Japan aims to release a preliminary estimate for the country’s “green GDP” by the end of March 2022, as reported by Reuters on January 24. The Japanese government has been drafting the new economic indicator in this fiscal year, which considers the impact of carbon emissions when measuring economic growth. This is part of the government’s effort to help reduce emissions by including carbon emissions into the national GDP.
The green GDP indicator measures domestic carbon emissions in monetary terms. If carbon emissions increase, additional costs will be required to reduce such emissions, leading to a fall in green GDP. According to Nikkei Asia, Japan’s GDP estimate is projected to rise if the new measurement is implemented since this country has been trying to reduce carbon emissions in recent years. Japan has approved the Act on Promotion of Global Warming Countermeasures, which legislate the national goal of carbon neutrality by 2050. To meet the target, the country developed a Green Growth Strategy by the end of 2020, proposing to accelerate the development of clean energy such as hydrogen and wind power. The government reportedly estimates JPY90tr (USD790bn) in yearly economic gains from the strategy by 2030.