The Sihwaho Project got off to a bad start, which led to a series of mishaps and an imbalance of the whole project. The purpose of this study is to select the case of Sihwaho as a research subject, clean up the contamination caused by the ill planned project, develop suitable measures to stabilize the lake environment, and find the implications of similar development projects. For this, the authorshave conducted three simulations after studying the structural reasons for the failure of the Sihwaho Policy by identifying cause and effect relationships, pre-testing a number of policy measures for the current lake project, and presenting measures for solving the contamination problem at the lake. The simulations have shown us that filling the lake with seawater is inadequate to solve the problem and that we also have to make efforts to reduce the volume of wastes to the lake as well. The authorshave also analyzed the degree of difference between the simulation and survey results for scenario 1, in which we have studied how much seawater can reduce the contamination of the Sihwaho Lake without the effort to reduce the volume of wastes into the lake. The survey showed that most citizens and employees of the Ministry of Environment did not think it would be serious as the simulation results pointed out, and the employees of the Ministry of Environment were more optimistic about the situation than the public.