Japan can become more energy self-sufficient through increased use of renewable energy. However, decarbonization will require more assets such as power lines, renewable energy equipment, and storage batteries. These are built with specific resources, some of which are mainly found outside Japan and in some cases in countries governed by authoritarian regimes. The markets for these materials, more so than for fossil fuels, tend to be oligopolies. Heavily reliant on other countries for assets needed in solar and wind power generation, Japan will see increased economic security risk as it transitions to carbon neutrality. Resource circulation and a circular economy will become paramount.
Decarbonization is poised to provide Japan’s economy with positive effects on a national level. However, the spread will not be uniform. For example, power generation and electric equipment industries will expand but conventional automotive industries will contract; industrial structure will change significantly. A smooth transition to a decarbonized society will be based on a shift of employment into those industries in demand, with workers executing their roles in new fields. Human resource development must follow suit, taking a long-term approach to cultivate the technical and creative prowess needed for growth industries during decarbonization, such as digital talent. To minimize the negative effects of higher consumer prices, including electricity, on personal finances, the government will have to address the major challenge of how to spread the burden fairly.