By Abimbola Shode
For three decades from the 60s to the 80s, Japan maintained a spectacular real economic growth with an average of 6.3% over the period. As at 2008, Japan ranked third among the largest economies in the world based on its GDP (Purchasing power parity)[1]. Although Japan is a resource poor country[2], its economic growth ‘miracle’ was facilitated by rapid technological advancement in virtually all sectors of its economy coupled with liberalisation of world markets that allowed it leverage on its industrial sector to produce goods for exports[3].Every year, millions of cars, Electronic gadgets, steel and non ferrous metals, processed food, chemicals to list a few are produced in Japanese industries and exported to markets around the world.The industrial sector is just one of the sectors amongst other sectors that rely on the use of fossil fuels for generation of energy. This heavy reliance on fossil fuels makes Japan a high carbon emitting country, currently ranking fifth largest GHG (Green House Gas) emitter in the world emitting an average of 1300 million tonnes of GHG per year. Japan in realisation of its contribution to the current high levels of GHG to the atmosphere took steps to become a part of the carbon mitigation by hosting the Kyoto Protocol (KP) in 1997. The KP was adopted by some 150 nations as a result of the recognition that industrialised countries were responsible for the current high levels of GHG, they should bear a heavier burden for its reduction. Japan’s target for the first phase is to cut its GHG emission levels by 6% below 1990 levels[4] but so far Japan’s performance under KP has not been particularly impressive.
According to the G8 Climate Scorecard for 2009, Japan’s GHG emission has increased by 15.1 % above 1990 levels[5]. Japan as the host country to the KP still remains very committed to reaching its Kyoto targets even its though past performance has been embarrassingly weak. One of the reasons proffered for Japan’s difficulty in meeting its targets was that it was already energy efficient as at the time of signing the treaty. If that is true, for Japan to enhance its chances of meeting its targets, it must vigorously starts to pursue clean energy technologies[6]. In 2009, the Ministry of Economy, Trade and Industry in Japan signed an MOU with the USA as part of the Japan-US Clean Energy Technologies Plan to collaborate and accelerate joint research on development of clean technologies in order to achieve a low carbon global economy and sustainable energy development in both countries[7]. One effective clean energy technology which has been found to be a zero-carbon technology is the hydrogen fuel cell but the commercialisation of this ground breaking technology in Japan still remains on hold. The main thrust of this paper therefore is to examine how possible it is for Japan to enhance its chance of meeting its KP targets by substituting hydrogen fuel cell for fossil fuels in its energy mix. I start by giving an overview of Japan and its Kyoto targets while also exploring Japan’s energy mix. Next, I discuss Japan’s overall energy policy while discussing the potential environmental impact of a hydrogen transition in Japan. In the next article I will focus on the road towards a hydrogen economy in Japan by first examining R&D efforts towards hydrogen, the technical feasibility, commercial viability and socio-economic practicality of a hydrogen economy.
JAPAN AND ITS KYOTO TARGETS
WHY THE KYOTO PROTOCOL?[8]
In the early 60s and 70s, climatologists began to clamour that increasing CO2 concentrations in the earth’s atmosphere was creating a global warming impact. As these concerns deepened, UNEP (United Nations Environmental Programme) and WMO (World Meteorological Organization) formed the Intergovernmental panel on climate change (IPCC), a group made up of 400 meteorologists and scientists in 1988, to investigate these global warming claims. The IPCC submitted its first report in 1990 and stated categorically in the report that the global warming was real and urged that something be done about it. The IPCC base their theory on scientific evidences that human activities are resulting in the accumulation of green house gases- a development which is significantly impacting on the solar energy balance and a creating a global warming scourge[9]. The IPCC report led to the creation of the United Nations Framework Convention on Climate Change (UNFCC) in 1992 at the ‘Earth Summit’ in Rio de Janiero so that countries of the world could begin to consider what could be done to reduce the global warming and stabilise GHG emissions. The KP is an additional treaty to the UNFCC which is more legally binding in that it set targets for 37 industrialised countries and the EU to cut down their GHG emissions in the interest of the environment. The first phase of the KP is the 2008 – 2012 period and the target given by the KP is that current GHG emissions from developed countries must be reduced by an average of 5.2% below 1990 levels[10]. Under the Kyoto, countries have the option of meeting their targets either through the use of national policy measures or the three flexible mechanisms provided by the KP. These mechanisms will not be explored in depth in this work as the focus of this paper involves the use of a national policy option of fuel switching from fossil fuels to hydrogen fuel cells as a means of achieving its Kyoto targets.
EVOLUTION OF GHG EMISSIONS AND KP PERFORMANCE IN JAPAN
Japan’s GHG emission has grown over the years since the 1990s, this growth has largely been driven by some factors, such as; demography (high population density, an increase in the amount of households and an ageing population), changes in economic structure (a shift from industry towards the services sector) and changes in primary energy mix (a temporary major decline in the operating rate of nuclear power plants)[11].
Japan is listed as an Annex I Party to the United Nations Framework Convention on Climate Change[12] and a review of its performance so far shows that Japan’s GHG emissions have been on the increase since 1990, and the latest confirmed figure for the year 2007 indicates a 9% increase from the 1990 base year [13] (See figure 1).
Figure 1: Trend in GHG Emissions in Japan 1990 -2007
SECTORAL COMPOSITION OF THE GHG EMISSION IN JAPAN
Japan’s primary energy supply mix in 2007 (figure 2) is oil (44.6%), coal (22.3%), natural gas (16.2%), nuclear (13.4%), hydro & geothermal (2.1%), and new energy (including solar, wind and other renewables) (1.4%)[14].
Figure 2: Japan’s Primary Energy Mix in 2007
Source: IEA Energy Statistics, 2008
Since fossil fuels account for as high as 84% of Japan’s TPES (Total Primary Energy Supply), the sectors that are the highest end users of fossil fuels are also the largest emitters. Sectoral emissions show that the Industrial, Energy and Transport sectors together account for about 80 percent of direct emissions by sector in 2006 (Figure 3).
Figure 3: Direct Emissions by sector in 2006
JAPAN’S ENERGY POLICY
OVERVIEW OF JAPAN’S ENERGY POLICY[15]
With a GDP of USD4.4million in 2006, Japan has been the second largest economy in the world and also the third largest importer of energy resources. With Japan being a resource-poor country, Japan’s energy policy focuses on two priorities which are energy security and energy efficiency. ‘The Basic Energy policy in Japan’ adopted in June 2002[16] targets the Energy[17], assurance of a stable supply of energy, enhance energy conservation expansion and promotion of safer nuclear technologies, development of novel sources of and reduced GHG emissions by promoting energy and environment interactions.
As result of the recent changes in the international energy demand and supply structure, ‘The New National Strategy’[18] was created. The main elements of the strategy include the following:
- To achieve further 30% advancement in energy efficiency in consumption by 2030.
- To decrease by 40% or less the share of oil in TPES by 2030.
- To cut oil dependence in transport by 80% by 2030.
- To boost by 30 – 40% the share of nuclear in power generation by 2030
- To further increase by at least 40% the ratio of exploration and development of oil resources by Japanese companies.
Another area covered in Japan’s energy policy is the energy efficiency and CC issue. Since Japan under the KP committed to reducing GHG emissions by 6% below 1990 levels in the first period 2008 – 2012, the Kyoto Protocol Target Achievement Plan (KPTAP) was developed as a domestic measure to ensure the KP target is met. The KPTAP is a very robust plan that comprises of about 60 policies and measures[19] Most of these policies however focus on energy efficiency measures and voluntary agreements with the industry (See figure 4 for overview of KP targets and measures to achieve the target).
Figure 4: Overview of Kyoto Emissions Targets and Measures to achieve the Target
Source: Japan Country Submission to OECD, IEA, 2008
The country also has some guiding science and technology principles which- in addition to its general policy direction- help to boost innovation and technological advancement in novel energy sources. Under the third Science and Technology policy Plan from 2006 -2010, a five year energy plan targeted at improving particular types of energies like the hydrogen fuel cells, fast breeder reactors (FBR), clean coal technologies and the solar photo voltaic panels. Energy efficiency in consumption is also being encouraged through taxes and subsidies. For instance to discourage consumption of fossil fuels; the coal and pet tax, gasoline delivery tax and the LPG tax are in place. In 2007, the Japanese government had a budget of about 172 billion JPY for all kinds of subsidies[20].
A CRITICAL EVALUATION OF JAPAN’S ENERGY POLICY
Although a lot has been given for the well developed and robust nature of the domestic national policy on energy in Japan, there are a few areas of concern which if not addressed could impact on the overall performance of the policy. One of such issues is that the renewable energy policy is not as ambitious as it should be for a country that places a lot of importance on energy security. A sure way to gain independence from fossil fuel imports is to augment current efforts on renewables so that it can generate long term dividends for the economy. Moreover, efficiency levels are already very high in Japan in comparison with countries; hence there is a need for a change of focus to renewables and clean fuel technologies if the challenges posed by the KP targets will be surmounted[21].
It has also been observed that price signals for GHG emissions in Japan are still weak. This could be due to the fact that a voluntary approach for reduction in GHG is currently being pursued by the government with the industrial sector. Japan should re-examine the effectiveness of this approach and consider complementing other policies options in addition to the voluntary approach such as setting standards, administering emissions taxes and establishing a trading systems in order to reduce emissions in the industrial sector. The government should also consider specific belt tightening measures where sector-specific GHG emission benchmarks are set.
Energy efficiency improvement of 30% to 2030 is a long term approach to GHG emissions reduction; this long term target needs to be supplemented by some interim targets which will aid medium term evaluations to enable government to adequately keep track of the progress of the long term plan.
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