In a bid to promote energy stability amid ongoing global challenges and to accelerate the transition to a low-carbon economy, the Japanese Cabinet approved the “Strategy for Promoting the Transition to a Decarbonized Growth-Oriented Economic Structure” (GX Promotion Strategy) on July 28. This approval follows the enactment of several key policies earlier this year, including the “GX Promotion Law” and the “GX Decarbonization Power Supply Law”.
The global energy landscape has been volatile since Russia’s invasion of Ukraine in February of last year. In response, the Cabinet has materialized novel strategies, including the “Growth-Oriented Carbon Pricing Concept”, designed to ensure a reliable energy supply and foster economic growth.
The newly approved GX Promotion Strategy, which was developed under the auspices of the “GX Promotion Law”, is set to implement these progressive policies.
The strategy outlines two main courses of action to address climate change, maintain a stable energy supply, and simultaneously stimulate economic growth.
The first action involves promoting extensive energy conservation and shifting towards decarbonized power sources such as renewable energy and nuclear power. These efforts are expected to enhance energy self-sufficiency and foster progress towards GX, a decarbonized society.
The second action concerns the “Growth-Oriented Carbon Pricing Concept”, a plan that encourages upfront investments in GX through the issuance of “GX Economic Transition Bonds” and other financial instruments. It also incorporates incentives for early-stage GX investments through carbon pricing.
By implementing the GX Promotion Strategy, the Cabinet aims to reconcile economic growth with efforts to mitigate climate change, laying the foundation for a sustainable, green economy. This approach positions the country to effectively respond to the new realities of the global energy market, demonstrating its commitment to fostering a decarbonized, growth-oriented future.
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