Impacts of CO2 constraints on energy systems in Japan

This research examines the impacts of using carbon taxes and Btu taxes to reduce carbon emissions from the Japanese energy system. A partial equilibrium model of the Japanese energy sector has been developed to forecast changes in the energy system out to the year 2040. The model can account for the changes in energy technology capacities, fuels, and consumption in response to policy initiatives, such as taxes. We find that although carbon taxes are somewhat more efficient in some senses than Btu taxes, the difference is not large. Btu taxes have the advantage of encouraging a more diverse set of technologies and fuels, which may be an advantage since energy security is a primary concern to Japan.