Japan and Global Warming Policies
In November 2008, Dr Alan Moran, Director of the IPA's Deregulation Unit travelled overseas to get on-the-spot looks at the international policy climate for global warming mitigation strategies. This first report looks at Japan.
Japan has not sought prominence in the global climate policy debate. Its major corporations and their representative bodies are largely absent from the media debate except as offering general support. Its car firms have been in the forefront of promoting radical emission reductions but not from their own in-factory domestic energy usage viewpoint.
In terms of emission levels, Japan has seen increases since 1990. Per capita levels grew from 8.7 tonnes to 9.9 tonnes of CO2-e (compared to 16 tonnes for Australia). There has been a swing away from oil and gas to coal (which supplies 21 per cent of primary energy) and nuclear (having increased its primary energy share from 12 per cent to 15 per cent, some 30 per cent of electricity). Nuclear is a favoured approach by the government but is stalled partly due to a reactor having been damaged by an earthquake in July of this year and though this did not pose a threat it nonetheless caused concern. More important is the lack of sites - local opposition to nuclear is strong.
Following the 1970s oil crisis, Japan expended considerable sums in "insurance" policies that looked to commercialise coal-to-oil. Victorian brown coal was a major target and over the course of 15 years hundreds of millions of dollars were spent on seeking to find a low cost conversion regime. Parallel activities are now being undertaken with low carbon emitting coal including a major pilot program in Queensland.
According to Kyoto University Professor of Economics, Seiji Ikkatai (who is also the environmental economics adviser to the Japan Bank for International Cooperation) Japan's measures implement its own targets have rested on the exhortatory (for households) and voluntary targets (for business sectors). Japan has announced that its Kyoto outcome will be an increase of 8.6 per cent over 1990 compared with the -7 per cent reduction agreed to.
The two ministries involved in policy are METI and the Environment Ministry. The former has advocated voluntary and moveable targets that vary with growth and this approach has until recently prevailed. The Environment Ministry favours an EU style cap and trade approach and the former Prime Minister (Mr Fakuda) agreed to this in May of this year. However the caps are in effect voluntary as is the base on which their level is measured. The sectoral approach is to be measured with reference to the relative performance of Japanese industry sectors set against those in other countries. This seems to bear some similarities to a scheme proposed by the Australian Garnaut Report for the trade exposed sectors. Industry broadly calls for voluntary measures though some firms, notably Sony, favour stiffer targets to foster greater energy saving innovation.
In his research, Professor Ikkatai estimates that the effects of the measures introduced have not appreciably differed from those that would have prevailed without them.
Other sources confirmed that Japan is taking a de facto approach that involves no action of a substantive nature. Japanese industry is very concerned to combat measures that would add to its costs and retard growth. It also takes the view that it is highly efficient already and points out that the Japanese use less energy than others domestically due to the smallness of their houses, a matter which called forth deprecating comment from the western media not long ago. Even so, the policy approach followed is not consistent with the 3-4 tonnes per capita average global emission levels that would be required if CO2 levels are to be stabilised at the 550 ppm level.
Japan will participate in all international matters and contribute to carbon savings but is not considered at all likely to introduce a tax or ETS that involves any disciplines on industry.
Japan sees no role for wind as a significant source of power into the future. It does have wind investments and together with photovoltaics wind comprises about 0.3 per cent of sales. There is no equivalent to an MRET scheme fostering these renewables and firms appear willing to undertake modest investments in them in response to jawboning and to promote their images.