We analyze the growth-energy use nexus for South Korea, considering province-level consumption data for both total energy use and the five main energy carriers from 2002 to 2017. Given the importance in the country's environmental initiatives and lack of Korea-specific empirical evidence, our focus lies on the role of technological change in reducing the corresponding energy intensities and related changes induced by the National Strategy for Green Growth launched in 2009. While we decompose the growth effect into technique and composition effects and treat income as endogenous, three additional indicators are used to measure innovation activity. We find that not only the income-induced technique effect, but also trade openness, government environmental expenditures, and in part innovation, reduce the total energy intensity. Interestingly, the effects of innovation and government expenditures have been significantly stronger since 2009, whereas the total energy intensity has not improved during the same period. At the energy carrier level, the importance of the drivers is heterogeneous. The technique effect reduces the oil and electricity consumption intensity in particular, and increases the renewables consumption intensity. Reductions in the coal consumption intensity are driven by increases in government expenditures, innovation activity, and trade openness. Decreasing the natural gas consumption intensity appears difficult to achieve.

Using province-level data for South Korea, we analyze the dynamic relationship between economic growth and several energy parameters. Specifically, we decompose the growth effect into scale, composition, and technique effects, and control for regional spillovers through the use of a dynamic GMM estimator for spatial panel data models. The analyzed period, ranging from 2000 to 2017, allows us to look for changes in the regional growth effects following the implementation of the National Strategy for Green Growth in 2009. Our estimates show that the scale and composition effect tended to increase both per capita final energy use and energy intensity, outweighing reductions through the technique effect. In contrast, when considering renewable energy production, the scale and technique effect increased and the composition effect decreased the corresponding figures. Thereby, the technique effect was the main driver of increases in renewable energy production. Despite the larger, yet comparatively small share of renewables in Korea’s energy mix, no considerable change of the growth effects can be observed since 2009. Therefore, to reduce the risks for the economy and achieve the political objectives of the green growth strategy throughout the whole country and in a timely manner, a stronger commitment seems to be required.