Green Economy Policy in Japan: After East Japan Disaster and Fukushima Nuclear Accident

Green Economy Policy in Japan: After East Japan Disaster and Fukushima Nuclear Accident

Xin Zhou, Ph.D., Deputy Director &

Satoshi Kojima, Ph.D. , Director

Economy and Environment Group

Institute for Global Environmental Strategies (IGES)

Institute for Global Environmental Strategies

Outline

Green economy and green investment

Green economy policy in Japan

Lessons learned from east Japan disaster and Fukushima accident

New policy directions for Japan

Strengthening collaborations on green investment in China, Korea and Japan


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Green Economy and Green Investment

UNEP gave the working definition of a green economy as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.

The essence of a green economy is to pursue harmonization of inclusive economic growth and environmental sustainability.

Green investment is vital in gradually changing the fundamental structure of conventional economic infrastructure, create new jobs and help economic recovery.


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Green Economy in the Context of Japan

A green economy is “an economic system which promotes sustainable growth while improving human welfare, by pursuing economic growth and the environmental conservation in tandem, properly utilizing and conserving natural resources and ecosystem services”.

A green economy is regarded as “a useful tool to achieve Sustainable Development”.

Government of Japan (2011) Input to the Rio+20 Outcome Document [http://www.mofa.go.jp/mofaj/press/release/23/10/1031_05_01.pdf]Institute for Global Environmental Strategies

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On 31 October 2011, Japan gave its definition to a green economy for the first time in its preparation for the Rio+20.

Japan’s Policy Aiming at Green Economy


3 pillars in the vision of “becoming a leading environmental nation in the 21st century” (2007)

Low carbon society (Challenge25: 25% reduction by 2020)

Sound material-cycle society (3R initiative)

Society in harmony with nature (Satoyama Initiative)

Green Economy

Society in Harmony with Nature

Low Carbon Society

Sound Material-Cycle Society

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Japan’s Green New Deal


Minister of the Environment announced “Green Economy and Social Change” (Japanese Green New Deal) in April 2009.

Greening social overhead capital (public investment) Renovation of public buildings e.g. schools to eco-building Renovation of transportation/city to eco-friendly system Investment in forestry for carbon mitigation Greening consumption (mainly through eco-point schemes) Promotion of energy-saving home electric appliances Promotion of next generation eco-housing Promotion of next generation vehicles and biofuels Greening investment (through carbon market and green tax) Introduction of domestic cap-and-trade Greening tax Carbon offsetting, carbon foot-print

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Japan’s New Growth Strategy

New demand Job creation

Green innovation

JPY 50 trillion (USD 415 billion)

1.4 million jobs

Life innovation JPY 50 trillion (USD 415 billion)

2.8 million jobs

Asian economy JPY 12 trillion (USD 100 billion)

0.2 million jobs

Tourism JPY 12 trillion (USD 100 billion)

0.6 million jobsInstitute for Global

Environmental Strategies

Cabinet approved “New Growth Strategy” as the direction of Japanese economic/industrial policy on 18 June 2010.

Aim to create new demand and employment in 4 priority areas

Economic growth through green innovation

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＜ Energy Sector ＞•Renewable energy•Nuclear power plant•Efficiency improvement in power generation•Smart grid

＜ Transportation ＞•Promotion of modal shift•Next-generation vehicle

＜ Building ＞•Energy-saving home electronics•Eco-house•Heat-pomp•LED and organic EL•Environmental concierge

＜ Resource ＞•Promotion of recycling•Invention of alternative materials for rare metals

Targets by 2020•50 trillion of environment related new market•1.4 million new environment related employment•Emissions reduction by 1.3 billion t-CO2 at the global level

Green Innovation in New Growth Strategy

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Contributions to Green Economy in Asia


Utilise green innovation in Japan to greening economies in Asia

Promote infrastructure development, e.g. Shinkansen for urban transportation, water infrastructure, energy infrastructure, and eco-city.

Not only increased exports of green products but also consequent economic growth in Asian countries will provide large markets for Japanese producers.

Clean Asia Initiative (Ministry of the Environment) Help achieve the transition towards green economy (low carbon

economy, sound material-cycle economy and economy in harmony with nature) in Asian countries through ODA.

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Classification of Green Industry


Matured industry:• well-developed technology•market share in both domestic and foreign markets

Example: hybrid car

Matured industry with limited market share • well-developed technology• home markets• no entry or only a recent entry in foreign markets

Example: energy (nuclear energy), transportation (high-speed rail), construction (low-carbon housing), water, recycling

Premature industry: Industries with small domestic marketExample: electric cars, biomass energy

Supportive:Industry which support industrial sectors listed left for their contributions to green activities

Example:Financial institution,Trading company

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Lessons from 3.11 and Fukushima

Japan is still vulnerable to serious disasters

Japan is very advanced in seismic engineering and technologies. Have experienced serious Tsunami damages nearly every 50 years and have rich experiences in preventing Tsunami damages.Still, more than 20,000 died and Japan did not prevent the Fukushima accident.

Precautionary principle is key to avoid uncertain catastrophes

Immediate cooling by sea water could have avoided hydrogen explosion of Fukushima No.1 reactor, however nobody could have made such a decision without a social acceptance of the precautionary principle.


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Lessons from the Rolling Blackout of TEPCO

Overconsumption of electricity

After adapted to darker illumination in stations and trains, many people think previous illumination was too bright.Rolling blackout raises general awareness in energy saving.

Vulnerable electricity supply to lifelines and medical services

TEPCO’s rolling blackout seriously affected lifelines such as railway services, car traffic due to no traffic signals, etc. and medical services in hospital as well as at home. Disadvantages in centralised and monopolistic electricity system are presented. Serious discussions started on the separation of electricity generation from distribution and transmission as well as introduction of decentralised generation and distribution system using renewable energy.


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New Policy Directions for Japan

Discussions are ongoing including

Ecological tax reform to promote investment in renewable energy and smart grid that enable more renewables in the energy mix.Not only resource efficiency improvement but also reductions in absolute resource use should be achieved such that economy and life style is compatible with the carrying capacity of our planet.Application of payment for ecological services and green accounting to support sustainable agriculture and green supply chains.


Key success factors:

Development paradigm shifting from economic efficient growth to ecologically resilient growth based on precautionary principle.

Progress indicators reflecting quality of life and resilience (or vulnerability) of the society and economy.

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Strengthening Collaborations on Green Investment in China, Korea and Japan

Japan and Korea represent developed countries and China is an emerging economy. The three countries have different visions and priorities in achieving a green economy. Experiences from the three countries can be referred to other countries.

Proposal for a comparative study on green investment in China, Korea and Japan

IGES are conducting several projects related to green economy, e.g. SDG, pathway of low carbon growth, resource management and recycling, and indicators, etc. The Economy and Environment Group applies several analytical tools, CGE, MRIO, GIS, MESSAGE models, to conduct policy assessment.

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Output Effects of New and Renewable Energy Investment (preliminary estimation)

JPN KOR CHN ROW

M&E Ely M&E Ely M&E Ely M&E Ely

Global output effect (u$/u$ investment 2.47 1.93 2.65 1.91 3.04 2.44 2.42 2.03JPN 88.5% 87.4% 7.1% 1.2% 3.7% 1.9% 2.0% 0.6%KOR 0.6% 0.2% 73.5% 76.8% 2.1% 1.1% 0.7% 0.2%CHN 2.3% 0.9% 3.1% 3.0% 79.0% 87.4% 1.9% 0.8%ROW 8.6% 11.5% 16.3% 19.0% 15.2% 9.6% 95.4% 98.4%Total 1 1 1 1 1 1 1 1

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Income effects of New and Renewable Energy Investment (preliminary estimation)

JPN KOR CHN ROW

M&E Ely M&E Ely M&E Ely M&E Ely

Global income effect (u$/u$ investment 0.50 0.27 0.39 0.20 0.39 0.28 0.47 0.30JPN 90.9% 87.8% 9.0% 2.1% 5.4% 3.1% 2.0% 0.8%KOR 0.4% 0.1% 69.7% 69.4% 1.8% 1.0% 0.4% 0.2%CHN 1.3% 0.9% 2.5% 4.6% 73.1% 82.8% 1.1% 0.6%ROW 7.5% 11.1% 18.7% 23.9% 19.6% 13.1% 96.5% 98.4%Total 1 1 1 1 1 1 1 1

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Thank you for your kind attention!

[email protected]; [email protected]

http://www.iges.or.jp


Documents

Green Economy Policy in Japan: After East Japan Disaster and Fukushima Nuclear Accident