Japan’s Green Push Seen Sparking $1.8 Trillion Windfall by 2050

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Japan’s ambitious climate pledge could result in a $1.8 trillion windfall for the nation’s economy by 2050.

Prime Minister Yoshihide Suga’s target to achieve net-zero emissions by 2050 will require various industries to change their business models, and may prompt vast investments to cleanup supply chains and develop innovative technologies, a government report said Friday. The annual economic impact of these decisions could reach 90 trillion yen in 2030, and 190 trillion yen ($1.8 billion) in 2050, the report found.

Still, Japan has a long way to go before it can count on reaping the benefits of going green. While Japan’s carbon emissions have been on a downward trend, they will need to fall faster to meet the goal within three decades, according to BloombergNEF analysis.

The government report also included the nation’s so-called green strategy, providing the first glimpse at the broad policies Japan plans to adopt in order to achieve the 2050 pledge.

One of the overarching strategies to lower emissions will be to electrify sectors such as transportation and heating. This could boost Japan’s power demand by as much as 50% to 2050, when more than half of electricity will be generated by reneweables, the report said.

The report outlined over a dozen general targets including:

AreaTarget
Offshore WindExpand capacity to 45 gigawatts by 2040
AmmoniaDilute fossil fuels by 20% at all thermal power plants by 2030
HydrogenBoost total consumption to 20 million tons by 2050
NuclearDevelop new types of reactors
AutomotiveBan gasoline-only cars by mid-2030s
SemiconductorsHalving electricity consumption by power semiconductors by 2030
ShippingReplace fuel with hydrogen or other carbon-free alternatives by 2050
LogisticsDecarbonize operations at ports
AgricultureReduce emissions to zero
AviationElectrify airplanes and develop cleaner fuels
Carbon recyclingReduce costs
Real estateAchieve net-zero emissions for new projects by 2030
Regional businessesPromote carbon footprint reduction

©2020 Bloomberg L.P.

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