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October 27, 2020

Asia

JAPAN: Suga’s climate pledge catalyzes long-delayed debate on energy future

BY Tobias Harris

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  • In a policy speech that largely stressed continuity with the Abe administration, Prime Minister Yoshihide Suga announced that Japan will target net-zero carbon emissions by 2050.
  • The target, though distant, will force the Suga government to grapple with questions about the relative balance of nuclear power, renewables, and fossil fuels in its medium-term energy mix.

The autumn extraordinary session of the Diet began on Monday, 26 October, opening with Prime Minister Yoshihide Suga’s first major policy speech since succeeding former prime minister Shinzo Abe in September. The address contained few surprises. Beyond prioritizing the ongoing campaign to contain Covid-19 while safeguarding economic recovery, Suga stressed the need for digitalization and supply chain resilience; regional revitalization, with an emphasis on agricultural exports and encouraging more entrepreneurial activity; reopening Japan to migrants and international visitors; and building a “social security system for all generations,” particularly by expanding child-care availability for working parents.

The most notable difference from his predecessor was Suga’s introduction of a new pledge for Japan to achieve net-zero carbon emissions by 2050. Abe had emphasized the need to combat climate change, but he avoided ambitious targets in the Paris climate accord and generally preferred to discuss fostering innovation than to address harder questions about Japan’s energy mix. Suga’s pledge, coming as the administration prepares to release a new basic energy plan in 2021 and ahead of the rescheduled COP26 in November 2021, has the potential to spur new thinking about how to reduce Japan’s post-2011 reliance on imported coal and natural gas. It also highlights how competition with other countries – zero emissions targets in China and the European Union, as well as the possibility of more aggressive climate action by a Biden administration in the US likely contributed to Suga’s announcement – could induce more aggressive commitments by Tokyo. The upshot is that under Suga the Japanese government may be prepared to have the politically challenging debate about its long-term energy future that the Abe administration largely avoided.

The prime minister’s pledge signifies a political victory in its own right; Environment Minister Shinjiro Koizumi had been stymied last year when he tried to convince Abe to embrace a net-zero target. But meaningful progress towards this goal will be difficult without a personal investment by Suga in addressing several challenges. Institutionally, the prime minister will have to navigate between an environment ministry that wants a more ambitious approach to greenhouse gas emissions reductions and a Ministry of Economy, Trade, and Industry (METI) that regulates the energy sector and business more broadly, which has more power to determine emissions levels and has also been more reluctant to abandon nuclear and coal power. Despite the more aggressive emissions target, the government will also likely continue to seek a balance between what it calls the “3Es + S” in its energy mix: energy security, economic efficiency, environmental suitability, and safety.

Shifting energy portfolio

As it approaches the new energy plan, the Suga administration will need to decide what role, if any, nuclear power will have as part of Japan’s energy mix. The 2018 energy plan called for nuclear power to provide 20-22% of Japan’s electricity by 2030. However, only nine of 33 operable reactors have been approved for operation, few of which are currently generating electricity. The Ministry of Economy, Trade, and Industry (METI) and the power industry are both committed to retaining nuclear capacity but political leaders have not mustered the will either to accelerate the approval process for restarting existing reactors or building new reactors to replace the roughly two dozen that have been closed since 2011. There has also been relatively little political commitment to next-generation nuclear reactors, such as small modular reactors (SMR). Abe and other Japanese leaders have generally not linked nuclear power to Japan’s climate policies, and enduring public opposition to nuclear power since 2011 will continue to be a constraint on including nuclear as part of Japan’s energy mix.

Whether the new basic energy plan will include a more politically realistic share for nuclear power will depend in part on how the Suga administration tackles two other major energy sources, renewables and coal. The 2018 plan already called for 22-24% of Japan’s energy mix by 2030 to come from renewable sources. However, Japan’s use of renewables, most notably solar, wind, and hydroelectricity, may already be more than 19% of its energy mix, and the government has made progress in recent years reducing the cost of the solar generation in particular. METI will therefore be pressured to raise its 2030 renewables target; Minister Hiroshi Kajiyama has indicated his openness to raising the target, treating renewables as a “major energy source,” and investing more in renewables, particularly offshore wind. METI also wants to invest in advanced battery technology to increase the reliability of renewables.

Against this backdrop, it seems inevitable that the 2021 energy plan will include a reduced dependence on fossil fuels; imported natural gas and coal have largely filled the gap left by suspended nuclear reactors, decreasing Japan’s energy self-sufficiency ratio from 20.3% in 2010 to 9.6% in 2017 according to METI. METI has already announced plans to close up to 100 inefficient coal plants by 2030, although some utilities still plan to build new, more efficient coal-fired power plants. The plan already aimed to reduce coal power to 26% from around 32%. The question, therefore, is whether METI opts for an even more aggressive target next year. A related question is whether Koizumi, who has pushed for a move away from coal, can successfully convince the administration to implement stricter standards for the export of coal technology to emerging markets in Asia.

These choices will have significant effects on public and private investment, tax credits and subsidies, and the energy bills for households and businesses. In short, the prime minister’s new target is only the start of what will be a drawn-out process that will reach far beyond electricity generation. Ultimately, the Japanese government will continue to look to “discontinuous innovation” – dramatic cost reductions and improvements in green hydrogen, battery storage, and carbon storage technologies for example – as the key to achieving net-zero emissions.

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