Long-term Low-carbon Vision Global Environment Committee, Central Environment Council March 2017 1 Table of Contents Foreword 4 Chapter 1: Climate Change ............................................................................................... 9 (1) Scientific knowledge concerning climate change ................................................. 9 (a) Climate change is a threat to society .................................................................. 9 (b) The 2°C target and effective elimination of GHG emissions .............................12 (c) The carbon budget ...............................................................................................13 (2) Significance of the Paris Agreement .....................................................................15 (3) Japan’s long-term targets .......................................................................................17 Chapter 2: Global Trends Taking Place based on the Paris Agreement ......................22 (1) Trends in the world’s countries ..............................................................................22 (2) Trends in local governments ..................................................................................23 (3) Trends in private enterprises..................................................................................23 (4) Trends in the financial sector .................................................................................24 (5) Trends among private citizens and scientists ......................................................26 Chapter 3: The Economic and Social Challenges Facing Japan ..................................27 (1) Major internal and external challenges and the orientations of responses .......27 (a) Major economic and social challenges ..............................................................27 (b) Direction of responses to economic and social challenges .............................30 (2) Main factors deserving consideration in a rapidly changing society .................33 Chapter 4: Basic Concept toward Long-Term Significant Greenhouse Gas Reduction with a View to Building a Decarbonized Society ...........................................35 (1) Simultaneous solution of economic and social problems, driven by climate change policy ...........................................................................................................35 (a) Economic Growth from Climate Change Policy ..................................................36 (b) Regional Revitalization and Land Resilience through Climate Change Policy 41 (c) Climate and Energy Security ................................................................................43 (2) Japan Contributing to Global Emissions Reduction in addition to Domestic Policies .....................................................................................................................44 (3) The Key to Long-Term Significant Reduction is Innovation .................................46 (4) The Time to Act is Now .............................................................................................47 2 Chapter 5: A Vision of Long-Term Significant Reduction..............................................50 (1) Vision of a Japanese society that achieves 80% reduction by 2050 (Figures 16 and 17 and Pages 94 and 95 of the Reference Materials) ....................................50 (a) Sustainable growth through “creation of a decarbonization market” and realization of an “economy of quality” ...............................................................50 (b) “Regional revitalization” through renewable energy industries and compact urban development based on natural capital .....................................................51 (c) Making a significant contribution to climate security while realizing a nation with improved energy security ............................................................................51 (2) A Vision of Society with Significant Reductions in Various Sectors ..................53 (a) Buildings/Lifestyle ................................................................................................54 (b) Transportation ......................................................................................................56 (c) Industry and Business Activity ...........................................................................57 (d) Energy Demand and Supply ................................................................................59 (e) Region and City ....................................................................................................61 Chapter 6: Policy Direction towards Long-Term Significant Reduction ......................63 (1) Basic direction .........................................................................................................63 (a) Maximum utilization of existing technologies, know-how, and knowledge ....63 (b) Development and deployment of new innovation .............................................64 (c) Full mobilization of all effective policies and measures (PaMs) ......................67 (2) Direction of Main PaMs ...........................................................................................68 (a) Carbon Pricing: Making Best Use of Market Dynamism ...................................69 (b) Other PaMs for Significant GHG Reduction .......................................................77 (3) Making steady progress toward long-term significant reduction .......................84 Conclusion .........................................................................................................................87 3 Foreword In order to avoid the immense climate change risks to future generations, action must be taken now based on long-term policies and strategies that look to the year 2050 and beyond. Moreover, it must be recognized that there is no reversing the movements and trends of international initiatives aimed at achieving the decarbonized society that was agreed upon in the Paris Agreement, and that no retreat is permissible from targets that have been set for future reductions of greenhouse gas (GHG) emissions. This “Long-term Low-carbon Vision” was prepared by the Central Environment Council with an eye to Japan’s formulation of a long-term strategy concerning climate change policy that is required of signatories of the Paris Agreement. It was compiled with the aim of putting forth ways of thinking that should form the basis of that strategy from the standpoint of environmental policy and, particularly, a philosophy that clarifies Japan’s role and a “vision” of the kind of country Japan should aim to become in the future. It is hoped that the strategy as well as the programs implemented to give shape to it will be formulated with reference to this Vision. Japan should make it its orientation and philosophy to become a country that contributes to international society’s sustainable growth and development and that is looked to with expectation and trust by international society through initiatives aimed at achieving decarbonization and low- carbonization. This Vision presents what Japan must do over the medium and long term, based on a precise understanding of targets agreed upon by international society. In studying those actions, we stressed above all else the scientific knowledge that forms the foundation of the Paris Agreement and, further, placed importance on a long-term perspective. The “Plan for Global Warming Countermeasures” that was approved by the Cabinet on May 13, 2016, already states, “Leading the international community so that major emitters will take steps to reduce their emissions in accordance with their abilities based on the Paris Agreement and within a fair and effective international framework in which all major countries participate, Japan will, as a long-term target, aim to reduce its GHG emissions by 80% by the year 2050 while balancing global warming countermeasures and economic growth.” Further, the same plan also points out that “the achievement of such a long-term significant reduction of GHG emissions will be difficult with the extension of conventional initiatives alone.” In other words, this long-term target, which presents the direction that Japan must take to achieve an 80% reduction by 2050, differs in nature from another target mentioned in the same Plan for Global Warming Countermeasures that calls for reducing emissions by 26% compared to 2013 by the year 2030. Thus, it must be remembered that, when studying the ideal future for Japan that is presented in this Vision based on the long-term target, applying the measures that are identified in consideration of the 2030 target in the plan—or more specifically, measures that involve simply building on what can be achieved by extending out already existing technologies and systems—will not be able to adequately attain the target. The Plan for Global Warming Countermeasures goes on to state, “Accordingly, Japan will pursue, to the maximum degree possible, solutions that are based on innovation, including the development and dissemination of innovative technologies that make possible fundamental emissions reductions, and will strive to achieve major emissions reductions within long-term and strategic initiatives while simultaneously encouraging domestic investment, raising international competitiveness, and seeking broad knowledge among the citizenry. Moreover, Japan will also contribute to global reductions.” Taking this Cabinet decision as a basis,