A national carbon-tax is the next big thing in Japan, and its supporters say it could help the country address climate change and improve its economy.
The carbon-price idea has been in the works for decades and has the support of Prime Minister Shinzo Abe, but it has never been implemented before.
The country’s economy is expected to shrink 1.5% this year and the government has pledged to reduce its greenhouse gas emissions by 10% by 2030, while it also aims to achieve a 50% reduction by 2050.
But while some experts say the idea could be a boon for Japan, others warn the price of the carbon could put the country at a disadvantage economically.
The government has promised to set a carbon-pricing system for the whole country, and it is also considering raising taxes to offset the impact of a rise in costs from the tax.
But some economists warn the country could have trouble controlling its economic growth and inflation if it does not have a reliable means of paying for the carbon tax.
“We can’t expect a quick solution to the climate change issue, because we need to implement the system of a carbon tax at a national level, but we could get a decent amount of carbon revenues for the national budget,” said Shunichi Nakamura, head of the Centre for Economic and Policy Research.
Nakamura said it was too early to say how much Japan could raise from the carbon-coupon system, but he said that could be enough to cover the government’s needs.
But the carbon pricing idea could also be viewed as a political liability for Abe, who has repeatedly clashed with climate change advocates and critics in his administration.
Abe has faced pressure to reduce the country’s greenhouse gas emission and push back against the criticism that he has not done enough to address the problem.
The Prime Minister has made climate change a key issue, and he is widely expected to run for re-election next year.
According to the World Bank, Japan has one of the highest levels of carbon pollution in the world.
In March, Abe said the country should not use fossil fuels as a way to fuel economic growth.
“We need to reduce emissions as soon as possible,” Abe told a group of business leaders.
“The more we emit, the more money we lose.”
Abe has also repeatedly said he would do “everything possible” to help Japan’s coal-fired power plants and nuclear power plants stay open, but critics say this does not bode well for the country if its economy is to keep growing.
According to a government survey, more than a quarter of Japanese people think the government should reduce carbon emissions.
But a recent poll found that less than half of the people think that the government will make progress on climate change.
Abe and his ruling Liberal Democratic Party have been criticized by environmental groups and the public for failing to do enough to tackle climate change in the past.
While Abe has said Japan will set up a national climate-change fund, he has also indicated he will pursue other policies to help ease emissions.
The government also plans to spend up to ¥300 billion ($42 billion) on research and development for a new carbon-capture technology that could help offset the costs of a national tax. (Nikkei)