Abstract
In this study, a recursive dynamic Computable General Equilibrium (CGE) model which can deal with Greenhouse Gas (GHG) constraint is applied to Japan. Based on several references, Japan's emissions reduction targets are determined as 25% reduction from 1990 level by 2020 and 80% reduction from 2005 level by 2050 in this study. Several cases with different scenarios for nuclear power plant, international emissions trading, and CO2 Capture and Strage (CCS) technology are simulated using the CGE model. By comparison among the results of each case, the effects, especially economic effects are evaluated and analyzed quantitatively. The results show that the most important counter measure to achieve GHG emissions reduction targets in Japan is whether Japan joins international emissions trading or not. In a no-trading case, in which GHG emissions constraints are imposed and Japan does not participate to the trading, GHG reduction costs reach 2,560 USD/tCO2-eq,yr (2005 price) in 2050. In addition, Gross Domestic Product (GDP) decreases 3.8% compared with a counter measure case in which GHG constraints are imposed but the emissions trading is allowed. The results also show that in case Japan targets no nuclear power plants in 2050, CCS technology and emissions trading are able to make up for the gap resulted from the nuclear power decrease. About the speed of CCS technology introduction, the share of power plants with CCS technology is changed depended on the speed; however, GDP and GHG reduction costs do not affected so much.
