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Using a multi-region and multi-sector computable general equilibrium model, this paper evaluates the border adjustment policies of carbon regulations in Japan. We consider five types of border adjustments and examine their effects on the welfare, carbon leakage, and competitiveness of the Japanese energy-intensive trade-exposed (EITE) sectors. Our analysis shows that no single border adjustment policy is superior to the other policies in terms of simultaneously solving three primary issues: Welfare degradation, carbon leakage, and a loss of competitiveness in the EITE sectors. In addition, we show that export border adjustments are effective at restoring the competitiveness of Japanese exporters and reducing leakage. Our analysis also reveals that border adjustment in Japan significantly affects carbon leakage to China and the competitiveness of the iron and steel sectors. Finally, we show that border adjustments with and without consideration of indirect emissions have similar impacts, which indicates that the information regarding direct emissions is sufficient for implementing border adjustment in Japan.

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This study assesses the economic and environmental impacts of Japan's nuclear power scenarios and examines the implications for renewable energy. To assess nuclear power scenarios, we use the following three scenarios: ''new policy scenario'' of the International Energy Agency as a reference; a 40-year operational time limit of nuclear power plants; and no restart of nuclear power plants. For all scenarios, renewable energy with feed-in tariffs is considered. In addition, to assess the impact on the international competitiveness of Japanese industry, we construct a multi-regional, recursive dynamic computable general equilibrium model based on version 8.1 of the Global Trade Analysis Project database. Compared to the reference scenario, the other two scenarios increase CO 2 emissions through an increase in fossil fuel electricity generation and decreases Japan's real gross domestic product, although renewable energy supply also increases. In particular, a nuclear power phase-out negatively impacts Japan's energy-intensive and trade-exposed sectors. However, our model does not consider externalities from fossil fuel usage and nuclear risk. The results of this simulation study represent the first step in answering important questions on energy policy but further research on externalities of fossil fuel and nuclear power usage should be conducted.

The Japanese government plans to reduce greenhouse gas emissions by 80% by 2050. However, it is not yet clear which policy measures the government will adopt to achieve this goal. In this regard, environmental tax reform, which is the combination of carbon regulation and the reduction of existing distortionary taxes, has attracted much attention. This paper examines the effects of an environmental tax reform in Japan. Using a dynamic computable general equilibrium (CGE) model, we analyze the quantitative impacts of an environmental tax reform and clarify which types of environmental tax reform are the most desirable. In the simulation, we introduce a carbon tax and consider the following four scenarios for the use of the carbon tax revenue: (1) a lump-sum rebate to the household, (2) a cut in income taxes, (3) a cut in corporate taxes and (4) a cut in consumption taxes. The first scenario is a pure carbon tax, and the other three scenarios are types of environmental tax reform. Our CGE simulation shows that (1) environmental tax reform tends to generate more desirable impacts than the pure carbon tax and that (2) the strong double dividend is obtained in some cases. In particular, we show that a cut in corporate taxes leads to the most desirable policy in terms of GDP and national income.