The Japanese Cabinet has adopted new climate and decarbonization targets in a long-term plan to cut greenhouse gas emissions. The new plan is to reduce carbon emissions by 73% from 2013 levels over the next 15 years till 2040. The long-term focus will be on promoting decarbonization, making sure of a stable supply of energy, and making industrial capacity strong to drive economic growth.
Private market firms, asset managers, and impact investors with portfolios in the renewable energy sector and energy-efficient technologies may need to consider the new emission reduction targets introduced by Japan. In addition, the updated climate plan might create potential opportunities in renewable energy and green technologies sectors.
Let's explore the details of Japan's new emission reduction target.
About Japan's 73% emission reduction target
The new emission reduction initiative is a part of the updated climate plan Japan adopted to achieve its commitment to carbon neutrality by 2050. The new targets for emission reduction are 60% by 2035 and 73% by 2040, relative to 2013 levels. This marks a significant leap from previous targets—initially set at a 26% reduction by 2030 in 2016, later revised to 46%. The new targets will be submitted to the United Nations as a Nationally Determined Contribution (NDC) under the Paris Agreement.
Key aspects of the new emission reduction target of Japan
- Central to this new target plan is a substantial expansion of renewable energy, with the goal of supplying up to half (50%) of the country's electricity needs through sustainable sources by 2040. This is a notable rise from 22.9% in 2023.
- Under the new climate plan, Nuclear energy is expected to contribute about 20% of the energy mix by 2040, which signals a shift from the 2011 Fukushima disaster.
- The updated climate plan replaces the old one, which was released in 2021. The intention for this is to ensure energy security, encourage decarbonization, and strengthen long-term policy stability.
- Citing earlier expert discussions, the administration finalized the present goals without altering them, even though over 80% of public submissions called for more aggressive targets. The targets have drawn criticism from environmental organizations for lacking the ambition to achieve the required reductions to keep global warming to 1.5°C over pre-industrial levels.
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