Yurika Ayukawa Japan s Climate Policy

8/6/2019 Yurika Ayukawa Japan s Climate Policy

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Japans Climate PolicyWill We be able to Achieve the Target?

October 19, 2007

Yurika Ayukawa

WWF Japan, Climate Change Programme


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1,300

,20

,10

,00

MtCO2

.

Kyoto Target 20082012 2004Base Year (1990)

8.4%moreemissionreductionneeded

2005

1360 7.8%

1261

1357 +7.6%

Sinks 3.8%

Kyoto Mechanism 1.6%

Temporal increase due to

nuclear power plant shutdown

(+4.8%

(+5.5%

.% .%

Japanese GHG Emissions and Plans forReduction

Graph made by Ministry ofEnvironment, May 29, 2007,

translated by WWF Japan


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Kyoto Target Achievement Plan(2005)

Main Policies

Energy Conservation Law (incl. Top Runner Program)Mandatory GHG Emissions Accounting, Reporting, and Disclosure

(all large&middle sized facilities)

More Nuclear Power (by 2010, 2 new NPP in addition to the current55)

Renewable Portfolio Standard(2014Target: 1.63% of Total ElectricitSupply, revised Jan.29, 07)

Voluntary Actions

Keidanrens Voluntary Actions (Covers 40% of Japans TotalEmissions)

Team Minus 6% (for the general public)Green Logistics Partnership (Transport)

Home Energy Management System, Building Energy ManagementSystem (ESCO)


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Whats Wrong with the Plan?

Mainly based on Voluntary Actions which do not guarantee

real reductionsMostly targeted to improve carbon intensity per production,

sales turnover, or energy consumption, and not to reduceabsolute amount of emissions

Totally dependent on more nuclear power plants to reducethe carbon intensity per kilowatt hour of electricity

No market-based instruments such as carbon tax oremissions trading scheme

No scheme for the big emitters

No incentive scheme for the increasing sectors such asoffice buildings, households, and transport


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Review Process of the Kyoto TargetAchievement Plan

Review Committee comprised of committees from METI and MOEheld more than 20 meetings since last November.

Related stakeholders from the government, industries, academics,NGOs were invited to make statements and proposals on thecurrent policies, achievements and insufficiencies.

The Points of Discussion were publicized in April, and put to

public consultation.

Additional measures were discussed and an Interim Report waspublicized in August and put to public consultation.

Final Summary is due in November

Final Report due in December

The New Plan will be adopted by the Cabinet in March, 2008.


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The Review Process is TotallyInsufficient

Although the Report admitted that the current policies were not enough

to meet the Kyoto target, the measures discussed are still onvoluntary schemes, and no mandatory schemes or economicmeasures are discussed.

The main pillar of the New Plan will be to expand the boundaries ofVoluntary Actions to all sectors.

There is no scheme for the big emitters except Keidanrens

Voluntary Actions There is still no incentives for the increasing transport,

commercial and household sectors

Renewable Energies are not regarded as an essential part of the CO2reduction policy.

Totally dependent on nuclear power. Though there has been many

accidents, frauds, and earthquakes which forced the nuclear powerplants to shut down, it still plans to increase the operational rate upto about 88%, which is absolutely unrealistic and dangerous.


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Where does Japanese CO2 emit from? Direct Emissions for 2005

Industry

29%

Industrial

Process

4%

Transport

19%

Commercial

8%

Households5%

Waste

3% Power

Generation

32%

Made from Greenhouse GasInventory Office, May 29, 2007

Total of the Bluepart is 65


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Indirect Emissions Sources compared to 1990

Greenhouse Gas Inventory Office of Japan, May,2007

0

100

200

300

400

500

600

Powe

rSector

Industry

Tran

sport

Comm

ercial

Hous

ehold

s

Industria

lProcess

Waste

1000tCO2

1990

2005

Industries say these

sectors are theproblem, not them


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0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

industry passenger

travel

freight

transport

commercial domesticChangesinCO2e

missions;

changesinactivity

(1990=1

Changes in CO2 emissions Changes in activity

CO2 emissions and activity data by sector Emissions by sector should be considered with activity data

Activity in the industrial sector has leveled off, but in the commercial and

domestic sectors it has risen sharply

Source Institute for Energy Economics Japan (IEEJ) Energy and economic statistics

survey 2007 and tentative figures for 2005 GHG emissions

Changes between 1990-2005 by sector in CO2 emissions and economic activity>

Indices of activity are IIP, traffic volume of passenger transport and freight transport, floor area, numberof households, respectively.)


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Is Japan the Most Efficient Country?Trends in industrys energy efficiency

0

20

40

6080

100

120

140

1960 1970 1980 1990 2000

Unit:toe/$US

millio Japan

EU15

US

Germany

UK

France

Italy

Final energy consumption of each countrys industrial sector/Real GDP (based onexchange rates): changes between 1960-2004

Source IEA (2006)Energy Balances of OECD Countries 2003-2004. IEA/OECD

Japans superior performance in the 1970-80s is clearly starting tobe overtaken, with the UK surpassing Japan in 2004


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Japanese manufacturing industrys energy efficiency

Source: IEEJ. (2007) Handbook of Energy and Economic Statistics in Japan (2007 edition). EnergyConservation Center, Japan.

Changes in energy intensity based on IIP Indices of industrial production) 1970-2005

Following the oil shock, energy efficiency improved

After 1990 it has stagnated (and somewhat worsened)

40

50

60

70

80

90

100

110

120

1970 1975 1980 1985 1990 1995 2000 2005

FEC/IIP

(1973=100)

Manufacturing Industry

Steel

Chemical

Cement

Paper and Pulp

Fiscal Year


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CO2 emissions/ GDP ratio: international comparison(exchange rate)

In total, Japan emits less CO2 than other developed countries

Transport and domestic sectors have particularly low emissions. Industry emitsmore than the EU, and is comparable with the US.

Total CO2 emissions/GDP ratio (exchange rate): direct emissions 2004>

0

100

200

300

400

500

600

Japan

U

S

Germ

an

UK

France

Italy

CO2emission

s/GDPratio(tonn

m

illion)

other

other agricultural

domestic

commercial

transport

industryenergy conversion

Source Japan, EU, US submissions on GHG emissions to UNFCCC IEA(2006) Energy Balances of OECD Countries 2003-2004. IEA/OECD.

1.0 1.6 2.3 1.7 1.4 1.1 1.7


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Source: Japan, EU, US submissions of GHG Inventories to UNFCCC; IEA Energybalances of OECD Countries 2003-2004GDP

As a whole, Japans emission intensity is the same as the EUs.

Japans transport and domestic emission intensities are low but industrysintensity is high compared with the US and EU

CO2 emissions/GDP ratio: international comparison(purchasing power parity)

Total CO2 emissions/GDP ratio (purchasing power parity): direct emissions 2004>

0

100

200

300

400

500

600

Japa

U

S

Germ

an

UK

Fran

c

Italy

CO2/GDPratio(tonne/$U

other

other agricultural

domestic

commercial

transport

industryenergy conversion

1.00 0.92 1.61 1.06 0.91 0.69 0.89


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CO2 emissions by sector: international comparison

Japan`s industrial emissions constitute a higher proportion of totalemissions than in any other G8 country

The proportion of emissions from domestic and transport sectors is lowcompared with other countries

CO2 emissions by sector: international comparison (direct emissions, 2004)

0% 50% 100%

Japan

15

US

Germany

UK

France

Italy

energy conversion

industry

transport

commercial

domestic

other agricultural

other

Source Japan, EU, US submissions of GHG Inventories to UNFCCC


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International comparison of fuel mix in industry sector

Among developed countries,Japan stands out as a heavy user of coal in the industry sector

International comparison of fuel mixes in industry (2004))

0% 50% 100%

Italy

France

UK

Germany

US

EU15

Japan

coking coal

fuel coal

oil

gasnatural gas

electricity

thermal

Source: IEA (2006) Energy Balances of OECD Countries 2003-2004. IEA /OECD.


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International comparison of coal use between 1990 and2004 in industry sector

Changes (1990-2004) in coal use in industry: international comparison

0 10 20 30 40 50 60

Japan

EU15

US

Germany

UK

France

Italy

1990

2004

-15%

-53%

-30%

-61%

-69%

-48%

-12%

Unit 1 milliontonnes of oilequivalent

Reduction

rate

Since 1990, Japan has not made progress in switching fuels

Source: IEA (2006) Energy Balances of OECD Countries 2003-2004. IEA /OECD.


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0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50-52 48-50 46-48 44-46 42-44 40-42 38-40 36-38 34-36 32-34 30-32 28-30 26-28 24-26 22-24

Power generation efficiency

Generationcapa

city[1,0

00kW]

Energy efficiency distribution of thermal powerstations (2003)

Source Kiko Networks estimate based on METI Natural Resources Agency, Electricityand Gas Business Section (2005) Summary of Electricity Supply/Demand in 2004.

ntil all power stations have the same high energy efficiency, the claim that there

Top Runner Factory


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. ,07)

Government asked to raise thetargets of 13 industries

However, these industries haveachieved their targets formany years, and some haveeven achieved the newly

established target.

Power Sector and Steel havenot achieved their target,but will buy CDM credits tomeet their targets, though

there is no penalty. This means that the Voluntary

Action is actuallyMandatory.

In this case, without trading,the abatement cost

becomes higher.

industry Increased targetcompared to 90level (%)

Achieved in2006?

Additionalreduction(MtCO

chemical 1020 856.3

paper 1320 217.4

oil 1013 139.3

gas 4659 19

cement 33.8 17.8rubber 06 11.2

glass 1521 10.5

Lime 68 7.1

dyeing 4040.6 5.8cable 2027 5.4

Sanitary 2025 2.4

aluminium 1011 1.8

Copper brass 8.69.05

0.2

Government asked todo more in theVoluntary Action


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Kiko Network Survey on facilities emissions, basedon Energy Conservation Law

31% from top emitting 100facilities which disclosedtheir emissions

19% from top 80undisclosed facilities

In total, about top 200facilities emit half ofJapans total emissions

Including other topfacilities, who disclosed(7%) and undisclosed(4%), about 60% comefrom large emittersAugust, 2005 by

Kiko Network

Japans Total CO2

Emissions=1259.4MtCO2(2003)

Small & mediumfacilities &households


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Domestic Emissions Trading Systemfor Large Emitters

WWF proposes a Cap&Trade Domestic Emissions TradingSystem as the most cost effective measure to make areal difference

Released the Emissions Trading Scheme ForDecarbonizing Japan (January 24, 2007)

Published it into a book (October, 2007)

For other small and medium emitters, tax, and abaseline & credit system to participate in a domesticCarbon Trading Market are proposed as a climatechange policy mix for Japan.


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WWFs Emissions Trading Scheme For

Decarbonizing Japan

GHG coverage: CO2 by Direct Emissions in a Downstreamtype (Power generation, industry use, industrialprocesses)

Cap: 710 million tons CO2 Coverage: 64%

Allocation:Grandfathering + 5% auction + 5% new entrants

reserve (in the future,benchmarking+auctioning)Grandfathering to each sector will be based on average of

base year 2000-2004

First commitment period: 2008-2012

Allocation to each factory will be a bottom-up approach

based on average of base year, using a ComplianceFactor to adjust the total amount of allocation


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WWFs Emissions Trading Scheme For

Decarbonizing Japan

Policy Mix ideas for sectors not directly covered by ETS1) Tax

Tax on the upstream, with 75% exemption for those covered byETS

At the downstream, the tax will be paid indirectly throughincreased price shift

2) Baseline & Credit Trading System Sectors, such as commercial, residential, transport and other

small business will do emission reduction projects and sell the reductioncredit to those covered by ETS

In this case, we propose a Baseline & Credit Reserve in theETS in order to avoid double counting of reduction from electricity andheat

We also propose a Japanese version of the CDM EB to ensure aton is a real ton


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Why Emissions Trading is Essential

Abatement cost differs according to companies, enablingcompanies to minimize cost by using the trading system

Guarantees reduction amount by capping large emitters

Can sell the amount of efforts, but can also buy whennecessary, so flexibility is guaranteed

Social/Economical structure will change to realize a low-carbon society

If linked with other regions or countries with similar system,the abatement cost becomes even lower


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ETS essential from an Internationalperspective and National interests

EU has started its internal emissions trading scheme fromJanuary, 2005, and plans for the second phase isalready established.

Norway, Canada, Australian States and 10 Eastern Statesin the USA as well as California and 5 western statestogether with 2 Canadian provinces are developing asimilar system, aiming to link together with EU ETS.

A global network of a regional emissions trading schememay happen

Japan needs to know that we are about to beleft behind!


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How are Key Actors in JapanResponding to this?

The Ministry of Environment (MoE)Considering it positively; implementing an experimental,

voluntary scheme since 2005, with subsidies for those whomake commitments to reduce.

A learning process about marginal abatement costs

The new Environment Minister Kamoshita isforward looking towards Emissions Trading,and has stated that the MOEs voluntaryscheme should be used as a policy tool to be

expanded to include larger participants, eitheras incentives or regulation. (September 26, 2007)


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METIs Observation

It does not totally reject the idea of ETS.

But has serious doubts about the effectiveness of ETSbased on their observation about EU ETS.

1.They sent a mission together with MOE and Keidanren to

conduct hearings about the situation of EU ETS.2.Conclusion was, its too early for Japan to introduce such

a system.

3.They would try to expand and strengthen Voluntary

Actions more, while comprehensively consider aboutthe scheme further.


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Renewable Energy not Seriously Considered as anAbatement measure in Japan(International Comparison)

0

5

10

15

20

25

30

Australia

Canada

Denm

ark

France

Germany

Japan

Spain

Sweden

Unite

dKing

dom

USA

1990

2001

2004

Made from IEA (2006) Renewable Information 2006. IEA/OECD by WWF Japan


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Wind Power Capacity by Countries

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

10M

W

Germany Spain USA Denmark Japan

Source:Wind Power Monthly, July, 2006 made by WWF Japan


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Solar Panel Installation by Countries

0

20

40

60

80

100

120

140

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

1

0

M

W

Germany Japan USA Australia Netherlands Spain

Source Solar Generation Associationhttp://www.jpea.gr.jp/4/4-2-4.htm
http://www.jpea.gr.jp/4/4-2-4.htmhttp://www.jpea.gr.jp/4/4-2-4.htm


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Energy Technology Perspectives 2006(IEA)Scenarios and Strategies to 2050


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Thank you very muchhttp://www.wwf.or.jp/climate

[email protected]

WWF-Canon / Adam OSWELL
http://www.wwf.or.jp/climatehttp://www.wwf.or.jp/climate

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Yurika Ayukawa Japan s Climate Policy