Socio-economic footprint of the energy transition: Japan.

Parajuli, B., Guadarrama, C., Seck, G. S., Casals, X., Diab, S. & Lehr, U. (2022): Socio-economic footprint of the energy transition: Japan. International Renewable Energy Agency (IRENA), Abu Dhabi.

Abstract

This outlook report presents two scenarios and their socio-economic outcomes:
The Planned Energy Scenario (PES) is the reference case for this study, providing a perspective on energy system developments based on governments’ energy plans, as well as other planned targets and policies as of 2019, including Nationally Determined Contributions (NDC) under the Paris Agreement. This report considers policy targets and developments until April 2019. Policy changes and targets announced since then are not considered in the modelling exercise but are mentioned in the analysisto provide insights on latest developments.

The 1.5°C Scenario (1.5-S) describes an energy transition pathway aligned with the 1.5 degree Celsius (°C) climate ambition – that is, to limit the global average temperature increase by the end of the present century to 1.5°C, relative to pre-industrial levels. It prioritises readily available technology solutions including all sources of renewable energy, electrification measures and energy efficiency, which can be scaled up at the necessary pace for the 1.5°C goal.

The time frame of the analysis covers the period to 2050.

The socio-economic analysis of these scenarios is carried out using a global macro-econometric model, E3ME 1, which links the energy system and the world’s economies within a single quantitative framework. E3ME analyses the impact of the energy transition on variables such as gross domestic product (GDP), employment and welfare to inform energy system planning and policy making to ensure a just and inclusive energy transition at the global, regional and national levels. Energy mixes and the related investment based on the REmap Model 2 of the International Renewable Energy Agency (IRENA) are used as exogenous inputs for each scenario, as well as climate and transition-related policies. Annex II lists some of the key policy assumptions underlying each scenario and considers how indicators vary (or not) across both scenarios.

The outcome of implementing energy transition planning is closely linked to its socio-economic impacts. This socio-economic footprint of energy transition roadmaps results from the many interactions and feedbacks between the energy system and the wider economy and social systems. Understanding the socio-economic footprint of energy transition roadmaps informs policy making for a successful transition.

IRENA has been exploring the socio-economic footprint of energy transition roadmaps since 2016 (IRENA, 2016a, 2017, 2018, 2019a 2019b, 2020a, 2020b, 2021a, 2022a), analysing key drivers and impacts, providing insights to support energy transition planning and implementation at the global, regional and national levels. Throughout its reports, IRENA has emphasised that a holistic global policy framework is needed for the energy transition to be successful and broadly beneficial. Different policy elements complement and reinforce each other, covering a broad spectrum of technical, social and economic issues to accelerate the transition and ensure that its benefits are broadly shared, and its burdens minimised.