Panel urges quick adoption of carbon pricing to hit emissions goal

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Japan must introduce carbon pricing and fiscal incentives for green investment to achieve its goal of becoming carbon-neutral by 2050, private-sector members of a key government panel said on Wednesday.

Prime Minister Yoshihide Suga last December instructed his environment and industry ministries to work on a plan in 2021 to create a carbon pricing scheme, as part of efforts to meet his pledge to make Japan carbon-neutral by 2050.

But progress has been slow due to differences between the environment ministry, which is keen to adopt carbon pricing, and the industry ministry, which is wary of initiatives that increase costs for Japan’s manufacturers.

“Japan should use carbon pricing in a way that contributes to the government’s growth strategy,” private members said in a joint proposal to the government’s top economic council held on Wednesday, urging the government to reach an early decision.

The government should also offer incentives to promote green technology, said the private members, whose proposals lay the groundwork for future policy decisions.

“Japan needs to respond strategically, working closely with other Asian countries,” to stay engaged in global rule-making on issues such as carbon border fees, said council member Takeshi Niinami, who is CEO of Japan’s beverage giant Suntory Holdings.

Suga told the council Japan can create 8.5 million jobs and annual wealth of 90 trillion yen ($850 billion) by 2030 by enhancing energy efficiency and promoting green investment.

Suga’s pledge on carbon neutrality by 2050 brings Japan into line with the European Union. But Tokyo is under pressure to move more quickly, as new U.S. President Joe Biden steps up efforts to tackle climate change.