South Korea invests big in green industry – or does it?

Some 80 percent of its $38 billion economic stimulus package is for clean technology. But environmentalists say half the money is 'greenwash.'

At first glance, the Borrego looks like any of the chunky SUVs that crowd today's roads, guzzling gas. Take a closer look, though, and you notice that there is no tailpipe.

Under the hood of Kia Motors' most advanced experimental car sits a fuel-cell stack that runs on hydrogen and emits nothing but a low hum and a small puddle of water.

Still six years away from mass production, the hydrogen-powered Borrego is a poster child for the South Korean government's splashy new plans to build its economic future on green foundations.

"That's our dream," said South Korean President Lee Myung-bak as he showed the vehicle off to fellow Asian leaders at a summit in June.

Spurred by rising oil prices and last year's economic crisis, President Lee has thrown the full weight of his conservative administration behind what he calls "low carbon green growth." This, officials explain, is an overarching strategy to turn the country's back on the cement factories, steel plants, and shipyards that powered its postwar industrialization boom and seek economic growth from energy-­efficient technologies instead.

Though some question just how green the growth will be, the government is investing massively in the effort.

Eighty percent of its postcrisis $38 billion economic stimulus package will go to green projects, officials claim – the biggest proportion of any country in the world, according to the United Nations Environment Program (UNEP).

On top of that, the government's five-year economic plan, currently before parliament, sets aside 2 percent of the country's gross national product for green investments – twice as much as UNEP is asking of world leaders.

"We are looking for a new development paradigm," says Kim Hyung-kook, chairman of the Presidential Committee on Green Growth. "We are trying to put this theory into practice."

There is, however, a worm in the apple. Half the "green new deal" money being spent to create jobs and pull the suffering South Korean economy out of its slump will go to a massive river-management scheme that environmental activists say is anything but green.

The Four Rivers Restoration Project, a $20 billion plan to dredge, dam, and channel the rivers designed to save water, prevent floods, and create hundreds of thousands of temporary jobs "is not revival, it means death for the rivers," argues Choi Yul, the country's most prominent environmentalist. "This is fake green growth."

Other activists complain that authorities have inflated their green credentials by simply rebranding old projects – such as the ongoing construction of a new high-speed railroad – as green. "This is 'greenwashing,' " snorts Yun Sun-jin, a professor of Envi­ronmental Studies at Seoul National University.

"This government is growth-­oriented ... but they call it green," she adds, because "low carbon green growth is a very sexy term."

Deputy Environment Minister Lee Byung-wook acknowledges the criticism. "At the emerging stage, most people can say growth is first and green is next," he admits. "Most people think that growth is more important [to the government], and I agree with them. But it will change."

Officials dismiss environmentalists' hostility as politically motivated sour grapes, born of resentment that a right-wing government has hijacked their cause.

Even some activists say that objections to the Four Rivers project have muddied the waters.

"Without the Four Rivers project, I don't think civil society groups could criticize the green growth strategy," suggests Choi Ye-yong, head of the Citizens' Institute for Environmental Studies. "But because of it, they don't believe anything" the government says.

South Korea is currently something of an environmental disaster area. Its use of energy, pesticides, and fertilizer – as well as its carbon-dioxide emissions – are among the highest in the world relative to the size of the nation's economy, according to the Paris-based Organization for Economic Cooperation and Development (OECD).

President Lee has pledged to announce his government's targets for CO2 emission reduction by the end of this year.

In the meantime, signaling its intentions, the government announced on Oct. 8 that it would accelerate its investment in electric-car technology to bring forward mass production by two years, to 2011.

By 2015, predicts Cho Seok, deputy knowledge econ­omy minister, South Korean automakers should have captured 10 percent of the world market for electric vehicles.

That kind of profit potential is one clear motivation behind the green growth strategy, alongside environmental benefits. "Global warming is a crisis, while at the same time an opportunity that can create a gigantic market," Lee said in a radio address in August.

To that end, the government is focusing its green investment drive on projects to make South Korea a world leader in solar-cell production.

South Korean firms have already mastered advanced low-energy light-emitting diode (LED) technology, and the government plans to outlaw conventional light bulbs within four years. (A US phase-out of incandescent light bulbs, enacted by Congress in 2007, begins in 2012 and will be complete by 2014.)

Officials say they will also invest heavily in nuclear energy – another aspect of government policy that angers local environmentalists – which already supplies 40 percent of the country's energy supply. The new five-year economic plan also foresees a jump in the use of alternative energy sources, such as wind and solar.

It remains to be seen what all the green buzz currently animating government policy will actually achieve, UNEP cautions in an interim report on South Korea's efforts published last August.

It depends, says environmentalist Lee, how many slogans are translated into reality, as the government seeks to change citizens' everyday behavior. "Everybody says green is important, but nobody feels it is important," he points out. "We do not need any 'greenwash.' " We need practice."

• Kang Yewon contributed reporting to this article.