Japan - Climate
At a glance
Japan is a leader in climate-related finance
In 2018, Japan distributed US$9.6 billion (in 2018 prices) in ODA that targeted climate change as a principal or significant goal, comprising a majority of its bilateral allocable ODA (53%), according to Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) data. This makes Japan the highest DAC donor for climate-related ODA in both absolute and relative terms.
Japan’s climate-related financing in 2018 represents a sizable increase (31%) from 2017 (US$7.3 billion) but a slight decrease (2%) from the most recent peak in 2015 (US$9.8 billion).
Climate finance: funding for projects tagged in the OECD’s Creditor Reporting System (CRS) database with the Rio markers for climate change mitigation and/or climate change adaptation. Projects can be tagged with either or both markers.
Each marker has three possible scores:
- Principal, for projects in which climate change mitigation or adaptation is a fundamental and explicitly stated goal;
- Significant, for projects in which climate change mitigation or adaptation is not a key driver but still an explicitly stated goal; or
- Not targeted, meaning the project does not address climate change mitigation or adaptation.
Not all projects are screened against the Rio markers; this funding falls into the ‘not screened’ category.
Japan references both climate change mitigation and adaptation as priorities in its Development Cooperation Charter, with greater detail provided in various agency strategy documents. Of particular relevance is the Japan International Cooperation Agency’s Climate Cooperation Strategy (last updated in 2016), which names four priority issues: 1) promoting low-carbon climate-resilient infrastructure, 2) enhancing climate risk management, 3) supporting climate policy and institution building, and 4) enhancing forest and other ecosystem conservation and management. Additionally, the policy pays special attention to utilizing Japanese skills and technologies that contribute to addressing climate change.
Commitments made at international climate conferences and in multi-party agreements also impact Japan’s climate-related ODA policies. Of note is the ‘Actions for Cool Earth 2.0 (ACE)’ policy announced by Prime Minister, Shinzo Abe, at United Nations Climate Change Conference (COP21) in 2015. Among other actions, the policy committed Japan to providing ¥1.3 trillion (US$11.8 billion) annually in climate finance to developing economies from public and private sources by 2020. This contributes to a collective agreement made by Japan and other developed country parties at COP15 in 2009 to mobilize annual funds in excess of US$100 billion by 2020.
Japan has also established the ‘Joint Crediting Mechanism’ (JCM), a bilateral offset mechanism which allows Japan to credit contributions of low-carbon technologies and expertise to developing economies towards its own international emissions reduction commitments. Since establishing the JCM in 2011, Japan has signed agreements with 17 countries.
Major focus is on infrastructure and climate change mitigation; main channels include multilateral organizations
The bulk of Japan’s climate-related ODA is directed to infrastructure projects (72%), with the remaining funding directed towards energy (10%), water and sanitation (9%), and agriculture (7%). This largely matches the overall sectoral focus of Japan’s ODA (see ‘ODA Breakdown’), with an even greater emphasis on infrastructure projects. Due partly to Japan’s focus on low-carbon infrastructure and energy, Japan’s ODA has a heavy focus on climate change mitigation projects, which represent 86% of all climate-related ODA, as compared to climate change adaptation, which represent 17%.
Japan delivers a portion of its climate financing through multilateral institutions, though not all of this is counted as ODA. These include the following multilaterals:
- Green Climate Fund (GCF), amounting to US$349 million in 2018. This amount reflects Japan’s initial pledge of US$1.5 billion to GCF for the initial period of 2015-2019 and is expected to remain steady following Japan’s additional pledge of US$1.5 billion for the 2020-2023 period.
- Global Environment Facility (GEF) Trust Fund, amounting to US$141 million in 2018 according to GEF financial statements. Japan has been the largest contributor to the GEF Trust Fund, contributing US$3.3 billion since the establishment of the fund in 1992. Japan’s contributions to GEF are expected to grow, due to its US$638 million pledge to the 2018-2022 replenishment period, an increase from US$500 million to the 2014-2018 period.
- The Multilateral Fund for the Implementation of the Montreal Protocol, amounting to US$31 million between 2018 and 2020 (according to financial statements from the Multilateral Fund). Japan is the second-largest donor to this protocol which is committed to reversing the deterioration of the Earth's ozone layer. Japan’s commitment is expected to stay at this level due to outstanding commitments and recent budget documents.
- United Nations Environment Programme (UNEP) Environment Fund, amounting to US$2 million in 2018, according to UNEP data. Starting in 2015, Japan also started making regular earmarked contributions to UNEP, which totaled US$10 million in 2018.
MOFA, MOF, and MOE direct climate finance-related ODA; JICA and other agencies implement
The Ministry of Foreign Affairs (MOFA), the Ministry of Finance (MOF), and the Ministry of the Environment (MOE) all hold responsibilities for setting priorities and directing climate finance-related ODA. Within MOFA, the Global Environment Division, led by Ko Morishita, and the Climate Change Division, led by Kaoru Magosaki, are primarily responsible for formulating bilateral projects. These projects are typically implemented by JICA, with Vice President Tadashi Sato responsible for projects that address climate change and the environment. Given the high number of infrastructure projects that include climate finance components, the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) is also relevant in implementation. Additionally, MOE and the Ministry of Economy, Trade and Industry (METI) both implement projects credited under the JCM.