EMF 35 JMIP study for Japan’s long-term climate and energy policy: scenario designs and key findings

Masahiro Sugiyama; Shinichiro Fujimori; Kenichi Wada; Ken Oshiro; Etsushi Kato; Ryoichi Komiyama; Diego Silva Herran; Yuhji Matsuo; Hiroto Shiraki; Yiyi Ju

doi:10.1007/s11625-021-00913-2

EMF 35 JMIP study for Japan’s long-term climate and energy policy: scenario designs and key findings

Sugiyama, Masahiro; Fujimori, Shinichiro; Wada, Kenichi; Oshiro, Ken; Kato, Etsushi; Komiyama, Ryoichi; Silva Herran, Diego; Matsuo, Yuhji; Shiraki, Hiroto; Ju, Yiyi 2021-02-17 00:00:00 In June, 2019, Japan submitted its mid-century strategy to the United Nations Framework Convention on Climate Change and pledged 80% emissions cuts by 2050. The strategy has not gone through a systematic analysis, however. The present study, Stanford Energy Modeling Forum (EMF) 35 Japan Model Intercomparison project (JMIP), employs five energy-economic and integrated assessment models to evaluate the nationally determined contribution and mid-century strategy of Japan. EMF 35 JMIP conducts a suite of sensitivity analyses on dimensions including emissions constraints, technology availability, and demand projections. The results confirm that Japan needs to deploy all of its mitigation strategies at a substantial scale, including energy efficiency, electricity decarbonization, and end-use electrification. Moreover, they suggest that with the absence of structural changes in the economy, heavy industries will be one of the hardest to decarbonize. Partitioning of the sum of squares based on a two-way analysis of variance (ANOVA) reconfirms that mitigation strategies, such as energy efficiency and electrification, are fairly robust across models and scenarios, but that the cost metrics are uncertain. There is a wide gap of policy strength and breadth between the current policy instruments and those suggested by the models. Japan should strengthen its climate action in all aspects of society and economy to achieve its long-term target. Keywords Climate change mitigation · Integrated assessment · Long-term strategy · National climate policy · Uncertainty · Carbon neutrality · Net-zero emissions Introduction In accordance with Article 4 of the Paris Agreement, the Government of Japan submitted its long-term low green- Handled by Mikiko Kainuma, Senior Research Advisor, Institute house gas emission development strategy (or mid-century for Global Environmental Strategies. strategy) to the United Nations Framework Convention on * Masahiro Sugiyama masahiro_sugiyama@alum.mit.edu; masahiro@ifi.u-tokyo.ac.jp School of Engineering, The University of Tokyo, Hongo Institute for Future Initiatives, The University of Tokyo, 7-3-1, Bunkyo-ku, Tokyo 113-8656, Japan 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan Institute for Global Environmental Strategies (IGES), Graduate School of Engineering, Kyoto University, Kyoto 2108-11 Kamiyamaguchi, Hayama, Kanagawa 240-0115, daigaku-katsura, Nishikyo-ku, Kyoto 615-8530, Japan Japan National Institute for Environmental Studies, 16-2 Onogawa, Institute of Energy Economics, Japan, Kachidoki 1-chome, Tsukuba, Ibaraki 305-8506, Japan Chuo-ku, Tokyo 104-0054, Japan 4 9 Research Institute of Innovative Technology for the Earth, The University of Shiga Prefecture, 2500, Hassaka-cho, 9-2 Kizugawadai, Kizugawa, Kyoto 619-0292, Japan Hikone-City, Shiga 522-8533, Japan 5 10 Institute of Applied Energy, 1-14-2 Nishi-Shimbashi, Minato, International Institute for Applied System Analysis (IIASA), Tokyo 105-0003, Japan Schlossplatz 1, 2361 Laxenburg, Austria Vol.:(0123456789) 1 3 356 Sustainability Science (2021) 16:355–374 Climate Change (UNFCCC) in June 2019 (Government of unharmonized parametric uncertainties. This definition is Japan 2019). The strategy mentioned Japan’s goal of reduc- methodological, not conceptual. This is also consistent with ing greenhouse gas emissions by 80% by 2050, which was our statistical approach. stated in an earlier document (Ministry of the Environment This paper lays out the scenario design and some key 2012; Government of Japan 2016). Recently, in October findings of the EMF 35 JMIP study. Detailed investigations 2020, Prime Minister Suga made a pledge to net-zero emis- into the role of variable renewables (Shiraki et al. 2021), sions by 2050 (Suga 2020). However, it is not immediately end-use electrification (Sakamoto et al. 2021), and industrial clear how Japan could achieve deep decarbonization while mitigation (Ju et al. 2021) are presented in the companion the consequences of and policy choices after the 2011 Fuku- papers in this special feature. They are further enriched by shima nuclear disaster still linger, including difficulties of individual modeling papers in this special issue. nuclear restarts and the rise of coal-fired power. The rest of the paper is organized as follows. The “Policy Although the Japanese government has not formally and literature review” section presents a short summary of conducted a quantitative analysis of the proposal, many Japan’s climate policy and the modeling literature. Although studies have already examined long-term policy proposals, our main focus is on modeling, we provide a fairly broad including economy-wide climate policies (Fujimori et al. overview of Japan’s policy situation. The “Method” section 2019; Kato and Kurosawa 2019; Oshiro et al. 2019; Sugiy- describes the models used and the scenarios utilized. This ama et al. 2019). Other studies have analyzed power sector is followed by the “Results” section, which presents the out- policies that feature the significant penetration of variable comes of the five-model analysis. The paper concludes with renewable energies (VREs) (Komiyama et al. 2015; Matsuo “Discussion and conclusions”. et al. 2018). While these studies have advanced our understanding of the policy issues, they have not comprehensively ana- Policy and literature review lyzed all the relevant factors. An important factor that has not received enough attention is the inter-model uncertainty Policy review among energy-economic and integrated assessment models, which is crucial in informing the climate policy debate (Krey This section gives a brief overview of Japan’s climate 2014). policies and places the present analysis in a wider context, To address the issue of inter-model uncertainty, the Stan- given that the policymaking in Japan is quite different from ford Energy Modeling Forum 35 (EMF) Japan Model Inter- the western countries (Sofer 2016) in that Japan’s climate comparison Project (JMIP) is tasked with analyzing Japan’s policy has been mostly shaped by bureaucracies, and other climate policy with a multi-model framework. The present stakeholders played a limited role (Kameyama 2016). This study extends a pilot study by Sugiyama et al. (2019) and section is based on earlier reviews by Takase and Suzuki explores uncertainties in policy, technology, demand, and (2011), Kuramochi (2015), and Kuriyama et al. (2019). To import dimensions in a systematic manner. understand the political economy aspects, see Kameyama In particular, this study asks the following research (2016), Sofer (2016), and Trencher et al. (2019) and the ref- questions: erences therein. Kameyama (2016) chronicled the climate policy of Japan from 1980s until 2015, focusing on the role • (1) How do various types of uncertainties affect the cost, of premiership. Sofer (2016) gave a concise summary of the feasibility, and features (e.g., power generation mix) of actors and their roles in Japan’s climate policy, contrasting Japan’s mitigation policy? Japan and the United States. Trencher et al. (2019) is cen- (2) Is there a specific, robust pattern in Japan’s decarboni- tered around coal-fired power plants, for which Japan has zation pathways that cuts across uncertainties? What is been supporting domestic usage and exports. The review the policy implication, given the magnitude of uncertain- here focuses on the central government and does not cover ties? sub-national or non-state actors. Japan’s climate policy was based mainly on energy effi- Though our primary focus is on the 80% emissions reduc- ciency measures, such as Top-Runner Programs (Inoue tion, we also discuss the implications for the net-zero target. and Matsumoto 2019) and building codes and labeling Some words on the definition of uncertainty are in order. (Murakami et al. 2009; MLIT 2016), and voluntary actions There are many sources of uncertainties, including struc- taken by the industry (Keidanren 2013, 2019; Wakabayashi tural and parametric uncertainties. This paper classifies the 2013; Wakabayashi and Arimura 2016). These are mainly source of uncertainties into those originating from scenario under the remit of the Ministry of Economy, Trade, and specification (inter-scenario uncertainty) and the remainder, Industry (METI). Though they are so called, voluntary model uncertainty, which encompasses both structural and action plans go through formal reviews by expert committees 1 3 Sustainability Science (2021) 16:355–374 357 that are set up by the government. In particular, the Kyoto of hardest to decarbonize (Davis et al. 2018; Luderer et al. Protocol Target Achievement Plan formalized the review 2018) and innovative technologies have not been developed during the Protocol’s first commitment period. With regard sufficiently (Ju et al. 2021), industrial mitigation presents a to the promotion of lifestyle changes, the Ministry of the significant challenge for Japan. Environment has pushed for information campaigns, such as Cool Biz (since 2005). This campaign proved to be more Quantitative policy targets extensive than its counterparts in other countries (Shove and Granier 2018). In the first commitment period of the Kyoto Protocol Conversely, Japan has not been enthusiastic about price (2008–2012), Japan honored its commitment to reduce instruments. Overall, carbon pricing (both explicit and emissions by 6% from the 1990 levels by reducing domestic implicit) has been relatively weak in Japan (Ramstein et al. emissions and purchasing credits from abroad (Ministry of 2019). The fossil fuel tax, namely chikyu ondanka taisaku the Environment 2014). In June 2009, the Aso administra- zei (tax for global warming countermeasures), stands at 289 tion announced a mid-term target of 15% emissions reduc- JPY/t-CO or about 3 USD/t-CO (Ministry of the Environ- tion by 2020 relative to the 2005 levels (8% reduction rela- 2 2 ment 2020, partly because of a competitiveness concern for tive to the 1990 levels) (Prime Minister’s Office 2009). A the industry. It is important to recognize that transport fuels significant modeling exercise (as part of a policy process) have been taxed already at a high level. At the prefectural was conducted in preparation for this target (Fukui 2009). level, the Tokyo Metropolitan Government and Saitama Pre- In September 2009, however, the newly elected, Hatoyama fectural Government have been implementing an emissions administration of the Democratic Party of Japan (DPJ) trading scheme (ETS) for the commercial sector (Arimura announced its ambition to reduce its emissions by 25% by and Abe 2020). The Tokyo ETS was successful during Phase 2020 relative to the 1990 levels (33% reduction relative to 1 (2010–2014). A remarkable 25% reduction in carbon diox- the 2005 levels) (Copenhagen Pledge), but this plan required ide (CO ) emissions was partly attributable to the carbon a significant expansion of nuclear power fleets (Duffield and price signal but also assisted by the energy savings after Woodall 2011). The pledge was overturned after the 2011 the 2011 energy crisis and the effect of an advisory system Great Eastern Japan Earthquake, tsunamis, and the Fuku- (Wakabayashi and Kimura 2018; Arimura and Abe 2020). shima Daiichi nuclear disaster. The DPJ contemplated an Currently, the electricity sector is going through rapid alternative energy path without relying on nuclear power. changes, including the retail deregulation of 2016, the However, it lost to a coalition of the Liberal Democratic unbundling of utilities in 2020, and new market frameworks Party and Komeito in the 2012 election. Japan did not take (i.e., baseload, flexibility, non-fossil value, and capacity) part in the second commitment period of the Kyoto Protocol. (Hattori 2019). Compared to countries like Germany, Japan Furthermore, it downgraded its 2020 pledge to 3.8% emis- had a slow start in its transition to renewables (Cherp et al. sions reduction relative to the 2005 levels under the prospect 2017). The 2011 feed-in tariff (FIT) scheme helped in the of limited nuclear operation (Warsaw Target) (Ministry of growth of renewables. In particular, solar photovoltaics rose the Environment 2013). from 0.4% of Japan’s power generation in FY2011 to 6% In the run-up to the COP21 in Paris, the Abe administra- in FY2018 (ANRE 2020a). However, the FIT also led to a tion, which won the 2012 election, submitted its Intended gargantuan price tag of trillions of yen per year. The gov- Nationally Determined Contribution to the UNFCCC. ernment is currently transitioning from the FIT scheme to a Herein, Japan committed to reduce its emissions by 26% by feed-in premium scheme and energy auctions to address the FY2030 from the FY 2013 levels (Government of Japan cost issue (Calculation Committee for Procurement Price, 2015). In the following year, the Cabinet approved the Plan etc. 2020). Shiraki et al. (2021) in this issue reviews power for Global Warming Countermeasure, which included a goal sector policy development more fully. to reduce emissions by 80% by 2050 (Government of Japan However, Japan’s energy sector has not been fundamen- 2016). In 2019, the Government of Japan (2019) decided on tally altered despite a series of reforms in energy policies its mid-century strategy and reiterated the 80% emissions after the 2011 nuclear disaster, because it is dictated by reduction goal. In March 2020, in the 5-year update cycle of resource constraints and broader economic conditions. Japan mitigation policies, Japan retained the formerly announced has a relatively small renewable resource base compared targets (Government of Japan 2020). Most recently, in Octo- to its electricity demand (Luderer et al. 2017) because of ber 2020, Prime Minster Suga made a pledge of net-zero its high population density, and the costs of renewables are emissions by 2050 in his inaugural speech in the parliament. higher than those in other countries (IRENA 2019; Calcula- tion Committee for Procurement Price, etc. 2020). Unlike many of Western countries, Japan retains a large presence 1 The fiscal year runs from April 1st until March 31st of the follow - of heavy industry. However, as the industry sector is one ing year. 1 3 358 Sustainability Science (2021) 16:355–374 Fig. 1 Historical GHG emis- sions, and 2020, 2030, and −3.6% from 2005 by 2020 2050 targets. Data are from (UNFCCC 2020). Note that the 2020 target is based on a strong assumption of no mitigation 1000 −26% from 2013 by 2030 contribution from nuclear power scenario historical target −80% by 2050 1990 2000 2010 2020 2030 2040 2050 year Fig. 2 Power generation mix for Power generation mix FY2010 and FY2018 (actual), the 2030 target plans accord- 100 ing to the 2010 (ANRE 2010), 2012 (Energy and Environmen- tal Council 2012) and 2015 (METI 2015) plans. The 2030 75 type (FY2010) plan corresponds to Non−Hydro Renewables the Saidai Dounyu (maximum Hydro deployment) case. The 2030 (2012 plan) is from the nuclear- Nuclear zero case LNG Coal Oil One topic of contention in Japan’s target is the choice of contribution (NDC), 22–24% of electricity is to be supplied the reference year (Kuramochi 2015). The most significant is by renewables, and there is an additional detailed break- with respect to the Warsaw target such that a 3.8% reduction down for individual renewable technologies. Another con- from the 2005 levels translates into a 3.1% increase from the tentious issue is the role of nuclear power, which is assumed 1990 levels. The reference year for the mid-century strategy to account for 20–22%. Although restarting nuclear power had not yet been decided; this no longer matters since the plants has been slow and only six units are operational as of government pledged a net-zero target (Fig. 1). April 20, 2020 (ANRE 2020b), the detailed breakdown of Another key feature of Japan’s long-term policy is that it the power generation mix has not been revised during the is associated with a detailed emissions sectoral breakdown update of the Strategic Energy Plan in 2018 (ANRE 2018). and energy mix (Fig. 2). Moreover, these numbers are not There are high expectations for an improvement in energy merely indicative targets but serve as concrete goals in policy intensity of GDP with an annual improvement rate of 2.1% discussions. For instance, under the nationally determined per year for 2014–2030, although the observed rate was 1 3 FY2010 FY2018 2030 (2010 plan) 2030 (2012 plan) 2030 (2015 plan) GHG emissions [Mt−CO e/yr] [%] 2 Sustainability Science (2021) 16:355–374 359 1.6% per year for 2000–2015. This could be the result of a and found a smaller share of variable renewables in Japan high growth projection of gross domestic product (GDP), because of its high population density. however (Kuriyama et al. 2019). Modeling: multi‑model studies Mid‑century strategy Among multi-model studies in Japan, the earlier ones were part of the government-led policy process. In recent years, In contrast to the 2030 target, Japan’s 2050 policy document we have seen an increasing number of academic studies, is vague with respect to numerous concrete issues (Gov- including our pilot phase research (Sugiyama et al. 2019). ernment of Japan 2019). For instance, it does not specify Government-led efforts include the Mid-Term Target the reference year or demonstrate any specific pathway to Evaluation Committee (Chuki Mokuhyo Kento Iinkai) (Fukui achieve the 80% emission reduction goal. Nonetheless, it 2009) and the Energy and Environmental Council (2012) mentions certain notable points. The Fifth Strategic Energy (Enerugi Kankyo Kaigi). Both exercises were conducted Plan (ANRE 2018) also provides useful information. as part of the policymaking process with town hall meet- First, the long-term strategy and the Strategic Energy ings and deliberative polls. They mainly analyzed six and Plan states “multi-track scenarios” or pluralistic perspec- three scenarios, respectively. The former analyzed differ - tives on scenarios, and in particular, technology develop- ent emissions reduction levels and policy packages, and the ment. This approach is in contrast to the Japanese approach (modified) middle option out of the six was eventually cho- with respect to the 2030 target, for which the government sen. The latter focused on different levels of nuclear power has allocated emissions reduction to each technology. Sec- generation, and the zero nuclear case was finally selected. ond, both documents place significant emphasis on the role Unfortunately, these model inter-comparison results were of technological innovations in achieving the long-term goal, not published in the academic literature, unlike the EMF with the long-term strategy touting a virtuous cycle between studies in the United States (Fawcett et al. 2014) or Europe economic growth and mitigation. Furthermore, it mentions (Knopf et al. 2013). the link with related innovation strategies the government In the academic literature, one of the recurring themes is has already formulated. Lastly, the Strategic Energy Plan the high marginal abatement costs in Japan. A five-model proposes a scientific review mechanism through which the study by Hanaoka and Kainuma (2012) examined medium- government periodically reviews progress toward the tran- term (2020 and 2030) marginal costs of abatement but did sition to a clean energy system. This point has not been not focus on emissions pathways. The Asian Modeling Exer- emphasized in the long-term strategy. It is not clear how cise (AME) (Calvin et al. 2012) implemented scenarios of modeling studies, such as the present one, could contribute idealized carbon prices and globally coordinated scenarios, to this proposed review mechanism. in which four models from Japan participated. Aldy et al. (2016) contrasted the marginal cost of Japan against those Modeling: single‑model studies from other parts of the world. Our pilot study (Sugiyama et al. 2019) compared the cost of 80% emissions reduction Many studies have focused on economy-wide, long-term cli- by 2050 in Japan against those in the United States and mate change mitigation for Japan up to 2050. These can be Europe. These four studies revealed that the marginal cost classified into (1) single-model studies and (2) multi-model in Japan is higher than that in other countries. studies. For sectoral-level reviews, please refer to the com- As part of the EU-funded MILES project, Akimoto et al. panion papers (Ju et al. 2021; Sakamoto et al. 2021; Shiraki (2015) used DNE21 + and AIM/Enduse models to analyze et al. 2021). the intended NDC of Japan. For the EU-funded CD-Links For single-model studies, Kainuma et al. (2015) used the project, Oshiro et al. (2019) compared global IAM results AIM/Enduse energy systems model to analyze the impli- against two, national models (AIM/Enduse [Japan] and cations of 80% emissions reduction by 2050. Oshiro et al. DNE21 + (national)), and demonstrated that Japan’s goal of (2018) employed AIM/Enduse to analyze net zero emissions 80% emissions reduction is consistent with cost-effective of CO by 2050, and found the importance of bioenergy with pathways for the 2-degree target, but not with the 1.5-degree carbon capture and storage (BECCS). In a similar vein, Kato target. and Kurosawa (2019) examined 2050 emissions reduction Although these studies are of crucial importance, they of 80% and more, and found that reduced service demands do not fully characterize the inter-model uncertainty in and the availability of BECCS would be vital to achieve assessing the 2050 target, including technology availability 90% emissions reduction. Schreyer et al. (2020) used the (Clarke et al. 2014a). For instance, in the wake of the Fuku- ReMIND model to compare 2050 net-zero targets for Aus- shima nuclear disaster, more attention has been paid to the tralia, the European Union, Japan, and the United States, future of power generation mix, and the costs of bringing 1 3 360 Sustainability Science (2021) 16:355–374 Table 1 Participating energy-economic and integrated assessment models to assess the climate policies in Japan Model Coverage Institute Model type Representative reference (see ESM for fuller descriptions) AIM/Enduse-Japan V2.1 National Kyoto University and National Recursive dynamic, partial equilib- Oshiro and Masui (2015) Institute for Environmental Studies rium (NIES, Japan) AIM/Hub-Japan 2.1 National Kyoto University, National Institute Recursive dynamic, general equi- Fujimori et al. (2017) for Environmental Studies (NIES, librium Japan) and Institute for Global Environmental Strategies (IGES) DNE21 Version 1.3 Global The University of Tokyo (UTokyo) Perfect foresight, partial equilibrium Fujii et al. (2015) IEEJ Japan ver. 2017 National Institute of Energy Economics, Perfect foresight, partial equilibrium Matsuo et al. (2013) Japan (IEEJ) TIMES-Japan 3.1 National The Institute of Applied Energy Perfect foresight, partial equilibrium Kato and Kurosawa (2019) (IAE), Japan AIM/Hub-Japan is a computable general equilibrium model while AIM/Enduse-Japan is a bottom-up, technology-rich model about a desired mix. And yet, it is well known (at least at the Scenarios global scale) that such a power mix is subject to enormous uncertainty. The scenario design of this study examines four dimensions Moreover, the inter-model uncertainty interacts with of uncertainty (Table 2): other sources of uncertainty. Sugiyama et al. (2019) con- ducted an initial assessment of inter-model uncertainty, but • emissions constraint stringency; did not fully consider other types of uncertainty, including • technological sensitivity; policy stringency, technological availability, service demand • service demand levels; and reduction, and import prices. To address these issues, the • energy import prices. present study conducts a multi-model assessment of Japan’s long-term climate policy under varying future scenarios. The detailed scenario descriptions are given in the ESM (“Scenario descriptions”). Unlike previous EMF studies Method (e.g., EMF 27) (Kriegler et al. 2014), we did not combine variations in different dimensions to produce a scenario Models matrix since in our case, the number of scenarios would have been prohibitively large. Five energy-economic and integrated assessment models are The name of each scenario is denoted as (policy dimen- used in the present study: AIM/Hub-Japan, AIM/Enduse- sion)_(other parameter settings). (policy dimension) takes Japan, DNE21, IEEJ_Japan 2017, and TIMES-Japan. the format of either “Baseline” or “(xx)by30 + (yy)by50”, (DNE21 should not be taken for DNE21 +, which is a dif- which stipulates xx% reduction by 2030 and yy% reduction ferent model.) These differ in model type, regional aggrega- by 2050. The main scenarios of our study are as follows: tion level and technological representation. As shown below, using a variety of models leads to a wide range of assess- • Baseline_Def: no climate policy assumed with default ment results, confirming the usefulness of the analysis of parameter settings: inter-model uncertainty. • 26by30 + 80by50_Def: each model imposes Japan’s Table 1 shows the summary of models used in the present NDC (26% emissions reduction by FY2030 relative to study. A detailed description of each model can be found the FY2013 levels) and mid-century strategy (80% emis- in the Electronic Supplementary Material (ESM) (“Model sions reduction by 2050). descriptions”). Some models cover multiple greenhouse gases, but this The different levels of emission constraints are ana- study focuses on CO emissions from energy use and indus- lyzed to explore the implications of the over- and trial processes. No broad-based, stringent climate policy exists in Japan as of this writing. 1 3 Sustainability Science (2021) 16:355–374 361 Table 2 Description of EMF 35 JMIP scenarios Dimension Scenarios Notes Policy stringency (emissions constraint) 26by30 + 80by50_Def NDC and mid-century strategy 26by30 + 70by50_Def NDC and 70% reduction by 2050 26by30 + 90by50_Def NDC and 90% reduction by 2050 26by30 + 100by50_Def NDC and 100% reduction by 2050 16by30 + 80by50_Def 16% reduction by 2030 and mid-century strategy 36by30 + 80by50_Def 36% reduction by 2030 and mid-century strategy Technology sensitivity 26by30 + 80by50_NoCCS No carbon capture and storage (CCS) is available 26by30 + 80by50_LimNuc Only limited deployment of nuclear is allowed 26by30 + 80by50_NoNuc Nuclear power is not available 26by30 + 80by50_HighInt High challenges of renewables system integration 26by30 + 80by50_LoInt Low challenges of renewables system integration 26by30 + 80by50_LoVREcost The costs of renewables are halved 26by30 + 80by50_HiVREcost The costs of renewables are doubled 26by30 + 80by50_LoVREpot The potentials of renewables are halved 26by30 + 80by50_HiVREpot The potentials of renewables are doubled 26by30 + 80by50_LoStorageCost The cost of energy storage is greatly reduced Service demand levels 26by30 + 80by50_LoDem A lower GDP scenario is applied 26by30 + 80by50_LoDemBld Lower GDP and demands halved for buildings 26by30 + 80by50_LoDemTra Lower GDP and demands halved for transport 26by30 + 80by50_LoDemInd Lower GDP and demands halved for industry Energy import prices 26by30 + 80by50_HiImportCost Energy import prices are doubled Only policy scenarios are shown for brevity. Note that baseline scenarios are denoted as Baseline_Def, etc. See the ESM Scenario Descriptions for more details There are some differences in the implementation of scenarios in each model. For instance, for the LoVREcost scenario, some models imple- mented the VRE cost reduction from the beginning of the calculation period while others reduced the cost in a linear schedule under-achievement of current policies. This is also useful Japan relies heavily on energy imports with a self-suf- to inform the ratchet-up mechanism in the Paris Agree- ficiency rate of less than 10% (ANRE 2019). Even after ment, though the Government of Japan has already submit- transitioning to a clean energy system, Japan may continue ted its updated NDC in March without revising its goal for to rely on imports. Currently the government is exploring 2030 (Government of Japan 2020). the possibility of importing a significant amount of hydro- The technology sensitivity analysis follows previous gen (Ministerial Council on Renewable Energy, Hydrogen EMF studies (Knopf et al. 2013; Clarke et al. 2014a; Fawc- and Related Issues 2017) from countries, such as Australia ett et al. 2014) and analyzes the impacts of the availability (Ozawa et al. 2017). It is therefore useful to examine the of various technological options in an idealized manner. sensitivity to energy import price changes. In addition, this study looks at renewables and systems integration (including energy storage). As nuclear power is Harmonization of GDP and population such a divisive issue, we consider three nuclear scenarios: model default, limited nuclear, and no nuclear. Availabil- In previous EMF studies, it was a standard practice to not ity of a technological option is affected by technological harmonize basic input assumptions. While this approach is development, public acceptance, or both. useful in characterizing variations in such parameters, an Energy service demands are an important factor in alternative strategy involves harmonizing basic inputs so that determining the mitigation challenges (Fujimori et al. the analysis can focus on model structures and more detailed 2014; Grubler et al. 2018; Kuriyama et al. 2019). Our technical parameters. In this study, we harmonize gross scenario design includes idealized sensitivity analyses to domestic product (GDP) and population, two key drivers of reduce the service demands by half in each of the three energy consumption and greenhouse gas (GHG) emissions. sectors (industry, transport, and buildings), besides a sce- Population data were adopted from (IPSS 2017). We nario with lower economic growth rate. Although we treat assume two GDP growth scenarios. The high growth sce- them as idealized scenarios, a myriad of factors can induce nario uses data on the growth rate till 2030 from the gov- changes in service demands, including a sudden demand ernment’s Long-Term Energy Outlook, and selects the shock, such as the 2019–2021 outbreak of the novel coro- 2030–2050 growth rates, from the Shared Socioeconomic navirus and improvements in material efficiency. Pathway (SSP) 2 (Dellink et al. 2017). The low growth 1 3 362 Sustainability Science (2021) 16:355–374 Population GDP|MER million billion US$2010/yr E E T TII H T T H H E E T T II H H H H H H H E E T TII H H T T II H E E T T H H E E T T II II H E E T T II H E E T T II E E H H E E T TII T T II E E H H E E T T II II model T T E E H H II H H E E T TII T T E E E AIM/Enduse−Japan H H 6000 T TII H H E E T TII E E H AIM/Hub−Japan H H II T T T T E E H H E E T TII H H DNE21 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 I IEEJ_Japan 2017 Final Energy CO2 emissions T TIMES−Japan EJ/yr Mt−CO2/yr H H H HH 16 H 1600 H H H H H H D D H H H H H H H D scenario H H D D H H H H T T H H H II 14 D E E T T E E E E E EI T T T T II E H T T H I 1200 II II E 26by30+80by50_Def EI E I E E E E I E T E I E H T E E T T T EI T T I I 12 T E H T T T D Baseline_Def T E T H T I T H 800 E I H T E I E I T T 10 I I T T T I I E T I E T I T I I E 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 year Fig. 3 Drivers [population (upper left) and economic growth (upper right)], final energy (lower left), and CO emissions (lower right) from energy and industrial processes. Note that AIM/Hub-Japan calculates GDP endogenously scenario presumes the SSP 2 growth rate throughout. Sce- where y is a generic, normalized model variable for a certain narios with “LoDem”, “LoDemInd”, “LoDemBld”, and period, the subscripts s, and m denote scenarios and models, “LoDemTra” also have a low GDP growth rate. Although respectively. is the mean response. and represent the m s we consider only one population scenario and two GDP main effect of model and scenario, respectively. is the m,s scenarios, service demand sensitivity scenarios provide an interaction term, and is the residual term. To compare m,s opportunity to explore the impact of drivers in an idealized across variables, we restrict ourselves to mitigation scenar- manner. Further details are provided in the ESM Scenario ios with the NDC and mid-century strategy (scenario name Descriptions. The scenario submission status is summarized starting with 26by30 + 80by50), and normalize all variables in Table ESM 4. by its mean across scenarios and models. The sum of squares can be decomposed as Decomposition of variance (sum of squares) SS = SS + SS + SS , (2) total m s i Our rich dataset is underlined by five models and 38 scenario 2 where SS is the total sum of squares (y − y ̄) , with total m,s m,s settings. To identify robust areas and uncertain domains, we the bar denoting the pooled mean. SS , SS , and SS repre- m s i compare the variance of the normalized value of each vari- sent the sums of squares attributable to models, scenarios, able and decompose the variance. and interactions, respectively. Specifically, we partition the sum of squares of a two-way analysis of variance (ANOVA) model (NIST/SEMATECH 2013; Takakura et al. 2019): y = + + + + , (1) m,s m s m,s m,s 1 3 Sustainability Science (2021) 16:355–374 363 26by30+80by50_Def Industry Electricity Transport Buildings (incl. process) H T E E model 400 T T T T H E AIM/Enduse−Japan E T I H H T I T H I AIM/Hub−Japan I E IEEJ_Japan 2017 H E I H H E H H EI H T TIMES−Japan H E T T H I I HH E T I E H H I T H E H median E H H I T H I H EI I E E T T E H I EI I E H E T EI I E I E H E T E E I H H I E I H T I T T E T I year Fig. 4 Sectoral CO emissions for the selected scenarios. The lines correspond to the 26by30 + 80by50_Def scenario. The ribbons represent the range of NoNuc, NoCCS, LoDem, and Def scenarios (the scenario prefix “26by30 + 80by50_” is dropped) shows a baseline emissions trajectory that is similar to the Results policy case (26by30 + 80by50_Def) because of assumed energy efficiency trends. Emissions in the base year from First, we focus on selected scenarios (emissions constraints AIM/Hub-Japan are different from those of other models of the NDC and mid-century strategy) to highlight key fea- because of the use of a different database (see the ESM sec- tures and explore the parameter sensitivities of no nuclear tion Energy data sources and model treatment). power, no carbon capture and storage (CCS), and lower GDP Figure 4 disaggregates emissions reduction into differ - growth. The choice of this set is motivated by the following ent sectors, thereby demonstrating how Japan can reduce considerations. First, nuclear power remains a contentious its own emissions by 2050. There is a difference between political issue. Second, CCS is often considered to be a key the partial equilibrium and general equilibrium models. enabler of deep decarbonization (Kriegler et al. 2014; Clarke The former chooses almost complete decarbonization of et al. 2014a). Third, there is criticism against the government the power and transport sectors by 2050, whereas there are projection of GDP (Kuriyama et al. 2019). As shown below, some differences in the buildings sector. The industry emis- these factors have a large impact on policy costs. sion is the most difficult to abate, as shown in our previous Figure 3 presents the time series of the two key driv- research (Sugiyama et al. 2019). On the other hand, AIM/ ers (population and gross domestic product or GDP), total Hub-Japan, the only general equilibrium model, exhibits a final energy consumption, and CO emissions from energy significant emissions reduction for industry. In AIM/Hub- use and industrial processes for the baseline and NDC and Japan, the hardest sector to decarbonize is transportation. mid-century strategy scenario (for other scenarios, see Fig. Figure 4 also displays the model range of emissions across ESM 1). Although the population is projected to decrease by scenarios, represented by ribbons. The cross-scenario range 19% from 2020 to 2050, the Japanese economy is assumed is dominated by the inter-model differences. to grow by approximately 30% over the same timeframe. To understand the type of approaches used by models to There is a significant variation in final energy and emis- achieve deep emissions cuts, Fig. 5 characterizes the key sions in the baseline scenario, which reconfirms the need indicators of mitigation for the four main scenarios, with for model inter-comparison. The IEEJ_Japan 2017 model 1 3 CO2 emissions [Mt CO2/yr] 364 Sustainability Science (2021) 16:355–374 Energy Intensity of GDP CO2/Electricity Electrification Rate [MJ/US2010$] [kg−CO2/kWh] [%] 0.6 2.5 I E H T H 60 I H H E T E 0.4 E H H E T H 2.0 H I T T T E 50 E I T I I H I H E H I T EI T scenario 1.5 40 H T E 0.2 T H D H I T H E I E T H H T I E T D E 26by30+80by50_Def I T H E H I 30 T I E E T 1.0 D T T I E H D I E I E H T E HI E T D E T H I H 0.0 model E AIM/Enduse−Japan VRE Rate Fossil Fuel Share Industry Share in FE H AIM/Hub−Japan [%] [%] [%] E D DNE21 T T H E 60 H T E T T H E I D T I E D T I E HI I IEEJ_Japan 2017 T T H HI T H H T I 50 T T TIMES−Japan D E I 40 E HI H T T I E E I E I I I E E E T T T E I E E I D H E H I 20 H H E I E T I H T H I I D H T H T I 40 H T H E H I H H D H H E T E E H 0 H T DD D year Fig. 5 Key indicators of decarbonization options: (top left) energy share of fossil fuels in primary energy, and (bottom right) the share intensity of GDP, (top middle) CO intensity of electricity, (top right) of the industry sector in total final energy consumption. The ribbons the share of electricity in final energy consumption, (bottom left) the represent the ranges of NoNuc, NoCCS, LoDem, and Def scenarios share of solar and wind in secondary electricity, (bottom middle) (the scenario prefix “26by30 + 80by50_” is dropped). 26by30 + 80by50_Def represented by solid lines and other models, and the 26by30 + 100by50_Def in three models scenarios depicted by ribbons. The figure reveals that the (Table ESM 4). options that are found to be useful in the global context are For electrification, AIM/Hub-Japan shows a higher rate also effective in Japan: economy-wide energy efficiency than other models. The reason for this is due to high elec- (Clarke et al. 2014b; Sugiyama et al. 2014), power sector trification of the industry sector (Fig. ESM 2) (see Saka- decarbonization (Clarke et al. 2014b; Krey et al. 2014), moto et al. 2021 for more on this). Also, the industry share end-use electrification (Williams et al. 2012; Sugiyama of final energy decreases in AIM/Hub-Japan not because 2012; Krey et al. 2014), penetration of VREs (Luderer the industry final energy decreases more rapidly than in et al. 2014), and a shift away from fossil fuels (Krey et al. other models, but because the total final energy consump- 2014; IPCC 2018). Robustness varies by indicator. Energy tion does not reduce as much as other partial equilibrium efficiency and electricity decarbonization are most robust, models (Fig. ESM 3). and the electrification rate changes by model. The increas- On the basis of per-capita indicators, the median final ing tendencies of VREs and non-fossil energy are robust energy consumption decreases by 11% from 2010 to but the magnitudes are uncertain. The share of industry in 2050, while the median value of electricity consumption final energy consumption increases with time in the partial increases by 43% (see Figures ESM 4 and 5). equilibrium models, a tendency consistent with Fig. 4. There are some variations across scenarios in the share Our focus is on the mid-century strategy (80% emis- of VREs and fossil fuel shares, but they are not as large sions reduction), but we find that the same strategies as the inter-model uncertainties. A large fossil fuel share are also effective in more stringent cases, though they found for DNE21 is from the NoNuc scenario, in which the are further strengthened (Fig. ESM 11). Note that the model prefers natural gas power plants with CCS (Fig. 7). 26by30 + 90by50_Def scenario is infeasible in two 1 3 2010 2020 2040 2050 2050 Sustainability Science (2021) 16:355–374 365 Fig. 6 Primary energy mix for the selected scenarios for 2030 (top) and 2050 (bottom) Another uncertain variable is the use of CCS. The median to the difference in the database used among the partici - CCS sequestration is about 50 Mt-CO /year in 2050, with pating models. The models use either the energy balance the maximum amount being approximately 350Mt-CO /year of the International Energy Agency or the comprehensive for AIM/Hub-Japan (Fig. ESM 5). energy statistics compiled by METI. There are some differ - There is a discrepancy in the industry share of final ences between these two databases, and the variations are energy consumption even in the base year. This is attributed 1 3 366 Sustainability Science (2021) 16:355–374 Fig. 7 Power generation mix in 2030 and 2050 for the selected scenarios. The “other” in AIM/Hub-Japan refers to power generation technolo- gies, such as ocean, tidal, etc. pronounced for the industry share (Aoshima 2008). See the Figures 6 and 7 describe the primary energy and power ESM Energy data sources and model treatment for a fuller generation mixes for different scenarios for 2030 and description. 2050. The ESM presents the compositions of energy and power generation in the baseline scenario, which are domi- Whether blast furnace gas is counted in the energy conversion sec- nated by fossil fuels (Fig. ESM 7 for 2010; Figs. ESM 8 tor or the industry sector makes a non-negligible difference. This and 9 for 2030 and 2050, respectively). The penetration difference affects both the emissions and final energy, and hence the changes reported in this paper. 1 3 Sustainability Science (2021) 16:355–374 367 Price|Carbon energy system cost / GDP Consumption loss / GDP [US$2010/t CO2] [%] [%] 4 4 H H H 3 3 H H H H H H H H 2 2 II H H H T T T E E E E E E E H H H H H H H H H 1 1 E E E E E E E E E E E E E E T T T T IIIII H H H E E E E E E E E E E E E E E E E E E E E E E E E E E H H H H H H H H IIIIIIIIIII E E E E E E E E E E E E D D D D T T T T T T T T T T H H H IIIIIIIIIIIII E E E E E E E E E E E E IIIII E E E E E E E E E E E E H H H H H H H H H H H H H H H H H H H H H H H H H H H E E E E E E E E E E E E E E E E E E E E E E E T T T T T E E E E E E E IIII IIIIIIIIIIIIIII IIIIIIII T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T H H H H H H H H H H H H H H H H H H H H H H H H H H T T T T T T T T T IIIIIIIIIIIIIIIIIII H H H H 0 T T T E E E E E E E E E E E E E T T TI E E E E E E E E E E E E E E E E E E E E E E T T T E E E E E E E E E E E E E E E E E E E E E E E EI 0 H H H H I T T T T T D D D D D D D D D D D D D D D D D I E E E E E E E E E E E E E E E E E E E E E E E E E E H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H D D D D D D D D D D D D D D D D D D D D D D D D D D D IIIIIIIIIIIII IIIIIIIIIIII D D D D D D D D D D D D D D D D D D D D D D D D D DI 0 H T H D E TI H H H H H H H H H H H H H H H E E T TI H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H E E E E E E E E E E E E E E E T T T T T T T T T T T T T T T year E E AIM/Enduse−JapanA H H IM/Hub−Japan D D DNE21 II IEEJ_Japan 2017 T T TIMES−Japan model Fig. 8 Marginal cost and policy costs (energy system cost and consumption loss) for the selected mitigation scenarios. The ribbons correspond to the uncertainty range represented by the four scenarios of the 26by30 + 80by50 scenario variants: Def, NoNuc, NoCCS, and LoDem of renewables is limited in the baseline scenario partly year in IEEJ_Japan 2017 to approximately 2.1 PWh/year in because of high costs. AIM/Hub-Japan. VREs expand greatly, with a median pene- In 2030, fossil fuels are still dominant, and clean energy tration rate of 42% among the four models (AIM/Hub-Japan, sources greatly expand after then (Fig. 6). In 2050, the AIM/Enduse-Japan, IEEJ_Japan 2017, and TIMES-Japan). models exhibit differing primary energy supply levels. It is The exception to this is DNE21, which prefers nuclear power 8EJ/year for IEEJ_Japan 2017 and 16EJ/year for AIM/Hub- (Shiraki et al. 2021). When CCS or nuclear power is not Japan. They also show different preferred mixes, with their available, the gap is compensated for by other clean energy mixes strongly reflecting model defaults, despite scenario sources, but different models exhibit different preferred influences. In the primary energy mix, oil and gas (often generation methods. For instance, in IEEJ_Japan 2017, the with CCS) continue to play an important role for all the unavailability of nuclear power increases gas with CCS and models even in 2050, irrespective of scenarios. The sec- wind, and hydrogen increases when CCS is not available. ondary energy trade, which represents hydrogen imports, is Nuclear power is replaced with biopower in TIMES-Japan, projected to play an increasing role in IEEJ_Japan 2017 and and the unavailability of CCS increases hydrogen. A large TIMES-Japan. Note that both models incorporate domestic deployment of wind in AIM/Enduse-Japan and AIM/Hub- hydrogen production and imports, and that imports predomi- Japan can be explained by larger wind resource potentials in nate because of cost considerations and renewable resource these models (Shiraki et al. 2021). limitations for green hydrogen (see Sakamoto et al. 2021 Next, we characterize the costs of achieving deep emis- for more on this). sions reduction (Fig. 8) by examining marginal costs and Power sector decarbonization accelerates significantly total costs (consumption loss for AIM/Hub-Japan and after 2030 (Fig. 7). The 2030 power generation mix should additional total energy system cost for other bottom–up be compared with the official targets (Fig. 2) that fixes the models). The carbon prices rise exponentially with time. share of nuclear power at around 20%. By design, our anal- The median price (2010USD/t-CO ) is 0 in 2020, 74 in ysis considers a scenario without nuclear power, and the 2030, 144 in 2040, and 819 in 2050 for the main mitiga- results include a power mix that is quite different from the tion scenario (26by30 + 80by50_Def). In the case of the official target. 26by30 + 80by50_LoDem scenario, the median price is 0 As with total primary energy, total power generation var- in 2020, 18 in 2030, 75 in 2040, and 709 in 2050. ies greatly across models. In 2050, it ranges from 0.9 PWh/ 1 3 2050 368 Sustainability Science (2021) 16:355–374 Average costs discounted at 5%, 2020−2050 Price|Carbon policy cost / GDP [US$2010/t CO2] [%] 1.5 H H model H E AIM/Enduse−Japan 1.0 H H AIM/Hub−Japan D DNE21 I IEEJ_Japan 2017 E 0.5 H I E 100 H E H T T TIMES−Japan E E I I E I D E H E I E T E T I E D I D T T I I I D I D D E I T D I D D T 0.0 scenario Fig. 9 Sensitivity of average cost metrics (discounted at 5%, over per GDP loss for AIM/Hub-Japan and the additional total energy sys- 2020–2050) to scenario assumptions. Carbon price (left) and policy tem cost per GDP for other models cost per GDP (right). Policy cost/GDP is defined as consumption loss The values are sensitive to scenario assumptions. Though In fact, the difference in the discounted carbon price between model fingerprints persist, the unavailability of CCS the 26by30 + 80by50_Def (99 2010USD/t-CO ) and increases the marginal cost of mitigation in many models 36by30 + 80by50_Def (105 USD-tCO ) scenarios is small. (Fig. ESM 10), leading to a wide range of uncertainty, as This is because early action leads to a higher cost in an ear- represented by ribbons. Total cost metrics are less sensitive. lier period but a lower cost in later periods. As the AIM/ In 2050, the policy costs amount to approximately 3% of Hub-Japan is a myopic model, an early mitigation action GDP for AIM/Hub-Japan, while other partial equilibrium partially improves welfare in their modeling framework. models suggest 0.8–0.9% of GDP. To assess the variability of each variable across mod- To compare the cost metrics in a more concise manner, els and scenarios, Fig. 10 presents the average carbon Fig. 9 presents the average costs (both total and marginal) price discounted at 5%, normalized by its value for the discounted at 5% for the period 2020–2050. The two most 26by30 + 80by50_Def scenario. Based on the behavior of stringent scenarios (90% or 100% emissions reduction) are the medians (triangle in the diagram), stringent emissions feasible only for AIM/Hub-Japan and DNE21. Total costs constraints (90% and 100% reduction by 2050) are most roughly scale linearly with stringency, whereas marginal impactful in increasing the costs, followed by non-availa- costs increase exponentially. The inter-model uncertainty bility of CCS and nuclear power. This is followed by sensi- range is sizable for both metrics, but particularly large for tivity analyses on renewables and systems integration. Lower marginal costs. levels of demand can significantly reduce the costs, and the Sensitivity analysis of the parameter setting reveals that lowering of the industrial service demand reduces the cost lower demand and availability of nuclear power and CCS aid substantially. Doubling the VRE potential and halving the in containing the costs. In terms of policy costs, as compared VRE costs are also helpful in reducing the cost. High-energy to CCS, nuclear power has a larger impact in all the models, import costs do not have a significant impact. except AIM/Hub-Japan. For marginal costs, AIM/Hub-Japan An analysis based on a two-way ANOVA model reveals and AIM/Enduse-Japan suggest lower impacts due to the both uncertain metrics (e.g., costs, the role of nuclear, lack of nuclear power than CCS; the rest of the models point CCS, and VREs) and robust indicators (e.g., economy- in a different direction. wide energy efficiency, electrification). Figure 11 depicts We also examine the impacts of setting different 2030 the results of decomposition of the sum of squares of key targets. Imposing a stricter target leads to higher costs in all variables, based on a two-way ANOVA model. Except for the models, but AIM/Hub-Japan shows a nuanced behavior. cost metrics, the variations are dominated by inter-model 1 3 26by30+70by50_Def 26by30+80by50_Def 26by30+90by50_Def 26by30+100by50_Def 26by30+80by50_LoDem 26by30+80by50_NoNuc 26by30+80by50_NoCCS 16by30+80by50_Def 36by30+80by50_Def 26by30+70by50_Def 26by30+80by50_Def 26by30+90by50_Def 26by30+100by50_Def 26by30+80by50_LoDem 26by30+80by50_NoNuc 26by30+80by50_NoCCS 16by30+80by50_Def 36by30+80by50_Def Sustainability Science (2021) 16:355–374 369 Carbon Price averaged over 2020−2050 at a discount rate of 5% 26by30+100by50_Def D H D HE 26by30+90by50_Def scenario_type 26by30+80by50_NoCCS D I H ET demand 26by30+80by50_NoNuc H DE I T 26by30+80by50_HiVREcost DTH I E import 36by30+80by50_Def D HE T I main 26by30+80by50_LoVREpot DEH I T policy 26by30+80by50_HiImportCost E HDI T tech 26by30+80by50_LimNuc HE D I T 26by30+80by50_Def D H E TI 26by30+80by50_HighInt H E D T I model 26by30+80by50_LoInt D E H IT IE T H D E AIM/Enduse−Japan 26by30+80by50_LoStorageCost 26by30+80by50_HiVREpot TH I ED H AIM/Hub−Japan 26by30+80by50_LoVREcost E H I TD D DNE21 16by30+80by50_Def I E TD H I IEEJ_Japan 2017 26by30+80by50_LoDem TIDE H 26by30+70by50_Def T I HD E T TIMES−Japan 26by30+80by50_LoDemTra IT E H median 26by30+80by50_LoDemBld E TI H 26by30+80by50_LoDemInd T EI H 0.31.0 3.0 value Fig. 10 Discounted averages of the normalized carbon price in each scenario. Discounting is over 2020–2050 at 5%. Normalization is conducted with the 26by30 + 80by50_Def value being unity. The model median for each scenario is represented by a triangle ANOVA of 26by30+80by50 scenario variants CCS Carbon Sequestration Nuclear Power Generation VRE rate Discounted, Avearged Carbon Price var interaction Discounted Energy System Cost per GDP scenario model Electrification Rate Industry Share in FE Fossil Fuel Share Energy Intensity of GDP sum of squares Fig. 11 The sums of squares of the two-way ANOVA of each variable. The time period is 2050, except for cumulative variables. A discount rate of 5% is applied for discounted variables 1 3 variable normalized value 370 Sustainability Science (2021) 16:355–374 uncertainty, and inter-scenario variation plays a minor assumptions, such as technology availability, service role. While CCS tops the list of the uncertainty among demand levels, and policy stringency. variables, all the cost metrics loom large because of model and scenario uncertainties. Both total and marginal cost Policy implications metrics are sensitive, and scenario uncertainties are large, especially for the energy system cost. The shares of In the following, we provide the implications for policy nuclear power and VREs are also susceptible to the choice based on our interpretation of modeling results. of model and scenario. Besides reconfirming the findings The current mid-century strategy has not detailed any sec- of Figs. 5 and 11 clarifies where uncertainty prevails. toral breakdown, and given the uncertainty in the industrial Note that the CO intensity of electricity is close to zero mitigation, policymakers should carefully design sectoral and has been excluded from this analysis. policies. On the other hand, power sector decarbonization is robust across models and scenarios. As discussed in the pol- icy review section, the government has established a 2030 target, but not for 2050. The government should clarify the Discussion and conclusion overall, 2050 power sector target in the future policy. The current study reveals an exponential rise in carbon Summary of modeling results prices. As reviewed in policy review, currently, the carbon tax of Japan stands at ~ 3 USD/t-CO . While the effective The present study has identified robust mitigation strate - price is higher in some sectors, the current policy framework gies that cut across models and scenarios. In spite of a has not resulted in ambitious actions. Therefore, mitigation diverse set of modeling frameworks, the models find econ- efforts need to be greatly expanded so that effective carbon omy-wide energy efficiency and electricity decarboniza- pricing increases several-fold and covers all the sectors. The tion to be the most robust. All the models find increasing Organization for Economic Cooperation and Development trends of end-use electrification, deployment of VREs, and (OECD 2018) reports that at the 30 EUR/t-CO level, there a shift away from fossil fuels, though the magnitudes vary is a 69% coverage gap of market instruments. Though this is among models. Partial equilibrium models also indicate indicative only of market instruments, our findings hint that that the residual emissions from the industry sector are climate policy must be substantially strengthened in both difficult to abate. These are largely consistent with the lit- breadth and depth. erature and previous research (see the “Results”). Though In the real world, the government does not necessarily not all models show feasible solutions for stringent policy have to rely on explicit carbon pricing; it can invoke regula- scenarios (90% and 100% emissions reduction), the overall tions, research and demonstration, tax credits, subsidies, and strategies remain the same and they are enhanced further. information campaigns as implicit carbon pricing, though Another robust feature is the stringency and cover- extremely stringent policies could be politically infeasible. age of future climate policy. The marginal cost or carbon As our models suggest, there are robust strategies that can price is set to increase rapidly. The 26by30 + 80by50_ be pursued by Japan, including energy efficiency improve- Def scenario shows a median price of ~ 70 2010USD/t- ment, power sector decarbonization, electrification, and CO in 2030 and ~ 800 USD/t-CO in 2050, whereas the development of variable renewables. Although the govern- 2 2 26by30 + 80by50_LoDem scenario exhibits a median price ment is making significant efforts, these efforts must be fur - of ~ 18 USD/t-CO in 2030 and ~ 709 USD/t-CO in 2050. ther accelerated by strengthening all the (effective) policy 2 2 Accordingly, policies must be strengthened to meet Japan’s instruments, including energy efficiency standards, renew - NDC and mid-century strategy goals. All the emission able energy auctions, and demonstration and diffusion of sectors must contribute to mitigation with an exponen- early-stage technologies. tially rising marginal cost. In terms of the total cost, this As costs are dynamic, they should not be taken at their translates into a 3% consumption loss per GDP for AIM/ face value (Grubb et al. 2015; Nemet 2019). They can be Hub-Japan and an additional total energy system cost of considerably reduced by innovation. Given the scale of cost 0.8–0.9% of GDP for the partial equilibrium models in reduction required, however, broad innovation efforts must 2050. be markedly expanded. The first target should be VREs, as These models also suggest areas of uncertainty. One our analysis shows that halving the VRE costs does signifi- such area is the energy mix. The models reveal multiple cantly reduce the costs. It is no brainer since other countries energy futures that are economically efficient. Another have successfully slashed the costs (IRENA 2019; Shiraki uncertain aspect is the exact size of the cost, which et al. 2021). Japan needs to follow suit. Another key consid- depends on both the model and scenario assumption. eration is the role of CCS and hydrogen. Models suggest that Both marginal and total costs vary greatly by model and either CCS or hydrogen is required on a large scale, and yet 1 3 Sustainability Science (2021) 16:355–374 371 technology development remains at the level of demonstra- Study limitations and future research agenda tion projects. The government needs to strengthen market creation policies for these new technologies. Though this study covered multiple models and addressed Nurturing innovation at such a grandiose scale is a huge many different sources of uncertainty, there are several limi- challenge because of the fundamental uncertainty in innova- tations to the present study. tion and their interaction with other sources of uncertainty. First, there is an acute need for further model develop- Moreover, the role of the government in innovation is often ment. The infeasibility of 90% emissions reduction in two indirect given the complexity of the national innovation sys- models and 100% reduction in three models, and the carbon tem; see Nemet (2019) for the case of solar photovoltaics. price levels exceeding the cost of carbon dioxide removal As seen in Figs. 6 and 7, models show divergent pathways (Fuss et al. 2018), imply that models must incorporate for Japan’s energy system. Except for VREs, the role of options, such as BECCS. The sensitivity analysis suggests individual technologies cannot be ascertained. Therefore, the important role of industrial decarbonization (for mar- policymakers will have to employ adaptive management in ginal costs) and renewables (for total costs), and further recognition of contemporaneous technology progress. For improvement on these fronts would be crucial (Ju et al. instance, the current government pays significant attention to 2021; Shiraki et al. 2021). As there is a wide range reported hydrogen as a clean energy carrier. The Tokyo 2020 Olym- in the literature (Matsuo et al. 2018), it would be illuminat- pic and Paralympic games that have been postponed (as of ing to conduct an inter-comparison dedicated to renewables. this writing) are going to feature hydrogen in the Olympic Second, in this paper, we have focused on the time hori- flame. The Tokyo Metropolitan Government is planning to zon of 2050. The 2050 net-zero emissions target emphasizes introduce 50 fuel-cell buses (Tokyo Metropolitan Govern- 2050, but there is a need to analyze what happens after 2050. ment 2020). The government has an ambitious goal to slash Thus, the model framework should be expanded. Some mod- the cost of hydrogen by approximately one-third to 30 JPY/ els already have this capability and conducted such an analy- Nm by 2030s (Ministerial Council on Renewable Energy, sis (Kato and Kurosawa 2019, 2021). This is an important Hydrogen and Related Issues 2017). Although these efforts research issue in the next iteration. are laudable, innovation targets are easy to miss; hydrogen Third, we did not include global models (Oshiro et al. may come but not at the desired time nor in the expected 2019) or some notable models of Japan (Ozawa et al. 2021; form. In fact, the energy mix presented in Figs. 6 and 7 Takeda and Arimura 2021). Most of the participating models does not show a significant role of hydrogen in 2030. Even are based on partial equilibrium concepts. The global models in 2050, only two models (IEEJ_Japan 2017 and TIME- that include Japan as a distinct region do not necessarily Japan) show some penetration. Policymakers should take represent Japan with the most up-to-date parameters. The into consideration the uncertainty of the future technology Japanese research teams have advantages with data updating development. because of proximity and the language whereas global mod- In other words, the climate policy package must incor- els have strengths in terms of comprehensiveness. Therefore, porate adaptive management as an essential element. In it is useful to compare global and national models in a more light of the updating mechanism under the Paris Agree- consistent manner. Although Oshiro et al. (2019) have con- ment, the Government of Japan should take full advantage sidered only two models from Japan, their work is the first of the opportunity to address uncertainties. This approach step in the right direction. is already embedded in the Strategic Energy Plan, which Fourth, we did not analyze all sources of uncertainties, focuses on multi-track scenarios. The details are yet to be nor did we analyze why models differ from each other. As of fleshed out. However, in the medium term, there appears to this writing, the COVID-19 pandemic crisis has had signifi- be less flexibility. For instance, the NDC essentially stipu- cant impacts on final energy and CO emissions as well as lates energy mix in the medium term. In the previous energy the possible future energy trajectories. All of our models and plans, the rule of nuclear power fluctuated greatly thanks to scenarios have missed it. More importantly, the effect of the optimism, a nuclear disaster, and public perception, which base year should ideally be fully explored, but this aspect has affected the prospect of mitigation (Fig. 2). Our results not been analyzed. These issues are left for future research. demonstrate that there is no single energy future for Japan Fifth, the models did not represent any policy except for (Figs. 6, 7). Policymakers should embrace diverse possibili- economy-wide carbon pricing. Some studies have begun ties for 2030 as well as 2050 by incorporating flexibility into work on this front (Roelfsema et al. 2020), and more realis- the policy framework. tic representation of policies would be crucial in the future. Supplementary Information The online version contains supplemen- tary material available at https:// doi.org/10.1007/s11625-02 1-00913-2 . 1 3 372 Sustainability Science (2021) 16:355–374 Acknowledgements This research was supported by the Environment Arimura TH, Abe T (2020) The impact of the Tokyo emissions trad- Research and Technology Development Fund (JPMEERF20172004) of ing scheme on office buildings: what factor contributed to the the Environmental Restoration and Conservation Agency of Japan. MS emission reduction? Environ Econ Policy Stud. https ://doi. was also supported by JSPS KAKENHI Grant number JP20H04395. org/10.1007/s1001 8-020-00271 -w KO was supported by JSPS KAKENHI Grant number JP20K14860 Calculation Committee for Procurement Price, etc. (2020) Opinion on and the Environmental Research and Technology Development Fund purchase prices and so forth for the Fiscal Year Reiwa 2. Ministry JPMEERF20201002 of the Environmental Restoration and Conserva- of Economy, Trade, and Industry tion Agency of Japan. SF and KO were supported by the Sumitomo Calvin K, Clarke L, Krey V et al (2012) The role of Asia in mitigating Foundation. RK was supported by JSPS KAKENHI Grant number climate change: results from the Asia modeling exercise. Energy JP20H02679 and JP17H03531. 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Keidanren (2013) Results of the Fiscal 2013 Follow-up to the Voluntary Action Plan on the Environment (Summary). Keidanren (Japan Business Federation)
Keidanren (2013) Results of the Fiscal 2013 Follow-up to the Voluntary Action Plan on the Environment (Summary). Keidanren (Japan Business Federation), Keidanren (2013) Results of the Fiscal 2013 Follow-up to the Voluntary Action Plan on the Environment (Summary). Keidanren (Japan Business Federation)
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Main points of KEIDANREN's Commitment to a Low Carbon Society Fiscal 2018 Follow-up Results Summary
(Keidanren (2019) Main points of KEIDANREN’s Commitment to a Low Carbon Society Fiscal 2018 Follow-up Results Summary. Keidanren (Japan Business Federation))
Keidanren (2019) Main points of KEIDANREN’s Commitment to a Low Carbon Society Fiscal 2018 Follow-up Results Summary. Keidanren (Japan Business Federation)
Keidanren (2019) Main points of KEIDANREN’s Commitment to a Low Carbon Society Fiscal 2018 Follow-up Results Summary. Keidanren (Japan Business Federation), Keidanren (2019) Main points of KEIDANREN’s Commitment to a Low Carbon Society Fiscal 2018 Follow-up Results Summary. Keidanren (Japan Business Federation)

Publisher: Springer Journals
Copyright: Copyright © The Author(s) 2021
ISSN: 1862-4065
eISSN: 1862-4057
DOI: 10.1007/s11625-021-00913-2
Publisher site: See Article on Publisher Site

Abstract

In June, 2019, Japan submitted its mid-century strategy to the United Nations Framework Convention on Climate Change and pledged 80% emissions cuts by 2050. The strategy has not gone through a systematic analysis, however. The present study, Stanford Energy Modeling Forum (EMF) 35 Japan Model Intercomparison project (JMIP), employs five energy-economic and integrated assessment models to evaluate the nationally determined contribution and mid-century strategy of Japan. EMF 35 JMIP conducts a suite of sensitivity analyses on dimensions including emissions constraints, technology availability, and demand projections. The results confirm that Japan needs to deploy all of its mitigation strategies at a substantial scale, including energy efficiency, electricity decarbonization, and end-use electrification. Moreover, they suggest that with the absence of structural changes in the economy, heavy industries will be one of the hardest to decarbonize. Partitioning of the sum of squares based on a two-way analysis of variance (ANOVA) reconfirms that mitigation strategies, such as energy efficiency and electrification, are fairly robust across models and scenarios, but that the cost metrics are uncertain. There is a wide gap of policy strength and breadth between the current policy instruments and those suggested by the models. Japan should strengthen its climate action in all aspects of society and economy to achieve its long-term target. Keywords Climate change mitigation · Integrated assessment · Long-term strategy · National climate policy · Uncertainty · Carbon neutrality · Net-zero emissions Introduction In accordance with Article 4 of the Paris Agreement, the Government of Japan submitted its long-term low green- Handled by Mikiko Kainuma, Senior Research Advisor, Institute house gas emission development strategy (or mid-century for Global Environmental Strategies. strategy) to the United Nations Framework Convention on * Masahiro Sugiyama masahiro_sugiyama@alum.mit.edu; masahiro@ifi.u-tokyo.ac.jp School of Engineering, The University of Tokyo, Hongo Institute for Future Initiatives, The University of Tokyo, 7-3-1, Bunkyo-ku, Tokyo 113-8656, Japan 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan Institute for Global Environmental Strategies (IGES), Graduate School of Engineering, Kyoto University, Kyoto 2108-11 Kamiyamaguchi, Hayama, Kanagawa 240-0115, daigaku-katsura, Nishikyo-ku, Kyoto 615-8530, Japan Japan National Institute for Environmental Studies, 16-2 Onogawa, Institute of Energy Economics, Japan, Kachidoki 1-chome, Tsukuba, Ibaraki 305-8506, Japan Chuo-ku, Tokyo 104-0054, Japan 4 9 Research Institute of Innovative Technology for the Earth, The University of Shiga Prefecture, 2500, Hassaka-cho, 9-2 Kizugawadai, Kizugawa, Kyoto 619-0292, Japan Hikone-City, Shiga 522-8533, Japan 5 10 Institute of Applied Energy, 1-14-2 Nishi-Shimbashi, Minato, International Institute for Applied System Analysis (IIASA), Tokyo 105-0003, Japan Schlossplatz 1, 2361 Laxenburg, Austria Vol.:(0123456789) 1 3 356 Sustainability Science (2021) 16:355–374 Climate Change (UNFCCC) in June 2019 (Government of unharmonized parametric uncertainties. This definition is Japan 2019). The strategy mentioned Japan’s goal of reduc- methodological, not conceptual. This is also consistent with ing greenhouse gas emissions by 80% by 2050, which was our statistical approach. stated in an earlier document (Ministry of the Environment This paper lays out the scenario design and some key 2012; Government of Japan 2016). Recently, in October findings of the EMF 35 JMIP study. Detailed investigations 2020, Prime Minister Suga made a pledge to net-zero emis- into the role of variable renewables (Shiraki et al. 2021), sions by 2050 (Suga 2020). However, it is not immediately end-use electrification (Sakamoto et al. 2021), and industrial clear how Japan could achieve deep decarbonization while mitigation (Ju et al. 2021) are presented in the companion the consequences of and policy choices after the 2011 Fuku- papers in this special feature. They are further enriched by shima nuclear disaster still linger, including difficulties of individual modeling papers in this special issue. nuclear restarts and the rise of coal-fired power. The rest of the paper is organized as follows. The “Policy Although the Japanese government has not formally and literature review” section presents a short summary of conducted a quantitative analysis of the proposal, many Japan’s climate policy and the modeling literature. Although studies have already examined long-term policy proposals, our main focus is on modeling, we provide a fairly broad including economy-wide climate policies (Fujimori et al. overview of Japan’s policy situation. The “Method” section 2019; Kato and Kurosawa 2019; Oshiro et al. 2019; Sugiy- describes the models used and the scenarios utilized. This ama et al. 2019). Other studies have analyzed power sector is followed by the “Results” section, which presents the out- policies that feature the significant penetration of variable comes of the five-model analysis. The paper concludes with renewable energies (VREs) (Komiyama et al. 2015; Matsuo “Discussion and conclusions”. et al. 2018). While these studies have advanced our understanding of the policy issues, they have not comprehensively ana- Policy and literature review lyzed all the relevant factors. An important factor that has not received enough attention is the inter-model uncertainty Policy review among energy-economic and integrated assessment models, which is crucial in informing the climate policy debate (Krey This section gives a brief overview of Japan’s climate 2014). policies and places the present analysis in a wider context, To address the issue of inter-model uncertainty, the Stan- given that the policymaking in Japan is quite different from ford Energy Modeling Forum 35 (EMF) Japan Model Inter- the western countries (Sofer 2016) in that Japan’s climate comparison Project (JMIP) is tasked with analyzing Japan’s policy has been mostly shaped by bureaucracies, and other climate policy with a multi-model framework. The present stakeholders played a limited role (Kameyama 2016). This study extends a pilot study by Sugiyama et al. (2019) and section is based on earlier reviews by Takase and Suzuki explores uncertainties in policy, technology, demand, and (2011), Kuramochi (2015), and Kuriyama et al. (2019). To import dimensions in a systematic manner. understand the political economy aspects, see Kameyama In particular, this study asks the following research (2016), Sofer (2016), and Trencher et al. (2019) and the ref- questions: erences therein. Kameyama (2016) chronicled the climate policy of Japan from 1980s until 2015, focusing on the role • (1) How do various types of uncertainties affect the cost, of premiership. Sofer (2016) gave a concise summary of the feasibility, and features (e.g., power generation mix) of actors and their roles in Japan’s climate policy, contrasting Japan’s mitigation policy? Japan and the United States. Trencher et al. (2019) is cen- (2) Is there a specific, robust pattern in Japan’s decarboni- tered around coal-fired power plants, for which Japan has zation pathways that cuts across uncertainties? What is been supporting domestic usage and exports. The review the policy implication, given the magnitude of uncertain- here focuses on the central government and does not cover ties? sub-national or non-state actors. Japan’s climate policy was based mainly on energy effi- Though our primary focus is on the 80% emissions reduc- ciency measures, such as Top-Runner Programs (Inoue tion, we also discuss the implications for the net-zero target. and Matsumoto 2019) and building codes and labeling Some words on the definition of uncertainty are in order. (Murakami et al. 2009; MLIT 2016), and voluntary actions There are many sources of uncertainties, including struc- taken by the industry (Keidanren 2013, 2019; Wakabayashi tural and parametric uncertainties. This paper classifies the 2013; Wakabayashi and Arimura 2016). These are mainly source of uncertainties into those originating from scenario under the remit of the Ministry of Economy, Trade, and specification (inter-scenario uncertainty) and the remainder, Industry (METI). Though they are so called, voluntary model uncertainty, which encompasses both structural and action plans go through formal reviews by expert committees 1 3 Sustainability Science (2021) 16:355–374 357 that are set up by the government. In particular, the Kyoto of hardest to decarbonize (Davis et al. 2018; Luderer et al. Protocol Target Achievement Plan formalized the review 2018) and innovative technologies have not been developed during the Protocol’s first commitment period. With regard sufficiently (Ju et al. 2021), industrial mitigation presents a to the promotion of lifestyle changes, the Ministry of the significant challenge for Japan. Environment has pushed for information campaigns, such as Cool Biz (since 2005). This campaign proved to be more Quantitative policy targets extensive than its counterparts in other countries (Shove and Granier 2018). In the first commitment period of the Kyoto Protocol Conversely, Japan has not been enthusiastic about price (2008–2012), Japan honored its commitment to reduce instruments. Overall, carbon pricing (both explicit and emissions by 6% from the 1990 levels by reducing domestic implicit) has been relatively weak in Japan (Ramstein et al. emissions and purchasing credits from abroad (Ministry of 2019). The fossil fuel tax, namely chikyu ondanka taisaku the Environment 2014). In June 2009, the Aso administra- zei (tax for global warming countermeasures), stands at 289 tion announced a mid-term target of 15% emissions reduc- JPY/t-CO or about 3 USD/t-CO (Ministry of the Environ- tion by 2020 relative to the 2005 levels (8% reduction rela- 2 2 ment 2020, partly because of a competitiveness concern for tive to the 1990 levels) (Prime Minister’s Office 2009). A the industry. It is important to recognize that transport fuels significant modeling exercise (as part of a policy process) have been taxed already at a high level. At the prefectural was conducted in preparation for this target (Fukui 2009). level, the Tokyo Metropolitan Government and Saitama Pre- In September 2009, however, the newly elected, Hatoyama fectural Government have been implementing an emissions administration of the Democratic Party of Japan (DPJ) trading scheme (ETS) for the commercial sector (Arimura announced its ambition to reduce its emissions by 25% by and Abe 2020). The Tokyo ETS was successful during Phase 2020 relative to the 1990 levels (33% reduction relative to 1 (2010–2014). A remarkable 25% reduction in carbon diox- the 2005 levels) (Copenhagen Pledge), but this plan required ide (CO ) emissions was partly attributable to the carbon a significant expansion of nuclear power fleets (Duffield and price signal but also assisted by the energy savings after Woodall 2011). The pledge was overturned after the 2011 the 2011 energy crisis and the effect of an advisory system Great Eastern Japan Earthquake, tsunamis, and the Fuku- (Wakabayashi and Kimura 2018; Arimura and Abe 2020). shima Daiichi nuclear disaster. The DPJ contemplated an Currently, the electricity sector is going through rapid alternative energy path without relying on nuclear power. changes, including the retail deregulation of 2016, the However, it lost to a coalition of the Liberal Democratic unbundling of utilities in 2020, and new market frameworks Party and Komeito in the 2012 election. Japan did not take (i.e., baseload, flexibility, non-fossil value, and capacity) part in the second commitment period of the Kyoto Protocol. (Hattori 2019). Compared to countries like Germany, Japan Furthermore, it downgraded its 2020 pledge to 3.8% emis- had a slow start in its transition to renewables (Cherp et al. sions reduction relative to the 2005 levels under the prospect 2017). The 2011 feed-in tariff (FIT) scheme helped in the of limited nuclear operation (Warsaw Target) (Ministry of growth of renewables. In particular, solar photovoltaics rose the Environment 2013). from 0.4% of Japan’s power generation in FY2011 to 6% In the run-up to the COP21 in Paris, the Abe administra- in FY2018 (ANRE 2020a). However, the FIT also led to a tion, which won the 2012 election, submitted its Intended gargantuan price tag of trillions of yen per year. The gov- Nationally Determined Contribution to the UNFCCC. ernment is currently transitioning from the FIT scheme to a Herein, Japan committed to reduce its emissions by 26% by feed-in premium scheme and energy auctions to address the FY2030 from the FY 2013 levels (Government of Japan cost issue (Calculation Committee for Procurement Price, 2015). In the following year, the Cabinet approved the Plan etc. 2020). Shiraki et al. (2021) in this issue reviews power for Global Warming Countermeasure, which included a goal sector policy development more fully. to reduce emissions by 80% by 2050 (Government of Japan However, Japan’s energy sector has not been fundamen- 2016). In 2019, the Government of Japan (2019) decided on tally altered despite a series of reforms in energy policies its mid-century strategy and reiterated the 80% emissions after the 2011 nuclear disaster, because it is dictated by reduction goal. In March 2020, in the 5-year update cycle of resource constraints and broader economic conditions. Japan mitigation policies, Japan retained the formerly announced has a relatively small renewable resource base compared targets (Government of Japan 2020). Most recently, in Octo- to its electricity demand (Luderer et al. 2017) because of ber 2020, Prime Minster Suga made a pledge of net-zero its high population density, and the costs of renewables are emissions by 2050 in his inaugural speech in the parliament. higher than those in other countries (IRENA 2019; Calcula- tion Committee for Procurement Price, etc. 2020). Unlike many of Western countries, Japan retains a large presence 1 The fiscal year runs from April 1st until March 31st of the follow - of heavy industry. However, as the industry sector is one ing year. 1 3 358 Sustainability Science (2021) 16:355–374 Fig. 1 Historical GHG emis- sions, and 2020, 2030, and −3.6% from 2005 by 2020 2050 targets. Data are from (UNFCCC 2020). Note that the 2020 target is based on a strong assumption of no mitigation 1000 −26% from 2013 by 2030 contribution from nuclear power scenario historical target −80% by 2050 1990 2000 2010 2020 2030 2040 2050 year Fig. 2 Power generation mix for Power generation mix FY2010 and FY2018 (actual), the 2030 target plans accord- 100 ing to the 2010 (ANRE 2010), 2012 (Energy and Environmen- tal Council 2012) and 2015 (METI 2015) plans. The 2030 75 type (FY2010) plan corresponds to Non−Hydro Renewables the Saidai Dounyu (maximum Hydro deployment) case. The 2030 (2012 plan) is from the nuclear- Nuclear zero case LNG Coal Oil One topic of contention in Japan’s target is the choice of contribution (NDC), 22–24% of electricity is to be supplied the reference year (Kuramochi 2015). The most significant is by renewables, and there is an additional detailed break- with respect to the Warsaw target such that a 3.8% reduction down for individual renewable technologies. Another con- from the 2005 levels translates into a 3.1% increase from the tentious issue is the role of nuclear power, which is assumed 1990 levels. The reference year for the mid-century strategy to account for 20–22%. Although restarting nuclear power had not yet been decided; this no longer matters since the plants has been slow and only six units are operational as of government pledged a net-zero target (Fig. 1). April 20, 2020 (ANRE 2020b), the detailed breakdown of Another key feature of Japan’s long-term policy is that it the power generation mix has not been revised during the is associated with a detailed emissions sectoral breakdown update of the Strategic Energy Plan in 2018 (ANRE 2018). and energy mix (Fig. 2). Moreover, these numbers are not There are high expectations for an improvement in energy merely indicative targets but serve as concrete goals in policy intensity of GDP with an annual improvement rate of 2.1% discussions. For instance, under the nationally determined per year for 2014–2030, although the observed rate was 1 3 FY2010 FY2018 2030 (2010 plan) 2030 (2012 plan) 2030 (2015 plan) GHG emissions [Mt−CO e/yr] [%] 2 Sustainability Science (2021) 16:355–374 359 1.6% per year for 2000–2015. This could be the result of a and found a smaller share of variable renewables in Japan high growth projection of gross domestic product (GDP), because of its high population density. however (Kuriyama et al. 2019). Modeling: multi‑model studies Mid‑century strategy Among multi-model studies in Japan, the earlier ones were part of the government-led policy process. In recent years, In contrast to the 2030 target, Japan’s 2050 policy document we have seen an increasing number of academic studies, is vague with respect to numerous concrete issues (Gov- including our pilot phase research (Sugiyama et al. 2019). ernment of Japan 2019). For instance, it does not specify Government-led efforts include the Mid-Term Target the reference year or demonstrate any specific pathway to Evaluation Committee (Chuki Mokuhyo Kento Iinkai) (Fukui achieve the 80% emission reduction goal. Nonetheless, it 2009) and the Energy and Environmental Council (2012) mentions certain notable points. The Fifth Strategic Energy (Enerugi Kankyo Kaigi). Both exercises were conducted Plan (ANRE 2018) also provides useful information. as part of the policymaking process with town hall meet- First, the long-term strategy and the Strategic Energy ings and deliberative polls. They mainly analyzed six and Plan states “multi-track scenarios” or pluralistic perspec- three scenarios, respectively. The former analyzed differ - tives on scenarios, and in particular, technology develop- ent emissions reduction levels and policy packages, and the ment. This approach is in contrast to the Japanese approach (modified) middle option out of the six was eventually cho- with respect to the 2030 target, for which the government sen. The latter focused on different levels of nuclear power has allocated emissions reduction to each technology. Sec- generation, and the zero nuclear case was finally selected. ond, both documents place significant emphasis on the role Unfortunately, these model inter-comparison results were of technological innovations in achieving the long-term goal, not published in the academic literature, unlike the EMF with the long-term strategy touting a virtuous cycle between studies in the United States (Fawcett et al. 2014) or Europe economic growth and mitigation. Furthermore, it mentions (Knopf et al. 2013). the link with related innovation strategies the government In the academic literature, one of the recurring themes is has already formulated. Lastly, the Strategic Energy Plan the high marginal abatement costs in Japan. A five-model proposes a scientific review mechanism through which the study by Hanaoka and Kainuma (2012) examined medium- government periodically reviews progress toward the tran- term (2020 and 2030) marginal costs of abatement but did sition to a clean energy system. This point has not been not focus on emissions pathways. The Asian Modeling Exer- emphasized in the long-term strategy. It is not clear how cise (AME) (Calvin et al. 2012) implemented scenarios of modeling studies, such as the present one, could contribute idealized carbon prices and globally coordinated scenarios, to this proposed review mechanism. in which four models from Japan participated. Aldy et al. (2016) contrasted the marginal cost of Japan against those Modeling: single‑model studies from other parts of the world. Our pilot study (Sugiyama et al. 2019) compared the cost of 80% emissions reduction Many studies have focused on economy-wide, long-term cli- by 2050 in Japan against those in the United States and mate change mitigation for Japan up to 2050. These can be Europe. These four studies revealed that the marginal cost classified into (1) single-model studies and (2) multi-model in Japan is higher than that in other countries. studies. For sectoral-level reviews, please refer to the com- As part of the EU-funded MILES project, Akimoto et al. panion papers (Ju et al. 2021; Sakamoto et al. 2021; Shiraki (2015) used DNE21 + and AIM/Enduse models to analyze et al. 2021). the intended NDC of Japan. For the EU-funded CD-Links For single-model studies, Kainuma et al. (2015) used the project, Oshiro et al. (2019) compared global IAM results AIM/Enduse energy systems model to analyze the impli- against two, national models (AIM/Enduse [Japan] and cations of 80% emissions reduction by 2050. Oshiro et al. DNE21 + (national)), and demonstrated that Japan’s goal of (2018) employed AIM/Enduse to analyze net zero emissions 80% emissions reduction is consistent with cost-effective of CO by 2050, and found the importance of bioenergy with pathways for the 2-degree target, but not with the 1.5-degree carbon capture and storage (BECCS). In a similar vein, Kato target. and Kurosawa (2019) examined 2050 emissions reduction Although these studies are of crucial importance, they of 80% and more, and found that reduced service demands do not fully characterize the inter-model uncertainty in and the availability of BECCS would be vital to achieve assessing the 2050 target, including technology availability 90% emissions reduction. Schreyer et al. (2020) used the (Clarke et al. 2014a). For instance, in the wake of the Fuku- ReMIND model to compare 2050 net-zero targets for Aus- shima nuclear disaster, more attention has been paid to the tralia, the European Union, Japan, and the United States, future of power generation mix, and the costs of bringing 1 3 360 Sustainability Science (2021) 16:355–374 Table 1 Participating energy-economic and integrated assessment models to assess the climate policies in Japan Model Coverage Institute Model type Representative reference (see ESM for fuller descriptions) AIM/Enduse-Japan V2.1 National Kyoto University and National Recursive dynamic, partial equilib- Oshiro and Masui (2015) Institute for Environmental Studies rium (NIES, Japan) AIM/Hub-Japan 2.1 National Kyoto University, National Institute Recursive dynamic, general equi- Fujimori et al. (2017) for Environmental Studies (NIES, librium Japan) and Institute for Global Environmental Strategies (IGES) DNE21 Version 1.3 Global The University of Tokyo (UTokyo) Perfect foresight, partial equilibrium Fujii et al. (2015) IEEJ Japan ver. 2017 National Institute of Energy Economics, Perfect foresight, partial equilibrium Matsuo et al. (2013) Japan (IEEJ) TIMES-Japan 3.1 National The Institute of Applied Energy Perfect foresight, partial equilibrium Kato and Kurosawa (2019) (IAE), Japan AIM/Hub-Japan is a computable general equilibrium model while AIM/Enduse-Japan is a bottom-up, technology-rich model about a desired mix. And yet, it is well known (at least at the Scenarios global scale) that such a power mix is subject to enormous uncertainty. The scenario design of this study examines four dimensions Moreover, the inter-model uncertainty interacts with of uncertainty (Table 2): other sources of uncertainty. Sugiyama et al. (2019) con- ducted an initial assessment of inter-model uncertainty, but • emissions constraint stringency; did not fully consider other types of uncertainty, including • technological sensitivity; policy stringency, technological availability, service demand • service demand levels; and reduction, and import prices. To address these issues, the • energy import prices. present study conducts a multi-model assessment of Japan’s long-term climate policy under varying future scenarios. The detailed scenario descriptions are given in the ESM (“Scenario descriptions”). Unlike previous EMF studies Method (e.g., EMF 27) (Kriegler et al. 2014), we did not combine variations in different dimensions to produce a scenario Models matrix since in our case, the number of scenarios would have been prohibitively large. Five energy-economic and integrated assessment models are The name of each scenario is denoted as (policy dimen- used in the present study: AIM/Hub-Japan, AIM/Enduse- sion)_(other parameter settings). (policy dimension) takes Japan, DNE21, IEEJ_Japan 2017, and TIMES-Japan. the format of either “Baseline” or “(xx)by30 + (yy)by50”, (DNE21 should not be taken for DNE21 +, which is a dif- which stipulates xx% reduction by 2030 and yy% reduction ferent model.) These differ in model type, regional aggrega- by 2050. The main scenarios of our study are as follows: tion level and technological representation. As shown below, using a variety of models leads to a wide range of assess- • Baseline_Def: no climate policy assumed with default ment results, confirming the usefulness of the analysis of parameter settings: inter-model uncertainty. • 26by30 + 80by50_Def: each model imposes Japan’s Table 1 shows the summary of models used in the present NDC (26% emissions reduction by FY2030 relative to study. A detailed description of each model can be found the FY2013 levels) and mid-century strategy (80% emis- in the Electronic Supplementary Material (ESM) (“Model sions reduction by 2050). descriptions”). Some models cover multiple greenhouse gases, but this The different levels of emission constraints are ana- study focuses on CO emissions from energy use and indus- lyzed to explore the implications of the over- and trial processes. No broad-based, stringent climate policy exists in Japan as of this writing. 1 3 Sustainability Science (2021) 16:355–374 361 Table 2 Description of EMF 35 JMIP scenarios Dimension Scenarios Notes Policy stringency (emissions constraint) 26by30 + 80by50_Def NDC and mid-century strategy 26by30 + 70by50_Def NDC and 70% reduction by 2050 26by30 + 90by50_Def NDC and 90% reduction by 2050 26by30 + 100by50_Def NDC and 100% reduction by 2050 16by30 + 80by50_Def 16% reduction by 2030 and mid-century strategy 36by30 + 80by50_Def 36% reduction by 2030 and mid-century strategy Technology sensitivity 26by30 + 80by50_NoCCS No carbon capture and storage (CCS) is available 26by30 + 80by50_LimNuc Only limited deployment of nuclear is allowed 26by30 + 80by50_NoNuc Nuclear power is not available 26by30 + 80by50_HighInt High challenges of renewables system integration 26by30 + 80by50_LoInt Low challenges of renewables system integration 26by30 + 80by50_LoVREcost The costs of renewables are halved 26by30 + 80by50_HiVREcost The costs of renewables are doubled 26by30 + 80by50_LoVREpot The potentials of renewables are halved 26by30 + 80by50_HiVREpot The potentials of renewables are doubled 26by30 + 80by50_LoStorageCost The cost of energy storage is greatly reduced Service demand levels 26by30 + 80by50_LoDem A lower GDP scenario is applied 26by30 + 80by50_LoDemBld Lower GDP and demands halved for buildings 26by30 + 80by50_LoDemTra Lower GDP and demands halved for transport 26by30 + 80by50_LoDemInd Lower GDP and demands halved for industry Energy import prices 26by30 + 80by50_HiImportCost Energy import prices are doubled Only policy scenarios are shown for brevity. Note that baseline scenarios are denoted as Baseline_Def, etc. See the ESM Scenario Descriptions for more details There are some differences in the implementation of scenarios in each model. For instance, for the LoVREcost scenario, some models imple- mented the VRE cost reduction from the beginning of the calculation period while others reduced the cost in a linear schedule under-achievement of current policies. This is also useful Japan relies heavily on energy imports with a self-suf- to inform the ratchet-up mechanism in the Paris Agree- ficiency rate of less than 10% (ANRE 2019). Even after ment, though the Government of Japan has already submit- transitioning to a clean energy system, Japan may continue ted its updated NDC in March without revising its goal for to rely on imports. Currently the government is exploring 2030 (Government of Japan 2020). the possibility of importing a significant amount of hydro- The technology sensitivity analysis follows previous gen (Ministerial Council on Renewable Energy, Hydrogen EMF studies (Knopf et al. 2013; Clarke et al. 2014a; Fawc- and Related Issues 2017) from countries, such as Australia ett et al. 2014) and analyzes the impacts of the availability (Ozawa et al. 2017). It is therefore useful to examine the of various technological options in an idealized manner. sensitivity to energy import price changes. In addition, this study looks at renewables and systems integration (including energy storage). As nuclear power is Harmonization of GDP and population such a divisive issue, we consider three nuclear scenarios: model default, limited nuclear, and no nuclear. Availabil- In previous EMF studies, it was a standard practice to not ity of a technological option is affected by technological harmonize basic input assumptions. While this approach is development, public acceptance, or both. useful in characterizing variations in such parameters, an Energy service demands are an important factor in alternative strategy involves harmonizing basic inputs so that determining the mitigation challenges (Fujimori et al. the analysis can focus on model structures and more detailed 2014; Grubler et al. 2018; Kuriyama et al. 2019). Our technical parameters. In this study, we harmonize gross scenario design includes idealized sensitivity analyses to domestic product (GDP) and population, two key drivers of reduce the service demands by half in each of the three energy consumption and greenhouse gas (GHG) emissions. sectors (industry, transport, and buildings), besides a sce- Population data were adopted from (IPSS 2017). We nario with lower economic growth rate. Although we treat assume two GDP growth scenarios. The high growth sce- them as idealized scenarios, a myriad of factors can induce nario uses data on the growth rate till 2030 from the gov- changes in service demands, including a sudden demand ernment’s Long-Term Energy Outlook, and selects the shock, such as the 2019–2021 outbreak of the novel coro- 2030–2050 growth rates, from the Shared Socioeconomic navirus and improvements in material efficiency. Pathway (SSP) 2 (Dellink et al. 2017). The low growth 1 3 362 Sustainability Science (2021) 16:355–374 Population GDP|MER million billion US$2010/yr E E T TII H T T H H E E T T II H H H H H H H E E T TII H H T T II H E E T T H H E E T T II II H E E T T II H E E T T II E E H H E E T TII T T II E E H H E E T T II II model T T E E H H II H H E E T TII T T E E E AIM/Enduse−Japan H H 6000 T TII H H E E T TII E E H AIM/Hub−Japan H H II T T T T E E H H E E T TII H H DNE21 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 I IEEJ_Japan 2017 Final Energy CO2 emissions T TIMES−Japan EJ/yr Mt−CO2/yr H H H HH 16 H 1600 H H H H H H D D H H H H H H H D scenario H H D D H H H H T T H H H II 14 D E E T T E E E E E EI T T T T II E H T T H I 1200 II II E 26by30+80by50_Def EI E I E E E E I E T E I E H T E E T T T EI T T I I 12 T E H T T T D Baseline_Def T E T H T I T H 800 E I H T E I E I T T 10 I I T T T I I E T I E T I T I I E 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 year Fig. 3 Drivers [population (upper left) and economic growth (upper right)], final energy (lower left), and CO emissions (lower right) from energy and industrial processes. Note that AIM/Hub-Japan calculates GDP endogenously scenario presumes the SSP 2 growth rate throughout. Sce- where y is a generic, normalized model variable for a certain narios with “LoDem”, “LoDemInd”, “LoDemBld”, and period, the subscripts s, and m denote scenarios and models, “LoDemTra” also have a low GDP growth rate. Although respectively. is the mean response. and represent the m s we consider only one population scenario and two GDP main effect of model and scenario, respectively. is the m,s scenarios, service demand sensitivity scenarios provide an interaction term, and is the residual term. To compare m,s opportunity to explore the impact of drivers in an idealized across variables, we restrict ourselves to mitigation scenar- manner. Further details are provided in the ESM Scenario ios with the NDC and mid-century strategy (scenario name Descriptions. The scenario submission status is summarized starting with 26by30 + 80by50), and normalize all variables in Table ESM 4. by its mean across scenarios and models. The sum of squares can be decomposed as Decomposition of variance (sum of squares) SS = SS + SS + SS , (2) total m s i Our rich dataset is underlined by five models and 38 scenario 2 where SS is the total sum of squares (y − y ̄) , with total m,s m,s settings. To identify robust areas and uncertain domains, we the bar denoting the pooled mean. SS , SS , and SS repre- m s i compare the variance of the normalized value of each vari- sent the sums of squares attributable to models, scenarios, able and decompose the variance. and interactions, respectively. Specifically, we partition the sum of squares of a two-way analysis of variance (ANOVA) model (NIST/SEMATECH 2013; Takakura et al. 2019): y = + + + + , (1) m,s m s m,s m,s 1 3 Sustainability Science (2021) 16:355–374 363 26by30+80by50_Def Industry Electricity Transport Buildings (incl. process) H T E E model 400 T T T T H E AIM/Enduse−Japan E T I H H T I T H I AIM/Hub−Japan I E IEEJ_Japan 2017 H E I H H E H H EI H T TIMES−Japan H E T T H I I HH E T I E H H I T H E H median E H H I T H I H EI I E E T T E H I EI I E H E T EI I E I E H E T E E I H H I E I H T I T T E T I year Fig. 4 Sectoral CO emissions for the selected scenarios. The lines correspond to the 26by30 + 80by50_Def scenario. The ribbons represent the range of NoNuc, NoCCS, LoDem, and Def scenarios (the scenario prefix “26by30 + 80by50_” is dropped) shows a baseline emissions trajectory that is similar to the Results policy case (26by30 + 80by50_Def) because of assumed energy efficiency trends. Emissions in the base year from First, we focus on selected scenarios (emissions constraints AIM/Hub-Japan are different from those of other models of the NDC and mid-century strategy) to highlight key fea- because of the use of a different database (see the ESM sec- tures and explore the parameter sensitivities of no nuclear tion Energy data sources and model treatment). power, no carbon capture and storage (CCS), and lower GDP Figure 4 disaggregates emissions reduction into differ - growth. The choice of this set is motivated by the following ent sectors, thereby demonstrating how Japan can reduce considerations. First, nuclear power remains a contentious its own emissions by 2050. There is a difference between political issue. Second, CCS is often considered to be a key the partial equilibrium and general equilibrium models. enabler of deep decarbonization (Kriegler et al. 2014; Clarke The former chooses almost complete decarbonization of et al. 2014a). Third, there is criticism against the government the power and transport sectors by 2050, whereas there are projection of GDP (Kuriyama et al. 2019). As shown below, some differences in the buildings sector. The industry emis- these factors have a large impact on policy costs. sion is the most difficult to abate, as shown in our previous Figure 3 presents the time series of the two key driv- research (Sugiyama et al. 2019). On the other hand, AIM/ ers (population and gross domestic product or GDP), total Hub-Japan, the only general equilibrium model, exhibits a final energy consumption, and CO emissions from energy significant emissions reduction for industry. In AIM/Hub- use and industrial processes for the baseline and NDC and Japan, the hardest sector to decarbonize is transportation. mid-century strategy scenario (for other scenarios, see Fig. Figure 4 also displays the model range of emissions across ESM 1). Although the population is projected to decrease by scenarios, represented by ribbons. The cross-scenario range 19% from 2020 to 2050, the Japanese economy is assumed is dominated by the inter-model differences. to grow by approximately 30% over the same timeframe. To understand the type of approaches used by models to There is a significant variation in final energy and emis- achieve deep emissions cuts, Fig. 5 characterizes the key sions in the baseline scenario, which reconfirms the need indicators of mitigation for the four main scenarios, with for model inter-comparison. The IEEJ_Japan 2017 model 1 3 CO2 emissions [Mt CO2/yr] 364 Sustainability Science (2021) 16:355–374 Energy Intensity of GDP CO2/Electricity Electrification Rate [MJ/US2010$] [kg−CO2/kWh] [%] 0.6 2.5 I E H T H 60 I H H E T E 0.4 E H H E T H 2.0 H I T T T E 50 E I T I I H I H E H I T EI T scenario 1.5 40 H T E 0.2 T H D H I T H E I E T H H T I E T D E 26by30+80by50_Def I T H E H I 30 T I E E T 1.0 D T T I E H D I E I E H T E HI E T D E T H I H 0.0 model E AIM/Enduse−Japan VRE Rate Fossil Fuel Share Industry Share in FE H AIM/Hub−Japan [%] [%] [%] E D DNE21 T T H E 60 H T E T T H E I D T I E D T I E HI I IEEJ_Japan 2017 T T H HI T H H T I 50 T T TIMES−Japan D E I 40 E HI H T T I E E I E I I I E E E T T T E I E E I D H E H I 20 H H E I E T I H T H I I D H T H T I 40 H T H E H I H H D H H E T E E H 0 H T DD D year Fig. 5 Key indicators of decarbonization options: (top left) energy share of fossil fuels in primary energy, and (bottom right) the share intensity of GDP, (top middle) CO intensity of electricity, (top right) of the industry sector in total final energy consumption. The ribbons the share of electricity in final energy consumption, (bottom left) the represent the ranges of NoNuc, NoCCS, LoDem, and Def scenarios share of solar and wind in secondary electricity, (bottom middle) (the scenario prefix “26by30 + 80by50_” is dropped). 26by30 + 80by50_Def represented by solid lines and other models, and the 26by30 + 100by50_Def in three models scenarios depicted by ribbons. The figure reveals that the (Table ESM 4). options that are found to be useful in the global context are For electrification, AIM/Hub-Japan shows a higher rate also effective in Japan: economy-wide energy efficiency than other models. The reason for this is due to high elec- (Clarke et al. 2014b; Sugiyama et al. 2014), power sector trification of the industry sector (Fig. ESM 2) (see Saka- decarbonization (Clarke et al. 2014b; Krey et al. 2014), moto et al. 2021 for more on this). Also, the industry share end-use electrification (Williams et al. 2012; Sugiyama of final energy decreases in AIM/Hub-Japan not because 2012; Krey et al. 2014), penetration of VREs (Luderer the industry final energy decreases more rapidly than in et al. 2014), and a shift away from fossil fuels (Krey et al. other models, but because the total final energy consump- 2014; IPCC 2018). Robustness varies by indicator. Energy tion does not reduce as much as other partial equilibrium efficiency and electricity decarbonization are most robust, models (Fig. ESM 3). and the electrification rate changes by model. The increas- On the basis of per-capita indicators, the median final ing tendencies of VREs and non-fossil energy are robust energy consumption decreases by 11% from 2010 to but the magnitudes are uncertain. The share of industry in 2050, while the median value of electricity consumption final energy consumption increases with time in the partial increases by 43% (see Figures ESM 4 and 5). equilibrium models, a tendency consistent with Fig. 4. There are some variations across scenarios in the share Our focus is on the mid-century strategy (80% emis- of VREs and fossil fuel shares, but they are not as large sions reduction), but we find that the same strategies as the inter-model uncertainties. A large fossil fuel share are also effective in more stringent cases, though they found for DNE21 is from the NoNuc scenario, in which the are further strengthened (Fig. ESM 11). Note that the model prefers natural gas power plants with CCS (Fig. 7). 26by30 + 90by50_Def scenario is infeasible in two 1 3 2010 2020 2040 2050 2050 Sustainability Science (2021) 16:355–374 365 Fig. 6 Primary energy mix for the selected scenarios for 2030 (top) and 2050 (bottom) Another uncertain variable is the use of CCS. The median to the difference in the database used among the partici - CCS sequestration is about 50 Mt-CO /year in 2050, with pating models. The models use either the energy balance the maximum amount being approximately 350Mt-CO /year of the International Energy Agency or the comprehensive for AIM/Hub-Japan (Fig. ESM 5). energy statistics compiled by METI. There are some differ - There is a discrepancy in the industry share of final ences between these two databases, and the variations are energy consumption even in the base year. This is attributed 1 3 366 Sustainability Science (2021) 16:355–374 Fig. 7 Power generation mix in 2030 and 2050 for the selected scenarios. The “other” in AIM/Hub-Japan refers to power generation technolo- gies, such as ocean, tidal, etc. pronounced for the industry share (Aoshima 2008). See the Figures 6 and 7 describe the primary energy and power ESM Energy data sources and model treatment for a fuller generation mixes for different scenarios for 2030 and description. 2050. The ESM presents the compositions of energy and power generation in the baseline scenario, which are domi- Whether blast furnace gas is counted in the energy conversion sec- nated by fossil fuels (Fig. ESM 7 for 2010; Figs. ESM 8 tor or the industry sector makes a non-negligible difference. This and 9 for 2030 and 2050, respectively). The penetration difference affects both the emissions and final energy, and hence the changes reported in this paper. 1 3 Sustainability Science (2021) 16:355–374 367 Price|Carbon energy system cost / GDP Consumption loss / GDP [US$2010/t CO2] [%] [%] 4 4 H H H 3 3 H H H H H H H H 2 2 II H H H T T T E E E E E E E H H H H H H H H H 1 1 E E E E E E E E E E E E E E T T T T IIIII H H H E E E E E E E E E E E E E E E E E E E E E E E E E E H H H H H H H H IIIIIIIIIII E E E E E E E E E E E E D D D D T T T T T T T T T T H H H IIIIIIIIIIIII E E E E E E E E E E E E IIIII E E E E E E E E E E E E H H H H H H H H H H H H H H H H H H H H H H H H H H H E E E E E E E E E E E E E E E E E E E E E E E T T T T T E E E E E E E IIII IIIIIIIIIIIIIII IIIIIIII T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T H H H H H H H H H H H H H H H H H H H H H H H H H H T T T T T T T T T IIIIIIIIIIIIIIIIIII H H H H 0 T T T E E E E E E E E E E E E E T T TI E E E E E E E E E E E E E E E E E E E E E E T T T E E E E E E E E E E E E E E E E E E E E E E E EI 0 H H H H I T T T T T D D D D D D D D D D D D D D D D D I E E E E E E E E E E E E E E E E E E E E E E E E E E H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H D D D D D D D D D D D D D D D D D D D D D D D D D D D IIIIIIIIIIIII IIIIIIIIIIII D D D D D D D D D D D D D D D D D D D D D D D D D DI 0 H T H D E TI H H H H H H H H H H H H H H H E E T TI H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H E E E E E E E E E E E E E E E T T T T T T T T T T T T T T T year E E AIM/Enduse−JapanA H H IM/Hub−Japan D D DNE21 II IEEJ_Japan 2017 T T TIMES−Japan model Fig. 8 Marginal cost and policy costs (energy system cost and consumption loss) for the selected mitigation scenarios. The ribbons correspond to the uncertainty range represented by the four scenarios of the 26by30 + 80by50 scenario variants: Def, NoNuc, NoCCS, and LoDem of renewables is limited in the baseline scenario partly year in IEEJ_Japan 2017 to approximately 2.1 PWh/year in because of high costs. AIM/Hub-Japan. VREs expand greatly, with a median pene- In 2030, fossil fuels are still dominant, and clean energy tration rate of 42% among the four models (AIM/Hub-Japan, sources greatly expand after then (Fig. 6). In 2050, the AIM/Enduse-Japan, IEEJ_Japan 2017, and TIMES-Japan). models exhibit differing primary energy supply levels. It is The exception to this is DNE21, which prefers nuclear power 8EJ/year for IEEJ_Japan 2017 and 16EJ/year for AIM/Hub- (Shiraki et al. 2021). When CCS or nuclear power is not Japan. They also show different preferred mixes, with their available, the gap is compensated for by other clean energy mixes strongly reflecting model defaults, despite scenario sources, but different models exhibit different preferred influences. In the primary energy mix, oil and gas (often generation methods. For instance, in IEEJ_Japan 2017, the with CCS) continue to play an important role for all the unavailability of nuclear power increases gas with CCS and models even in 2050, irrespective of scenarios. The sec- wind, and hydrogen increases when CCS is not available. ondary energy trade, which represents hydrogen imports, is Nuclear power is replaced with biopower in TIMES-Japan, projected to play an increasing role in IEEJ_Japan 2017 and and the unavailability of CCS increases hydrogen. A large TIMES-Japan. Note that both models incorporate domestic deployment of wind in AIM/Enduse-Japan and AIM/Hub- hydrogen production and imports, and that imports predomi- Japan can be explained by larger wind resource potentials in nate because of cost considerations and renewable resource these models (Shiraki et al. 2021). limitations for green hydrogen (see Sakamoto et al. 2021 Next, we characterize the costs of achieving deep emis- for more on this). sions reduction (Fig. 8) by examining marginal costs and Power sector decarbonization accelerates significantly total costs (consumption loss for AIM/Hub-Japan and after 2030 (Fig. 7). The 2030 power generation mix should additional total energy system cost for other bottom–up be compared with the official targets (Fig. 2) that fixes the models). The carbon prices rise exponentially with time. share of nuclear power at around 20%. By design, our anal- The median price (2010USD/t-CO ) is 0 in 2020, 74 in ysis considers a scenario without nuclear power, and the 2030, 144 in 2040, and 819 in 2050 for the main mitiga- results include a power mix that is quite different from the tion scenario (26by30 + 80by50_Def). In the case of the official target. 26by30 + 80by50_LoDem scenario, the median price is 0 As with total primary energy, total power generation var- in 2020, 18 in 2030, 75 in 2040, and 709 in 2050. ies greatly across models. In 2050, it ranges from 0.9 PWh/ 1 3 2050 368 Sustainability Science (2021) 16:355–374 Average costs discounted at 5%, 2020−2050 Price|Carbon policy cost / GDP [US$2010/t CO2] [%] 1.5 H H model H E AIM/Enduse−Japan 1.0 H H AIM/Hub−Japan D DNE21 I IEEJ_Japan 2017 E 0.5 H I E 100 H E H T T TIMES−Japan E E I I E I D E H E I E T E T I E D I D T T I I I D I D D E I T D I D D T 0.0 scenario Fig. 9 Sensitivity of average cost metrics (discounted at 5%, over per GDP loss for AIM/Hub-Japan and the additional total energy sys- 2020–2050) to scenario assumptions. Carbon price (left) and policy tem cost per GDP for other models cost per GDP (right). Policy cost/GDP is defined as consumption loss The values are sensitive to scenario assumptions. Though In fact, the difference in the discounted carbon price between model fingerprints persist, the unavailability of CCS the 26by30 + 80by50_Def (99 2010USD/t-CO ) and increases the marginal cost of mitigation in many models 36by30 + 80by50_Def (105 USD-tCO ) scenarios is small. (Fig. ESM 10), leading to a wide range of uncertainty, as This is because early action leads to a higher cost in an ear- represented by ribbons. Total cost metrics are less sensitive. lier period but a lower cost in later periods. As the AIM/ In 2050, the policy costs amount to approximately 3% of Hub-Japan is a myopic model, an early mitigation action GDP for AIM/Hub-Japan, while other partial equilibrium partially improves welfare in their modeling framework. models suggest 0.8–0.9% of GDP. To assess the variability of each variable across mod- To compare the cost metrics in a more concise manner, els and scenarios, Fig. 10 presents the average carbon Fig. 9 presents the average costs (both total and marginal) price discounted at 5%, normalized by its value for the discounted at 5% for the period 2020–2050. The two most 26by30 + 80by50_Def scenario. Based on the behavior of stringent scenarios (90% or 100% emissions reduction) are the medians (triangle in the diagram), stringent emissions feasible only for AIM/Hub-Japan and DNE21. Total costs constraints (90% and 100% reduction by 2050) are most roughly scale linearly with stringency, whereas marginal impactful in increasing the costs, followed by non-availa- costs increase exponentially. The inter-model uncertainty bility of CCS and nuclear power. This is followed by sensi- range is sizable for both metrics, but particularly large for tivity analyses on renewables and systems integration. Lower marginal costs. levels of demand can significantly reduce the costs, and the Sensitivity analysis of the parameter setting reveals that lowering of the industrial service demand reduces the cost lower demand and availability of nuclear power and CCS aid substantially. Doubling the VRE potential and halving the in containing the costs. In terms of policy costs, as compared VRE costs are also helpful in reducing the cost. High-energy to CCS, nuclear power has a larger impact in all the models, import costs do not have a significant impact. except AIM/Hub-Japan. For marginal costs, AIM/Hub-Japan An analysis based on a two-way ANOVA model reveals and AIM/Enduse-Japan suggest lower impacts due to the both uncertain metrics (e.g., costs, the role of nuclear, lack of nuclear power than CCS; the rest of the models point CCS, and VREs) and robust indicators (e.g., economy- in a different direction. wide energy efficiency, electrification). Figure 11 depicts We also examine the impacts of setting different 2030 the results of decomposition of the sum of squares of key targets. Imposing a stricter target leads to higher costs in all variables, based on a two-way ANOVA model. Except for the models, but AIM/Hub-Japan shows a nuanced behavior. cost metrics, the variations are dominated by inter-model 1 3 26by30+70by50_Def 26by30+80by50_Def 26by30+90by50_Def 26by30+100by50_Def 26by30+80by50_LoDem 26by30+80by50_NoNuc 26by30+80by50_NoCCS 16by30+80by50_Def 36by30+80by50_Def 26by30+70by50_Def 26by30+80by50_Def 26by30+90by50_Def 26by30+100by50_Def 26by30+80by50_LoDem 26by30+80by50_NoNuc 26by30+80by50_NoCCS 16by30+80by50_Def 36by30+80by50_Def Sustainability Science (2021) 16:355–374 369 Carbon Price averaged over 2020−2050 at a discount rate of 5% 26by30+100by50_Def D H D HE 26by30+90by50_Def scenario_type 26by30+80by50_NoCCS D I H ET demand 26by30+80by50_NoNuc H DE I T 26by30+80by50_HiVREcost DTH I E import 36by30+80by50_Def D HE T I main 26by30+80by50_LoVREpot DEH I T policy 26by30+80by50_HiImportCost E HDI T tech 26by30+80by50_LimNuc HE D I T 26by30+80by50_Def D H E TI 26by30+80by50_HighInt H E D T I model 26by30+80by50_LoInt D E H IT IE T H D E AIM/Enduse−Japan 26by30+80by50_LoStorageCost 26by30+80by50_HiVREpot TH I ED H AIM/Hub−Japan 26by30+80by50_LoVREcost E H I TD D DNE21 16by30+80by50_Def I E TD H I IEEJ_Japan 2017 26by30+80by50_LoDem TIDE H 26by30+70by50_Def T I HD E T TIMES−Japan 26by30+80by50_LoDemTra IT E H median 26by30+80by50_LoDemBld E TI H 26by30+80by50_LoDemInd T EI H 0.31.0 3.0 value Fig. 10 Discounted averages of the normalized carbon price in each scenario. Discounting is over 2020–2050 at 5%. Normalization is conducted with the 26by30 + 80by50_Def value being unity. The model median for each scenario is represented by a triangle ANOVA of 26by30+80by50 scenario variants CCS Carbon Sequestration Nuclear Power Generation VRE rate Discounted, Avearged Carbon Price var interaction Discounted Energy System Cost per GDP scenario model Electrification Rate Industry Share in FE Fossil Fuel Share Energy Intensity of GDP sum of squares Fig. 11 The sums of squares of the two-way ANOVA of each variable. The time period is 2050, except for cumulative variables. A discount rate of 5% is applied for discounted variables 1 3 variable normalized value 370 Sustainability Science (2021) 16:355–374 uncertainty, and inter-scenario variation plays a minor assumptions, such as technology availability, service role. While CCS tops the list of the uncertainty among demand levels, and policy stringency. variables, all the cost metrics loom large because of model and scenario uncertainties. Both total and marginal cost Policy implications metrics are sensitive, and scenario uncertainties are large, especially for the energy system cost. The shares of In the following, we provide the implications for policy nuclear power and VREs are also susceptible to the choice based on our interpretation of modeling results. of model and scenario. Besides reconfirming the findings The current mid-century strategy has not detailed any sec- of Figs. 5 and 11 clarifies where uncertainty prevails. toral breakdown, and given the uncertainty in the industrial Note that the CO intensity of electricity is close to zero mitigation, policymakers should carefully design sectoral and has been excluded from this analysis. policies. On the other hand, power sector decarbonization is robust across models and scenarios. As discussed in the pol- icy review section, the government has established a 2030 target, but not for 2050. The government should clarify the Discussion and conclusion overall, 2050 power sector target in the future policy. The current study reveals an exponential rise in carbon Summary of modeling results prices. As reviewed in policy review, currently, the carbon tax of Japan stands at ~ 3 USD/t-CO . While the effective The present study has identified robust mitigation strate - price is higher in some sectors, the current policy framework gies that cut across models and scenarios. In spite of a has not resulted in ambitious actions. Therefore, mitigation diverse set of modeling frameworks, the models find econ- efforts need to be greatly expanded so that effective carbon omy-wide energy efficiency and electricity decarboniza- pricing increases several-fold and covers all the sectors. The tion to be the most robust. All the models find increasing Organization for Economic Cooperation and Development trends of end-use electrification, deployment of VREs, and (OECD 2018) reports that at the 30 EUR/t-CO level, there a shift away from fossil fuels, though the magnitudes vary is a 69% coverage gap of market instruments. Though this is among models. Partial equilibrium models also indicate indicative only of market instruments, our findings hint that that the residual emissions from the industry sector are climate policy must be substantially strengthened in both difficult to abate. These are largely consistent with the lit- breadth and depth. erature and previous research (see the “Results”). Though In the real world, the government does not necessarily not all models show feasible solutions for stringent policy have to rely on explicit carbon pricing; it can invoke regula- scenarios (90% and 100% emissions reduction), the overall tions, research and demonstration, tax credits, subsidies, and strategies remain the same and they are enhanced further. information campaigns as implicit carbon pricing, though Another robust feature is the stringency and cover- extremely stringent policies could be politically infeasible. age of future climate policy. The marginal cost or carbon As our models suggest, there are robust strategies that can price is set to increase rapidly. The 26by30 + 80by50_ be pursued by Japan, including energy efficiency improve- Def scenario shows a median price of ~ 70 2010USD/t- ment, power sector decarbonization, electrification, and CO in 2030 and ~ 800 USD/t-CO in 2050, whereas the development of variable renewables. Although the govern- 2 2 26by30 + 80by50_LoDem scenario exhibits a median price ment is making significant efforts, these efforts must be fur - of ~ 18 USD/t-CO in 2030 and ~ 709 USD/t-CO in 2050. ther accelerated by strengthening all the (effective) policy 2 2 Accordingly, policies must be strengthened to meet Japan’s instruments, including energy efficiency standards, renew - NDC and mid-century strategy goals. All the emission able energy auctions, and demonstration and diffusion of sectors must contribute to mitigation with an exponen- early-stage technologies. tially rising marginal cost. In terms of the total cost, this As costs are dynamic, they should not be taken at their translates into a 3% consumption loss per GDP for AIM/ face value (Grubb et al. 2015; Nemet 2019). They can be Hub-Japan and an additional total energy system cost of considerably reduced by innovation. Given the scale of cost 0.8–0.9% of GDP for the partial equilibrium models in reduction required, however, broad innovation efforts must 2050. be markedly expanded. The first target should be VREs, as These models also suggest areas of uncertainty. One our analysis shows that halving the VRE costs does signifi- such area is the energy mix. The models reveal multiple cantly reduce the costs. It is no brainer since other countries energy futures that are economically efficient. Another have successfully slashed the costs (IRENA 2019; Shiraki uncertain aspect is the exact size of the cost, which et al. 2021). Japan needs to follow suit. Another key consid- depends on both the model and scenario assumption. eration is the role of CCS and hydrogen. Models suggest that Both marginal and total costs vary greatly by model and either CCS or hydrogen is required on a large scale, and yet 1 3 Sustainability Science (2021) 16:355–374 371 technology development remains at the level of demonstra- Study limitations and future research agenda tion projects. The government needs to strengthen market creation policies for these new technologies. Though this study covered multiple models and addressed Nurturing innovation at such a grandiose scale is a huge many different sources of uncertainty, there are several limi- challenge because of the fundamental uncertainty in innova- tations to the present study. tion and their interaction with other sources of uncertainty. First, there is an acute need for further model develop- Moreover, the role of the government in innovation is often ment. The infeasibility of 90% emissions reduction in two indirect given the complexity of the national innovation sys- models and 100% reduction in three models, and the carbon tem; see Nemet (2019) for the case of solar photovoltaics. price levels exceeding the cost of carbon dioxide removal As seen in Figs. 6 and 7, models show divergent pathways (Fuss et al. 2018), imply that models must incorporate for Japan’s energy system. Except for VREs, the role of options, such as BECCS. The sensitivity analysis suggests individual technologies cannot be ascertained. Therefore, the important role of industrial decarbonization (for mar- policymakers will have to employ adaptive management in ginal costs) and renewables (for total costs), and further recognition of contemporaneous technology progress. For improvement on these fronts would be crucial (Ju et al. instance, the current government pays significant attention to 2021; Shiraki et al. 2021). As there is a wide range reported hydrogen as a clean energy carrier. The Tokyo 2020 Olym- in the literature (Matsuo et al. 2018), it would be illuminat- pic and Paralympic games that have been postponed (as of ing to conduct an inter-comparison dedicated to renewables. this writing) are going to feature hydrogen in the Olympic Second, in this paper, we have focused on the time hori- flame. The Tokyo Metropolitan Government is planning to zon of 2050. The 2050 net-zero emissions target emphasizes introduce 50 fuel-cell buses (Tokyo Metropolitan Govern- 2050, but there is a need to analyze what happens after 2050. ment 2020). The government has an ambitious goal to slash Thus, the model framework should be expanded. Some mod- the cost of hydrogen by approximately one-third to 30 JPY/ els already have this capability and conducted such an analy- Nm by 2030s (Ministerial Council on Renewable Energy, sis (Kato and Kurosawa 2019, 2021). This is an important Hydrogen and Related Issues 2017). Although these efforts research issue in the next iteration. are laudable, innovation targets are easy to miss; hydrogen Third, we did not include global models (Oshiro et al. may come but not at the desired time nor in the expected 2019) or some notable models of Japan (Ozawa et al. 2021; form. In fact, the energy mix presented in Figs. 6 and 7 Takeda and Arimura 2021). Most of the participating models does not show a significant role of hydrogen in 2030. Even are based on partial equilibrium concepts. The global models in 2050, only two models (IEEJ_Japan 2017 and TIME- that include Japan as a distinct region do not necessarily Japan) show some penetration. Policymakers should take represent Japan with the most up-to-date parameters. The into consideration the uncertainty of the future technology Japanese research teams have advantages with data updating development. because of proximity and the language whereas global mod- In other words, the climate policy package must incor- els have strengths in terms of comprehensiveness. Therefore, porate adaptive management as an essential element. In it is useful to compare global and national models in a more light of the updating mechanism under the Paris Agree- consistent manner. Although Oshiro et al. (2019) have con- ment, the Government of Japan should take full advantage sidered only two models from Japan, their work is the first of the opportunity to address uncertainties. This approach step in the right direction. is already embedded in the Strategic Energy Plan, which Fourth, we did not analyze all sources of uncertainties, focuses on multi-track scenarios. The details are yet to be nor did we analyze why models differ from each other. As of fleshed out. However, in the medium term, there appears to this writing, the COVID-19 pandemic crisis has had signifi- be less flexibility. For instance, the NDC essentially stipu- cant impacts on final energy and CO emissions as well as lates energy mix in the medium term. In the previous energy the possible future energy trajectories. All of our models and plans, the rule of nuclear power fluctuated greatly thanks to scenarios have missed it. More importantly, the effect of the optimism, a nuclear disaster, and public perception, which base year should ideally be fully explored, but this aspect has affected the prospect of mitigation (Fig. 2). Our results not been analyzed. These issues are left for future research. demonstrate that there is no single energy future for Japan Fifth, the models did not represent any policy except for (Figs. 6, 7). Policymakers should embrace diverse possibili- economy-wide carbon pricing. Some studies have begun ties for 2030 as well as 2050 by incorporating flexibility into work on this front (Roelfsema et al. 2020), and more realis- the policy framework. tic representation of policies would be crucial in the future. Supplementary Information The online version contains supplemen- tary material available at https:// doi.org/10.1007/s11625-02 1-00913-2 . 1 3 372 Sustainability Science (2021) 16:355–374 Acknowledgements This research was supported by the Environment Arimura TH, Abe T (2020) The impact of the Tokyo emissions trad- Research and Technology Development Fund (JPMEERF20172004) of ing scheme on office buildings: what factor contributed to the the Environmental Restoration and Conservation Agency of Japan. MS emission reduction? Environ Econ Policy Stud. https ://doi. was also supported by JSPS KAKENHI Grant number JP20H04395. org/10.1007/s1001 8-020-00271 -w KO was supported by JSPS KAKENHI Grant number JP20K14860 Calculation Committee for Procurement Price, etc. (2020) Opinion on and the Environmental Research and Technology Development Fund purchase prices and so forth for the Fiscal Year Reiwa 2. Ministry JPMEERF20201002 of the Environmental Restoration and Conserva- of Economy, Trade, and Industry tion Agency of Japan. SF and KO were supported by the Sumitomo Calvin K, Clarke L, Krey V et al (2012) The role of Asia in mitigating Foundation. RK was supported by JSPS KAKENHI Grant number climate change: results from the Asia modeling exercise. Energy JP20H02679 and JP17H03531. DSH was supported by the Environ- Econ 34:S251–S260. https://doi.or g/10.1016/j.eneco.2012.09.003 mental Research and Technology Development Fund (1-2002) of the Cherp A, Vinichenko V, Jewell J et al (2017) Comparing electricity Environmental Restoration and Conservation Agency of Japan, and by transitions: a historical analysis of nuclear, wind and solar power the Strategic Operation Fund and the Strategic Research Fund of IGES. in Germany and Japan. Energy Policy 101:612–628. https ://doi. org/10.1016/j.enpol .2016.10.044 Clarke L, Fawcett AA, Weyant JP et al (2014a) Technology and US Author contributions MS, SF, and KW conceived the study. MS, SF, emissions reductions goals: results of the EMF 24 modeling exer- KW, and HS designed the scenarios. DSH, EK, KO, RK, and YM cise. Energy J. https ://doi.org/10.5547/01956 574.35.SI1.2 conducted model runs. MS and JY constructed the scenario database. Clarke L, Jiang K, Akimoto K et al (2014b) Assessing Transformation MS produced figures. 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EMF 35 JMIP study for Japan’s long-term climate and energy policy: scenario designs and key findings

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