Japan bets on homegrown startups to adapt to a hotter world
Japan is hoping startups can help the fifth-biggest carbon dioxide polluter prepare for and adapt to a warmer world.
The Environment Ministry is offering ¥60 billion ($415 million) of support for the commercialization of homegrown climate and environmental technology through the Japan Green Investment Corp. for Carbon Neutrality, a government-backed fund that invests in ventures to reduce emissions. The effort is expected to promote innovations in areas from aquaculture to flood defenses.
"We realized that it'd be difficult to address climate issues without embracing the innovation, creativity and free thinking at startups,' State Minister of the Environment Fumiaki Kobayashi said in an interview Wednesday.
The program will also offer seed money to startups and promote those that make it to commercialization to overseas markets.
The government's role as a potential buyer of these technologies will serve to further accelerate development, according to Kobayashi. The ministry is also working with other agencies such as the Government Pension Investment Fund to direct more money to green-tech startups.
"The money we've allocated isn't enough at all,' Kobayashi said regarding the ¥60 billion sum. "The ministry's budget may be extremely small, but the role the Japanese government can play as the consumer of these technologies would be absolutely huge.'
Japan remains heavily reliant on fossil fuels for electricity and has struggled to shift to cleaner energy sources or to achieve major progress in industrial decarbonization. The country said in February that it would aim to cut 60% of greenhouse gas emissions by 2035 from 2013 levels under a revised climate target, a policy seen as falling short of action required to meet Paris Agreement goals.
While the latest initiative doesn't directly address how to reduce gas and coal consumption, Kobayashi said the ministry will encourage cooperation between startups and large corporations to address the problem. The ministry also offers investments of as much as ¥500 million to eligible startups and larger companies that are developing technologies that limit emissions.
Kobayashi believes climate-tech startups will eventually comprise 10% of Japan-born unicorns. This would be in line with an initiative that was first introduced under former Prime Minister Fumio Kishida three years ago, which outlined an ambitious push to create 100,000 new startups and 100 unicorns by 2027.
"The money we spend on our environment shouldn't be considered a cost,' Kobayashi said. "What's important is to think of this as a business opportunity, not just as a problem to solve.'
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