Commentary / Japan

This is the moment for Japan to rethink coal

by Brad Glosserman

Contributing writer

The Japanese government has reversed course on its support for coal power. Two key decisions — one on infrastructure exports and the other addressing domestic energy policy — have been heralded by Environment Minister Shinjiro Koizumi as “a turning point” for Japan. Maybe there is something to be said for public shaming after all.

While Japan prides itself on its “green outlook” and has tried to lead on international environmental policy, its track record in recent years has fallen woefully short of its ambitions. Part of the problem are the continuing aftershocks of the March 2011 accident at the Fukushima nuclear power plant. That horrific incident forced Japan to reconsider an energy strategy that was reliant on nuclear power and the country has struggled to make up for the shortfall.

Coal has figured prominently in that effort, with 140 coal-power plants accounting for just under a third (32 percent) of Japan’s total power generation in 2018. The government aims to decrease that figure to 26 percent by 2030. As troubling as Japan’s reliance on such a “dirty” energy source has been its readiness to export coal plants to other countries in the region as part of its overseas economic cooperation.

Earlier this month, however, Japan announced that it was revising its domestic energy strategy and would be phasing out older, less efficient coal-power facilities. It is estimated that about 100 plants — which provide about 16 percent of the country’s power — would be closed. While there is a desire to promote renewable energy alternatives, Japan will not be turning its back on coal; two-thirds of that capacity will be replaced with newer, more efficient coal plants.

While the country’s energy policymakers know that reliance on coal blackens the country’s environmental credentials, there remains concern about future natural disasters and the need to have a reliable backup energy option.

That decision was followed by the Cabinet’s approval last week of a new strategy for infrastructure exports that marks a decisive shift in the country’s approach toward the use of coal technology overseas. According to the new policy, Japan will support coal-technology exports of only the most efficient generators and only if the recipient country has a national strategy to reduce carbon emissions.

Plainly, it is not a complete break with coal. The government will reportedly continue to provide funds for plants that use integrated gasification combined technology, which emits 15 percent less carbon dioxide that a regular coal-fired facility, or plants that use a combination of coal and biomass. Some environmental groups applauded the move, while highlighting a big loophole: The new policy does not apply to projects already in planning, of which there are three in the region, one in Bangladesh, one in Indonesia and one in Vietnam.

Nevertheless, Koizumi was optimistic, calling the new strategy “a big, positive move.” The decision reflects a new mentality in Japan, one that goes beyond the legacy of Fukushima. While acknowledging that new sales have not been banned outright, thinking has evolved. “Japan’s attitude was that if we can sell, then we should,” he explained. “That is completely changed. In principle, there will be no support.”

Koizumi credited criticism that Japan received at the COP25 conference in Madrid last December for stimulating the change. Then, Koizumi confessed that “I cannot share new developments on our core policy,” a statement that generated considerable criticism. In addition to more conventional and formal pushback at the meeting, Japan was given two “Fossil of the Day” awards from Climate Action International, a network of over 1,300 groups in more than 120 countries working to limit climate change: one for its continued reliance on coal and the second for financing coal use overseas, particularly in Southeast Asia.

There is another potential problem with the new export strategy: Many developing countries do not have national carbon reduction strategies. That should be considered an opportunity, however, and not an obstacle. Japan must help recipient governments formulate those strategies. Such an approach is consistent with the “high-quality infrastructure” that is the foundation of Japan’s approach to assistance.

Japan can and should make the case for alternative energy policies on environmental grounds and the growing public support for green strategies. The economics of such policies is improving as well. The cost of renewable power is falling. There is also a growing pool of international capital that is available for green projects. The terms for financing environmentally sustainable projects are improving and there is growing skepticism of “dirty” projects.

In other words, if Japan didn’t change its policy it would be increasingly isolated as it pursued its coal projects and forced to absorb an increasing share of the risk.

This is a good time for Japan to shift its approach. Supply chains are being restructured and that creates new opportunities for investment, which should be guided by “green field” thinking.

The COVID-19 outbreak has also forced governments to embrace stimulus initiatives to compensate for the devastating economic effects of the pandemic. One of the smartest approaches is to step up environmentally sustainable infrastructure investment projects to provide jobs and build in a “green” approach, in particular one that cuts carbon emissions.

This orientation assumes even more importance given the Asia-Pacific region’s halting progress toward targets for sustainable consumption and climate change as laid out in the United Nations 2030 Sustainable Development Goals. In March, the U.N. Economic and Social Commission for the Asia Pacific (ESCAP) released an interim report on regional efforts that concluded that the region is going backward in efforts to address responsible consumption and production and climate action. It characterized the lack of progress on environmental issues as “striking.”

Kaveh Zahedi, deputy executive secretary of ESCAP, argues that the current crisis “has to be the beginning of our region’s decarbonization.” Japan should seize the moment, reaching out to local as well as national governments overseas to promote sustainable energy projects. This can range from infrastructure initiatives that address supply-side concerns, such as power plants, to demand-side measures, such as retrofitting buildings or “building in” greater efficiencies. Japan’s private sector has leading-edge technologies and the national government should give them more support instead of relying on traditional standard bearers that use dirty, outdated ones.

While overseas development assistance has traditionally been used to aid Japanese companies along with recipients, Tokyo should adjust its thinking to work with other regional partners. Infrastructure development is one of the pillars of Japanese multilateral cooperation and Tokyo must do more to inculcate a responsible, environmentally sustainable approach in the plans and policies of recipient and donor governments alike. New thinking about coal is a good start.

Brad Glosserman is deputy director of and visiting professor at the Center for Rule Making Strategies at Tama University as well as senior adviser (nonresident) at Pacific Forum. He is the author of “Peak Japan: The End of Great Ambitions.”

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