An economic and environmental assessment of future electricity generation mixes in Japan – an assessment using the E3MG macro-econometric model

• Published in: Energy policy Vol. 67; pp. 243 - 254
• Main Authors: Pollitt, Hector, Park, Seung-Joon, Lee, Soocheol, Ueta, Kazuhiro
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01.04.2014; Elsevier; Elsevier Science Ltd
• Subjects: Applied sciences; Cost; Econometrics; Economic data; Economic theory; Electric energy; Electric power; Electricity generation; Emissions control; Employment; Energy; Energy economics; Energy policy; Environment; Environmental impact; Environmental policy; Environmental tax; Exact sciences and technology; Fossil fuels; General, economic and professional studies; Greenhouse effect; Greenhouse gases; Japan; Macroeconomic modelling; Methodology. Modelling; Nuclear; Pollution control; Risk assessment; Studies; Taxation; Japan; Nuclear; Macroeconomic modelling; Japan
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2013.12.018

In this paper we consider future options for Japanese energy and climate policy. We assess the economic and environmental impacts of changing the share of electricity generated by nuclear power and varying the mid-term GHG targets. The quantitative approach we use is based on the global macro-econometric E3MG model. Our analysis reveals that the cost of denuclearisation to Japanese GDP is close to zero, and for employment the impact is slightly positive. Our results also show a double-dividend effect if (revenue-neutral) carbon taxes are levied in order to meet the GHG reduction targets, and this double-dividend effect is largest in the scenarios without nuclear power. However, our analysis suggests that a very high carbon tax rate would have to be imposed in order to achieve a 25% reduction in GHG emissions in 2020 (compared to 1990 levels) while simultaneously phasing out nuclear power. •We modelled 12 scenarios for Japan with different shares for nuclear power and different emission targets.•The results showed that phasing out nuclear power would have at most a very small reduction in GDP.•If a carbon tax with revenue recycling is applied, there could be an increase in GDP.•But the carbon price required to meet Japan's 25% emission reduction target is very high if the share of nuclear power is reduced.