Beyond Japanese NDC: energy and macroeconomic transitions towards 2050 in emission pathways with multiple ambition levels

Japan has set greenhouse gas emissions reduction targets for 2030 and 2050, as stated in the nationally determined contribution (NDC) and in the long-term strategy for decarbonization (LTS) submitted to the UNFCCC in 2020, respectively. While upgrading these targets is needed to realize the global climate goals (2 degrees C and 1.5 degrees C), the implications of the target for the period in-between remains unclear. This study assesses the energy and macroeconomic impacts of enhancing the ambition of 2040 and 2050 emission reduction targets in Japan by means of a computable general equilibrium (CGE) model. In addition, we analyze the implications on the speed of energy efficiency improvement and low-carbon energy penetration along with macroeconomic impacts, and the shift from the current LTS goal (80% emissions reduction by 2050) to a full decarbonization one. The study shows that, compared to the current ambition (53% reduction by 2040 compared to 2005), enhancing ambition of the 2040 (63% reduction by 2040 compared to 2005) and 2050 targets (zero emissions by 2050) rises the share of low-carbon energy supply more drastically than the decreases in energy intensity, and increases macroeconomic costs by 19-72%. Moreover, meeting these targets demands accelerating considerably the reductions in carbon intensities through expansion of renewables and CCS beyond historical trends and beyond current efforts towards the 2030s NDC. Enabling larger low-carbon supplies and energy efficiency improvements makes full decarbonization by 2050 possible at costs equivalent to current ambition. Further analyses are needed to clarify at a finer detail the implications of changes in these enablers by sectors, technologies and policies. This kind of analysis offer key insights on the feasibility of Japan's emission reduction targets for the formulation of new commitments for the next cycle of the Global Stocktake under the Paris Agreement.

Automated summary

Japan has set greenhouse gas emissions reduction targets for 2030 and 2050, and increasing these targets significantly impacts energy supply structure and macroeconomic costs. Accelerating the reduction of carbon intensity will be crucial for achieving the goal of full decarbonization by 2050.