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Thoughts on Japan’s First Post-Fukushima Energy Policy

 

Thoughts on Japan's First Post-Fukushima Energy Policy

Japan’s Nuclear Power Plants; Source: www.japanfocus.org

Japan is reversing its decades-long advocacy of nuclear power as Bloomberg reported last Friday. In its first post-Fukushima energy policy approved by Prime Minister Noda a cabinet panel endorsed and outlined the potential next steps to phase out nuclear power plants by 2040. In general, that is in line with Japanese public opinion. A report issued by Professor Yasunori Sone who organized the survey for the government had the following findings: “A total 47 percent opted for zero nuclear, 16 percent favored the nuclear ratio at 15 percent, while 13 percent endorsed 20-25 percent.” The Bloomberg authors go on and cite from the report that the results “indicate Japanese citizens are prepared for a policy shift to green energy from nuclear power and consequent lifestyle changes and cost burdens.” Note, that before the Fukushima accident Japan got almost 30 percent of its electricity from nuclear power — Japan’s primary energy generation source.

So, no surprise that the new recommended policy calls for emphasizing renewable energy sources (wind and solar) and more conservation. However, this policy has to be viewed as what it actually is — namely, a political move by the ruling Democratic Party of Japan to position itself providentially for reelection. According to Bloomberg, elections may be on the horizon as early as next month.

Why do I think this is a political move? Only one day later, a member of the Noda administration confirmed that it intends to continue construction of three new nuclear power plants, two located in Aomori in northern Japan and one further south in the western district of Shimane. The reasonable next step would then be to have at least those three modern – incorporating the Fukushima disaster lessons – nuclear power plants up and running past 2040 and thus keeping nuclear power part of the Japanese energy mix.

In any event, as Anne Seccombe rightly points out the result will be increased electricity costs and the “damage that could do to the Japanese economy and their ability to be internationally competitive in manufacturing and export” is in my opinion a huge gamble and not quantifiable. Remember, higher energy costs can lead to a loss of global competitiveness of Japan’s dominant industrial sectors such as automobiles, machinery and equipment in addition to the constant export burden of a strong “safe haven” Yen. We live in a globalized world and especially in Asia there are many countries which would love to be newly incorporated in the global supply chains.

In sum, policy recommendations as well as advocacy is a far cry from policy implementation. A resource-poor country should not create more self-inflicted resource dependencies. Japan should also not follow Germany’s example which is embedded in a totally different security environment. The current Japan-China tensions over the Senkaku islands in the East China Sea should also make the Japanese hesitant to just like that bury its formidable nuclear power infrastructure. Nobody knows what the U.S.-Japan security treaty will be worth in reality in the decades to come given future changes in relative power, the very volatile security environment in Asia and U.S. budget constraints. What is certain is that the U.S. role as the world’s policeman is becoming less prominent by the day. Japan needs to keep its options open and not create a hopeless security dependency. Lastly, nobody should underestimate the Japanese business lobby and its industrial policy interests. The latter goes hand in hand with government policy.

 

 

Author

Roman Kilisek

Roman Kilisek is a Global Energy & Natural Resources Analyst.
His research focuses on global energy politics, mining, infrastructure and trade, global political risk and macroeconomics. He is fond of using scenario development and analysis.

He has lived on three continents and traveled to over 40 countries around the world. He now lives and works in New York City.