Incremental or transformative? Japan’s pledge to become carbon-neutral by 2050
On 26th October 2020, Japan’s Prime Minister declared in his speech to the Diet that “by 2050 Japan will aim to reduce greenhouse gas emissions to net-zero”. Japan’s “net zero” commitment represents a significant shift from an earlier pledge to reduce emissions by 80% by 2050, and become carbon-neutral in the second half of the century. It also aligns Japan with a material global shift in ambition and policy, especially in major Asian economies.
In this paper we offer an initial assessment of the challenges and opportunities ahead for Japan as it strives towards “net zero”. While many challenges are common globally, Japan also faces a particular set of circumstances which will drive its response. Specifically, power generation in Japan requires a large scale shift away from fossil fuels – and coal fired generation in particular, with renewables and potentially hydrogen likely to pick up significant share. Industries such as steel and chemicals are also likely to see transformative change, as does Japan’s auto sector. At the same time, addressing climate change both domestically and globally should present new opportunities for Japan’s corporate sector. The Prime Minister’s pledge and resulting policy momentum is likely to give impetus for innovation and technological advances.