Carbon Pricing

The carbon tax in Japan falls significantly below expert recommendations, hindering its effectiveness in driving behavioral changes among companies and consumers. While signals of a more ambitious approach emerged under the GX League initiative, the slow implementation schedule and existing loopholes limit the effectiveness of current carbon pricing mechanisms in reducing the majority of Japan’s greenhouse gas (GHG) emissions.


  • To expedite the transition to a low-carbon economy, Japan should swiftly adopt a more robust carbon pricing system, whether through an emission trading system, a carbon tax, or a combination of measures. The objective is to substantially increase the cost of emissions, compelling stakeholders to redirect their investments and purchases toward low-carbon products and services. This will play a crucial role in aligning Japan with international climate goals and driving tangible reductions in GHG emissions.