copyright: Fukui Shinbun

Almost one month has passed after Yukio Hatoyama, the leader of the Democratic Party of Japan (DPJ), was appointed as Prime Minister of Japan in September 16. According to a public opinion poll carried out by Yomiuri Shinbun in September 17, 75 percent of its respondents supported the ‘Hatoyama’ cabinet, the second highest figure after Prime Minister Junichiro Koizumi’s cabinet, since Yomiuri started carrying out its popularity surveys in 1978.  Further, surprisingly, the opinion poll showed that 74 percent supported the proposal of DPJ to reduce emissions of Japan by 25 percent by 2020, compared to the 1990 level. Thus, it could be argued that most Japanese expected Yukio Hatoyama to dramatically advance its climate change policy. But has he really changed Japan’s climate change policy that dramatically?

The most dramatic change that Hatoyama has achieved lies in his declaration that Japan would seek to cut its emissions by 25 percent by 2020 as the mid-term target compared to the 1990 level. As the target of the previous Government led by the Liberal Democratic Party (LDP) and New Komeito was 8 percent, this is a great advance for Japanese climate change policy.

Then, in order to materialize the target, on October 7, the cabinet committee on climate change established two work teams; one to estimate the costs to achieve the target; the other to identify concrete measures of the ‘Hatoyama Initiative’ to support developing countries announced at the United Nations Summit on Climate Change (New York) on September 22. Then, the former team, ‘the team concerning the achievement of the mid-term target’, held its first meeting in October 14. At the meeting, it was decided that a specialist group would be established under the team for estimating costs to achieve the mid-term target, and an interim report on cost estimation would be produced in this month and a final report would be produced in December before COP15 in Copenhagen.

These two may be all that New Prime Minister has achieved for climate change policy so far. Then, has he changed Japan’s climate change policy dramatically? It seems that he has dramatically changed it because he has proposed ambitious target. However, the seemingly ambitious ’25 percent’ includes reductions from buying carbon credits, GHG absorption by forests and plants, etc., as well as the domestic reductions. At the first meeting of the team concerning the achievement of the mid-term target, it was suggested as one plan that cost estimation would be carried out for the following three patterns; among the 25 percent reductions, (1) 10 percent will be reduced domestically; (2) 15 percent will be reduced domestically; and (3) all of them will be reduced domestically. If the total amount of domestic reductions is 10 percent or even 15 percent, it must be rather disappointing.

Thus, it should be said that he has not changed Japan’s climate change policy dramatically so far. However, the birth of the Hatoyama cabinet has clearly increased environmental concerns and made industry motivated to become greener. It is highly expected that new Prime Minister, with greener people and industry, will change climate change policy dramatically or concretely propose radical climate change policy before COP15 in December so that he can be considered as one of the greenest leaders of the world again as in the United Nations Summit on Climate Change in New York.

On 22 July, Shoji Muneoka, the chairman of the Japan Iron and Steal Foundation (JISF), at its regular press conference criticized the largest opposition Democratic Party of Japan (DPJ) because its mid-term target of greenhouse gas (GHG) emissions reductions by 2020 is not realistic.

Compared to the current government led by the coalition of the Liberal Democratic Party (LDP) and New Komeito, DPJ proposes a surprisingly ambitious proposal for global warming. Indeed, while the Government’s mid-term target of GHG emissions reductions by 2020 is to cut them by 15 percent below the 2005 levels, DPJ proposes 30 percent.

It is now highly probable that DPJ will gain a majority in the next election for the House of Representatives on 30 August and a government led by DPJ will be established for the first time.

Consequently, major economic groups have recently been seriously aware of its proposal and demanding reconsideration for DPJ.
Muneoka claimed that though the mid-term target of the Government is severe enough for industries, it is hardly understandable that DPJ proposes twice as strict a mid-term target as the Government’s target. He further points out that achieving the DPJ’s mid-term target would generate 800,000 to 1,200,000 of the employed and it is thus necessary for DPJ to show a proposal that carefully considers impacts upon Japanese economy and people.
Similarly, the Economic Association of Japan currently criticized that a proposal of DPJ is idealistic and DPJ should understand the economic situations. Further, on 17 July, Shosuke Mori, the chairman of the Federation of Electirc Power Companies of Japan, at the summer seminar of the Japan Association of Corporate Executives, claimed its proposal is unrealistic saying ‘DPJ should make clear impacts of its climate change proposal on economy and people.

Indeed, the DPJ’s proposal cannot be seen as realistic. In order to achieve this ambitious target, for example, DPJ insists on the creation of a global warming tax. However, DPJ decided not to clarify contents of the tax in its manifesto because there has been a conflicting idea on its contents within DPJ, some proposing the creation of carbon tax and others suggesting increase in consumption tax. Both plans seem difficult for DPJ because labour unions, the mainstay of support for DPJ, can hardly support carbon tax as it would be a heavy burden for the economy and because DPJ promises not to raise the consumption tax rate for four years.

In addition, though, DPJ mostly neglects negative impacts placed on people and economy by its mid-term target because economic growth stimulated by environmental investment, it insists, can avoid them. Consequently, the DPJ’s proposal for global warming in the election is much more stringent than the proposal of LDP as LDP takes carefully into consideration negative effects of its proposal. DPJ tends to propose attractive proposals for everyone without showing their negative effects. For instance, while DPJ proposes such an ambitious target for GHG emissions reductions, it contradictorily promises to make highway charges free, which might lead to increase in CO2 emissions from automobiles.

Though the DPJ’s ambitious proposal for GHG emissions reductions is surely welcomed, DPJ should concretely clarify ways to achieve it and its negative effects on people and economy.

©Sankei

On 10 June, Taro Aso, Prime Minister of Japan, pledged that Japan would cut its greenhouse gas emissions by 15 percent below the 2005 levels by 2020 (8 percent below the 1990 levels). He expected that, achieving this mid-term target would lead to greenhouse gas emissions reductions approximately by 25 percent by 2030 and then by 70 percent by 2050.

Japan had six plans for the mid-term target, ranging from 4 percent reductions below the 2005 levels to 30 percent reductions.  The mid-term target came from one of the six plans, 14 percent reductions below the 2005 levels. This plan has been reinforced by another one percent because the Komei party, comprising the ruling coalition with the liberal democratic party, and the Ministry of the Environment, strongly demanded a more ambitious target.

One of the main reasons for this choice is that the Japanese people favour the 14 percent reductions plan. On 24 May 2009, Cabinet Secretariat showed the results of the ‘public opinion poll concerning the mid-term target for global warming’. According to the results, 45.4 percent of the respondents were for the 14 percent reductions plan: 15.3 percent for the 4 percent reductions plan; 13.5 percent for the 21 percent reductions plan; and 4.9 percent for the 30 percent reductions plan. Although the respondents were shown how much each household had to pay to reduce greenhouse gases by 14 percent  (i.e. 80,000 yen in a year), most of the respondents chose this target. Aso said in his mail magazine on 11 June that he deeply respected the good sense of his people. If the Japanese people favoured a less ambitious target, he could not have made this decision despite strong industrial oppositions. Indeed, generally, the Japanese industry very strongly demanded that Japan had to choose a 4 percent reductions plan. In addition, though the Ministry of Economy, Trade and Industry demanded a target that would not severely damage the Japanese economy, it compromised to accept the 14 percent reductions plan because it said that 14 percent reductions would be possible with the introduction of most updated technologies.This may be another important reason that Aso chose this target.

Although Japan chose the ambitious target, it is apparently difficult for Japan to achieve it. Though Japan ambitiously vowed to cut its greenhouse gas emissions by 6 percent below the 1990 levels by 2012 under the Kyoto protocol agreement , Japan has been unable to reduce its greenhouse gas emissions, and it would possibly fail to achieve it, mainly because the Japanese Government has been highly concerned with protecting the industry from suffering costs for reducing greenhouse gas emissions. It is questionable whether the Government can persuade the industry to reduce dramatically greenhouse gas emissions to achieve the more stringent mid-term target though it has failed to do so to achieve the Kyoto protocol agreement.

Finally, it should be emphasized that the Government must consider how the mid-term target influence the most vulnerable segments of the society including the poor, the handicapped, children and the elderly, which has been almost totally neglected in the discussion of the mid-term target. Because achieving the mid-term target clearly requires a wide range of ‘changes’ in the society, the Government has to be concerned with influences of the target placed onto them. Although the mid-term target has been finally set, there are a number of difficult and complicated issues that Japan has to start to work out for achieving the target.

©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.

On 12 February, the committee on the mid-term goal (Chuki mokuhyo kento iinkai; Chairman: Toshihiko Fukui, former Governor of the Bank of Japan), which has been established under the conference on global warming of the Government (Chikyu ondanka mondai ni kansuru kondankai; Chairman: Hiroshi Okuda, Corporate advisor of Toyota) and has examined the mid-term goal of greenhouse gas (GHG) reductions, submitted its interim report to the conference.

The interim report suggested SIX plans concerning the GHG reductions by 2020.

Among six plans, three plans were proposed for the case in which industrialized nations are required to reduce GHG emissions by 25% compared to the year 1990 based on the requirements of the IPCC fourth Assessment Report though it requires them to reduce emissions by 25% to 40%.

• First Plan:

The costs in reducing GHG emissions should be as equal as those in other industrialized nations.

• Second Plan:
  

The costs per GDP should be as equal as those in other industrialized nations.

• Third Plan:

Japan should reduce GHG emissions by 25% as equally as other industrialized nations.

The rest of the six plans include:

• Fourth Plan:

Japan should reduce GHG emissions by the extension of current technologies.

• Fifth Plan:

Japan should spend almost the same amount of money in reducing GHG emissions as those in the EU and the US.

• Sixth Plan:

Japan should introduce most advanced technologies for the reduction of GHG emissions not by

compulsory measures but by voluntary efforts.

According to the trial calculations of the reduction rates in GHG emissions compared to its levels in 1990 for each plan, GHG emissions of Japan will

(Plan1) decrease by 1% to 12%

(Plan2) decrease by 16% to 17%

(Plan3) decrease by 25%

(Plan4) increase by 6%

(Plan5) increase by 0% to 7% if Japan spends the same amount of money as the EU; increase by –2% to 7% if Japan spends the same amount of money as the US

(Plan6) decrease by 4%

Then, which plan will Japan choose?

Undoubtedly, it will not be acceptable for the rest of the world that Japan will increase its GHG emissions. However, Japan surprisingly has such an option. This reflects a strong frustration of the Japanese industrial world in the current unequal burdens of costs in reducing GHG emissions among industrialized nations.

According to Economic Association of Japan (EAJ: Nihon keidanren), in order to reduce GHG emissions by 25% compared to its levels in 1990, in Japan, where energy-saving is highly advanced, reducing 1 ton of CO2 requires almost 400 dollars though it requires almost 143 dollars for the US and almost 128 dollars for the EU. EAJ argues that it would demand the equality in cost burdens among nations because if the equality is not secured, Japanese people will be forced to suffer excessive burdens in reducing GHG emissions and the international competitiveness will weaken and overseas production transfer will occur.

Along the same line, the Ministry of Economy, Trade and Industry (METI) has demanded the equality in the cost burdnes among nations and insisted that the mid-term goal should not pose excessive burdens on the Japanese industrial world. For instance, Vice-Minister of Economy, Trade and Industry Harufumi Mochizuki emphasized ‘it is a basic principle to make the best selection in consideration of the comparability between the economy and the environment.

Contrarily, the Ministry of the Environment has sought for the mid-term goal that is as strict as possible. Indeed, Minister of the Environment Tetsuo Saito insisted on reducing GHG emissions by 25% to 40% saying ‘although the government has not reached its consensus, the reduction of GHG emissions by 25% to 40% is the only one option that Japan should choose.’

These two conflicting lines exist in the debates on the mid-term goal in the committee too and the committee consequently had to propose SIX plans including both ‘increase’ and ‘decrease’ options. Because the conflicts between these two lines cannot be easily solved, Japan will not announce its mid-term goal soon although the world has been waiting for its early decision. Further, considering the strong frustration in unequal cost burdens and the opposition of the industrial world in setting strict mid-term goal, the final choice of Japan will not be the strictest plan.

However, it cannot be expected that Japan will choose an ‘increase’ plan because the government and even the industrial world understand that such an option will not be acceptable for the rest of the world and Japan will loose power in the international debates on the global climate change.

Thus, the choice Japan will make may be a ‘moderate reduction’ plan, which is not impressive but acceptable for the rest of the world. Surely, if Prime Minister Taro Aso is determined to dramatically reduce GHG emissions of Japan by exercising his strong leadership, it may be still possible for Japan to choose the strictest plan. However, Aso has recently often emphasized ‘the mid-term goal should be internationally acceptable but should be feasible at the same time.’ Clearly, Aso seeks for a ‘moderate reduction’ plan. Although Japan will announce its mid-term goal by June, the reduction rates will be 25% at best and possibly less than 25%.