The Tokyo Foundation for Policy Research


The Tokyo Foundation for Policy Research

The DPJ Platform on Climate-Change—A Reality Check

August 7, 2009

With a critical election looming and an international climate-change conference just over the horizon, the opposition Democratic Party of Japan has embraced an emissions-reduction target far more ambitious than that announced by the current administration. Does the DPJ's green platform represent responsible leadership or reckless political grandstanding?

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International negotiations are intensifying in advanced of the United Nations Climate Change Conference (COP 15), to be held in Copenhagen in December this year. On June 10, Prime Minister Taro Aso, leader of the Liberal Democratic Party, announced Japan's new midterm national targets, promising to reduce greenhouse gas emissions 15% from the 2005 level by 2020.

Aso's announcement followed the April release of a report by the government's advisory panel on climate-change policy. The panel based its conclusions on six months of study and deliberation, including objective analysis of various mitigation policies and measures and the economic costs incurred in the process of reducing greenhouse gas reductions, all carried out with the help of sophisticated economic models and environmental simulations. In its report the panel outlined six options, ranging from ongoing implementation of current emissions-reduction measures, for a 4% reduction from the 2005 level (option 1), to a comprehensive package of policies and measures, including strict regulation, leading to an estimated 30% reduction compared with 2005 (option 6). Numerically, the target Aso announced in June falls roughly midway between those two extremes. In terms of policy mix, it represents the maximum reduction (14% from the 2005 level) attainable through government subsidies and incentives alone, without recourse to compulsory regulation, plus an additional 1% reduction to be realized through the "bold political decision" to pursue policies to expand the use of solar power. The plan announced by Prime Minister Aso has naturally been incorporated into the LDP platform for the coming general election.

The Democratic Party of Japan has responded in its own platform with a midterm emissions reduction target of 25% from the 1990 level, or 30% below 2005—a goal rejected by the current government as unrealistic. (The DPJ has also proposed a long-term reduction target of more than 60%, as compared with the LDP's goal of halving emissions by 2050. However, since no politician today can assume responsibility for outcomes 40 years hence, the long-term target has been omitted from this assessment.) Why such a discrepancy between the two parties, and how has each justified its position?

Rejecting the Middle Ground

In Japan, as in other countries, the advocates of economic realism and the champions of the environment have sharply differing views on the appropriate midterm target for reduction of greenhouse gas emissions. The economic realists make the point that in the process of weathering two oil crises Japanese industry has already developed the most energy-efficient technologies and products in the world, and thus has reached the point where further reductions will involve a high marginal reduction cost. Barring the development of truly ground-breaking technology, this means that large cuts cannot be achieved without depressing the economy and lowering people's living standards over the short term. From an international perspective, they point out that the Kyoto Protocol has imposed a disproportionately heavy burden on Japan, inasmuch as the United States has refused to participate, developing countries are exempt from reduction commitments, and the European Union is able to achieve its target relatively easily, thanks to factors independent of environmental policy, such as Germany's unification and Britain's conversion from coal to other fuels. Convinced that accepting a similar framework moving forward would put Japan at a severe competitive disadvantage, they emphasize the importance of ensuring fairness, as seen from the standpoint of marginal reduction cost.

The environmental camp, meanwhile, argues that Japan must demonstrate leadership in the arena of environmental diplomacy by adopting a more ambitious reduction target than other countries. It also maintains that such an ambitious target, far from depressing the economy, will stimulate it by encouraging technological development and innovation. The environmentalists point to the "green economy" strategy of US President Barack Obama, a change of course that they welcome enthusiastically after the previous eight years. They agree that participation by the developing countries is desirable but maintain that it is more important for the industrial powers—Japan in particular—to lead the way, thus encouraging active involvement by China and other developing countries.

The economic realists are represented by such industry groups as Nippon Keidanren, and at the government level by the Ministry of Economy, Trade, and Industry. Speaking for the environmentalists are a variety of environmental nongovernmental organizations and the Ministry of the Environment. (Within the business realm, the finance industry supports the adoption of a cap-and-trade system, anticipating profits from an emissions-trading market.) The realist camp advocated the first and least ambitious of the panel's options (4% reduction from 2005), while the environmentalists supported option 5 or 6 (a 20%–30% reduction from 2005).

Prime Minister Aso and the LDP settled on a position midway between those two extremes. The DPJ's position, by contrast, corresponds to option 6, the most ambitious of the group (30% from 2005). The economic camp has voiced concerns that a DPJ victory would open the way for policies that could further depress the economy and increase the public burden. The environmental camp, by contrast, has waxed enthusiastic in its support of the DPJ.

The Untold Story

Unfortunately, the DPJ's position on climate change is not merely ambitious but fatally flawed, on three separate counts.

The first flaw is that it offers no indication whatever of the economic burden its policies would impose on the nation. There is an regrettable tendency, not only within the DPJ but around the world, to ignore the cold hard truth that environmental protection involves a tradeoff in terms of economic growth and living standards. In the EU in particular, environmental protection is all too frequently treated as a sacred cow. But here in Japan, which is victim not only to a devastating recession but also to growing wealth gap stemming from the free-market reforms of Prime Minister Jun'ichiro Koizumi, the public has become alert to the potential costs and consequences of new policies, including the impact on income distribution. Thus, few voters are indifferent to the economic impact of a cap-and-trade system or a feed-in tariff system that would oblige electric utilities to buy all electricity from renewable energy sources at a fixed, incentive price. Prime Minister Aso made it clear that his plan's cost to the average household would amount to 76,000 yen annually. The DPJ's proposal, by contrast, skirts any mention of cost.

In some circumstances it might be argued that the DPJ was handicapped by insufficient information, lacking the ruling LDP's extensive resources for policy analysis. But where the midterm emissions-reduction targets are concerned, virtually all relevant quantitative data was made public during the lengthy process of deliberation, along with the deliberations themselves. Voters therefore have the right to expect that any competing proposal will be backed by solid facts and figures.

The second flaw in the DPJ's climate-change position is that it envisions the adoption of both emissions trading and an environmental tax, despite the fact that the two options are mutually exclusive from the standpoint of effective policy. No nation in the world has adopted or even considered adopting both options simultaneously as a strategy for fighting climate change. The DPJ platform never addresses this policy-mix issue with an explanation as to why both measures are necessary. Nor, for that matter, does it attempt to explain the inconsistency between its policies to counter global warming and its promise to eliminate tolls on expressways and reduce gasoline taxes, measures that would lead to an increase in greenhouse gas emissions.

The Meaning of Leadership

The third flaw in the DPJ platform is the assumption that Japan can "take a leadership role internationally" (in the words of Secretary General Katsuya Okada) by adopting the midterm target of reducing emissions 25% from the 1990 level. Doubtless other nations of the world would marvel at the spectacle of Japan, already a world leader in energy efficiency, undertaking to reduce emissions by another 25% at an estimated reduction cost of 80,000 yen/t-CO2. "Japan is in a league by itself," they would exclaim. "We could never do that; it would be economic suicide." In this way Japan might enjoy a moment in the spotlight, if this is the DPJ's idea of leadership. But others might disagree with that definition.

With the EU pledging a 20% midterm reduction in emissions (30% if other countries will go along), the DPJ apparently decided that Japan must do the Europeans one better. Setting a target with the sole intent of avoiding the superficial appearance of having been numerically bested is the kind of simple-minded political posturing that scarcely bears comment. If it were an issue of numbers alone, not even a 25% target would satisfy countries like China, which is seeking a 40% reduction by the industrial world, and India, which is calling for an 80% cut. If some in the international community regard Aso's target as insufficiently ambitious, part of the reason is the government's failure to convey the high cost of the measures Japan is preparing to take. The DPJ's seeming effort to impress the world simply by raising Japan's number to 25 bespeaks a failure to grasp the larger issue, inviting the suspicion that the party has no strategy whatsoever for international climate-change negotiations. Incidentally, the DPJ's argument that a more ambitious midterm target will actually stimulate the Japanese economy by spurring innovation leads one to wonder why developing countries have adamantly rejected emissions-reduction commitments on the grounds that they would hamstring their efforts to rise from poverty. One somehow doubts that the DPJ's logic would be sufficient to persuade China and other developing countries to sign onto the next international climate-change framework. Today the true test of leadership in the fight against climate change is not one's audacity in playing the numbers game but one's ability to formulate and advance a viable concept for an overall framework to succeed the Kyoto Protocol.

Of course, to some degree every party platform bows to the necessity for brevity and the need to make its policies politically appealing. But this does not excuse the DPJ's apparent failure to make use of the data and models now available to anyone who wishes to analyze the costs and benefits of measures to stem climate change. It would be rash and foolish for DPJ—should it take control of the government—to summarily revise the target Prime Minister Aso has announced domestically and internationally, simply because it has written that into its platform. We can only hope it will have the wisdom to submit the issue to the nation for thorough reexamination and debate.

    • Senior Executive Fellow, The 21st Century Public Policy Institute
    • Akihiro Sawa
    • Akihiro Sawa

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