Thoughts about Making Japan a Low-Carbon Society

June 9, 2008

The Japan Iron and Steel Federation

Shoji Muneoka, Chairman

Prime Minister Yasuo Fukuda recently announced his commitment to making Japan a “low-carbon society.” JISF views this pledge as a sign of Japan’s commitment to help create an effective international framework for reducing greenhouse gas emissions and for transforming Japan into a low-carbon society. Japan’s steel industry is determined to continue taking forceful actions alongside the Japanese government to fight global warming.

1. Long-term targets

JISF regards the long-term targets as merely indications of the basic direction for a vision for achieving a low-carbon society. Cutting Japan’s carbon dioxide emissions by 60% to 80% will be an extremely difficult task. Actions needed to achieve this reduction could have a serious impact on Japan’s economy and the living standards of the public.

JISF would like the Japanese government to create a roadmap for reaching its targets based on the scientific knowledge associated with the government’s “Cool Earth Innovative Energy Technology Program” and other plans. In addition, we would like the government to adopt a clearly defined policy for channeling substantial resources to the drive for developing the necessary technologies.

2. Medium-term targets

Japan already has the highest energy efficiency in the world. There are fears that the actions needed to achieve even higher efficiency while sustaining economic growth would place a great burden on the Japanese public and make Japanese manufacturers less competitive in the world. Japan’s Ministry of Economy, Trade and Industry recently announced its long-term outlook for energy supply and demand. The outlook assumes that the latest advances in technology will be used to the fullest extent possible. Based on this assumption, the ministry estimates the social cost will be about \52 trillion by 2020.

To determine the medium-term targets, we must reach a consensus. This will require drawing on the collective knowledge of experts this field in government, industry and academics. We must formulate specific measures to cut greenhouse gas emissions along with an estimate of the associated expenses. Furthermore, as Prime Minister Fukuda stated, this process must include a review of the establishment of fair targets for each country using sectoral approaches. A reexamination of the years selected as the basis for comparisons of future reductions in emissions is also imperative.

3. Japanese Emission Trading Scheme

There is a big difference in progress made in reducing greenhouse gas emissions when looking at different economic sectors. In the consumer sector, emissions have increased significantly (up 40% for businesses and 30% for households between FY1990 and FY2006). But in the industrial sector, emissions are down 5% during this period due mainly to voluntary action plans.

Japanese companies in all industries have used these plans in order to preserve and enhance Japan’s position as the world’s most energy-efficient country. In addition, these companies view the achievement of reduction targets as a social commitment. These corporate initiatives, including the purchase of CDM (clean development mechanism) credits, are the primary component of measures in Japan to fight global warming.

Imposing even stricter emission caps on Japanese industrial companies may be harmful rather than beneficial. For instance, Japan’s economy could be damaged by outflows of capital as Japanese companies buy overseas emission allowances to meet the stricter caps. Furthermore, the shift of manufacturing from Japan to developing countries would contribute to global warming by raising greenhouse gas emissions.

No details have been announced concerning the Emissions Trading Scheme mentioned by Prime Minister Fukuda. But there has been both support and opposition regarding this system even in the report of the Policy Methodology

Subcommittee formed to discuss the global warming problem. The report stated that “examinations should continue based on actual conditions in Japan and while monitoring developments in Europe and North America.” JISF hopes that actions involving the trading system will be taken only after conducting sufficient examinations.

4. The G8 Hokkaido Toyako Summit and expectations for Prime Minister Fukuda

Assembling an effective framework in which all major greenhouse gas emitting nations can participate is the most urgent issue for the G8 Hokkaido Summit as well as upcoming multilateral discussions. That means Japan, as the G8 host country, must fulfill two important roles: (1) have all countries recognize global warming as a crisis and (2) establish a broad outline for building a flexible and diverse framework that reflects different conditions in individual countries. This framework would apply to all countries while incorporating the principle of differing responsibilities. China’s participation is particularly important, and Japan must play a major role. Consequently, Japanese industrial companies as well hope to see Prime Minister Fukuda exercise strong leadership with regard to the issue of global warming.

 

For more information about this subject：
  The Japan Iron and Steel Federation
   Secretariat Affairs & Public Relations Group
   General Administration Division
        Tel: 03-3669-4822 Fax: 03-3664-1457
   Technology,Environment & Energy Group
   Technology,Environment & Energy Division　
　　　 Tel: 03-3669-4824 Fax: 03-3669-0228