The climate change phenomenon that is believed to be caused by global warming, such as so many powerful typhoons and record-breaking torrential downpours, has started to emerge on a world scale. Measures for preventing global warming are indispensable in the examination of long-term energy policies. To what extent is a substantial reduction in greenhouse gas (GHG) emissions possible, taking into consideration of changes on the energy demand side and technological advancement on the energy supply side after the Fukushima nuclear accident in 2011? What conditions are necessary for such reduction? We estimated that CO2 emissions can be reduced by 70% or more from 2013 level if the prices of fossil fuels rise to about six times their current level by fiscal 2050. However, if prices of fossil fuels remain virtually unchanged, revenues from an environment tax (carbon tax) totaling at least 12 trillion yen would be necessary for the 70% reduction. We also found that the substantial reduction in CO2 emissions does not lead directly to a lower economic growth rate. We conclude that it will be possible to make the environment protection compatible with the economic growth (in other words, to prevent global warming and create an affluent society at the same time) through structural economic reforms, i.e. if we accelerate innovations for advancing the informatization of the economy, called the fourth industrial revolution.

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