Phasing out carbon not coal? Identifying coal lock-in sources in Japan’s power utilities

Gregory Trencher, Yuri Okubo and Akihisa Mori

Climate Policy, 2024, vol. 24, issue 6, 766-784

Abstract: Lock-in to existing assets and business practices is a major obstacle to the global objective of phasing out coal-fired power to accelerate decarbonization towards Paris Agreement goals. Japan has attracted attention in previous literature, with several studies demonstrating how market and political conditions have propelled investments in new coal-fired power plants while raising barriers to achieving a phase-out. But in addition to market-level conditions, firm-level characteristics – including assets, commitments, investment behaviour and future-oriented innovation activities – are also critical determinants of lock-in vulnerability. To deepen understanding of how such firm-level dynamics might affect the power industry, this empirical study takes the case of ten incumbent utilities in Japan to identify and compare potential sources of coal lock-in. We leverage diverse quantitative and qualitative data to assess the state of: (1) management, assets and operational factors; and (2) the development and deployment of next-generation coal technologies. Through this two-fold approach, we demonstrate how current conditions and future-oriented activities are likely to reinforce tendencies to continue using coal in coming decades, thereby hampering the emergence of phase-out ambitions. These findings harbour important implications for climate policy and the urgent need to end coal burning in the power sector.Japan’s major power utilities all intend to maintain coal in power mixes while transitioning to net-zero by 2050, aiming to eliminate carbon emissions rather than coal-fired power per se.Ambitions to reduce dependence on coal are weakened by a multitude of potential lock-in sources across individual utilities.All utilities are attempting to commercialize next-generation technologies such as co-firing with ammonia and biomass, carbon capture and coal gasification.Phasing out coal in Japan thus requires climate policies that incentivize the development and diffusion of non-emitting power sources that offer faster emissions reduction than expensive and unproven technologies.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/14693062.2024.2302324 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:tcpoxx:v:24:y:2024:i:6:p:766-784

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/tcpo20

DOI: 10.1080/14693062.2024.2302324

Access Statistics for this article

Climate Policy is currently edited by Professor Michael Grubb

More articles in Climate Policy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().