Friday, July 4, 2008

Japan as Efficiency Superpower

The New York Times today covered an issue that has interested me for a while now. The article is titled "Japan Sees a Chance to Promote Its Energy-Frugal Ways." I have argued in a chapter in Gal Luft's forthcoming book on energy security that Japan should aim to be an efficiency superpower, promoting its unique ethic of conservation or "mottainai." In other words, Japan can offer moral leadership by acting as a technological model and a departure point for global cooperation. Here are excepts of my chapter, which I presented in February of this year to the Tokyo-Reischauer Group, sponsored by Johns Hopkins SAIS and Tokyo Foundation:

Energy security concerns are nothing new in Japan. The oil embargo during World War II and the 1970s oil shocks shaped much of Japan’s recent history. Long the technology leader in Asia, Japan finds itself preparing for a future in which its energy policy must weigh increased global energy demand, emerging resource nationalism, and stagnating upstream development. Japanese energy policy is built upon an understanding that resources are finite. By putting efficiency at the center of its policies, the country is shaping the definition of energy security for the 21st century.

In the international context, Japanese energy security depends on the U.S. military’s protection of sea lanes for the transport of oil. But its overall policy mix has relied on global market mechanisms and domestic regulation. Japan’s homegrown efforts to achieve energy security revolve around efficiency and diversification. Since 1973, Japan’s energy intensity has improved by 37% and its oil dependency has dropped by 30 points, making Japan one of the largest, most-energy efficient economies in the world.

Given Japan’s oil dependence during this period, few countries were as affected as Japan was by the OPEC oil embargo of 1973. The resulting changes in the industrial landscape, the economic slowdown that followed, and dramatic increases in energy prices helped to mobilize the Japanese population in support of energy efficient policies. By the second oil shock six years later, Japan was in a position not only to weather the storm better than most developed countries, but also to capitalize on the world’s newfound desire for energy conservation by exporting fuel-efficient cars and other technology.

The mid-1970s saw a wave of energy-related legislation in Japan. Enacted in December 1973, the Emergency Law for the Stabilization of National Life gave the government the ability to set prices for everyday products during times of severe inflation.

Energy consumption in Japan’s industrial sector remained flat and conservation efforts plateaued in the 1990s, as Japanese manufacturers reached the upper limit of efficiency gains through the turnover of capital stock to more efficient machinery. An economic downturn and historically-low energy prices weakened the pressure to conserve, refocusing government efforts on energy concerns.

In 2005, the Japanese government introduced the “Cool Biz” campaign, which aimed to lower energy consumption and greenhouse gas emissions by encouraging businessmen to wear lighter clothes and forgo wearing a tie in order to encourage a reduction in air-conditioning use. The campaign was introduced with a fashion show featuring captains of Japanese industry, based on the belief that in Japan’s hierarchical business culture the participation of upper management would increase the effectiveness of the campaign. The Environmental Ministry said the campaign led to a 1.4 million ton emissions reduction during the summer of 2007.

Another initiative that aims to increase energy efficiency by influencing consumption choices is the “Warm Biz” campaign, which encourages companies to set their heaters to 20 degrees Celsius (68 degrees Fahrenheit) in the winter.

Is Japan model transferable to foreign countries? Japan boasts top class technology for nuclear power and energy efficiency/conservation, with economic growth during times of rising energy costs. It has been cooperating with China on energy efficiency technology. On the other hand, some Japanese interviewees said though technology or regulations may be transferable, the Japanese spirit of “mottainai” (“don’t waste”) would be hard to transfer, or at least only mature societies with the willingness to pay for green power could do so. Nevertheless, some studies show that the Japanese willingness to pay for clean energy is about the same as it is in other countries.

Jimmy Carter might have been prescient about the risks to the environment but American culture did not take to the notion of conservation. Meanwhile, in Japan, the country underwent a conservation revolution. Many have argued that an incremental approach to energy and environmental problems would be insufficient. Given recent factors, such as increased demand and lack of infrastructure, driving up energy prices and the broader consensus on climate change, a national project for energy efficiency would be timely.

The current international order is witnessing the emergence of layers of power. I believe that thinking about the system in terms of "poles" is unhelpful. (Harry Harding recently argued that we might think of the system as two political parties: an elitist reform party led by the United States and a conservative populist party led by China and Russia.) A number of factors, such as the 1997 Asian financial crisis, the 9/11 terrorist attacks, and the recent changes in the energy markets have opened a window of opportunity for new power centers--the Middle East's financial power, Russia's influence over Europe, China's new role in East Asia, etc.

(I would like to thank Chris Janiec and Warren Wilczewski for their research assistance on this project.)

Photo by El Fotopakismo

No comments: