The Ministry of the Environment (MOE) released its draft interim report on carbon pricing at a meeting of its subcommittee set up to discuss carbon pricing (CP). Carbon pricing is a system to put a price tag on greenhouse gas emissions. Industry takes a cautious stance on carbon pricing due to concerns over the increased financial burden of carbon tax and emissions trading on companies. For this reason, the report presents arguments for and against CP and postpones making a decision. Although China, South Korea, and many European countries have introduced CP, Japan has seen a delay due to its prolonged discussions on the issue.
The draft report said that “discussions will proceed with a view to reaching a conclusion by year-end” without setting a course of action for creating a CP framework. The report noted arguments for and against a carbon tax, with some saying “[the tax] would promote a transition to decarbonization across many sectors and consumers” and others countering that “[the tax] would place a burden on small and medium-sized companies and prevent them from investing in facilities to further decarbonization.” Although many subcommittee members were in favor of CP, members representing the Japan Business Federation [Keidanren] and the steel industry were wary of it. (Abridged)