingaplant-by-plantinventoryofemissions;(2)estimatingpollutiondispersionfromCFPPsthroughatmosphericmodeling;(3)quantifyingairpollutionhealthimpactsresultingfromchangesinambientconcentration;and(4)valuingimpactsinmonetarytermsusingacostofillnessmethod.TheanalysiswascarriedoutintheRdataanalysissoftware,inaglobalspatialgridwith1x1kmresolution,withhealthimpactscalculatedforeachgridcell.Alldatasetswereaggregatedorinterpolatedtothisresolutionasrequired.A.EmissionsAplant-by-plantemissionsinventorywasusedasinputdatatotheCALPUFFmodel,accountingforplant-specifictechnology,location,andcapacityforeveryoperatingcoalplantinthecountry(seeAppendixC).Informationoncombustionandemissioncontroltechnology,coaltypeused,stackheightanddiameter,aswellasfluegasreleasevelocityandtemperaturewereusedtocalculateemissionsloadandaccountforplumereleaseheightandthermalriseofpollutants.Ifaplant’semissionsvalueswerelackingorunavailable,itwasgeneralizedusingaveragevaluesforprojectswithsimilarcapacityandcombustiontechnology.Weassumedthatsuchplantswereincompliancewiththecountry’semissionsstandardsandoperatingemissioncontrolstechnologyatfullcapacity.Informationoninstalledemissioncontrolswasalsocollectedfromtheseprimarydocuments,aswellastheS&P(2020)WorldElectricPowerPlantsdatabase.Stackheightaswellasfluegasexitvelocityandtemperaturewereimputedfromavailabledatafollowingthesameapproach.Whenmissing,thestackdiameterwascalculatedbasedontheestimatedtotalfluegasvolumeflowandvelocity.Ifunavailable,thermalefficienciesof37%,41%and43%wereassumedforsubcritical,supercriticalandultra-supercriticalplants,respectively,inlinewithindustrystandards.Separately,mercuryemissionswereprojectedusingtheformula:EHg=CCxMCx(1-CE),whereCCisthecoalconsumptionmassrateoftheplant,MCisthemercurycontentofthecoal,andCEisthecaptureefficiency.Fortoxicdepositionfrommainboilersofthepowerplants,30%ofemittedflyashwasassumedtobePM2.5,and37.5%PM10,inlinewiththeU.S.EPA(1998)AP-42defaultvalueforelectrostaticprecipitators(ESP).Mercurydepositionwasmodeledforthreedifferenttypesof21TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentmercury:elemental,reactivegaseousandparticle-boundmercury,withthespeciationbetweenthethreetypescalculatedbasedonLeeetal.(2006).Forotherheavymetals,emissionsdatawasnotavailable.NPSresponsibilityforemissionsandimpactsestimatesarecalculatedusingthe10thand90thpercentilesofvaluesinUSGScoalsamples(USGS,2011),andassuminganenrichmentfactorof1fromashinunburnedcoaltoflyashemittedfromthestack,inlinee.g.withtheempiricalresultsofLinaketal.(2000).B.AtmosphericmodelingTheCALPUFFmodelingsystemwasusedtopredictthecontributionofCFPPstoambientairpollutantconcentrationsateverymodeled“receptor”location.Theseresultswereprocessedtoextracttheannualmean,24-hourmaximumand1-hourmaximumpollutantconcentrationsfor2019.CALPUFFisthemostwidelyused,industry-standardemissiondispersionmodelforlong-rangeairqualityimpactsofpointsources.ItisabletomodeltheformationofsecondarysulfateandnitrateparticlesfromcoalpowerSO2andNOxemissionsandlong-rangetransport.Thesetwomechanismsareresponsibleformorethan90%ofthepopulation'sexposuretoPM2.5andforthehealthimpactsofCFPPemissions;theirexclusionwouldmeanomittingthemajorityofthehealthimpacts.Byaccountingfortransport,chemicaltransformationanddepositionofpollutants,itprovidesshortandlong-rangeimpactscausedbycoalplantemissions.MeteorologicaldatausedforthesimulationsweregeneratedwiththeWRFmodel,ona9x9kmgrid.Land-usedatawereobtainedfromtheEuropeanSpaceAgency(2018)andterrainelevationdatawereobtainedfromNASAShuttleRadarTopographyMission(SRTM)high-resolutiondatasets(Farretal.,2007).Depositionresultsweredifferentiatedbyland-usetypeusingtheEuropeanSpaceAgencygloballand-usemapfortheyear2015ata300mresolution(ESA,2018).Land-usecodes10-30weremappedascropland;codes50-100weremappedasforestandcode170asmangrove.MonthlyaveragebackgroundsforNH3,O3andH2O2concentrationswerealsoobtainedfromtheGeos-Chemmodelresults(Koplitzetal.,2017)andwereinputtedintotheCALPUFFchemistrymodule(ISORROPIA/RIVAD).22C.Healthimpactassessment&economicvaluationMajorairpollutantsThehealthimpactassessmentmethodologyandtheeconomicvaluationareadaptedfromCREA’s“QuantifyingtheEconomicCostsofAirPollutionfromFossilFuels”(Myllyvirta,2020).Dataonthetotalpopulationandpopulationagestructure,aswellasallmortalityresults,baselinedeathratesandyearsoflifelostinSouthKoreaweretakenfromtheGBDproject2019(IHME,2020).ThebaselineconcentrationsofPM2.5andNO2weretakenfromvanDonkelaaretal.(2016)andLarkinetal.(2017),respectively.Thehealthimpactsareadjustedbyagegroup-specificchangesinpopulationandall-causemortality,basedonhistoricaldataandprojectionsinUNPDWorldPopulationProspects2019(mediumvariant).Additionally,economiccostsareadjustedbychangesinpercapitaGDP(PPP).Upto2019,thedataaretakenfromtheWorldBankDatabank,andfutureprojectionsfromOECDGDPlong-termforecasts.Theforecastsandhistoricaldatauntil1989includeGDPinconstantpricesbutwithoutPPPadjustment,sogrowthratesinPPPadjustedGDPareassumedequaltothegrowthratesofrealGDP.Pastandfuturecostsarediscountedto2019valueat4%/year,asrecommendedbye.g.Hurleyetal.(2005).TableB-C-1.PowerplantandpowergeneratorconsolidatedfinancialdataEffectValuationCurrencyUnitYearSourceAdjustmentReferenceElasticity2010Income1Newasthma3,914USDcase2010BrandtetGDPPPPlevel1cases8442010al.(2012)California12018California1AsthmaUSDvisit2005BrandtetGDPPPPUS0.9emergencyal.(2012)UKroomvisitsEUPretermbirth321,989USDbirthTrasandeetGDPPPPal.(2016)GNIPPPDisability62,800GBPyeadrsislaivbeilditywith56,000BirchbyPremature(2019)deathsEURlostlifeyearEEA(2014)GNIPPPWorkabsence130EURworkday2005EEA(2014)GDPPPPEU123TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentTableB-C-2.InputparametersanddatausedtoestimateeconomiccostsofhealthimpactsconvertedtoSouthKoreanWon(KRW)OutcomeWorldAvg.GDP,ValuationinSouthValuationinSouthValuationinSouth2011USDKorea,2011USDKorea,2019USDKorea,2019KRWpretermbirths105,725283,419.47211,010.67245,902,871.97workabsence(sickleavedays)85227.86169.65197,699.16yearsoflifelost39,32495,517.8371,114.6782,874,018.24yearslivedwithdisability31,04783,228.4161,964.9972,211,364.07numberofchildrensufferingfrom1,1683,131.082,331.152,716,619.10asthmaduetopollutionexposure252675.54502.95586,119.87(increasedprevalence)asthmaemergencyroomvisits24AppendixC:StackpropertiesandemissionsdataThefollowingtableincludesdataforeachoftheindividualcoal-firedpowerplantsandunitsinSouthKoreathatwereusedforthemodeling.TheemissionsinputswereusedasinputdataintheCALPUFFModeling.TableC-1.Coordinates,stackpropertiesandairpollutantemissions(2021and2022)ofSouthKoreancoal-firedpowerplantsCoordinatesStackPropertiesEmissionsinputsEmissionsinputs(t/pa),2021(t/pa),2022PowerPlantLatLongStackDia-ExitFlueSOxNOxPMSOxNOxPMYeosuUnit1height,meter,Temp,Gas29.75283.5012.3737.569126.640metermeterCelsiusVelocity17.77254.137.7524.5931505.185.96YeosuUnit237.569126.6401504.879.327.09233.66272.910.4837.68256.399.15YeoUnngihte1ung37.237126.4382006.677.522.05583.60536.5138.11000YeoUnngihte2ung37.237126.4382006.679.725.7871.84733.5347.17YeoUnngihte3ung37.235126.4381986.390.528.7561.78355.7119.37113.2484.796.44YeoUnngihte4ung37.235126.4381986.387.629.7706.79441.9322.62YeoUnngihte5ung37.249126.4382006.899.527.6463.08373.7921.82829.81531.8630.41YeoUnngihte6ung37.249126.4382006.892.528.4528.19362.5022.10642.67408.0427.20TaeanUnit136.904126.238150.38.8311117.5305.19327.4934.65497.83437.8831.35TaeanUnit236.905126.237150.38.8311117.5247.86324.5845.27501.42401.1332.83305.38336.1447.58TaeanUnit336.904126.236150.38.8311117.5290.61337.6133.45246.17227.7232.73251.45358.9739.23TaeanUnit436.904126.236150.38.8311117.5271.86385.4736.01596.46371.3634.93602.87469.1626.44TaeanUnit536.902126.22961505.413714.2341.15359.6612.10588.86471.3631.85227.30337.5319.43TaeanUnit636.902126.22591505.413714.2706.61532.2340.25304.09424.6518.32249.34429.0116.05TaeanUnit736.903126.2321505.413916.5317.02494.0821.27511.68586.4023.04TaeanUnit836.902126.2321505.413916.5241.57340.6018.90TaeanUnit936.9022126.2291507.713514375.71541.8819.40523.63271.0521.29Taea1n0Unit36.902126.2291507.713514399.42440.2323.52267.31208.3418.03ShningBUonritye1o-36.385126.4881507.59027.62439.44222.3917.21ShningBUonritye2o-36.385126.4881507.59027.62645.18382.2533.17624.92855.0645.69SamUcnhieto3npo34.911128.1082005.1697.2217.4725558.41806.7227.80SamUcnhieto4npo34.910128.1892005.1699.2118.3925754.721091.4453.36410.33654.8149.53SamUcnhieto5npo34.911128.1082005.1684.9716.80590.97101.978.56SamUcnhieto6npo34.911128.1082005.1680.0216.7922.6021.682.24256.23166.568.18180.36180.6511.2625TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentCoordinatesStackPropertiesEmissionsinputsEmissionsinputsStackDia-ExitFlue(t/pa),2021(t/pa),2022PowerPlantLatLongheight,meter,Temp,GasmetermeterCelsiusVelocitySOxNOxPMSOxNOxPMSamcheokGreenPower37.186129.338907.97155.325.2785447.11375.4048.31234.63450.0850.67Unit137.187129.338907.97155.325.2785296.56241.3948.18254.24407.0460.02SamcheokGreenPower37.243129.1023207.49030691.96332.5365.35691.96332.5365.35Unit237.243129.1023207.49030691.96332.5365.35691.96332.5365.35SamcheokBluePower34.9497127.821509.38515.12597.14337.8938.22481.30271.4631.2834.951127.821509.38515.12467.82403.7729.90Unit134.9504127.8191509.38515.12390.71399.4527.76422.45444.6432.84Samcheok34.952127.291509.38515.12432.07426.5125.88BluePower34.952127.8191509.38515.12319.61355.3728.28392.84507.6031.4734.953127.8191509.38515.12511.84548.0631.07Unit234.955127.8191505.49122.66471.30432.1129.97323.30362.1019.35Hadong34.954127.8181505.49122.66539.11410.8340.83Unit137.2907129.085150414019.43656.93221.648.17562.75518.3441.02Hadong37.2909129.085150414019.43611.72205.979.64Unit237.0568126.5151506.5851.03295.42168.0535.66500.85447.7223.91Hadong37.057126.5151506.58519.03280.36156.7128.84Unit337.057126.5131506.58519.03312.22164.4037.33430.08369.2426.56Hadong37.057126.5121506.58519.03310.25131.4925.50Unit437.058126.5111505.49124.03244.37182.2338.34455.06398.5841.36Hadong37.058126.50851505.49124.03382.21183.7635.75Unit537.059126.5081505.49023.32256.76163.4631.77712.04219.778.50Hadong37.059126.50691505.49123.32371.36212.9744.62Unit637.0536126.5062087.39026.17900.30426.990.40551.30178.727.26Hadong37.0547126.5032087.39026.17692.32360.470.36Unit737.477129.1461505.49326.81795.22306.8116.15000Hadong37.477129.1461505.49326.817102.64304.1512.14Unit836.402126.4911508.799022.25100.2465.4921.33455.20298.0746.45DonghaeUnit1357.51251.3932.62DonghaeUnit232.5111.072.48DangjinUnit1352.04289.4857.04DangjinUnit2199.59212.8234.60DangjinUnit3258.51195.2631.53DangjinUnit4299.05239.8547.68DangjinUnit5615.67469.2418.84DangjinUnit6702.45591.2054.31DangjinUnit7163.79309.2518.23DangjinUnit8167.51271.7516.91DangjinUnit9117.4258.7039.26DangjinUnit10BukpyeongUnit1BukpyeongUnit2BoryeongUnit3SamcheokBluePoweremissionsinputsarefutureestimates26CoordinatesStackPropertiesEmissionsinputsEmissionsinputs(t/pa),2021(t/pa),2022PowerPlantLatLongStackDia-ExitFlueSOxNOxPMheight,meter,Temp,GasSOxNOxPMBoryeongmetermeterCelsiusVelocity0.571.570.24Unit4439.52312.7824.8936.402126.4911508.769019.96384.77275.9832.43541.84316.7733.27Boryeong36.402126.493184.17154.5031.38Unit536.402126.4931508.799019.96654.25378.8047.44248.18215.4726.8836.402126.495119.92206.5712.64Boryeong36.402126.4951508.799019.96554.91303.7428.76618.73378.2313.07Unit636.145126.498623.17378.4313.4634.906128.1271505.49032.7158.46170.0930.70442.09269.1038.44Boryeong34.906128.127442.09269.1038.44Unit737.435128.5841505.49032.7274.17197.6129.6337.435128.584Boryeong1507.59124.890.25133.8112.10Unit8Shin1907.59024.78429.15407.6110.02Seocheon1907.59024.7884.2075.412.17GoseongHi1077.693.820442.09269.1038.44Unit1GoseongHi1077.693.820442.09269.1038.44Unit2GangneungAninUnit1GangneungAninUnit227TheInconsistent"Coal-FreePledge"ofKorea'sNationalPensionService-AnanalysisontheairpollutionandhealthdamagecausedbytheNPS'coalinvestmentReferences•Donkelaarvan,A.,Martin,R.V.,Brauer,M.,Hsu,N.C,Khan,R.A.,Levy,R.C.,Lyapustin,A.,Sayer,A.M.&Winker,D.M2016.GlobalEstimatesofFineParticulateMatterusingaCombinedGeophysical-StatisticalMethodwithInformationfromSatellites,Models,andMonitors,Environ.Sci.Technol.50(7):3762-3772.https://doi.org/10.1021/acs.est.5b05833•EPA.1998.EmissionFactorDocumentationforAP-42Defaulhttps://www3.epa.gov/ttnchie1/old/ap42/ch01/s06/bgdocs/b01s06_feb1999.pdf•EuropeanSpaceAgency(ESA)2018.LandCoverMaps–v2.0.7.http://maps.elie.ucl.ac.be/CCI/viewer/download.ph•Farr,T.G.,Rosen,P.A.,Caro,E.,Crippen,R.,Duren,R.,Hensley,S.,Kobrick,M.,Paller,M.,Rodriguez,E.,Roth,L.,Seal,D.,Shaffer,S.,Shimada,J.,Umland,J.,Werner,M.,Oskin,M.,Burbank,D.&Alsdorf,D.2007.TheShuttleRadarTopographyMission.ReviewsofGeophysics4(2),RG2004.https://doi.org/10.1029/2005RG000183•Hurley,F.,Hunt,A.,Cowie,H.,Holland,M.,Miller,B.,Pye,S.&Watkiss,P.2005.MethodologyfortheCost-BenefitanalysisforCAFE:Volume2:HealthImpactAssessment.AEATechnologyEnvironment,UK.https://ec.europa.eu/environment/archives/cafe/pdf/cba_methodology_vol2.pdf•InstituteforHealthMetricsandEvaluation(IHME).(2020).GBDResults.http://ghdx.healthdata.org/gbd-results-tool•Koplitz,S.N.,Jacob,D.J.,Sulprizio,M.P.,Myllyvirta,L.&Reid,C.2017.BurdenofDiseasefromRisingCoal-FiredPowerPlantEmissionsinSoutheastAsia.EnvironmentalScience&Technology51(3):1467-1476.https://doi.org/10.1021/acs.est.6b03731•Larkin,A.,Geddes,J.A.,Martin,R.V.,Xiao,Q.,Liu,Y.,Marshall,J.D.,Brauer,M.&Hystad,P.2017.GlobalLandUseRegressionModelforNitrogenDioxideAirPollution.EnvironmentalScience&Technology51(12):6957-6964.https://doi.org/10.1021/acs.est.7b01148•Lee,S.J.,Seo,Y.C.,Jang,H.N.,Park,K.S.,Baek,J.I.,An,H.S.,Song,K.S.,2006.Speciationandmassdistributionofmercuryinabituminouscoal-firedpowerplant.AtmosphericEnvironment40:2215–2224.https://doi.org/10.1016/j.atmosenv.2005.12.01•Linak,W.,Miller,A.andWendt,J.2000.ComparisonofParticleSizeDistributionsandElementalPartitioningfromtheCombustionofPulverizedCoalandResidualFuelOil.http://www.tandfonline.com/doi/pdf/10.1080/10473289.2000.10464171•Myllyvirta,L.2020.QuantifyingtheEconomicCostsofAirPollutionfromFossilFuels.CentreforResearchonEnergyandCleanAir.https://energyandcleanair.org/wp/wp-content/uploads/2020/02/Cost-of-fossil-fuels-briefing.pd•S&PGlobal.2020.WorldElectricPowerPlantsdatabase.https://www.spglobal.com/marketintelligence/en/campaigns/data-distribution•USGS.2011.WorldCoalQualityInventoryv1.1.http://energy.usgs.gov/Coal/AssessmentsandData/WorldCoalQualityInventory.aspx•MinistryofHealthandWelfare.28May2021.NationalPensionFundDeclares‘CoalPhase-Out’toReduceCarbonEmissions.PressRelease."국민연금기금,탄소배출감축을위한‘탈석탄선언’"힘이되는평생친구,보건복지부(mohw.go.kr)28•PCAF.2022.TheGlobalGHGAccountingandReportingStandardPartA:FinancedEmissions.SecondEdition.https://carbonaccountingfinancials.com/files/downloads/PCAF-Global-GHG-Standard.pdf•SeoulMetropolitanGovernment.n.d.InformationonAirPollutants.SulfurDioxide.https://cleanair.seoul.go.kr/information/info153•SeoulMetropolitanGovernment.n.d.InformationonAirPollutants.NitrogenDioxide.https://cleanair.seoul.go.kr/information/info151•SeoulMetropolitanGovernment.n.d.InformationonAirPollutants.ParticulateMatter(PM)Pollution.https://cleanair.seoul.go.kr/information/info1129
VIP
