Policy status:In Force
Date Effective:2012
Policy Type:Economic Instruments>Market-based instruments, Economic Instruments>Fiscal/financial incentives>Taxes
Policy Target:Energy Sector, Framework/ Multi-sectoral Policy

The Carbon tax (Global Warming Countermeasures Tax or Tax for Climate Change Mitigation) is a surtax on the existing upstream Petroleum and Coal Tax, one of many fossil fuel taxes.

Beginning at a rate of JPY95per tCO2(USD 0.95 per tCO2) in October 2012, the tax will eventuall rise to JPY289 per t-CO2(USD2.89 per t-CO2) by April 2016.

The tax is not revenue neutral; the revenue will be used to promote energy conservation, renewable energy, distributed generation, and innovative technologies (including new generation batteries and carbon capture and storage) through various measures, including facility installation subsidies and R&D support. Revenue is expected to be JPY 39 bn for the first year, and up to JPY 260 bn.

The emissions impact of the tax is expected to be around 6–24 Mt/yr by 2020 (0.5–2.2 percent of CO2 emissions in 1990), of which 1.8 Mt/yr results from a “price effect” (reduction in energy use through taxation) and 3.9–22 Mt/yr results from a “budget effect” (reduction through the use of tax revenue for emissions reduction measures). 

Related policies:Energy Taxes on Fossil Fuels

Last modified: Wed, 04 Mar 2015 17:04:52 CET