According to Japanese media, Prime Minister Yoshihide Suga will use his first official policy address on Monday to set a target for achieving carbon neutrality by 2050—joining a growing list of governments targeting net zero and bringing the world’s fifth largest greenhouse gas emitter in line with the goals of the Paris Agreement.
The previous administration had said Japan would target an 80% reduction in emissions by 2050, with vague notions of reaching complete carbon neutrality sometime thereafter. Suga’s new target will put Tokyo on track to match the EU and the U.K., both of which have pledged net-zero by 2050.
The 2050 deadline also sets Japan on a slightly shorter carbon-neutral course than the one China is on. Last month, President Xi Jinping announced China would hit net zero by 2060: the target deadline for “developing” economies.
On Wednesday, Boston Consulting Group reported it will cost Beijing $15 trillion over the next 30 years to meet Xi’s goal, or about 2% of the country’s annual GDP. It would also require China to wean itself completely off of coal by 2050.
Japan’s transition to net zero comes with its own complications. The world’s third largest economy is also the world’s fourth largest electricity consumer per capita. Once a pioneer in nuclear power, the Fukushima disaster of 2011 spooked Japan away from the clean energy. Nuclear production dropped 64% and was replaced primarily by imports of natural gas.
Japan’s mountainous island topography also makes it relatively unsuitable for generating solar and onshore wind energy. Renewables account for just 7.6% of Japan’s power consumption. Tokyo’s current power policy looks to boost that figure to 24% by 2030, while reducing reliance on fossil fuels to 56%. But overcoming the country’s natural disadvantages will require more investment than Tokyo is currently willing to make.
According to the Atlantic Council, a U.S. think tank, Japan lags far behind its peers in budgeting for a green recovery from the pandemic. Tokyo provided a massive $2.1 trillion stimulus package to the economy—amounting to 40% of GDP—but only allocated $103 million of it to a “green transition.” For comparison, South Korea issued stimulus equivalent to 12% of its GDP with $25 billion earmarked for sustainable development.
Suga’s announcement will be a welcome move if and when it comes Monday, but setting a target is the easy bit. Hopefully as more countries set similar goals, the means to get there will become clearer too.
More below.
Eamon Barrett
— eamon.barrett@fortune.com
CARBON COPY
Pioneer Natural Resources is buying Parsley Energy in a $4.5 billion U.S. oil merger, valuing Parsley at nearly 8% above its closing value Monday. As oil demand dries up amid the pandemic—perhaps never to fully return—mergers are vital for the survival of independent drillers.
The Philippines has resumed oil and gas explorations in the South China Sea, ending a six-year moratorium on exploration in the disputed waters. The moratorium was issued to ease tensions with China, which claims large swathes of the sea as its own, but political wrangling over the seas continues. In July, Manilla said it would give up its territorial dispute in exchange for priority access to Chinese-developed COVID-19 vaccines.
HSBC and the Queensland government are buying “Reef Credits”—a new investment option that aims to protect the Great Barrier Reef. The tradeable credit system was spearheaded by Australian sustainable investment manager GreenCollar and pays landholders to ensure water quality.
EU environment ministers are due to pass the draft European Climate Law on Friday, making the bloc’s commitment to carbon neutrality by 2050 legally binding. But Bloomberg reports the ministers will only sign a partial agreement, deferring on a key element that sets a stricter carbon emissions goal for 2030. That clause may not be signed until EU leaders meet at another summit in December.
In order to achieve global net zero carbon emissions by 2050, half of the reductions will rely on technology that doesn’t exist yet, says IEA head Fatih Birol in an interview with the FT. Carbon capture tech is one of the missing components. The other is hydrogen fuel, with Birol says enjoys “more universal support of all governments” than anything he has ever seen.
SpaceX is due to launch a satellite into orbit that can measures changes in sea level down to the millimeter. The satellite tech is a collaborative effort between NASA and the European Space Agency (ESA) and will update maps of the oceans every 10 days.
Newmont, the world’s largest gold miner, plans to set a carbon emissions target consistent with the Paris Agreement—a first in the industry. The miner says it is currently creating a “zero emissions” mine in Canada that could serve as a blueprint for the rest of the company as it moves towards carbon neutrality.
IN CASE YOU MISSED IT
How one of the world’s biggest banks plans to tackle climate change by Daniel Pinto and Ashley Bacon
Dis-United States of electricity: Mapping America’s energy supplies by Nicolas Rapp and Brian O’Keefe
Facebook A.I. researchers push for a breakthrough in renewable energy storage by Jeremy Kahn
This electricity giant’s stock is booming as the corporate world gets serious about its ‘net zero’ goals by Katherine Dunn
In pursuit of ‘net zero,’ Spain’s Iberdrola bets big on America by Katherine Dunn
Tom Steyer thinks business is missing a big opportunity—and that Trump has done ‘nothing but whiff’ by Robert Hackett
CLOSING NUMBER
33%
According to estimates from Oxfam, only a third of financial donations pledged by rich nations to help developing economies deal with climate change are actually carried out. Oxfam reports that of an average $59.5 billion pledged between 2017 and 2018, as little as $19 billion was actually given as charity. Some 80% of climate finance was given as repayable loans.