Public comments on “Draft the Plan for Global Warming Countermeasures” and “Draft 7th Strategic Energy Plan”

Corporate Action Japan submitted comments on the “Draft Global Warming Prevention Plan” and the “Draft 7th Strategic Energy Plan”, which the government had been accepting public comments since December 27, 2024. We urge a revision of both plans to make them more ambitious in terms of climate change measures in order to achieve long-term corporate value enhancement towards a decarbonized society, which CAJ advocates for. Our remarks are summarized below.

1. Comments on the Draft Global Warming Prevention Plan  

1. Reduction Targets 

In order to limit the tempreture rise to less than 1.5 degrees with a probability of over 50%, the IPCC’s Sixth Assessment Report demands that global greenhouse gas emissions be reduced by approximately 60% compared to 2019 levels by 2035. The G7 should strive for a minimum of a 66% reduction in comparison to 2013 levels, as the proposed target of a 60% reduction falls short of this level.

• Marginal Abatement Cost

Among the multiple scenario analyses, this Draft relies heavily on data focusing on marginal costs, compromising the EBPM principles. To address the need to curb the rise in costs associated with decarbonization, a more thorough examination is required, considering additional aspects such as job creation, industrial competitiveness, and natural disaster mitigation.

• International competitiveness

Climate change is a corporate management issue, so domestic and foreign investors are monitoring for the sake of long-term investment. As RE100 and JCLP claim in their proposals, it is imperative to establish more ambitious GHG reduction targets to enhance competitiveness in the global market. 

• Decision-making process

The committee members should deliberate on whether these comments should be incorporated into the plan, and a subsequent joint meeting should be convened in response to the public comments.

• Comments on the Draft 7th Strategic Energy Plan 

1. The escalating climate impacts

An energy mix with an even higher proportion of renewable energy than that proposed in the Draft is necessary, as there are concerns about the worsening of future climate change and the global GHG emissions have not yet declined. This energy mix should be founded on more ambitious reduction targets.  

• Enhancing national wealth

In order to enhance energy security by reducing geopolitical risks and price fluctuation risks associated to energy supply, and to curb the outflow of national wealth due to fossil fuel imports, the proportion of domestic solar and wind power generation should be increased further than in this draft. 

• Improving international credibility  

Adhering to international agreements, such as the COP28 agreement to triple renewable energy capacity by 2030 and the G7 Hiroshima Summit agreement, to achieve fully or dominantly decarbonization of the power sector by 2035 will enhance Japan’s international credibility. The proposed increase in the share of renewable energy to 40% to 50% by FY2040 is insufficient from the perspective of international commitments, hence the proposal needs to be revised.  

• Strengthening economic competitiveness

Companies that are being required to decarbonize their supply chains internationally will be forced to either relocate their bases overseas or be excluded from the supply chains, which is a significant concern for Japan’s economic competitiveness, as the situation continues to make it difficult to procure renewable energy in Japan. The establishment of a target for a substantial increase in the proportion of renewable energy is essential in order for companies and renewable energy enterprises to make large-scale investments with confidence in the predictability of the future.

• Upgrading decision-making process 

Transparent discussions that incorporate the opinions of diverse stakeholders, including public comments, are necessary to enhance the decision-making process for the policy plans.