60% reduction in Greenhouse Gas driven by Digital transformation of Economy

- 10,000-yen Carbon tax for an 80% Reduction by 2050
- Extensive Carbon Capture and Storage Necessary for Zero Emissions

2019/05/27

The United Nations Intergovernmental Panel on Climate Change (IPCC) has reported that unless the global temperature increase following the industrial revolution is kept at 1.5°C or below, there will be a major impact on health and agricultural crops. The Japanese government published a draft of long-term growth strategy under the Paris Agreement, and clearly stated an 80% reduction (with the goal of less than 2°C increase) in greenhouse gas emissions (mainly CO2) by 2050, and a contribution toward limiting the temperature increase to 1.5°C (zero emissions). JCER simulated a digitalized economy following the Fourth Industrial Revolution, where artificial intelligence (AI), the Internet of things (IoT) ―internet connectivity of various devices and objects―and big data are widespread. From this simulation we forecasted economic structure and cost in 2050 based on an assumption that there had been an 80% reduction in the level of greenhouse gas emission since 2013.. The result was that, if we could fully transform to the digital economy, energy consumption can be reduced by 60%. Additionally, if 10,000 yen/ton-CO2 carbon tax were imposed, an 80% reduction in emissions can be achieved. To achieve the target of a temperature increase of 1.5℃ or lower, the tax rate needs to exceed 21,000 yen. If transitioning away from nuclear power production, carbon capture and storage (CCS) becomes necessary. We need to strongly promote a transform to the digital economy, which not only improves productivity, but also ultimately contributes to reduction of greenhouse gases, notably increasing the potential for zero emissions.