INSIGHTS

Japan is missing an opportunity to promote energy savings

With rising energy prices Japan seems to have forgotten its decarbonization goals and is missing on an opportunity to promote energy savings.

In April 2021 prime minister Suga announced his target of reducing CO2 emissions by 46% compared to 2013 levels. If the number “46%” was subject to debate, it fits into the 2050 “net-zero” target. To achieve these goals, Japan will have to reduce its emissions by ~4% by year, every year.

Prime minister Kishida’s government is now considering subsidizing utility firms to curb power prices as well as a subsidy scheme for gas. The Japanese government has already been subsidizing gasoline wholesalerssince January to reduce retail prices. What was supposed to be a temporary measure, reviewed weekly, was extended in April. According to Reuters, these measures aim at achieving real economic growth of 2%-2.5% this fiscal year.

These measures will keep demand high for fossil fuels, maintaining Japan CO2 emissions above target levels and failing to bring any sustainable solution to future energy crisis.

Instead, by letting the retail price of energy rise and by promoting energy savings measures Japan could not only make progress on its climate goals but also ensure that future volatility of prices and long-term scarcity of fossil fuels would have a lower impact on its economy and its population.

Japan could promote Energy saving measures similar to what France recently announced, including temperature limits in buildings, limiting cars speed or turning-off advertisement displays at night. But it could of course go further. Subsidies could then be focused on consumers with low revenues and without alternatives.

Climate goals are extremely unlikely to be achieved without a reduction in consumption. Japan has the opportunity and a plausible excuse to start implementing measures that could not only have a short-term impact but set the direction of a new strategy with a real chance of meeting its climate goals.