The impact of a carbon tax implementation on non-CO₂ gas emissions: the case of Japan

ABSTRACT

Carbon taxation affects carbon dioxide (CO₂) emissions through the price of fossil fuels, and hence can also affect emissions of air pollutants. Based on this fact, this study aims at exploring the impact of the carbon tax in Japan on various pollutants’ emissions, using a regression-based approach. The main contribution of this study is to assess the impact of a tax that is mainly directed at cutting CO₂, on other gases, namely sulphur dioxide (SO₂), suspended particulate matter (SPM), carbon monoxide (CO) and nitrogen oxide (NO_X), as well as analyzing the impact of this tax on different sectors of the Japanese economy. Our results imply that the introduction of the carbon tax in Japan effectively reduced non-CO₂ greenhouse gases (GHGs) and pollutants, even when controlling for demographic and economic variables. The results of this study can be explained by a partial decoupling of fossil fuel consumption and GHG emissions, possibly through investment in anti-pollution measures.

KEYWORDS:

• Carbon tax
• Japan
• prefectural analysis
• anthropogenic emissions
• greenhouse gases
• pollution control

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Taxes against engaging in activities that create adverse side effects for society.

2 Given that GLS’ R-squared is not computed in the same manner, and is simply an approximation of the goodness of fit, it cannot be properly compared with the other coefficient, and is written as an indication for the goodness of fit.

Additional information

Funding

Farhad Taghizadeh-Hesary acknowledges the financial support of the JSPS KAKENHI Grant-in-Aid for Young Scientists No.19K13742 and Grant-in-Aid for Excellent Young Researcher of the Ministry of Education of Japan (MEXT). The research was supported by the Grant-in-Aid of the University of Economics Ho Chi Minh City – UEH, Viet Nam.