Is Criticism of Japan on Climate Change Well-Placed?

June 30, 2015Global Challengesby East Asia Forum

Japan received sharp criticism on climate change at the G7 summit.

Japan has received some sharp criticism following the G7 meeting in June 2015 for its stance on climate change. Japanese Prime Minister Shinzo Abe announced a target of cutting greenhouse gas emissions of 26 percent below 2013 emission levels by 2030, which is equivalent to 18 percent less than 1990 emissions. If replicated globally, this would fall short of what is needed to keep the risk of catastrophic climate change to reasonable levels.

However, this criticism is largely unfair. Japan’s energy supply remains in turmoil following the Fukushima disaster of 11 March 2011. All governments face the reality that transforming energy systems takes time and require overcoming domestic obstacles to change. The truth is that Japan cannot now be a pathbreaker on climate change. Nevertheless, by keeping its target within the range of those announced by others, it has ensured that other countries cannot use Japan as an excuse for shirking.

The protocol establishing binding targets for developed countries famously bears the name of Japan’s former capital of Kyoto. Tackling climate change was touted as a symbolic goal by Japanese policymakers, and former Prime Minister Yukio Hatoyama was lauded for committing Japan to cutting greenhouse gas (GHG) emissions by 25 percent from 1990 levels by 2020.

Since then, things have changed. At the 19th session of the Conference of the Parties (COP 19), under the UN Framework Convention on Climate Change (UNFCCC) in Warsaw, Japan — along with Australia — was criticised as a climate laggard for offering a 3.8 percent GHG emissions reduction from 2005 levels by 2020. In the lead-up to COP 21 in Paris in December 2015, Japan’s climate efforts are again being criticised as not going far enough.

However, this view fails to recognise that Japan is still reeling from the Fukushima nuclear disaster. Previously, a little under a third of Japan’s electricity was delivered from its fleet of 54 nuclear units. In the wake of the accident, remaining units were idled and emissions from fossil fuel combustion jumped. Energy-related emissions grew from 1139 to 1235 million tonnes of CO2 equivalent from 2010 to 2013, an increase of 8 percent. Japan’s nuclear plants are now subject to enhanced safety checks, and the power utilities are required to renegotiate with local governments.

Many countries failed to meet their Kyoto commitments. But this does not mean the international pledges governments are making in the lead-up to Paris are unimportant. International commitments — even in the absence of compliance mechanisms — can shape domestic policy choices by narrowing the range of what is acceptable.

Japan should be congratulated for trying to keep its emissions projections at a level sufficient not to undermine international negotiations. Indeed, a core goal of its long-term energy planning process was establishing a target for 2030 that approximates that of Europe and the United States, despite the effects of idling nuclear units on its emissions profile.

In the end, Japan’s contribution to mitigating climate change will be determined by the innovation of its companies and by how it manages energy supply and demand domestically. The government recognises nuclear power will play a diminished role in Japan’s energy system. Some analysts think nuclear power will contribute far less to Japan’s electricity generation than the announced target of 20–22 percent. The key question is how policy choices will affect future investment choices. Here there is room for criticism.

Japan’s emissions target emerged in part from a bottom-up assessment of energy supply and demand to 2030 on a fuel-by-fuel basis, which takes into account the government’s assessment of the cost competitiveness and technological constraints of different fuels. This approach tends to underestimate the possibilities of technological and policy innovation. A case in point is Japan’s version of the feed-in tariff (FIT). Japan was the global leader in solar photovoltaics in the 1990s. The FIT, through which investors received a guaranteed return on investment for power generated through renewable energy sources, increased the installation rates well beyond government expectations and shifted its distribution toward utility-scale grid connected projects.

Total electricity generated by solar photovoltaics today remains tiny compared to nuclear power delivered prior to 2011. However, the FIT’s success demonstrates that policy change can contribute more than expected to emissions cuts in the power sector. The intermittency of renewables is offered as one reason for increasing the role of coal as baseload power for the grid, but falling costs in battery storage could change this calculus.

Market reform will also shape the cost competitiveness of different fuels. Japan is currently overhauling the rules governing competition in the power sector, including opening the residential sector to competition and pushing forward with unbundling the vertically integrated regional power utilities.

This may have little effect. Previous rounds of market reform failed to weaken the enormous market power wielded by the utilities. But with Tokyo Electric Power Company announcing plans to shift to a holding company structure, and beginning to allocate investments outside its home market, it is possible that new market entrants will spur greater penetration of natural gas and renewables, shifting demand away from more carbon-intensive fuels.

Though Japan can certainly do more, in the wake of the Fukushima disaster, it cannot be a trailblazer in climate change. However, the government deserves a modicum of praise for ensuring it does not undermine the global project of producing a binding agreement that incorporates all the major emitters.

Japan deserves some praise on climate change is republished with permission from East Asia Forum

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