Growth Strategy towards Achieving Carbon Neutrality by 2050
June 23, 2021
Mr. Hideka Morimoto
Professor of Waseda University, Faculty of Jurisprudence
Over 120 countries around the world aim to achieve carbon neutrality by 2050, including Japan, the U.S.A. and across Europe. In October 2020, Prime Minister Suga declared Japan would become carbon neutral by 2050. He urged a mindset shift and set forth his political direction by emphasizing “environmental measures are no longer constraints on economic growth. Instead, they are the keys to transforming the industrial structure and producing robust growth.” Today in my speech, I will summarize initiatives taken inside and outside Japan, followed by my views on additional measures that can accelerate our sustainability journey.
Global Trends
Europe leads the world in reducing its carbon footprint, first introducing the environmental taxes in the 1990s. The Paris Agreement adopted in 2015 has given further impetus to seek growth opportunities in the green digital economy. The EU just adopted a landmark European climate law and plans to introduce the world’s first carbon border tax to be imposed on certain goods imported from countries with lower environmental standards. Interestingly, China takes proactive measures to spearhead a transition to renewable energy sources and serves as a major manufacturing base for solar generation and electric vehicles. Under the new Biden Presidency, the U.S. federal Government has allocated a large amount of the budget to accelerate decarbonization of its energy system.
Strategies for Green Growth in Japan
Following the aforementioned declaration made by Prime Minister Suga, our Government has drawn two strategies. One is to “promote the development of innovative technologies” to achieve green growth and the other is to implement the “roadmap for local decarbonization.” The Government has set ambitious targets to accelerate technological development in key 14 areas such as renewable energy sources and power generation fueled by hydrogen and ammonia. The Government’s far-reaching stimulus package includes preferential corporate tax rates applied to companies that have invested in energy-efficient manufacturing facilities or processes that will lead to reduce greenhouse gas (GHG) emissions, including plants for new lithium-ion batteries or power semiconductors. Through the second strategy, the Government plans to set up 100 model decarbonation areas, covering diverse settings such as forests, farmlands, fishing villages, university campuses as well as large cities like Kawasaki and Yokohama. Governmental subsidies will be granted to private businesses engaged to promote local decarbonization initiatives. After evaluating the effectiveness of model cases, the Government will push for bold climate actions throughout the country. I want to highlight one successful case at Mutsuzawa Town in Chiba Prefecture where “independent dispersed energy” sources ensured a stable power supply even in emergency situations. Local residents still had access to electricity when wide-scale power outage hit the Prefecture twice caused by powerful typhoons last year. This decarbonization initiative also helped to build resilience and mitigate disaster impacts.
Effectiveness of Governmental Policies and a Future Course
While the Government rolls out various initiatives across the country, I must say there is an ample room for improvement. We should learn from the past as well as tap into advanced measures taken in other countries. As we look back on history, former Prime Minister Eisaku Sato took drastic measures against industrial pollution that had inflicted devastating consequences for people’s health. The so-called “Pollution Diet Session” in 1970 passed as many as 14 anti-pollution laws, including the Water Pollution Prevention Act and the Waste Disposal Law, and turned Japan from being one of the “most polluted countries” into a country “with the most comprehensive environmental protection laws in the world.” I believe strong political leadership enables our country to leapfrog in our sustainability journey.
There is also much to learn from other countries. Renewable energies already play a major role in the EU member states, including Germany where renewable sources met 46% of its power consumption in 2020. France stipulated the Energy Transition Law and shifts to wind and solar power generation while reducing nuclear energy. The EU aims to be a game changer in the world faced with the most urgent mission to become carbon neutral. The European Green Deal presents a roadmap to boost efficient use of resources by moving to a digital technology-based sharing economy that will lead to dematerialization of economic activities. The private sector has abundant funds which are ten times larger than Governmental budgets and it will surely play an instrumental role in accelerating decarbonization through strategic sustainable finance programs.
As we look ahead to the future, let me highlight three challenges we should address. First, any ambitious goals ought to be backed by “robust measures.” When the U.S. Congress passed the Clean Air Act (the so-called Muskie Act) in the 1970s and reinforced Governmental regulations, the Japanese auto industry overcame this challenge by advancing research and development to strengthen its market competitiveness. Second, we must introduce a new mechanism that “makes carbon an index to benchmark economic efficiency.” For example, we import large amounts of fruits from Israel located far away. By incorporating carbon footprint into commodity prices, we can quantify the amount of GHG emissions during the course of transportation. And third, we should seek ways to collaborate with developing countries to make steady progress towards carbon neutrality through information disclosure in a transparent and accountable manner. I believe strategic measures to make Japan carbon neutral by 2050 will stimulate growth and prosperity.