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E-book Carbon Pricing in Japan
The Paris Agreement adopted in December 2015 sets out the trend toward decar-bonization, which calls for net zero GHG emissions by the latter half of this century.Along with this trend not a few countries have set ambitious emission reductiontargets to address it, and among them Japan officially set an 80% reduction target for greenhouse gas (GHG) emissions by 2050 in the Plan for Global Warming Coun-termeasures adopted by the Cabinet in May 2016. The IPCC 1.5°C Special Report(IPCC2018) published in November 2018 further corroborates this trend, and nowinternational society seriously discusses decarbonization measures to reduce CO2emissions to net zero around 2050. In order to realize such a decarbonized society, afundamental transformation of the entire economic and social system is needed andnot only carbon intensive sectors such as the power generation sector and the ironand steel sector but also all sectors and all stakeholders including households mustbe decarbonized.How to realize such a fundamental transformation is apparently an extremelydifficult question, but there are number of existing studies tackling this daunting taskto answer this question and there seems to be a general agreement that carbon pricingis necessary to realize a fundamental systemic change toward a decarbonized society.The Deep Decarbonization Pathways Project (DDPP), an international researchproject that aimed to chart a pathway to reach the 2050 reduction target using back-casting methods to be consistent with the Paris Agreement, placed carbon pricing asa key element in all policy packages (DDPP2015). It is explained that the realizationof decarbonization assumes that a large number of discrete (decentralized) actors willmake the right choices, and carbon pricing is essential to harmonize such discretedecisions (DDPP2015). Rockström et al. (2017), in their “Roadmap for Rapid Decar-bonization“ to achieve net zero CO2emissions by 2050, stated that carbon pricingof at least USD 50/t-CO2in 2020 for all CO2emissions needs to be introduced, andthat it needs to be raised to a level above USD 400/t-CO2by 2050.
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