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Sunday, May 20, 2007
Buy a car and drive up your grocery bill
Toyota Motor Corp. made headlines when it announced that its profit for 2006 was a record-breaking 2.24 trillion yen. In the United States, the news was greeted with some bitterness, since the Japan automaker had recently surpassed General Motors in terms of worldwide sales for the first time ever.
In Japan, the news was bittersweet. Toyota's profits were spurred by sales in America and Europe, as well as by the weaker yen — and, like those of every other Japanese car company, domestic sales were down. On its nighttime news show, Fuji TV tried to get to the bottom of things by talking to consumers on the street. No one said anything about not being able to afford a new car and, more significantly, nobody mentioned the high price of gasoline, a factor that analysts say has a negative impact on car sales. One person admitted she was thinking about buying a used car because the quality of used cars is very high in Japan. Another woman said parking had become too much of a problem. One older gentleman said public transportation was "easier."
Back in the studio, an announcer commented that many people used to consider cars "their hobbies," but that no longer seems to be true. Veteran newsman Taro Kimura concurred. "I think the Japanese have become more mature about automobiles," he said. "They now see them as tools."
Implicit in Kimura's remark is the idea that as long as new cars retained their status as symbols of personal accomplishment and style, people would be inclined to buy them; but once they outgrew this attitude and saw automobiles for what they are ("To get from point A to point B," as the older gentleman put it), their outlook would become more practical.
Practicality has different meanings in different places. The U.S. is huge, and it is impossible to imagine modern life in America without the automobile. Japan is much more cluttered and has arguably the best public transportation system in the world. What's more, Japan's population is contracting while America's continues to expand.
In terms of the environmental damage that automobiles cause, a declining interest in cars should be seen as a good thing: If you don't really need one, then you don't have to drive one — or own one, for that matter. Nevertheless, car ownership is still considered vital to the Japanese economy, so car makers try to make people feel less guilty about the environmental damage they cause when they drive. Mostly they've done this through improved fuel efficiency.
Now, there is talk in Japan's government about increasing use of biofuels like ethanol as a countermeasure to global warming. Japan is way behind America and Europe in ethanol use in cars, mainly because of lack of support from the domestic oil and automobile industries. Some environmentalists, however, have become increasingly skeptical about biofuels as a solution. Ethanol still produces CO 2 when it's burned. What business and the media tend to harp on about is the tradeoff. Biofuels are made from plants that absorb CO 2 , so when you grow the raw materials, you offset the CO 2 you produce when you later burn them.
Environmentalists call this a specious claim, but it may be too late. The ethanol rush is already on, and the consequences may compound the world's environmental problems, not alleviate them. U.S. President George Bush's promotion of biofuels should automatically make people suspicious since his administration only grudgingly accepts that CO 2 emissions have something to do with global warming. To Bush, biofuels represent a substitute for foreign oil. Ethanol may tip the balance of power in the energy realm away from the oil-producing countries and toward the U.S., which is the biggest agricultural country in the world.
As often happens with decisions made on high for economic reasons, there are winners and losers in the ethanol game. Mexico is already a loser, since the biofuel boom has driven up the price of its staple food, corn, which it buys from the U.S. Brazilian orange farmers are switching to sugar cane because they can make more money selling sugar cane for biofuel, and consequently the price of oranges skyrockets. The world's reserves of foodstuffs, according to the U.S. Dept. of Agriculture, is equivalent to about 51 days' worth, the lowest amount in 35 years. With crop production shifting from food to fuel, this amount will decrease.
Japan will end up being a loser as well because its food self-sufficiency rate is only 40 percent (18 percent, according to the magazine Shukan Kinyobi, if you factor in imported feed for domestic livestock). As American farmers switch from soy beans to corn, Japan, which imports most of its soy beans from the U.S., will pay more for food. The price of vegetable oil has risen four times in the last year in Japan, and biofuel demand for corn means that livestock feed will become more expensive, as will the price of corn starch, a key ingredient in many processed foods, not to mention beer.
Naturally, Japan wants to get into the act, but even the ethanol that went on sale on a trial basis several weeks ago was made from wheat imported from France. In order to break Japan's own reliance on foreign suppliers, the agricultural ministry has said it might dip into its surplus rice stocks to make domestic ethanol, thus reducing Japan's food self-sufficiency even more.
In a May 11 editorial, the Asahi Shimbun said that the solution to global warming isn't changing fuel types but rather changing lifestyles, which seems to be happening naturally with regard to car ownership. In Japan, where no environmental warning of the past year has been covered more thoroughly than the news that world tuna stocks are dwindling, the most effective appeal to environmental action may be through the stomach. Which would you choose, your Corolla or your tofu?