©WWF, Japan

As explained in a previous article, the Japanese Government has been examining its mid-term goal of greenhouse gas (GHG) reductions (2020) and is going to announce it in June. On 12 February, the committee on the mid-term goal, which has been established under the conference on global warming of the Government and has examined the mid-term goal of GHG reductions, proposed six plans concerning the GHG reductions. According to the six plans, proposed reduction rates range from a 6% increase to a 25% decrease.

Then, on 27 March, the committee disclosed results of economic impact assessment of those plans, which were carried out by several research institutes. The ranges of GHG reduction rates in this analysis became slightly modified to those of a 4% increase to a 25% decrease because the previous trial calculations of the reduction rates in GHG emissions looked at CO2 only, excluding other greenhouse gases that were included in the current trial calculations.

Economic impact assessment was carried out based on an assumption that Japanese GDP would increase annually by 1.3% and analysed economic impact of five plans compared to the other plan of increasing GHG emissions by 4%. According to the results of economic impact assessment, for example, in a case that Japan would reduce GHG emissions by 25%, the cumulative GDP losses by 2020 would be 3.2% to 6.0%; the maximum increase in the annual average unemployment rates would be raised by 1.9%; disposable income per household in 2020 would be pushed down by 220,000 yen to 770,000 yen.

Because the results of economic impact assessment of GHG reduction plans strongly emphasized negative economic effects, if people read them, they might feel threatened not to agree to the great reductions of GHG emissions. Although environmentalists and those who believe in ecological modernization (EM), may argue that strict environmental regulation would have positive economic effects, the committee might underestimate or even neglect positive effects of reducing GHG emissions greatly. Surely, environmentalists and EM believers would not agree to the results of economic impact assessment.

The battle between the industry side and the side of the Ministry of the Environment (MoE) over the mid-term goal of GHG reductions has been recently critically severe. In order to make people to stand by their own side, both of them have shown their results of economic impact assessment and cost estimation of GHG reductions. For instance, the Institute of Energy Economics, Japan, under the jurisdiction of the Ministry of Economy, Trade and Industry (METI), estimated that reducing GHG emissions by 7% by voluntarily introducing most up-to-date energy saving technologies would cost totally approximately 52 trillion yen by 2020. On the contrary, the National Institute for Environmental Studies, under the jurisdiction of MoE, analysed that reducing GHG emissions by 25% would cost annually approximately only 7 trillion yen. According to Sankei Shinbun, this difference was generated by different preconditions between them over costs of introducing energy-saving technologies and diffusion rates of them. Further, several economic associations, including the Economic Association of Japan (Nippon Keidanren), jointly carried out opinion advertising in major newspapers on 17 March. They emphasized that only the small amount of GHG reductions would cost 52 trillion yen for the society as a whole and approximately 1.05 million yen for each household. Regarding this argument, Tetsuo Saito, the Minister for the Environment, criticized that such an argument would be misleading people because it was the opinion of the industry side. World Wide Fund for Nature (WWF), Japan, also complained that if energy saving technologies were domestically used, it would expand domestic demand.

Although environmentalists and MoE have often criticized negative campaigns of the industry side including METI, it might be unfair if they were not entitled to do so. Because there are millions of uncertainties in economic assessment and cost estimation of GHG reductions, there might be no ‘right’ arguments and a wide range of conflicting opinions/data/analyses should be discussed in public whether they support for GHG reductions or not. Thus, the number of different opinions/data/analyses might be less important.

The more important thing is rather ‘who choose?’. It might be a waste of time and money if the Government did not ask what people want though a number of both public and private organizations/groups/individuals showed their own opinions/data/analyses to people. Choosing a plan for the mid-term goal of GHG reductions is a very important choice for the Japanese future. People should be involved in this important choice process. Because of millions of uncertainties over economic/social/environmental impact of GHG reductions, it might be highly difficult for the Government and Prime Minister to take a responsibility for consequences of the choice. Different opinions/data/analyses should be showed to people by different sides, especially the industry side and the MoE side. Then, examining them, people should choose a plan for the mid-term goal of GHG reductions even though they would choose the worst plan for the environment.

According to the analysis of the Ministry of the Environment (MoE), it was estimated that Japan could reduce greenhouse gas (GHG) emissions by 50 million tons (CO2 equivalent), which is equivalent to a 4% reduction compared to the 1990 base year.

Although GHG emissions increased by 8.7% (provisional) in the fiscal year 2007, MoE estimated that it would decrease by 1.4% in the third quarter of the fiscal year 2008 and approximately by 2.8% in the fourth quarter, leading to a 4 percent decrease in the fiscal year 2008. This unexpected great reduction of GHG emissions is due to the economic recession and resulting low economic activity in Japan.

Temporarily, this reduction seems beautiful. However, examined from the long-term viewpoint, it may not be so admirable because ‘economic recession’ and ‘temporary environmental improvements’ can become an unbeatable excuse of industry to avoid strict environmental policy. Though Japan’s economy contracted at an annualised 12.7 per cent in real terms in the third quarter of the fiscal year 2008, this was the SECOND worst after the Second World War. The worst occurred in the fourth quarter of the fiscal year 1974, influenced by the first oil crisis. At that time, its economy contracted at an annualised 13.1 per cent in real terms.

In the early 1970s, until the economic recession happened, Japanese environmental policy remarkably developed in response to four deadly pollution-related diseases including Minamata disease, Itai-itai disease, Yotsukaichi asthma, and Niigata Minamata disease, a wide range of serious pollution all over Japan and resulting strong public demand for pollution prevention. For instance, the ‘Pollution Diet’ was held in 1970, in which existing environmental regulations were modified or reinforced and new environmental regulations were also established. Further, in 1971, the Environmental Agency (EA) was created for integrated environmental administration so that environmental policy would be systematically planned and administered. Though Japanese industry often sought to interrupt establishment of strict environmental policies, it had to stand and deal with them in the early 1970s because of strong power of EA originated from great public support for pollution prevention.

However, after the economic recession, Japanese industry with the Ministry of International Trade and Industry (MITI), started a counterattack on EA by using ‘economic recession’ and ‘temporary environmental improvements’ as an excuse. In the mid-1970s, the air quality did improve because of low economic activity though environmental policies enforced in the early 1970s contributed to it. For instance, emissions of Nitrogen Oxides (NOx) increased every year and almost by 5% on average in the 1971 to 1973 fiscal years, it decreased by 9% in the fiscal year 1974 compared to its level in the fiscal year 1973. Consequently, Japanese industry succeeded in making the national ambient air quality standard for NOx eased (from 0.02ppm for a daily mean to 0.04ppm to 0.06ppm) in 1978. The relaxation of the ambient air quality standard was a must issue for some Japanese industries, such as the auto industry and the steal industry, because emission standards for both cars and factories were to be reinforced until the national ambient air quality standard was achieved.

While the national ambient air quality standard for NOx was the main target in the previous serious economic recession, what would be the main target for Japanese industry in the current economic recession? The target might be the mid-term goal of GHG reductions by 2010 because Japanese industry would have to suffer severe burdens unless the mid-term goal would be less strict. Actually, as discussed before, Japanese industry has strongly and actively sought to make the mid-term target less strict and nearly succeeded in making so.

Will history repeat itself?