Skepticism as Japan banks on ‘green’ to power economic revival
In a move to get back on its feet following economic losses that were partly a result of its environmental disasters last year, the Japanese government is putting “green growth” at the core of its recently approved long-term economic revival plan.
According to a Reuters report, the new strategy aims to deliver 3 percent annual gross domestic product growth or 2 percent per year of “real” growth by 2020 by focusing on improving three sectors – renewable energy, healthcare and farming.
Reuters reported that Japan seeks to boost the green energy sector, creating 50 trillion yen (USD639 billion) in investments by 2020, creating up to 1.4 million new jobs.
The new green targets are set in the wake of the generous feed-in tariff rates approval for renewable energy schemes in the country, which is expected to advance its shift toward a low-carbon future.
"It would help the economy if Japan could raise its competitiveness in the global renewable energy market ... because the nation now lags behind," Yasuo Yamamoto, senior economist at Mizuho Research Institute, told Reuters.
Other economists, however, are skeptical about whether the plan will really help Japan hit its growth targets and that it was geared too much toward growth of domestic markets .
Japan needs solid economic growth to have a fighting chance of reducing its public debt burden, which already exceeds two years’ worth of economic output and which economists say cannot be brought down by raising taxes or cutting spending alone.
Instead, they said the strategy should put more emphasis on free trade deals as a way of unlocking growth in an economy beset by a decade of deflation, a strong currency and a shrinking workforce.
"Ideally, the development of trade agreements should be a pillar for the strategy," said Hideo Kumano, chief economist at Dai-ichi Life Research Institute, told Reuters.