Japan on Wednesday began a debate over how to achieve decarbonization and green growth by tapping 20 trillion yen ($146 billion) in government spending as Prime Minister Fumio Kishida sees green transformation as a critical component of his vision for a new version of capitalism.
Kishida appointed industry minister Koichi Hagiuda to double as minister for promoting green transformation, or GX, with the government slated to draw up a 10-year roadmap by the end of the year for Japan's transition to a greener economy.
The government will hammer out the details of how the 20 trillion yen, likely raised via green transition bonds, should be spent. It will also focus on ways for the country to ensure a stable energy supply.
Speaking at an inaugural meeting, Kishida urged the government panel to promote GX to identify areas where "political decisions" are needed, with the restart of nuclear power plants in mind, as Japan faces a greater need to ensure energy security and overcome the crisis caused by Russia's war in Ukraine.
The launch of the panel, led by Kishida and involving business leaders, is intended to accelerate efforts to achieve carbon neutrality by 2050, a difficult task for Japan, which relies heavily on fossil fuels.
"GX will bring about a major transformation of all sectors, including energy, and the broader economy and society," he told the meeting at the prime minister's office.
Masakazu Tokura, who heads the Japan Business Federation, a business lobby known as Keidanren, is among the panel members from the business community.
Energy security has taken on added importance since Russia's invasion of Ukraine exposed the vulnerability of economies that rely heavily on fossil fuels and sent global energy prices surging amid supply concerns.
Kishida is aiming for greater use of renewables to reduce carbon dioxide emissions, as they account for a small portion of the country's energy mix dominated by fossil fuels.
He is also calling for "maximum" use of nuclear power by restarting power plants that have passed stringent safety standards implemented following the 2011 Fukushima accident caused by a massive earthquake and tsunami.
Most reactors in Japan have been idled since the disaster, partly due to persisting safety concerns among the public.
The government is aiming for nine of 10 nuclear reactors that have already passed safety screening to be operational by this winter.
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