Lee Chang-yong, the governor of the Bank of Korea, emphasized that the country must address climate change and the issues of low birth rates and aging to achieve sustainable growth. Proposed measures include reorganizing the taxonomy system, realizing carbon emission rights pricing, fostering regional hub cities, and implementing regional proportional selection systems.
On the 13th, Governor Lee delivered a keynote speech at the 'Global Sustainable Development Forum (GEEF) 2025' held at Yonsei University's Baek Ju-nyeom Memorial Hall. This forum is an international event co-hosted annually by Yonsei University, the Global Social Contribution Foundation, the Ban Ki-moon Center for Global Citizens, and the Ban Ki-moon Foundation for a Better Future, and this year marks its seventh iteration.
He mentioned the recent frequent heavy rainfall, noting that climate change is directly impacting our lives. The governor said, "In the year before last, the rainfall exceeded 50 mm in 13 days, causing the collapse of embankments in underground passages, resulting in the tragic loss of 14 precious lives," and added, "I can't help but think that the 'squall' phenomenon occurring in Thailand or South America has reached Korea."
The governor also explained that "climate change is directly impacting our food supply" and stated, "In the past, apple cultivation was possible in most areas of the country except for the southern coast and Jeju Island, but as climate change is progressing faster than expected, forecasts indicate that it will be nearly impossible to grow high-quality apples in Korea, except in mountainous areas of Gangwon Province, in the 2030s."
The governor argued that measures must be taken to reorganize the green classification system (green taxonomy) and realize carbon emission rights pricing to address climate change. He said, "It is necessary to present a clearer definition of 'eco-friendly' in the green taxonomy to provide a clear direction for carbon reduction," and added, "Additionally, the pricing of carbon emission rights should be improved by gradually reducing the current proportion of free allocations, which is at 90%, and gradually decreasing the total volume of emission rights."
Regarding low birth rates and aging, he evaluated them as serious issues that could lower economic growth rates. The governor explained the scenarios of maintaining the current total fertility rate of 0.75 versus increasing it to 1.4, stating, "In both cases, the domestic gross domestic product (GDP) growth rates will differ by 0.4 percentage points each year."
He also projected that "as the birth rate declines, government finances will worsen, while the proportion of the elderly demographic increases relative to the youth, leading to a rapid rise in the burden of fiscal expenditures for pensions, medical care, and childcare on the younger generation." He continued, "If the birth rate maintains the level of 0.75, the government debt ratio is expected to soar to 182% in 50 years, but if the birth rate is at 1.4, the government debt ratio will rise to 163%, with a somewhat mitigated increase."
He analyzed that the cause of low birth rates and aging is competitive pressure. He said, "Competition over the limited number of quality jobs has intensified, and even if one succeeds in employment, there is diminished confidence in job stability," and added, "Moreover, skyrocketing housing prices have made it even harder for young people to achieve the dream of owning a home, which directly translates into burdens associated with marriage and childbirth."
The governor further commented that "one of the core factors exacerbating competition and anxiety among the youth is the phenomenon of 'capital area concentration.'" He noted, "In Korea, the concentration of population, GDP, and jobs in the capital area exceeds 50%, whereas in the United States and Germany, it is around 5%, in the United Kingdom and Italy it ranges from 10% to 20%, and in France, it is between 20% and 30%. Even in Japan, it is only around 30%."
To address this issue, the governor stated that 2 to 6 regional hub cities should be developed, and a 'regional proportional selection system' should be introduced for university admissions based on the proportion of school-age population in each region. He argued that this would lead to the realization of substantive balanced national development and alleviation of inter-regional conflicts.
Finally, the governor said, "The issues of climate change and low birth rates and aging are core challenges that must be addressed for our country to achieve sustainable growth," adding, "The Bank of Korea will also take the lead in efforts to pass on a better life to future generations."