Japan needs more than a carbon tax and green fund to achieve net zero

Japan needs more money to invest in innovative technology to help it achieve its decarbonization goals — and one potential solution may be to consider a new form of sovereign debt to fund it.

That’s the view of the country’s environment minister, Tsuyoshi Yamaguchi, who was appointed to the office in November. While other officials don’t necessarily share his vision for a different type of bond, the minister said Japan’s ¥2 trillion ($17.5 billion) green innovation fund, created in 2020, and a potential carbon tax won’t be sufficient to get to net zero.

"It’s important to share the urgency of carbon neutrality goals with the people,” he said in an interview. "We need investment for future prosperity, not just for plugging in the country’s deficits.”