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Sunday, July 6, 2008

G8 SUMMIT SPECIAL: Commentary

Fukuda's low-carbon society 'vision' needs to shorten its sights, include medium-term target


Special to The Japan Times

On June 9, Prime Minister Yasuo Fukuda released his "vision" for creating a low-carbon society in a determined bid to fulfill his responsibility as chairman of the summit of the Group of Eight industrialized nations in Toyako, Hokkaido.

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No smoke without fire: Exhaust flues point to the heavens at a thermal power plant in the industrial city of Kawasaki in Kanagawa Prefecture. Heated debate continues in Japan about the advisability of introducing a carbon tax geared to provide disincentives to corporate greenhouse gas emitters. KYODO PHOTO

It called for a long-term target of Japan reducing greenhouse gas emissions by 60 percent to 80 percent from 2005 levels. In the medium term, however, it went no further than vaguely stating that it is possible to reduce such emissions by 14 percent from the levels of 2005, in an apparent gesture to avoid resentment from industrial circles and the Ministry of Economy, Trade and Industry (METI).

On the issue of trading emissions quotas, the prime minister only said that such a scheme would be introduced on a trial basis in autumn. Such trading has been opposed by the steel and electric power industries.

Nevertheless, the Fukuda vision is worthy of praise for being "epoch making" as it mentioned the introduction of an environment tax and called for increasing the capacity of solar-power generation — a symbol of renewable energy sources — tenfold by 2020 and fortyfold by 2030. This was in stark contrast to the far less aggressive stance Japan had taken only a few years ago.

Between November 2006 and December last year, the Central Environment Council and the Industrial Structure Council met jointly 50 times to review measures to meet the emissions reduction targets set forth in the Kyoto Protocol.

By attending these meetings, I witnessed that the conferees failed to engage in any substantive debate and merely reached the conclusion that the targets can be attained by further encouraging voluntary efforts on the part of private enterprises. Discussion of economic steps such as the environment tax and emissions quota trading was taboo at these sessions.

There had long been a deep-rooted feud between the Environment Ministry and METI on the introduction of economic steps while the Japan Business Federation (Nippon Keidanren) has staunchly opposed any such plan. In short, acceding to Nippon Keidanren's basic position that the whole matter should be left to voluntary actions on the part of private corporations was the main point in the review.

Since the adoption of the Kyoto Protocol in 1997, the Japanese government has done little or nothing. As I recall, the only actions taken were enacting the 1998 Energy Conservation Law and encouraging people to dress lightly in summer to save energy. As a result, the volume of greenhouse gases emitted in Japan in fiscal 2006 was 6.2 percent above 1990 levels, making it virtually impossible for Japan to achieve the 6 percent reduction from 1990 levels mandated by the Kyoto Protocol.

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The government is said to have contracted with Hungary to purchase the right to emit 10 million tons of greenhouse gases for ¥20 billion. Yet, according to my estimate, this country would have to purchase another 80 million tons a year from the countries of the former Soviet Union and Eastern Europe. The cost of ¥160 billion per year may seem a small sum for some people, but a huge expenditure for some others.

When Junichiro Koizumi became prime minister in April 2001, he took the initiative of drawing up and implementing important policies on his own rather than relying on political party leaders and bureaucrats. This tactic was inherited by his immediate successor, Shinzo Abe, who on May 24 last year surprised many observers by delivering a lecture titled "Invitation to Cool Earth 50." In that speech, he floated the long-term objective of "reducing total global emissions of greenhouse gases by one-half from the present level." For that purpose, he called for the development of "innovative technologies" and the creation of a "financial mechanism" to ensure the smooth flow of money from industrialized nations to developing countries.

Abe also stated that the participation of "all major emitters" of greenhouse gases was a prerequisite to working out a new framework to replace the Kyoto Protocol, obviously referring to the United States, China and India. He made a similar proposal at last year's G8 summit in Heiligendamm, Germany, which adopted a resolution calling for serious discussion on the Abe initiative at the forthcoming Toyako meeting. Thus, Prime Minister Abe made bold proposals by ignoring a bitter confrontation that had existed between the Environment Ministry on the one hand, and METI and Nippon Keidanren on the other since the adoption of the Kyoto Protocol.

When Fukuda replaced Abe, I watched closely whether the new prime minister would follow in the footsteps of his predecessor. Fortunately, Fukuda declared in his first policy speech before the Diet that the fight against global warming is urgent, thus making it clear he would inherit the Abe initiative.

Fukuda wasted no time, making many statements that ran counter to the will of Nippon Keidanren and building up faits accomplis, all of which culminated in the announcement of the "Fukuda vision." It is extremely difficult to form a unified view of the government on environmental issues, because they cover a wide range of matters under the jurisdiction of the Environment Ministry, METI, the Land, Infrastructure and Transport Ministry, and the Agriculture, Forestry and Fisheries Ministry. To make matters even more difficult, the position of Nippon Keidanren, the most powerful business lobbying body, cannot be ignored. Only because Fukuda personally took the initiative under his leadership has he been able to come up with his "vision," which is an epoch-making accomplishment, at least by Japanese standards.

Yet, a close look at his vision reveals that he faced extraordinary resistance from METI and Nippon Keidanren. For example, the figure he mentioned in connection with a medium-term target is too conservative compared with the European Union's goal of reducing emissions by 20 percent from 1990 levels. If carbon dioxide absorbed by forests is deducted, Fukuda's target is tantamount to a mere 4 percent reduction.

Another example is that even though the vision calls for a trial implementation of emissions quota trading, it does not go far enough to allocate quotas to individual corporations and besides, it is entirely devoid of concrete steps. As I stated at the outset, the "Fukuda vision" can properly be called epoch-making when compared with the wishy-washy policies of the past 10 years, when the government was plagued with an ugly power struggle among various ministries seeking to protect their vested interests and was weak-kneed in confronting pressure from Nippon Keidanren. Nevertheless, the vision is not likely to win much support at the G8 summit as it does not contain medium-term targets.

Contentious issues at the Toyako summit are expected to include how to clarify medium-term targets, whether to adopt 1990 or 2005 as the base year for emissions reduction, and how to have China and India participate in the fight against global warming. Other issues likely to be taken up in connection with protecting the environment include soaring oil prices, and the relationship between bioethanol production and high food prices.

The Toyako summit is of special importance and can be regarded as a turning point because it will be an arena for thorough discussions on a wide range of 21st century problems, with the participation not only of the eight industrialized nations but also of the leaders from rapidly developing countries like China and India. A new international framework to replace the Kyoto Protocol is scheduled to be worked out late next year at the United Nations Climate Change Conference (COP 15) in Copenhagen. And Prime Minister Fukuda is charged with the task of winning a consensus at the Toyako summit on a broad outline of the new framework. In all likelihood, the target period for the post-Kyoto framework will cover five years in which the year 2020 falls. Agreeing on a long-term target is one thing, winning a consensus on the new framework is something altogether different. I call upon Prime Minister Fukuda to draft a medium-term target that has enough persuasive power so that the participants at the summit will accept it. It is not too late.

Takamitsu Sawa is a professor at Ritsumeikan University's Graduate School of Policy Science and a specially appointed professor at Kyoto University's Institute of Economic Research.


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