Prime Minister Yoshihide Suga instructed Minister of the Environment Shinjiro Koizumi and Minister of Economy, Trade and Industry (METI) Hiroshi Kajiyama on December 21 to consider the introduction of carbon pricing. On the same day, the FY2021 draft budget was approved by the Cabinet, following the draft FY2020 third supplementary budget which was approved on December 15, on which I also had a keen interest. This carbon pricing is indispensable for the Suga Cabinet which sets a target for the country to become carbon neutral by cutting carbon dioxide (CO2) emissions to net zero by 2050, and realize the virtuous cycle of economy and the environment. In this sense, the Cabinet’s carbon pricing policy will become one of the most important policies along with the control of the spread of new coronavirus infections and the “digital government execution plan” which is a framework to accomplish digital government services.
The scheme of carbon pricing itself – commonly executed in the form of ‘carbon tax’ – has existed for many years, but it is difficult to put it into concrete shape. Carbon dioxide (CO2) emissions caused by burning coal and other fossil fuels are the dominant majority in greenhouse gas emissions, and carbon pricing is the method to reduce those emissions by levying a tax on carbon. When I served as Minister of the Environment, I tackled the issue earnestly. We had as many conferences and staff meetings as possible within the Ministry, and endeavored to persuade the Central Environment Council to promote further tax on carbon. The then Chief Cabinet Secretary Suga asked me not to rush the process.
As a result, mainly due to lack of my endurance, I could not put all the opinions together and reach a consensus, but I continued expressing my opinion to support the necessity of carbon pricing at the meetings of the Liberal Democratic Party. From my experience, it is extremely difficult for the Ministry of the Environment to accomplish the tax system on carbon on its own because this issue requires a close cooperation with the METI. I firmly believe that Prime Minister Suga’s instruction given to both Ministers to promote carbon pricing represents a significant step toward the realization of a decarbonized society in Japan.