“Responding to climate change is no longer a constraint on economic growth,” he said. “We need to change our thinking to the view that taking assertive measures against climate change will lead to changes in industrial structure and the economy that will bring about great growth.”
Suga said innovation was key to achieving the goal, including next-generation solar cells and carbon recycling, and he promised investment in research and development, as well as deregulation and “green investment.”
Japan, the world’s third-largest economy and its fifth-largest emitter of carbon dioxide, has come under intense criticism from international environmental groups for continuing to build and finance coal-fired power plants, both at home and abroad.
It had previously made a commitment only to reduce emissions 80 percent by 2050 and achieve carbon neutrality in the second half of the century. Now, however, it is following in the footsteps of the European Union, which vowed last year to become carbon neutral by 2050, and China, where President Xi Jinping set a similar target for 2060 only last month.
“It’s pretty powerful,” said Takashi Hongo, a senior fellow at Mitsui Global Strategic Studies Institute. “He was emphasizing a fundamental shift, and that indicates how strongly he feels about the change that needs to be made.”
Hongo said the shift would be difficult to achieve, especially going from an 80 percent cut to carbon neutrality, but he said it was achievable with the right policies.
China’s recent decision to aim for carbon neutrality by 2060, as well as the prospect that Joe Biden may win the U.S. presidency, may have influenced Suga, Hongo added.
In 2017, Japan sourced more than 41 percent of its electrical power supplies from coal and oil, with natural gas accounting for almost 40 percent. Renewable energy made up about 16 percent, while nuclear power, still recovering from the aftermath of the 2011 Fukushima accident, made up just 3 percent.
Under its current Basic Energy Plan, it aims to increase the share of renewables to 22 to 24 percent by 2030, and nuclear power to between 20 and 22 percent, although it is expected to unveil new targets next year.
“If Japan and the rest of the world are to avoid the catastrophic effects of the climate crisis, it is precisely this kind of action that the world needs,” said Sam Annesley, executive director of Greenpeace Japan.
But Annesley said Japan needs to back up the announcement with a major shift toward renewable energy in its upcoming energy plan “if this rhetoric is to be made reality.”
Arguing that the Fukushima disaster shows that nuclear energy “has no place in a green, sustainable future,” Annesley said Japan should aim to produce 50 percent of its electricity via renewable sources by 2030.
“Anything less than 50 percent and Japan risks falling short of net zero, and, more importantly, risks driving the world above 1.5 degrees as per the Paris agreement,” he said, referring to the 2016 global pledge to cut greenhouse gas emissions and tackle climate change.
Economy Minister Hiroshi Kajiyama said the target would not be easy to meet. He vowed to bring together all the country’s resources, including industry, government and academia, to achieve the goal while creating growth and business opportunities.
“We will work with the business world so a virtuous cycle with the economy can be created,” he said at a news conference after Suga’s speech.
The government sees hydrogen as a new source of energy, Kajiyama said, while also having high expectations for offshore wind power. Coal would be a feasible source of power only to the extent it could be offset by carbon capture, utilization and storage technology.
In the past, his ministry has been a strong backer of coal and nuclear power, but observers say it may hold less influence in the Suga administration than it did under his immediate predecessor, Shinzo Abe.
Still, a shift was already underway toward the end of the Abe administration in response to international pressure and gradually changing public opinion. Japan’s banks were scaling back financing for coal power abroad, and the government said it would “in principle” no longer subsidize the construction of coal-power thermal plants overseas.
Fitch Solutions, a financial market-risk analysis company, said the announcement will significantly boost Japan’s electric and hydrogen-powered vehicle sector, which has been lagging behind those of Asian peers such as China, Hong Kong and South Korea.
“For that potential to be fully realized, Japan will need to . . . start decommissioning coal power,” said Eric Pedersen, head of responsible investments at Nordea Asset Management. “And as an absolute minimum, Japanese companies must stop building and financing new coal power abroad.”