The estimates were presented in a BOK Issue Note examining the economic effects of two paths toward the country's goal of reaching net-zero carbon emissions by 2050.
Researchers modeled a linear reduction path in which greenhouse gas emissions fall 53 percent from 2018 levels by 2035 and an early-reduction path targeting a 61 percent cut by the same year.
Both paths would require a sharp rise in carbon prices and substantial investment in renewable energy and carbon capture and storage technologies.
The study estimated that the carbon price would need to rise from about $7 per ton at the end of 2025 to around $1,400 by 2050.
Investment in the energy supply sector alone would total around 840 trillion won ($633 billion) through 2050, with the amount required across the broader economy likely to be substantially larger once industry and transport are included.
The economic burden would not be evenly distributed over time.
Under the early-reduction path, tighter emissions limits and a faster rise in carbon prices would impose a larger drag between 2030 and 2045, while earlier adoption of low-carbon technologies would ease the impact later.
The linear path would impose a smaller burden initially, but delayed investment in low-carbon technology would leave the economy facing a sharper adjustment around 2050.
By 2050, gross domestic product could be 8.2 percent below the baseline under the early-reduction path and 10.2 percent lower under the linear path, before the gap narrows as low-carbon technologies become more widely adopted.
Producer prices could be 5.1 percent above the baseline under the early-reduction path and 6.5 percent higher under the linear path by 2050.
The impact would be concentrated in carbon-intensive industries. Manufacturing value added could fall 26 to 32 percent below the baseline around 2050, while producer prices in manufacturing could rise 13.4 to 16.8 percent.
Oil refining, chemicals, cement and steel would face particularly strong direct cost pressures, with the effects also spreading to related sectors including automobiles and construction.
The researchers said the transition could create a prolonged trade-off between price stability and economic growth as carbon prices rise and companies replace capital stock with lower-emission equipment.
The study measured only the economic costs associated with the transition and did not include the benefits from limiting climate change.
Previous research cited in the report estimated that mitigating climate damage could improve annual growth by around 0.3 percentage point compared with a no-action scenario, exceeding the estimated transition cost, although the researchers cautioned that the estimates are not directly comparable.
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