Firms leery of DPJ emissions vow

by Hiroko Nakata

Despite plaudits from the international community, Japanese business remains critical of the Democratic Party of Japan’s pledge to reduce greenhouse gas emissions by 25 percent from 1990 levels by 2020.

The Japan Business Federation (Nippon Keidanren), the country’s most powerful business lobby, said Monday the DPJ should provide more evidence that the target is fair and feasible in terms of global competitiveness and cost.

“As far as the midterm target goes, the government needs to reach a public consensus after examining it further,” Keidanren head Fujio Mitarai said at a news conference in Tokyo. The lobby includes the country’s biggest polluters, such as steel companies and utilities.

It has warned that the ambitious target threatens Japan’s competitiveness and that switching to low-carbon energy sources will be costly to businesses and individuals.

Asked how much Keidanren thinks the emission cuts will cost, Mitarai said, “We are saying the government should figure it out.”

The group also released on Monday its wish list for the incoming administration, including a request that the emissions target be re-examined, as well as further steps to bolster economic growth led by the private sector, and a sustainable social security system.

The organization will hand over the list soon after DPJ leader Yukio Hatoyama forms his Cabinet on Wednesday.

Hatoyama will likely make a pledge on emissions cuts with a numerical target when he attends the U.N. General Assembly in New York on Sept. 22.

Experts say the new government needs to take several steps to reach its goal.

“For the short term, the country should stop constructing new coal-based thermal power plants and boost production of renewable energy, while curbing energy consumption,” said Tetsunari Iida, executive director of the Institute for Sustainable Energy Policies.

The country’s total energy demand has risen for more than two decades since recovering from the second oil shock in the early 1980s. In fiscal 2007, demand was equivalent to 593 million kiloliters of crude oil, compared with a peak of 443 million kiloliters of crude in fiscal 1979, according to the Federation of Electric Power Companies of Japan.

Amid the rising demand, the country’s utility companies plan to build at least seven more coal-fired power plants, Iida said.

Meanwhile, alternative energy including wind power and solar power accounts for just 1 percent of the country’s overall electricity production of 1 trillion kwh, according to the federation.

It says renewable energy is not likely to be a major energy source because generating enough power to meet current demand would take huge amounts of money and space.

The federation also says the country’s mountainous geography blocks the steady winds seen in Europe, and that Japan lacks the space needed to construct enough solar panels.

Scientists, however, take issue with these arguments.

Iida said installing large-scale offshore wind farms in Chiba Prefecture could meet 95 percent of the country’s electricity needs. He also said solar panels built on just 5 percent of the country’s land area could generate enough electricity to meet that demand, and that the space could be found if rooftops and other unused space is used.

Some Japanese companies that stand to benefit from the DPJ’s emissions pledge have been reluctant to speak up in the face of overwhelming opposition from heavy polluters.

Share prices of solar panel makers Sharp Corp. and Kyocera Corp., and Sanyo Electric Co., which makes lithium-ion rechargeable batteries for hybrid vehicles, have risen strongly in recent weeks.

Asked if they welcome the DPJ’s stance, the companies declined to comment.

In contrast, major polluting firms have already criticized the outgoing Liberal Democratic Party’s 8 percent emissions cut target, calling it “very severe.”

Amid strong opposition from big businesses, Hatoyama reaffirmed at a seminar in Tokyo on Sept. 7 that his government will stick to the 25 percent greenhouse gas reduction target.