A mathematical and economic approach to energy problems: an interview with Park Jin-su

The uncertainties of expanding and commercializing renewable energy have led to the rising prominence of quantitative research as a guide to navigate complex technical problems. Park Jin-su, the CEO of research institute PLANiT discussed in this interview how the institute discoveres optimal solutions to energy issues and his visions as the author of the book Carbon Bubble. Taking on the role of both a research institute CEO as well as an author, he also delivered personal insights on economic policy changes needed for Korea to pursue sustainability. 

Could you tell us about the activities you’re currently leading at PLANiT, and specifically what aspects of climate and energy issues you’re focusing on?

PLANiT is a research institute that conducts quantitative research on climate change and the energy sectors. Essentially, we develop various models, perform analyses using those models, and provide both the results and the models themselves to other organizations and civil society organizations (CSOs). In simple terms, you can think of us as an organization that attempts to solve climate and energy problems mathematically.

What specific aspects of climate and energy issues do you focus on?

We primarily focus on renewable energy modeling. Increasing renewable energy isn’t just about installing more capacity; it requires simultaneously solving complex issues like grid integration and market design—problems that are more intricate than one might think. The same goes for the industry. So, you can think of us as an organization that analyzes these issues and works to solve the complex problems surrounding renewable energy. 

In high school math, there’s a concept called differentiation. Within that, there’s also the concept of partial differentiation. Essentially, we set all the constraints and then, to put it simply, take the derivative. You could say that our work involves finding the optimal independent variables through this differentiation. However, there are often as many as 500 or 600 constraints. Our role is to find the optimal solution by considering both physical constraints and policy-related constraints, and to provide a platform that solves these problems.

Besides working as the CEO of PLANiT, what inspired you to write the book Carbon Bubble, and what do you think is the key message readers should understand?

The book Carbon Bubble is about how climate change could lead to an economic crisis. Many people tend to approach and understand climate change primarily as an ethical imperative. However, climate change represents a shift to a new paradigm and a transformation of our era. If we fail to grasp this properly, an economic crisis could ensue—that’s the first point. The second is that it’s not just about an economic crisis; in fact, many of the luxuries we enjoy and the industrial systems that support them are largely based on greenhouse gases. So, I wrote this book to convey that we are essentially borrowing these benefits—this abundance we enjoy—as externalities, borrowing from nature or from future generations.

In the prologue of Carbon Bubble, you emphasized that the climate crisis extends beyond environmental issues to become a problem for the economic and financial systems. In that context, what do you hope readers will think, and do you hope to see a shift in their thinking?

This might seem like a simple question, but it’s actually a very difficult issue. So, while I do have expectations for how citizens will change, let's say the world today is “A,” but there’s a world I envision, which is “B.” In that “B” world, people take some responsibility for every action they take regarding climate change, and that responsibility is converted into a cost. I hope we can become a society of citizens who are conscious of paying that cost. But honestly, this “change in citizens” isn’t something that can be achieved through a shift in consciousness alone. At this stage, especially in the short term, there’s a greater need for policy changes. That’s my view. And since politicians will only change once citizens do, I hope for a shift where people are well-informed enough to push politicians in that direction.

You mentioned that significant policy changes are needed. Since climate policy isn’t just about regulating the environmental industry but also about transforming the economic structure, how prepared do you think the Korean economy is for such a transition? Also, if there are policies that could be implemented if desired, what are they?

In the past, I thought that simply enforcing regulations was important, but it’s true that we’re in a very confusing time right now. In the past, market liberalism gained some traction. So, I thought that implementing market-based policies was the most important way to change the world, but since Trump’s election, statism has been re-emerging as an important paradigm, so to speak.

Since the structure and approach to growth—where the state invests in specific industries—is changing significantly, I believe it’s crucial for the government to take a leading role in investing in eco-friendly industries and climate change initiatives, as well as implementing financial policies. Financial policies can take various forms, such as lowering interest rates or improving financial transparency. I believe it’s most important for the government to demonstrate strong commitment and take concrete action on these details.

Currently, many companies are making efforts to achieve carbon neutrality. As the CEO of PLANiT, you likely have a first-hand view of the cost burdens and competitiveness issues these companies are actually facing. How do you think companies should resolve these difficulties and economic dilemmas?

I don’t actually think technology is lacking. However, the issue is that our country’s industrialization period has been relatively short. Because of this short timeframe, the industrial infrastructure we currently possess can be difficult to let go of—sunk costs may arise. But, I believe it’s crucial to recognize that bold reinvestment while maximizing the value of those sunk costs is an inevitable requirement of our times, and to make investment decisions quickly. In other words, if the government demonstrates a clear commitment—signaling that we will continue in this direction for the next 20 to 30 years—companies will actually be more likely to abandon those sunk costs and make the transition. That is why I believe such efforts are necessary.

The economy is rarely interpreted in purely short-term terms. While current phenomena always appear immediate, significant changes or industrial shifts often unfold over a period spanning 20 to 30 years. Furthermore, infrastructure and facilities are often used for 50 or 60 years. Therefore, the government needs to send a strong market signal, clearly indicating the path we must follow for the next 30 years.