NCPA - National Center for Policy Analysis


August 7, 2009

Japan's efforts to achieve its midterm goal of curbing greenhouse gas emissions could cost each household 77,000 yen (about US$798) a year and adversely impact the country's economic growth and employment situation, a government panel estimated recently showed.

The estimate, made by the Ministry of Economy, Trade and Industry before the Japan's Advisory Committee for Natural Resources and Energy, also shows the government needs some 49 trillion yen (about US$508 billion) for its policies necessary to achieve the emissions goal:

  • The amount is close to the size of general expenditures in Japan's initial state budget for the current fiscal year, and some members of the subcommittee have voiced doubt over the feasibility of financing such a hefty expense.
  • Among the policy costs, promotion of electric and other environment- friendly cars is seen as the biggest expense at 12 trillion yen (about US$124 billion).
  • The effort to realize wider use of solar-power generation will cost 8 trillion yen (about US$83 billion), while making existing homes and buildings more energy- efficient will need 8 trillion yen (about US$83 billion) and spreading energy-saving home appliances 7 trillion yen (about US$73 billion).
  • Japan will emit 1,157 million tons of greenhouse gas in 2020, down from 1,358 million tons in 2005, and emissions will be cut by 27 percent.

As for the effects of government policies, the panel said the introduction of energy-efficient homes and buildings is expected to help reduce gas by 38 million tons in 2020. Advanced vehicles will contribute to a 21 million ton cut and energy-efficient appliances a 17 million ton in reduction.

But it also referred to negative fallouts on the economy, saying forcing people to share the burden in the battle against global warming would weaken household spending and push the nation's real gross domestic product down by 0.6 percent, while raising the unemployment rate by 0.2 percent in 2020.

Source: Editorial, "Japan's emission-cut efforts may hurt consumers, economic growth," Associated Press, August 5, 2009.

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