The Financial Impact of Carbon Taxation on Corporates: Japan

Japan’s commitment to achieve net zero emissions by 2050 will likely require substantial carbon pricing. Corporates appear to be able to absorb a sharp increase in carbon taxes on average, but there is a substantial weak tail of firms that could face financial stress.
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Volume/Issue: Volume 2023 Issue 034
Publication date: May 2023
ISBN: 9798400244223
$15.00
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Money and Monetary Policy , Taxation - General , International - Economics , Environmental Economics , Environmental Conservation and Protection , Carbon Taxation , Carbon Pricing , Debt-at-Risk , Climate Change , Japan , B , emission trend , Japan's commitment , emission data , reporting company , Carbon tax , Greenhouse gas emissions , Global

Summary

Japan’s commitment to achieve net zero emissions by 2050 will likely require substantial carbon pricing. Corporates appear to be able to absorb a sharp increase in carbon taxes on average, but there is a substantial weak tail of firms that could face financial stress. The analysis underscores the need to align the private sector and public policies with Japan’s climate targets to ensure a smooth transition to net zero.