Stranded Assets and Thermal Coal in Japan: An Analysis of Environment-Related Risk Exposure

Caldecott, Ben; Dericks, Gerard; Tulloch, Daniel J.; Kruitwagen, Lucas; Kok, Irem

doi:10.2139/ssrn.2779580

Cited by 13 publications

(8 citation statements)

References 17 publications

(3 reference statements)

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“…Such IAM studies have largely quantified stranded assets results in physical terms such as GW of stranded capacity, seldom assigning monetary values to these stranding outcomes. A number of studies have used other methods to estimate stranded assets in more specific regional and sectoral contexts (see IRENA (2017) [10]), including several studies focused on coalfired power plants [24][25][26][27][28][29][30][31].…”

Section: Introductionmentioning

confidence: 99%

Stranded asset implications of the Paris Agreement in Latin America and the Caribbean

Binsted

Edmonds

Vogt-Schilb

et al. 2020

Environ. Res. Lett.

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Achieving the Paris Agreement's near-term goals (nationally determined contributions, or NDCs) and longterm temperature targets could result in pre-mature retirement, or stranding, of carbon-intensive assets before the end of their useful lifetime. We use an integrated assessment model to quantify the implications of the Paris Agreement for stranded assets in Latin America and the Caribbean (LAC), a developing region with the least carbon-intensive power sector in the world. We find that meeting the Paris goals results in stranding of $37-90 billion and investment of $1.9-2.6 trillion worth of power sector capital (2021-2050) across a range of future scenarios. Strengthening the NDCs could reduce stranding costs by 27%-40%. Additionally, while politically shielding power plants from pre-mature retirement or increasing the role of other sectors (e.g. land-use) could also reduce power sector stranding, such actions could make mitigation more expensive and negatively impact society. For example, we find that avoiding stranded assets in the power sector increases food prices 13%, suggesting implications for food security in LAC. Our analysis demonstrates that climate goals are relevant for investment decisions even in developing countries with low emissions.

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Section: Introductionmentioning

confidence: 99%

Stranded asset implications of the Paris Agreement in Latin America and the Caribbean

Binsted

Edmonds

Vogt-Schilb

et al. 2020

Environ. Res. Lett.

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“…natural gas and renewables) ensure that any new coal generation infrastructure will quickly become stranded assets. 173 3.11 showed the need to restructure Japan's power sector-including the need to create incentives for adjusting demand rather than relying on an overabundance of supply-even as it highlighted the challenges in shifting a system set up to promote fixed and reliable electric power supply towards accommodating more flexible approaches. 174 Japan's Post-3.11 Turn Towards DSM After 3.11, in addition to waiving the normal approval process for restarting mothballed thermal generators, officials at the Cabinet Office and the Ministry of Economy, Trade & Industry's (METI) Agency for Natural Resources & Energy (ANRE) sought to implement a sustainable energy-saving strategy before peak consumption during the hottest summer months outstripped available electricity supply.…”

Section: Defining Demand-side Managementmentioning

confidence: 99%

Energy Policy in Japan

Hughes

2021

The Oxford Handbook of Japanese Politics

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This chapter examines major changes in Japan’s energy system, focusing on the period since the March 11 Fukushima disaster. There remain numerous opportunities to describe and explain how politics is affecting the incremental but radical changes in the Japanese energy system. While the Japanese government continues to place concerns about security of energy supplies at the center of energy policy, climate change is the defining challenge for the Japanese government, and energy use is at the center of Japan’s greenhouse gas emissions profile. This chapter offers a sectoral analysis of the direction and degree of change evident across nuclear power, renewable energy, coal, electrification, and transport. A key question is the extent to which the politics of energy is democratizing, understood both in terms of an increased ability to influence siting choices for large centralized energy assets and directly owning or using sources of distributed renewable energy such as rooftop solar power.

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“…More than half of the current domestic coal power capacity is at risk of becoming stranded. This means that despite being technically operational, economic viability has been diminished to the point of a de facto asset-level shutdown (Caldecott et al 2016). This signifies that these plants would have to be booked as active losses for the remaining life of the asset.…”

Section: Transitional Climate Risksmentioning

confidence: 99%

Sustainable finance in Japan

Schumacher

Chenet

Volz

2020

Journal of Sustainable Finance & Investment

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This article examines the role of sustainable finance and investment in Japan and how the Japanese financial sector can mitigate growing climate risks and support Japan's transition towards a zero-carbon, sustainable economy. It first illustrates Japan's exposure to physical and transitional climate risks before reviewing emerging practices in sustainable finance. These include the growing importance of environmental, social, and governance (ESG) criteria in financial decision-making; more rigid reporting and disclosure standards; and the development of green bond and sustainable investment markets. The article also assesses the role of policies and regulations in scaling up sustainable finance and low-carbon infrastructure investments. Subsequently, it analyses transitional climate risks via scenario analysis, applying the Paris Agreement Capital Transition Assessment (PACTA) tool to examine the exposure of subsectors of the Japanese equity market over several climate scenarios. The article concludes with policy recommendations for aligning Japan's financial sector with global climate and sustainability goals.

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Stranded Assets and Thermal Coal in Japan: An Analysis of Environment-Related Risk Exposure

Cited by 13 publications

References 17 publications

Stranded asset implications of the Paris Agreement in Latin America and the Caribbean

Stranded asset implications of the Paris Agreement in Latin America and the Caribbean

Energy Policy in Japan

Sustainable finance in Japan

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