With record-breaking heat waves, droughts, hurricanes and catastrophic flooding, it’s not an exaggeration to describe the past three months as one of the most extreme and costly summers in recent memory around the globe.

From a typhoon making an unprecedented 360-degree loop over Japan to torrential rainfalls after the Meteorological Agency had declared the end of the rainy season, Japan has experienced its fair share of the severe weather. Similar to the rest of the world affected by climate change, the cost of these extreme weather patterns has been painful for Japan, both in terms of economic damage and human lives. The flooding of Kansai International Airport by Typhoon Jebi early this month serves as a stern reminder of how vulnerable and fragile we are as an island nation surrounded by rising seas.

While the mechanism of recent extreme weather has not been thoroughly understood, evidence suggests global warming is closely linked to the increasingly volatile and intense weather patterns. The rise in carbon dioxide emissions and the accompanying increase in global temperatures affect precipitation patterns unevenly, causing many dry areas to become drier and wet areas to become wetter. In general, the number of catastrophic natural events is on the rise globally and it is expected to become worse, threatening biodiversity and human lives alike.

In other words, the price we are now paying is undoubtedly the direct consequence of self-inflicted wounds, namely human activities. The question is whether Japan is doing enough to address the root causes of these man-made disasters.

A sense of climate crises has been felt by many world leaders and policymakers have started to take much needed action. In the Paris agreement of December 2015, efforts to cut greenhouse gas emissions are included in the so-called nationally determined contributions. Nearly 200 countries have pledged reduced emissions through 2025 and beyond. The vast majority of governments are now committed to both ambitious global temperature goals and national actions to limit emissions.

Despite the heightened efforts by many governments, atmospheric carbon dioxide concentrations continue to rise rapidly. The World Meteorological Organization announced that the rate of growth in 2016 was 50 percent above the 10-year average before that. Concentrations of carbon dioxide are 145 percent of pre-industrial levels, the highest in 800,000 years. We are now in a race against time.

At about the same time the worst rains in the nation’s recent history killed more than 220 people in western Japan this summer, the government announced the Long-Term Energy Supply and Demand Outlook. In this new national energy plan, the government set goals to increase the ratio of renewable energy in the overall energy mix to 22 to 24 percent by 2030. While it is an improvement from the current low level of just over 15 percent, Japan’s goal seems far less ambitious compared with many industrialized countries. Germany aims to increase the ratio to over 50 percent from the current 30 percent and France is going for 40 percent from the current 26 percent by 2030, for example.

In its energy outlook, the Japanese government, for the first time, positioned renewable energy as a primary energy source. One has to question, however, why the primary energy source is not even one-third of the overall energy mix. Granted, the sensitive social and political environment surrounding nuclear energy complicates Japan’s energy strategy, but this is precisely why much stronger emphasis should be placed on renewable energy alternatives.

The irony is that Japan possesses some of the most advanced renewable energy technologies in the world. Of the 20 top global firms with patents related to renewable energy, 12 are Japanese. By country, Japan boasts the highest number of patents in the world in the field of renewable energy, particularly solar technology. Yet Japan is behind the curve when it comes to commercialization of such technologies. The cost of solar energy in Japan still hovers at around ¥24 per kilowatt-hours, while that in Germany has been rapidly falling and now it is as low as ¥9 per kWh.

More robust and high-quality private sector investment in renewable energy is the key to successful energy transitions. Policymakers need to trigger deeper changes to their policies to incentivize investment and innovation by deregulating the energy industry. It should provide a level playing field for new entrants and major power companies alike, and set much more ambitious goals to expand renewable energy markets. Such actions by the government should incentivize private sector firms to seek ways to monetize their technologies as well.

The role of capital markets to promote investment in clean energy is also critical. Marubeni’s announcement of a plan for fossil fuel divestment signals how private sector companies have started to respond to the global shift in the financial markets. The ESG fund launched by the Government Pension Investment Fund last year has increased awareness for institutional investors to consider environment-related risks and opportunities as part of their fiduciary duty.

Yet Japanese financial markets, despite their size, are still in the catch-up phase relative to the rest of the world in regard to green finance activities. Out of some $70 billion worth of green bonds issued by the private sector globally in 2017, a mere $2 billion came from Japanese companies. China, on the other hand, issued more than $25 billion of green bonds to tackle its environmental challenges. There exists a significant opportunity for Japan to mainstream green finance and investment in its large capital markets.

Watching the deadly mega-storms tearing apart coastal towns in Southeast Asia and the east coast of the United States is a powerful reminder that this is a formidable global challenge requiring formidable global solutions. Utilizing Japan’s superior technology and expertise in clean energy, we must step up and take the lead in the global fight to save the Earth.

Yumiko Murakami is head of the OECD Tokyo Centre, where she engages in policy discussions between the OECD and governments, businesses and academia in Japan and Asia, covering a wide range of economic policy issues.

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